Document:

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                                                                    EXHIBIT 10.8

                        CONFIDENTIAL TREATMENT REQUESTED
   CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE MARKED
WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

                                                              [CMS LOGO]

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop C2-21-15
Baltimore, Maryland 21244-1850

OFFICE OF ACQUISITION AND GRANTS MANAGEMENT

March 7, 2005

Mr. Paul Dinkins, Exec. VP
PRG-Schultz International, Inc.
600 Galleria Parkway,
Suite 100 Atlanta, GA 30339

SUBJECT:  Notice of Award, Contract for Non-MSP Recovery Audit Work in the State
          of California

Dear Mr. Dinkins:

Congratulations, CMS has accepted PRG's final revised proposal for the subject
contract requirement. Attached is a copy of the subject contract.

The contract was developed from the Request for Proposal and now incorporates
your contractor-specific information and the state-specific information in
Sections B, C and G.

Please acknowledge acceptance of this award by providing two (2) original signed
SF 26 forms. The signature shall be by an authorized official of your
organization. Both originals shall be returned to CMS no later than March 10,
2005, 10:00 am local Baltimore time so that the Contracting Officer may
effectuate the award by COB on the 10th as well. Please return to the following
address:

                        Centers for Medicare & Medicaid Services
                        OAGM, Attn: Barbara J. Erbe
                        7500 Security Boulevard, MS C2-21-15
                        Baltimore, MD 21244-1850
                        RAC CONTRACT

You do not need to return the contractual document, just the signed forms. Upon
execution by the Contracting Officer, one original SF 26 will be returned to you
for your files. If you have any questions, please contact Barbara Erbe at (410)
786-5142.

Please understand you are not to have any press releases concerning this award
until the Secretary has officially announced the award to the public. We will
notify you at that time.

Sincerely,

/s/ Carol G. Sevel
Contracting Officer

Enclosure

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Contract No. HHSM-500-2005-000041
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                                TABLE OF CONTENTS

PART I - THE SCHEDULE

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

      B.1   DESCRIPTION OF SERVICES

      B.2   TYPE OF CONTRACT

      B.3   PRICE SUMMARY

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

      C.1   STATEMENT OF WORK

      C.2   INCORPORATION OF REPRESENTATIONS AND CERTIFICATIONS

SECTION D - PACKAGING AND MARKING

      D.1   PACKAGING AND MARKING

SECTION E - INSPECTION AND ACCEPTANCE

      E.1   FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

      E.2   INSPECTION AND ACCEPTANCE

      E.3   ACCEPTANCE BY THE PROJECT OFFICER/GOVERNMENT TASK LEADER

SECTION F - DELIVERIES OR PERFORMANCE

      F.1   FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

      F.2   PERIOD OF PERFORMANCE

      F.3   ITEMS TO BE FURNISHED AND DELIVERY SCHEDULE

      F.4   TIME AND PLACE OF DELIVERIES

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SECTION G - CONTRACT ADMINISTRATION DATA

      G.1   DATA TO BE DELIVERED

      G.2   USE OF GOVERNMENT DATA (REPORTS/FILES/COMPTER TAPES OR DISCS)

      G.3   OMB A-130 INFORMATION RESOURCE POLICY

      G.4   KEY PERSONNEL

      G.5   GOVERNMENT PROJECT OFFICER (PO)/CONTRACT SPECIALIST

      G.6   CONTRACTING OFFICER'S RESPONSIBILITY

      G.7   DESIGNATION OF PROPERTY ADMINISTRATOR AND PROPERTY ADMINISTRATION

      G.8   INVOICING AND PAYMENT

      G.9   PAYMENT BY ELECTRONIC FUNDS TRANSFER-CENTRAL CONTRACTOR REGISTRATION

      G.10  CONSENT TO SUBCONTRACT

      G.11  PAST PERFORMANCE REGISTRATION

      G.12  ACCOUNTING AND APPROPRIATION DATA

SECTION H - SPECIAL CONTRACT REQUIREMENTS

      H.1   DELIVERABLES/INTERNET - INTRANET APPLICATIONS

      H.2   HHSAR 352.224-70 CONFIDENTIALITY OF INFORMATION

      H.3   CONTRACTING PROHIBITIONS/ORGANIZATIONAL CONFLICT OF INTEREST

      H.4   CONDITIONS FOR PERFORMANCE

      H.5   HHSAR 352.270-7 PAPERWORK REDUCTION ACT

      H.6   DISPOSAL OF IMAGED MEDICAL RECORDS

      H.7   HIPAA BUSINESS ASSOCIATE PROVISION

      H.8   COPYRIGHTS

      H.9   DISSEMINATION, PUBLICATION AND DISTRIBUTION OF INFORMATION

      H.10  FAR 52.204-7 CENTRAL CONTRACTOR REGISTRATION (CCR)

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Contract No. HHSM-500-2005-000041
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PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

      I.1   FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

      I.2   DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATIONS
            (HHSAR)

      I.3   FAR 52.215-19 NOTIFICATION OF OWNERSHIP CHANGES (OCT 1997)

      I.4   FAR 52.244-6 SUBCONTRACTS FOR COMMERCIAL ITEMS (JUL 2004)

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION J - LIST OF ATTACHMENTS

      J.1   STATEMENT OF WORK - NO. 40700NMSPB

      J.2   GLOSSARY

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Contract No. HHSM-500-2005-000041
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SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 DESCRIPTION OF SERVICES

The purpose of this contract will be to support the Centers for Medicare &
Medicaid Services (CMS) in conducting a demonstration project in the state of
California using recovery audit contractors (RACs) to provide recovery audit
services to identify underpayments and overpayments and/or recoup overpayments
under the Medicare program for services for which payment is made under part A
or B of title XVIII of the Social Security Act.

B.2 TYPE OF CONTRACT

This is an Indefinite Delivery (ID) Requirements contract.

B.3 PRICE SUMMARY

a.    All payments shall be paid only on a contingency basis. The contingency
      fees shall be paid once the recovery audit contractor collects the
      Medicare overpayments. The recovery audit contractor shall not receive any
      payments for the identification of the underpayments or overpayments.

b.    For the identification of non-MSP overpayment and underpayments and the
      recovery of non-MSP overpayments under SOW 40700NMSPB the RAC will receive
      [***]% of the amount that is collected.

      A reduced contingency percentage shall apply to a recoupment by offset.
      (See below.)

      The RAC shall receive [***]% of the agreed upon contingency fee percentage
      for any of the following recovery efforts:

            (a)   Recovery efforts accomplished through the offset process of a
                  fiscal intermediary or carrier.

            (b)   Recovery efforts accomplished through Treasury offset or
                  another collection vehicle after the debt is referred to the
                  Department of Treasury.

            (c)   Recoveries made through a self-disclosure made by a provider
                  as a result of a prior RAC identified request for medical
                  records or demand letter. Self- disclosed service and time
                  period must be included in the RAC's project plan.

[***] - CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE
MARKED WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

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Contract No. HHSM-500-2005-000041
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            d.    If the provider files an appeal disputing the overpayment
                  determination and the appeal is adjudicated in the provider's
                  favor at the first level, the recovery audit contractor shall
                  repay Medicare the contingency payment for that recovery. If
                  the appeal is adjudicated in the agency's favor at the first
                  level, the recovery audit contractor shall retain the
                  contingency payment for that recovery. Subsequent appeals,
                  after the first level of appeal, will not affect the recovery
                  audit contractor's ability to retain the contingency payment.
                  See Payment Methodology Chart in Attachment J-1.

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Contract No. HHSM-500-2005-000041
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SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 STATEMENT OF WORK

Independently and not as an agent of the Government, the Contractor shall
furnish all the necessary services, qualified personnel, material, equipment,
and facilities, not otherwise provided by the Government, as needed to perform
the Statement of Work (SOW), SECTION J. ATTACHMENT J.1, SOW 40700NMSPB, attached
hereto and made a part of this solicitation.

C.2 INCORPORATION OF REPRESENTATIONS AND CERTIFICATIONS

The Contractor's Representations and Certification's, submitted in response to
the solicitation's Section K, dated December 14, 2004, are hereby incorporated
by reference and made a part hereof of this contract.

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Contract No. HHSM-500-2005-000041
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SECTION D - PACKAGING AND MARKING

All deliverables required under this contract shall be shipped and marked in
accordance with Section C.1 Statement of Work and Section F.3 Items to be
Furnished and Delivery Schedule

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Contract No. HHSM-500-2005-000041
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SECTION E - INSPECTION AND ACCEPTANCE

E.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

52.246-5 INSPECTION OF SERVICES - COST REIMBURSEMENT (APR 1984)

E.2 INSPECTION AND ACCEPTANCE

a.    All work under this contract is subject to inspection and final acceptance
      by the Contracting Officer or the duly authorized representative of the
      Government.

b.    The Government's Project Officer or Government Task Leader are duty
      authorized representatives of the Government and are responsible for
      inspection and acceptance of all items to be delivered under this
      contract.

c.    Inspection and acceptance of the Contractor's performance shall be in
      accordance with the applicable FAR Clauses in Section E.1 above.

E.3 ACCEPTANCE BY THE PROJECT OFFICER/GOVERNMENT TASK LEADER

All items to be delivered to the Project Officer will be deemed to have been
approved 60 calendar days after date of delivery, except as otherwise specified
in this contract, if written approval or disapproval has not been given within
such period.

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Contract No. HHSM-500-2005-000041
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SECTION F - DELIVERIES OR PERFORMANCE

F.1 FEDERAL ACQUISITION REGULATION (FAR) CLAUSES

52.242-15 STOP-WORK ORDER. (AUG 1989) - ALTERNATE I (APR 1984)

F.2 PERIOD OF PERFORMANCE

This is a three (3) year contract. The period of performance is 3 years from the
time of award: March 10, 2005 through March 9, 2008. No contingency fees shall
be paid after the end of the period of performance.

F.3 ITEMS TO BE FURNISHED AND DELIVERY SCHEDULE

The Contractor shall furnish the items required under this contract in
accordance with the reporting instructions and delivery schedule set forth in
Attachment J.1.

F.4 TIME AND PLACE OF DELIVERIES

The supplies/services to be furnished shall be delivered in accordance with the
delivery schedule as specified in the statement of work.

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Contract No. HHSM-500-2005-000041
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SECTION G - CONTRACT ADMINISTRATION DATA

G.1 DATA TO BE DELIVERED

a.    Any working papers, interim reports, data given by the Government to the
      Contractor or first produced by the Contractor under the contract, data
      collected or otherwise obtained by Contractor under the contract (subject
      to any specific restrictions that may pertain to this data), or results
      obtained or developed by the Contractor (subcontractor or consultants)
      pursuant to the fulfillment of this contract are to be delivered,
      documented, and formatted as directed by the Contracting Officer.

b.    In addition, information and/or data, which are held by the Contractor
      related to the operation of their business and/or institution and which
      are obtained without the use of Federal funds, shall be considered
      "PROPRIETARY DATA" and are not "subject data" to be delivered under this
      contract.

G.2 USE OF GOVERNMENT DATA (REPORTS/FILES/COMPUTER TAPES OR DISCS)

Any data given to the Contractor by the Government shall be used only for the
performance of the contract unless the Contracting Officer specifically permits
another use, in writing. Should the Contracting Officer permit the Contractor
the use of Government-supplied data for a purpose other than solely for
performance of this contract and, if such use could result in a commercially
viable product, the Contracting Officer and the Contractor must negotiate a
financial benefit to the Government. This benefit should most often be in the
form of a reduction in the price of the contract; however, the Contracting
Officer may negotiate any other benefits he/she determines is adequate
compensation for the use of these data.

Upon the request of the Contracting Officer, or the expiration date of this
contract, whichever shall come first, the Contractor shall return all data given
to the Contractor by the Government (including any images of medical records).
However, the Contracting Officer may direct that the Contractor retain the data
for a specific period of time, which period shall be subject to agreement by the
Contractor. Whether the data are to be returned, retained, or destroyed shall be
the decision of the Contracting Officer with the exception that the Contractor
may refuse to retain the data. The Contractor shall retain no data, copies of
data, or parts thereof, in any form, when the Contracting Officer directs that
the data be returned or destroyed. If the data are to be destroyed, the
contractor shall directly furnish evidence of such destruction in a form the
Contracting Officer shall determine is adequate.

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G.3 OMB A-130 INFORMATION RESOURCE POLICY

Each RAC is required to follow the established comprehensive approach to improve
the acquisition and management of their information resources in accordance with
this OMB Circular. This circular is issued pursuant to the Paperwork Reduction
Act (PRA) of 1980, as amended by the PRA of 1995, the Clinger-Cohen Act of 1996,
et al. The PRA establishes a broad mandate to perform information resources
management activities in an efficient, effective, and economical manner.

G.4 KEY PERSONNEL

a.    For the purposes of this contract, the key person shall be the Project
      Director/Project Manager, Rob Paulsson. It will be his responsibility to
      obtain the staff necessary and to direct the work for the conduct of this
      project. The key person under this contract shall be in accordance with
      the HHSAR clause provided below.

b.    HHSAR 352-270-5 KEY PERSONNEL (APR 1984)

      The personnel specified in this contract are considered to be essential to
      the work being performed hereunder. Prior to diverting any of the
      specified individuals to other programs, the Contract shall notify the
      Contracting Officer reasonably in advance and shall submit justifications*
      (including proposed substitutions) in sufficient detail to permit
      evaluation of the impact on the programs. No diversion shall be made by
      the Contractor without the written consent of the Contracting Officer;
      provided, that the Contracting Officer may ratify in writing such
      diversions and such ratification shall constitute the consent of the
      Contracting Officer required by the clause. The contract may be amended
      from time to time during the course of the contract by either add or
      delete personnel, as appropriate. (End of Clause)

      *All proposed substitutions shall be submitted, in writing, to the
      Contracting Officer at least 30 days prior to the proposed substitution.
      Each request shall provide a detailed explanation of the circumstances
      necessitating the proposed substitution, a complete resume and any other
      information required by CMS. All proposed substitutions shall have
      qualifications equal, to or greater than the person being replaced.

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G.5 GOVERNMENT PROJECT OFFICER (PO)/CONTRACT SPECIALIST

a.    The Project Officer (PO) for this task order is Ms. Connie Leonard. Her
      address is:

                  Centers for Medicare and Medicaid Services
                  7500 Security Blvd.
                  ATTN: Ms. Connie Leonard
                  Mailstop: C3-14-20
                  Baltimore, MD 21244-1850
                  (410) 786-0627

b.    The Project Officer is responsible for: (1) monitoring the Contractor's
      technical progress, including the surveillance and assessment of
      performance and compliance with all substantive project objectives; (2)
      interpreting the statement of work and any other technical performance
      requirements; (3) performing technical evaluation as required; (4)
      performing technical inspections and acceptances required by this
      contract; (5) assisting in the resolution of technical problems
      encountered during performance; and (6) providing technical direction in
      accordance with Section G.6.; and, (7) reviewing of invoices/vouchers.

c.    The Project Officer does not have the authority to act as agent of the
      Government under this contract beyond the roles defined in G.5.b. above.
      Only the Contracting Officer has authority to: (1) direct or negotiate any
      changes in the statement of work; (2) modify or extend the period of
      performance; (3) change the delivery schedule; (4) authorize reimbursement
      to the Contractor any costs incurred during the performance of this
      contract; or (5) otherwise change any terms and conditions of this
      contract.

d.    The Contract Specialist for this task order is Ms. Barbara Erbe. Her
      address is:

                       Centers for Medicare and Medicaid Services
                       7500 Security Blvd.
                       ATTN:  Ms. Barbara Erbe
                       Mailstop:  C2-21-15
                       Baltimore, MD 21244-1850
                       (410) 786-5142

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Contract No. HHSM-500-2005-000041
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G.6 CONTRACTING OFFICER'S RESPONSIBILITY

In accordance with FAR 52.201-1 Definitions, The term Contracting Officer means
a person with the authority to enter into, administer, and/or terminate
contracts and make related determinations and findings. The term includes
certain authorized representatives of the Contracting Officer acting within the
limits of their authority delegated by the Contracting Officer.

Notwithstanding any of the other provisions of this Contract, the Contracting
Officer shall be the ONLY individual authorized to:

      enter into and commit/bind the Government by contract for supplies or
      services;

      accept nonconforming work or waive any requirement of this Contract;

      authorize reimbursement to the Contractor for any costs incurred during
      the performance of the Contract, and

      modify any term or condition of this Contract, i.e., make any changes in
      the Statement of Work; modify/extend the period of performance; change the
      delivery schedule.

G.7 DESIGNATION OF PROPERTY ADMINISTRATOR AND PROPERTY ADMINISTRATION

a.    The CMS Property Administrator, Administrative Services Group, Office of
      Property and Space Management at (410) 786-3346, is hereby designated the
      property administration function for this contract. The Contractor agrees
      to furnish information regarding Government Property to the Property
      Administrator in the manner and to the extent required by the Property
      Administrator, his duly designated successors, and in accordance with FAR
      Part 45 and DHHS Manual entitled, Contractor's Guide for Control of
      Government Property (1990).

b.    The contractor is responsible for an annual physical inventory accounting
      for all Government property under this contract. The inventory must be
      conducted by September 30th and the form 565, Report of Accountable
      Personal Property (J-15) submitted by October 31st of each year.

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Contract No. HHSM-500-2005-000041
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c.    The inventory report shall include all items acquired, furnished, rented
      or leased under the contract. Employees who conduct the inventories should
      not be the same individuals who maintain the property records. Following
      the physical inventory, the contractor shall prepare an inventory report
      and submit the report to the CMS Property Administrator at the following
      address:

                   Centers for Medicare & Medicaid Services
                   OICS, Administrative Services Group
                   Division of Property and Space Management
                   7500 Security Blvd., Mailstop: SLL-14-06
                   Baltimore, MD 21244-1850

d.    Commercially leased software is subject to these reporting requirements.

e.    The RAC shall submit a consolidated report of all accountable Government
      property under this contract, including subcontractor inventory
      information.

f.    The final inventory report shall indicate that all items required for
      continued contract performance are acceptable and free from contamination.
      Property that is no longer usable or required shall be reported and
      disposition requested.

G.8 INVOICING AND PAYMENT

Invoicing and Payment

a.    Submission of Invoices and Place of Payment

      (i)   No more than once each month following the effective date of this
            contract, the Contractor may submit to the Government an invoice (or
            public voucher) for payment, in accordance with FAR Clause 52.216-7
            "Allowable Cost & Payment." Invoices shall be prepared in accordance
            with this contract. All invoices shall be reconciled against the RAC
            Database (40700NMSPB) or other documentation as appropriate to
            ensure collection has been made and funds recouped deposited prior
            to any invoice being paid.

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      (ii)  To expedite payment, invoices shall be sent, as follows:

            Monthly invoices (original and four copies) shall be sent directly
            to the address below (where applicable, the Contractor shall submit
            the invoice to said office via the cognizant government auditor):

            Department of Health and Human Services
            Centers for Medicare & Medicaid Services
            P.O. BOX 7520
            7500 Security Boulevard
            Baltimore, Maryland 21207-0520

      (iii) Content of Invoice (if Applicable):

            Contractor's name and invoice date;

            Contract number of other authorization for delivery of property
                 and/or services;

            Description, cost or price, and quantity of property and/or
                 services actually delivered or rendered;

            Shipping and payment terms;

            Othersubstantiating documentation or information as required by
                 the contract; and

            Name (where practicable), title, phone number, and complete
                 mailing address of responsible official to whom payment is
                 to be sent.

b.    Invoice Payment

      (i)   In accordance with FAR 52.232-33, the Centers for Medicare and
            Medicaid Services (CMS) shall only make an electronic
            reimbursement/payment.

            In accordance with FAR 52.204-7, the contractor must register in the
            Central Contractor Registration (CCR) database. Failure to register
            in CCR may prohibit CMS from making awards to your organization.

            The contractor shall notify CMS' Division of Accounting Operations
            of all EFT and address changes in CCR via the following email
            address: CCRChanges@cms.hhs.gov

      (ii)  The target date for payment pursuant to the provision of FAR Clause,
            52.216-7 "Allowable Cost and Payment" of this contract shall be 30
            calendar days after an invoice containing the information set forth
            in Paragraph "a" of this article is received in the 7 payment office
            designated herein.

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      (iii) Upon receipt of the Contractor's "completion invoice" in the payment
            office designated in Paragraph "a" of this article, payment of any
            remaining cost and fee determined to be allowable pursuant to the
            provisions of FAR Clause, 52.216-7 "Allowable Cost and Payment" of
            this contract shall be due 30 calendar days after the Contracting
            Officer approves the "completion invoice" for payment.

      (iv)  Payment shall be authorized after the Division of Accounting has
            audited the invoice in accordance with Federal Regulations. This
            audit includes verification that the invoice contains the rates/unit
            prices, those indicated in the contract or purchase order. Any
            discrepancies determined as a result of the audit, could delay the
            processing of the invoice and may result in the invoice being
            returned to the vendor for correction. Inquiries relating to
            payments should be directed to Jean Katzen on (410) 786-5423 or
            Suzanne Turgeon on (410) 786-1924.

G.9 PAYMENT BY ELECTRONIC FUNDS TRANSFER - CENTRAL CONTRACTOR REGISTRATION

a. Method of payment. (1) All payments by the Government under this contract
shall be made by electronic funds transfer (EFT), except as provided in
paragraph (a)(2) of this clause. As used in this clause, the term "EFT" refers
to the funds transfer and may also include the payment information transfer. (2)
In the event the Government is unable to release one or more payments by EFT,
the Contractor agrees to either -

      (i)   Accept payment by check or some other mutually agreeable method of
            payment; or

      (ii)  Request the Government to extend the payment due date until such
            time as the Government can make payment by EFT (but see paragraph
            (d) of this clause).

b. Contractor's EFT information. The Government shall make payment to the
Contractor using the EFT information contained in the Central Contractor
Registration (CCR) database. In the event that the EFT information changes, the
Contractor shall be responsible for providing the updated information to the CCR
database.

c. Mechanisms for EFT payment. The Government may make payment by EFT through
either the Automated Clearing House (ACH) network, subject to the rules of the
National Automated Clearing House Association, or the Fedwire Transfer System.
The rules governing Federal payments through the ACH are contained in 31 CFR
part 210.

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d. Suspension of payment. If the Contractor's EFT information in the CCR
database is incorrect, then the Government need not make payment to the
Contractor under this contract until correct EFT information is entered into the
CCR database; and any invoice or contract-financing request shall be deemed not
to be a proper invoice for the purpose of prompt payment under this contract.
The prompt payment terms of the contract regarding notice of an improper invoice
and delays in accrual of interest penalties apply.

e. Liability for uncompleted or erroneous transfers. (1) If an uncompleted or
erroneous transfer occurs because the Government used the Contractor's EFT
information incorrectly, the Government remains responsible for -

      (i)   Making a correct payment;

      (ii)  Paying any prompt payment penalty due; and

      (iii) Recovering any erroneously directed funds.

      If an uncompleted or erroneous transfer occurs because the Contractor's
      EFT information was incorrect, or was revised within 30 days of Government
      release of the EFT payment transaction instruction to the Federal Reserve
      System, and -

      (i) If the funds are no longer under the control of the payment office,
      the Government is deemed to have made payment and the Contractor is
      responsible for recovery of any erroneously directed funds; or

      (ii) If the funds remain under the control of the payment office, the
      Government shall not make payment, and the provisions of paragraph (d) of
      this clause shall apply.

f. EFT and prompt payment. A payment shall be deemed to have been made in a
timely manner in accordance with the prompt payment terms of this contract if,
in the EFT payment transaction instruction released to the Federal Reserve
System, the date specified for settlement of the payment is on or before the
prompt payment due date, provided the specified payment date is a valid date
under the rules of the Federal Reserve System.

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g. EFT and assignment of claims. If the Contractor assigns the proceeds of this
contract as provided for in the assignment of claims terms of this contract, the
Contractor shall require as a condition of any such assignment, that the
assignee shall register separately in the CCR database and shall be paid by EFT
in accordance with the terms of this clause. Notwithstanding any other
requirement of this contract, payment to an ultimate recipient other than the
Contractor, or a financial institution properly recognized under an assignment
of claims pursuant to subpart 32.8, is not permitted. In all respects, the
requirements of this clause shall apply to the assignee as if it were the
Contractor. EFT information that shows the ultimate recipient of the transfer to
be other than the Contractor, in the absence of a proper assignment of claims
acceptable to the Government, is incorrect EFT information within the meaning of
paragraph (d) of this clause.

h. Liability for change of EFT information by financial agent. The Government is
not liable for errors resulting from changes to EFT information made by the
Contractor's financial agent.

i. Payment information. The payment or disbursing office shall forward to the
Contractor available payment information that is suitable for transmission as of
the date of release of the EFT instruction to the Federal Reserve System. The
Government may request the Contractor to designate a desired format and
method(s) for delivery of payment information from a list of formats and methods
the payment office is capable of executing. However, the Government does not
guarantee that any particular format or method of delivery is available at any
particular payment office and retains the latitude to use the format and
delivery method most convenient to the Government. If the Government makes
payment by check in accordance with paragraph (a) of this clause, the Government
shall mail the payment information to the remittance address contained in the
CCR database.

G.10 CONSENT TO SUBCONTRACT

      a.    The Contractor shall be in compliance with FAR Part 44 and the
            conflict of interest and exclusions provisions of this contract when
            entering into a subcontract arrangement for the purpose of
            performing this contract.

      b.    The Contractor shall be required to complete and submit the
            Subcontract Checklist in order to obtain subcontract consent after
            award of the contract.

      c.    Consent is granted to the following subcontracts:

               Concentra Preferred Systems

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G.11 PAST PERFORMANCE REGISTRATION

In accordance with the past performance requirements of the FAR, CMS shall
require the contractor to register with the National Institutes of Health (NIH)
Contractor Performance System (CPS). The database allows for the electronic
collection, maintenance and dissemination of contractor performance information.
Contractor registration is available online at: https://cpscontractor.nih.gov.

G.12 ACCOUNTING AND APPROPRIATION DATA

            CAN NO.         SOURCE OF RECORD NO.

             TBD                09-70-0005

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Contract No. HHSM-500-2005-000041
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SECTION H - SPECIAL CONTRACT REQUIREMENTS

H.1 DELIVERABLES/INTERNET - INTRANET APPLICATIONS

If applicable, all written deliverables will include a version in Hypertext
Mark-Up Language (HTML) formatted according to Centers for Medicare and Medicaid
(CMS) Intenet, Intranet, and Extranet Standards; available online at
www.cms.gov/about/web/inetspecx.htm.

All websites. Internet applications, and content developed by Contractor shall
reside on CMS servers, follow CMS Standards and Guidelines, and fitter through
the standard agency Internet Clearance process.

If CMS agents or Contractor include information that appears on www.cms.gov or
www.medicare.gov as part of their websites, they must link directly to these
sites to ensure the validity and timeliness of the information. Duplication of
content is not permitted.

Contractor performing work on projects that include the development of Internet,
Intranet, or Extranet applications, shall schedule and meet with CMS's Web
Support Team for guidance before they begin to develop the project.

H.2. HHSAR 352-224-70 CONFIDENTIALITY OF INFORMATION (APR 1984)

      (a)   Confidential information, as used in this clause, means information
            or data of a personal nature about an individual, or proprietary
            Information or data submitted by or pertaining to an institution or
            organization.

      (b)   In addition to the types of confidential information described in
            paragraph (a) of this clause, information which might require
            special consideration with regard to the timing of its disclosure
            may derive from studies or research, during which public disclosure
            of preliminary unvalidated findings could create erroneous
            conclusions which might threaten public health or safety if acted
            upon.

      (c)   The Contracting Officer and the Contractor may, by mutual consent,
            identify elsewhere in this contract specific information and/or
            categories of information which the Government will furnish to the
            Contractor or that the Contractor is expected to generate which is
            confidential. Similarly, the Contracting Officer and the Contractor
            may, by mutual consent, identify such confidential information from
            time to time during the performance of the contract. Failure to
            agree will be settled pursuant to the "Disputes" clause.

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Contract No. HHSM-500-2005-000041
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      (d)   If it is established elsewhere in this contract that information to
            be utilized under this contract, or a portion thereof, is subject to
            the Privacy Act, the Contractor will follow the rules and procedures
            of disclosure set forth in the Privacy Act of 1974, 5 U.S.C. 552a,
            and implementing regulations and policies, with respect to systems
            of records determined to be subject to the Privacy Act.

      (e)   Confidential information, as defined In paragraph (a) of this
            clause, that is information or data of a personal nature about an
            individual, or proprietary Information or data submitted by or
            pertaining to an institution or organization, shall not be disclosed
            without the prior written consent of the individual, institution, or
            organization.

      (f)   Written advance notice of at least 45 days will be provided to the
            Contracting Officer of the Contractor's intent to release findings
            of studies or research, which have the possibility of adverse
            effects on the public or the Federal agency, as described in
            paragraph (b) of this clause. If the Contracting Officer does not
            pose any objections in writing within the 45-day period, the
            Contractor may proceed with disclosure. Disagreements not resolved
            by the Contractor and the Contracting Officer will be settled
            pursuant to the "Disputes" clause.

      (g)   Whenever the Contractor Is uncertain with regard to the proper
            handling, of material under the contract, or If the material In
            question is subject to the Privacy Act or is confidential
            Information subject to the provisions of this clause, the Contractor
            should obtain a written determination from the Contracting Officer
            prior to any release, disclosure, dissemination, or publication.

      (h)   Contracting Officer determinations will reflect the result of
            internal coordination with appropriate program and legal officials.

      (i)   The provisions of paragraph (e) of this clause shall not apply when
            the information is subject to conflicting or overlapping provisions
            in other Federal, State or local laws.

H.3 CONTRACTING PROHIBITIONS/ORGANIZATIONAL CONFLICT OF INTEREST

      a.    The RAC and all subcontractors must be in compliance with FAR 9.5,
            Conflict of Interest.

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Contract No. HHSM-500-2005-000041
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b.    In addition, Section 306 of the Medicare Prescription Drug and
      Modernization Act of 2003 stipulates that the Secretary may not enter into
      a recovery audit contract under this section with an entity to the extent
      that the entity is a fiscal intermediary under section 1816 of the Social
      Security Act (42 U.S.C. 1395h), a carrier under section 1842 of such Act
      (42 U.S.C. 1395u), or a Medicare Administrative Contractor under section
      1874A of such Act.

c.    In further carrying out the intention of the prohibition of MMA Section
      306, CMS has determined the following exclusions apply:

      (i)   For the purpose of this contract, FIs, Carriers, PSCs, COBCs, and
            DMERCs are precluded from being in a team arrangement, joint venture
            arrangement, subcontract or in a wholly owned subsidiary arrangement
            in order to perform this work.

      (ii)  If you are a Fl, Carrier, PSC, COBC, or DMERC with a wholly owned
            subsidiary, that wholly owned subsidiary is also prohibited from
            receiving an award at any tier for this work.

      (iii) Any vendor that holds a MMA 306 RAC contract is prohibited from
            entering into any other contract with CMS for the purpose of
            identifying and/or recoupment of underpayments and overpayments
            relating to Medicare claims. This prohibition shall be in effect for
            the full term of the RAC contract.

H.4 CONDITIONS FOR PERFORMANCE

In addition to the performance requirement of this contract as set forth under
Section C. DESCRIPTION/SPECIFICATIONS/WORK STATEMENT, the Contractor may be
required to comply with the requirements of any revisions in legislation or
regulations which may be enacted or implemented during the period of performance
of this contract, and are directly applicable to the performance requirements of
this contract.

In the event new legislation or regulations impacting the Contract require
immediate implementation, the Contracting Officer shall issue a change order
pursuant to FAR Clause 52.243-1, entitled Changes - Cost Reimbursement.

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Contract No. HHSM-500-2005-000041
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H.5 HHSAR 352.270-7 PAPERWORK REDUCTION ACT (JAN 2001)

(a)   In the event that it subsequently becomes a contractual requirement to
      collect or record information calling either for answers to identical
      questions from 10 or more persons other than Federal employees, or
      information from Federal employees which is outside the scope of their
      employment, for use by the Federal government or disclosure to third
      parties. The Paperwork Reduction Act of 1995 (Pub. L. 104-13) shall apply
      to this contract. No plan, questionnaire, interview guide or other similar
      device for collecting information (whether repetitive or single-time) may
      be used without first obtaining clearance from the Office of Management
      and Budget (OMB). Contractors and Project Officers should be guided by the
      provisions of 5 CFR 1320, Controlling Paperwork Burdens on the Public, and
      seek the advice of the HHS operating division or Office of the Secretary
      Reports Clearance Offers to determine the procedures for acquiring OMB
      clearance.

(b)   The Contractor shall obtain the required OMB clearance through the Project
      Officer before expending any funds or making public contacts for the
      collection of data. The authority to expend funds and proceed with the
      collection of information shall be in writing by the Contracting Officer.
      The Contractor must plan at least 120 days for OMB clearance. Excessive
      delays caused by the Government that arises out of causes beyond the
      control and without the fault or negligence of the Contractor will be
      considered in accordance with the Excusable Delays or Default clause of
      this contract.

H.6 DISPOSAL OF IMAGED MEDICAL RECORDS

Imaged medical records must be disposed of in a manner than leaves no trace of
data. The RAC shall use a method compliant with CMS operating procedures and
standards. In addition, a log of all disposed records shall be maintained by the
RAC.

H.7 HIPAA BUSINESS ASSOCIATE PROVISION

HIPAA BUSINESS ASSOCIATE PROVISION II

DEFINITIONS:

All terms used herein and not otherwise defined shall have the same meaning as
in the Health Insurance Portability and Accountability Act of 1996 ("HIPAA," 42
U.S.C. sec. 1320d) and the
<PAGE>

Contract No. HHSM-500-2005-000041
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corresponding implementing regulations. Provisions governing the Contractor's
duties and obligations under the Privacy Act (including data use agreements) are
covered elsewhere in the contract.

"Business Associate" shall mean the Contractor.

"Covered Entity" shall mean CMS' Medicare Fee for Service program and/or
Medicare's Prescription Drug Discount Care and Transitional Assistance Programs.
"Secretary" shall mean the Secretary of the Department of Health and Human
Services or the Secretary's designee.

OBLIGATIONS AND ACTIVITIES OF BUSINESS ASSOCIATE

(a)   Business Associate agrees to not use or disclose Protected Health
      Information ("PHI"), as defined In 45 C.F.R. ss. 160.103, created or
      received by Business Associate from or on behalf of Covered Entity other
      than as permitted or required by this Contract or as required by law.

(b)   Business Associate agrees to use safeguards to prevent use or disclosure
      of PHI created or received by Business Associate from or on behalf of
      Covered Entity other than as provided for by this Contract. Furthermore,
      Business Associate agrees to use appropriate administrative, physical and
      technical safeguards that reasonably and appropriately protect the
      confidentiality, integrity and availability of the electronic protected
      health information ("EPHI"), as defined in 45 C.F.R. 160.103, it creates,
      receives, maintains or transmits on behalf of the Covered Entity to
      prevent use or disclosure of such EPHI.

(c)   Business Associate agrees to mitigate, to the extent practicable, any
      harmful effect that is known to Business Associate of a use or disclosure
      of PHI by Business Associate in violation of the requirements of this
      Contract.

(d)   Business Associate agrees to report to Covered Entity any use or
      disclosure involving PHI it receives/maintains from on behalf of the
      Covered Entity that is not provided for by this Contract of which it
      becomes aware. Furthermore, Business Associate agrees to report to Covered
      Entity any security incident involving EPHI of which it becomes aware.

(e)   Business Associate agrees to ensure that any agent, including a
      subcontractor, to whom it provides PHI received from Covered Entity, or
      created or received by Business Associate on behalf of Covered Entity,
      agrees to the same restrictions and conditions that apply through this
      Contract to Business Associate with respect to such information.
      Furthermore, Business Associate agrees to ensure that its agents and
      subcontractors implement reasonable and appropriate safeguards for the PHI
      received from or on behalf of the Business Associate.

(f)   Business Associate agrees to provide access, at the request of Covered
      Entity, to PHI received by Business Associate in the course of contract
      performance, to Covered Entity or, as directed by Covered Entity, to an
      individual In order to meet the requirements under 45 CFR ss. 164.524.

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Contract No. HHSM-500-2005-000041
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(g)   Business Associate agrees to make any amendment(s) to PHI in a Designated
      Record Set that Covered Entity directs or agrees to pursuant to 45 CFR ss.
      164.526 upon request of Covered Entity.

(h)   Business Associate agrees to make internal practices, books, and records,
      including policies and procedures and PHI, relating to the use and
      disclosure of PHI received from, or created or received by Business
      Associate on behalf of Covered Entity, available to Covered Entity, or to
      the Secretary for purposes of the Secretary determining Covered Entity's
      compliance with the various rules implementing the HIPAA.

(i)   Business Associate agrees to document such disclosures of PHI and
      information related to such disclosures as would be required for Covered
      Entity to respond to a request by an individual for an accounting of
      disclosures of PHI In accordance with 45 CFR ss. 164.528.

(j)   Business Associate agrees to provide to Covered Entity, or an individual
      identified by the Covered Entity, information collected under this
      Contract, to permit Covered Entity to respond to a request by an
      Individual for an accounting of disclosures of PHI in accordance with 45
      CFR ss. 164.528.

PERMITTED USES AND DISCLOSURES BY BUSINESS ASSOCIATE

Except as otherwise limited in this Contract, Business Associate may use or
disclose PHI on behalf of, or to provide services to, Covered Entity for
purposes of the performance of this Contract, if such use or disclosure of PHI
would not violate the HIPAA Privacy or Security Rules if done by Covered Entity
or the minimum necessary policies and procedures of Covered Entity.

OBLIGATIONS OF COVERED ENTITY

(a)   Covered Entity shall notify Business Associate of any limitation(s) in its
      notice of privacy practices of Covered Entity in accordance with 45 CFR
      ss. 164.520, to the extent that such limitation may affect Business
      Associate's use or disclosure of PHI.

(b)   Covered Entity shall notify Business Associate of any changes in, or
      revocation of, permission by Individual to use or disclose PHI, to the
      extent that such changes may affect Business Associate's use or disclosure
      of PHI.

(c)   Covered Entity shall notify Business Associate of any restriction to the
      use or disclosure of PHI that Covered Entity has agreed to in accordance
      with 45 CFR ss. 164.522, to the extent that such restriction may affect
      Business Associate's use or disclosure of PHI.

PERMISSIBLE REQUESTS BY COVERED ENTITY

Covered Entity shall not request Business Associate to use or disclose PHI in
      any manner that would not be permissible under the HIPAA Privacy or
      Security Rules.

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Contract No. HHSM-500-2005-000041
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TERM OF PROVISION

(a)   The term of this Provision shall be effective as of March 10, 2005, and
      shall terminate when all of the PHI provided by Covered Entity to Business
      Associate, or created or received by Business Associate on behalf of
      Covered Entity, is destroyed or returned to Covered Entity, or, if it is
      infeasible to return or destroy PHI, protections are extended to such
      information, in accordance with the termination provisions in this
      Section.

(b)   Upon Covered Entity's knowledge of a material breach by Business
      Associate, Covered Entity shall either:

      (1)   Provide an opportunity for Business Associate to cure the breach or
            end the violation consistent with the termination terms of this
            Contract. Covered Entity may terminate this Contract for default if
            the Business Associate does not cure the breach or end the violation
            within the time specified by Covered Entity; or

      (2)   Consistent with the terms of this Contract, terminate this Contract
            for default if Business Associate has breached a material term of
            this Contract and cure is not possible; or

      (3)   If neither termination nor cure is feasible, Covered Entity shall
            report the violation to the Secretary.

(c) Effect of Termination.

      (1)   Except as provided In paragraph (2) of this section, upon
            termination of this Contract, for any reason, Business Associate
            shall return or destroy all PHI received from Covered Entity, or
            created or received by Business Associate on behalf of Covered
            Entity. This provision shall apply to PHI that is in the possession
            of subcontractors or agents of Business Associate. Business
            Associate shall retain no copies of the PHI.

      (2)   In the event that Business Associate determines that returning or
            destroying the PHI is infeasible, Business Associate shall provide
            to Covered Entity notification of the conditions that make return or
            destruction infeasible. Upon such notice that return or destruction
            of PHI is infeasible, Business Associate shall extend the
            protections of this Contract to such PHI and limit further uses and
            disclosures of such PHI to those purposes that make the return or
            destruction infeasible, for so long as Business Associate maintains
            such PHI.

MISCELLANEOUS

(a)   A reference in this Contract to a section in the Rules issued under HIPAA
      means the section as in effect or as amended,

(b)   The Parties agree to take such action as is necessary to amend this
      Contract from time to time as is necessary for Covered Entity to comply
      with the requirements of the Rules issued under HIPAA.

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Contract No. HHSM-500-2005-000041
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(c)   The respective rights and obligations of Business Associate under
      paragraph (c) of the section entitled "term of Provision" shall survive
      the termination of this Contract.

(d)   Any ambiguity in this Contract shall be resolved to permit Covered Entity
      to comply with the Rules implemented under HIPAA.

H.8 COPYRIGHTS

a.    Data first produced in the performance of this contract.

      (i)   The contractor agrees not to assert, establish, or authorize others
            to assert or establish, any claim to copyright subsisting in any
            data first produced in the performance of this contract without
            prior written permission of the contracting officer. When claim to
            copyright is made, the contractor shall affix the appropriate
            copyright notice of 17 U.S.C. 401 or 402 and acknowledgment of
            government sponsorship (including contract number) to such data when
            delivered to the government, as well as when the data are published
            or deposited for registration as a published work In the U.S.
            Copyright Office. The contractor grants to the government, and
            others acting on its behalf, a paid-up nonexclusive, irrevocable,
            worldwide license for all such data to reproduce, prepare derivative
            works, distribute copies to the public, and perform publicly, and
            display publicly, by or on behalf of the government.

      (ii)  If the government desires to obtain copyright in data first produced
            in the performance of this contract and permission has not been
            granted as set forth above, the contracting officer may direct the
            contractor to establish, or authorize the establishment of, claim to
            such copyright to the government or its designated assignee.

b.    Data not first produced in the performance of this contract.

      The contractor shall not, without prior written permission of the
      contracting officer, incorporate in data delivered under this contract any
      data not first produced in the performance of this contract and which
      contain the copyright notice of 17 U.S.C. 401 or 402, unless the
      contractor identifies such data and grants to the government.

H.9   DISSEMINATION, PUBLICATION AND DISTRIBUTION OF INFORMATION

a.    Subject to Section H.8, data and information either provided to the
      contractor or any subcontractor generated by activities under this
      contract or derived from research or studies supported by this contract
      shall be used only for purposes of this contract.

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Contract No. HHSM-500-2005-000041
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b.    Data and information either provided to the contractor, or to any
      subcontractor, generated by activities under this contract, or derived
      from research or studies supported by this contract, shall be used only
      for the purposes of the contract. It shall not a duplicated, used or
      disclosed for any purpose other than the fulfillment of the requirements
      set forth in this contract. This restriction does not limit the
      contractor's right to use data or information obtained from a
      non-restrictive source. Any questions concerning "privileged information"
      shall be referred to the contracting officer.

c.    Some data or information may require special consideration with regard to
      the timing of its disclosure. Also, some data or information, which relate
      to policy matters under consideration by the government, may also require
      special consideration with regard to the timing of its disclosure so that
      the open and vigorous debate, within the government, of possible policy
      options is not damaged.

d.    Any requests for or questions about use or release of the date or
      information or handling of material under this contract shall be referred
      to the contracting officer who must render a written determination. The
      contracting officer's determinations will reflect the results of internal
      coordination with appropriate program and legal officials.

e.    The contractor agrees not to release Medicare data and information either
      provided to the contractor, generated by activities tinder contract, or
      derived from research or studies supported by this contract without the
      prior permission of the contracting officer.

f.    Any presentation of any report, statistical or analytical material based
      on information obtained from this contract which requires special
      consideration with regard to the protection of the privacy of individuals
      or of trade secrets or privileged or confidential commercial information
      shall be subject to review by the contracting officer before
      dissemination, publication, or distribution. Presentation includes, but is
      not limited to, papers, articles, professional publications, speeches,
      testimony or interviews with public print or broadcast media.

g.    Written advance notice of at least forty-five (45) days shall be provided
      to the contracting officer of the contractors desire to release
      information where there may be a question of the protection of the privacy
      of individuals or of trade secrets or privileged or confidential
      commercial Information.

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Contract No. HHSM-500-2005-000041
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h.    The contracting officer's review shall cover confidentiality issues and
      the protection of the privacy of individuals. If the review reveals that
      the privacy of individuals, trade secrets or privileged or confidential
      commercial information is, or may be violated, the release use of the
      presentation shall be denied until the offending material is removed or
      until the contracting officer makes a formal determination, in writing,
      that confidentiality provisions, the privacy of individuals, trade secrets
      or privileged or confidential commercial information is not being
      violated.

i.    The contractor agrees to acknowledge support by CMS whenever reports of
      projects funding, in whole or in part, by this contract are published in
      any medium. The contractor shall include in any publication resulting from
      work under this contract, an acknowledgment substantially, as follows:

      "The analyses upon which this publication is based were performed under
      contract number HHSM-500-2005-000041, entitled, "MMA Section 306 Recovery
      Audit Demonstration," sponsored by the Centers for Medicare and Medicaid
      Services, Department of Health and Human Services." The conclusions and
      opinions expressed, and methods used herein are those of the author. They
      do not necessarily reflect CMS policy. The author assumes full
      responsibility for the accuracy and completeness of the ideas presented.
      Ideas and contributions to the author concerning experience in engaging
      with issues presented are welcomed. Any deviation from the above legend
      shall be approved, in writing, by the contracting officer.

H.10  FAR 52.204-7 CENTRAL CONTRACTOR REGISTRATION CENTRAL (OCT 2003)

(a)   Definitions. As used in this clause-

"Central Contractor Registration (CCR) database" means the primary Government
repository for Contractor information required for the conduct of business with
the Government.

"Data Universal Numbering System (DUNS) number" means the 9-digit number
assigned by Dun and Bradstreet, Inc. (D&B) to identify unique business entities.

"Data Universal Numbering System+4 (DUNS+4) number" means the DUNS number means
the number assigned by D&B plus a 4-character suffix that may be assigned by a
business concern. (D&B has no affiliation with this 4-character suffix.) This
4-character suffix may be

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Contract No. HHSM-500-2005-000041
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assigned at the discretion of the business concern to establish additional CCR
records for identifying alternative Electronic Funds Transfer (EFT) accounts
(see the FAR at Subpart 32.11) for the same parent concern.

"Registered in the CCR database" means that-

(1)   The Contractor has entered all mandatory information, Including the DUNS
      number or the DUNS+4 number, into the CCR database; and

(2)   The Government has validated all mandatory data fields and has marked the
      record "Active."

(b)

(1)   By submission of an offer, the offeror acknowledges the requirement that a
      prospective awardee shall be registered in the CCR database prior to
      award, during performance, and through final payment of any contract,
      basic agreement, basic ordering agreement, or blanket purchasing agreement
      resulting from this solicitation.

(2)   The offeror shall enter, in the block with its name and address on the
      cover page of its offer, the annotation "DUNS" or "DUNS+4" followed by the
      DUNS or DUNS+4 number that identifies the offeror's name and address
      exactly as stated in the offer. The DUNS number will be used by the
      Contracting Officer to verify that the offeror is registered in the CCR
      database.

(c)   If the offeror does not have a DUNS number, it should contact Dun and
      Bradstreet directly to obtain one.

(1)   An offeror may obtain a DUNS number-

(i)   If located within the United States, by calling Dun and Bradstreet at
      1-866-705-5711 or via the Internet at http://www.dnb.com; or

(ii)  If located outside the United States, by contacting the local Dun and
      Bradstreet office.

(2)   The offeror should be prepared to provide the following information:

(i)   Company legal business name.

(ii)  Tradestyle, doing business, or other name by which your entity is commonly
      recognized.

(iii) Company physical street address, city, state and Zip Code.

(iv)  Company mailing address, city, state and Zip Code (if separate from
      physical).

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Contract No. HHSM-500-2005-000041
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(v)   Company telephone number.

(vi)  Date the company was started.

(vii) Number of employees at your location.

(viii) Chief executive officer/key manager.

(ix)  Line of business (industry).

(x)   Company Headquarters name and address (reporting relationship within your
      entity).

(d) If the Offeror does not become registered in the CCR database in the time
prescribed by the Contracting Officer, the Contracting Officer will proceed to
award to the next otherwise successful registered Offeror.

(e) Processing time, which normally takes 48 hours, should be taken into
consideration when registering. Offerors who are not registered should consider
applying for registration immediately upon receipt of this solicitation.

(f) The Contractor is responsible for the accuracy and completeness of the data
within the CCR database, and for any liability resulting from the Government's
reliance on inaccurate or incomplete data. To remain registered in the CCR
database after the initial registration, the Contractor is required to review
and update on an annual basis from the date of initial registration or
subsequent updates its information in the CCR database to ensure it is current,
accurate and complete. Updating information in the CCR does not alter the terms
and conditions of this contract and is not a substitute for a properly executed
contractual document.

(1)

(i) If a Contractor has legally changed its business name, "doing business as"
name, or division name (whichever is shown on the contract), or has transferred
the assets used in performing the contract, but has not completed the necessary
requirements regarding novation and change-of-name agreements in Subpart 42.12,
the Contractor shall provide the responsible Contracting Officer a minimum of
one business day's written notification of its intention to:

(A) Change the name in the CCR database;

(B) Comply with the requirements of Subpart 42.12 of the FAR;

(C) Agree in writing to the timeline and procedures specified by the responsible
Contracting Officer. The Contractor must provide with the notification
sufficient documentation to support the legally changed name.

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Contract No. HHSM-500-2005-000041
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(ii) If the Contractor fails to comply with the requirements of paragraph
(g)(1)(i) of this clause, or fails to perform the agreement at paragraph
(g)(1)(i)(C) of this clause, and, in the absence of a properly executed novation
or change-of-name agreement, the CCR information that shows the Contractor to be
other than the Contractor indicated in the contract will be considered to be
incorrect information within the meaning of the "Suspension of Payment"
paragraph of the electronic funds transfer (EFT) clause of this contract.

(2) The Contractor shall not change the name or address for EFT payments or
manual payments, as appropriate, in the CCR record to reflect an assignee for
the purpose of assignment of claims (see FAR Subpart 32.8, Assignment of
Claims). Assignees shall be separately registered in the CCR database.
Information provided to the Contractor's CCR record that indicates payments,
including those made by EFT, to an ultimate recipient other than that Contractor
will be considered to be incorrect information within the meaning of the
"Suspension of Payment" paragraph of the EFT clause of this contract.

(g) Offerors and Contractors may obtain information on registration and annual
confirmation requirements via the Internet at http://www.ccr.gov or by calling
1-888-227-2423, or 269-961-5757.

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Contract No. HHSM-500-2005-000041
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SECTION I - CONTRACT CLAUSES

I.1 FEDERAL ACQUISITION REGULATION CLAUSES

FAR 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

This contract incorporates one or more clauses by reference, with the same force
and effect as if they were given in full text. Upon request, the Contracting
Officer will make their full text available. Also, the full text of a clause may
be accessed electronically at this/these address(es)

      www.arnet.gov/far/

<TABLE>
<CAPTION>
 NUMBER                         TITLE                          DATE
---------       --------------------------------------       --------
<S>             <C>                                          <C>
52.202-1        DEFINITIONS                                  MAY 2001
52.203-3        GRATUITIES                                   APR 1984
52.203-5        COVENANT AGAINST CONTINGENT FEES             APR 1984
52.203-6        RESTRICTIONS ON SUBCONTRACTOR SALES
                TO THE GOVERNMENT                            JUL 1995
52.203-7        ANTI-KICKBACK PROCEDURES                     JUL 1995
52.203-8        CANCELLLATION, RESCISSION, AND
                RECOVERY OF FUNDS FOR ILLEGAL
                ACTIVITIES                                   JAN 1997
52.203-10       PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR
                IMPROPER ACTIVITY                            JAN 1997
52.203-12       LIMITATION ON PAYMENTS TO INFLUENCE
                CERTAIN FEDERAL TRANSACTIONS                 JUN 1997
52.204-4        PRINTING OR COPYING DOUBLE-SIDED ON
                RECYCLED PAPER                               AUG 2000
52.204-7        CENTRAL CONTRACTOR REGISTRATION              OCT 2003
52.209-6        PROTECTING THE GOVERNMENT'S INTEREST
                WHEN SUBCONTRACTING WITH CONTRACTING
                WITH CONTRACTORS DEBARRED, SUSPENDED,
                OR PROPOSED FOR DEBARMENT                    JUL 1995
52.215-2        AUDIT AND RECORDS - NEGOTIATION              JUN 1999
52.215-8        ORDER OF PRECEDENCE - UNIFORM
                CONTRACT                                     OCT 1997
52.215-11       PRICE REDUCTION FOR DEFECTIVE COST OR
                PRICING DATA - MODIFICATIONS                 OCT 1997
52.215-13       SUBCONTRACTOR COST OR PRICING DATA -
                MODIFICATIONS                                OCT 1997
52.215-15       PENSION ADJUSTMENTS AND ASSET
                REVERSIONS                                   DEC 1998
</TABLE>

<PAGE>

Contract No. HHSM-500-2005-000041
Page 36 of 40

<TABLE>
<S>             <C>                                          <C>
52.215-18       REVERSION OR ADJUSTMENT OF PLANS FOR
                POST-RETIREMENT BENEFITS (PRB) OTHER
                THAN PENSIONS                                OCT 1097
52.215-21       REQUIREMENTS FOR COST OR PRICING DATA
                OR INFORMATION OTHER THAN COST OR
                PRICING DATA-MODIFICATIONS                   OCT 1997
52.216-7        ALLOWABLE COST AND PAYMENT                   DEC 2002
52.216-7        REQUIREMENTS                                 OCT 1995
52.222-3        CONVICT LABOR                                JUN 2003
52.222-21       PROHIBITION OF SEGREGATED FACILITIES         FEB 1999
52.222-26       EQUAL OPPORTUNITY                            APR 2002
52.222-35       EQUAL OPPORTUNITY FOR SPECIAL DISABLED
                VETERANS, VETERANS OF THE VIETNAM ERA,
                AND OTHER ELIGIBLE VETERANS                  DEC 2001
52.222-36       AFFIRMATIVE ACTION FOR WORKERS WITH
                DISABILITIES                                 JUN 1998
52.222-37       EMPLOYMENT REPORTS ON SPECIAL DISABLED
                VETERANS, AND VETERANS OF THE VIETNAM
                ERA, AND OTHER ELIGIBLE VETERANS             DEC 2001
52.223-6        DRUG-FREE WORKPLACE                          MAR 2001
52.223-14       TOXIC CHEMICAL RELEASE REPORTING             AUG 2003
52.224-1        PRIVACY ACT NOTIFICATION                     APR 1984
52.224-2        PRIVACY ACT                                  APR 1984
52.227-17       RIGHTS IN DATA - SPECIAL WORKS               JUN 1987
52.229-3        FEDERAL, STATE, AND LOCAL TAXES              JAN 1991
52.230-2        COST ACCOUNTING STANDARDS                    APR 1998
52.230-3        DISCLOSURE AND CONSISTENCY OF COST
                ACCOUNTING PRACTICES                         APR 1998
52.230-6        ADMINISTRATION OF COST ACCOUNTING
                STANDARDS                                    NOV 1999
52.232-25       PROMPT PAYMENT                               OCT 2003
52.232-33       PAYMENT BY ELECTRONIC FUNDS TRANSFER-
                CENTRAL CONTRACTOR REGISTRATION              OCT 2003
52.233-1        DISPUTES- ALTERNATE 1                        JUL 2002
52.233-2        SERVICE OF PROTEST                           AUG 1996
52.233-3        PROTEST AFTER AWARD (AUG 1996) - ALT I       JUN 1985
52.239-1        PRIVACY OR SECURITY SAFEGUARDS               AUG 1998
52.242-1        NOTICE OF INTENT TO DISALLOW COSTS           APR 1984
52.242-3        PENALTIES FOR UNALLOWABLE COSTS              MAR 2001
52.242-13       BANKRUPTCY                                   JUL 1995
52.243-2        CHANGES - COST-REIMBURSEMENT                 AUG 1997
</TABLE>

<PAGE>

Contract No. HHSM-500-2005-000041
Page 37 of 40

<TABLE>
<S>             <C>                                          <C>
52.244-2        SUBCONTRACTS ALTERNATE II                    AUG 1998
52.245-1        PROPERTY RECORDS                             APR 1984
52.246-25       LIMITATION OF LIABILITY - SERVICES           FEB 1997
52.249-6        TERMINATION (COST-REIMBURSEMENT)             MAY 2004
52.251-1        GOVERNMENT SUPPLY SOURCES                    APR 1984
52.253-1        COMPUTER GENERATED FORMS                     JAN 1991
</TABLE>

1.2. DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATIONS (HHSAR)

<TABLE>
<CAPTION>
  NUMBER                         TITLE                         DATE
----------      ---------------------------------------      --------
<S>             <C>                                          <C>
352.202-1       DEFINITIONS-ALTERNATE                        JAN 2001
352.228-7       INSURANCE - LIMITATION TO THIRD PERSONS      DEC 1991
352.232-9       WITHHOLDING OF CONTRACT PAYMENTS             APR 1984
352.233-70      LITIGATION AND CLAIMS                        APR 1984
352.242-71      FINAL DECISIONS ON AUDIT FINDINGS            APR 1984
352.270-1       ACCESSIBILITY OF MEETINGS, CONFERENCES,
                AND SEMINARS TO PERSONS WITH
                DISABILITIES                                 JAN 2001
352.270-6       PUBLICATION AND PUBLICITY                    JUL 1991
</TABLE>

I.3. 52.215-19 NOTIFICATION OF OWNERSHIP CHANGES-OCT 1997

      (a)   The Contractor shall make the following notifications in writing:

            (1)   When the Contractor becomes aware that a change in its
                  ownership has occurred, or is certain to occur, that could
                  result in changes in the valuation of its capitalized assets
                  in the accounting records, the Contractor shall notify the
                  Administrative Contracting Officer (ACO) within 30 days.

            (2)   The Contractor shall also notify the ACO within 30 days
                  whenever changes to asset valuations or any other cost changes
                  have occurred or are certain to occur as a result of a change
                  in ownership.

      (b)   The Contractor shall -

            (1)   Maintain current, accurate, and complete inventory records of
                  assets and their costs;

            (2)   Provide the AGO or designated representative ready access to
                  the records upon request;

            (3)   Ensure that all individual and grouped assets, their
                  capitalized values, accumulated depreciation or amortization,
                  and remaining useful lives are identified accurately before
                  and after each of the Contractor's ownership changes; and

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Contract No. HHSM-500-2005-000041
Page 38 of 40

            (4)   Retain and continue to maintain depreciation and amortization
                  schedules based on the asset records maintained before each
                  Contractor ownership change.

      (c)   The Contractor shall include the substance of the clause in all
            subcontracts under this contract that meet the applicability
            requirement of FAR 15.408(k).

I.4 FAR 32.244-6 SUBCONTRACTS FOR COMMERCIAL ITEMS.
                        (JUL 2004)

      (a)   Definitions. As used in this clause-

            "Commercial item" has the meaning contained Federal Acquisition
            Regulation 2.101, Definitions.

            "Subcontract" includes a transfer of commercial items between
            divisions, subsidiaries, or affiliates of the Contractor or
            subcontractor at any tier.

      (b)   To the maximum extent practicable, the Contractor shall incorporate,
            and require its subcontractors at all tiers to incorporate,
            commercial items or non-developmental items as components of items
            to be supplied under this contract.

      (c)

            (1)   The Contractor shall insert the following clauses in
                  subcontracts for commercial items:

                  (i)   52.219-8, Utilization of Small Business Concerns (May
                        2004) (15 U.S.C. 837(d)(2)(3)), in all subcontracts that
                        offer further subcontracting opportunities. If the
                        subcontract (except subcontracts to small business
                        concerns) exceeds $500,000 ($1,000,000 for construction
                        of any public facility), the subcontractor must include
                        52.219-8 in lower tier subcontracts that offer
                        subcontracting opportunities.

                  (ii)  52.222-26, Equal Opportunity (Apr 2002) (E.O.11246).

                  (iii) 52.222-35, Equal Opportunity for Special Disabled
                        Veterans, Veterans of the Vietnam Era, and Other
                        Eligible Veterans (Dec 2001) (38 U.S.C. 4212(a));

                  (iv)  52.222-36, Affirmative Action for Workers with
                        Disabilities (Jun 1998) (29 U.S.C. 793).

                  (v)   52.247-64, Preference for Privately Owned U.S.-Flag
                        Commercial Vessels (APR 2003) (46 U.S.C. Appx 1241 and
                        10 U.S.C. 2631) (flow down required in accordance with
                        paragraph (d) of FAR clause 522.47-64).

<PAGE>

Contract No. HHSM-500-2005-000041
Page 39 of 40

            (2)   While not required, the Contractor may flow down to
                  subcontracts for commercial Items a minimal number of
                  additional clauses necessary to satisfy its contractual
                  obligations.

      (d)   The Contractor shall include the terms of this clause, including
            this paragraph (d), in subcontracts awarded under this contract.

<PAGE>

Contract No. HHSM-500-2005-000041
Page 40 of 40

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTSS.

SECTION J - LIST OF ATTACHMENTS

      J.1 STATEMENT OF WORK- NO. 40700NMSPB
      J.2 GLOSSARY

<PAGE>

                                 ATTACHMENT J-1

                        STATEMENT OF WORK NO. 40700NMSPB

                        CONFIDENTIAL TREATMENT REQUESTED
   CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE MARKED
WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

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

                                 ATTACHMENT J-1

                        STATEMENT OF WORK NO. 40700NMSPB

--------------------------------------------------------------------------------
<PAGE>

ATTACHMENT J-1

              STATEMENT OF WORK FOR THE RECOVERY AUDIT CONTRACTORS
                       PARTICIPATING IN THE DEMONSTRATION
                         (NON-MEDICARE SECONDARY PAYER)
                                 NO. 40700NMSPB

I.    PURPOSE

The purpose of this contract will be to support the Centers for Medicare &
Medicaid Services (CMS) in conducting a demonstration project in the state of
California using recovery audit contractors (RACs) to provide recovery audit
services to identify underpayments and overpayments and/or recoup overpayments
under the Medicare program for services for which payment is made under part A
or B of title XVIII of the Social Security Act. CMS is utilizing this
demonstration project to evaluate the use of recovery audit services in
identifying and recouping overpayments determined during the post payment claim
review process and in identifying and recovering Non-Medicare Secondary Payer
(MSP) non beneficiary Group Health Plan (GHP) based overpayments. This package
includes the requirements for RACs in identifying and recouping Non-Medicare
Secondary Payer (MSP) non beneficiary Group Health Plan (GHP) based
overpayments.

CMS envisions the following task:

      1.    Identifying Medicare claims through the post payment claims review
            process that contain non-MSP underpayments and overpayments for
            which payment was made under part A or B of title XVIII of the
            Social Security Act. This may NOT include identifying overpayments
            associated with non-MSP voluntary refunds.

            a.    For each of these overpayments identified, the RAC SHALL
                  attempt recoupment.

      For any RAC-initiated overpayment that is appealed by the provider, the
      RAC shall provide support to CMS throughout the administrative appeals
      process and, where applicable, a subsequent appeal to the appropriate
      Federal court.

      Note: Duplicate primary payments to providers (where both Medicare and
      another payer have made payment) are MSP recovery claims against the
      provider and are not within the scope of this SOW.

II.   BACKGROUND

STATUTORY REQUIREMENTS

Section 306 of the Medicare Prescription Drug, Improvement and Modernization Act
of 2003 (MMA) requires the Secretary of Health and Human Services (the
Secretary) to conduct a demonstration project for the Medicare population to
demonstrate the use of RACs under the Medicare Integrity Program in identifying
underpayments and overpayments and recouping overpayments under the Medicare

                                        1

<PAGE>

ATTACHMENT J-1

program associated with services for which payment is made under part A or B of
title XVIII of the Social Security Act.

CMS is required to actively review Medicare payments for services to determine
accuracy and if errors are noted to pursue the collection of any payment that it
determines was in error. To gain additional knowledge research the following
documents:

      -     The Financial Management Manual, the Program Integrity Manual (PIM),
            and the Medicare Secondary Payer Manual (see
            www.cms.hhs.gov/manuals) published by CMS for use by CMS
            contractors,

      -     The Debt Collection Improvement Act of 1996

      -     The Federal Claims Collection Act, as amended and

      -     Related regulations found in 42 CFR.

III. SPECIFIC TASKS

Independently and not as an agent of the Government, the Contractor shall
furnish all the necessary services, qualified personnel, material, equipment,
and facilities, not otherwise provided by the Government, as needed to perform
the Statement of Work.

TASK 1 - PROJECT ADMINISTRATION

A.    Initial Meeting with PO and CMS Staff

      The RAC's key project staff shall meet in Baltimore, Maryland with the PO
      and relevant CMS staff within two weeks of the date of award (DOA) to
      discuss the project plan. The specific focus will be to discuss the time
      frames for the tasks outlined below. Within 2 weeks of this meeting, the
      RAC will submit a formal project plan outlining the resources and time
      frame for completing the work outlined. It will be the responsibility of
      the RAC to update this project plan as necessary during the course of the
      demonstration. In particular, the RAC will be responsible for notifying
      CMS when any changes in the project plan will affect the ability to
      complete tasks according to the agreed upon time frame. No changes shall
      be made to the project plan without prior approval from the PO.

B.    MONTHLY CONFERENCE CALLS

      On a monthly basis the RAC's key project staff will participate in a
      conference call with CMS to discuss the progress of the work, evaluate any
      problems, and discuss plans for immediate next steps of the project. The
      RAC will be responsible for setting up the conference calls, preparing an
      agenda documenting the minutes of the meeting and preparing any other
      supporting materials as needed.

                                        2

<PAGE>

ATTACHMENT J-1

C.    MONTHLY PROGRESS REPORTS

      The RAC shall submit monthly administrative progress reports outlining all
      work accomplished during the previous month.

      At a minimum, such reports shall cover the following items:

      -     Activities during the previous month:

            -     For the identification of overpayment/underpayments and the
                  collection of overpayments: underpayments and overpayments
                  identified, overpayments demanded, overpayments disputed with
                  status, "intent to refer" letters issued, overpayments
                  collected in full, overpayments partially collected,
                  overpayments resolved without collection (and the basis for
                  resolution).

            -     For the recovery of uncollectible non-MSP debts: debts
                  collected in full, debts partially collected, debts resolved
                  without collection (and the basis for resolution), reports on
                  all other standard activities as described in the accepted
                  proposal or as agreed upon by CMS and the RAC.

      -     Problems encountered and potential future problems including actual
            and possible delays in deliverables.

      -     Activities planned for the forthcoming month

      -     A brief discussion of substantive findings to date, if any

      Each monthly report shall be submitted by the close of business on the
      fifth business day following the end of the month by email to the CMS PO
      and one copy accompanying the contractor's voucher that is sent to the CMS
      contracting officer.

D.    RAC DATABASE

      CMS will provide a RAC Database to facilitate communication between the
      RACs, CMS, certain other contractors, and any other CMS-identified entity.
      CMS anticipates that the RAC Database will be a web-based application and
      that the RAC will connect to the RAC Database through a T1 line. CMS will
      provide user ID's/passwords to access the RAC Database. The RAC will be
      responsible for providing the appropriate equipment so that they can
      access the database.

TASK  2 - IDENTIFICATION OF NON- MSP OVERPAYMENTS

Identification of Non-MSP Medicare Overpayments and Underpayments

                                        3

<PAGE>

ATTACHMENT J-1

The RAC(s) shall pursue the identification of Medicare claims which contain
non-MSP overpayments and underpayments for which payment was trade or should
have been made under part A or B of title XVIII of the Social Security Act.

A.    NON-MSP OVERPAYMENTS/UNDERPAYMENTS INCLUDED IN THIS STATEMENT OF WORK

      Unless prohibited by Section 2B, the RAC may attempt to identify
      overpayments/underpayments that result from any of the following:

      -     Incorrect payment amounts (exception: in cases where CMS issues
            instructions directing contractors to not pursue certain incorrect
            payments made)

      -     Non-covered services (including services that are not reasonable and
            necessary under section 1862(a)(1)(A) of the Social Security Act).

      -     Incorrectly coded services (including DRG miscoding)

      -     Duplicate services

      The RAC may attempt to identify non-MSP overpayments/underpayments on
      claims (including inpatient hospital claims) -

      -     Appropriately submitted to carriers and intermediaries in
            California, or

      -     Appropriately submitted to DMERCs for services provided to
            beneficiaries with a primary residence in California.

B.    NON-MSP OVERPAYMENTS/UNDERPAYMENTS EXCLUDED FROM THIS STATEMENT OF WORK

      The RAC may NOT attempt to identify overpayments/underpayments arising
      from any of the following:

            1.    SERVICES PROVIDED UNDER A PROGRAM OTHER THAN MEDICARE
                  FEE-FOR-SERVICE

                  For example, RACs may NOT attempt to identify
                  overpayments/underpayments in the Medicare Managed Care
                  program, Medicare drug card program or drug benefit program.

            2.    COST REPORT SETTLEMENT PROCESS

                  RACs may NOT attempt to identify underpayments and
                  overpayments that result from Indirect Medical Education (IME)
                  and Graduate Medical Education (GME) payments

            3.    EVALUATION AND MANAGEMENT (E&M) SERVICES THAT ARE INCORRECTLY
                  CODED (CPT CODES 99201-99499)

                  The RAC shall NOT attempt to identify
                  overpayments/underpayments that result form a provider
                  mis-coding the E&M service (e.g., billing for a level 4 visit
                  when the medical record only supports

                                        4

<PAGE>

ATTACHMENT J-1

                  a level 3 visit). However, the RAC MAY attempt to identify
                  overpayments/underpayments arising from:

                        -     E&M services that are not reasonable and necessary

                        -     violations of Medicare's global surgery payment
                              rules even in cases involving E&M services

            4.    CLAIMS PAID OR DENIED IN THE CURRENT FISCAL YEAR.

                  The RAC shall not attempt to identify any overpayment or
                  underpayment in the current fiscal year. The RAC shall limit
                  its work to claims paid in prior fiscal years.

            5.    CLAIMS WHERE THE MEDICARE REGULATIONS INDICATE THAT THE
                  MEDICARE PROGRAM DOES NOT HAVE THE AUTHORITY TO REOPEN CLAIMS

                  The RAC shall not attempt to identify any overpayment or
                  underpayment more than 4 years past the date of the initial
                  determination made on the claim. Any overpayment or
                  underpayment inadvertently identified by the RAC after this
                  timeframe shall be set aside. The RAC shall take no further
                  action on these claims except to indicate the appropriate
                  status code on the RAC Database.

            6.    CLAIMS WHERE THE BENEFICIARY IS LIABLE FOR THE OVERPAYMENT
                  BECAUSE THE PROVIDER IS WITHOUT FAULT WITH RESPECT TO THE
                  OVERPAYMENT

                  The RAC shall not attempt to identify any overpayment where
                  the provider is without fault with respect to the overpayment.
                  If the provider is without fault with respect to the
                  overpayment, liability switches to the beneficiary. The
                  beneficiary would be responsible for the overpayment and would
                  receive the demand letter. The RAC may not attempt recoupment
                  from a beneficiary. One example of this situation may be a
                  service that was not covered because it was not reasonable and
                  necessary but the beneficiary signed an Advance Beneficiary
                  Notice. Chapter 3 of the PIM and HCFA/CMS Ruling #95-1 explain
                  Medicare liability rules. Without fault regulations can be
                  found at 42 CFR 405.350 and further instructions can be found
                  in Chapter 3 of the Financial Management Manual.

            7.    RANDOM SELECTION OF CLAIMS

                  The RAC shall adhere to Section 935 of the Medicare
                  Prescription Drug, Improvement and Modernization Act of 2003,
                  which prohibits the use of random claim selection for any
                  purpose other than to establish an error rate. Therefore, the
                  RAC shall not use random review in order to identify cases for
                  which it will order medical records from the provider.
                  Instead, the RAC shall utilize data analysis techniques in
                  order to identify those claims most likely to contain
                  overpayments. The process is called "targeted review". The RAC
                  may not target a claim solely because it is a high dollar

                                        5

<PAGE>

ATTACHMENT J-1

                  claim but may target a claim because it is high dollar AND
                  contains other information that leads the RAC to believe it is
                  likely to contain an overpayment.

            8.    CLAIMS IDENTIFIED WITH A SPECIAL PROCESSING NUMBER

                  Claims containing Special Processing Numbers are involved in a
                  Medicare demonstration or have other special processing rules
                  that apply. These claims are not subject to review by the RAC.

            9.    PREPAYMENT REVIEW

                  The RAC shall identify Medicare overpayments and underpayments
                  using the post payment claims review process. Any other source
                  of identification of a Medicare overpayment or underpayment
                  (such as prepayment review) is not included in the scope of
                  this contract.

C.    PREVENTING OVERLAP

      1.    PREVENTING OVERLAP WITH CONTRACTOR PERFORMING CLAIMS REVIEW AND/OR
            RESPONSIBLE FOR RECOVERIES.

            In order to minimize the impact on the provider community, CMS would
            like to avoid situations where the RAC and another Medicare
            contractor are working on the same claim. Therefore, the RAC
            Database will be used by the RAC to determine if another entity
            already has the provider and/or claim under review. The RAC Database
            will include a master table of excluded providers and claims. This
            table will be updated on an as needed basis. Before beginning a
            claim review the RAC shall input the claim(s) into the RAC Database.
            If another entity has the provider and/or claim under review the RAC
            Database will notify the RAC. If the RAC Database does not inform
            the RAC that the provider and/or claim is under review the RAC may
            proceed with the review. As updates to the master table are
            received, the RAC Database will scan all current entries in the
            database. If any exist that are now excluded the RAC will be
            notified through a report. The following contractors may input
            providers and/or claims into the master table for exclusion:

                  -     Part B physician or supplier claims: the carrier medical
                        review unit for the state.

                  -     Part A claims (other than inpatient PPS hospital claims
                        and long term care hospital claims): the intermediary
                        medical review unit for the state.

                  -     Part A inpatient PPS hospital claims and long term
                        hospital claims: the Quality Improvement Organization
                        (QIO) for the state,

                                        6

<PAGE>

ATTACHMENT J-1

                  -     Durable Medical Equipment, Prosthetics, Orthotics and
                        Supplies: the appropriate DMERC medical review unit or
                        full PSC medical review unit for the state.

            For the purposes of this SOW, these contractors will be called
            "affiliated contractors" or ACs.

            The AC will only identify the claim as not available for review for
            the following reasons: 1) the AC has an ongoing postpay review on
            the claim, 2) the AC previously made a prior authorization
            determination on the claim, 3) the AC previously requested the
            medical record associated with the claim. or 4) the AC previously
            issued a full or partial denial for the claim. CMS will instruct ACs
            that once a claim is identified as available, the AC may not begin a
            postpayment medical review case on similar claims (i.e., same
            provider, same services). CMS policy is that the first organization
            to identify the overpayment gets to develop the case.

      2.    PREVENTING RAC OVERLAP WITH CONTRACTORS, CMS, OGC, DOJ, OIG AND/OR
            OTHER LAW ENFORCEMENT ENTITIES PERFORMING POTENTIAL FRAUD REVIEW.

            CMS must ensure that RAC activities do not interfere with potential
            fraud reviews being conducted by Benefit Integrity (BI) Program
            Safeguard Contractors (PSCs) or DMERC BI units or with potential
            fraud investigations being conducted by law enforcement. Therefore,
            RACs shall input all claims into the RAC Database before attempting
            to identify or recover overpayments. (The master table described
            above will be utilized.) The following contractors may input
            providers and/or claims into the master table for exclusion:

                  -     The BI PSC for the state and/or

                  -     The DMERC BI unit with claims jurisdiction for
                        beneficiaries residing in the state

            For the purposes of this SOW, these contractors will be called "BI
            contractors."

            (See Task 7, section F regarding how BI contractors or CMS can
            recall cases at any time.) CMS policy is that the BI contractor's
            (and law enforcement's) needs take precedence over the RAC's desire
            to pursue a case.

D.    OBTAINING AND STORING MEDICAL RECORDS FOR NON-MSP REVIEWS

      Whenever needed for non-MSP reviews, the RAC may obtain medical records by
      going onsite to the provider's location to view/copy the records or by
      requesting that the provider mail/fax the records to the RAC. If the RAC
      attempts an onsite visit and the provider refuses to allow access to their
      facility, the RAC may not make an overpayment determination based upon the
      lack of access. Instead, the RAC shall request the needed records in
      writing.

                                        7

<PAGE>

ATTACHMENT J-1

      1.    PAYING FOR MEDICAL RECORDS

            a.    RACs shall pay for medical records

                  Should the RAC guest medical records associated with:

                        -     an acute care inpatient prospective payment system
                              (PPS) hospital (DRG) claim,

                        -     a Long Term Care hospital claim,

                  the RAC shall pay the provider for producing the records in
                  accordance with the current formula or any applicable payment
                  formula created by state law. (The current per page rate is:
                  medical records photocopying costs at a rate of $.12 per page
                  for reproduction of PPS provider records and $.15 per page for
                  reproduction of non-PPS institutions and practitioner records,
                  plus first class postage. Specifically, hospitals and other
                  providers (such as critical access hospitals) under a Medicare
                  cost reimbursement system, receive no photocopying
                  reimbursement. Capitation providers such as HMOs and dialysis
                  facilities receive $.12 per page. The formula calculation can
                  be found at 42 CFR Section 476.78(c). All changes to the
                  formula calculation or rate will be published in the Federal
                  Register.)

            b.    RACs may pay for medical records.

                  Should the RAC request medical records associated with any
                  other type of claim including but not limited to the
                  facilities listed in PIM 1.12, paragraph 2, the RAC may (but
                  is not required to) pay the provider for producing the record
                  using any formula the RAC desires.

2.    UPDATING THE CASE FILE

      The RAC shall indicate in the case file (See Task 7, section H for
      additional case record maintenance instructions.)

            -     A copy of all request letters,

            -     Dates of any calls made, and

            -     Notes indicating what transpired during the call.

3.    ASSESSING AN OVERPAYMENT FOR FAILING TO PROVIDE REQUESTED MEDICAL RECORDS

      Pursuant to the instructions found in PIM 3.10 and Exhibits 9-12, the RAC
      may find the claim to be an overpayment if medical records are requested
      and not received within 45 days. Additional letters/calls are at the
      discretion of the RAG.

                                        8

<PAGE>

ATTACHMENT J-1

      4.    STORING AND SHARING MEDICAL RECORDS

            The RAC must make available, to all ACs, CMS, OIG, (and others as
            indicated by the PO) any requested medical record.

            a.    Storing and sharing PAPER medical records

                  Should the RAC choose to store and share paper medical records
                  upon request, they shall:

                        -     Store medical record NOT associated with an
                              overpayment for 1 year,

                        -     Store medical records associated with an
                              overpayment for duration of the contract,

                        -     Send the copy via mail or fax within 10 calendar
                              days of the request,

                        -     Maintain a log of all requests for medical records
                              indicating at least the requester, a description
                              of the medical record being requested, the date
                              the request was received, and the date the request
                              was fulfilled. The RAC Database will not be
                              available for this purpose.

            b.    Storing and sharing IMAGED medical records

                  Should the RAC choose to store and share imaged medical
                  records, they shall:

                        -     Provide a document management system that meets
                              the requirements outlined in Appendix 1

                        -     Store medical record NOT associated with an
                              overpayment for 1 year,

                        -     Store medical records associated with an
                              overpayment for duration of the contract,

                        -     Maintain a log of all requests for medical records
                              indicating at least the requester, a description
                              of the medical record being requested, the date
                              the request was received, and the date the request
                              was fulfilled. The RAC Database will not be
                              available for this purpose.

                                        9

<PAGE>

ATTACHMENT J-1

Upon the end of the demonstration or contract, the RAC shall send copies of the
imaged records to the contractor specified by the PO.

E.    COVERAGE AND/OR CORRECT CODING REVIEW PROCESS

      1.    COVERAGE CRITERIA.

            The RAC shall consider a service to be covered under the Medicare
            program if it meets all of the following conditions:

                  a.    It is included in one of the benefit categories
                        described in Title XVIII of the Act;

                  b.    It is not excluded from coverage on grounds other than
                        1862(a)(1); and

                  c.    It is reasonable and necessary under Section 1862(a)(1)
                        of the Act.

      2.    MINOR OMISSIONS.

            The RAC shall not make denials on minor omissions such as missing
            dates or signatures.

      3.    MEDICARE POLICIES AND ARTICLES.

            The RAC shall comply with all National Coverage Determinations
            (NCDs), Coverage Provisions in Interpretive Manuals, national
            coverage and coding articles, local coverage determinations (LCDs)
            (formerly called local medical review policies (LMRPs) and local
            coverage/coding articles in their jurisdiction. NCDs, LMRPs/LCD and
            local coverage/coding articles can be found in the Medicare Coverage
            Database (www.cms.hhs.gov/mcd). Coverage Provisions in Interpretive
            Manuals can be found in various parts of the Medicare Manuals. In
            addition, the RAC shall comply with all relevant joint signature
            memos forwarded to the RAC by the project officer.

      4.    INTERNAL GUIDELINES.

            As part of its process of reviewing claims for coverage and coding
            purposes, the RAC may (but is not required to) develop detailed
            written review guidelines. For the purposes of this SOW, these
            guidelines will be called "Internal Guidelines." Internal
            Guidelines, in essence, will allow the RAC to operationalize carrier
            and intermediary LCDs and NCDs. Internal Guidelines shall specify
            what information should be reviewed by reviewers and the appropriate
            resulting determination. The RAC need not hold public meetings or
            seek public comments on their proposed internal guidelines. However,
            they must make their Internal Guidelines available to CMS, ACs, BI

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            contractor and the public upon request. Internal Guidelines shall
            not create or change policy.

      5.    ADMINISTRATIVE RELIEF FROM REVIEW IN THE PRESENCE OF A DISASTER.

            The RAC shall comply with PIM 3.2.2 regarding administrative relief
            from review in the presence of a disaster.

      6.    EVIDENCE.

            The RAC shall only identify a claims overpayment where there is
            supportable evidence of the overpayment. There are two primary ways
            of identification:

                  a)    Through "automated review" of claims data without human
                        review of medical or other records; and

                  b)    Through "complex review" which entails human review of a
                        medical record or other documentation.

      7.    AUTOMATED COVERAGE/CODING REVIEWS.

            The RAC shall use automated review only in situations where there is
            certainty that the services is not covered or incorrectly coded, was
            a duplicate payment or other claims related overpayment. An
            automated review may only be performed if the requirements of PIM
            3.5.1 are met. For example, if the National Coverage Determination
            (NCD) or Local Coverage Determination (LCD) states that the service
            is never considered reasonable and necessary for people with
            condition X, the RAC may identify this overpayment via an automated
            review. On the other hand, if the NCD states that the service is
            rarely considered reasonable and necessary for people with condition
            X, the RAC shall conduct a complex review in order to determine if
            an overpayment exists.

      8.    COMPLEX COVERAGE/CODING REVIEWS.

            The RAC shall use complex medical review in situations where the
            requirements of PIM 3.5.1 are not met. Complex medical review is
            used in situations where there is a high probability (but not
            certainty) that the service is not covered and copies of medical
            records will be needed to provide support for the overpayment.

F.    ACTIVITIES FOLLOWING REVIEW

      1.    RATIONALE FOR DETERMINATION.

            The RAC shall document the rationale for the determination. This
            rationale shall list the review findings including a description of
            the Medicare policy or rule that was violated and a statement as to
            whether the violation a) resulted in an overpayment or b) did not
            affect payment.

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            The RAC shall make available upon request by any other ACs, CMS,
            OIG, (and others; as indicated by the PO) any requested rationale.

            a.    Storing and sharing PAPER rationale documents

            Should the RAC choose to store and share review rationale documents
            in paper format, they shall:

                  -     Store rationale documents NOT associated with an
                        overpayment for 1 year,

                  -     Store rationale documents associated with an overpayment
                        for the duration of the contract,

                  -     Send the copy via mail or fax within 10 calendar days of
                        the request

                  -     Maintain a log of all requests for rationale documents
                        indicating at least the requester, a description of the
                        rationale being requested, the date the request was
                        received, and the date the request was fulfilled. The
                        RAC Database will not be available for this purpose.

            c.    Storing and making available IMAGED rationale documents

            Should the RAC choose to store and make available imaged rationale
            documents, they shall:

                  -     Provide a document management system that meets the
                        requirements outlined in Appendix 1,

                  -     Store rationale documents NOT associated with an
                        overpayment for 1 year,

                  -     Store rationale documents associated with an overpayment
                        for the duration of the contract,

                  -     Maintain a log of all requests for rationale documents
                        indicating at least the requester, a description of the
                        medical record being requested, the date the request was
                        received, and the date the request was fulfilled. The
                        RAC Database will not be available for this purpose.

            Upon the end of the demonstration or contract, the RAC shall send
            copies of the imaged rationale documents to the contractor specified
            by the PO.

      2.    COMMUNICATION WITH PROVIDERS ABOUT NON-MSP CASES

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            a.    Automated review.

                  The RAC shall communicate to the provider the results of each
                  automated review that results in an overpayment determination.
                  The RAC shall inform the provider of which
                  coverage/coding/payment policy or article was violated. The
                  RAC need not communicate to providers the results of automated
                  reviews that do not result in an overpayment determination.
                  The RAC shall record the date and format of this communication
                  in the RAC Database.

            b.    Complex review.

                  The RAC shall communicate to the provider the results of every
                  complex review (i. e., every review where a medical record was
                  obtained), including cases where no overpayment was
                  identified. In cases where an overpayment was identified, the
                  RAC shall inform the provider of which coverage/coding/payment
                  policy or article was violated. The RAC shall record the date
                  and format of this communication in the RAC Database.

      3.    DETERMINE THE OVERPAYMENT AMOUNT ON NON-MSP CASES

            a.    Full denials

                  A full denial occurs when the RAC determines that:

                        i.    The submitted service was not reasonable and
                              necessary and no other service would have been
                              reasonable and necessary, or

                        ii.   No service was provided.

                  The overpayment amount is the total paid amount for the
                  service in question.

            b.    Partial denials

                  A partial denial occurs whets the RAC determines that:

                        i.    The submitted service was not reasonable and
                              necessary but a lower level service would have
                              been reasonable and necessary, or

                        ii.   The submitted service was upcoded (and a lower
                              level service was actually performed).

                  In these cases, the RAC must determine the level of service
                  that was reasonable and necessary or represents the correct
                  code for the service described in the medical record. In order
                  to determine the actual overpayment amount, the claim
                  adjustment will have to be completed by the AC. Once the AC
                  completes the claim adjustment, the AC will notify the RAC
                  through the RAC

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                  Database (or another method instructed by CMS) of the
                  overpayment amount. The RAC shall then proceed with recovery.
                  The RAC can only collect the difference between the paid
                  amount and the amount that should have been paid.

            c.    Extrapolation.

                  Follow the procedures found in PIM 3.10 and Exhibits 9-12, as
                  well as MMA Section 935(a), regarding the use of
                  extrapolation.

            d.    Recording the Overpayment Amount in the RAC Database

                  The RAC shall update the RAC Database with:

                        -     The overpayment amount for each claim in question

                        -     Line level claim detail with
                              overpayment/underpayment amounts;

                        -     The date of the original demand, any subsequent
                              demand and the DCIA intent to refer letter;

                        -     The applicable interest rate;

                        -     Collection detail and/or document adjustments due
                              to valid documented defenses to the overpayment.

      Once an overpayment is identified, the RAC shall proceed with the Recovery
      of Medicare Overpayments.

G.    POTENTIAL FRAUD

      The RAC shall report instances of potential fraud immediately to the BI
      contractor via the RAC Database. The RAC must review all entries made by
      the BI contractor into the RAC Database on a daily basis to see if the BI
      contractor has recalled any cases. (If possible, the RAC Database will
      create a report to assist the RAC in determining if any new recalled cases
      exist and if any of them are being worked by the RAC.) (See Task 7 section
      F on recalled cases)

TASK 3 - NON-MSP UNDERPAYMENTS

Upon identifying an underpayment, normally through an automated review, the RAC
will update the RAC Database (Or another method instructed by CMS) with the
claim and the underpayment status code. On a monthly basis the RAC shall submit
a report to the PO listing all underpayments the RAC identified during the
month. All documentation supporting the underpayment determinations shall be
attached to the report. The report and supporting documentation shall be
characterized so that a reviewer could easily determine what documentation goes
with what underpayment determination. The PO will maintain a file and then
forward relevant Medicare underpayment information to the appropriate AC or
instruct the appropriate AC to proceed with the underpayment determination.

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TASK 4 - RECOUPMENT OF NON-MSP OVERPAYMENTS

The RAC(s) will pursue the recoupment of non-MSP Medicare overpayments that are
identified through Task 2. The recovery techniques utilized by the RAC shall be
legally supportable. The recovery techniques shall follow the guidelines of all
applicable CMS regulations and manuals as well as all federal debt collection
standards. Some guidelines specific to CMS include, but are not limited to, 42
CFR, the Debt Collection Improvement Act of 1996, and the Federal Claims
Collection Act, as amended. The RAC is required to follow the manual guidelines
in the Medicare Financial Management Manual, Chapter 3 & 4, as well as
instructions in CMS One Time Notifications and Joint Signature Memorandum unless
otherwise instructed in this statement of work or specifically agreed to by the
PO.

CMS utilizes a threshold for the recovery of overpayments to physicians and
suppliers for non-MSP Part B or DME claims. This threshold is $10.00. The RAC
shall not demand or attempt recoupment on a non-MSP overpayment for a Part B
service to a physician or supplier if the amount is less than $10.00.
Overpayments may be aggregated to meet the $10.00 threshold. CMS does not
utilize a threshold for the recovery of overpayments for non-MSP Part A claims.

A.    Demand Letter

Afteridentification, the first recovery step taken by the RAC shall be the
issuance of a written demand letter. Non-MSP demand letter(s) shall include all
necessary information specified in the Medicare Financial Management Manual,
Chapter 4, section 20 and section 90 (unless specifically excluded in this
statement of work). The CMS Project Officer shall approve a sample demand letter
before any demand letters can be sent.

B.    Recoupment through Current and/or Future Medicare Payments

Medicare utilizes recoupment, as defined in 42 CFR 405.370 to recover a large
percentage of all Medicare provider overpayments. "Recoupment" as defined in 42
CFR 405.370 is the recovery by Medicare of any outstanding Medicare debt by
reducing present or future Medicare provider payments and applying the amount
withheld to the indebtedness. Non-MSP overpayments identified and demanded by
the RAC will also be subject to the existing withhold procedures. The existing
withhold procedures can be found in the Medicare Financial Management Manual,
Chapter 4, section 40.1. The withhold of present and/or future payments will
occur by the appropriate Medicare FI or Carrier. These withhold procedures will
be used for all non-MSP provider overpayments.

Once payments are withheld, the withhold remains in place until the debt is
satisfied in full or alternative payment arrangements are made. As payments are
withheld they are applied against the oldest outstanding overpayment. The debt
receiving the payments may or may not have been determined by the RAC. All
payments are first applied to interest and then to principal. Interest accrues
from the date of the demand letter and in accordance with 42 CFR 405.378.

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ATTACHMENT J-1

The RAC will receive a contingency payment, as stated in the Payment Methodology
attachment, for all amounts recovered from the withhold of present and/or future
payments that are applied to the principal amount identified and demanded by the
RAC.

The RAC should not stop recovery attempts strictly because recoupment of the
overpayment through current and/or future Medicare payments is being attempted.
Outside of the first demand letter and the Intent to Refer demand letter and the
offset process, the RAC can determine the recovery methods they choose to
utilize. See the Medicare Financial Management Manual, Chapter 4 ss.20 and ss.90
for minimum requirements of the Medicare Fiscal Intermediaries and Carriers. All
recoupment methods shall be explained in the bidder's proposal.

C.    Repayment Through Installment Agreements

The RAC shall offer the provider the ability to repay the overpayment through an
installment plan. The RAC shall have the ability to approve installment plans up
to 12 months in length. If a provider requests an installment plan over 12
months in length the RAC shall forward a recommendation to the appropriate
regional office. The regional office will review the case and if the recommended
installment plan is over 36 months in length, the regional office will forward
the recommendation to Central Office for approval. The RAC shall not deny an
installment plan request. However, the RAC may recommend denial. All recommended
denials shall be forwarded to the appropriate regional office for review. If
necessary the regional office will request Central Office assistance. If an
installment plan requires assistance from the Regional or Central Office, the
package shall include all documents listed in the Medicare Financial Management
Manual, Chapter 4, Section 50.3. When reviewing all installment agreements the
RAC shall follow the guidelines in section 1893(f)(1) of the Social Security Act
as amended by section 935(a) of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003.

The RAC will receive a contingency payment based on the principal amount of each
installment payment. As the provider submits monthly payments, the RAC shall
receive the applicable contingency payment for the principal amount received.

D.    Referral to the Department of Treasury

The Debt Collection Improvement Act of 1996 (DCIA) requires federal agencies to
refer eligible delinquent debt to a Treasury designated Debt Collection Center
for cross servicing and further collection activities, including the Treasury
Offset Program. CMS is mandated to refer all eligible debt, over 180 days
delinquent, for cross servicing.

Per DCIA referral criteria, "delinquent" is defined as debt: (1) that has not
been paid (in full) or otherwise resolved by the date specified in the agency's
initial written notification (i.e.. the agency's first demand letter), unless
other payment arrangements have been made, or (2) that at any time thereafter
the debtor defaults on a repayment agreement.

Debts ineligible for referral include:

      -     Debts in appeal status (pending at any level);

      -     Debts where the debtor is in bankruptcy;

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ATTACHMENT J-1

      -     Debts under a fraud and abuse investigation if the contractor has
            received specific instructions from the investigating unit (i.e.,
            Office of Inspector General or Office of General Counsel, etc.) not
            to attempt collection;

      -     Debts in litigation ("litigation" means litigation which involves
            the federal government as a party; it does not include litigation
            between the debtor and some party other than the federal
            government);

      -     Debts where the only entity which received the last demand letter is
            the employer and the employer is a Federal agency (MSP debts only);

      -     Debts where the debtor is deceased;

      -     Debts where CMS has identified a specific debt or group of debtors
            as excluded from DCIA referral (MSP debts only);

      -     Debts where there is a pending request for a waiver or compromise;

      -     Debts less than $25.00 (for non-MSP this amount is principal only;
            for MSP this amount is principal and interest);

      -     Debts of $100 or less where no TIN is available.

The RAC shall issue a written notification to the debtor with the appropriate
intent to refer language within a time frame that allows for the RAC to issue an
appropriate reply to all timely responses to the "intent to refer" letter before
the debt is 130 days DELINQUENT. All outstanding debts remaining unresolved and
not under a non-delinquent installment agreement must be sent to the affiliated
contractor for referral to Treasury on or before they are 130 days delinquent.
The intent to refer language can be found in the Medicare Financial Management
Manual, Chapter 4, Section 70 for non-MSP. The RAC is required to cease all
recovery efforts once the debt is referred to the Department of Treasury. The AC
will prepare the case for referral and will notify the RAC, through the RAC
Database when the debt is referred. Once the overpayment referred it is no
longer the responsibility of the RAC. However, the RAC shall receive a lesser
contingency payment as identified in the Payment Methodology Scale if Treasury
is able to fully or partially collect the overpayment. This fee will be a
percentage of the principal amount recovered after deduction for fees that must
be paid to Treasury.

E.    Compromise and/or Settlement of Overpayment

The RAC shall not have any authority to compromise and/or settle an identified
or possible non-MSP overpayment. If a debtor presents the RAC with a compromise
request, the RAC shall forward the overpayment/MSP recovery claim case and all
applicable supporting documentation to the CMS PO for direction. The RAC must
include its recommendation on the request and justification for such
recommendation. If the debt is greater than $100,000, the package must include a
completed Claims Collection Litigation Report (CCLR). If the provider presents
the RAC with a settlement offer or a consent settlement inquest, the RAC shall
forward the overpayment case and all applicable supporting documentation to the
CMS PO for direction. If CMS determines that a compromise and/or settlement is
in the best interests of Medicare, the RAC shall receive a contingency payment
for the portion of principal that was recouped, providing that the RAC initiated
recoupment by sending a demand letter prior to the compromise and/or settlement
offer being received.

F.    Voluntary/Self-Disclosure of Non-MSP Overpayments by the Provider

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ATTACHMENT J-1

If a provider voluntarily self-discloses a non-MSP overpayment after the RAC
issues a demand letter or a request for medical record, the RAC will receive a
discounted contingency fee based on the Payment Methodology Scale. In order to
be eligible for the contingency fee, the type and dates of service for the
self-disclosed overpayment must be in the RAC's most recently approved project
plan.

      -     If the provider self-discloses this kind of case to the RAC, the RAC
            shall document the case in its files and databases, and forward the
            check to the appropriate Medicare contractor.

      -     If the provider self-discloses this kind of case to the Medicare
            contractor, the Medicare contractor will notify the RAC within 5
            calendar days and will forward the case file (minus the check) to
            the RAC within 10 calendar days. The RAC will document the case in
            its files and databases.

The RAC shall cease recovery efforts for the claims involved in the
self-disclosure immediately upon becoming aware (i.e., when the RAC is notified
by the Medicare contractor, the provider, etc.)

If a provider voluntarily self-discloses a non-MSP overpayment, and the
self-disclosed overpayment does NOT involve the same types of services for which
the RAC had issued a demand letter or a request for medical records, then the
RAC is not entitled to a contingency fee amount.

      -     If the provider self-discloses this kind of case to the RAC and
            forward the check to the appropriate Medicare contractor.

      -     If the provider self-discloses this kind of case to the Medicare
            contractor, the RAC need take no action.

The RAC may continue recovery efforts since the provider self- disclosure
involved a different provider/service combination.

Unsolicited/Voluntary Refunds (by check or claims adjustment, including those
due to credit balances) -- Occasionally the AC may receive an
unsolicited/voluntary refund from a provider. An unsolicited/voluntary refund is
a refund that is submitted to the AC without a demand letter. It is a situation
where the provider realizes that a refund is due the Medicare program and
refunds the money to the AC. By definition, an unsolicited/voluntary refund (by
check or by claims adjustment) must occur before a demand letter is issued. The
RAC shall not receive any contingency payment on an unsolicited/voluntary
refund.

G.    Recoupment During the Appeals Process

This section is applicable only to non-MSP provider overpayments and MSP
non-beneficiary GHP uncollectible debt. There is no formal administrative
appeals process for employer, insurer/third party administrator, or workers'
compensation carrier debt although the RAC must respond timely and appropriately
to all debtor communications, including payment by check. Additionally the RAC

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ATTACHMENT J-1

must provide support, as needed, if the debt is disputed outside of the formal
administrative appeals process after being returned to the local contractor (or
a third party as designated by CMS) for further collection action including
referral to the Department of the Treasury for further debt collection
activities.

The RAC shall ensure that all demand letters initiated as a result of an
identified overpayment in Task 2 contain provider appeal rights, where
applicable.

If a provider files an appeal with the appropriate entity within the appropriate
timeframes, the RAC shall follow Section 1893(f)(2) of the Social Security Act
as amended by section 935(a) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 regarding the limitation on recoupment.

Once the RAC is notified of the appeal request, the RAC shall cease all recovery
efforts. If a provider instructs the RAC that it has filed an appeal, the RAC
shall cease recovery efforts and confirm the appeal request with the CMS Project
Officer or its delegate. After the reconsideration level of the appeal process
(completed by the Qualified Independent Contractor (QIC)) is adjudicated (or the
first level of appeal if the QIC reconsideration process has not been
implemented yet), the RAC shall resume recovery efforts if the decision was
against the provider.

THE AGING OF THE PROVIDER OVERPAYMENT FOR DEBT REFERRAL PURPOSES WILL CEASE
WHILE RECOVERY EFFORTS ARE STOPPED DURING THE APPEAL PROCESS. Interest shall
continue to accrue, from the date of the demand letter, throughout the appeals
process.

G.    Interest

For non-MSP debt -- Regulations regarding interest assessment on determined
non-MSP Medicare overpayments and underpayments can be found at 42 CFR 405.378.
Interest will accrue from the date of the final determination and will either be
charged on the overpayment balance or paid on the underpayment balance for each
full 30-day period that payment is delayed. The interest rate in effect on the
date of final determination is the rate that will be assessed for the entire
life of the overpayment. When payments are received, payments are first applied
to any accrued interest and then to the remaining principal balance. Contingency
fees are based upon the principal amounts recovered. All payments are applied to
interest first, principal second.

H.    Customer Service

The RAC shall provide a toll free customer service telephone number in all
correspondence sent to Medicare providers or other prospective debtors. The
customer service number shall be staffed by qualified personnel during normal
business hours from 8:00 am. to 4:30 p.m. in the applicable time zone. For
example, if the RAC is conducting the demonstration in California the customer
service number shall be staffed from 8:00am to 4:30pm Pacific standard time.
After normal business hours, a message shall indicate the normal business hours
for customer service. All messages playing after normal business hours or while

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ATTACHMENT J-1

on hold shall be approved by the CMS Project Officer before use.

The staff answering the customer service lines shall be knowledgeable of the
demonstration. The staff shall have access to all identified non- overpayments
and shall be knowledgeable of all possible recovery methods and the appeal
rights of the provider (for provider debts). If need be, the staff person
responsible for that overpayment shall return the call within 1 business day.
The RAC shall provide a translator for Spanish speaking providers or other
prospective debtors. This translator shall be available within 1 business day of
the provider's original call.

The RAC shall respond to written correspondence within 30 days of receipt. The
RAC shall provide the CMS Project Officer with copies by fax and mailed hard
copy, of all correspondence indicating displeasure in the demonstration, in the
overpayment identification, or in the recovery methods utilized, within ten (10)
calendar days of receipt of such correspondence. (If the RAC is not sure how the
correspondence will be interpreted, it should forward the correspondence to the
CMS Project Officer.) The RAC shall provide remote call monitoring capability to
CMS personnel in Baltimore. The RAC's phone system must notify all callers that
the call may be monitored for quality assurance purposes.

The RAC shall retain a written report of contact for all telephone inquiries.

TASK 5- SUPPORTING IDENTIFICATION OF NON-MSP OVERPAYMENT IN THE MEDICARE APPEAL
PROCESS AND/OR IN THE DCIA PROCESS.

Providers are given appeal rights for the majority of Medicare overpayments
determined during the post payment review process. If a provider chooses to
appeal an overpayment determined by the RAC, the RAC shall assist CMS with
support of the overpayment determination throughout all levels of the appeal.
This includes providing supporting documentation with appropriate reference to
Medicare statutes, regulations, manuals and instructions when requested,
providing assistance, and representing CMS at any hearings associated with the
overpayment when requested by CMS.

Providers shall request an appeal through the appropriate Medicare appeals
process. A third party shall adjudicate all appeal requests related to provider
overpayments identified by the RAC. This third party may be the current Medicare
contractor, a third party contractor identified by CMS, a Qualified Independent
Contractor, an Administrative Law Judge, or HHS' Departmental Appeals Board's
Medicare Appeals Council. Some recovery claims may eventually be appealed to the
appropriate Federal court. If the RAC receives a written appeal request it shall
forward it to the appropriate third party adjudicator within one business day of
receipt. If the appropriate Medicare contractor is not known, the RAC shall
contact the CMS PO within one business day of receipt for assistance. If the
R.AC receives a verbal request for appeal from a provider, the RAC shall give
the provider the telephone number of the appropriate Medicare contractor and
inform them that their verbal request does not suspend the permissible time
frame for requesting an appeal as set forth in the demand letter.

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The appropriate Medicare contractor will notify the RAC and the CMS PO of the
appeal request and the outcome of each applicable appeal level through the RAC
Database. The update to the RAC Database shall occur within 5 business days of
learning of the appeal request and/or decision.

Additionally the RAC must provide support, as needed, if the debt is disputed
outside of the formal administrative appeals process after being returned to the
local contractor (or a third party as designated by CMS) for further collection
action including referral to the Department of the Treasury for further debt
collection activities.

TASK 6A - REPORTING OF IDENTIFIED, DEMANDED AND COLLECTED MEDICARE NON-MSP
OVERPAYMENTS AND IDENTIFIED MEDICARE NON-MSP UNDERPAYMENTS

The RAC will be required on a monthly basis to provide the CMS PO or its
delegate with detailed information concerning non-MSP overpayments and
underpayments that have been identified, overpayments that have been demanded
and overpayments that have been fully or partially collected. At CMS discretion,
these figures supplied by the RAC shall be incorporated into the financial
statements prepared by CMS. The RAC shall have supporting documentation for all
line items on the report. This report will be due no later than the fifth (5th )
business day of the following month. CMS will supply the RAC with the correct
format for the reporting no later than 15 calendar days after the first recovery
efforts have begun.

Database Reporting of Possible/Identified Non-MSP

CMS plans to utilize a database to house information on potential and
outstanding non-MSP overpayments under the RAC realm of responsibility. This
database will store outstanding overpayment data, determination dates, principal
and interest amounts, the status of the overpayment and will allow CMS to
prepare detailed and/or summary reports from various data included in the
database.

At least 15 days prior to the beginning of the identification process begins,
each RAC will receive a training manual for the database that will be utilized
by CMS for this demonstration project. In addition to the training manual, CMS
will conduct training on the applicable system. This training will be completed
by teleconference, videoconference or onsite at CMS or the RAC site at least 15
days prior to the beginning of the first identification and recovery efforts.

Contractors will be required to either manually or electronically enter the
following types of information into the database:

*Universe of potential overpayments (electronic file update if possible)

*Manual update of status code when approval to request medical records is
needed, when various demand letters are sent, when claim adjustments are
needed...

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TASK 6B OTHER SYSTEMS CREATED BY RAC

The RAC is free to utilize a subsequent system in addition to RAC Database
provided by CMS. Any subsequent system shall not take the place of the RAC
Database.

All reports generated from an alternative system shall be converted to Microsoft
Excel 2000 prior to submission to the CMS Project Officer.

TASK 7 - ADMINISTRATIVE AND MISCELLANEOUS ISSUES

A.    Administrative Functions

Once the RAC has identified a non-MSP overpayment, the RAC shall send the debtor
a demand letter as indicated in Task 4A. This demand letter shall request that
the debtor submit payment in full. Payments shall be sent to the appropriate
third party contractor or lockbox. CMS will instruct the RACs of the applicable
payment address. (CMS plans, if possible, to have a separate address/lockbox for
all overpayments demanded by the RAC.) At CMS discretion. CMS may utilize a
third party contractor to process the administrative functions for the non-MSP
overpayments and underpayments determined by the RAC. This may include the
financial reporting of the receivable, any claims adjustments necessary to
ensure an accurate claims history, the appeal process, depositing the refund
check and initiating offset. The RAC shall have no rights in the selection of a
third party contractor to process the administrative functions if CMS elects to
utilize such a third party contractor. The RAC shall interact cooperatively with
the third party contractor on an as-needed basis.

B.    Separate reporting

If a single entity is awarded a single contract that includes more than one of
the four major tasks identified in section I of this SOW, the reporting and data
for each of those for major tasks must be kept separate.

C.    Payment Methodology

All payments shall be paid only on a contingency fee basis and shall be based on
the principal amount of the collection.

Contingency fees:

      -     Because interest collected is returned to General Revenue rather
            than to the Medicare trust funds, a contingency fee shall not be
            paid on any interest collected.

      -     The RAC shall not receive any payments for the identification of the
            non-MSP overpayments or underpayments.

                                       22

<PAGE>

ATTACHMENT J-1

      -     The contingency fee will be determined by the overpayments collected
            without consideration given to the underpayments identified (i.e.
            without netting out the underpayments against the overpayments.)

      -     For a RAC for the identification of non-MSP overpayment and
            underpayments and the recovery of non-MSP overpayments:

            -     The RAC shall be paid a percentage of the amount that is
                  collected through its recovery efforts. A RAC's recovery
                  efforts are defined as a recoupment received through a demand
                  letter or telephone call or some other form of contact through
                  a check from the provider. Recoupment by offset shall not be
                  considered a RAC recovery effort for the purposes of
                  establishing the contingency percentage to be paid.

            -     The RAC shall receive 50% of the agreed upon contingency
                  percentage for any of the following recovery efforts:

                  -     Recovery efforts accomplished through the offset process
                        of a fiscal intermediary or carrier.

                  -     Recovery efforts accomplished through Treasury offset or
                        another collection vehicle after the debt is referred to
                        the Department of Treasury.

                  -     Recoveries made through a self-disclosure made by a
                        provider in result of a prior RAC identified request for
                        medical records or demand letter. Self-disclosed service
                        and time period must be included in the RAC's project
                        plan.

            -     if a provider files an appeal disputing the non-MSP
                  overpayment determination and the appeal is adjudicated in the
                  provider's favor at the first level, the RAC shall repay
                  Medicare the contingency payment for that recovery. If the
                  appeal is adjudicated in the agency's favor at the first
                  level, the RAC shall retain the contingency payment for that
                  recovery. Subsequent appeals, after the first level of appeal,
                  will not affect the RAC's ability to retain tire contingency
                  payment. (The first level of appeal is currently a
                  reconsideration for Part A providers and either a carrier
                  review or a carrier hearing for Part B and DMERC providers. At
                  some point during the demonstration, final regulations will be
                  released, which will change the appeal process for all
                  Medicare providers. The first level of appeal may change to a
                  redetermination for all Medicare providers or to a
                  reconsideration for all Medicare overpayments. This change
                  will not negatively impact the payment methodology for the
                  RACs.)

D.    Geographic Location of Demonstration

The claims being analyzed for this aware will be claims from providers with
originating addresses in California (or debts associated with claims, as
applicable) appropriately submitted to carriers and intermediaries in California
and claims (or debts associated with claims, as applicable) submitted to a DMERC
for a beneficiary with a primary residence in California.

                                       23

<PAGE>

ATTACHMENT J-1

E.    Point of Contact for RACs

The primary point of contact for the RACs shall be the CMS PO or his/her
delegate.

For non-MSP, the RACs and current Medicate Contractors shall communicate via the
RAC Database discussed in Task 6. This includes all communication related to
requests for medical records, fraud investigation, appeal, offset and claim
adjustments. Any necessary communications other than through the RAC Database,
shall be forwarded to the CMS PO who will facilitate any possible discussions
with the appropriate Medicare contractor. The CMS PO shall be copied on all
correspondence, email or written, between the RAC and the current Medicare
contractor.

F.    Data Accessibility

CMS shall provide the RAC with one data file of all claims in the appropriate
geographic area. The RAC will be able to update this file on a monthly basis.
The data file format, data fields available and user agreements can be found at
http://www.cms.hhs.gov/data/order/identifiable.asp#safs.

Any additional data requests will be subject to the normal fees charged by CMS.
The RAC shall follow the normal CMS procedures for requesting additional data.
The RAC shall pay for any charges associated with the transfer of data. This
includes, but is not limited to, cartridges, data communications equipment,
lines, messenger service, mail, etc. The RAC shall pay for all charges
associated with the storage and processing of any data necessary to accomplish
the demonstration. The RAC shall establish and maintain back-up and recovery
procedures to meet industry standards. The RAC shall comply with all CMS privacy
and security requirements. The RAC shall provide all personal computers,
printers and equipment to accomplish the demonstration throughout the contract
term,

G.    Recalled Cases

CMS may determine that a non-MSP case or a particular uncollectible debt should
be handled by CMS staff and may recall the case/debt for that reason. Should CMS
recall a case/debt, the RAC shall immediately stop all activities on the
case/debt identified by CMS for recall and return the case/debt and all related
information to CMS within one (1) business day of the recall request.

The RAC shall receive no payment, except for monies already recouped, for
recalled cases.

A BI PSC or BI Unit of a DMERC may determine that overpayment identification or
recoupment action on a case should cease and may recall the case for that
reason. Should the BI PSC/unit recall a case, the RAC shall immediately stop all
activities on the case identified by the BI PSC/unit for recall. The RAC shall
receive too payment, except for monies already recouped for recalled cases.

                                       24

<PAGE>

ATTACHMENT J-1

All requests for recall shall be forwarded to the CMS PO for concurrence. CMS
and the BI PSC or BI Unit of a DMERC shall have a valid reason for the recall of
the case. If there is a dispute, the CMS PO shall make the final decision
concerning the recall of the case.

H.    Case Record Maintenance

The RAC shall maintain a case file for every Non-MSP overpayment that is
identified, including documentation of subsequent recovery efforts. This file
shall include documentation of all processes followed by the contractor
including a copy of all correspondence, including demand letters, a telephone
log for all conversations with the provider/insurer/or other individuals or on
behalf of the provider or other debtor, and all collection activities (including
certified/registered mail receipts, extended repayment agreements, etc). For
non-MSP, the case file may be electronic, paper or a combination of both. For
electronic files, the case file shall be easily accessible and made available
within 48 hours of request. At CMS's request or no later than fifteen (15) days
after contract termination, the RAC shall return to CMS all case files stored in
accordance with CMS instructions. Once a non-MSP overpayment or underpayment is
determined, all documentation shall be kept in the case file. The RAC shall not
destroy any supporting documentation relating to the identification or recovery
process.

All case files shall meet the requirements as set by OMB Circular A-130, which
can be found at http://www.whitehouse.gov/omb/circulars/a130/a130trans4.html.

I.    Recovery Deposits

The demand letters issued by the RAC will instruct debtors to forward their
refund checks to the appropriate address which will be specified by CMS at a
later date. All refund checks shall be payable to the Medicare program. If the
RAC receives a refund check, the RAC shall forward the check to the appropriate
address. Before forwarding the check, the RAC shall make copies of and otherwise
document these payments. A copy shall be included in the appropriate overpayment
case file.

J.    Submit a List of Claim Adjustments

In order to maintain an accurate claims history for the beneficiary, the
appropriate claims adjustment, if necessary, must be made once an overpayment is
determined. The RAC, however, will not have access to the claims processing
system utilized by Medicare. To enable the claims history updates to occur, the
RAC shall forward the claim to the appropriate Medicare contractor. (This may
occur through the RAC Database or through another method instructed by CMS.) The
appropriate Medicare contractor will perform the claim adjustment and relay the
overpayment amount, if necessary, back to the RAC. The Medicare contractor will
be instructed to complete the claim adjustment within 5 calendar days of the RAC
notifying the Medicare contractor. Once the claim adjustment is completed, the
beneficiary will receive a Medicare Summary Notice notifying them of the
adjustment. Any customer service inquiries to the current Medicare contractor
shall be forwarded to the appropriate RAC, if necessary. CMS will provide the
RAC with the format for reporting the claim adjustments prior to the beginning
of the identification process.

                                       25
<PAGE>

ATTACHMENT J-1

K.    Support OIG or Other Audits

Should the OIG, CMS or a CMS authorized contractor choose to conduct an audit of
the RAC, the RAC shall provide workspace and produce all needed reports and case
files within 1 business day of the request.

L.    Public Relations & Outreach

The initial project plan shall include a section covering public relations and
outreach. CMS, through the Medicare fiscal intermediaries and carriers, will
announce the use of the RACs in the specified geographic area. CMS will also
post a notice regarding this effort on its COBC website and on the CMS website
for Medicare Secondary Payer Debt Collection and Referral FAQs. All other debtor
education and outreach (or beneficiary education for efforts involving
follow-ups to the MSP IEQ) concerning the use of RACs will be the responsibility
of the RAC. The RAC shall only educate providers on their business, their
purpose and their process. The RACs shall not educate providers on Medicare
policy. The CMS PO shall approve all presentations and written information
shared with the provider, beneficiary, and/or other debtor communities before
use. If requested by CMS, the RACs project manager for the demonstration, at a
minimum, shall attend any provider group or debtor group meetings or
congressional staff information sessions where the services provided by the
recovery audit contractors are the focus.

TASK 8 FINAL REPORT

The final report shall include a synopsis of the entire demonstration project.
This includes a final report identifying all amounts identified and demanded,
all amounts collected and all amounts still outstanding at the end of the
demonstration. It shall include a brief listing of all identification methods or
other new processes utilized and their success or failure. The contractor should
include any final thoughts on the demonstrations, as well as any advantages or
disadvantages encountered. From a contractor point of view, the final report
should determine if the demonstration was a success or a failure and provide
support for either opinion.

A final report shall be delivered to the CMS PO in the three formats
(paper/electronic) as stated below and in the required "electronic" formats to
the fnlrpts@cms.hhs.gov mailbox:

1)    Paper, bound, in the number of copies specified;

2)    Paper, unbound, suitable for use as camera-ready copy;

3)    Electronic, as one file in Portable Document Format (PDF), as one file in
      HyperText Markup Language (HTML), and in Microsoft Word 2000 [for text] or
      Microsoft Excel [for tables]. Data tables must be in HTML and PDF formats
      as well. Charts and graphs must be in Graphical Interchange Format. Data
      files (spreadsheets, databases) must be made available primarily as
      comma-delimited or flat files, with proprietary file formats (Excel,
      Access) available as alternative downloads. Documents submitted in PDF
      must be prepared using Adobe Acrobat 5.0 (or subsequent versions) to
      assure compliance with the requirements of Section 508 (Rehabilitation
      Act) when placed on CMS's Web site. More detailed guidelines for creation
      of internet-ready content are available on CMS's Web site at
      http://www.cms.gov. (The Final Report shall conform to CMS's Author's

                                       26
<PAGE>

ATTACHMENT J-1

Guidelines: Grants and Contracts Final

Reports-http://www.cms.gov/research/author4.pdf.) In addition, the contractor
shall provide a 200-word abstract/summary of the final report suitable for
submission to the National Technical Information Service.

Drafts of all documentation shall be provided to CMS approximately four weeks
prior to final deliverable due dates unless otherwise agreed to. CMS staff will
review materials and provide comments back to the contractor within 2 weeks,
thereby allowing 2 additional weeks for the contractor to make any necessary
revisions. All data files and programs created under this project shall be the
sole property of CMS and provided to CMS upon request in the appropriate format.
They shall not be used for any other purpose other than fulfilling the terms of
this contract without the express permission of the contracting officer.

                                       27
<PAGE>

ATTACHMENT J-1

SCHEDULE OF DELIVERABLES

The contract awardee shall provide the necessary personnel, materials,
equipment, support, and supplies to accomplish the tasks shown below in the
specified time. The contract awardee shall complete the evaluation and report to
CMS its findings. All work done under this contract shall be performed under the
general guidance of the CMS project officer (PO) subject to the PO's approval.

Written documents for this project shall be delivered in hard copy to the
project officer (2 copies), unless otherwise specified. These documents shall
also be delivered to the Project Officer in an electronic version via email or a
3.5-inch diskette. At present, the CMS standard is Microsoft Word 2000 and
Microsoft Excel 2000. This is subject to change, and the contractor shall be
prepared to submit deliverables in any new CMS standard.

<TABLE>
<CAPTION>
 Task     Deliverable                                        Due Date
Number      Number             Deliverable           from contract award date
<S>       <C>           <C>                          <C>
1.a.           1        Initial Meeting                   2 weeks

1.a.           2        Project Plan                      4 weeks

1.b.           3        Monthly Conference Calls          Monthly

1.c.           4        Monthly Progress Reports          Monthly

 2.            5        Requests for Medical         Bi-weekly or at least
                        Records                      monthly (non-MSP
                                                     identification of
                                                     overpayments and
                                                     underpayments and
                                                     recovery only)

 3.            6        Monthly Underpayment         Monthly (non-MSP
                        report                       identification of
                                                     overpayments and
                                                     underpayments and
                                                     recovery only)

 6             7        Monthly Financial Report     Monthly

 6             8        Claim Adjustment report      Weekly

 6             9        Training on RAC              Within 15 days of the
                        Database                     start of Task 2

 6            10        Case File Transfers          Within 15 days after
                        end                          contract

 9            11        Final Report-Draft           Within 4 weeks of
                                                     contract end date

 9            12        Final Report-Final           Within 8 weeks of
                                                     contract end date
</TABLE>

                                       28
<PAGE>

ATTACHMENT J-1

                            PAYMENT METHODOLOGY SCALE

1  [***]% When non-MSP recovery is made through
   RACs efforts (check sent in by provider in
   response to demand letters, phone calls ...)               [***]%

2  [***]% of the contingency fee specified in number 1 above
   when non-MSP recovery is made through the offset process
   by the Medicare fiscal intermediary or carrier

3  [***]% of the contingency fee specified in number 1 above
   when non-MSP recovery is made after the debt is referred
   to the Department of Treasury

4  [***]% of the contingency fee specified in number 1 above
   when a self-disclosure is made by a provider in result of
   a prior RAC identified request for medical requests or
   demand letter/Self disclosed service and time period
   must be included in the RAC's project plan

5  [***]% When no recovery is made for a non-MSP
   overpayment                                                [***]%

[***] - CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE
MARKED WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

                                       29
<PAGE>

ATTACHMENT J-1

APPENDIX 1 - REQUIREMENTS FOR OPTIONAL IMAGING OF MEDICAL RECORDS AND RATIONALE
DOCUMENTS

The following are the minimum technical requirements for any RAC choosing to
implement the electronic imaging of medical records and rationale documents.
Costing information is provided as a general guideline for the RAC. Costs for
specific system implementations could vary significantly depending upon the
number of documents imaged/stored by the RAC, systems already in place, the
configuration chosen by the RAC, and other factors beyond the scope of this
document. Prices provided are estimates and do not reflect final costs expected
by CMS.

      1.    The RAC contractor shall use a system compatible with the IBM
            Content Manger Technical Suite on a Sun Solaris 9 platform to index
            and store imaged documents. The RAC contractor shall follow all
            existing and future technical guidelines issued by CMS/OIS regarding
            the indexing and storage of imaged documents.

      2.    The imaging and indexing process used by the RAC contractor shall be
            compatible with the IBM Content Manager Technical Suite and related
            modules. The RAC contractor shall follow all existing and future
            technical guidelines issued by CMS/OIS regarding scanning hardware
            and software. Currently, CMS recommends using Kodak family scanners
            and Kofax imaging software; however, this not a requirement for RACs
            at this time. See the table at the end of this appendix for general
            pricing information.

      3.    The RAC contractor shall have the ability to receive documents via a
            fax server. The RAC contractor shall Index each incoming document
            based on beneficiary name, provider name, contractor number, claim
            control number and any other field mandated by CMS. In addition, for
            providers/contractors who choose not to submit documents via fax,
            the RAC contractor shall receive hardcopy records and scan the
            records. All documents received by mail shall be scanned and indexed
            in order and shall be scanned and indexed within one business day of
            receipt.

      4.    Imaged documents shall be stoned in a central medical record image
            repository that utilizes the IBM Content Manger Technical Suite. The
            image repository shall be located at the RAC contractor site. CMS
            plans to require the RACs who choose to maintain imaged medical
            records to send all images to a CMS IBM Content Manager System
            (located in Baltimore, Maryland) at some point during the time
            period of the demonstration.

      5.    The RAC contractor shall support versioning of received documents,
            since the system will need to handle multiple versions of a document
            from the same request.

      6.    The RAC contractor shall support partitioning of document images so
            that specific sections of the document images can be reviewed
            independent of other sections to support the current medical review
            process.

                                       30
<PAGE>

ATTACHMENT J-1

7.    The RAC contractor shall support a less than 5 second image retrieval time
      over a reasonably loaded T1 connection for the online retrieval system.
      Typical medical record image size is 5-10 pages for Part B and DMERC; and
      50-100 pages for Part A.

8.    The RAC shall make the imaged documents available to any authorized
      Medicare contractor using the IBM Content Manager E-client over MDCN
      lines.

                                       31
<PAGE>

ATTACHMENT J-1

PAYMENT METHODOLOGY
      NON-MEDICARE SECONDARY PAYER)
            NO. 40700NMSPB

                         [organizational graph omitted]

                                       32
<PAGE>

ATTACHMENT J-1

                                 ATTACHMENT J-2

                                    GLOSSARY

<PAGE>

ATTACHMENT J-1

                               GLOSSARY & ACRONYMS

GLOSSARY

PROVIDER - generally used to refer to individuals or organizations that bill
carriers, intermediaries (including RHHIs), and DMERCs. If references apply only
to specific providers (e.g., physicians), the specific provider will be
identified. Unless specifically identified as such, the term "provider" is not
limited to the meaning of that term as defined in title XVIII of the Social
Security Act and implementing regulations.

RECOUPMENT - the term "recoupment" is generally used to mean "recovery" and is
not limited to the meaning of that term as defined in 42 CFR 405.370 unless
specifically stated in this SOW.

ACRONYMS

AC - Affiliated Medicare Contractors

AGNS - AT&T Global Network Services

BI Unit - Benefit Integrity Unit

CCLR - Claims Collection Litigation Report

CCR - Central Contractor Registration

CFR - Code of Federal Regulations

CMS - Centers for Medicare & Medicaid Services

COBC - Coordination of Benefits Contractor

CPS - Contractor Performance System

CPT Codes - Current Procedural Terminology Codes

CWF - Common Working File

DCIA - Debt Collection Improvement Act of 1996

DMERC - Durable Medical Equipment Regional Carrier

DOA - Date of Award

DOJ - Department of Justice

<PAGE>

ATTACHMENT J-1

DRG - Diagnosis Related Group

E & M Services - Evaluation and Management Services

ECRS - Electronic Correspondence Referral System

EFT - Electronic Funds Transfer

FCCA - Federal Claims Collection Act, as amended

FAQ - Frequently Answered Questions

GHP - Group Health Plan

GME - Graduate Medical Education

HHS - Health & Human Services

IME - Indirect Medical Education

LCD - Local Coverage Determination

LMRP - Local Medical Review Policies

MDCN - Medicare Data Communications Network

MMA - Medicare Prescription Drug, Improvement and Modernization Act of 2003

MSP - Medicare Secondary Payer

NCD - National Coverage Determination

NCH - National Claims History

NIH - National Institute of Health

OIG - Office of Inspector General

OGC - Office of General Counsel

OMB - Office of Management and Budget

PIM - Program Integrity Manual

PO - Project Officer

<PAGE>

ATTACHMENT J-1

PPS - Prospective Payment System

PSC - Program Safeguard Contractor

QIC - Qualified Independent Contractor

QIO - Quality Improvement Organization

RAC - Recovery Audit Contractor R

FQ - Request for Quotation

SOW - Statement of Work

TGA - Treasury General Account

TIN - Tax Identification Number<PAGE>

                                                                    Exhibit 10.9

                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION

----------------------------------------------------
                                                   )
IN RE PROFIT RECOVERY                              )         CIVIL ACTION FILE
GROUP INTERNATIONAL, INC.                          )         NO. 1:00-CV-1416-CC
SECURITIES LITIGATION                              )
                                                   )
----------------------------------------------------

                            STIPULATION OF SETTLEMENT

     This   Stipulation  of  Settlement  dated  as  of  February  8,  2005  (the
"Stipulation"),  is made and entered  into by and among the  following  Settling
Parties:  (i) the Lead Plaintiffs (on behalf of themselves and each of the Class
Members), by and through their counsel of record in the Litigation; and (ii) the
Defendants  identified  below,  by and  through  their  counsel of record in the
Litigation.  The  Stipulation  is  intended  by the  Settling  Parties to fully,
finally and forever resolve,  discharge and settle the Released Claims, upon and
subject to the terms and conditions hereof.

I.   THE LITIGATION

     On or after June 6, 2000,  the  following  actions were filed in the United
States  District Court for the Northern  District of Georgia,  Atlanta  Division
(the  "Court"),  as class  actions on behalf of persons who purchased the common
<PAGE>
stock of Profit Recovery Group International,  Inc. ("Profit Recovery," "PRG" or
the  "Company"):  Schmiedberg v. Profit Recovery Group  International,  Inc., et
al.,  Civil  Action  No.   1:00-CV-1416;   Charles  v.  Profit   Recovery  Group
International,  Inc., et al.,  Civil Action No.  1:00-CV-1529;  and Malobecki v.
Profit   Recovery   Group   International,   Inc.,  et  al.,  Civil  Action  No.
1:00-CV-1887.  By order of the Court,  these three actions were consolidated and
styled In re Profit Recovery Group International, Inc. Sec. Litig., Civil Action
No.  1:00-CV-1416-CC  (the  "Litigation").  On  September  27,  2000  Plaintiffs
Jeanette Roberts,  Stephen Haynes, and Fernando Melendez (the "Lead Plaintiffs")
were appointed  Lead  Plaintiffs and their choice of counsel was approved by the
Court.

     The operative  Complaint in the Litigation is the  Consolidated and Amended
Class Action  Complaint  for  Violation  of Federal  Securities  Laws,  filed on
November 13, 2000 (the "Complaint").  The Complaint alleges claims for violation
of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and
Securities and Exchange  Commission Rule 10b-5  promulgated  thereunder  against
Profit Recovery,  John M. Cook,  Scott L. Colabuono,  and Michael Lustig and for
violation of Section  20(a) of the  Exchange Act against John M. Cook,  Scott L.
Colabuono, and Michael Lustig (the "Individual Defendants").

                                       2
<PAGE>
     The Court, by Order dated December 3, 2002, has certified the Litigation to
proceed as a class action on behalf of all persons who purchased common stock of
Profit  Recovery Group  International,  Inc.  between July 19, 1999 and July 26,
2000, inclusive, and were allegedly damaged thereby. Excluded from the Class are
Defendants,  members of the immediate families of the Individual Defendants, any
entities in which any  Defendant  has a  controlling  interest or is a parent or
subsidiary of or is controlled  by the Company,  and the legal  representatives,
heirs,  successors,  predecessors  in  interest,  affiliates  or  assigns of any
Defendant.

II.  DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY

     Defendants  have denied and continue to deny each and all of the claims and
contentions alleged by Lead Plaintiffs in the Litigation.  Defendants  expressly
have denied and continue to deny all charges of wrongdoing or liability  against
them arising out of any of the conduct,  statements,  acts or omissions alleged,
or that could have been alleged, in the Litigation.  Defendants also have denied
and continue to deny,  inter alia, the  allegations  that Lead Plaintiffs or the
Class have suffered  damage or that Lead  Plaintiffs or the Class were harmed by
the conduct alleged in the Litigation.

     Defendants'  decision to settle the  Litigation was based on the conclusion
that further conduct of the Litigation  would be protracted and expensive,  that

                                       3
<PAGE>
it is desirable that the  Litigation be fully and finally  settled in the manner
and upon the terms and conditions set forth in this Stipulation, the uncertainty
and risks  inherent in any  litigation,  especially  in complex  cases like this
Litigation,  and the determination  that it is desirable and beneficial that the
Litigation be settled in the manner and upon the terms and  conditions set forth
in this Stipulation.

III. CLAIMS OF LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT

     Lead  Plaintiffs  believe that the claims  asserted in the Litigation  have
merit.  Counsel for Lead  Plaintiffs,  however,  recognize and  acknowledge  the
expense  and  length  of  continued   proceedings  necessary  to  prosecute  the
Litigation  against  Defendants  through  trial and  appeals.  Counsel  for Lead
Plaintiffs  also have taken into account the  uncertain  outcome and the risk of
any litigation,  especially in complex actions such as this Litigation,  as well
as the  difficulties  and delays inherent in such  litigation.  Counsel for Lead
Plaintiffs also are mindful of the inherent problems of proof under and possible
defenses  to  the  violations  asserted  in the  Litigation.  Counsel  for  Lead
Plaintiffs  believe that the  settlement set forth in this  Stipulation  confers
substantial benefits upon the Class. Based on their evaluation, counsel for Lead
Plaintiffs  have  determined that the settlement set forth in the Stipulation is
in the best interests of the Lead Plaintiffs and the Class.

                                       4
<PAGE>
IV.  TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

     NOW,  THEREFORE,  IT IS HEREBY  STIPULATED  AND  AGREED  by and among  Lead
Plaintiffs (for themselves and the Class Members) and Defendants, by and through
their respective counsel of record,  that, subject to the approval of the Court,
the Litigation and the Released  Claims shall be finally and fully  compromised,
settled, and released, and the Litigation shall be dismissed with prejudice,  as
to all Settling  Parties,  upon and subject to the terms and  conditions  of the
Stipulation, as follows:

     1.   DEFINITIONS

     As used in the Stipulation, the following terms have the meanings specified
below:

     1.1 "Profit Recovery," "PRG," or the "Company," means Profit Recovery Group
International, Inc. (n/k/a PRG-Schultz International, Inc.).

     1.2  "Authorized  Claimant" means any Class Member whose claim for recovery
has been allowed pursuant to the terms of the Stipulation.

     1.3  "Claimant"  means any Class  Member who files a Proof of Claim in such
form and manner, and within such time, as the Court shall prescribe.

                                       5
<PAGE>
     1.4 "Claims  Administrator"  means the firm of The Garden City Group, Inc.,
P.O. Box 9000 #6143, Melville, New York 11566-9000.

     1.5 "Defendants"  means Profit  Recovery,  John M. Cook, Scott L. Colabuono
and Michael Lustig.

     1.6 "Individuals  Defendants"  means John M. Cook, Scott L. Colabuono,  and
Michael Lustig.

     1.7  "Effective  Date"  means the first date by which all of the events and
conditions  specified  in P.  7.1 of the  Stipulation  have  been  met and  have
occurred.

     1.8 "Escrow Agent" means the law firm of Chitwood & Harley LLP.

     1.9 "Final"  means:  (i) the date of final  affirmance  on an appeal of the
Judgment, the expiration of the time for a petition for or a denial of a writ of
certiorari to review the Judgment  and, if  certiorari  is granted,  the date of
final  affirmance of the Judgment  following  review  pursuant to that grant; or
(ii) the date of final  dismissal  of any appeal from the  Judgment or the final
dismissal of any proceeding on certiorari to review the Judgment; or (iii) if no
appeal is filed,  the expiration  date of the time for the filing or noticing of
any appeal from the Court's Judgment approving the Stipulation  substantially in
the form of Exhibit B attached hereto, i.e., thirty (30) days after entry of the
Judgment,  such that the Judgment  represents a final and binding  judgment with

                                       6
<PAGE>
respect to the  Litigation.  Any proceeding or order,  or any appeal or petition
for a writ of  certiorari  pertaining  solely to any plan of  allocation  and/or
application for attorneys' fees,  costs or expenses,  shall not in any way delay
or preclude the Judgment from becoming Final.

     1.10   "Judgment"   means  the  judgment  to  be  rendered  by  the  Court,
substantially in the form attached hereto as Exhibit B.

     1.11  "Person"  means  an  individual,   corporation,   limited   liability
corporation,    professional   corporation,   limited   liability   partnership,
partnership,  limited  partnership,  association,  joint stock company,  estate,
legal  representative,  trust,  unincorporated  association,  government  or any
political subdivision or agency thereof, any business or legal entity and all of
their  respective  spouses,  heirs,  beneficiaries,  executors,  administrators,
predecessors, successors, representatives, or assignees.

     1.12  "Plaintiffs'  Co-Lead  Counsel"  means  Chitwood & Harley  LLP,  Wolf
Haldenstein Adler Freeman & Herz LLP, and Milberg Weiss Bershad & Schulman LLP.

     1.13 "Lead Plaintiffs" means Jeanette Roberts, Stephen Haynes, and Fernando
Melendez.

                                       7
<PAGE>
     1.14 "Plan of  Allocation"  means a plan or formula  of  allocation  of the
Settlement  Fund whereby the Settlement  Fund shall be distributed to Authorized
Claimants  after  payment  of  expenses  of  notice  and  administration  of the
settlement, Taxes and Tax Expenses and such attorneys' fees, costs, expenses and
interest as may be awarded by the Court.  Any Plan of  Allocation is not part of
the Stipulation and Defendants  shall have no  responsibility  or liability with
respect thereto.

     1.15  "Released  Claims" means all claims  (including,  but not limited to,
Unknown Claims),  demands,  losses,  rights,  and causes of action of any nature
whatsoever, whether known or unknown, whether suspected or unsuspected,  whether
concealed or hidden,  whether  accrued or  unaccrued,  by any Lead  Plaintiff or
Class Member against the Released  Persons,  whether under state or federal law,
based upon or  arising  out of, or  related  to the  purchase  or sale of Profit
Recovery common stock during the Class Period and any acts, facts, transactions,
events, occurrences,  disclosures, statements, omissions, or failures to act, at
anytime during the Class Period,  including without  limitation those which were
alleged in the  Litigation,  or those which could or might have been  alleged in
the Litigation based upon such acts, facts, transactions,  events,  occurrences,
disclosures,   statements,   omissions,  or  failures  to  act  alleged  in  the
Litigation.

                                       8
<PAGE>
     1.16  "Released  Persons"  means each and all of the  Defendants  and their
respective past, present and future directors,  officers,  employees,  partners,
members, principals, agents, underwriters, insurers (including Federal Insurance
Company  and St.  Paul  Mercury  Insurance  Company),  co-insurers,  reinsurers,
controlling  shareholders,  attorneys, law firms, (including Alston & Bird LLP),
accountants  or auditors,  banks or investment  banks,  associates,  personal or
legal  representatives,   predecessors,   successors,   parents,   subsidiaries,
divisions,  joint  ventures,  assigns,  spouses,  heirs,  related or  affiliated
entities,  any entity in which any  Defendant has a  controlling  interest,  any
members of their immediate families,  or any trust of which any Defendant is the
settlor or which is for the benefit of any  Defendant  and/or  member(s)  of his
family.

     1.17  "Plaintiffs"  means all of the  Plaintiffs  that have appeared in the
Litigation.

     1.18  "Plaintiffs'  Counsel" means counsel who have appeared for any of the
Plaintiffs in the Litigation.

     1.19  "Settled  Defendants'  Claims" means all claims  (including,  but not
limited to, Unknown Claims),  demands,  losses,  rights, and causes of action of
any  nature  whatsoever,   whether  known  or  unknown,   whether  suspected  or
unsuspected,  whether  concealed  or  hidden,  that have been or could have been

                                       9
<PAGE>
asserted  in the  Action  or any forum by the  Defendants  or any of them or the
successors and assigns of any of them against any of the Lead Plaintiffs,  Class
Members or Plaintiffs'  Counsel,  which arise out of or relate in any way to the
institution, prosecution, assertion, settlement, or resolution of the Litigation
(except for claims to enforce the Settlement).

     1.20  "Class"  means all Persons who  purchased  the common stock of Profit
Recovery between July 19, 1999 and July 26, 2000,  inclusive.  Excluded from the
Class are  Defendants,  members  of the  immediate  families  of the  Individual
Defendants, any entities in which any Defendant has a controlling interest or is
a parent  or  subsidiary  of or is  controlled  by the  Company,  and the  legal
representatives,  heirs,  successors,  predecessors  in interest,  affiliates or
assigns of any  Defendant.  Also  excluded  from the Class are those Persons who
timely and validly  request  exclusion from the Class pursuant to the "Notice of
Pendency of Class Action and Proposed Settlement, Motion for Attorneys' Fees and
Settlement Fairness Hearing" to be sent to potential Class Members.

     1.21  "Class  Member" or  "Member  of the  Class"  means a Person who falls
within the definition of the Class.

     1.22 "Class Period" means the period commencing on July 19, 1999 and ending
on July 26, 2000, inclusive.

                                       10
<PAGE>
     1.23  "Settlement  Fund" means the  principal  amount of six million  seven
hundred  fifty  thousand  dollars  ($6,750,000.00),  plus any interest  that may
accrue thereon as provided for herein.

     1.24 "Settling Parties" means, collectively, each of the Defendants and the
Lead Plaintiffs on behalf of themselves and the Members of the Class.

     1.25 "Unknown  Claims" means any Released Claims that any Lead Plaintiff or
Class Member does not know or suspect to exist in his,  her, or its favor at the
time of the release of the Released Persons,  and any Settled Defendants' Claims
that any Defendant does not know or suspect to exist in his or its favor, which,
if known by him, her, or it, might have  affected his, her, or its  decisions(s)
with respect to the settlement.  With respect to any and all Released Claims and
Settled  Defendants' Claims, the Settling Parties stipulate and agree that, upon
the Effective Date, Lead  Plaintiffs and the Defendants  shall expressly  waive,
and each of the Class Members  shall be deemed to have,  and by operation of the
Judgment  shall have,  expressly  waived the  provisions,  rights,  and benefits
conferred  by any  law of any  state  or  territory  of the  United  States,  or
principle  of  common  law,  which  is  similar,  comparable  or  equivalent  to
California Civil Code ss. 1542, which provides:

          A general  release does not extend to claims  which the creditor  does
     not know or  suspect  to exist in his  favor at the time of  executing  the

                                       11
<PAGE>
     release, which if known by him must have materially affected his settlement
     with the debtor.

     The Lead  Plaintiffs  and Class  Members may  hereafter  discover  facts in
addition to or different from those that any of them now knows or believes to be
true  related  to the  subject  matter  of the  Released  Claims,  but each Lead
Plaintiff shall expressly and each Class Member,  upon the Effective Date, shall
be deemed to have, and by operation of the Judgment shall have, fully,  finally,
and forever settled and released any and all Released Claims,  known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed upon any theory of law or
equity now existing or coming into existence in the future,  including,  but not
limited to, conduct that is negligent, intentional, with or without malice, or a
breach of any duty, law or rule,  without regard to the subsequent  discovery or
existence of such different or additional facts.  Similarly,  the Defendants and
Released  Persons may hereafter  discover facts in addition to or different from
those that any of them now knows or believes  to be true  related to the subject
matter of the Settled Defendants' Claims, but each Defendant shall expressly and
each Released  Person,  upon the Effective Date, shall be deemed to have, and by
operation of the Judgment shall have,  fully,  finally,  and forever settled and
released any and all Settled Defendants' Claims, known or unknown,  suspected or

                                       12
<PAGE>
unsuspected,  contingent or non-contingent,  whether or not concealed or hidden,
which now exist, or heretofore have existed upon any theory of law or equity now
existing or coming into existence in the future,  including, but not limited to,
conduct that is negligent,  intentional,  with or without malice, or a breach of
any duty, law or rule,  without regard to the subsequent  discovery or existence
of such different or additional facts. The Settling Parties acknowledge, and the
Class Members and Released  Persons shall be deemed by operation of the Judgment
to have  acknowledged,  that the inclusion of "Unknown Claims" in the definition
of Released Claims and Settled  Defendants' Claims was separately  bargained for
and is a key element of the settlement of which these releases are a part.

     2.   THE SETTLEMENT

          A.   THE SETTLEMENT FUND

     2.1 The  principal  amount of  $6,750,000.00  (plus any  interest  that may
accrue thereon as provided for herein) shall  constitute the Settlement Fund and
shall be paid or caused to be paid by Defendants into an interest bearing escrow
account  maintained by the Escrow Agent on or before the  expiration of ten (10)
business  days from the date of entry of the order  preliminarily  approving the

                                       13
<PAGE>
settlement by wire transfer of the funds pursuant to written  instructions  from
Plaintiffs'  Co-Lead  Counsel,  which have already  been  provided in writing to
counsel for Defendants.

          B.   THE ESCROW AGENT

     2.2 The Escrow Agent shall invest the Settlement Fund deposited pursuant to
P. 2.1 above in  short-term  instruments  backed by the full faith and credit of
the United States Government or fully insured by the United States Government or
an agency thereof (or in a mutual fund invested solely in such  instruments) and
shall  reinvest  the  proceeds  of these  instruments  as they mature in similar
instruments and/or funds at their then current market rates.

     2.3 The Escrow  Agent  shall not  disburse  the  Settlement  Fund except as
provided in the Stipulation, by an order of the Court, or with the prior written
agreement  of counsel for  Defendants,  counsel  for  Defendants'  Insurer,  and
Plaintiffs' Co-Lead Counsel.

     2.4 Subject to further order and/or  direction as may be made by the Court,
the Escrow Agent is  authorized  to execute such  transactions  on behalf of the
Class Members as are consistent with the terms of the Stipulation.

                                       14
<PAGE>
     2.5 All funds held by the Escrow Agent shall be deemed and considered to be
in custodia  legis,  and shall remain subject to the  jurisdiction of the Court,
until such time as such funds shall be distributed  pursuant to the  Stipulation
and/or further order(s) of the Court.

     2.6 The  Escrow  Agent may pay up to  $100,000  from the  Settlement  Fund,
without  further  approval from the  Defendants or the Court,  for the costs and
expenses reasonably and actually incurred in connection with providing notice to
the Class, locating Class Members,  soliciting Class claims,  assisting with the
filing  of  claims,  administering  and  distributing  the  Settlement  Fund  to
Authorized  Claimants,  processing  Proof of Claim and Release forms, and paying
escrow fees and costs, if any.

          C.   TAXES

     2.7 The Settling  Parties and their counsel agree that the Settlement  Fund
is intended to be a  "qualified  settlement  fund"  within the meaning of Treas.
Reg.  ss.1.468B-1.  The  Settling  Parties  and  their  counsel  agree  that the
Settlement Fund should be treated as being at all times a "qualified  settlement
fund" within the meaning of Treas.  Reg.  ss.1.468B-1.  In addition,  the Escrow
Agent shall  timely make such  elections  as necessary or advisable to carry out
the  provisions  of this P. 2.7,  including  the  "relation-back  election"  (as
defined in Treas. Reg.  ss.1.468B-1)  back to the earliest  permitted date. Such

                                       15
<PAGE>
elections  shall be made in  compliance  with the  procedures  and  requirements
contained  in such  regulations.  It shall be the  responsibility  of the Escrow
Agent to timely and properly prepare and deliver the necessary documentation for
signature by all necessary  parties,  and  thereafter  to cause the  appropriate
filing to occur.

     (a) For the purpose of ss. 468B of the Internal  Revenue  Code of 1986,  as
amended, and the regulations promulgated  thereunder,  the "administrator" shall
be the Escrow  Agent.  The Escrow  Agent  shall  timely  and  properly  file all
informational  and other tax returns  necessary or advisable with respect to the
Settlement Fund (including,  without limitation, the returns described in Treas.
Reg. ss.  1.468B-2(k)).  Such returns (as well as the election described in this
P. 2.7) shall be  consistent  with this P. 2.7 and in all events  shall  reflect
that all Taxes as defined  in  subsection  (b) below  (including  any  estimated
Taxes,  interest or penalties) on the income earned by the Settlement Fund shall
be paid out of the Settlement Fund as provided in P. 2.7(b) hereof.

     (b) All (i) Taxes  (including any estimated  Taxes,  interest or penalties)
arising with respect to the income earned by the Settlement Fund,  including any
Taxes or tax detriments  that may be imposed upon the Defendants with respect to
any  income  earned  by the  Settlement  Fund for any  period  during  which the

                                       16
<PAGE>
Settlement Fund does not qualify as a "qualified settlement fund" for federal or
state income tax purposes  ("Taxes"),  and (ii)  expenses and costs  incurred in
connection  with the operation  and  implementation  of this P. 2.7  (including,
without limitation, expenses of tax attorneys and/or accountants and mailing and
distribution  costs and  expenses  relating  to filing (or  failing to file) the
returns  described  in this P. 2.7) ("Tax  Expenses"),  shall be paid out of the
Settlement  Fund;  in all events  neither  Defendants  nor the Released  Persons
(including without limitation  Defendants'  insurer) shall have any liability or
responsibility  for the  Taxes  or the Tax  Expenses.  The  Escrow  Agent  shall
indemnify and hold each of the Defendants and the Released  Persons harmless for
Taxes and Tax Expenses (including,  without limitation,  Taxes payable by reason
of any such  indemnification).  Further, Taxes and Tax Expenses shall be treated
as, and considered to be, a cost of  administration  of the Settlement  Fund and
shall be timely  paid by the Escrow  Agent out of the  Settlement  Fund  without
prior  order  from  the  Court,   and  the  Escrow   Agent  shall  be  obligated
(notwithstanding  anything herein to the contrary) to withhold from distribution

                                       17
<PAGE>
to Authorized  Claimants any funds necessary to pay such amounts,  including the
establishment  of adequate  reserves  for any Taxes and Tax Expenses (as well as
any  amounts   that  may  be  required  to  be  withheld   under   Treas.   Reg.
ss.1.468B-2(1)(2));  neither Defendants nor the Released Persons are responsible
nor shall they have any liability  therefore.  The Settling Parties hereto agree
to cooperate  with the Escrow  Agent,  each other,  and their tax  attorneys and
accountants  to the extent  reasonably  necessary to carry out the provisions of
this P. 2.7.

          D.   TERMINATION OF SETTLEMENT

     2.8 In the event that the  Stipulation  is not approved,  or is terminated,
canceled,  or fails to  become  effective  for any  reason,  including,  without
limitation,  in the event the  Judgment  is reversed  or vacated  following  any
appeal taken therefrom, or is successfully collaterally attacked, the Settlement
Fund (including accrued interest) less reasonable  expenses actually incurred or
due and owing from the Settlement Fund for the notice and  administration of the
Settlement  pursuant to P. 2.6 above,  shall be refunded to Defendants'  Insurer
contributing  to the  Settlement  Fund by wire transfer in  accordance  with the
instructions  to be provided by the Insurer or defense  counsel within three (3)

                                       18
<PAGE>
business days of the availability of the monies from the investments  authorized
herein or as otherwise agreed upon in writing by Defendants' Insurer.

     3.   NOTICE ORDER AND SETTLEMENT HEARING

     3.1 Promptly after execution of the Stipulation, the Settling Parties shall
submit the Stipulation together with its Exhibits to the Court and shall jointly
apply for entry of an order (the "Notice Order"),  substantially in the form and
content of Exhibit A attached  hereto,  requesting,  inter alia, the preliminary
approval of the  settlement set forth in the  Stipulation,  and approval for the
mailing of a  settlement  notice (the  "Notice")  and  publication  of a summary
notice,  substantially in the forms of Exhibits A-1 and A-3 attached hereto. The
Notice  shall  include  the  general  terms of the  settlement  set forth in the
Stipulation,  the proposed Plan of Allocation,  the general terms of the Fee and
Expense  Application  as defined in P. 6.1 below and the date of the  Settlement
Hearing as defined below.

     3.2 The Settling  Parties  request that,  after Notice is given,  the Court
hold a hearing (the  "Settlement  Hearing")  and approve the  settlement  of the
Litigation as set forth herein. At or after the Settlement Hearing,  Plaintiffs'
Co-Lead  Counsel also will request that the Court  approve the proposed  Plan of
Allocation and the Fee and Expense Application.

                                       19
<PAGE>
     3.3 Except for their  obligation to pay or cause payment of the  Settlement
Amount,  and to cooperate in the production of  information  with respect to the
identification  of Class  Members from Profit  Recovery's  shareholder  transfer
records, as provided herein,  Defendants shall have no liability,  obligation or
responsibility  for the  administration of the Settlement or disbursement of the
Net Settlement Fund.

     4.   RELEASES

     4.1 Upon the Effective  Date,  the Lead  Plaintiffs,  and each of the Class
Members  shall be deemed to have,  and by operation of the Judgment  shall have,
fully,  finally, and forever released,  relinquished and discharged all Released
Claims  against the Released  Persons,  regardless  of whether such Class Member
executes and delivers a Proof of Claim and Release.

     4.2  Upon  the  Effective  Date,  each  of the  Defendants,  on  behalf  of
themselves and the Released  Persons,  shall be deemed to have, and by operation
of the Judgment shall have, fully,  finally, and forever released,  relinquished
and discharged  all Settled  Defendants'  Claims,  and shall forever be enjoined
from prosecuting the Settled Defendants' Claims.

     5.   ADMINISTRATION   AND   CALCULATION  OF  CLAIMS,   FINAL  AWARDS,   AND
          SUPERVISION AND DISTRIBUTION OF SETTLEMENT FUND

                                       20
<PAGE>
     5.1 The Claims Administrator,  subject to such supervision and direction of
the  Court  and/or  Plaintiffs'  Co-Lead  Counsel  as  may  be  necessary  or as
circumstances  may require,  shall administer and calculate the claims submitted
by Class  Members and shall  oversee  distribution  of the Net  Settlement  Fund
(defined below) to Authorized Claimants. The Settlement Fund shall be applied as
follows:

     (a) to pay all the costs and expenses  reasonably and actually  incurred in
connection  with providing  Notice,  locating Class  Members,  soliciting  Class
claims, assisting with the filing of claims,  administering and distributing the
Settlement Fund to Authorized  Claimants,  processing Proof of Claim and Release
forms, and paying escrow fees and costs, if any;

     (b) to pay the Taxes and Tax Expenses described in P. 2.7 above;

     (c) to pay to Plaintiffs' Counsel attorneys' fees, expenses, and costs with
interest thereon (the "Fee and Expense Award"),  if and to the extent allowed by
the Court; and

     (d) to distribute the balance of the Settlement  Fund (the "Net  Settlement
Fund") to  Authorized  Claimants  as  allowed  by the  Stipulation,  the Plan of
Allocation, or the Court.

                                       21
<PAGE>
     5.2 Upon the Effective  Date and  thereafter,  and in  accordance  with the
terms of the Stipulation,  the Plan of Allocation,  or such further approval and
further  order(s)  of the  Court as may be  necessary  or as  circumstances  may
require,  the Net Settlement Fund shall be distributed to Authorized  Claimants,
subject to and in accordance with the following:

     (a) Within  ninety  (90) days after the mailing of the Notice or such other
time  as may be set by the  Court,  each  Person  claiming  to be an  Authorized
Claimant  shall be  required to submit to the Claims  Administrator  a completed
Proof of Claim and  Release,  substantially  in the form of Exhibit A-2 attached
hereto,  signed  under  penalty of perjury and  supported  by such  documents as
specified in the Proof of Claim and Release and as are  reasonably  available to
the Authorized Claimant.

     (b) Except as otherwise ordered by the Court, all Class Members who fail to
timely  submit a Proof of Claim and Release  within such  period,  or such other
period as may be ordered by the Court,  or otherwise  allowed,  shall be forever
barred  from  receiving  any  payments  pursuant  to  the  Stipulation  and  the
settlement  set forth herein,  but will in all other  respects be subject to and
bound by the provisions of the Stipulation,  the releases  contained herein, and
the Judgment.

                                       22
<PAGE>
     (c)  The  Net  Settlement  Fund  shall  be  distributed  to the  Authorized
Claimants substantially in accordance with a Plan of Allocation described in the
Notice and approved by the Court.

     5.3 Except for their  obligation to pay or cause payment of the  Settlement
Amount,  and to cooperate in the production of  information  with respect to the
identification  of Class  Members from Profit  Recovery's  shareholder  transfer
records,  as provided herein,  Defendants and the Released Persons shall have no
responsibility  for,  interest in, or liability  whatsoever  with respect to the
investment or distribution of the Settlement  Fund, the Plan of Allocation,  the
determination,   administration,  or  calculation  of  claims,  the  payment  or
withholding of Taxes, or any losses incurred in connection therewith.

     5.4 No Person  shall  have any claim  against  Plaintiffs'  Counsel  or any
claims administrator, or Defendants or their counsel based on distributions made
substantially  in accordance with the  Stipulation and the settlement  contained
herein, the Plan of Allocation, or further orders of the Court.

                                       23
<PAGE>
     5.5 If there is any balance  remaining in the Net Settlement Fund after six
months from the date of  distribution  of the Net  Settlement  Fund  (whether by
reason of tax refunds,  uncashed checks,  or otherwise),  then, after the Claims
Administrator has made reasonable and diligent efforts to have Class Members who
are entitled to participate in the  distribution of the Net Settlement Fund cash
their  distributions,  any  balance  remaining  shall  be  re-distributed  among
Authorized  Claimants in an  equitable  and  economic  manner and any  remainder
donated to an appropriate non-profit organization.

     5.6 It is understood  and agreed by the Settling  Parties that any proposed
Plan of Allocation of the Net Settlement Fund including, but not limited to, any
adjustments  to an  Authorized  Claimant's  claim  set forth  therein,  is not a
necessary  term  of  the  Stipulation  and  is to be  considered  by  the  Court
separately from the Court's consideration of the fairness,  reasonableness,  and
adequacy  of the  settlement  set  forth in the  Stipulation,  and any  order or
proceedings relating to the Plan of Allocation shall not operate to terminate or
cancel the Stipulation or affect the finality of the Court's Judgment  approving
the Stipulation and the settlement set forth herein, or any other orders entered
pursuant to the Stipulation.

                                       24
<PAGE>
     6.   PLAINTIFFS' COUNSEL'S ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES

     6.1  Plaintiffs'  Co-Lead Counsel may submit an application or applications
(the  "Fee  and  Expense  Application")  for  distributions  to  them  from  the
Settlement  Fund  for:  (a) an  award  of  attorneys'  fees to be paid  from the
Settlement  Fund;  plus (b)  reimbursement  of  expenses  and costs  incurred in
connection with prosecuting the Litigation, plus any interest on such attorneys'
fees, costs, and expenses at the same rate and for the same periods as earned by
the  Settlement  Fund.  Plaintiffs'  Co-Lead  Counsel  reserve the right to make
additional applications for fees and expenses incurred.

     6.2 The attorneys' fees, expenses and costs,  including the fees of experts
and consultants,  as awarded by the Court, shall be paid to Plaintiffs'  Co-Lead
Counsel  from the  Settlement  Fund,  as  ordered,  immediately  after the Court
executes an order awarding such fees and expenses.  Plaintiffs'  Co-Lead Counsel
shall thereafter  allocate the attorneys' fees amongst  Plaintiffs' Counsel in a
manner in which they in good faith believe  reflects the  contributions  of such
counsel to the prosecution  and settlement of the Litigation.  In the event that
the Effective  Date does not occur,  or the Judgment or the order making the Fee
and Expense Award is reversed or modified,  or the  Stipulation  is cancelled or
terminated for any other reason, and in the event that the Fee and Expense Award
has been paid to any extent, then Plaintiffs' Counsel, including their law firm,

                                       25
<PAGE>
partners, and/or shareholders,  shall within ten (10) days from receiving notice
from Defendants' Counsel or from a court of appropriate jurisdiction,  refund to
the Settlement  Fund, the fees,  expenses and costs previously paid to them from
the  Settlement  Fund plus  interest  thereon  at the same rate as earned on the
Settlement Fund in an amount consistent with such reversal or modification. Each
such  Plaintiffs'  Counsel's law firm, as a condition of receiving such fees and
expenses,  on behalf of itself and each partner and/or shareholder of it, agrees
that  the law firm and its  partners  and/or  shareholders  are  subject  to the
jurisdiction  of the Court for the purpose of enforcing  the  provisions of this
paragraph.

     6.3 Any appeal from any order relating to the Fee & Expense  Application or
reversal or modification  thereof,  shall not operate to terminate or cancel the
Stipulation,  or affect or delay the  finality  of the  Judgment  approving  the
Stipulation and the settlement of the Litigation set forth herein.

     6.4 Defendants and the Released Persons shall have no  responsibility  for,
and no liability  whatsoever with respect to, any payment to Plaintiffs' Counsel
from the Settlement Fund.

                                       26
<PAGE>
     7.   CONDITIONS  OF  SETTLEMENT,  EFFECT OF  DISAPPROVAL,  CANCELLATION  OR
          TERMINATION

     7.1 The  Effective  Date of the  Stipulation  shall be  conditioned  on the
occurrence of all of the following events:

     (a)  Defendants  have made or caused  the  contributions  to be made to the
Settlement Fund as required by P. 2.1 above;

     (b) the Court has entered the Notice Order,  or an order  substantially  in
the form of Exhibit A attached hereto;

     (c) the Court has entered the Judgment, or a judgment  substantially in the
form of  Exhibit B  attached  hereto,  or a  judgment  in a form other than that
provided  above  ("Alternative  Judgment")  acceptable  to all  of the  Settling
Parties;

     (d) the Settlement shall not have been terminated pursuant to P. 7.3;

     (e) the Judgment or Alternate Judgment has become Final; and

     (f) a Final order has been entered by the Court  approving the  Stipulation
and settlement.

     7.2 Upon the  occurrence  of all of the events  referenced in P. 7.1 above,
any and all remaining  interest or right of  Defendants in or to the  Settlement
Fund, if any, shall be absolutely and forever extinguished.

                                       27
<PAGE>
     7.3 Defendants' Counsel or Plaintiffs' Co-Lead Counsel shall have the right
to terminate the Settlement and this Stipulation by providing  written notice of
their  election  to do so  ("Termination  Notice") to all other  parties  hereto
within thirty (30) days of: (a) the Court's  declining to enter the Notice Order
in any material respect;  (b) the Court's refusal to approve this Stipulation or
any material part of it; (c) the Court's  declining to enter the Judgment in any
material  respect;  (d) the date upon which the Judgment is modified or reversed
in any material respect by the Court of Appeals or the Supreme Court; or (e) the
date upon which an Alternative  Judgment is modified or reversed in any material
respect by the Court of Appeals or the Supreme Court.

     7.4 A hearing (the  "Settlement  Hearing") shall be held at a date and time
convenient to the Court,  at the United States  District  Court for the Northern
district of Georgia,  Atlanta Division, 75 Spring Street,  Atlanta, GA 30303, to
determine  whether the proposed  settlement  of the  litigation on the terms and
conditions  provided for in this  stipulation  is fair,  just,  reasonable,  and
adequate as to the Class and should be approved by the Court; whether a Judgment
as provided in P. 1.10 should be entered  herein;  whether the proposed  Plan of
Allocation should be approved;  and to determine the amount of fees and expenses
that  should be  awarded  to  Plaintiffs'  Counsel.  If prior to the  Settlement
Hearing,  Persons  who  otherwise  would be Members of the Class have  submitted
timely  requests for  exclusion  ("Requests  for  Exclusion")  from the Class in
accordance with the provisions of the Notice Order and the notice given pursuant
thereto,  and if the aggregate  number of shares of Profit Recovery common stock
purchased by such Class  Members  during the Class Period  equals or exceeds the

                                       28
<PAGE>
amount specified in a separate supplemental agreement ("Supplemental Agreement")
between  the  parties,  then,  unless  unanimously  agreed to in  writing by all
Defendants  and their insured,  Defendants  shall  terminate the  Stipulation in
accordance  with the procedures  set forth in the  Supplemental  Agreement.  The
Supplemental  Agreement and all of its terms are hereby  incorporated  into this
Stipulation (and vice versa);  however,  the Supplemental  Agreement will not be
filed with the Court unless and until a dispute among the parties concerning its
interpretation  or  application  arises.  Copies of all Requests  for  Exclusion
received  and  copies of all  written  revocations  of  Requests  for  Exclusion
received  shall be sent to counsel for  Defendants  and to  Plaintiffs'  Co-Lead
Counsel within a reasonable time of receipt.

     7.5 Unless  otherwise  ordered by the Court,  in the event the  Stipulation
shall terminate,  or be cancelled, or shall not become effective for any reason,
within five (5) business days after written  notification  of such event is sent
by counsel for  Defendants or Plaintiffs'  Co-Lead  Counsel to the Escrow Agent,
the Settlement  Fund  (including  accrued  interest),  less any expenses and any
costs that have  either  been  properly  disbursed  pursuant to P. 2.6 or P. 2.7

                                       29
<PAGE>
herein, or are determined to be chargeable to the Settlement Fund for the notice
and  administration  of the  Settlement  pursuant  to P.  2.6  herein,  shall be
refunded by the Escrow Agent on to the Defendants'  Insurer  pursuant to written
instructions  from  counsel  for  Defendants.  At the  request  of  counsel  for
Defendants, the Escrow Agent or its designee shall apply for any tax refund owed
to the  Settlement  Fund and pay the  proceeds,  after  deduction of any fees or
expenses  reasonably  incurred in connection with such application(s) for refund
to the Defendants' Insurer.

     7.6 In the event that the  Stipulation  is not approved by the Court or the
settlement  set  forth in the  Stipulation  is  terminated  or  fails to  become
effective in accordance with its terms,  the Settling  Parties shall be restored
to  their  respective  positions  in the  Litigation  immediately  prior  to the
execution of this  Stipulation.  In such event,  the terms and provisions of the
Stipulation,  with the exception of P. P. 7.4-7.6 herein,  shall have no further
force and effect with respect to the  Settling  Parties and shall not be used in
the Litigation or in any other  proceeding for any purpose,  and any judgment or
order entered by the Court in accordance with the terms of the Stipulation shall
be treated as vacated,  nunc pro tunc. No order of the Court or  modification or
reversal on appeal of any order of the Court  concerning  the Plan of Allocation
or the amount of any attorneys' fees, costs,  expenses,  and interest awarded by
the Court to the Plaintiffs or any of their counsel shall constitute grounds for
cancellation or termination of the  Stipulation.  If the Effective Date does not
occur,  or if the Stipulation is terminated  pursuant to its terms,  neither the

                                       30
<PAGE>
Lead  Plaintiffs nor any of their counsel shall have any obligation to repay any
amounts actually and properly  disbursed from the Settlement Fund for the notice
and administration of the Settlement pursuant to P. 2.6 hereof. In addition, any
expenses already incurred and properly chargeable to the Settlement Fund for the
notice and  administration  of the  Settlement  pursuant to P. 2.6 hereof at the
time of such  termination or cancellation but which have not been paid, shall be
paid by the Escrow Agent in accordance with the terms of the  Stipulation  prior
to the balance being refunded in accordance with P. 7.5 above.

     8.   MISCELLANEOUS PROVISIONS

     8.1 If a case is  commenced  in respect of any  Defendant  (or any  insurer
contributing  funds to the  Settlement  Fund on behalf of any  Defendant)  under
Title 11 of the United  States  Code  (Bankruptcy),  or a trustee,  receiver  or
conservator is appointed under any similar law, and in the event of the entry of
a final order of a court of competent  jurisdiction  determining the transfer of
money to the Settlement  Fund, or any portion  thereof,  by or on behalf of such
Defendant to be a preference,  voidable transfer, fraudulent transfer or similar
transaction and any portion thereof is required to be returned,  and such amount
is not promptly  deposited to the Settlement Fund by other Defendants,  then, at

                                       31
<PAGE>
the election of Plaintiffs' Co-Lead Counsel,  the parties shall jointly move the
Court to vacate and set aside the releases  given and Judgment  entered in favor
of the  Defendants  pursuant to this  Stipulation,  which  releases and Judgment
shall be null and void,  and the parties  shall be restored to their  respective
positions  in  the  litigation  immediately  prior  to  the  execution  of  this
Stipulation  and any cash  amounts in the  Settlement  Fund shall be returned as
provided in P. 7.5 above.

     8.2 The  Settling  Parties:  (a)  acknowledge  that it is their  intent  to
consummate this agreement;  and (b) agree to cooperate to the extent  reasonably
necessary  to  effectuate   and  implement  all  terms  and  conditions  of  the
Stipulation and to exercise their best efforts to accomplish the foregoing terms
and conditions of the Stipulation.

     8.3 The Settling  Parties intend this settlement to be a final and complete
resolution  of all disputes  between them with  respect to the  Litigation.  The
settlement compromises all claims that were contested and shall not be deemed an
admission  by any Settling  Party as to the merits of any claim or defense.  The
Judgment will contain a statement that, during the course of the Litigation, the
Settling  Parties and their  respective  counsel at all times  complied with the
requirements of Federal Rule of Civil  Procedure 11. The Settling  Parties agree

                                       32
<PAGE>
that  the  amount  paid to the  Settlement  Fund  and  the  other  terms  of the
settlement were negotiated in good faith by the Settling Parties,  and reflect a
settlement that was reached  voluntarily after consultation with competent legal
counsel.

     8.4 Neither the Stipulation  nor the  settlement,  nor any act performed or
document  executed  pursuant  to or in  furtherance  of the  Stipulation  or the
settlement:  (a) is or may be deemed to be or may be used as an admission of, or
evidence  of, the  validity  of any  Released  Claim,  or of any  wrongdoing  or
liability of the Defendants;  or (b) is or may be deemed to be or may be used as
an admission of, or evidence of, any fault or omission of any of the  Defendants
in  any  civil,   criminal,   or   administrative   proceeding   in  any  court,
administrative  agency,  or other tribunal.  Defendants may file the Stipulation
and/or the  Judgment in any action that may be brought  against them in order to
support  a  defense  or  counterclaim  based  on  principles  of  res  judicata,
collateral estoppel, release, good faith settlement,  judgment bar or reduction,
or any other theory of claim  preclusion or issue  preclusion or similar defense
or counterclaim.

                                       33
<PAGE>
     8.5 All  agreements  made and  orders  entered  during  the  course  of the
Litigation  relating to the  confidentiality  of information  shall survive this
Stipulation.

     8.6 All of the Exhibits to the  Stipulation are material and integral parts
hereof and are fully incorporated herein by this reference.

     8.7 The Stipulation may be amended or modified only by a written instrument
signed  by  or  on  behalf  of  all   Settling   Parties  or  their   respective
successors-in-interest.

     8.8  This  Stipulation  supersedes  and  extinguishes  any  and  all  other
promises,  representations  or agreements,  whether written or oral, made at any
time prior to the date of this  Stipulation by and between the Settling  Parties
or any of their current and former officers, directors, stockholders,  partners,
principals,  employees, agents, parent corporations,  subsidiaries,  affiliates,
predecessors,   estates,  successors,  assigns,  and  attorneys,  regarding  the
resolution of the Litigation.  The Settling  Parties agree that this Stipulation
and the Supplemental Agreement contain the entire agreement between the Settling
Parties with respect to the  Litigation  and that the terms of this  Stipulation
are contractual and not mere recitals.

                                       34
<PAGE>
     8.9  Plaintiffs'  Co-Lead  Counsel,  on behalf of the Class,  are expressly
authorized  by Lead  Plaintiffs  to take all  appropriate  actions  required  or
permitted to be taken by the Class pursuant to the Stipulation to effectuate its
terms and also are  expressly  authorized  to enter  into any  modifications  or
amendments to the Stipulation on behalf of the Class that they deem appropriate.

     8.10 Each counsel or other Person  executing the  Stipulation or any of its
Exhibits on behalf of any party hereto hereby  warrants that such Person has the
full authority to do so.

     8.11 The  Stipulation  may be  executed  in one or more  counterparts.  All
executed  counterparts  and each of them  shall be deemed to be one and the same
instrument.  A complete  set of  executed  counterparts  shall be filed with the
Court.

     8.12 The  Stipulation  shall be binding upon,  and inure to the benefit of,
the successors and assigns of the Settling Parties.

     8.13 The Court shall retain jurisdiction with respect to implementation and
enforcement of the terms of the Stipulation,  and the Settling Parties submit to
the  jurisdiction  of the Court for purposes of  implementing  and enforcing the
settlement embodied in the Stipulation.

     8.14 The Stipulation and the Exhibits  attached hereto and the Supplemental
Agreement shall be considered to have been  negotiated,  executed and delivered,
and to be  wholly  performed,  in the  State  of  Georgia,  and the  rights  and

                                       35
<PAGE>
obligations of the parties to the Stipulation shall be construed and enforced in
accordance with, and governed by, the internal, substantive laws of the State of
Georgia without giving effect to that State's choice of law principles.

     8.15  After  the  distribution  of the Net  Settlement  Fund to  Authorized
Claimants  and upon  request from counsel for  Defendants,  Plaintiffs'  Co-Lead
Counsel shall furnish reasonable written assurances to counsel for Defendants of
destruction of discovery  material  produced in the Litigation,  including inter
alia, transcripts,  documents,  CD-ROMs,  interrogatory responses, and all other
materials provided by Defendants during discovery consistent with the Stipulated
Order Regarding Confidential Information dated July 25, 2001.

                                       36
<PAGE>
     IN WITNESS  WHEREOF,  the parties hereto have caused the  Stipulation to be
executed, by their duly authorized attorneys, dated as of February 8, 2005.

                                         CHITWOOD & HARLEY, LLP
                                         Martin D. Chitwood
                                         Georgia State Bar No. 124950
                                         David J. Worley
                                         Georgia State Bar No. 776665
                                         Krissi T. Gore
                                         Georgia State Bar No. 687020

                                         /s/ Martin D. Chitwood
                                         ---------------------------------------
                                         Martin D. Chitwood

                                         Promenade II, Suite 2300
                                         1230 Peachtree Street, N.E.
                                         Atlanta, GA  30309
                                         Telephone:  (404) 873-3900
                                         Fax:  (404) 876-4476

                                         WOLF HALDENSTEIN ADLER
                                         FREEMAN & HERZ LLP
                                         Daniel W. Krasner
                                         Mark C. Rifkin
                                         Robert Abrams
                                         Matthew Guiney

                                         /s/ Mark C. Rifkin
                                         ---------------------------------------
                                         Mark C. Rifkin

                                         270 Madison Avenue
                                         New York, NY 10016
                                         Telephone: (212) 545-4600
                                         Fax: (212) 686-0114

                                       37
<PAGE>
                                         MILBERG WEISS BERSHAD & SCHULMAN LLP

                                         /s/ David Brower
                                         ---------------------------------------
                                         David Brower

                                         One Pennsylvania Plaza, 49th Floor
                                         New York, NY  10119
                                         Telephone:  (212)594-5300
                                         Fax:  (212)868-1229

                                         R. Timothy Vannatta
                                         Tower One
                                         5200 Town Center Circle, Suite 600
                                         Boca Raton, FL 33486
                                         Telephone: (561) 361-5000
                                         Fax: (561) 367-8400

                                         Plaintiffs' Co-Lead Counsel

                                       38
<PAGE>
                                         ALSTON & BIRD LLP
                                         Todd R. David
                                         Georgia Bar No. 206526
                                         Susan E. Hurd
                                         Georgia Bar No. 379628
                                         Kelly C. Wilcove
                                         Georgia Bar No. 185682

                                         /s/ Todd R. David
                                         ---------------------------------------
                                         Todd R. David

                                         1201 West Peachtree Street
                                         Atlanta, Georgia 30309
                                         Telephone:  (404) 881-7000
                                         Fax:  (404) 881-7777

                                         Counsel for Defendants

                                       39
<PAGE>
                                    EXHIBIT A

                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION

----------------------------------------------------
                                                   )
IN RE PROFIT RECOVERY                              )         CIVIL ACTION FILE
GROUP INTERNATIONAL, INC.                          )         NO. 1:00-CV-1416-CC
SECURITIES LITIGATION                              )
                                                   )
----------------------------------------------------

                    [PROPOSED] ORDER PRELIMINARILY APPROVING
                       SETTLEMENT AND PROVIDING FOR NOTICE

     WHEREAS,  a putative  class  action is  pending in this Court  styled In re
Profit Recovery Group International,  Inc. Securities  Litigation,  Civil Action
No. 1:00-CV-1416-CC (the "Litigation"); and

     WHEREAS,  the parties,  having made application  pursuant to Rule 23 of the
Federal Rules of Civil  Procedure for an order  approving the settlement of this
action,  in accordance  with a Stipulation of Settlement  dated February 8, 2005
(the  "Stipulation"),  which,  together with the Exhibits  annexed  thereto sets
forth the terms and conditions  for a proposed  settlement of the Litigation and
for dismissal of the Litigation with prejudice upon the terms and conditions set
forth therein;

                                       1
<PAGE>
     WHEREAS, pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil
Procedure  and by Order dated  December  3, 2002,  the Court has  certified  the
Litigation  to proceed as a class action on behalf of all persons who  purchased
common stock of Profit Recovery Group International,  Inc. between July 19, 1999
and July 26, 2000, inclusive, and were allegedly damaged thereby.  Excluded from
the Class are  Defendants,  members of the immediate  families of the Individual
Defendants, any entities in which any Defendant has a controlling interest or is
a parent  or  subsidiary  of or is  controlled  by the  Company,  and the  legal
representatives,  heirs,  successors,  predecessors  in interest,  affiliates or
assigns of any Defendant; and

     WHEREAS,  the Court  having read and  considered  the  Stipulation  and the
Exhibits annexed thereto; and

     WHEREAS, all defined terms contained herein shall have the same meanings as
set forth in the Stipulation;

     NOW THEREFORE, IT IS HEREBY ORDERED:

     1. A hearing (the "Settlement  Hearing") shall be held before this Court on
___________,  2005 at __:__ __.m.,  at the United States  District Court for the
Northern  District of Georgia,  Atlanta  Division,  75 Spring  Street,  Atlanta,
Georgia 30303, to determine whether the proposed settlement of the Litigation on
the  terms  and  conditions  provided  for in the  Stipulation  is  fair,  just,
reasonable,  and  adequate  as to the Class and should be approved by the Court;

                                       2
<PAGE>
whether a Judgment  as  provided in the  Stipulation  should be entered  herein;
whether the proposed Plan of Allocation should be approved; and to determine the
amount of fees and expenses that should be awarded to Plaintiffs'  Counsel.  The
Court may adjourn the Settlement  Hearing  without  further notice to Members of
the Class.

     2. The Court reserves the right to approve the  Settlement  with or without
modification  and with or without  further notice of any kind. The Court further
reserves  the  right  to  enter  its  Judgment  approving  the  Stipulation  and
dismissing the Litigation on the merits and with prejudice regardless of whether
it has approved the Plan of Allocation or awarded attorneys' fees and expenses.

     3. The Court  approves,  as to form and content,  the Notice of Pendency of
Class Action and Proposed Settlement,  Motion for Attorneys' Fees and Settlement
Fairness Hearing (the "Notice"), the Proof of Claim and Release form (the "Proof
of Claim"),  and Summary Notice annexed as Exhibits A-1, A-2 and A-3 hereto, and
finds that the  mailing and  distribution  of the Notice and  publishing  of the
Summary Notice substantially in the manner and form set forth in this Order meet
the  requirements  of Rule 23 of the Federal  Rules of Civil  Procedure  and due

                                       3
<PAGE>
process,  and is the best notice  practicable  under the circumstances and shall
constitute due and sufficient notice to all Persons entitled thereto.

     4. Plaintiffs'  Co-Lead Counsel are hereby authorized to retain the firm of
The Garden City Group, Inc. ("Claims Administrator") to supervise and administer
the notice procedure as well as the processing of claims as more fully set forth
below:

     (a) Not later than  ____________,  2005 (the  "Notice  Date"),  Plaintiffs'
Co-Lead  Counsel  shall  cause a copy of the  Notice  and the  Proof  of  Claim,
substantially in the forms annexed as Exhibits A-1 and A-2 hereto,  to be mailed
by first class mail to all Class Members who can be identified  with  reasonable
effort;

     (b) Not  later  than ten days from the  Notice  Date,  Plaintiffs'  Co-Lead
Counsel  shall cause the Summary  Notice to be  published  once in the  national
edition of Investor's Business Daily; and

     (c) Prior to the  Settlement  Hearing,  Plaintiffs'  Co-Lead  Counsel shall
serve on  Defendants'  counsel and file with the Court  proof,  by  affidavit or
declaration, of such mailing and publishing.

     5. The  Defendants  shall  cause  Profit  Recovery's  transfer  records and
shareholder information to be made available to the Claims Administrator for the
purpose of identifying and giving notice to the Class. The Claims  Administrator
shall use reasonable  efforts to give notice to nominee owners such as brokerage

                                       4
<PAGE>
firms and other persons or entities who purchased  Profit  Recovery common stock
during the Class Period as record owners but not as beneficial owners.  Nominees
who  purchased  the common  stock of Profit  Recovery for the benefit of another
Person  during the Class  Period  shall be  requested to send the Notice and the
Proof of Claim to all such beneficial  owners within ten (10) days after receipt
thereof,  or to send a list of the names and addresses of such beneficial owners
to the Claims  Administrator  within  ten (10) days of receipt  thereof in which
event the Claims Administrator shall promptly mail the Notice and Proof of Claim
to such beneficial owners.

     6. The form and content of the Notice,  and the method set forth  herein of
notifying the Class of the  Settlement  and its terms and  conditions,  meet the
requirements  of  Rule 23 of the  Federal  Rules  of  Civil  Procedure,  Section
21D(a)(7) of the  Securities  Exchange  Act of 1934,  15 U.S.C.  78u-4(a)(7)  as
amended  by the  Private  Securities  Litigation  Reform  Act of  1995,  and due
process,  constitute the best notice  practicable under the  circumstances,  and
shall constitute due and sufficient  notice to all persons and entities entitled
thereto.

     7. Any Person  falling within the definition of the Class shall be bound by
all  determinations  and judgments in the Litigation  concerning the settlement,
including,  but not limited  to, the  releases  provided  for  therein,  whether

                                       5
<PAGE>
favorable or unfavorable  to the Class,  unless such Persons  request  exclusion
from the Class in a timely and proper manner, as hereinafter  provided.  A Class
Member  wishing to make such  request  shall mail the request in written form by
first class mail postmarked no later than  _______________,  2005 to the address
designated in the Notice.  Such request for exclusion shall clearly indicate the
name,  address and telephone  number of the person seeking  exclusion,  that the
sender  requests  to be  excluded  from the Class in the In re  Profit  Recovery
International,  Inc. Securities  Litigation,  and must be signed by such person.
Such  persons  requesting  exclusion  are also  directed to state:  the date(s),
price(s),  and number(s) of shares of all purchases and sales of Profit Recovery
common stock during the Class  Period.  The request for  exclusion  shall not be
effective  unless it provides  the required  information  and is made within the
time stated above,  or the exclusion is otherwise  accepted by the Court.  Class
Members requesting exclusion from the Class shall not be entitled to receive any
payment out of the Net  Settlement  Fund as  described  in the  Stipulation  and
Notice.

     8. Class Members who wish to participate  in the settlement  shall complete
and submit Proof of Claim forms in accordance  with the  instructions  contained
therein.  Unless the Court  orders  otherwise,  all Proof of Claim forms must be
submitted no later than  ______________,  2005 [ninety (90) days from the Notice

                                       6
<PAGE>
Date].  Any Class Member who does not timely  submit a Proof of Claim within the
time  provided  for shall be barred  from  sharing  in the  distribution  of the
proceeds of the Settlement Fund, unless otherwise ordered by the Court.

     9. Any Member of the Class may enter an  appearance in the  Litigation,  at
their own expense,  individually or through counsel of their own choice. If they
do not enter an appearance,  they will be  represented  by  Plaintiffs'  Co-Lead
Counsel.

     10. All proceedings in the Litigation are stayed until further order of the
Court, except as may be necessary to implement the settlement or comply with the
terms of the Stipulation.  Pending final determination of whether the settlement
should be approved,  neither the Lead Plaintiffs,  nor any Class Member,  either
directly,  representatively,  or  in  any  other  capacity,  shall  commence  or
prosecute against any of the Released  Persons,  any action or proceeding in any
court or tribunal asserting any of the Released Claims.

     11. Any Member of the Class may appear and show  cause,  if he,  she, or it
has any reason why the proposed  settlement of the  Litigation  should or should
not be approved as fair,  reasonable,  and adequate, or why a judgment should or
should not be entered thereon,  why the Plan of Allocation  should or should not
be approved, or why attorneys' fees and expenses should or should not be awarded

                                       7
<PAGE>
to counsel for the Plaintiffs;  provided,  however,  that no Class Member or any
other Person shall be heard or entitled to contest the approval of the terms and
conditions  of the  proposed  settlement,  or, if  approved,  the judgment to be
entered  thereon  approving  the  same,  or the  order  approving  the  Plan  of
Allocation, or the attorneys' fees and expenses to be awarded to counsel for the
Plaintiffs,  unless  written  objections and copies of any papers and briefs are
filed  with the Clerk of the  United  States  District  Court  for the  Northern
District of Georgia, Atlanta Division, on or before __________, 2005; and copies
of said objections,  papers, and briefs are also served upon Martin D. Chitwood,
Esq., Chitwood & Harley LLP, 1230 Peachtree Street, 2300 Promenade Two, Atlanta,
Georgia 30309; Mark C. Rifkin,  Esq., Wolf Haldenstein Adler Freeman & Herz LLP,
270 Madison Avenue, New York, New York 10016; David Brower,  Esq., Milberg Weiss
Bershad & Schulman LLP, One  Pennsylvania  Plaza, New York, New York 10119-0165;
and Todd R. David, Esq., Alston & Bird LLP, 1201 West Peachtree Street, Atlanta,
Georgia  30309.  Any  Member of the Class  who does not make  his,  her,  or its
objection in the manner  provided  shall be deemed to have waived such objection
and shall  forever be  foreclosed  from making any  objection  to the  fairness,
justness, reasonableness, or adequacy of the proposed settlement, to the Plan of

                                       8
<PAGE>
Allocation,  or to the award of attorneys'  fees and expenses to counsel for the
Plaintiffs, unless otherwise ordered by the Court.

     12. The passage of title and ownership of the Settlement Fund to the Escrow
Agent in  accordance  with the  terms  and  obligations  of the  Stipulation  is
approved.  No Person  that is not a Class  Member or counsel  to the  Plaintiffs
shall  have  any  right  to any  portion  of,  or in the  distribution  of,  the
Settlement Fund unless otherwise  ordered by the Court or otherwise  provided in
the Stipulation.

     13. All funds held by the Escrow Agent shall be deemed and considered to be
in custodia  legis,  and shall remain subject to the  jurisdiction of the Court,
until such time as such funds shall be distributed  pursuant to the  Stipulation
and/or further order(s) of the Court.

     14.  All  motions  and papers in  support  of the  settlement,  the Plan of
Allocation,  and any  application  by counsel for the  Plaintiffs for attorneys'
fees or  reimbursement  of expenses shall be filed and served seven (7) calendar
days prior to the Settlement Hearing.

     15. Neither Profit  Recovery,  the Individual  Defendants,  nor the Related
Parties  shall  have  any  responsibility  for  the  Plan of  Allocation  or any
application  for  attorneys'  fees or  reimbursement  of expenses  submitted  by

                                       9
<PAGE>
Plaintiffs' Co-Lead Counsel, and such matters will be considered separately from
the fairness, justness, reasonableness, and adequacy of the settlement.

     16. At or after the Settlement  Hearing,  the Court shall determine whether
the  Plan  of  Allocation  proposed  by  Plaintiffs'  Co-Lead  Counsel  and  any
application for attorneys' fees or reimbursement of expenses shall be approved.

     17. All  reasonable  costs  incurred in  identifying  and  notifying  class
members,  as well as in administering  the Settlement Fund, shall be paid as set
forth in the  Stipulation.  In the event the  settlement  is not approved by the
Court, or otherwise fails to become effective, neither the Plaintiffs nor any of
their counsel shall have any  obligation to repay to Defendants or their Insurer
the reasonable and actual costs of class notice and of administration.

     18.  The Court  reserves  the right to adjourn  the date of the  Settlement
Hearing  without  further  notice  to the  Members  of  the  Class  and  retains
jurisdiction  to consider all further  applications  arising out of or connected
with the proposed  settlement.  The Court may approve the settlement,  with such
modifications  as may be  agreed to by the  Settling  Parties,  if  appropriate,
without further notice to the Class.

     19. If: (a) the Settlement is terminated by Defendants pursuant to [P. 7.4]
of the Stipulation;  or (b) any specified  condition to the Settlement set forth
in the Stipulation is not satisfied and  Plaintiffs'  Co-Lead Counsel or Counsel

                                       10
<PAGE>
for the Defendants elects to terminate the Settlement as provided in [P. 7.3] of
the  Stipulation,  then,  in any such  event,  the  Stipulation,  including  any
amendment(s) thereof, and this Order shall be null and void, of no further force
or effect,  and without  prejudice to any party,  and may not be  introduced  as
evidence or referred to in any actions or  proceedings  by any person or entity,
and each party shall be restored to his,  her or its  respective  position as it
existed prior to the execution of the Stipulation.

   IT IS SO ORDERED.

DATED:  _____________, 2005

                                            ----------------------------------
                                            THE HONORABLE CLARENCE COOPER
                                            UNITED STATES DISTRICT JUDGE

                                       11
<PAGE>
                                   EXHIBIT A-1
                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION
------------------------------------------x
                                        )      CIVIL ACTION FILE
IN RE PROFIT RECOVERY                   )      NO. 1:00-CV-1416-CC
GROUP INTERNATINAL, INC. SECURITIES     )
LITIGATION                              )
                                        )
------------------------------------------x

                 NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED
             SETTLEMENT, MOTION FOR ATTORNEYS' FEES AND SETTLEMENT
                                FAIRNESS HEARING

      IF YOU BOUGHT PROFIT RECOVERY GROUP INTERNATIONAL, INC. COMMON STOCK
 BETWEEN JULY 19, 1999 AND JULY 26, 2000, INCLUSIVE, THEN YOU MAY BE ENTITLED TO
                    PAYMENT FROM A CLASS ACTION SETTLEMENT.

     A federal court authorized this notice.  This is not a solicitation  from a
lawyer.

     o    The settlement  will provide a $6.75 million  settlement  fund for the
          benefit  of  investors  who  bought  shares of Profit  Recovery  Group
          International,  Inc. ("Profit Recovery") common stock between July 19,
          1999 and July 26, 2000, inclusive (the "Class Period").

     o    The settlement  resolves a lawsuit over whether Profit Recovery misled
          investors about its future earnings.

     o    Your legal  rights are  affected  whether you act or do not act.  Read
          this notice carefully.

                YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
--------------------------------------------------------------------------------
SUBMIT A CLAIM FORM                      The only way to get a payment.
--------------------------------------------------------------------------------

                                       1
<PAGE>
EXCLUDE YOURSELF                         Get no payment. This is the only option
                                         that allows you to ever be part of  any
                                         other lawsuit  against Profit  Recovery
                                         and  the  other  Released Persons about
                                         the Released Claims.
--------------------------------------------------------------------------------
OBJECT                                   Write to the Court about why you do not
                                         like the settlement.
--------------------------------------------------------------------------------
GO TO A HEARING                          Ask  to   speak  in   Court  about  the
                                         fairness of the settlement.
--------------------------------------------------------------------------------
DO NOTHING                               Get no payment. Give up rights.
--------------------------------------------------------------------------------

     o    These rights and options - AND THE  DEADLINES  TO EXERCISE  THEM - are
          explained in this notice.

     o    The  Court in charge of this  case  still  has to  decide  whether  to
          approve the  settlement.  Payments will be made if the Court  approves
          the settlement and after appeals are resolved. Please be patient.

                                 SUMMARY NOTICE

Statement of Plaintiff Recovery
-------------------------------
Pursuant to the settlement  described  herein,  a Settlement  Fund consisting of
$6.75 million in cash, plus interest, has been established.  Plaintiffs estimate
that there were  approximately  21.7 million  shares of Profit  Recovery  common
stock traded  during the Class Period  which may have been  damaged.  Plaintiffs
estimate that the average  recovery per damaged share of Profit  Recovery common
stock  under the  settlement  is $0.31 per damaged  share  before  deduction  of
Court-awarded  attorneys'  fees and expenses.  A Class Member's  actual recovery
will be a proportion of the Net  Settlement  Fund  determined by his, her or its
Recognized Claim as compared to the total Recognized Claims of all Class Members
who  submit  acceptable  Proofs  of  Claim.  Depending  on the  number of claims
submitted,  when  during the Class  Period a Class  Member  purchased  shares of
Profit Recovery  common stock,  and whether those shares were held at the end of
the Class Period or sold during the Class  Period,  and if sold,  when they were
sold,  an  individual  Class  Member may receive  more or less than this average
amount.  See the Plan of Allocation on page [___] for more  information  on your
Recognized Claim.

                                       2
<PAGE>
Statement of Potential Outcome of Case
--------------------------------------
The  parties  disagree  on both  liability  and  damages and do not agree on the
average amount of damages per share that would be recoverable if plaintiffs were
to have  prevailed  on each claim  alleged.  The  Defendants  deny that they are
liable to the plaintiffs or the Class and deny that plaintiffs or the Class have
suffered any damages.

Statement of Attorneys' Fees and Costs Sought
---------------------------------------------
Plaintiffs'  Counsel are moving the Court to award attorneys' fees not to exceed
one third  (33-1/3%) of the Gross  Settlement  Fund,  and for  reimbursement  of
expenses  incurred  in  connection  with the  prosecution  of this Action in the
approximate amount of $700,000.  The requested fees and expenses would amount to
an  average  of  $0.136  per  damaged  share  in total  for  fees and  expenses.
Application  may also be made for  reimbursement  to the Lead  Plaintiffs for an
amount not to exceed  $_____ for  reimbursement  of their  reasonable  costs and
expenses  directly relaing to their  representantion  of the Class.  Plaintiffs'
Counsel have expended  considerable  time and effort in the  prosecution of this
litigation  on a  contingent  fee basis,  and have  advanced the expenses of the
litigation,  in the  expectation  that if they were  successful  in  obtaining a
recovery  for the Class they would be paid from such  recovery.  In this type of
litigation  it is customary for counsel to be awarded a percentage of the common
fund recovery as their attorneys' fees.

Further Information
-------------------
Further  information  regarding  the Action and this  Notice may be  obtained by
contacting  Plaintiffs'  Co-Lead Counsel:  Martin D. Chitwood,  Esq., Chitwood &
Harley LLP, 1230 Peachtree Street,  2300 Promenade Two, Atlanta,  Georgia 30309,
Telephone (404) 873-3900; Mark C. Rifkin, Esq., Wolf Haldenstein Adler Freeman &
Herz  LLP,  270  Madison  Avenue,  New York,  New York  10016,  Telephone  (212)
545-4600;  or David  Brower,  Esq.,  Milberg  Weiss  Bershad & Schulman LLP, One
Pennsylvania Plaza, New York, New York 10119-0165, Telephone (212) 594-5300.

                                       3
<PAGE>
Reasons for the Settlement
--------------------------
The  principal  reason for the  settlement  is the benefit to be provided to the
Class now.  This benefit must be compared to the risk that no recovery  might be
achieved  after a contested  trial and likely  appeals,  possibly years into the
future.

[END OF COVER PAGE]
--------------------------------------------------------------------------------
                            WHAT THIS NOTICE CONTAINS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>                                                                                                            <C>
                                                                                                               PAGE

SUMMARY NOTICE....................................................................................................2
--------------

         Statement of Plaintiff Recovery..........................................................................2

         Statement of Potential Outcome of Case...................................................................3

         Statement of Attorneys' Fees and Costs Sought............................................................3

         Further Information......................................................................................3

         Reasons for the Settlement...............................................................................3

BASIC INFORMATION.................................................................................................7

                  1.       Why did I get this notice package?.....................................................7

                  2.       What is this lawsuit about?............................................................7

                  3.       Why is this a class action?............................................................8

                  4.       Why is there a settlement?.............................................................8

WHO IS IN THE SETTLEMENT..........................................................................................8

                  5.       How do I know if I am part of the settlement?..........................................8

                  6.       Are there exceptions to being included?................................................8

                  7.       What if I am still not sure if I am included?..........................................9
</TABLE>

                                       4
<PAGE>
<TABLE>
<S>                                                                                                            <C>
THE SETTLEMENT BENEFITS -- WHAT YOU GET...........................................................................9

                  8.       What does the settlement provide?......................................................9

                  9.       How much will my payment be?...........................................................9

HOW YOU GET A PAYMENT -- SUBMITTING A CLAIM FORM.................................................................10

                  10.      How can I get a payment?..............................................................10

                  11.      When would I get my payment?..........................................................10

                  12.      What am I giving up to get a payment or stay in the Class?............................10

EXCLUDING YOURSELF FROM THE SETTLEMENT...........................................................................12

                  13.      How do I get out of the proposed settlement?..........................................12

                  14.      If I do not exclude myself, can I sue Profit Recovery and the other Released
                           Parties for the same thing later?.....................................................13

                  15.      If I exclude myself, can I get money from the proposed settlement?....................13

THE LAWYERS REPRESENTING YOU.....................................................................................13

                  16.      Do I have a lawyer in this case?......................................................13

                  17.      How will the lawyers be paid?.........................................................14

OBJECTING TO THE SETTLEMENT......................................................................................14

                  18.      How do I tell the Court that I do not like the proposed settlement?...................14

                  19.      What is the difference between objecting and excluding?...............................15

THE COURT'S FAIRNESS HEARING.....................................................................................16

                  20.      When and where will the Court decide whether to approve the proposed
                           settlement?...........................................................................16
</TABLE>

                                       5
<PAGE>
<TABLE>
<S>                                                                                                            <C>
                  21.      Do I have to come to the hearing?.....................................................16

                  22.      May I speak at the hearing?...........................................................16

IF YOU DO NOTHING................................................................................................17

                  23.      What happens if I do nothing at all?..................................................17

GETTING MORE INFORMATION.........................................................................................17

                  24.      Are there more details about the proposed settlement?.................................17

                  25.      How do I get more information?........................................................17

PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS....................................................18

SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES..........................................................21
</TABLE>

                                       6
<PAGE>
                                BASIC INFORMATION

--------------------------------------------------------------------------------
1.   Why did I get this notice package?
--------------------------------------------------------------------------------

You or  someone  in your  family may have  purchased  shares of Profit  Recovery
common stock between July 19, 1999 and July 26, 2000, inclusive.

The Court directed that this Notice be sent to Class Members because they have a
right to know about a proposed  settlement of a class action lawsuit,  and about
all  of  their  options,  before  the  Court  decides  whether  to  approve  the
settlement.  If the Court  approves the  settlement,  and after  objections  and
appeals are  resolved,  an  administrator  appointed  by the Court will make the
payments that the settlement allows.

This package explains the lawsuit, the settlement,  Class Members' legal rights,
what benefits are available, who is eligible for them, and how to get them.

The Court in  charge of the case is the  United  States  District  Court for the
Northern District of Georgia,  Atlanta Division, and the case is known as the In
re Profit Recovery Group International, Inc. Securities Litigation, Civil Action
File No. 1:00-CV-1416-CC. This case was assigned to United States District Judge
Clarence Cooper. The people who sued are called plaintiffs,  and the company and
the persons they sued, Profit Recovery and John M. Cook, Scott L. Colabuono, and
Michael Lustig, are called the Defendants.

--------------------------------------------------------------------------------
2.   What is this lawsuit about?
--------------------------------------------------------------------------------

Profit  Recovery is engaged in the  business of providing  accounts  payable and
other  recovery  audit  services to large  businesses  and certain  governmental
agencies that have numerous  transactions  with many  vendors.  Profit  Recovery
identifies overpayments by their clients and receives a negotiated percentage of
any monies they recover.  Plaintiffs alleged that Profit Recovery and certain of
its  officers  and  directors,  John M. Cook,  Scott L.  Colabuono,  and Michael
Lustig, misled investors by intentionally making materially false and misleading
statements  about purported  changes to Profit  Recovery's  revenue  recognition
policies and  materially  overstating  the profits that the company  expected to
earn in the future.  Plaintiffs  also alleged that Profit  Recovery issued press

                                       7
<PAGE>
releases and  financial  statements  that had  materially  false and  misleading
information about the post-acquisition earnings of a newly-acquired  subsidiary.
The Defendants deny they did anything wrong.

--------------------------------------------------------------------------------
3.   Why is this a class action?
--------------------------------------------------------------------------------

In a class  action,  one or more Class  Representatives  (in this case  Jeanette
Roberts,  Stephen Haynes,  and Fernando  Melendez),  sue on behalf of people who
have similar  claims.  All these people are a Class or Class Members.  One court
resolves  the  issues  for all Class  Members,  except  for  those  who  exclude
themselves  from the Class.  The Court  certified this case as a class action on
December 3, 2002.

--------------------------------------------------------------------------------
4.   Why is there a settlement?
--------------------------------------------------------------------------------

The Court did not decide in favor of Plaintiffs  or  Defendants.  Instead,  both
sides  agreed  to a  settlement.  That way,  they  avoid the risks and cost of a
trial, and the people affected will get compensation.  The Class  Representative
and the attorneys think the settlement is best for all Class Members.

                            WHO IS IN THE SETTLEMENT

To see if you will get money from this  settlement,  you first have to decide if
you are a Class Member.

--------------------------------------------------------------------------------
5.   How do I know if I am part of the settlement?
--------------------------------------------------------------------------------

The Court decided that everyone who fits this description is a Class Member: all
Persons who purchased the common stock of Profit Recovery  between July 19, 1999
and July 26, 2000, inclusive.

--------------------------------------------------------------------------------
6.   Are there exceptions to being included?
--------------------------------------------------------------------------------

The Defendants,  members of the immediate families of the Individual Defendants,
any entities in which any Defendant has a controlling interest or is a parent or
subsidiary   of  or  is   controlled   by   Profit   Recovery,   and  the  legal
representatives,  heirs,  successors,  predecessors  in interest,  affiliates or
assigns of any Defendant are not members of the Class.

                                       8
<PAGE>
If one of your mutual funds  purchased  shares of Profit  Recovery  common stock
during the Class Period,  that alone does not make you a Class Member. You are a
Class Member only if you directly  purchased  shares of Profit  Recovery  common
stock  during the Class  Period.  Contact  your  broker to see if you  purchased
Profit Recovery common stock during the Class Period.

If you SOLD Profit  Recovery  common stock during the Class  Period,  that alone
does not make you a Class  Member.  You are a Class Member only if you PURCHASED
your shares during the Class Period.

--------------------------------------------------------------------------------
7.   What if I am still not sure if I am included?
--------------------------------------------------------------------------------

If you are still not sure whether you are  included,  you can ask for free help.
You can  call  1-800-_____-_________  or  visit  [WWW.__________.COM]  for  more
information.  Or you can fill out and return the claim  form  described  on page
[___], in question [10], to see if you qualify.

                     THE SETTLEMENT BENEFITS -- WHAT YOU GET

--------------------------------------------------------------------------------
8.   What does the settlement provide?
--------------------------------------------------------------------------------

In exchange for the  Settlement  and  dismissal of the Action,  Defendants  have
agreed to create a $6.75 million fund to be divided, after fees and expenses are
paid, among all Class Members who send in a valid Proof of Claim form.

--------------------------------------------------------------------------------
9.   How much will my payment be?
--------------------------------------------------------------------------------

Your share of the fund will depend on the total Recognized Claims represented by
the valid  Proof of Claim forms that Class  Members  send in, how many shares of
Profit Recovery common stock you bought, and when you bought and whether or when
you sold them.

By following the  instructions  on page [___] of this Notice,  you can calculate
what is called your Recognized Claim. It is unlikely that you will get a payment
for all of your  Recognized  Claim.  After all Class  Members have sent in their
Proof of Claim forms,  the payment you get will be a part of the Net  Settlement
Fund  equal  to  your  Recognized  Claim  divided  by the  total  of  everyone's
Recognized Claims. See the Plan of Allocation on page [___] for more information
on your Recognized Claim.

                                       9
<PAGE>
                HOW YOU GET A PAYMENT -- SUBMITTING A CLAIM FORM

--------------------------------------------------------------------------------
10.  How can I get a payment?
--------------------------------------------------------------------------------

To qualify  for a payment,  you must send in a Proof of Claim  form.  A Proof of
Claim form is being  circulated  with this  Notice.  You may also get a Proof of
Claim  form on the  Internet  at  [WWW.__________.COM].  Read  the  instructions
carefully,  fill out the Proof of Claim form, include all the documents the form
asks for, sign it, and mail it postmarked no later than _______________, 2005.

--------------------------------------------------------------------------------
11.  When might I get my payment?
--------------------------------------------------------------------------------

The Court will hold a hearing on  _______________,  2005,  to decide  whether to
approve the settlement.  If the Court approves the settlement  after that, there
may be appeals.  It is always  uncertain  whether these appeals can be resolved,
and resolving  them can take time,  perhaps more than a year. It also takes time
for all the Proofs of Claim to be processed. Please be patient.

--------------------------------------------------------------------------------
12.  What am I giving up to get a payment or stay in the Class?
--------------------------------------------------------------------------------

Unless you exclude yourself,  you are staying in the class, and that means that,
upon the  "Effective  Date," you will release all "Released  Claims" (as defined
below)  against the "Released  Persons" (as defined  below).

"Released  Claims"  means all claims  (including,  but not limited  to,  Unknown
Claims), demands, losses, rights, and causes of action of any nature whatsoever,
whether known or unknown, whether suspected or unsuspected, whether concealed or
hidden,  whether  accrued or  unaccrued,  by any Lead  Plaintiff or Class Member
against the Released Persons,  whether under state or federal law, based upon or
arising  out of, or related to the  purchase or sale of Profit  Recovery  common
stock  during  the Class  Period  and any  acts,  facts,  transactions,  events,
occurrences,  disclosures, statements, omissions, or failures to act, at anytime
during the Class Period,  including without  limitation those which were alleged
in the  Litigation,  or those  which  could or might  have been  alleged  in the

                                       10
<PAGE>
Litigation  based  upon such acts,  facts,  transactions,  events,  occurrences,
disclosures,   statements,   omissions,  or  failures  to  act  alleged  in  the
Litigation.

"Released  Persons" means each and all of the  Defendants  and their  respective
past,  present and future directors,  officers,  employees,  partners,  members,
principals, agents, underwriters,  insurers (including Federal Insurance Company
and St. Paul Mercury Insurance Company),  co-insurers,  reinsurers,  controlling
shareholders,  attorneys,  law firms, (including Alston & Bird LLP), accountants
or  auditors,  banks  or  investment  banks,   associates,   personal  or  legal
representatives,  predecessors,  successors,  parents, subsidiaries,  divisions,
joint ventures,  assigns,  spouses,  heirs, related or affiliated entities,  any
entity in which any Defendant has a controlling  interest,  any members of their
immediate families,  or any trust of which any Defendant is the settlor or which
is for the benefit of any Defendant and/or member(s) of his family.

"Unknown  Claims"  means any  Released  Claims that any Lead  Plaintiff or Class
Member  does not know or suspect to exist in his,  her, or its favor at the time
of the release of the Released Persons,  and any Settled Defendants' Claims that
any Defendant does not know or suspect to exist in his or its favor,  which,  if
known by him, her, or it, might have affected his, her, or its decisions(s) with
respect  to the  settlement.  With  respect to any and all  Released  Claims and
Settled  Defendants' Claims, the Settling Parties stipulate and agree that, upon
the Effective Date, Lead  Plaintiffs and the Defendants  shall expressly  waive,
and each of the Class Members  shall be deemed to have,  and by operation of the
Judgment  shall have,  expressly  waived the  provisions,  rights,  and benefits
conferred  by any  law of any  state  or  territory  of the  United  States,  or
principle  of  common  law,  which  is  similar,  comparable  or  equivalent  to
California Civil Code ss. 1542, which provides:

     A general  release does not extend to claims  which the  creditor  does not
     know or suspect to exist in his favor at the time of executing the release,
     which if known by him must have materially affected his settlement with the
     debtor.

The Lead  Plaintiffs and Class Members may hereafter  discover facts in addition
to or  different  from those that any of them now knows or  believes  to be true
related to the subject  matter of the Released  Claims,  but each Lead Plaintiff
shall expressly and each Class Member,  upon the Effective Date, shall be deemed
to have,  and by operation  of the  Judgment  shall have,  fully,  finally,  and
forever  settled and  released any and all  Released  Claims,  known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed upon any theory of law or
equity now existing or coming into existence in the future,  including,  but not
limited to, conduct that is negligent, intentional, with or without malice, or a
breach of any duty, law or rule,  without regard to the subsequent  discovery or

                                       11
<PAGE>
existence of such different or additional facts.  Similarly,  the Defendants and
Released  Persons may hereafter  discover facts in addition to or different from
those that any of them now knows or believes  to be true  related to the subject
matter of the Settled Defendants' Claims, but each Defendant shall expressly and
each Released  Person,  upon the Effective Date, shall be deemed to have, and by
operation of the Judgment shall have,  fully,  finally,  and forever settled and
released any and all Settled Defendants' Claims, known or unknown,  suspected or
unsuspected,  contingent or non-contingent,  whether or not concealed or hidden,
which now exist, or heretofore have existed upon any theory of law or equity now
existing or coming into existence in the future,  including, but not limited to,
conduct that is negligent,  intentional,  with or without malice, or a breach of
any duty, law or rule,  without regard to the subsequent  discovery or existence
of such different or additional facts. The Settling Parties acknowledge, and the
Class Members and Released  Persons shall be deemed by operation of the Judgment
to have  acknowledged,  that the inclusion of "Unknown Claims" in the definition
of Released Claims and Settled  Defendants' Claims was separately  bargained for
and is a key element of the settlement of which these releases are a part.

The "Effective Date" will occur when an Order entered by the Court approving the
Settlement becomes final and not subject to appeal.

If you remain a member of the Class, all of the Court's orders will apply to you
and legally bind you.

                     EXCLUDING YOURSELF FROM THE SETTLEMENT

If you do not want a  payment  from  this  settlement,  but you want to keep any
right  you may have to sue or  continue  to sue  Profit  Recovery  and the other
Released  Persons,  on your own, about the Released  Claims,  then you must take
steps to get out. This is called excluding  yourself -- or is sometimes referred
to as "opting out" of the  settlement  Class.  Defendants  may withdraw from and
terminate the Settlement if in excess of a certain  amount of claimants  exclude
themselves from the Class.

--------------------------------------------------------------------------------
13.  How do I get out of the proposed settlement?
--------------------------------------------------------------------------------

                                       12
<PAGE>
To exclude  yourself from the settlement  Class,  you must send a letter by mail
stating that you "request  exclusion from the Class in the In re Profit Recovery
Group International,  Inc. Securities  Litigation." Your letter should state the
date(s),  price(s),  and number(s) of shares of all your  purchases and sales of
Profit  Recovery common stock during the Class Period.  In addition,  be sure to
include your name, address,  telephone number, and your signature. You must mail
your exclusion request postmarked no later than _______________, 2005 to:

In re Profit Recovery Group International, Inc. Securities Litigation Exclusions
              c/o The Garden City Group, Inc., Claims Administrator
                                  P.O. Box 0000
                               City, ST 00000-0000

You  cannot  exclude  yourself  by  telephone  or by  e-mail.  If you  ask to be
excluded,  you will not get any settlement payment, and you cannot object to the
settlement.  You will not be  legally  bound by  anything  that  happens in this
lawsuit, and you may be able to sue (or continue to sue) Profit Recovery and the
other Released Persons in the future.

--------------------------------------------------------------------------------
14.  If I do not  exclude  myself,  can I sue  Profit  Recovery  and  the  other
     Released Persons for the same thing later?
--------------------------------------------------------------------------------

No. Unless you exclude  yourself,  you give up any rights to sue Profit Recovery
and the other Released  Persons for any and all Released  Claims.  If you have a
pending lawsuit speak to your lawyer in that case immediately.  You must exclude
yourself from this Class to continue your own lawsuit.  Remember,  the exclusion
deadline is _______________, 2005.

--------------------------------------------------------------------------------
15.  If I exclude myself, can I get money from the proposed settlement?
--------------------------------------------------------------------------------

No. If you exclude  yourself,  do not send in a claim form to ask for any money.
But, you may exercise any right you may have to sue, continue to sue, or be part
of a different lawsuit against Profit Recovery and the other Released Persons.

                          THE LAWYERS REPRESENTING YOU

--------------------------------------------------------------------------------
16.  Do I have a lawyer in this case?
--------------------------------------------------------------------------------

                                       13
<PAGE>
The  Court  ordered  that the law firms of  Chitwood  & Harley  LLP in  Atlanta,
Georgia,  Wolf Haldenstein Adler Freeman & Herz LLP in New York, New York 10016,
and Milberg Weiss  Bershad & Schulman LLP in New York,  New York and Boca Raton,
Florida will represent all Class Members.  These lawyers are called  Plaintiffs'
Co-Lead Counsel.  You will not be separately  charged for these lawyers.  If you
want to be represented by your own lawyer, you may hire one at your own expense.

--------------------------------------------------------------------------------
17.  How will the lawyers be paid?
--------------------------------------------------------------------------------

Plaintiffs'  Co-Lead Counsel are moving the Court to award  attorneys' fees from
the  Settlement  Fund in an amount not greater  than one third  (33-1/3%) of the
Gross Settlement Fund and for reimbursement of their expenses in the approximate
amount of $700,000, plus interest on such expenses at the same rate as earned by
the Settlement Fund. Plaintiffs' Co-Lead Counsel,  without further notice to the
Class,  may  subsequently  apply to the Court for fees and expenses  incurred in
connection with  administering  and distributing the settlement  proceeds to the
members of the Class and any proceedings  subsequent to the Settlement  Fairness
Hearing.

Plaintiffs'  Co-Lead Counsel may also move the Court to award a payment of up to
$______ to the Class  Representatives,  Jeanette  Roberts,  Stephen Haynes,  and
Fernando  Melendez,  for the reasonable costs and expenses  directly relating to
their representation of the Class.

                           OBJECTING TO THE SETTLEMENT

You can tell the Court that you do not agree with the settlement or some part of
it.

--------------------------------------------------------------------------------
18.  How do I tell the Court that I do not like the proposed settlement?
--------------------------------------------------------------------------------

If you are a Class Member,  you can object to the proposed  settlement if you do
not like any part of it. You can give reasons why you think the Court should not
approve  it. The Court will  consider  your  views.  To object,  you must send a
signed  letter  saying that you object to the proposed  settlement  in the In re
Profit Recovery Group  International,  Inc.  Securities  Litigation.  Be sure to
include your name, address,  telephone number, and your signature,  identify the
date(s),  price(s), and number(s) of shares of all purchases and sales of Profit
Recovery  common stock you made during the Class  Period,  and state the reasons

                                       14
<PAGE>
why you object to the proposed settlement. Your objection must be filed with the
Court and  served on all the  following  counsel  on or before  _______________,
2005:

<TABLE>
<CAPTION>
<S>                                      <C>                                    <C>
                 COURT                       PLAINTIFFS' CO-LEAD COUNSEL               DEFENDANTS' COUNSEL
Clerk of the Court                       Martin D. Chitwood, Esq.              Todd R. David, Esq.
United States District Court for the     Chitwood & Harley LLP                 Alston & Bird LLP,
Northern District of Georgia, Atlanta    2300 Promenade II                     1201 West Peachtree Street
Division                                 1230 Peachtree Street, N.E.           Atlanta, GA  30309
Richard B. Russell Federal Building      Atlanta, Georgia  30309
and Courthouse                           Mark Rifkin, Esq.
75 Spring Street, SW                     Wolf Haldenstein Adler Freeman &
Atlanta, GA  30303                       Herz LLP
                                         270 Madison Avenue
                                         New York, NY  10016
                                         David Brower, Esq.
                                         Milberg Weiss Bershad & Schulman LLP
                                         One Pennsylvania Plaza
                                         New York, NY  10119-0165
</TABLE>

--------------------------------------------------------------------------------
19.  What is the difference between objecting and excluding?
--------------------------------------------------------------------------------

Objecting is simply telling the Court that you do not like  something  about the
proposed  settlement.  You can object  only if you stay in the Class.  Excluding
yourself is telling  the Court that you do not want to be part of the Class.  If
you  exclude  yourself,  you have no basis to object  because the case no longer
affects you.

                                       15
<PAGE>
                     THE COURT'S SETTLEMENT FAIRNESS HEARING

The  Court  will hold a  hearing  to decide  whether  to  approve  the  proposed
settlement. You may attend and you may ask to speak, but you do not have to.

--------------------------------------------------------------------------------
20.  When and where  will the Court  decide  whether  to  approve  the  proposed
     settlement?
--------------------------------------------------------------------------------

The Court will hold a Settlement Fairness Hearing at ___:_____ __.m. on ____day,
_______________,  2005,  at the United  States  District  Court for the Northern
District of Georgia,  Atlanta Division,  Richard B. Russell Federal Building and
Courthouse,  75 Spring Street,  SW, Atlanta,  Georgia 30303. At this hearing the
Court will consider whether the settlement is fair,  reasonable and adequate. If
there are  objections,  the Court will consider  them.  The Court will listen to
people who have  asked to speak at the  hearing.  The Court may also  decide how
much to pay to  Plaintiffs'  Counsel.  After the hearing,  the Court will decide
whether to approve the settlement.  We do not know how long these decisions will
take.

You should be aware that the Court may change the date and time of the  hearing.
Thus,  if you want to come to the  hearing,  you should  check with  Plaintiffs'
Co-Lead  Counsel  before  coming  to be sure that the date  and/or  time has not
changed.

--------------------------------------------------------------------------------
21.  Do I have to come to the hearing?
--------------------------------------------------------------------------------

No.  Plaintiffs'  Counsel will answer questions the Court may have. But, you are
welcome to come at your own expense.  If you send an objection,  you do not have
to come to Court to talk about it. As long as you mailed your written  objection
on time, the Court will consider it. You may also pay your own lawyer to attend,
but it is not  necessary.  Class Members do not need to appear at the hearing or
take any other action to indicate their approval.

--------------------------------------------------------------------------------
22.  May I speak at the hearing?
--------------------------------------------------------------------------------

If you object to the  Settlement,  you may ask the Court for permission to speak
at the  Settlement  Fairness  Hearing.  To do so,  you must  include  with  your
objection  (see question [18] above) a statement  saying that it is your "Notice
of Intention to Appear in the In re Profit  Recovery Group  International,  Inc.

                                       16
<PAGE>
Securities Litigation." Persons who intend to object to the Settlement, the Plan
of Allocation,  and/or counsel's application for an award of attorneys' fees and
expenses and desire to present evidence at the Settlement  Fairness Hearing must
include in their written  objections the identity of any witnesses they may call
to testify and exhibits they intend to introduce into evidence at the Settlement
Fairness Hearing. You cannot speak at the hearing if you excluded yourself.

                                IF YOU DO NOTHING

--------------------------------------------------------------------------------
23.  What happens if I do nothing at all?
--------------------------------------------------------------------------------

If you do nothing,  you will get no money from this settlement.  But, unless you
exclude  yourself,  you  will not be able to start a  lawsuit,  continue  with a
lawsuit,  or be part of any other lawsuit  against Profit Recovery and the other
Released Persons about the Released Claims in this case, ever again.

                            GETTING MORE INFORMATION

--------------------------------------------------------------------------------
24.  Are there more details about the proposed settlement?
--------------------------------------------------------------------------------

This  notice  summarizes  the  proposed  settlement.   More  details  are  in  a
Stipulation of Settlement dated ___________,  2005 (the "Stipulation").  You can
get a copy of the Stipulation by visiting [WWW.__________.COM], or by writing to
Plaintiffs' Co-Lead Counsel.

You also can call the Claims Administrator at  1-800-_____-_________  toll free;
write  to  Profit  Recovery  Group  International,  Inc.  Securities  Litigation
Settlement,  P.O. Box _______,  _______, ___ _________;  or visit the website at
[WWW.__________.COM],  where you will find answers to common questions about the
settlement,  a claim form, plus other  information to help you determine whether
you are a Class Member and whether you are eligible for a payment.

--------------------------------------------------------------------------------
25.  How do I get more information?
--------------------------------------------------------------------------------

For even more  detailed  information  concerning  the  matters  involved in this
Action,  reference is made to the pleadings,  to the Stipulation,  to the Orders

                                       17
<PAGE>
entered by the Court and to the other papers  filed in the Action,  which may be
inspected at the Office of the Clerk of the United States District Court for the
Northern  District of Georgia,  Atlanta  Division,  Richard B.  Russell  Federal
Building and Courthouse,  75 Spring Street, SW, Atlanta,  Georgia 30303,  during
regular  business  hours.

         PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS

The $6.75 million Cash  Settlement  Amount and the interest earned thereon shall
be the  Gross  Settlement  Fund.  The Gross  Settlement  Fund,  less all  taxes,
approved  costs,  fees  and  expenses  (the  "Net  Settlement  Fund")  shall  be
distributed  to  members  of the Class  who  submit  acceptable  Proofs of Claim
("Authorized Claimants").

The Claims  Administrator  shall determine each  Authorized  Claimant's pro rata
share  of  the  Net  Settlement  Fund  based  upon  each  Authorized  Claimant's
"Recognized  Claim."  The  Recognized  Claim  formula is not  intended  to be an
estimate  of the amount of what a Class  Member  might have been able to recover
after  a  trial;  nor is it an  estimate  of the  amount  that  will  be paid to
Authorized Claimants pursuant to the settlement. The Recognized Claim formula is
the basis upon which the Net Settlement Fund will be  proportionately  allocated
to the Authorized Claimants.

The  following  proposed Plan of Allocation  reflects the  proposition  that the
price of Profit Recovery common stock was inflated artificially by reason of the
allegedly false and misleading  statements  made by Defendants  during the Class
Period.   The  alleged  artificial   inflation   commenced  with  the  Company's
announcement that it was using conservative invoice-based accounting conventions
with  regard  to its  revenue  and  earnings  recognition  that  led to a $2.125
increase in Profit  Recovery's common stock price on July 19, 1999. For purposes
of the allocation of the settlement  proceeds,  the maximum claim recognized per
share will be this $2.125 per share increase for claimants who purchased  during
the  Class  Period  and who  still  owned  those  shares at the end of the Class
Period.  The alleged  inflation,  and more, was eliminated on July 26, 2000 when
corrective  disclosures  were revealed,  and the price of Profit Recovery common
stock dropped  approximately $4.19 per share from its prior closing price. Class
Members who sold shares  before the  disclosures  at the end of the Class Period
(in-and-out traders) presumably received an artificially inflated price on their
sales and have a more difficult  claim to prove that their losses were caused by
the  Defendants'  allegedly  misleading  statements.   To  reflect  the  greater

                                       18
<PAGE>
difficulty  in-and-out  traders'  Recognized  Claims are limited to 10% of their
loss or, 10% of the $2.125 alleged  inflation,  whichever is less.

For shares of Profit  Recovery  common stock  purchased  during the Class Period
"Recognized  Claims"  will be  calculated  for  purposes  of the  Settlement  as
follows:

(a) For shares  purchased  during the period July 19, 1999 through July 26, 2000
(including any shares purchased on July 26, 2000 prior to PRG's announcement(1))
that  were  sold at a loss  prior to PRG's  announcement  on July 26,  2000,  an
Authorized Claimant's  "Recognized Claim" from such shares shall mean THE LESSER
OF (X) $0.21 per share, OR (Y) 10% of the difference  between the purchase price
paid (including  commissions,  etc.) (the "PPP") and the sales proceeds received
(net of commissions, etc.) (the "SPR").

(b) For shares  purchased  during the period July 19, 1999 through July 26, 2000
(including  any shares  purchased on July 26, 2000 prior to PRG's  announcement)
that were sold at a loss following  PRG's  announcement on July 26, 2000 through
the close of trading on October 23, 2000, an Authorized  Claimant's  "Recognized
Claim" from such shares shall mean THE LESSER OF (X) $2.12 per share, OR (Y) the
difference  between  the PPP and THE  GREATER  OF (I) the SPR OR (II)  $9.06 per
share (the average  closing price for the 90 days following the end of the Class
Period).

(c) For shares  purchased  during the period July 19, 1999 through July 26, 2000
(including  any shares  purchased on July 26, 2000 prior to PRG's  announcement)
that were still held at the close of trading on October 23, 2000,  an Authorized
Claimant's  "Recognized  Claim"  from such  shares  shall mean THE LESSER OF (X)
$2.12 per share, OR (Y) the difference between the PPP and $9.06 per share.

In the  event a Class  Member  has more  than  one  purchase  or sale of  Profit
Recovery  common  stock,  all purchases and sales shall be matched on a First In
First Out ("FIFO")  basis,  Class Period sales will be matched first against any
Profit  Recovery  shares  held at the  beginning  of the Class  Period  and then
against purchases in chronological  order. A purchase or sale of Profit Recovery
common stock shall be deemed to have occurred on the  "contract" or "trade" date
as opposed to the  "settlement" or "payment" date. The receipt or grant by gift,
devise or  operation  of law of Profit  Recovery  common  stock during the Class
Period  shall not be deemed a purchase or sale of Profit  Recovery  common stock

_________________
(1) PRG shares  traded on July 26,  2000 for $12.25 or more will be  presumed to
have been purchased prior to the  announcement,  and shares traded for less than
that price will be presumed to have been purchased after the announcement.

                                       19
<PAGE>
for the calculation of an Authorized Claimant's Recognized Claim nor shall it be
deemed an assignment of any claim relating to the purchase of such shares unless
specifically  provided in the instrument of gift or  assignment.  The receipt of
Profit  Recovery common stock during the Class Period in exchange for securities
of any other  corporation  or entity  shall not be deemed a purchase  or sale of
Profit Recovery common stock.

To the extent a Claimant had a gain from his, her or its overall transactions in
Profit  Recovery  common  stock  during  the  Class  Period,  the  value  of the
Recognized Claim will be zero. To the extent that a Claimant suffered an overall
loss on his, her or its overall  transactions  in Profit  Recovery  common stock
during  the  Class  Period,  but that loss was less  than the  Recognized  Claim
calculated  above,  then the Recognized  Claim shall be limited to the amount of
the actual loss.

For purposes of  determining  whether a Claimant had a gain from his, her or its
overall  transactions in Profit Recovery common stock during the Class Period or
suffered a loss, the Claims  Administrator  shall: (i) total the amount paid for
all Profit  Recovery  common  stock  purchased  during  the Class  Period by the
claimant (the "Total Purchase Amount");  (ii) match any sales of Profit Recovery
common  stock  during the Class  Period  first  against the  Claimant's  opening
position in the stock (the  proceeds of those sales will not be  considered  for
purposes of calculating  gains or losses);  (iii) total the amount  received for
sales of the remaining  shares of Profit  Recovery  common stock sold during the
Class  Period (the "Sales  Proceeds");  and (iv)  ascribe a [$_____]]  per share
holding value for the number of shares of Profit Recovery common stock purchased
during the Class Period and still held at the end of the Class Period  ("Holding
Value").  The difference  between (x) the Total Purchase  Amount ((i) above) and
(y) the sum of the Sales  Proceeds  ((iii)  above) and the  Holding  Value ((iv)
above)  will be  deemed a  Claimant's  gain or loss on his,  her or its  overall
transactions in Profit Recovery common stock during the Class Period.

Each  Authorized  Claimant  shall  be  allocated  a pro  rata  share  of the Net
Settlement  Fund based on his,  her or its  Recognized  Claim as compared to the
total Recognized Claims of all Authorized Claimants.

Class Members who do not submit acceptable Proofs of Claim will not share in the
settlement  proceeds.  Class  Members  who do not  either  submit a request  for
exclusion or submit an acceptable  Proof of Claim will  nevertheless be bound by

                                       20
<PAGE>
the  settlement and the Order and Final  Judgment of the Court  dismissing  this
Action.

Distributions  will be made to Authorized  Claimants  after all claims have been
processed and after the Court has finally approved the settlement.  If any funds
remain  in the Net  Settlement  Fund by  reason of  un-cashed  distributions  or
otherwise, then, after the Claims Administrator has made reasonable and diligent
efforts  to  have  Class  Members  who  are  entitled  to   participate  in  the
distribution  of the Net Settlement Fund cash their  distributions,  any balance
remaining in the Net Settlement  Fund six months after the initial  distribution
of such funds shall be  re-distributed  to Class  Members who have cashed  their
initial   distributions  and  who  would  receive  at  least  $10.00  from  such
re-distribution,  after  payment  of  any  unpaid  costs  or  fees  incurred  in
administering  the Net Settlement  Fund for such  re-distribution.  If after six
months after such  re-distribution  any funds shall remain in the Net Settlement
Fund, then such balance shall be contributed to  non-sectarian,  not-for-profit,
501(c)(3) organization(s) designated by Plaintiffs' Co-Lead Counsel.

Plaintiffs, Defendants, their respective counsel, and all other Released Persons
shall have no responsibility  for or liability  whatsoever for the investment or
distribution  of the  Settlement  Fund,  the Net  Settlement  Fund,  the Plan of
Allocation or the determination,  administration, calculation, or payment of any
Proof of Claim or  non-performance of the Claims  Administrator,  the payment or
withholding  of taxes  owed by the  Settlement  Fund or any losses  incurred  in
connection therewith.

             SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

If you purchased  common stock of Profit Recovery during the period between July
19, 1999 and July 26, 2000,  inclusive,  for the beneficial interest of a person
or  organization  other than yourself,  the Court has directed that,  WITHIN TEN
(10) DAYS OF YOUR RECEIPT OF THIS  NOTICE,  you either (a) provide to the Claims
Administrator the name and last known address of each person or organization for
whom or which you  purchased  such stock  during such time period or (b) request
additional  copies of this  Notice  and the Proof of Claim  form,  which will be
provided  to you free of  charge,  and  within ten (10) days mail the Notice and
Proof of Claim form directly to the beneficial owners of the securities referred
to herein.  If you choose to follow  alternative  procedure  (b),  the Court has
directed  that,  upon  such  mailing,   you  send  a  statement  to  the  Claims
Administrator confirming that the mailing was made as directed. You are entitled

                                       21
<PAGE>
to reimbursement  from the Settlement Fund of your reasonable  expenses actually
incurred in connection with the foregoing,  including  reimbursement  of postage
expense  and the cost of  ascertaining  the names and  addresses  of  beneficial
owners.  Those  expenses will be paid upon request and submission of appropriate
supporting documentation.  All communications concerning the foregoing should be
addressed to the Claims Administrator:

      In re Profit Recovery Group International, Inc. Securities Litigation
                         c/o The Garden City Group, Inc.
                              Claims Administrator
                                 P.O. Box ______
                           ____________, ___ _________
                                (800) ___ - _____

Dated:   Atlanta, Georgia
         _______________, 2005

                                                By Order of the Court
                                                CLERK OF THE COURT

                                       22
<PAGE>
                                   EXHIBIT A-2

                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION

----------------------------------------------------
                                                   )
IN RE PROFIT RECOVERY                              )         CIVIL ACTION FILE
GROUP INTERNATIONAL, INC.                          )         NO. 1:00-CV-1416-CC
SECURITIES LITIGATION                              )
                                                   )
----------------------------------------------------

                           PROOF OF CLAIM AND RELEASE

I.   GENERAL INSTRUCTIONS

     1. To recover as a Member of the Class  based on your  claims in the action
entitled In re Profit Recovery Group International,  Inc. Securities Litigation,
Civil Action No.  1:00-CV-1416-CC (the "Litigation"),  you must complete and, on
page ____ hereof,  sign this Proof of Claim and  Release.  If you fail to file a
properly  addressed  (as set  forth in  paragraph  3 below)  Proof of Claim  and
Release,  your claim may be rejected and you may be precluded  from any recovery
from the Settlement Fund created in connection  with the proposed  settlement of
the Litigation.

     2. Submission of this Proof of Claim and Release,  however, does not assure
that you will share in the proceeds of settlement in the Litigation.

                                       1
<PAGE>
     3. YOU MUST MAIL  YOUR  COMPLETED  AND  SIGNED  PROOF OF CLAIM AND  RELEASE
POSTMARKED ON OR BEFORE __________, 2005, ADDRESSED AS FOLLOWS:

                  In re Profit Recovery Group International, Inc. Sec. Litig.
                  c/o The Garden City Group, Inc.
                  Claims Administrator
                  P.O. Box ________
                  __________, ______  _____

     4. If you are NOT a Member  of the  Class  (as  defined  in the  Notice  of
Pendency of Class Action and Proposed Settlement, Motion for Attorneys' Fees and
Settlement Fairness Hearing (the "Notice")),  DO NOT submit a Proof of Claim and
Release Form.

     5. If you are a  Member  of the  Class  and  you  did  not  timely  request
exclusion in connection with the proposed settlement, you are bound by the terms
of any judgment  entered in the  Litigation,  including  the  releases  provided
therein, REGARDLESS OF WHETHER YOU SUBMIT A PROOF OF CLAIM AND RELEASE.

II.  CLAIMANT IDENTIFICATION

     1.  If  you   purchased   Profit   Recovery   common  stock  and  held  the
certificate(s)  in your name,  you are the  beneficial  purchaser as well as the
record  purchaser.  If, however,  you purchased Profit Recovery common stock and

                                       2
<PAGE>
the  certificate(s)  were  registered  in the name of a third  party,  such as a
nominee or brokerage firm, you are the beneficial  purchaser and the third party
is the record purchaser.

     2. Use Part I of this form entitled  "Claimant  Identification" to identify
each purchaser of record ("nominee"), if different from the beneficial purchaser
of Profit Recovery common stock which forms the basis of this claim.  THIS CLAIM
MUST BE FILED BY THE ACTUAL  BENEFICIAL  PURCHASER OR  PURCHASERS,  OR THE LEGAL
REPRESENTATIVE  OF SUCH PURCHASER OR PURCHASERS,  OF THE PROFIT  RECOVERY COMMON
STOCK UPON WHICH THIS CLAIM IS BASED.

     3. All joint  purchasers must sign this claim.  Executors,  administrators,
guardians,  conservators,  and  trustees  must  complete  and sign this claim on
behalf of persons  represented  by them and their  authority must accompany this
claim and their titles or  capacities  must be stated.  The Social  Security (or
taxpayer identification) number and telephone number of the beneficial owner may
be used in verifying  the claim.  Failure to provide the  foregoing  information
could delay verification of your claim or result in rejection of the claim.

                                       3
<PAGE>
III. CLAIM FORM

     1. Use Part II of this form entitled  "Schedule of  Transactions  in Profit
Recovery common stock" to supply all required details of your  transaction(s) in
Profit Recovery  common stock.  If you need more space or additional  schedules,
attach separate sheets giving all of the required  information in  substantially
the same form. Sign and print or type your name on each additional sheet.

     2. On the schedules,  provide all of the requested information with respect
to ALL of your purchases and ALL of your sales of Profit  Recovery common stock,
which took place at any time  beginning July 19, 1999 through and including July
26, 2000,  whether such transactions  resulted in a profit or a loss. Failure to
report all such transactions may result in the rejection of your claim.

     3. List each transaction  separately and in  chronological  order, by trade
date,  beginning with the earliest.  You must accurately provide the month, day,
and year of each transaction you list.

     4. The date of covering a "short sale" is deemed to be the date of purchase
of Profit Recovery common stock.  The date of a "short sale" is deemed to be the
date of sale of Profit Recovery common stock.

     5.  Copies  of  broker   confirmations  or  other   documentation  of  your
transactions  in Profit  Recovery common stock should be attached to your claim.

                                       4
<PAGE>
Failure to provide this documentation  could delay verification of your claim or
result in rejection of your claim.

                                       5
<PAGE>
                          UNITED STATES DISTRICT COURT
                          NORTHERN DISTRICT OF GEORGIA

      In re Profit Recovery Group International, Inc. Securities Litigation
                        Civil Action No. 1:00-CV-1416-CC

                           PROOF OF CLAIM AND RELEASE
                        Must be Postmarked No Later Than:
                                __________, 2005

                              Please Type or Print

PART I:  CLAIMANT IDENTIFICATION

--------------------------------------------------------------------------------
Beneficial Owner's Name (First, Middle, Last)

--------------------------------------------------------------------------------
Street Address

---------------------------------------- --------------------- -----------------
City                                     State                          Zip Code

---------------------------------------- ---------------------------------------
Foreign Province                         Foreign Country

                                                                     Individual
---------------------------------------- ----------------------
Social Security Number or
Taxpayer Identification Number                                       Corp./Other
                                         ----------------------

                                       6
<PAGE>
---------                  ---------------------
Area Code                  Phone Number (Work)

----------                 ---------------------
Area Code                  Telephone Number (Home)

--------------------------------------------------------------------------------
Record Owner's Name (if different from beneficial owner listed above)

                                       7
<PAGE>
PART II: SCHEDULE OF TRANSACTIONS IN PROFIT RECOVERY COMMON STOCK

     A.   Number of shares of Profit  Recovery  common stock held at the opening
          of trading on July 26, 1999: _______________

     B.   Purchases (July 26, 1999 - July 19, 2000 inclusive) of Profit Recovery
          common stock

      Trade Date                Number of Shares Purchased             Total
      Mo.  Day  Year                                              Purchase Price
1. ________________________         __________________            ______________
2. ________________________         __________________            ______________
3. ________________________         __________________            ______________

     IMPORTANT:  Identify  by number  listed  above all  purchases  in which you
                 covered a "short sale":_________________

     C.   Sales  (July 26, 1999 - July 19, 2000  inclusive)  of Profit  Recovery
          common stock

      Trade Date                   Number of Shares                   Total
      Mo.  Day  Year                     Sold                      Sales Price

1. ________________________        __________________             ______________
2. ________________________        __________________             ______________
3. ________________________        __________________             ______________

     D.   Number  of shares of Profit  Recovery  common  stock  held at close of
          trading on July 26, 2000:

If you require  additional  space,  attach extra schedules in the same format as
above.

Sign and print your name on each additional page.

YOU MUST READ AND SIGN THE RELEASE ON PAGE ___.

                                       8
<PAGE>
IV.  SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS

     I submit this Proof of Claim and Release under the terms of the Stipulation
of Settlement  described in the Notice. I also submit to the jurisdiction of the
United States  District Court for the Northern  District of Georgia with respect
to my claim as a Class  Member and for  purposes  of  enforcing  the release set
forth herein. I further  acknowledge that I am bound by and subject to the terms
of any  judgment  that may be  entered  in the  Litigation.  I agree to  furnish
additional  information  to the  Claims  Administrator  to support  this  claim,
including transactions in other Profit Recovery securities,  such as options, if
requested  to do so. I have not  submitted  any other  claim  covering  the same
purchases or sales of Profit  Recovery  common stock during the Class Period and
know of no other person having done so on my behalf.

V.   RELEASE

     1. I (We) hereby  acknowledge  full and  complete  satisfaction  of, and do
hereby fully,  finally, and forever settle,  release, and discharge all Released
Claims against the Released Persons

     2.  "Released  Claims"  means all claims  (including,  but not  limited to,
Unknown Claims),  demands,  losses,  rights,  and causes of action of any nature
whatsoever, whether known or unknown, whether suspected or unsuspected,  whether
concealed or hidden,  whether  accrued or  unaccrued,  by any Lead  Plaintiff or

                                       9
<PAGE>
Class Member against the Released  Persons,  whether under state or federal law,
based upon or  arising  out of, or  related  to the  purchase  or sale of Profit
Recovery common stock during the Class Period and any acts, facts, transactions,
events, occurrences,  disclosures, statements, omissions, or failures to act, at
anytime during the Class Period,  including without  limitation those which were
alleged in the  Litigation,  or those which could or might have been  alleged in
the Litigation based upon such acts, facts, transactions,  events,  occurrences,
disclosures,   statements,   omissions,  or  failures  to  act  alleged  in  the
Litigation.

     3.  "Released  Persons"  means  each and all of the  Defendants  and  their
respective past, present and future directors,  officers,  employees,  partners,
members, principals, agents, underwriters, insurers (including Federal Insurance
Company  and St.  Paul  Mercury  Insurance  Company),  co-insurers,  reinsurers,
controlling  shareholders,  attorneys, law firms, (including Alston & Bird LLP),
accountants  or auditors,  banks or investment  banks,  associates,  personal or
legal  representatives,   predecessors,   successors,   parents,   subsidiaries,
divisions,  joint  ventures,  assigns,  spouses,  heirs,  related or  affiliated
entities,  any entity in which any  Defendant has a  controlling  interest,  any
members of their immediate families,  or any trust of which any Defendant is the

                                       10
<PAGE>
settlor or which is for the benefit of any  Defendant  and/or  member(s)  of his
family.

     4. "Unknown  Claims" means any Released  Claims that any Lead  Plaintiff or
Class Member does not know or suspect to exist in his,  her, or its favor at the
time of the release of the Released Persons,  and any Settled Defendants' Claims
that any Defendant does not know or suspect to exist in his or its favor, which,
if known by him, her, or it, might have  affected his, her, or its  decisions(s)
with respect to the settlement.  With respect to any and all Released Claims and
Settled  Defendants' Claims, the Settling Parties stipulate and agree that, upon
the Effective Date, Lead  Plaintiffs and the Defendants  shall expressly  waive,
and each of the Class Members  shall be deemed to have,  and by operation of the
Judgment  shall have,  expressly  waived the  provisions,  rights,  and benefits
conferred  by any  law of any  state  or  territory  of the  United  States,  or
principle  of  common  law,  which  is  similar,  comparable  or  equivalent  to
California Civil Code ss. 1542, which provides:

          A general  release does not extend to claims  which the creditor  does
     not know or  suspect  to exist in his  favor at the time of  executing  the
     release, which if known by him must have materially affected his settlement
     with the debtor.

The Lead  Plaintiffs and Class Members may hereafter  discover facts in addition
to or  different  from those that any of them now knows or  believes  to be true

                                       11
<PAGE>
related to the subject  matter of the Released  Claims,  but each Lead Plaintiff
shall expressly and each Class Member,  upon the Effective Date, shall be deemed
to have,  and by operation  of the  Judgment  shall have,  fully,  finally,  and
forever  settled and  released any and all  Released  Claims,  known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed upon any theory of law or
equity now existing or coming into existence in the future,  including,  but not
limited to, conduct that is negligent, intentional, with or without malice, or a
breach of any duty, law or rule,  without regard to the subsequent  discovery or
existence of such different or additional facts.  Similarly,  the Defendants and
Released  Persons may hereafter  discover facts in addition to or different from
those that any of them now knows or believes  to be true  related to the subject
matter of the Settled Defendants' Claims, but each Defendant shall expressly and
each Released  Person,  upon the Effective Date, shall be deemed to have, and by
operation of the Judgment shall have,  fully,  finally,  and forever settled and
released any and all Settled Defendants' Claims, known or unknown,  suspected or
unsuspected,  contingent or non-contingent,  whether or not concealed or hidden,

                                       12
<PAGE>
which now exist, or heretofore have existed upon any theory of law or equity now
existing or coming into existence in the future,  including, but not limited to,
conduct that is negligent,  intentional,  with or without malice, or a breach of
any duty, law or rule,  without regard to the subsequent  discovery or existence
of such different or additional facts. The Settling Parties acknowledge, and the
Class Members and Released  Persons shall be deemed by operation of the Judgment
to have  acknowledged,  that the inclusion of "Unknown Claims" in the definition
of Released Claims and Settled  Defendants' Claims was separately  bargained for
and is a key element of the settlement of which these releases are a part.

     5. This release  shall be of no force or effect  unless and until the Court
approves the Stipulation of Settlement and the Stipulation  becomes effective on
its Effective Date.

     6. I (We) hereby  warrant and  represent  that I (we) have not  assigned or
transferred or purported to assign or transfer,  voluntarily  or  involuntarily,
any  matter  released  pursuant  to this  release  or any other  part or portion
thereof.

     7.  I  (We)  hereby  warrant  and  represent  that  I  (we)  have  included
information  about all of my (our)  transactions in Profit Recovery common stock
which occurred  during the Class Period as well as the amount of Profit Recovery
common stock held by me (us) at the opening of trading on July 19, 1999,  and at
the close of trading on July 26, 2000.

                                       13
<PAGE>
                               SUBSTITUTE FORM W-9
      Request for Taxpayer Identification Number ("TIN") and Certification
                                     PART I

NAME:

--------------------------------------------------------------------------------
Check appropriate box:

[_]      Individual/Sole Proprietor                 [_] Pension Plan
[_]      Corporation           [_]  Partnership     [_] Trust
[_]      IRA                   [_]  Other

     Enter TIN on appropriate line.

     For individuals, this is your social security number ("SSN").

     For sole proprietors,  you must show your individual name, but you may also
     enter your business or "doing  business as" name. You may enter either your
     SSN or your Employer Identification Number ("EIN").

     For other entities, it is your EIN.

     _ _ _-_ _-_ _ _ _          or      _ _-_ _ _ _ _ _ _
     Social Security Number             Employer Identification Number

                                     PART II

                    For Payees Exempt From Backup Withholding

If you are exempt from backup withholding,  enter your correct TIN in Part I and
write "exempt" on the following line:____________________.

                                       14
<PAGE>
                                    PART III

                                  Certification

UNDER THE PENALTY OF PERJURY, I (WE) CERTIFY THAT:

     1.   The number shown on this form is my correct TIN; and

     2.   I (We)  certify  that I am (we are) NOT subject to backup  withholding
          under the provisions of Section 3406 (a)(1)(C) of the Internal Revenue
          Code because: (a) I am (we are) exempt from backup withholding; or (b)
          I (we) have not been notified by the Internal  Revenue  Service that I
          am (we are) subject to backup  withholding as a result of a failure to
          report all interest or dividends;  or (c) the Internal Revenue Service
          has  notified  me (us) that I am (we are) no longer  subject to backup
          withholding.

NOTE: If you have been notified by the  Internal  Revenue  Service  that you are
      subject to backup withholding, you must cross out item 2 above.

                       SEE ENCLOSED FORM W-9 INSTRUCTIONS

The Internal  Revenue  Service does not require your consent to any provision of
this document other than the certification required to avoid backup withholding.

     I declare  under  penalty of perjury under the laws of the United States of
America that the foregoing  information  supplied by the undersigned is true and
correct and that this Proof of Claim and Release  form was  executed  this _____
day of (month) (year) in (City, State, Country).

                                       15
<PAGE>
                                         ---------------------------------------
                                         (Sign your name here)

                                         ---------------------------------------
                                         (Type or print your name here)

                                         ---------------------------------------
                                         (Capacity of person(s) signing,  e.g.,
                                         Beneficial  Purchaser, Executor or
                                         Administrator)

                       ACCURATE CLAIMS PROCESSING TAKES A
                           SIGNIFICANT AMOUNT OF TIME.
                          THANK YOU FOR YOUR PATIENCE.

                               REMINDER CHECKLIST:

     l.   Please sign the above release and declaration.

     2.   Remember to attach supporting documentation, if available.

     3.   Do not send original or copies of stock certificates.

     4.   Keep a copy of your claim form for your records.

     5.   If you desire an  acknowledgment of receipt of your claim form, please
          send it Certified Mail, Return Receipt Requested.

     6.   If you move, please send us your new address.

                                       16

<PAGE>
                                   EXHIBIT A-3

                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION

----------------------------------------------------
                                                   )
IN RE PROFIT RECOVERY                              )
GROUP INTERNATIONAL, INC.                          )         CIVIL ACTION FILE
SECURITIES LITIGATION                              )         NO. 1:00-CV-1416-CC
                                                   )
----------------------------------------------------

                   SUMMARY NOTICE OF PENDENCY OF CLASS ACTION,
                   PROPOSED SETTLEMENT AND SETTLEMENT HEARING

TO:  ALL  PERSONS  WHO  PURCHASED  THE  COMMON  STOCK OF PROFIT  RECOVERY  GROUP
     INTERNATIONAL, INC. BETWEEN JULY 19, 1999 AND JULY 26, 2000, INCLUSIVE, AND
     WHO WERE ALLEGEDLY DAMAGED THEREBY.

     YOU ARE HEREBY  NOTIFIED  that,  pursuant to an Order of the United  States
District Court for the Northern District of Georgia, Atlanta Division, a hearing
will be held on _________,  2005 at __:__ __.m.,  before the Honorable  Clarence
Cooper,  at the United States  Courthouse,  75 Spring Street,  Atlanta,  Georgia
30303,  for the purpose of determining:  (1) whether the proposed  settlement of
the  above-captioned  Litigation for the sum of  $6,750,000.00  in cash plus any
interest  that may  accrue  thereon  should  be  approved  by the Court as fair,
reasonable,  and adequate;  (2) whether,  thereafter,  this Litigation should be
dismissed  with  prejudice;   (3)  whether  the  Plan  of  Allocation  is  fair,
reasonable,  and  adequate  and  therefore  should  be  approved;  and  (4)  the

                                       1
<PAGE>
reasonableness  of the  application of counsel for the Plaintiffs for payment of
attorneys' fees and  reimbursement of expenses  incurred in connection with this
Litigation.

     If you  purchased  the common  stock of Profit  Recovery  during the period
beginning  July 19, 1999 through  July 26, 2000,  your rights may be affected by
this Litigation and the settlement  thereof.  If you have not received a copy of
the Notice of  Pendency  of Class  Action and  Proposed  Settlement,  Motion for
Attorneys' Fees and Settlement Fairness Hearing and a copy of the Proof of Claim
and Release, you may obtain copies by writing to the Claims Administrator:

                  In re Profit Recovery Group International, Inc. Sec. Litig.
                  c/o The Garden City Group
                  Claims Administrator
                  P.O. Box ________
                  __________, ______  _____
                  (800) ____-________
                  www.gardencitygroup.com

     If you are a Class  Member,  in order to share in the  distribution  of the
Settlement  Fund,  you must  submit a Proof of Claim and  Release  no later than
____________,  2005,  establishing that you are entitled to a recovery. You will
be bound by any  judgment  rendered in the  Litigation  unless you request to be
excluded,  in  writing,  to  the  Claims  Administrator  at the  above  address,
postmarked by ________________, 2005.

                                       2
<PAGE>
     Any objection to the settlement, the Plan of Allocation, or the application
for  attorneys'  fees and expenses  must be filed with the Clerk of Court at the
address below no later than _____________, 2005:

                                    CLERK OF THE COURT
                                    UNITED STATES DISTRICT COURT
                                    NORTHERN DISTRICT OF GEORGIA
                                    ATLANTA DIVISION
                                    75 Spring Street, SW
                                    Atlanta, Georgia  30303

and copies received by the following counsel no later than ____, 2005:

--------------------------------------------------------------------------------
Martin D. Chitwood, Esq.               Mark Rifkin, Esq.
CHITWOOD & HARLEY LLP                  WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP
2300 Promenade II                      270 Madison Avenue
1230 Peachtree Street, N.E.            New York, NY  10016
Atlanta, GA  30309                     Telephone:  (212) 545-4600
Telephone:  (404) 873-3900
                                       Plaintiffs' Co-Lead Counsel
Plaintiffs' Co-Lead Counsel
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
David Brower, Esq.                     Todd R. David, Esq.
MILBERG WEISS BERSHAD & SCHULMAN LLP   ALSTON & BIRD LLP
One Pennsylvania Plaza                 1201 West Peachtree Street
New York, NY  10119-0165               Atlanta, GA 30309
Telephone:  (212) 594-5300             Telephone:  (404) 881-7000

Plaintiffs' Co-Lead Counsel            Defendants' Counsel
--------------------------------------------------------------------------------

                                       3
<PAGE>
     PLEASE  DO NOT  CONTACT  THE COURT OR THE  CLERK'S  OFFICE  REGARDING  THIS
NOTICE.

DATED:_______________, 2005

                                         BY ORDER OF THE COURT
                                         UNITED STATES DISTRICT COURT
                                         NORTHERN DISTRICT OF GEORGIA
                                         ATLANTA DIVISION

                                       4
<PAGE>
                                    EXHIBIT B

                       IN THE UNITED STATES DISTRICT COURT
                      FOR THE NORTHERN DISTRICT OF GEORGIA
                                ATLANTA DIVISION

----------------------------------------------------
                                                   )
IN RE PROFIT RECOVERY                              )         CIVIL ACTION FILE
GROUP INTERNATIONAL, INC.                          )         NO. 1:00-CV-1416-CC
SECURITIES LITIGATION                              )
                                                   )
----------------------------------------------------

                          [PROPOSED] FINAL JUDGMENT AND
                        ORDER OF DISMISSAL WITH PREJUDICE

     On the ______ day of ____________________, 2005, a hearing having been held
before this Court to  determine:  (1) whether  the terms and  conditions  of the
settlement  set forth in the  Stipulation  of Settlement  dated February 8, 2005
(the "Stipulation") are fair, reasonable, and adequate for the settlement of all
claims asserted by the Class against the Defendants in the complaint now pending
in this Court under the above  caption,  including the release of the Defendants
and the Released Parties, and should be approved; (2) whether judgment should be
entered  dismissing  the complaint on the merits and with  prejudice in favor of
the  Defendants  and as against all  persons or entities  who are members of the
Class herein who have not requested exclusion therefrom;  (3) whether to approve
the  Plan  of  Allocation  as a fair  and  reasonable  method  to  allocate  the
settlement  proceeds among the members of the Class; and (4) whether and in what
amount to award  Plaintiffs'  Counsel fees and  reimbursement  of expenses.  The
Court  having  considered  all  matters  submitted  to it  at  the  hearing  and
otherwise;  and it appearing that a notice of the hearing  substantially  in the

                                       1
<PAGE>
form  approved  by the Court was mailed to all  persons or  entities  reasonably
identifiable,   who  purchased  the  common  stock  of  Profit   Recovery  Group
International, Inc. ("Profit Recovery") between July 19, 1999 and July 26, 2000,
inclusive (the "Class Period"),  except those persons or entities  excluded from
the  definition  of the  Class,  as shown by the  records  of Profit  Recovery's
transfer agent, at the respective  addresses set forth in such records, and that
a summary notice of the hearing  substantially in the form approved by the Court
was published in the national  edition of Investor's  Business Daily pursuant to
the  specifications of the Court; and the Court having considered and determined
the fairness and  reasonableness  of the award of  attorneys'  fees and expenses
requested;  and all  capitalized  terms used herein  having the  meanings as set
forth and  defined  in the  Stipulation,  IT IS HEREBY  ORDERED,  ADJUDGED,  AND
DECREED that:

     1.  This  Judgment   incorporates  by  reference  the  definitions  in  the
Stipulation  and all terms used herein shall have the same meanings as set forth
in the Stipulation.

                                       2
<PAGE>
     2. This Court has  jurisdiction  over the subject  matter of the Litigation
and over all parties to the Litigation, including all Class Members.

     3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure,  this Court
hereby  approves the settlement set forth in the  Stipulation and finds that the
contributions  to the Settlement  Fund are fair and that said  settlement is, in
all respects, fair, reasonable, and adequate to the Class.

     4.  Except  as to any  individual  claim of those  Persons  (identified  in
Exhibit 1 attached hereto) who have validly and timely requested  exclusion from
the Class,  this Court hereby dismisses with prejudice and without costs (except
as otherwise provided in the Stipulation) the Litigation against the Defendants.

     5. The  Court  finds  that the  Stipulation  and the  settlement  are fair,
reasonable,  and  adequate  as to each of the  Settling  Parties,  and  that the
Stipulation and the settlement are hereby finally approved in all respects,  and
the  Settling   Parties  are  hereby  directed  to  perform  the  terms  of  the
Stipulation.

     6. Upon the  Effective  Date hereof,  the Lead  Plaintiffs  and each of the
Class Members shall be deemed to have,  and by operation of this Judgment  shall
have, fully,  finally,  and forever released,  relinquished,  and discharged all
claims (including, but not limited to, Unknown Claims), demands, losses, rights,
and causes of action of any nature whatsoever, whether known or unknown, whether
suspected  or  unsuspected,  whether  concealed  or hidden,  whether  accrued or

                                       3
<PAGE>
unaccrued,  by any Lead Plaintiff or Class Member against the Released  Persons,
whether under state or federal law,  based upon or arising out of, or related to
the purchase or sale of Profit Recovery common stock during the Class Period and
any acts, facts, transactions,  events,  occurrences,  disclosures,  statements,
omissions,  or failures to act, at anytime  during the Class  Period,  including
without  limitation  those which were alleged in the Litigation,  or those which
could or might have been alleged in the Litigation based upon such acts,  facts,
transactions,  events,  occurrences,   disclosures,  statements,  omissions,  or
failures to act alleged in the Litigation (the "Released  Claims")  against each
and  all of the  Defendants  and  their  respective  past,  present  and  future
directors,   officers,   employees,   partners,  members,  principals,   agents,
underwriters, insurers (including Federal Insurance Company and St. Paul Mercury
Insurance   Company),   co-insurers,   reinsurers,   controlling   shareholders,
attorneys,  law firms,  (including Alston & Bird LLP),  accountants or auditors,
banks or  investment  banks,  associates,  personal  or  legal  representatives,
predecessors,  successors,  parents,  subsidiaries,  divisions,  joint ventures,
assigns, spouses, heirs, related or affiliated entities, any entity in which any
Defendant has a controlling  interest,  any members of their immediate families,
or any trust of which any  Defendant  is the settlor or which is for the benefit
of any  Defendant  and/or  member(s)  of his family  (the  "Released  Persons"),

                                       4
<PAGE>
regardless  of whether such Class Member  executes and delivers a Proof of Claim
and Release.

     7. Upon the Effective  Date hereof,  each of the Released  Persons shall be
deemed to have,  and by operation of this Judgment shall have,  fully,  finally,
and  forever   released,   relinquished  and  discharged  each  and  all  claims
(including,  but not limited to, Unknown Claims),  demands,  losses, rights, and
causes of action of any nature  whatsoever,  whether  known or unknown,  whether
suspected  or  unsuspected,  whether  concealed  or hidden,  whether  accrued or
unaccrued, that have been or could have been asserted in the Action or any forum
by the  Defendants or any of them or the  successors  and assigns of any of them
against any of the Lead Plaintiffs,  Class Members or Plaintiffs' Counsel, which
arise out of or relate in any way to the  institution,  prosecution,  assertion,
settlement,  or resolution of the  Litigation  (except for claims to enforce the
Settlement) (the "Settled Defendants' Claims").

     8. Pursuant to Rule 23 of the Federal Rules of Civil Procedure,  this Court
hereby finally certifiers this action as a class action on behalf of all Persons
who purchased the common stock of Profit Recovery between July 19, 1999 and July
26, 2000,  inclusive.  Excluded  from the Class are  Defendants,  members of the
immediate  families  of the  Individual  Defendants,  any  entities in which any
Defendant  has a  controlling  interest  or is a parent or  subsidiary  of or is
controlled by the Company,  and the legal  representatives,  heirs,  successors,

                                       5
<PAGE>
predecessors in interest,  affiliates or assigns of any Defendant. Also excluded
from the Class are those Persons who timely and validly  request  exclusion from
the Class  pursuant  to the Notice of  Pendency  of Class  Action  and  Proposed
Settlement,  Motion for  Attorneys'  Fees and Settlement  Fairness  Hearing (the
"Notice")  sent to  potential  Class  Members,  as listed  on  Exhibit 1 annexed
hereto.

     9. With respect to the Class, this Court, having previously found that this
action meets the requirements of Rule 23(a) and 23(b)(3) of the Federal Rules of
Civil Procedure for certification as a class action, now finds again and finally
confirms  that the  prerequisites  for class action under Federal Rules of Civil
Procedure 23(a) and 23(b)(3) have been satisfied in that: (a) the Members of the
Class are so numerous  that joinder of all Class  Members in the  Litigation  is
impracticable; (b) there are questions of law and fact common to the Class which
predominate over any individual questions; (c) the claims of the Lead Plaintiffs
are  typical  of the  claims of the  Class;  (d) the Lead  Plaintiffs  and their
counsel have fairly and  adequately  represented  and protected the interests of
all of the  Class  Members;  (e) the  questions  of law and fact  common  to the
members of the Class  predominate  over any questions  affecting only individual

                                       6
<PAGE>
members of the Class;  and (e) a class  action is  superior  to other  available
methods for the fair and efficient adjudication of the controversy.

     10. The notice provided to the Class was the best notice  practicable under
the  circumstances,  including the individual notice to all Members of the Class
who  could be  identified  through  reasonable  effort.  The form and  method of
notifying  the Class of the  pendency of the action as a class action and of the
terms and conditions of the proposed  Settlement met the requirements of Rule 23
of the Federal Rules of Civil  Procedure,  Section  21D(a)(7) of the  Securities
Exchange Act of 1934, 15 U.S.C. 78u-4(a)(7) as amended by the Private Securities
Litigation  Reform  Act of 1995,  due  process,  and any other  applicable  law,
constituted the best notice practicable under the circumstances, and constituted
due and sufficient notice to all persons and entities entitled thereto.

     11. The Plan of  Allocation  as set forth in the Notice is approved as fair
and reasonable, and Plaintiffs' Co-Lead Counsel and the Claims Administrator are
directed  to  administer  the  Stipulation  in  accordance  with its  terms  and
provisions.

     12. Plaintiffs' Co-Lead Counsel are hereby awarded __________% of the Gross
Settlement Fund in fees,  which the Court finds to be fair and  reasonable,  and
$_____ in  reimbursement  of expenses.  The attorneys' fees and expenses awarded
shall be paid to  Plaintiffs'  Co-Lead  Counsel  from the  Settlement  Fund with
interest from the date such Settlement Fund was funded to the date of payment at
the same net rate that the Settlement  Fund earns.  The award of attorneys' fees

                                       7
<PAGE>
shall be allocated  among  Plaintiffs'  Counsel in a fashion which,  in the sole
discretion  of  Plaintiffs'  Co-Lead  Counsel,  fairly  compensates  Plaintiffs'
Counsel for their respective contributions in the prosecution of the Litigation.

     13. Lead Plaintiff  Jeanette  Roberts is hereby awarded  $________________,
Lead  Plaintiff  Stephen  Haynes is hereby  awarded  $________________  and Lead
Plaintiff Fernando Melendez is hereby awarded $________________. Such awards are
for  reimbursement  of these  Lead  Plaintiffs  reasonable  costs  and  expenses
(including lost wages) directly related to their representation of the Class.

     14. In making this award of attorneys' fees and  reimbursement  of expenses
to be paid from the Gross  Settlement  Fund,  the Court has considered and found
that:

     (a) the  settlement  has  created a fund of $6.75  million  in cash that is
already on deposit,  plus interest thereon,  and that numerous Class Members who
submit  acceptable  Proofs of Claim will benefit from the Settlement  created by
Plaintiffs' Counsel;

                                       8
<PAGE>
     (b) Over _______ copies of the Notice were  disseminated  to putative Class
Members  indicating that Plaintiffs'  Counsel were moving for attorneys' fees in
the  amount  of  up  to  _________%  of  the  Gross   Settlement  Fund  and  for
reimbursement  of  expenses  in an amount of  approximately  $_____________  and
[________] objections were filed against the terms of the proposed Settlement or
the ceiling on the fees and expenses requested by Plaintiffs'  Counsel contained
in the Notice;

     (c)  Plaintiffs'  Counsel have  conducted the  litigation  and achieved the
Settlement with skill, perseverance and diligent advocacy;

     (d) The action  involves  complex factual and legal issues and was actively
prosecuted  over 4.5 years and, in the absence of a  settlement,  would  involve
further lengthy proceedings with uncertain resolution of the complex factual and
legal issues;

     (e) Had Plaintiffs'  Counsel not achieved the Settlement there would remain
a significant risk that Lead Plaintiffs and the Class may have recovered less or
nothing from the Defendants;

     (f) Plaintiffs'  Counsel have devoted over ________ hours,  with a lodestar
value of $___________, to achieve the Settlement; and

                                       9
<PAGE>
     (g) The amount of attorneys' fees awarded and expenses  reimbursed from the
Settlement Fund are consistent with awards in similar cases.

     15. Neither the Stipulation nor the settlement  contained therein,  nor any
act  performed  or  document  executed  pursuant  to or in  furtherance  of  the
Stipulation or the  settlement:  (a) is or may be deemed to be or may be used as
an  admission  of, or evidence  of, the validity or lack thereof of any Released
Claim,  or of any  wrongdoing or liability of Profit  Recovery or the Individual
Defendants;  or (b) is or may be deemed to be or may be used as an admission of,
or  evidence  of,  any  fault  or  omission  of  Profit  Recovery  or any of the
Individual Defendants in any civil,  criminal,  or administrative  proceeding in
any court,  administrative agency, or other tribunal.  Profit Recovery or any of
the Individual  Defendants may file the Stipulation  and/or this Judgment in any
other  action  that may be  brought  against  it or them in order to  support  a
defense  or  counterclaim  based  on  principles  of  res  judicata,  collateral
estoppel,  release,  good faith  settlement,  judgment bar or reduction,  or any
other  theory of claim  preclusion  or issue  preclusion  or similar  defense or
counterclaim.

     16. The Court finds that during the course of the Litigation,  the Settling
Parties and their respective counsel at all times complied with the requirements
of Federal Rule of Civil Procedure 11.

                                       10
<PAGE>
     17. Without  affecting the finality of this Judgment in any way, this Court
hereby  retains  continuing   jurisdiction  over:  (a)  implementation  of  this
settlement  and any award or  distribution  of the  Settlement  Fund,  including
interest earned thereon; (b) disposition of the Settlement Fund; (c) hearing and
determining  applications for attorneys'  fees,  costs,  interest,  and expenses
(including fees and costs of experts and/or consultants) in the Litigation;  and
(d)  all  parties  hereto  for  the  purpose  of  construing,   enforcing,   and
administering the Stipulation.

     18.  In the  event  that  the  settlement  does  not  become  effective  in
accordance  with the  terms of the  Stipulation,  then  this  Judgment  shall be
rendered  null and void to the extent  provided  by and in  accordance  with the
Stipulation  and shall be vacated  and,  in such event,  all orders  entered and
releases  delivered in connection  herewith shall be null and void to the extent
provided by and in accordance with the Stipulation.

                                       11
<PAGE>
     19.  There is no just reason for delay in the entry of this Order and Final
Judgment and  immediate  entry by the Clerk of the Court is  expressly  directed
pursuant to Rule 54 (b) of the Federal Rules of Civil Procedure.

     IT IS SO ORDERED.

DATED:  _____________, 2005

                                         ----------------------------------
                                         THE HONORABLE CLARENCE COOPER
                                         UNITED STATES DISTRICT JUDGE

                                       12

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