Exhibit 10.1

 

BUSINESS LOAN AND SECURITY AGREEMENT

 

dated as of May 4, 2004

 

by and among

 

OPINION RESEARCH CORPORATION, ORC INC., MACRO INTERNATIONAL INC.,

ORC PROTEL, INC., SOCIAL AND HEALTH SERVICES, LTD., ORC HOLDINGS, LTD.

and O.R.C. INTERNATIONAL LTD, as Borrowers,

and other Borrower parties hereto from time to time,

 

CITIZENS BANK OF PENNSYLVANIA and

FIRST HORIZON BANK, as Lenders,

and other Lender parties hereto from time to time,

 

and

 

CITIZENS BANK OF PENNSYLVANIA,

 

as Agent

 

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TABLE OF CONTENTS

 

CERTAIN DEFINITIONS

   1

ARTICLE 1 COMMITMENT

   19

1.1.  

  

Maximum Loan Amount

   19

1.2.  

  

Use of Proceeds

   19

1.3.  

  

Borrowing Base and Maximum Advances

   20

1.4.  

  

Advances, Interest and Repayment

   21

1.5.  

  

Additional Mandatory Payments

   21

1.6.  

  

Field Audits

   21

1.7.  

  

Certain Fees

   22

1.8.  

  

Appointment of the Parent Company

   23

1.9.  

  

Joinder of New Subsidiaries and Affiliates

   23

ARTICLE 2 LETTERS OF CREDIT

   24

2.1.  

  

Issuance

   24

2.2.  

  

Amounts Advanced Pursuant to Letters of Credit

   24

ARTICLE 3 SECURITY

   25

3.1.  

  

Security Generally

   25

3.2.  

  

No Preference or Priority

   26

ARTICLE 4 CONDITIONS TO THE LENDERS’ OBLIGATIONS

   27

4.1.  

  

Compliance with Law and Agreements; Third Party Consents

   27

4.2.  

  

Material Adverse Changes

   27

4.3.  

  

Litigation/Bankruptcy

   27

4.4.  

  

Opinion of Counsel

   27

4.5.  

  

No Default

   27

4.6.  

  

Documentation

   27

4.7.  

  

Third Party Agreements

   27

4.8.  

  

Financial Documents

   28

4.9.  

  

Capital Structure

   28

4.10.

  

Security Interests

   28

4.11.

  

Closing Costs and Expenses

   28

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

   28

5.1.  

  

Corporate Existence and Qualification

   28

5.2.  

  

Corporate Authority; Noncontravention

   29

5.3.  

  

Financial Position

   29

5.4.  

  

Payment of Taxes

   29

5.5.  

  

Accuracy of Submitted Information; Omissions

   29

5.6.  

  

Government Contracts/Government Subcontracts

   30

5.7.  

  

No Defaults or Liabilities

   30

5.8.  

  

No Violations of Law

   30

5.9.  

  

Litigation and Proceedings

   30

5.10.

  

Security Interest in the Collateral

   30

5.11.

  

Principal Place of Business; Location of Books and Records

   31

5.12.

  

Fiscal Year

   31

5.13.

  

Pension Plans

   31

 

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5.14.

  

O.S.H.A., ADA and Environmental Compliance

   32

5.15.

  

Intellectual Property

   33

5.16.

  

Existing or Pending Defaults; Material Contracts

   33

5.17.

  

Leases and Real Property

   33

5.18.

  

Labor Relations

   33

5.19.

  

Assignment of Contracts

   34

5.20.

  

Contribution Agreement

   34

5.21.

  

Ownership of the Borrowers

   34

5.22.

  

Solvency

   34

5.23.

  

Foreign Assets Control Regulations, Etc.

   34

5.24.

  

Survival of Representations and Warranties

   34

ARTICLE 6 AFFIRMATIVE COVENANTS OF THE BORROWERS

   35

6.1.  

  

Payment of Loan Obligations

   35

6.2.  

  

Payment of Taxes

   35

6.3.  

  

Delivery of Financial and Other Statements:

   35

6.4.  

  

Maintenance of Records; Review by the Lenders

   36

6.5.  

  

Maintenance of Insurance Coverage

   36

6.6.  

  

Maintenance of Property/Collateral; Performance of Contracts

   37

6.7.  

  

Maintenance of Corporate Existence

   37

6.8.  

  

Maintenance of Certain Accounts with the Agent

   37

6.9.  

  

Management

   37

6.10.

  

Disclosure of Defaults, Etc.

   37

6.11.

  

Security Perfection; Assignment of Claims Act; Payment of Costs

   38

6.12.

  

Defense of Title to Collateral

   39

6.13.

  

Compliance with Law

   39

6.14.

  

Other Collateral Covenants

   39

6.15.

  

Financial Covenants of the Borrowers

   41

6.16.

  

Landlord Waivers; Subordination

   42

6.17.

  

Substitute Notes

   43

6.18.

  

Interest Rate Contracts

   43

ARTICLE 7 NEGATIVE COVENANTS OF THE BORROWERS

   43

7.1.  

  

Change of Control; Disposition of Assets; Merger

   43

7.2.  

  

Margin Stocks

   44

7.3.  

  

Change of Operations

   44

7.4.  

  

Judgments; Attachments

   44

7.5.  

  

Further Assignments; Performance and Modification of Contracts; etc.

   44

7.6.  

  

Affect Rights of the Agent or Lenders

   45

7.7.  

  

Indebtedness; Granting of Security Interests

   45

7.8.  

  

Dividends; Loans; Advances; Investments and Similar Events

   46

7.9.  

  

Lease Obligations

   47

7.10.

  

Term Loan and Subordinated Debt

   47

7.11.

  

Transactions with Affiliates

   47

7.12.

  

Sale and Leaseback Transactions

   47

7.13.

  

Fiscal Year/Accounting Method

   47

7.14.

  

Lockbox Deposits

   47

ARTICLE 8 COLLATERAL ACCOUNTS

   47

ARTICLE 9 DEFAULT AND REMEDIES

   48

9.1.

  

Events of Default:

   48

9.2.

  

Remedies

   50

 

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ARTICLE 10 THE AGENT; AGENCY

   52     

10.1.  

  

Appointment

   52     

10.2.  

  

General Nature of Agent’s Duties

   52     

10.3.  

  

Exercise of Powers

   53     

10.4.  

  

General Exculpatory Provisions

   54     

10.5.  

  

Administration by the Agent

   54     

10.6.  

  

Lenders Not Relying on the Agent or Other Lenders:

   55     

10.7.  

  

Indemnification

   56     

10.8.  

  

Agent in its Individual Capacity; Agent’s Commitment

   56     

10.9.  

  

Holders of Notes

   56     

10.10.

  

Successor Agent

   56     

10.11.

  

Additional Agents

   57     

10.12.

  

Calculations.

   57     

10.13.

  

Funding by the Agent

   57     

10.14.

  

Benefit of Article

   59

ARTICLE 11 CERTAIN ADDITIONAL RIGHTS AND OBLIGATIONS REGARDING THE COLLATERAL

   59     

11.1.  

  

Power of Attorney

   59     

11.2.  

  

Lockbox:

   60     

11.3.  

  

Other Agreements

   61

ARTICLE 12 MISCELLANEOUS

   61     

12.1.  

  

Remedies Cumulative

   61     

12.2.  

  

Waiver

   61     

12.3.  

  

Notices:

   61     

12.4.  

  

Entire Agreement

   63     

12.5.  

  

Relationship of the Parties

   63     

12.6.  

  

Waiver of Jury Trial

   63     

12.7.  

  

Submission to Jurisdiction; Service of Process; Venue

   64     

12.8.  

  

Changes in Capital Requirements

   64     

12.9.  

  

Captions

   64     

12.10.

  

Modification and Waiver

   64     

12.11.

  

Transferability

   65     

12.12.

  

Governing Law; Binding Effect

   65     

12.13.

  

Gender; Number

   65     

12.14.

  

Joint and Several Liability

   65     

12.15.

  

Materiality

   65     

12.16.

  

Reliance on the Agent

   65     

12.17.

  

Taxes

   65     

12.18.

  

The Patriot Act

   66     

12.19.

  

Counterparts

   66

 

EXHIBITS

 

Exhibit 1     Request for Advance and Certification Exhibit 1 (a)   Request for
Swing Line Loan Advance Exhibit 2     LIBOR Election Form and Certification
Exhibit 3     LIBOR Interest Election Procedure and Requirements Exhibit 4    
Borrowing Base/Non-Default Certificate Exhibit 5     Quarterly Covenant
Compliance/Non-Default Certificate

 

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Exhibit 6    Form of Joinder Agreement Exhibit 7    Pricing Grid Exhibit 8   
Form of Assignment and Acceptance Agreement Exhibit 9    Form of Landlord Access
Letter

 

SCHEDULES

 

Schedule A

   Approved International Organizations

Schedule B

   Approved Non-Cash Charges

Schedule C

   Collateral Accounts

Schedule 1

   Lender Commitments/Percentages

Schedule 5.3

   Financial Position

Schedule 5.6

   Material Government Contracts

Schedule 5.7

   No Defaults or Liabilities

Schedule 5.9

   Litigation and Proceedings

Schedule 5.11

   Borrower’s Business Locations

Schedule 5.15 (a)

   Intellectual Property

Schedule 5.15(b)

   Intellectual Property Royalty Payments

Schedule 5.16(a)

   Material Contracts

Schedule 5.16(b)

   Contract Litigation

Schedule 5.18

   Labor Agreements

Schedule 5.21

   Borrower Ownership

Schedule 6.8

   Foreign Bank Accounts

Schedule 6.16(a)

   Landlord Waivers Not Required

Schedule 6.16(b)

   Landlord Waivers Required

Schedule 7.8

   Loans, Salary Advances, Etc.

 

iv

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BUSINESS LOAN AND SECURITY AGREEMENT

 

THIS BUSINESS LOAN AND SECURITY AGREEMENT is executed as of the      day of May,
2004, and is by and among (i) Citizens Bank of Pennsylvania, a Pennsylvania
state chartered bank (“Citizens Bank”), acting in the capacity of Lender, Swing
Line Lender and as the Agent for the Lenders; (ii) First Horizon Bank, a
division of First Tennessee Bank National Association, as Lender, (iii) other
“Lender” parties to this Business Loan and Security Agreement from time to time;
(iv) Opinion Research Corporation, a Delaware corporation, whose address is 600
College Road East, Suite 4100, Princeton, NJ 08540, ORC Inc., a Delaware
corporation, whose address is 600 College Road East, Suite 4100, Princeton, NJ
08540, Macro International Inc., a Delaware corporation, whose address is 11785
Beltsville Drive, Calverton, MD 20705, ORC ProTel, Inc., a Delaware corporation,
whose address is 17213 Continental Drive, Lansing, IL 60438, Social and Health
Services, Ltd., a Maryland corporation, whose address is 11426 Rockville Pike,
Suite 100, Rockville, MD 20852, ORC Holdings, Ltd., an English Company, whose
address is Angel Corner House, 1 Islington High Street, London, England N1 9AH,
O.R.C. International Ltd., an English Company, whose address is Angel Corner
House, 1 Islington High Street, London, England N1 9AH, and each other person or
entity hereafter executing a Joinder Agreement pursuant to Section 1.9 of this
Agreement (the “Borrowers”).

 

W  I  T  N  E  S  S  E  T  H    T   H  A  T:

 

In consideration of the mutual covenants and agreements herein contained, Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree,
represent and warrant as follows:

 

CERTAIN DEFINITIONS

 

For the purposes of this Business Loan and Security Agreement, the terms set
forth below shall have the following definitions:

 

“Account Debtor” shall mean any person or entity who is indebted to one (1) or
more of the Borrowers for the payment of any Receivable; it being understood and
agreed that when computations are being made with respect to amounts due and
owing from an Account Debtor such computations shall be made on a contract by
contract basis (as opposed to on an Account Debtor basis).

 

“Accounts” shall mean all the funds and accounts now or hereafter owned or held
by a Borrower and all monies, Receivables, Investment Property, Security
Entitlements and other property on deposit therein or credited thereto,
including without limitation, all “Accounts,” as such term is now or hereafter
defined in the UCC, whether now owned or hereafter acquired, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), including any such obligations that may be characterized as an
account or contract right by the UCC, (b) all rights in, to and under all
purchase orders or receipts for goods or services, (c) all rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or

 

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repossessed goods), (d) all rights to payment due for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered in connection with any other transaction
(whether or not yet earned by performance), (e) all “health care insurance
receivables”, as defined in the UCC and (f) all collateral security of any kind,
given by any person or entity with respect to any of the foregoing.

 

“ADA” shall have the meaning attributed to such term in Section 5.14(a) of this
Agreement.

 

“Additional Base Rate Interest Margin” shall have the meaning attributed to such
term in the Revolving Facility Notes and in Exhibit 7 attached to this
Agreement.

 

“Additional Libor Interest Margin” shall have the meaning attributed to such
term in the Revolving Facility Notes and in Exhibit 7 attached to this
Agreement.

 

“Agency Fee” shall have the meaning assigned to such term in Section 1.7(b) of
this Agreement.

 

“Agent” shall mean Citizens Bank, acting in its capacity as agent for the
Lenders, or any successor Agent appointed pursuant to Section 10.10 of this
Agreement.

 

“Agreement” or “Loan Agreement” shall mean this Business Loan and Security
Agreement, together with the schedules and exhibits attached hereto, and any and
all amendments or modifications of this Business Loan and Security Agreement.

 

“Allied Documents” shall mean any and all documents, instruments and agreements
now or hereafter executed, issued and/or delivered in connection with the Junior
Facilities (or either of them).

 

“Applicable Interest Rate” shall mean either the (i) LIBOR Lending Rate, plus
the Additional Libor Interest Margin or (ii) Base Rate, plus the Additional Base
Rate Interest Margin, as set forth in the Notes.

 

“Applicable Laws” shall mean any federal, state or local law, ordinance,
statute, rule or regulation to which any Borrower or the property of any
Borrower is subject, whether domestic or international.

 

“Applicable Percentage” shall mean: (i) from and after the date hereof until the
date which is one (1) year from the date hereof, seventy-five percent (75%),
(ii) from and after the date which is one (1) year from the date hereof until
the date which is two (2) years from the date hereof, sixty percent (60%); and
(iii) from and after the date which is two (2) years from the date hereof, fifty
percent (50%).

 

“Approved International Organization” shall mean any of the international
multilateral organizations listed on Schedule A hereto, or any other
international multilateral

 

2

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organization deemed acceptable by the Agent from time to time, in its sole and
absolute discretion.

 

“Asset Coverage Ratio” shall have the meaning attributed to such term in Section
6.15(b) of this Agreement.

 

“Base Rate” shall mean the higher of the (i) Federal Funds Rate plus one-half of
one percent (0.50%) or (ii) the Prime Rate.

 

“Board” shall have the meaning attributed to such term in the definition of
“LIBOR Reserve Percentage”.

 

“Borrower” and “Borrowers” shall have the meaning set forth in the preamble to
this Agreement.

 

“Borrowing Base/Non-Default Certificate” shall mean a certificate in the form of
Exhibit 4 hereto.

 

“Borrowing Base Deficiency” shall have the meaning attributed to such term in
Section 1.3 of this Agreement.

 

“Business Day” shall mean (a) any day which is neither a Saturday or Sunday nor
a legal holiday on which commercial banks are authorized or required to be
closed in the State of Maryland; (b) when such term is used to describe a day on
which a borrowing, payment, prepaying, or repaying is to be made in respect of
any LIBOR Rate Loan, any day which is: (i) neither a Saturday or Sunday nor a
legal holiday on which commercial banks are authorized or required to be closed
in New York City; and (ii) a London Banking Day; and (c) when such term is used
to describe a day on which an interest rate determination is to be made in
respect of any LIBOR Rate Loan, any day which is a London Banking Day.

 

“Carryover Year” shall have the meaning attributed to such term in Section
6.15(d) of this Agreement.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.).

 

“Chattel Paper” shall have the meaning attributed to such term by the UCC, and
shall include “electronic chattel paper” and “tangible chattel paper”, as such
terms are defined in the UCC, whether now owned or hereafter acquired by a
Borrower.

 

“Citizens Bank” shall mean Citizens Bank of Pennsylvania, a Pennsylvania state
chartered bank, acting individually, together with its successors and assigns.

 

“Closing” shall mean the settlement of the transactions contemplated by this
Agreement.

 

“Closing Date” shall mean the date on which the Closing occurs.

 

“Collateral” shall have the meaning attributed to such term in Article 3 of this
Agreement.

 

3

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“Collateral Accounts” shall have the meaning attributed to such term in Article
8 of this Agreement.

 

“Commercial Contract” shall mean any written or oral contract to which a
Borrower is a party (other than a U.S. Government Contract or U.S. Government
Subcontract) which gives rise or may give rise to Receivables.

 

“Commercial Tort Claims” shall have the meaning attributed to such term by the
UCC, and shall include any and all claims now existing or hereafter arising in
tort with respect to which (a) the claimant is an organization, or (b) the
claimant is an individual and the claim (i) arose in the course of the
claimant’s business or profession, and (ii) does not include damages arising out
of personal injury to or death of any individual.

 

“Commitment Amount” shall mean Thirty-Five Million and No/100 Dollars
($35,000,000.00), or if the maximum aggregate commitment of the Lenders
hereunder is reduced pursuant to the terms of this Agreement, such lesser
amount.

 

“Consolidated Net Income” shall mean, for any period of determination, the sum
of consolidated gross revenues of the Borrowers for such period, minus all
consolidated operating and non-operating expenses (including taxes) of the
Borrowers for such period, all as determined in accordance with GAAP.

 

“Contribution Agreement” shall mean the Contribution Agreement of even date
herewith, by and among the Borrowers, and delivered by the Borrowers prior to or
simultaneously with their execution and delivery of this Agreement or a Joinder
Agreement (as the case may be), together with all Agent-approved amendments and
modifications thereof hereafter executed and delivered by the Borrowers.

 

“Deposit Accounts” shall have the meaning attributed to such term by the UCC,
and shall include any demand, time, savings, passbook or similar account from
time to time established and maintained with a bank.

 

“Documents” shall have the meaning attributed to such term by the UCC, and shall
include any and all documents of any type and nature whether now owned or
hereafter created or acquired.

 

“EBITDA” shall mean, as of the date of any determination, the consolidated net
income of the Parent Company, including all Borrowers and Non-Borrower
Subsidiaries, plus interest expense, plus taxes, plus depreciation expense, plus
amortization expense, plus any non-cash, non-recurring charges against income
approved in writing by the Agent, minus any non-cash gain (to the extent
included in determining net income), minus any dividends paid in accordance with
Section 7.8(a) of this Agreement to the extent not deducted from net income, all
as determined on a rolling four (4) quarter consolidated basis in accordance
with GAAP. Additionally, any transaction costs for the closing of the Facilities
and any prepayment penalties or other costs related to refinancing the
Borrowers’ existing bank debt may be added back to net income in calculating
EBITDA.

 

4

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“Eligible Assignee” shall mean any Lender, an affiliate of any Lender, a Federal
Reserve Bank or any other “Qualified Institutional Buyer”, as such term is
defined under Rule 144(A), promulgated under the Securities Act of 1933, as
amended.

 

“Eligible Billed Commercial Accounts Receivable” shall mean all Receivables
which (a) represent amounts due and owing for products actually delivered or
services actually performed or rendered by or on behalf of a Borrower to or for
the benefit of an Account Debtor pursuant to a Commercial Contract; (b) have
been properly billed; (c) are outstanding less than ninety-one (91) days from
the date of original invoice; (d) arise in the ordinary course of the Borrower’s
business; (e) are due, owing and not subject to any defense, set-off or
counterclaim; ; and (f) are not otherwise Ineligible Receivables.

 

“Eligible Billed Foreign Accounts Receivable” shall mean all Receivables of ORC
Holdings, Ltd and O.R.C. International, Ltd. which (a) represent amounts due and
owing for products actually delivered or services actually performed or rendered
by or on behalf of a Borrower to or for the benefit of a foreign Account Debtor;
(b) are outstanding less than ninety-one (91) days from the date of original
invoice; (c) have been properly billed; (d) arise in the ordinary course of the
Borrower’s business; (e) are due, owing and not subject to any defense, set-off
or counterclaim; ; and (f) are not otherwise Ineligible Receivables.

 

“Eligible Billed Government Accounts Receivable” shall mean all Receivables
arising from Government Contracts (including Government Subcontracts) which (a)
represent amounts due and owing for products actually delivered or services
actually performed or rendered by or on behalf of a Borrower pursuant to a
Government Contract (or Government Subcontract); (b) have been properly billed;
(c) are outstanding less than ninety-one (91) days from the date of original
invoice; (d) arise in the ordinary course of the Borrower’s business; (e) are
due, owing and not subject to any defense, set-off or counterclaim; (f) are not
final invoices; and (g) are not otherwise Ineligible Receivables.

 

“Eligible Unbilled Commercial Accounts Receivable” shall mean all Receivables
arising from work actually performed by any Borrower pursuant to a Commercial
Contract which (a) are eligible to be billed to the Account Debtor in accordance
with the applicable Commercial Contract within sixty (60) days of the “as of”
date of the applicable Borrowing Base/Non-Default Certificate (with no
additional performance required by any person, and no condition to payment by
the Account Debtor, other than receipt of an appropriate invoice); (b) have not
been billed to the Account Debtor solely as a result of timing differences
between the date the revenue is recognized on such Borrower’s books and the date
the invoice is actually rendered; (c) represent revenue recognized on the books
of such Borrower not more than ninety (90) days prior to the “as of” date of the
applicable Borrowing Base/Non-Default Certificate as it relates to “milestones”
(with no additional performance required by any person, and no condition to
payment by the Account Debtor; i.e., all necessary written consents and
approvals have been obtained, whether in connection with a required contract
modification or otherwise); (d) may, in accordance with GAAP, be included as
current assets of such Borrower, even though such amounts have not been billed
to the Account Debtor; and (e) are not Ineligible Receivables.

 

“Eligible Unbilled Foreign Accounts Receivable” shall mean all Receivables of
ORC Holdings, Ltd and O.R.C. International, Ltd. arising from work actually
performed by any Borrower pursuant to a Commercial Contract which (a) are
eligible to be billed to the Account

 

5

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Debtor in accordance with the applicable Commercial Contract within sixty (60)
days of the “as of” date of the applicable Borrowing Base/Non-Default
Certificate (with no additional performance required by any person, and no
condition to payment by the Account Debtor, other than receipt of an appropriate
invoice); (b) have not been billed to the Account Debtor solely as a result of
timing differences between the date the revenue is recognized on such Borrower’s
books and the date the invoice is actually rendered; (c) represent revenue
recognized on the books of such Borrower not more than ninety (90) days prior to
the “as of” date of the applicable Borrowing Base/Non-Default Certificate as it
relates to “milestones” (with no additional performance required by any person,
and no condition to payment by the Account Debtor; i.e., all necessary written
consents and approvals have been obtained, whether in connection with a required
contract modification or otherwise); (d) may, in accordance with GAAP, be
included as current assets of such Borrower, even though such amounts have not
been billed to the Account Debtor; and (e) are not Ineligible Receivables.

 

“Eligible Unbilled Government Accounts Receivable” shall mean all Receivables
arising from work actually performed by any Borrower pursuant to a Government
Contract (including a Government Subcontract) which (a) are eligible to be
billed to the Government (or Prime Contractor) in accordance with the applicable
Government Contract (or Government Subcontract) within sixty (60) days of the
“as of” date of the applicable Borrowing Base/Non-Default Certificate (with no
additional performance required by any person, and no condition to payment by
the Government (or Prime Contractor), other than receipt of an appropriate
invoice); (b) have not been billed to the Government (or Prime Contractor)
solely as a result of timing differences between the date the revenue is
recognized on such Borrower’s books and the date the invoice is actually
rendered; (c) represent revenue recognized on the books of such Borrower not
more than ninety (90) days prior to the “as of” date of the applicable Borrowing
Base/Non-Default Certificate as it relates to “milestones” (with no additional
performance required by any person, and no condition to payment by the
Government (or Prime Contractor); i.e., all necessary written consents and
approvals have been obtained, whether in connection with a required contract
modification or otherwise); (d) may, in accordance with GAAP, be included as
current assets of such Borrower, even though such amounts have not been billed
to the Government (or Prime Contractor); and (e) are not Ineligible Receivables.

 

“Equalization Payments” shall have the meaning attributed to such term in
Section 10.13(a) of this Agreement.

 

“Equipment” shall have the meaning attributed to such term by the UCC, and shall
include any and all of the following, whether now owned or hereafter acquired
and wherever located: machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

 

6

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“ERISA” shall have the meaning attributed to such term in Section 5.13(a) of
this Agreement.

 

“Event of Default” shall have the meaning attributed to such term in Section 9.1
of this Agreement.

 

“Excess Cash Event” shall mean (i) any sale or disposition of any of the assets
of any Borrower which is (a) not in the ordinary course of business; or (b)
prohibited by the terms of this Agreement; (ii) the issuance by any Borrower
after the date of this Agreement to parties other than the current shareholders
of such Borrower of debt securities or other debt obligations (other than in
connection with debt expressly permitted pursuant to Section 7.7 of this
Agreement); (iii) the receipt by or on behalf of any Borrower of insurance
proceeds (other than insurance recoveries for business interruption loss,
workers compensation or damage to tangible property, which (a) with respect to
any of the foregoing insurance losses, do not exceed One Million and No/100
Dollars ($1,000,000.00), individually or in the aggregate, and (b) with respect
to insurance recoveries for damages to tangible property, are promptly applied
toward repair or replacement of the damaged property); (iv) the reversion of any
pension plan assets; and/or (v) any other cash revenue recognized by such
Borrower other than in the ordinary course of such Borrower’s business resulting
in excess cash to a Borrower, including, without limitation, cash proceeds
resulting from the issuance of additional equity interests or capital stock by a
Borrower.

 

“Facility” or “Facilities” shall mean the Revolving Facility and/or the Swing
Line Facility, individually or collectively, as the context may require.

 

“Federal Funds Rate” for any day shall mean the rate per annum (rounded upward
to the nearest 1/8 of 1%) determined by the Agent to be the rate per annum
announced by the Federal Reserve Bank of New York (or any successor) on such day
as being the weighted average of the rates on overnight Federal Funds
transactions arranged by Federal Funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate” as of the date of this Agreement; provided that if such Federal Reserve
Bank (or its successor) does not announce such rate on any day, the “Federal
Funds Effective Rate” for such day shall be the Federal Funds Rate for the last
day on which such rate was announced.

 

“First Horizon” shall mean First Horizon Bank, a division of First Tennessee
Bank National Association.

 

“Fixed Charge Coverage Ratio” shall have the meaning attributed to such term in
Section 6.15(a) of this Agreement.

 

“Foreign Bank Accounts” shall have the meaning attributed to such term in
Section 6.8 of this Agreement.

 

“GAAP” shall mean generally accepted accounting principles, consistently
applied, as in effect from time to time. The parties hereto acknowledge that
GAAP may change from time to time, and such changes may affect the calculation
of the covenants set forth in Section 6.15 hereof, causing an Event of Default
hereunder. If an Event of Default shall occur solely as

 

7

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a result of such changes in GAAP, the parties shall negotiate to achieve a
mutually acceptable amendment to the calculation of the breached covenants set
forth in Section 6.15.

 

“General Intangibles” shall have the meaning attributed to such term by the UCC,
and shall include any and all of the following, whether now owned or hereafter
created or acquired: all right, title and interest in or under any contract, all
“payment intangibles”, as defined in the UCC, customer lists, licenses,
copyrights, trademarks, patents, and all applications therefor and reissues,
extensions or renewals thereof, rights in intellectual property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any trademark or trademark license), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
stock and investment property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents.

 

“Goods” shall have the meaning attributed to such term by the UCC, and shall
include any and all of the following, whether now owned or hereafter acquired
and wherever located: embedded software to the extent included in “goods” as
defined in the UCC, manufactured homes, standing timber that is cut and removed
for sale and “as-extracted collateral” as defined in the UCC.

 

“Government” shall mean the United States government, any state government, any
local government, any department, instrumentality or any agency of the United
States government, any state government or any local government, or any Approved
International Organization.

 

“Government Contract Assignments” shall have the meaning attributed to such term
in Section 6.11 of this Agreement.

 

“Government Contract” and “Government Contracts” shall mean, individually or
collectively as the context may require, (i) written contracts between any
Borrower and the Government; and (ii) written subcontracts between any Borrower
and a Prime Contractor who is providing goods or services to the Government
pursuant to a written contract with the Government (a “Government Subcontract”),
provided that the subcontract relates only to goods or services being provided
to the Government pursuant to the Government Subcontract.

 

“Government Subcontract” shall have the meaning attributed to such term in the
definition of “Government Contract”.

 

8

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“Hazardous Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances, pollutants or
contaminants as defined in CERCLA, HMTA, RCRA or any other applicable
environmental law, rule, order or regulation.

 

“Hazardous Wastes” shall mean, without limitation, all waste materials subject
to regulation under CERCLA, RCRA or analogous state law, and/or any other
applicable Federal and/or state law now in force or hereafter enacted relating
to hazardous waste treatment or disposal.

 

“Hedging Contracts” shall mean interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, or any other agreements or
arrangements entered into between any Borrower and the Agent or a Lender and
designed to protect such Borrower against fluctuations in interest rates or
currency exchange rates.

 

“Hedging Obligations” shall mean all liabilities of any and all Borrowers to the
Agent or a Lender under Hedging Contracts.

 

“HMTA” shall mean the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801 et seq.)

 

“Indebtedness” shall mean, without duplication (a) all obligations of the
Borrowers in respect of money borrowed; (b) all obligations of the Borrowers
(other than trade debt incurred in the ordinary course of the Borrowers’
business), whether or not for borrowed money, (i) represented by notes payable,
or drafts accepted, in each case representing extensions of credit, (ii)
evidenced by bonds, debentures, notes or similar instruments, (iii) constituting
purchase money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property or services rendered; (c) capital lease obligations of the Borrowers;
(d) all obligations of the Borrower to purchase, redeem, retire, defease or
otherwise make any payment in respect of any mandatorily redeemable stock issued
by any Borrower, valued at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; (e) each Borrower’s
pro rata share of the Indebtedness of any unconsolidated affiliate of such
Borrower (including Indebtedness of any partnership or joint venture in which
such Borrower is a general partner or joint venturer to the extent of such
Borrower’s pro rata share of the ownership of such partnership or joint
venture), (f) all obligations of any other person or entity which any Borrower
has guaranteed, (g) reimbursement obligations in connection with letters of
credit issued for the benefit of any Borrower, and (h) the Obligations.

 

“Ineligible Receivables” shall mean Receivables which are (i) evidenced by a
promissory note or similar instrument; (ii) owed or payable by any Account
Debtor if payment of fifty percent (50%) or more of the aggregate balance due
from such Account Debtor is outstanding for more than ninety (90) days from the
date of original invoice (iii) owing from any person that is the subject of any
(a) suit, lien, levy or judgment which would or could reasonably be expected to
affect the collectibility of said account(s), or (b) bankruptcy, insolvency or a
similar process or proceeding; (iv) owing from foreign Account Debtors, but do
not constitute

 

9

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Eligible Billed Foreign Accounts Receivable; (v) unbilled accounts receivable
(except as otherwise specified herein); (vi) final invoices arising from
Government Contracts; (vii) bonded accounts receivable; or (viii) other
Receivables deemed ineligible by the Agent in its sole but reasonable
discretion. Additionally, without limiting any other provision of this
Agreement, or the discretion of the Agent to deem Receivables ineligible
pursuant to any other provision of this Agreement, it is expressly understood
and agreed that if any Borrower (I) has been debarred or suspended by the
Government, or been issued a notice of proposed debarment or notice of proposed
suspension by the Government; (II) is the subject of a Government investigation
involving or possibly involving fraud, willful misconduct or other wrongdoing;
(III) is a party to any Government Contract or Government Subcontract which has
been actually terminated due to such Borrower’s alleged fraud, willful
misconduct or any other wrongdoing; (IV) is a party to any Government Contract
or Government Subcontract which has been actually terminated for any other
reason whatsoever, which could result in liability or expense in excess of One
Million and No/100 Dollars ($1,000,000.00); or (V) has been issued a cure notice
or show cause notice under any Government Contract or Government Subcontract
involving amounts in excess of One Million and No/100 Dollars ($1,000,000.00),
and has failed to cure the default giving rise to such cure notice or failed to
resolve the matter set forth in the show cause notice (a) within the time period
available to such Borrower pursuant to such Government Contract, Government
Subcontract and/or such notice, or (b) before the date on which the Government
or other contracting party is entitled to exercise its rights and remedies under
the Government Contract or Government Subcontract (as a the case may be) as a
consequence of such default or matter set forth in the show cause notice, then
in any such event, any and all Receivables of such Borrower may, in the sole
discretion of the Agent, be deemed and treated as Ineligible Receivables.

 

“Instrument” shall have the meaning attributed to such term by the UCC, and
shall include any and all of the following, whether now owned or hereafter
acquired and wherever located: all certificates of deposit, and all “promissory
notes”, as defined in the UCC, and other evidences of indebtedness, other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.

 

“Interest Expense” shall mean, as of the date of any determination, the
Borrowers’ aggregate interest expense for borrowed money (including, without
limitation, premiums and interest expense arising from or relating to interest
rate protection agreements and original issue discounts), plus the amount of all
other interest due (whether paid or not paid) on any indebtedness of each
Borrower for the applicable measurement period, all as determined on a
consolidated basis in accordance with GAAP.

 

“Interest Payment Date” shall mean, relative to any LIBOR Rate Loan having an
Interest Period of three (3) months or less, the last Business Day of such
Interest Period, and as to any LIBOR Rate Loan having an Interest Period longer
than three (3) months, each Business Day which is three (3) months, or a whole
multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period.

 

“Interest Period” shall mean, relative to any LIBOR Rate Loans, (i) initially,
the period beginning on (and including) the date on which such LIBOR Rate Loan
is made or continued as, or converted into, a LIBOR Rate Loan pursuant to this
Agreement (including, without limitation, Exhibit 3 hereto) and the Notes and
ending on (but excluding) the day which numerically corresponds to such date one
(1), three (3) or six (6) months thereafter (or, if such

 

10

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month has no numerically corresponding day, on the last Business Day of such
month), in each case as available and as the Borrower may select in its notice
pursuant to this Agreement (including, without limitation, Exhibit 3 hereto) and
the Notes; and (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Rate Loan and ending one
(1), three (3) or six (6) months thereafter, as available and as selected by the
Borrower by irrevocable notice to the Agent not less than two (2) Business Days
prior to the last day of the then current Interest Period with respect thereto.

 

“Inventory” shall have the meaning attributed to such term by the UCC, and shall
include any and all of the following, whether now owned or hereafter acquired
and wherever located: all inventory, merchandise, goods and other personal
property for sale or lease or which are furnished or are to be furnished under a
contract of service, or that constitute raw materials, work in process, finished
goods, returned goods, or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
all supplies and embedded software.

 

“Investment Property” shall have the meaning attributed to such term by the UCC,
and shall include any and all of the following, whether now owned or hereafter
acquired: (a) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
United States treasury obligations, certificates of deposit, and mutual fund
shares; (b) all Securities Entitlements, including the rights to any securities
account and the financial assets held by a securities intermediary in such
securities account and any free credit balance or other money owing by any
securities intermediary with respect to that account; (c) all securities
accounts; (d) all commodity contracts; and (e) all commodity accounts.

 

“Issuing Lender” shall mean the Lender issuing a Letter of Credit to any
Borrower.

 

“Joinder Agreement” shall have the meaning attributed to such term in Section
1.9 of this Agreement.

 

“Junior Facilities” shall have the meaning attributed to such term in Section
4.7 of this Agreement.

 

“Lender” and “Lenders” shall mean, respectively, each and all of the banking or
financial institutions which, as of any date of determination, are (i) “Lender”
parties to this Agreement, and/or (ii) otherwise bound by the terms and
provisions of this Agreement and the other Loan Documents applicable to any and
all Lenders generally, pursuant to an Assignment and Acceptance or any other
document, instrument or agreement, in form and substance acceptable to the
Agent.

 

“Letter of Credit” and “Letters of Credit” shall mean, respectively, each and
all of the standby letters of credit issued pursuant to this Agreement.

 

“Letter of Credit Application” shall have the meaning attributed to such term in
Section 2.1 of this Agreement.

 

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“Letter of Credit Administration Fee” shall have the meaning attributed to such
term in Section 1.7(d) of this Agreement.

 

“Letter of Credit Rights” shall have the meaning attributed to such term by the
UCC, and shall include any and all of the following, whether now owned or
hereafter acquired: any right to payment or performance under a letter of
credit, whether or not the beneficiary has demanded or is at the time entitled
to demand payment or performance, but specifically excludes any right of a
beneficiary to demand payment or performance under a letter of credit.

 

“Leverage Ratio” shall have the meaning attributed to such term in Section
6.15(c) of this Agreement.

 

“LIBOR” or “LIBOR Rate” shall mean relative to any Interest Period for LIBOR
Rate Loans, the offered rate for deposits of U.S. Dollars in an amount
approximately equal to the amount of the requested LIBOR Rate Loan for a term
coextensive with the designated Interest Period which the British Bankers’
Association fixes as its LIBOR rate and which appears on the Telerate Page 3750
as of 11:00 a.m. London time on the day which is two (2) London Banking Days
prior to the beginning of such Interest Period, or as determined by the Agent if
such information is not available.

 

“LIBOR Election Form and Certification” shall mean the form attached as Exhibit
2 hereto.

 

“LIBOR Rate Loan” shall mean any loan or advance, the rate of interest
applicable to which is based upon the LIBOR Rate.

 

“LIBOR Lending Rate” shall mean, relative to any LIBOR Rate Loan to be made,
continued or maintained as, or converted into, a LIBOR Rate Loan for any
Interest Period, a rate per annum determined pursuant to the following formula:

 

LIBOR Lending Rate

   =   

LIBOR Rate

          (1.00 - LIBOR Reserve Percentage)

 

“LIBOR Reserve Percentage” shall mean, relative to any day of any Interest
Period for LIBOR Rate Loans, the maximum aggregate (without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) under any regulations of the Board of Governors of the Federal
Reserve System (the “Board”) or other governmental authority having jurisdiction
with respect thereto as issued from time to time and then applicable to assets
or liabilities consisting of “Eurocurrency Liabilities”, as currently defined in
Regulation D of the Board, having a term approximately equal or comparable to
such Interest Period.

 

“Lien Subordination Agreement” shall mean that certain Lien Subordination
Agreement dated the date hereof by and among the Borrowers, Allied Capital
Corporation and the Agent.

 

“Loan” shall mean the loans made by the Lenders to the Borrowers in the
aggregate maximum principal amount of Thirty-Five Million and No/100 Dollars
($35,000,000.00), or so

 

12

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much thereof as shall be advanced or readvanced from time to time, which are
represented by the Facilities, and which shall be evidenced by, bear interest
and be payable in accordance with the terms and provisions set forth in the
Notes.

 

“Loan Document” and “Loan Documents” shall mean, respectively, each and all of
this Agreement, the Notes, the Stock Security Agreements and each other
document, instrument, agreement or certificate heretofore, now or hereafter
executed and delivered by any Borrower in connection with the Loan.

 

“Loan Year” shall mean any twelve (12) month period, commencing on the Closing
Date and on each anniversary thereof.

 

“London Banking Day” shall mean a day on which dealings in US dollar deposits
are transacted in the London interbank market.

 

“Mandatory Payments” shall mean the mandatory payments required to be made on
the Loan pursuant to Section 1.5 of this Agreement.

 

“Material Adverse Effect” shall mean any set of facts or circumstances resulting
in a material adverse change to any Borrower’s business, property, profits,
condition (financial or otherwise), or the ability of any Borrower to perform
its obligations under this Agreement or any other Loan Document.

 

“Material Contract” shall mean any and all contracts or agreements to which the
Borrower is a party and pursuant to which the Borrower is or may be (a) entitled
to receive payments in excess of One Million and No/100 Dollars ($1,000,000.00),
in the aggregate, per annum, or (b) obligated to make payments or have any other
obligation or liability thereunder (direct or contingent) in excess of Five
Hundred Thousand and No/100 Dollars ($500,000.00), in the aggregate, per annum.

 

“Maximum Borrowing Base” shall have the meaning attributed to such term in
Section 1.3 of this Agreement.

 

“Net Cash” shall mean cash proceeds (net of cash taxes paid and reasonable and
customary costs paid to unrelated and unaffiliated third parties in connection
with a particular transaction) arising from any Excess Cash Event.

 

“Non-Borrower Subsidiaries” shall mean, collectively, ORC Korea, Ltd., ORC
Teleservice Corp., Opinion Research Corporation, S.A. de C.V., ORC International
Holdings, Ltd. and ORC Telecommunications Ltd.

 

“Note” and “Notes” shall mean, respectively, each and all of the promissory
notes executed, issued and delivered pursuant to this Agreement, together with
all extensions, renewals, modifications, replacements and substitutions thereof
and therefor.

 

“Obligation” and “Obligations” shall mean, respectively, any and all obligations
or liabilities of any Borrower to any Lender or the Agent (including any and all
obligations or liabilities with respect to outstanding Letters of Credit) in
connection with the Loan, whether now existing or hereafter created or arising,
direct or indirect, matured or unmatured, and

 

13

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whether absolute or contingent, joint, several or joint and several, and no
matter how the same may be evidenced or shall arise.

 

“Ordinary Course Payments” shall mean payments made directly by a Borrower to
any non-Borrower subsidiary or affiliate; provided that such payments are made
(i) in the ordinary course of such Borrower’s business, (ii) for products
actually delivered or services actually performed, and (iii) pursuant to an
“arm’s length” transaction (i.e., a transaction that would otherwise be made
with an unrelated and unaffiliated third party).

 

“O.S.H.A.” shall have the meaning attributed to such term in Section 5.14(a) of
this Agreement.

 

“Parent Company” shall mean Opinion Research Corporation, a Delaware
corporation, and its successors and assigns.

 

“Participating Lender” shall have the meaning attributed to such term in Section
12.11(b) of this Agreement.

 

“Patriot Act” shall mean the U.S.A. Patriot Act (Title III of Pub. L. 107-56
(signed into law on October 26, 2001)), as amended.

 

“Pension Plan” or “Pension Plans” shall have the meaning attributed to such term
in Section 5.13(a) of this Agreement.

 

“Percentage” shall mean with respect to each Lender, the percentage set forth
next to such Lender’s name on Schedule 1 to this Agreement in respect of the
Revolving Facility Commitment Amount and/or the Swing Line Commitment Amount (as
the context may require), as the same may be modified or amended from time to
time.

 

“Permitted Liens” shall mean: (a) liens for taxes which are not yet due and
payable or which are being contested in good faith and by appropriate
proceedings, which (i) the Borrower has the financial ability to pay, including
penalties and interest, and (ii) the non-payment thereof will not result in the
execution of any such tax lien or otherwise jeopardize the interests of the
Agent and/or the Lenders in any part of the Collateral; (b) deposits or pledges
to secure obligations under workers’ compensation, social security or similar
laws, incurred in the ordinary course of business; (c) liens securing secured
indebtedness of the Borrowers permitted by Section 7.7 of this Agreement; (d)
cash deposits pledged to secure the performance of bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature made in the
ordinary course of business; (e) mechanics’, workmen’s, repairmen’s,
warehousemen’s, vendors’ or carriers’ liens or other similar liens; provided
that such liens arise in the ordinary course of the Borrowers’ business and
secure sums which are not past due, or which are separately secured by cash
deposits or pledges in an amount adequate to obtain the release of such liens;
(f) except as otherwise provided in this Agreement, statutory or contractual
landlord’s liens on the Borrower’s tangible personal property located in such
Borrower’s demised premises; (g) zoning or other similar and customary land use
restrictions, which do not materially impair the use or value of any Collateral
or property of any Borrower; (h) judgment liens which are not prohibited by
Section 7.4 of this Agreement; (i) other liens expressly permitted by the terms
and provisions of this Agreement; (j) liens securing purchase money indebtedness
to the extent such indebtedness

 

14

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is expressly permitted pursuant to Section 7.7(a) of this Agreement; and (k)
liens in favor of the Agent.

 

“Prime Contractor” shall mean any person or entity (other than a Borrower) which
is a party to any Government Subcontract.

 

“Prime Rate” shall mean the rate of interest from time to time established and
publicly announced by Citizens Bank as its prime rate, in Citizens Bank’s sole
discretion, which rate of interest may be greater or less than other interest
rates charged by Citizens Bank to other borrowers and is not solely based or
dependent upon the interest rate which Citizens Bank may charge any particular
borrower or class of borrowers.

 

“Proceeds” shall have the meaning attributed to such term by the UCC or other
applicable law, and, in any event, shall include, but shall not be limited to,
any and all of the following, whether now owned or hereafter acquired: (i) any
and all proceeds of, or amounts (in any form whatsoever, whether cash,
securities, property or other assets) received under or with respect to, any
insurance, indemnity, warranty or guaranty payable from time to time, and claims
for insurance, indemnity, warranty or guaranty effected or held with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever,
whether cash, securities, property or other assets) made or due and payable from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any governmental
authority (or any person acting under color of governmental authority), (iii)
any claim against third parties (a) for past, present or future infringement of
any patent or patent license, or (b) for past, present or future infringement or
dilution of any copyright, copyright license, trademark or trademark license, or
for injury to the goodwill associated with any trademark or trademark license,
(iv) any recoveries against third parties with respect to any litigation or
dispute concerning any of the Collateral including claims arising out of the
loss or nonconformity of, interference with the use of, defects in, or
infringement of rights in, or damage to, Collateral, (v) all amounts collected
on, or distributed on account of, other Collateral, including dividends,
interest, distributions and Instruments with respect to Investment Property and
pledged stock, and (vi) any and all other amounts (in any form whatsoever,
whether cash, securities, property or other assets) from time to time paid or
payable under or in connection with any of the Collateral (whether or not in
connection with the sale, lease, license, exchange or other disposition of the
Collateral).

 

“RCRA” shall mean the Resource Conservation and Recovery Act, as amended (42
U.S.C. Sections 6901 et. seq.).

 

“Receivables” shall mean all of the Borrowers’ present and future accounts,
contracts, contract rights, chattel paper, general intangibles, notes, drafts,
acceptances, chattel mortgages, conditional sale contracts, bailment leases,
security agreements, contribution rights and other forms of obligations now or
hereafter arising out of or acquired in the course of or in connection with any
business the Borrowers conduct, together with all liens, guaranties, securities,
rights, remedies and privileges pertaining to any of the foregoing, whether now
existing or hereafter created or arising, and all rights with respect to
returned and repossessed items of inventory.

 

15

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“Releases” shall have the meaning attributed to such term in Section 5.14(c) of
this Agreement.

 

“Request for Advance and Certification” shall mean the form Request for Advance
and Certification attached as Exhibit 1 hereto.

 

“Required Lenders” shall mean all of the Lenders who at any given time, are not
in default under or in breach of any of the terms and conditions of this
Agreement applicable to such Lender, and who hold Notes or participation
interests representing, in the aggregate, at least sixty-six and two-thirds
percent (66 2/3%) of the Revolving Facility Commitment Amount (excluding the
Swing Line Commitment Amount).

 

“Revolving Facility Notes” shall mean each and all of the promissory notes
executed, issued and delivered in connection with the Revolving Facility,
together with all extensions, renewals, modifications, replacements and
substitutions thereof and therefor.

 

“Revolving Facility” shall mean the revolving credit facility being extended
pursuant to this Agreement on the basis of Eligible Billed Government Accounts
Receivable, Eligible Billed Commercial Accounts Receivable, Eligible Billed
Foreign Accounts Receivable and the Applicable Percentage of the sum of Eligible
Unbilled Government Accounts Receivable, Eligible Unbilled Commercial Accounts
Receivable and Eligible Unbilled Foreign Accounts Receivable, in the maximum
principal amount of Thirty-five Million and No/100 Dollars ($35,000,000.00),
with a sub-limit of Five Million and No/100 Dollars ($5,000,000.00) for Letters
of Credit.

 

“Revolving Facility Commitment Amount” shall mean Thirty-five Million and No/100
Dollars ($35,000,000.00), or if such amount shall be reduced pursuant to this
Agreement, such lesser amount.

 

“Revolving Facility Commitment Fee” shall have the meaning attributed to such
term in Section 1.7(b) of this Agreement.

 

“Revolving Facility Maturity Date” shall mean May     , 2007 or such earlier
date on which the Obligations have been accelerated and declared immediately due
and payable in accordance with the terms of this Agreement and/or applicable
law.

 

“Security Entitlements” shall have the meaning attributed to such term by the
UCC, and shall include any and all Security Entitlements whether now owned or
hereafter created or acquired.

 

“Stock Security Agreements” shall mean each and all of the five (5) separate
Stock Security Agreements dated the date hereof, executed by the Parent Company,
ORC, Inc., Macro International Inc., Social & Health Services, Ltd. and ORC
Holdings, Ltd., as pledgor/debtor, and the Agent, as secured party, together
with any and all other stock security agreements hereafter executed and
delivered by any Borrower as security for repayment of the Loan, and any and all
amendments and/or modifications of any of the foregoing stock security
agreements.

 

“Subordinated Debt” shall have the meaning attributed to such term in Section
4.7 of this Agreement.

 

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“Subordinated Debt Subordination Agreement” shall mean that certain
Subordination Agreement dated the date hereof by and among the Borrowers, Allied
Capital Corporation and the Agent.

 

“Subordination Agreements” shall mean collectively, the Lien Subordination
Agreement and the Subordinated Debt Subordination Agreement.

 

“Supporting Obligations” shall have the meaning attributed to such term by the
UCC, and shall include any and all of the following, whether now owned or
hereafter acquired: any and all letter of credit rights or secondary obligations
that support the payment or performance of an Account, Chattel Paper, Document,
General Intangible, Instrument or Investment Property.

 

“Swing Line Commitment Amount” shall mean Five Million and No/100 Dollars
($5,000,000.00).

 

“Swing Line Commitment Period” shall mean the period commencing on the Closing
Date and ending on the Swing Line Termination Date.

 

“Swing Line Facility” shall mean the swing line credit facility being extended
pursuant to this Agreement, in the original maximum principal amount equal to
the Swing Line Commitment Amount.

 

“Swing Line Lender” shall mean Citizens Bank.

 

“Swing Line Loan” or “Swing Line Loans” shall have the meaning attributed to
such terms in Section 1.1(b) of this Agreement.

 

“Swing Line Note” shall mean that certain Swing Line Promissory Note of even
date herewith, made by the Borrowers and payable to the order of the Swing Line
Lender, in the maximum principal amount of Five Million and No/100 Dollars
($5,000,000.00) or so much thereof as shall be advanced or readvanced, together
with all extensions, renewals, modifications, replacements and substitutions
thereof or therefor.

 

“Swing Line Outstanding Amounts” shall mean, as of any date of determination,
the aggregate principal amount of all Swing Line Loans then outstanding.

 

“Swing Line Termination Date” shall mean the fifth (5th) Business Day prior to
the Revolving Facility Maturity Date, or such earlier date on which the Swing
Line Lender shall have elected, in its sole and absolute discretion, to
terminate the Swing Line Facility.

 

“Term Loan” shall have the meaning attributed to such term in Section 4.7 of
this Agreement.

 

“Total Debt” shall mean the actual amount of borrowed money (including, without
limitation, subordinated debt, capital leases and synthetic leases that remain
unpaid or outstanding on the “as of” date of any determination), plus the
aggregate amount of any and all financial guarantees and the face amount of any
and all outstanding letters of credit (except that outstanding loans under the
Facilities will be the thirty (30) day average balance of the Facilities for the
thirty (30) day period immediately preceding the “as of” date of the
calculation).

 

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“UCC” shall mean the Uniform Commercial Code as the same may, from time to time,
be enacted and in effect in the State of Maryland; provided, that to the extent
that the UCC is used to define any term herein and such term is defined
differently in different Articles or Divisions of the UCC, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, the
Agent’s lien on any Collateral is governed by the Uniform Commercial Code as
enacted and in effect in a jurisdiction other than the State of Maryland, the
term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions thereof relating
to such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.

 

“UK Borrowers” shall mean ORC Holdings, Ltd., an English Company and O.R.C.
International Ltd., an English Company.

 

“Unused Fee” shall have the meaning attributed to such term in Section 1.7(c) of
this Agreement.

 

INTERPRETIVE PROVISIONS

 

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms

 

(b) The words “hereof”, “herein”, “hereunder” and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
“Subsection”, “Section”, “Schedule” and “Exhibit” references are to this
Agreement unless otherwise specified.

 

(c) Unless otherwise expressly provided herein, (i) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of this Agreement, and (ii) references to any statute or regulation are to
be construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.

 

(d) The article, section and paragraph headings of this Agreement are for
convenience of reference only, and in no way define, limit or describe the scope
of this Agreement or the intent of any provision hereof.

 

(e) This Agreement and the other Loan Documents are the result of negotiations
among all parties hereto, and have been reviewed by counsel to the Agent, the
Borrowers and the Lenders, and are the products of all parties. Accordingly,
this Agreement and the other Loan Documents shall not be construed against the
Agent or the Lenders merely because of the Agent’s or Lenders’ involvement in
their preparation.

 

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ARTICLE 1

COMMITMENT

 

1.1. Maximum Loan Amount.

 

(a) Subject to the terms and conditions of this Agreement, (i) each Lender
severally agrees to make the Loan to the Borrowers (except for the Swing Line
Loan, which shall be extended only by the Swing Line Lender), with the maximum
amount of each Lender’s obligation being equal to the Lender’s Percentage of the
Commitment Amount; and (ii) as set forth more fully in Section 1.1(b) below, the
Swing Line Lender will make the Swing Line Loan to the Borrowers. The Loan,
including the Swing Line Loan, shall bear interest and be payable in accordance
with the terms and provisions of and be initially evidenced by three (3)
promissory notes, two (2) of which shall evidence the Revolving Facility and one
(1) of which shall evidence the Swing Line Facility. Concurrent with the
Borrowers’ execution of this Agreement, Citizens Bank shall receive (x) a
revolving promissory note in the maximum principal amount of Twenty Five Million
and No/100 Dollars ($25,000,000.00) or so much thereof as shall be advanced or
readvanced, and (y) the Swing Line Note, and First Horizon shall receive a
revolving promissory note in the maximum principal amount of Ten Million and
No/100 Dollars ($10,000,000.00) or so much thereof as shall be advanced or
readvanced; and

 

(b) Subject to the terms and conditions of this Agreement, the Swing Line Lender
shall make swing line loans (each, a “Swing Line Loan” and collectively, the
“Swing Line Loans”) to the Borrowers from time to time during the Swing Line
Commitment Period, in the aggregate principal amount at any one time outstanding
not to exceed Five Million and No/100 Dollars ($5,000,000.00) and in advance
increments of One Hundred Thousand and No/100 Dollars ($100,000.00); provided,
however, that at no time may the aggregate outstanding principal amount of the
Swing Line Loans, plus the aggregate outstanding principal amount of the
Revolving Facility (including the aggregate face amount of all Letters of Credit
outstanding), exceed the Commitment Amount. During the Swing Line Commitment
Period, the Borrowers may use the Swing Line Facility by borrowing, repaying
Swing Line Loans in whole or in part (in minimum increments of One Hundred
Thousand and No/100 Dollars ($100,000.00)), and reborrowing, all in accordance
with the terms of this Agreement. At the request of the Swing Line Lender, the
Agent may, at any time, on behalf of the Borrowers (which hereby irrevocably
direct the Agent to act on their behalf) request each Lender having a Percentage
of the Revolving Facility, including the Swing Line Lender, to make, and each
such Lender, including the Swing Line Lender, shall make an advance under the
Revolving Facility, in an amount equal to such Lender’s Percentage of the
Revolving Facility, of the amount of the Swing Line Outstanding Amounts as of
the date such request is made. In such event, each such Lender shall make the
requested proceeds available to the Agent for the account of the Swing Line
Lender in accordance with the funding provisions set forth in this Agreement.
The proceeds of the Revolving Facility advanced pursuant to this Section 1.1(b)
shall be immediately applied to repay the Swing Line Outstanding Amounts.

 

1.2. Use of Proceeds. The Loan shall be used by the Borrowers only for the
following purposes: (a) for working capital, general corporate needs and letters
of credit; (b) to refinance certain existing Indebtedness of the Borrowers; and
(c) to finance Lender-approved costs and expenses incurred by the Borrowers in
connection with the Closing. Each Borrower

 

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agrees that it will not use or permit the Loan proceeds to be used for any other
purpose without the prior written consent of the Agent.

 

1.3. Borrowing Base and Maximum Advances. Notwithstanding any term or provision
of this Agreement or any other Loan Document to the contrary, it is understood
and agreed that in no event whatsoever shall the Lenders (including the Swing
Line Lender) be obligated to advance any amount or issue any Letter of Credit
hereunder if such advance or the issuance of such Letter of Credit would cause
the aggregate amount of outstanding Loans (including Swing Line Outstanding
Amounts), plus the face amount of all outstanding Letters of Credit, to exceed
the lesser of:

 

  (i) the Commitment Amount; or

 

  (ii) the aggregate of (the “Maximum Borrowing Base”):

 

  A. eighty-five percent (85%) of Eligible Billed Government Accounts
Receivable; plus

 

  B. eighty-five percent (85%) of Eligible Billed Commercial Accounts
Receivable; plus

 

  C. eighty-five percent (85%) of Eligible Billed Foreign Accounts Receivable;
plus

 

  D. the Applicable Percentage of the sum of Eligible Unbilled Government
Accounts Receivable, Eligible Unbilled Commercial Accounts Receivable and
Eligible Unbilled Foreign Accounts Receivable.

 

All determinations regarding the eligibility of any Receivable(s) (billed or
unbilled) shall be made by the Agent in its sole but reasonable discretion; it
being understood however, that at no time shall the availability from Eligible
Billed and Unbilled Foreign Accounts Receivable be greater than twenty percent
(20%) of the Maximum Borrowing Base. Assets acquired after the Closing Date by
any Borrower other than in the ordinary course of business of such Borrower
shall only be included in the calculation of the Maximum Borrowing Base with the
Agent’s prior written consent.

 

In the event that the amount outstanding under the Revolving Facility (including
the face amount of Letters of Credit and Swing Line Outstanding Amounts) exceeds
any of the limitations set forth in this Section 1.3 (such excess being referred
to herein as a “Borrowing Base Deficiency”), the Borrowers shall, within two (2)
Business Days of the occurrence of such Borrowing Base Deficiency, make a
principal payment in the amount of such deficiency so as to be in compliance
with this Section 1.3. For purposes of calculating the Maximum Borrowing Base,
such calculation shall be made based upon the immediately preceding Borrowing
Base Certificate, as such calculation may be adjusted pursuant to this
Agreement.

 

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1.4. Advances, Interest and Repayment.

 

(a) Agreement to Advance and Readvance; Procedure. So long as no Event of
Default shall have occurred and be continuing, and no act, event or condition
shall have occurred and be continuing which with notice or the lapse of time, or
both, shall constitute an Event of Default, and subject to the terms and
provisions of this Agreement, the Lenders (and the Swing Line Lender, as the
case may be) shall advance and readvance the proceeds of the Revolving Facility
and the proceeds of the Swing Line Facility (as applicable) from time to time in
accordance with this Agreement. Requests for advances with respect to the
Revolving Facility shall be in the form attached as Exhibit 1 hereto, and
requests for advances with respect to the Swing Line Facility shall be in the
form attached as Exhibit 1(a) hereto. Requests for advances of Loan proceeds
with respect to the Revolving Facility and the Swing Line Facility may be made
via facsimile on any given Business Day if the Borrowers provide the Agent, in
advance, with a written list of the names of the specific officers authorized to
request disbursements by facsimile. Upon request by the Agent, the Borrowers
shall confirm, in an original writing, each facsimile request for advance made
by any Borrower. Notwithstanding the foregoing, (i) the Lenders shall have no
obligation to make any advance with respect to the Revolving Facility after the
Revolving Facility Maturity Date; and (ii) the Swing Line Lender shall have no
obligation to make any advance with respect to the Swing Line Facility after the
Swing Line Termination Date.

 

(b) Interest Rate Election; Certain Advance Procedures and Limits. Amounts
advanced in connection with the Loan shall bear interest either on a Base Rate
basis or LIBOR basis, as more fully set forth in the Notes and in the exhibits
attached to this Agreement. Advances bearing interest on a Base Rate basis shall
be in minimum and incremental amounts of One Hundred Thousand Dollars
($100,000.00), and shall be made available on a same-day basis, if requested by
12:00 Noon Washington, D.C. time on any Business Day. Advances bearing interest
on a LIBOR basis shall be in minimum amounts of Five Hundred Thousand and No/100
Dollars ($500,000.00) and incremental amounts of One Hundred Thousand and No/100
Dollars ($100,000.00), and shall be made available not less than three (3)
Business Days after request therefor. The Borrowers’ right to request LIBOR
based interest, as well as certain additional terms, conditions and requirements
relating thereto, are set forth in the Notes and in the exhibits attached to
this Agreement, and each Borrower expressly acknowledges and consents to such
additional terms and provisions.

 

(c) Repayment. All sums advanced in connection with the Loan shall be repaid in
accordance with the terms of the Notes and the other Loan Documents.

 

1.5. Additional Mandatory Payments. In addition to all other sums payable by the
Borrowers pursuant to any of the Notes, this Agreement or any other Loan
Document, the Borrowers shall also make mandatory payments on the Notes (applied
first to Swing Line Outstanding Amounts (if any), and then to amounts
outstanding under the Revolving Facility, as provided herein below), in the
amount of one hundred percent (100%) of the cash proceeds (net of reasonable and
customary costs (including taxes and repayment of applicable purchase money
indebtedness) paid to unrelated and unaffiliated third parties in connection
with the particular transaction) arising from any Excess Cash Event.

 

1.6. Field Audits. The Agent has the right at any time and in its sole
discretion to conduct field audits with respect to the Collateral and each
Borrower’s accounts receivable,

 

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inventory, business and operations. All field audits shall be at the cost and
expense of the Borrowers; it being understood and agreed that, in the absence of
an Event of Default, the Borrowers’ shall only be required to pay for field
audit costs and expenses with respect to one (1) field audit conducted during
any twelve (12) month period (excluding, however, any field audits conducted by
the Agent: (i) pursuant to Section 1.9 of this Agreement in connection with the
joinder of a new “Borrower” hereunder, (ii) in connection with the acquisition
by any Borrower of new assets not in the ordinary course of business of such
Borrower, or (iii) prior to the Closing hereunder, the costs and expenses of all
of which shall be paid by the Borrowers). Additionally, any and all field audits
conducted following an Event of Default shall be at the Borrowers’ cost and
expense, with the foregoing limitation on field audit costs and expense being
inapplicable.

 

1.7. Certain Fees. In addition to principal, interest and other sums payable
pursuant to the Notes, the Borrowers shall pay the following fees:

 

(a) Upfront Fee. Simultaneously with the execution of this Agreement, the
Borrowers shall pay to the Agent, for the benefit of all Lenders pro-rata based
on each Lender’s Percentage, an upfront fee in the aggregate amount of One
Percent (1%) of the Commitment Amount.

 

(b) Agency Fee. The Borrowers shall pay to the Agent, for its own account, an
annual agency fee (the “Agency Fee”), in the amount of Twenty-Five Thousand and
No/100 Dollars ($25,000.00) per annum. The Agency Fee shall be due and payable
in full on the date of this Agreement and on each anniversary of the date of
this Agreement.

 

(c) Unused Fee. So long as any amounts remain outstanding in connection with the
Revolving Facility, or the Lenders have any obligation to make any advance or
issue any Letters of Credit in connection therewith, the Borrowers agree to pay
to the Agent, for the benefit of all Lenders pro-rata based on each Lender’s
Percentage, an annual unused fee (the “Unused Fee”), at a rate of one-half of
one percent (0.50%) per annum, calculated on the difference between (i) the
Revolving Facility Commitment Amount, and (ii) the average daily outstanding
principal balance of the Revolving Facility during the applicable calendar year
(including the aggregate face amount of all issued and outstanding Letters of
Credit and any Swing Line Outstanding Amounts). The Unused Fee shall be
calculated on the basis of the actual number of days elapsed and a three hundred
sixty (360) day year, shall be due for any calendar year in which the Revolving
Facility is available to the Borrowers or outstanding (for all or any portion of
such calendar year), and shall be payable in arrears, with payments commencing
on June 30, 2004, and continuing on the last Business Day of each and every
calendar quarter thereafter so long as this Agreement remains in effect.

 

(d) Letter of Credit Fees. With respect to each Letter of Credit issued pursuant
to this Agreement: (i) the Borrowers shall pay to the Issuing Lender its
customary issuance and administrative charges (the “Letter of Credit
Administration Fee”) with respect to the issuance and administration of any
Letters of Credit, as such issuance and administrative charges are in effect
from time to time, due and payable in full, in advance, on the date the Letter
of Credit is issued or amended; (ii) the Borrowers shall pay to the Issuing
Lender on a quarterly basis, in advance, a fronting fee of one eighth of one
percent (0.125%) of the face amount of

 

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each Letter of Credit issued; and (iii) the Borrowers shall pay to the Agent,
quarterly, in advance, for the account of the Lenders, a Letter of Credit fee
with respect to unfunded, outstanding Letters of Credit, which fee shall be in
an annual amount equal to the Additional LIBOR Interest Margin, multiplied by
the face amount of each Letter of Credit outstanding as of the first day of the
quarter for which the fee is being paid; such fee to be calculated on the basis
of the actual number of days in the immediately succeeding quarter and a three
hundred sixty (360) day year.

 

(e) Out-of-Pocket Fees and Expenses. The Borrowers shall be liable for and shall
timely pay all out-of-pocket costs and expenses (including reasonable attorneys’
fees and expenses of counsel for the Agent, and of other special and local
counsel and other experts, if any, engaged by the Agent) from time to time
incurred by the Agent in connection with the administration of, preservation of
rights in and enforcement of this Agreement, the other Loan Documents and the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, the Borrowers shall be liable for all of the Agent’s
out-of-pocket costs and expenses associated with any and all amendments, waivers
and/or consents relating to any of the Facilities.

 

1.8. Appointment of the Parent Company. Each Borrower acknowledges that (i) the
Lenders have agreed to extend credit to each of the Borrowers on an integrated
basis for the purposes herein set forth; (ii) it is receiving direct and/or
indirect benefits from each such extension of credit; and (iii) the obligations
of the “Borrower” or “Borrowers” under this Agreement are the joint and several
obligations of each Borrower. To facilitate the administration of the Loan, each
Borrower hereby irrevocably appoints the Parent Company as its true and lawful
agent and attorney-in-fact with full power and authority to execute, deliver and
acknowledge on such Borrower’s behalf, each Request for Advance and
Certification, Borrowing Base/Non-Default Certificate and all other Loan
Documents or other materials provided or to be provided to the Agent or any
Lenders pursuant to this Agreement or in connection with the Loan. This
power-of-attorney is coupled with an interest and cannot be revoked, modified or
amended without the prior written consent of the Agent. Upon request of the
Agent, each Borrower shall execute, acknowledge and deliver to the Agent a form
Power of Attorney confirming and restating the power-of-attorney granted herein.

 

1.9. Joinder of New Subsidiaries and Affiliates. Any present or future
subsidiary (other than the Non-Borrower Subsidiaries) of any Borrower in which
such Borrower now or hereafter owns, directly or indirectly, an ownership
interest of greater than fifty percent (50%) shall, unless waived in writing by
the Agent, execute and deliver to the Agent (a) a Joinder Agreement in the form
attached as Exhibit 6 hereto (a “Joinder Agreement”), pursuant to which such
subsidiary or affiliate shall (i) join in and become a party to this Agreement
and the other Loan Documents; (ii) agree to comply with and be bound by the
terms and conditions of this Agreement and all of the other Loan Documents; and
(iii) become a “Borrower” and thereafter be jointly and severally liable for the
performance of all the past, present and future obligations and liabilities of
the Borrowers hereunder and under the Loan Documents; and (b) such other
documents, instruments and agreements as may be reasonably required by the Agent
in connection therewith (including, without limitation, an opinion of counsel),
in form and substance acceptable to the Agent and its counsel in all respects.
The Borrowers acknowledge and agree that the Agent shall have the right, at the
Borrowers’ cost and expense, to perform a

 

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field audit of the accounts receivable, inventory, business and operations of
any present or future subsidiary or affiliate proposed to be joined as a
“Borrower” hereunder.

 

ARTICLE 2

LETTERS OF CREDIT

 

2.1. Issuance. The Borrowers and Lenders acknowledge that from time to time the
Borrowers may request that Citizens Bank issue or amend Letter(s) of Credit.
Subject to the terms and conditions of this Agreement, and any other reasonable
requirements for letters of credit normally and customarily imposed by Citizens
Bank, Citizens Bank agrees to issue such requested Letters of Credit, provided
that no Event of Default has occurred and is continuing, and no act, event or
condition which with notice or the passage of time, or both, would constitute an
Event of Default has occurred and is continuing. If any such Letter(s) of Credit
are issued by Citizens Bank, each of the Lenders shall purchase from Citizens
Bank a risk participation with respect to such Letter(s) of Credit in an amount
equal to such Lender’s Percentage of such Letter(s) of Credit. Citizens Bank
shall have no obligation to issue any Letter of Credit which has an expiration
date beyond the Revolving Facility Maturity Date, unless the Borrowers shall
have deposited with Citizens Bank, concurrent with the issuance of any such
Letter of Credit, cash security therefor in an amount equal to the face amount
of the Letter of Credit. Any request for a Letter of Credit shall be made by a
Borrower submitting to the Agent an Application and Agreement for Letter of
Credit or Amendment to Letter of Credit (each being herein referred to as a
“Letter of Credit Application”) on Citizens Bank’s standard form, at least three
(3) Business Days prior to the date on which the issuance or amendment of the
Letter of Credit shall be required, which Letter of Credit Application shall be
executed by a duly authorized officer of a Borrower, and be accompanied by such
other supporting documentation and information as the Agent may from time to
time reasonably request. Each Letter of Credit Application shall be deemed to
govern the terms of issuance of the subject Letter of Credit, except to the
extent inconsistent with the terms of this Agreement. It is understood and
agreed that Letters of Credit shall not be issued for durations of longer than
one (1) year. Any outstanding Letter of Credit may be renewed from time to time;
provided that (i) at least sixty (60) days’ prior written notice thereof shall
have been given by the Borrower to the Agent; and (ii) no default or Event of
Default exists under the terms and provisions of the particular Letter of Credit
or this Agreement.

 

2.2. Amounts Advanced Pursuant to Letters of Credit. Upon the issuance of any
Letter(s) of Credit (i) any amounts drawn under any Letter of Credit shall be
deemed advanced ratably under the Revolving Facility Notes, shall bear interest
and be payable in accordance with the terms of the Revolving Facility Notes and
shall be secured by the Collateral (in the same manner as all other sums
advanced under the Revolving Facility Notes); and (ii) each Lender shall
purchase from Citizens Bank such risk participations in the Letter(s) of Credit
as shall be necessary to cause each Lender to share the funding obligations with
respect thereto ratably in accordance with its particular Percentage. It is
expressly understood and agreed that all obligations and liabilities of the
Borrowers to Citizens Bank in connection with any such Letter(s) of Credit shall
be deemed to be “Obligations,” and the Agent shall not be required to release
its security interest in the Collateral until (i) all Notes and all other sums
due to the Lenders in connection with the Loan have been paid and satisfied in
full, (ii) all Letters of Credit have been canceled or expired, and (iii) no
Lender has any further obligation or responsibility to make additional Loan
advances or issue additional Letters of Credit. Furthermore, in no event

 

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whatsoever shall Citizens Bank have any obligation to issue any Letter of Credit
which would cause the face amount of all then outstanding Letters of Credit
issued for the benefit of any or all Borrowers, in the aggregate, to exceed Five
Million and No/100 Dollars ($5,000,000.00), at any time.

 

ARTICLE 3

SECURITY

 

3.1. Security Generally. As collateral security for the Loan and all other
Obligations, the Borrowers hereby grant and convey to the Agent, for the benefit
of the Lenders ratably, a security interest in all of the following
(collectively, the “Collateral”):

 

Receivables. All of each Borrower’s right, title and interest in and to any and
all present and future Accounts, contracts, contract rights, Chattel Paper,
General Intangibles, notes, drafts, acceptances, chattel mortgages, conditional
sale contracts, bailment leases, security agreements and other forms of
obligations now or hereafter arising out of or acquired in the course of or in
connection with any business each Borrower conducts, together with all liens,
guaranties, securities, rights, remedies and privileges pertaining to any of the
foregoing, whether now existing or hereafter created or arising, and all rights
with respect to returned and repossessed items of Inventory;

 

Inventory. All of each Borrower’s right, title and interest in and to any and
all Inventory and Goods now or hereafter owned by each Borrower, whenever
acquired and wherever located, and whether held for sale or lease or furnished
or to be furnished under contracts of service, and all raw materials, work in
process and materials now or hereafter owned by each Borrower, wherever located,
and used or consumed in its business, including all returned and repossessed
items; and all other property now or hereafter constituting Inventory;

 

Other Collateral. All of each Borrower’s right, title and interest in and to any
and all Deposit Accounts, Documents, Instruments, Investment Property, Letter of
Credit Rights and Supporting Obligations, whether any of the foregoing shall be
now owned or hereafter acquired by such Borrower, together with all of each
Borrower’s present and future furniture, fixtures, Equipment, machinery,
supplies and other assets (other than stock, as below provided) and personal
property of every type or nature whatsoever, including without limitation, all
of each Borrower’s present and future inventions, designs, patents, patent
applications, trademarks, trademark applications, trade names, trade secrets,
goodwill, registrations, copyrights, licenses, franchises, customer lists, tax
refunds, tax refund claims, rights of claims against carriers and shippers,
leases and rights to indemnification;

 

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Stock. All of each Borrower’s right, title and interest in and to the issued and
outstanding capital stock of any subsidiary, in each case, whether common and/or
preferred, and whether now or hereafter issued or outstanding and whether now or
hereafter acquired by the Borrowers, together with all voting or other rights
appurtenant thereto, including, without limitation, the right to receive all
dividends and/or distributions, and all proceeds thereof, pursuant to the terms
and conditions of the Stock Security Agreements;

 

Leases. All of each Borrower’s present and future right, title and interest in
and to any and all leases, occupancy agreements, subleases, contracts, licenses,
agreements and other understandings of or relating to the use, enjoyment and
occupancy of real property or any improvements thereon.

 

Records. All of each Borrower’s right, title and interest in and to any and all
records, documents and files, in whatever form, pertaining to the Collateral;
and

 

Proceeds, Etc. Any and all Proceeds of the foregoing, whether cash or non-cash
proceeds, and all increases, substitutions, replacements and/or additions to any
or all of the foregoing.

 

Notwithstanding the foregoing, the above described grant and conveyance shall
not be deemed to include the grant and conveyance of (A) any Government Contract
or Commercial Contract, which by its terms or applicable law may not be
conveyed; it being understood, however, that in any such situation(s), the
Agent’s security interest shall include (i) the entirety of each Borrower’s
right, title and interest in and to all accounts receivable and all other
Proceeds directly or indirectly arising from such Government Contract or
Commercial Contract, and (ii) all other rights and interests which any Borrower
may lawfully convey to the Agent; (B) any stock of a foreign corporation in
excess of sixty-five percent (65%) of all of the issued and outstanding stock of
such foreign corporation; (C) motor vehicles titled in the name of any Borrower;
and (D) any property acquired by a Borrower in the ordinary course of such
Borrower’s business which is subject to a purchase money security interest
permitted pursuant to this Agreement.

 

3.2. No Preference or Priority. It is expressly understood and agreed that each
of the Notes shall be secured without preference or priority; it being the
intention of the parties that the Notes shall be co-equal and coordinate in
right of payment of principal, interest, late charges and other sums due
thereunder.

 

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ARTICLE 4

CONDITIONS TO THE LENDERS’ OBLIGATIONS

 

The initial performance of the Lenders’ obligations under this Agreement shall
be subject to the following conditions, any or all of which may be waived by the
Agent:

 

4.1. Compliance with Law and Agreements; Third Party Consents. The Lenders shall
be reasonably satisfied that (i) the Loan shall be in full compliance with all
legal requirements, (ii) all regulatory and third party consents and approvals
required to be obtained have been obtained, and (iii) the Borrowers shall have
performed all agreements theretofore to be performed by the Borrowers.

 

4.2. Material Adverse Changes. There shall have been no material adverse change
in (i) the business, assets, properties, prospects or condition (financial or
otherwise) of any Borrower, between the date of the most recent financial
statement(s) delivered to the Lenders and the Closing Date or (ii) the
government contracting status of any Borrower with respect to the United States
government or any department or agency thereof.

 

4.3. Litigation/Bankruptcy. There shall be no pending or threatened litigation
by any entity (private or governmental) with respect to the Loan or any
documentation executed in connection therewith (except for such litigation
disclosed to and not objected to by the Agent and the Lenders prior to Closing),
nor shall there be any litigation, bankruptcy or other proceedings which the
Agent and the Lenders’ believe, in their good faith judgment, could reasonably
be expected to have a materially adverse effect on the business, property,
assets, liabilities, condition (financial or otherwise), results of operations
or prospects of the Borrowers on a going forward basis.

 

4.4. Opinion of Counsel. The Agent shall have received an opinion of Borrowers’
counsel with respect to each of the Borrowers, in form and substance
satisfactory to the Agent and its counsel in all respects.

 

4.5. No Default. There shall exist no Event of Default, and no act, event or
condition shall have occurred which with notice or the lapse of time, or both,
would constitute an Event of Default.

 

4.6. Documentation. The Agent shall have received the following: (i) all of the
Loan Documents executed by a duly elected officer of each Borrower, (ii) an
initial Borrowing Base/Non-Default Certificate, and (iii) such financial
statements, projections, certificates of good standing, corporate resolutions,
government contract assignments, UCC financing statements, opinions,
certifications, schedules to be attached to this Agreement and such other
documents, instruments and agreements as may be reasonably required by the
Lenders or the Agent, each in such form and content and from such parties, as
the Agent shall require (including, without limitation, all documentation and
other information required by bank regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the
Patriot Act). All documentation relating to the Loan and all related
transactions must be satisfactory in all respects to the Agent, the Lenders and
their respective counsel.

 

4.7. Third Party Agreements. The Borrowers shall have delivered to the Agent
copies of executed documents pursuant to which Allied Capital Corporation has
agreed to extend to the Borrowers (i) a term loan (the “Term Loan”) of Ten
Million and No/100 Dollars ($10,000,000.00); and (ii) subordinated debt (the
“Subordinated Debt”) of Twelve Million and No/100 Dollars ($12,000,000.00). The
Subordinated Debt and Term Loan must be fully funded at the time of the Closing
of the Loan and are herein collectively referred to as the “Junior

 

27

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Facilities”. The interest rate, term, repayment schedule, terms of subordination
and all other terms, conditions and requirements of the Junior Facilities (and
all documentation related thereto, including the Subordination Agreements) must
be satisfactory to the Agent and Lenders in all respects; it being understood
that the Term Loan may be secured by a second lien security interest in the
Borrower’s assets and the Subordinated Debt may be secured by a springing stock
pledge, which shall not come into being (or have any force or effect) until all
of the Obligations shall have been paid and satisfied in full, and the Lenders
have no further obligation to advance funds hereunder.

 

4.8. Financial Documents. The Agent shall have received the following: (i) pro
forma projections (for three (3) years) showing (a) covenant compliance coverage
levels satisfactory to the Agent and Lenders in all respects as of the Closing
Date; and (b) excess borrowing availability as of the Closing Date, in an amount
satisfactory to the Agent and Lenders in all respects; and (ii) a pre-closing
field audit with respect to the Collateral and each Borrower’s accounts
receivable, inventory, business, property, assets, liabilities, condition
(financial or otherwise) and operations. All of the foregoing must be
satisfactory in all respects to the Agent and the Lenders.

 

4.9. Capital Structure. The overall capital structure of the Borrowers must be
satisfactory to the Agent and the Lenders in all respects.

 

4.10. Security Interests. The Borrowers shall have executed and delivered all
documentation the Agent deems necessary or appropriate for the perfection of any
liens granted to the Agent or Lenders pursuant to this Agreement or any other
Loan Document.

 

4.11. Closing Costs and Expenses. The Borrowers shall have paid all fees payable
to the Agent and/or the Lenders, plus all closing costs and expenses incurred by
the Agent in connection with the transactions contemplated hereby, including,
without limitation, all recording costs.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

To induce the Agent and Lenders to enter into this Agreement, each Borrower
jointly and severally represents, warrants, covenants and agrees as follows:

 

5.1. Corporate Existence and Qualification. Each Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation referenced in the preamble of this
Agreement, with all corporate power and authority and all necessary licenses and
permits to own, operate and lease its properties and carry on its business as
now being conducted, and as it may in the future be conducted. Each Borrower has
only one jurisdiction of incorporation/formation. Each Borrower is duly
qualified and authorized to do business and is in good standing in each
jurisdiction in which the nature of its activities or the character of its
properties makes qualification necessary, except to the extent that the failure
to so qualify could not reasonably be expected to have a Material Adverse
Effect. The corporate name of each Borrower set forth in this Agreement and the
other Loan Documents (including, without limitation, all UCC-1 financing
statements

 

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relating to the Collateral) is accurate in all respects, and such corporate name
is identical to the corporate name of record with such Borrower’s jurisdiction
of incorporation or formation.

 

5.2. Corporate Authority; Noncontravention. The execution, delivery and
performance of the obligations of each Borrower set forth in this Agreement, the
Notes and the other Loan Documents (i) have been duly authorized by all
necessary corporate and/or stockholder action; (ii) do not require the consent
of any governmental body, agency or authority; (iii) will not violate or result
in (and with notice or the lapse of time will not violate or result in) the
breach of any provision of any Borrower’s Articles/Certificate of Incorporation,
By-laws or other corporate formation documents, as applicable, any Material
Contract, or any order or regulation of any governmental authority or
arbitration board or tribunal; and (iv) except as expressly permitted by the
terms and provisions of this Agreement, will not result in the creation of a
lien, charge or encumbrance of any nature upon any of the properties or assets
of any Borrower. When the Loan Documents are executed and delivered, they will
constitute legal, valid and binding obligations of each Borrower, enforceable
against each Borrower in accordance with their respective terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting the rights of
creditors generally.

 

5.3. Financial Position. The financial statements listed on Schedule 5.3 hereto,
copies of which have been delivered to the Lenders, present fairly the financial
condition of the Borrowers as of the date thereof and the results of the
Borrowers’ operations for the periods indicated therein, were prepared in
accordance with GAAP, are true and accurate in all respects, and are not
misleading in any respect. All material liabilities, fixed or contingent, are
fully shown or provided for on the referenced financial statements or the notes
thereto as of the dates thereof to the extent they are required to be shown or
disclosed in accordance with GAAP. There has been no material adverse change in
(i) the business, property or condition (financial or otherwise) of the
Borrowers, taken as whole, since the date of its most recent financial
statements listed on Schedule 5.3 or (ii) the government contracting status of
any Borrower with respect to the United States government or any department or
agency thereof.

 

5.4. Payment of Taxes. Each Borrower has filed all tax returns and reports
required to be filed by it with the United States Government, all state and
local governments and/or all foreign federal, state and local governments, and
has paid in full or made adequate provision on its books for the payment of all
taxes, interest, penalties, assessments or deficiencies shown to be due or
claimed to be due on or in respect of such tax returns and reports, except to
the extent that the validity or amount thereof is being contested in good faith
by appropriate proceedings and the non-payment thereof pending such contest will
not result in the execution of any tax lien or otherwise jeopardize the Agent’s
or the Lenders’ interests in any Collateral.

 

5.5. Accuracy of Submitted Information; Omissions. As of the date furnished, all
documents, certificates, information, materials and financial statements
furnished or to be furnished to any Lender or the Agent pursuant to this
Agreement or otherwise in connection with the Loan (i) are true and correct in
all material respects; (ii) do not contain any untrue statement of a material
fact; and (iii) do not omit any material fact necessary to make the statements
contained therein or herein not misleading. No Borrower is aware of any fact
which has not been disclosed to the Agent in writing which materially adversely
affects, or so far as any Borrower

 

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can now reasonably foresee, could materially adversely affect, the properties,
business, profit or condition (financial or otherwise) of the Borrowers, taken
as a whole, or the ability of any Borrower to perform its obligations set forth
in this Agreement or any other Loan Document.

 

5.6. Government Contracts/Government Subcontracts. No notice of suspension,
debarment, cure notice, show cause notice or notice of termination for default
has been issued by the Government to any Borrower, and no Borrower is a party to
any pending, or to any Borrower’s knowledge threatened, suspension, debarment,
termination for default or show cause requirement by the Government or other
adverse Government action or proceeding in connection with any Government
Contract or Government Subcontract. All Government Contracts which have a
remaining term of twelve (12) months or longer and a remaining value of Five
Million and No/100 Dollars ($5,000,000.00) or more are listed on Schedule 5.6
hereto.

 

5.7. No Defaults or Liabilities. No Borrower is in default of any obligation,
covenant or condition contained in any Material Contract which would entitle the
other party thereto to exercise remedies thereunder (excluding those defaults
pursuant to which the other party thereto has made a monetary claim for less
than Five Hundred Thousand and No/100 Dollars ($500,000.00)). Additionally,
except for the matters disclosed on Schedule 5.7 hereto, there is no litigation,
legal or administrative proceeding or investigation pending against any
Borrower, and no litigation, legal or administrative proceeding or investigation
has been threatened against any Borrower, which has not been disclosed to the
Agent and the Lenders in writing and which involves amounts in excess of Five
Hundred Thousand and No/100 Dollars ($500,000.00) or which could prejudice, in
any material respect, the Agent’s or any Lender’s rights or remedies under any
Loan Document.

 

5.8. No Violations of Law. No Borrower is in violation of any Applicable Laws,
except for such violations which could not reasonably be expected to have a
Material Adverse Effect; no Borrower has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the ownership of its
properties or to the conduct of its business, and each Borrower has conducted
its business and operations in compliance with all Applicable Laws, except in
each case, for such failures or non-compliances which could not reasonably be
expected to have a Material Adverse Effect.

 

5.9. Litigation and Proceedings. Except for the matters set forth on Schedule
5.9 attached hereto, no action, suit or proceeding against or affecting any
Borrower is presently pending, or to the knowledge of any Borrower, threatened,
in any court, before any governmental agency or department, or before any
arbitration board or tribunal, which involves the possibility of any judgment or
liability in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00)
and is not fully covered by insurance, subject to any applicable deductible. No
Borrower is in default with respect to any order, writ, injunction or decree of
any court, governmental authority or arbitration board or tribunal.

 

5.10. Security Interest in the Collateral. Each Borrower is the sole legal and
beneficial owner of the Collateral owned or purported to be owned by it, free
and clear of all liens, claims and encumbrances of any nature, except for the
Permitted Liens and other liens expressly permitted by the terms and provisions
of this Agreement. The security interests and liens granted by each Borrower to
the Lender pursuant to this Agreement and the other Loan

 

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Documents constitute valid and enforceable security interests in and liens on
each item of the Collateral of the type or nature which may be made subject to a
security interest under the UCC, subject to no other liens other than Permitted
Liens. Upon execution of this Agreement, and subject to the filing of UCC-1
financing statements containing a description of the Collateral and naming the
Borrowers as debtors in the appropriate jurisdictions as determined by
applicable law, the security interests and liens granted by each Borrower to the
Lender pursuant to this Agreement (i) constitute perfected security interests in
all Collateral of the type or nature in which a security interest may be
perfected by filing, recording or registering a financing statement in the
United States pursuant to the UCC, and (ii) shall be superior to and prior to
any other lien on any of such Collateral, other than Permitted Liens, and no
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and liens, other
than the filing of continuation statements in accordance with applicable law.
The Borrowers have provided written landlord waivers from each lessor/landlord
of any premises occupied by any Borrower to the extent required pursuant to
Section 6.16 of this Agreement. Each such landlord waiver subordinates any
statutory, contractual or other lien the lessor/landlord may have in any of the
Collateral to the lien, operation and effect of the lien being granted to the
Agent and the Lenders pursuant to this Agreement and the other Loan Documents.

 

5.11. Principal Place of Business; Location of Books and Records. Each Borrower
maintains its principal place of business and the office where it keeps its
books and records with respect to Receivables at the address set forth in the
preamble of this Agreement. Set forth on Schedule 5.11 hereto is a list of each
Borrower’s business locations as of the Closing Date, and all places where
Collateral is located. The locations set forth on Schedule 5.11 hereto denoted
with an asterisk reflect all locations where fixed assets of a Borrower are
valued in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00). Each
Borrower agrees to notify the Agent in writing at least ten (10) days prior to
any change in its principal place of business, or any change in the location of
the office where it keeps its books and records with respect to accounts and
contract rights, or any change of or addition to the locations where any
Collateral is or will be located.

 

5.12. Fiscal Year. Each Borrower’s fiscal year ends on December 31.

 

5.13. Pension Plans.

 

(a) The present value of all benefits vested under all “employee pension benefit
plans”, as such term is defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974 (“ERISA”), from time to time (individually, a
“Pension Plan” and collectively, the “Pension Plans”) maintained by the
Borrowers (other than the UK Borrowers) did not, as of December 31, 2003, exceed
the value of the assets of the Pension Plans allocable to such vested benefits;

 

(b) No Pension Plan, trust created thereunder or other person dealing with any
Pension Plan has engaged in a non-exempt transaction proscribed by Section 406
of ERISA or a non-exempt “prohibited transaction”, as such term is defined in
Section 4975 of the Internal Revenue Code;

 

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(c) No Pension Plan or trust created thereunder has been terminated within the
last three (3) years, and there have been no “reportable events” (as such term
is defined in Section 4043 of ERISA and the regulations thereunder) with respect
to any pension plan or trust created thereunder after June 30, 1974; and

 

(d) No Pension Plan or trust created thereunder has incurred any “accumulated
funding deficiency” (as such term is defined in Section 302 of ERISA or Section
412 of the Internal Revenue Code) as of the end of any plan year, whether or not
waived, since the effective date of ERISA.

 

5.14. O.S.H.A., ADA and Environmental Compliance.

 

(a) Each Borrower (other than the UK Borrowers) is in compliance with, and its
facilities, business assets, property, leaseholds and equipment are in
compliance with, the provisions of the Federal Occupational Safety and Health
Act (“O.S.H.A.”), the Americans with Disabilities Act (“ADA”), the Environmental
Protection Act, RCRA and all other applicable environmental and handicapped
access laws, except for such non-compliance which could not reasonably be
expected to have a Material Adverse Effect; and there have been no citations,
notices, notifications or orders of any such non-compliance issued to any
Borrower or relating to its business, assets, property, leaseholds or equipment
under any such laws, rules or regulations;

 

(b) each Borrower (other than the UK Borrowers) has been issued all required
federal, state and local licenses, certificates and permits necessary or
appropriate in the operation of its facilities, businesses, assets, property,
leaseholds and equipment, except to the extent that the failure to have such a
certificate, license or permit could not reasonably be expected to have a
Material Adverse Effect; and

 

(c) (i) there have been no releases, spills, discharges, leaks or disposal
(collectively referred to herein as “Releases”) of Hazardous Substances at,
upon, under or within any real property owned, or to the actual knowledge of any
Borrower any premises leased, by any Borrower (other than the UK Borrowers);
(ii) there are no underground storage tanks or polychlorinated biphenyls on any
real property owned, or to the actual knowledge of any Borrower any premises
leased, by any Borrower (other than the UK Borrowers); (iii) no real property
owned, or to the actual knowledge of any Borrower, premises leased, by any
Borrower (other than the UK Borrowers) has ever been used by any Borrower (and
to the best of each Borrower’s knowledge, any other person) as a treatment,
storage or disposal facility for Hazardous Waste; and (iv) no Hazardous
Substances are present on any real property owned, or to the actual knowledge of
any Borrower any premises leased, by any Borrower (other than the UK Borrowers),
except for such quantities of Hazardous Substances as are handled in accordance
with all applicable manufacturer’s instructions and governmental regulations,
and as are necessary or appropriate for the operation of the business of the
Borrowers (other than the UK Borrowers), except, in each case, to the extent
that such non-compliance could not reasonably be expected to have a Material
Adverse Effect. Each Borrower (other than the UK Borrowers), for itself and its
successors and assigns, hereby covenants and agrees to indemnify, defend and
hold harmless the Agent and Lenders from and against any and all liabilities,
losses, claims, damages, suits, penalties, costs and expenses of every kind or
nature, including, without limitation, reasonable attorneys’ fees arising from
or in connection with (x) the presence or

 

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alleged presence of any Hazardous Substance or Hazardous Waste on, under or
about any property of any Borrower (other than the UK Borrowers) (including,
without limitation, any property or premises now or hereafter owned or leased by
any Borrower (other than the UK Borrowers)), or which is caused by or results
from, directly or indirectly, any act or omission to act by any Borrower; and
(y) any Borrower’s violation of any environmental statute, ordinance, order,
rule or regulation of any governmental entity or agency thereof (including,
without limitation, any liability arising under CERCLA, RCRA, HMTA or any
Applicable Laws).

 

5.15. Intellectual Property. All material patents, patent applications,
trademarks, trademark applications, copyrights, copyright applications,
tradenames, trade secrets and licenses necessary for the conduct of the business
of each Borrower are (i) owned or utilized by such Borrower, (ii) valid and,
except with respect to licenses, have been duly registered or filed with all
appropriate governmental authorities, and (iii) listed on Schedule 5.15(a)
hereto. Except as disclosed in Schedule 5.15(a) hereto, there is no objection or
pending challenge to the validity of any such patent, trademark, copyright,
tradename, trade secret or license; no Borrower is aware of any grounds for any
such challenge or objection thereto; except as disclosed in Schedule 5.15(b)
hereto, no Borrower pays any royalty to anyone in connection with any patent,
trademark, copyright, tradename, trade secret or license; and each Borrower has
the right to bring legal action for the infringement of any such patent,
trademark, copyright, tradename, trade secret or license.

 

5.16. Existing or Pending Defaults; Material Contracts. All Material Contracts
are listed on Schedule 5.16(a) hereto. Except as set forth on Schedule 5.16(b)
attached hereto, no Borrower is aware of any pending or threatened litigation,
or any other legal or administrative proceeding or investigation pending or
threatened, against any Borrower arising from or related to any Material
Contract.

 

5.17. Leases and Real Property. No Borrower owns any real property. All leases
and other agreements under which any Borrower occupies real property are in full
force and effect and constitute legal, valid and binding obligations of, and are
legally enforceable against, the Borrower party thereto and, to the Borrowers’
best knowledge, are the binding obligations of and legally enforceable against,
the other parties thereto. All necessary governmental approvals, if any, have
been obtained for each such lease or agreement, and there have been no
threatened cancellations thereof or outstanding disputes with respect thereto.

 

5.18. Labor Relations. There are no strikes, work stoppages, grievance
proceedings, union organization efforts or other material controversies pending,
or to any Borrower’s knowledge, threatened or reasonably anticipated, between
any Borrower and (i) any current or former employee of any Borrower or (ii) any
union or other collective bargaining unit representing any such employee. Each
Borrower has complied and is in compliance with all Applicable Laws relating to
employment or the workplace, including, without limitation, provisions relating
to wages, hours, collective bargaining, safety and health, work authorization,
equal employment opportunity, immigration, withholding, unemployment
compensation, employee privacy and right to know, except for such non-compliance
which could not reasonably be expected to have a Material Adverse Effect. Except
as set forth on Schedule 5.18 hereto, there are no collective bargaining
agreements, employment agreements between any Borrower and any of its employees,
or professional service agreements not terminable at will

 

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relating to the businesses or assets of any Borrower. The consummation of the
transactions contemplated hereby will not cause any Borrower to incur or suffer
any liability relating to, or obligation to pay, severance, termination or other
similar payments to any person or entity.

 

5.19. Assignment of Contracts. No existing Government Contract or other Material
Contract of any Borrower (and no present or future interest of any Borrower, in
whole or in part, in, to or under any such Government Contract or other Material
Contract) is currently assigned, pledged, hypothecated or otherwise transferred
to any person or entity (other than in favor of the Agent for the benefit of the
Lenders ratably and to Allied Capital Corporation in connection with the Term
Loan).

 

5.20. Contribution Agreement. The Contribution Agreement is in full force and
effect, has not been modified, altered or amended in any respect whatsoever
(other than to add a new Borrower party thereto from time to time), and no
Borrower is in default thereunder.

 

5.21. Ownership of the Borrowers. As of the date of this Agreement, all of the
issued and outstanding capital stock of each Borrower, other than the Parent
Company, is owned by either the Parent Company or another Borrower, except as
described on Schedule 5.21 hereto.

 

5.22. Solvency. After giving effect to the transactions contemplated by the
terms and provisions of this Agreement, (i) each Borrower owns property
(including, without limitation, the Borrower’s rights under the Contribution
Agreement) whose fair saleable value is greater than the amount required to pay
all of such Borrower’s Indebtedness (including contingent debts), (ii) each
Borrower was and is able to pay all of its Indebtedness as such Indebtedness
matures, and (iii) each Borrower had and has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage.

 

5.23. Foreign Assets Control Regulations, Etc. No Borrower, nor any of their
subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act of the United States of America (50
U.S.C. App. §§1 et seq.), as amended. No Borrower, nor any of their subsidiaries
is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or (c) the Patriot Act. None of the Borrowers
(i) is a blocked person described in Section 1 of the Anti-Terrorism Order or
(ii) to the best of its knowledge, engages in any dealings or transactions or is
otherwise associated, with any such blocked person.

 

5.24. Survival of Representations and Warranties. All representations and
warranties made herein shall survive the making of the Loan and shall be deemed
remade and redated as of the date of each advance, readvance or request
therefor, and with respect to (i) those representations and warranties qualified
by a “materiality” standard, shall be true and correct in all respects as of the
date of such advance, readvance or request therefor, and (ii) those
representations and warranties not expressly qualified by a “materiality”
standard, shall be true and correct in all material respects as of the date of
such advance, readvance or request therefor; provided, however that the
Borrowers shall not be deemed to have remade or redated any representation or
warranty to the extent that such representation and warranty expressly related
solely to an earlier date. Notwithstanding the foregoing, the Borrowers will not
be deemed to

 

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have breached a remade and redated representation and warranty (a) with respect
to those changes in facts and circumstances which are expressly permitted by the
terms of this Agreement; or (b) if the Borrowers have previously disclosed to
the Agent in writing that they are unable to remake and redate any such
representation and warranty and such inability does not constitute or give rise
to a default or an Event of Default under this Agreement or any other Loan
Document.

 

ARTICLE 6

AFFIRMATIVE COVENANTS OF THE BORROWERS

 

So long as any Obligation remains outstanding or this Agreement remains in
effect, each Borrower jointly and severally covenants and agrees with the Agent
and Lenders that:

 

6.1. Payment of Loan Obligations. Each Borrower will duly and punctually pay all
sums to be paid to the Lenders and the Agent in accordance with the terms and
provisions of the Loan Documents, and will comply with, perform and observe all
of the terms and provisions thereof.

 

6.2. Payment of Taxes. Each Borrower will promptly pay and discharge when due
all federal, state and other governmental (including foreign) taxes,
assessments, fees and charges imposed upon it, or upon any of its properties or
assets, except to the extent that the validity or amount thereof is being
contested in good faith by appropriate proceedings and the non-payment thereof
pending such contest will not result in the execution of any tax lien or
otherwise jeopardize the Agent’s or the Lenders’ interests in any Collateral.

 

6.3. Delivery of Financial and Other Statements. The Borrowers shall deliver to
the Agent and the Lenders financial and other statements, each of which shall,
unless otherwise expressly set forth below to the contrary, be prepared in
accordance with GAAP consistently applied (provided, however, that any interim
statements required hereunder may be prepared without footnotes and shall be
subject to normal and customary year-end adjustments), as follows:

 

(a) on or before the ninetieth (90th) day following the close of each fiscal
year, the Parent Company will submit to the Agent and the Lenders annual audited
and unqualified consolidated financial statements, which shall be accompanied by
consolidating schedules and draft or issued management letters (within thirty
(30) days of the delivery of such letters to the Borrowers) and such
consolidated financial statements shall be certified by an independent certified
public accountant acceptable to the Agent;

 

(b) on or before the forty-fifth (45th) day following the close of each fiscal
quarter, the Parent Company will submit to the Agent and the Lenders (i)
internally prepared consolidated financial statements, reporting the Borrowers’
current financial position and the results of their operations for the quarter
then ended and year-to-date, and including a comparison of such results to the
then current budget, (ii) internally prepared contract backlog/revenue summary
reports, and (iii) a Quarterly Covenant Compliance/Non-Default Certificate in
the form attached as Exhibit 5 hereto, each of which shall be in form and
substance satisfactory to the Agent in all respects and certified by the Parent
Company pursuant to a

 

35

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certificate executed on its behalf by the Parent Company’s Chief Financial
Officer or another duly authorized executive officer of the Parent Company;

 

(c) on or before the thirtieth (30th) day following the close of each fiscal
month end, the Parent Company will submit to the Agent and the Lenders a
Borrowing Base/Non-Default Certificate in the form attached as Exhibit 4 hereto,
accompanied by detailed current aged billed and unbilled accounts receivable
reports, each of which shall be certified by the Parent Company pursuant to a
certificate executed on its behalf by the Parent Company’s Chief Financial
Officer or another duly authorized executive officer of the Parent Company;

 

(d) promptly, but in all events within three (3) Business Days after the filing
of all public filings, disclosure statements and/or registration statements with
the Securities and Exchange Commission or any state agency or department
regulating securities (or any other person or entity, pursuant to the rules
and/or regulations of the Securities and Exchange Commission or any state agency
or department regulating securities), the Borrowers will submit to the Agent and
the Lenders copies of all such documents distributed to or filed with the
Securities and Exchange Commission or such other regulatory agency;

 

(e) on or before the one hundred twentieth (120th) day following the close of
each calendar year, the Parent Company will submit to the Agent and the Lenders
pro forma consolidated and consolidating budgets, certified by the Parent
Company pursuant to a certificate executed on its behalf by the Parent’s Chief
Financial Officer or another duly authorized executive officer of the Parent
Company; and

 

(f) promptly upon the request of the Agent or any Lender, the Borrowers will
provide to the Agent and the Lenders such other information and/or reports
relating to each Borrower’s business, operations, properties or prospects as the
Agent and/or Lenders may from time to time request at their sole discretion,
provided, however, that in the absence of an Event of Default, neither the Agent
or Lenders will impose any additional periodic reporting requirements, other
than those set forth above.

 

6.4. Maintenance of Records; Review by the Lenders. Each Borrower will maintain
at all times proper books of record and account in accordance with GAAP,
consistently applied, and, subject to any applicable confidentiality and secrecy
requirements imposed by any Government agency, will permit the Agent’s and
Lenders’ officers or any of the Agent’s or Lenders’ authorized representatives
or accountants to visit and inspect each Borrower’s offices and properties,
examine its books of account and other records, and discuss its affairs,
finances and accounts with the officers of any Borrower, all at such reasonable
times during normal business hours (and so long as no Event of Default has
occurred hereunder, upon reasonable notice to such Borrower), and as often as
the Agent or Lenders may desire.

 

6.5. Maintenance of Insurance Coverage. Each Borrower will maintain in effect
fire and extended coverage insurance, public liability insurance, business
interruption insurance, worker’s compensation insurance and insurance on the
Collateral and each of its properties, with responsible insurance companies, in
such amounts and against such risks as are customary for similar businesses,
required by governmental authorities, if any, having jurisdiction over all or
part of its operations, or otherwise reasonably required by the Agent, and will
furnish to the

 

36

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Agent certificates evidencing such continuing insurance. The Agent, for the
benefit of the Lenders, shall be named as loss payee on all hazard and casualty
insurance policies by means of a standard noncontributory mortgagee clause and
as an additional insured on all liability insurance policies (other than with
respect to worker’s compensation insurance). All insurance policies shall also
provide for (i) not less than thirty (30) days written notice to the Agent prior
to expiration, cancellation or reduction in coverage; and (ii) waiver of
subrogation (other than with respect to worker’s compensation insurance).

 

6.6. Maintenance of Property/Collateral; Performance of Contracts. Each Borrower
will at all times maintain the Collateral and its tangible property, both real
and personal, in good order and repair (subject to ordinary wear and tear), and
will permit the Agent’s officers or authorized representatives to visit and
inspect the Collateral and each Borrower’s tangible property at such reasonable
times during normal business hours, as and when the Agent deems necessary or
appropriate. Each Borrower shall perform all obligations under all contracts to
which it is a party, including all exhibits and other attachments to such
contracts, all modifications thereto and all documents and instruments delivered
pursuant thereto, and will comply with all laws, rules and regulations governing
the execution, delivery and performance thereof, except to the extent that such
non-compliance could not reasonably be expected to have a Material Adverse
Effect.

 

6.7. Maintenance of Corporate Existence. Each Borrower will maintain its
corporate existence and will provide the Agent with evidence of the same from
time to time upon the Agent’s request.

 

6.8. Maintenance of Certain Accounts with the Agent. Except for the bank
accounts described on Schedule 6.8 hereto (the “Foreign Bank Accounts”) each
Borrower will maintain its primary operating accounts, including all primary
depository accounts (time and demand), disbursement accounts and collection
accounts, with the Agent. Additionally, any and all funds on deposit from time
to time in any Foreign Bank Account which exceed the U.S. Dollar equivalent of
One Million Five Hundred Thousand British Pounds Sterling (1,500,000), as of any
date of determination, shall, unless otherwise approved by the Agent, be wire
transferred, within one (1) Business Day, to the Collateral Accounts.

 

6.9. Management. Each Borrower will notify the Agent and the Lenders in writing
of a change of any of its corporate executive officers or directors within ten
(10) days of the date of any such change.

 

6.10. Disclosure of Defaults, Etc.

 

(a) Promptly upon the occurrence thereof, each Borrower will provide the Agent
and the Lenders with written notice of any Event of Default, or any act, event,
condition or occurrence that upon the giving of any required notice or the lapse
of time, or both, would constitute an Event of Default. In addition, each
Borrower will promptly advise the Agent and the Lenders in writing of any
condition, act, event or occurrence which comes to such Borrower’s attention
that would or could reasonably be expected to prejudice the Agent’s or any
Lender’s rights in connection with any Material Contract, the Collateral, this
Agreement, any Note or any other Loan Document, including, without limitation,
the details of any pending or

 

37

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threatened suspension, debarment or other governmental action or proceeding, any
pending or threatened litigation, and any other legal or administrative
proceeding or investigation pending or threatened against any Borrower,
including the entry of any judgment in excess of Five Hundred Thousand and
No/100 Dollars ($500,000.00) or lien (other than a Permitted Lien) against any
Borrower, its assets or property. Additionally, the Borrowers agree to provide
written notice to the Agent and Lenders within five (5) days of the date on
which any obligation of a Borrower for the payment of borrowed money, whether
now existing or hereafter created, incurred or arising, becomes or is declared
to be due and payable prior to the expressed maturity thereof.

 

(b) If, at any time after the Closing Date, any Borrower shall receive any
letter, notice, subpoena, court order, pleading or other document issued, given
or delivered by the Government, any Prime Contractor or by any person or entity
acting for or on behalf of the Government or such Prime Contractor with respect
to, or in any manner related to any alleged default, fraud, dishonesty,
malfeasance or other willful misconduct of a Borrower, such Borrower shall
deliver a true, correct and complete copy of such letter, notice, subpoena,
court order, pleading or document to the Agent, the Agent’s counsel and each
Lender within three (3) Business Days of such Borrower’s receipt thereof.
Furthermore, if any Borrower shall issue, give or deliver to the Government, any
Prime Contractor or any person or entity acting for or on behalf of the
Government or such Prime Contractor any letter, notice, subpoena, court order,
pleading or other document with respect to, or in any manner related to, or
otherwise in response to any alleged default, fraud, dishonesty, malfeasance or
other willful misconduct of a Borrower, such Borrower shall deliver a true,
correct and complete copy of such letter, notice, subpoena, court order,
pleading or other document to the Agent, the Agent’s counsel and each Lender
concurrent with the Borrower’s issuance or delivery thereof to the Government,
such Prime Contractor or any person or entity acting for or on behalf of the
Government or such Prime Contractor. If any letter, notice, subpoena, court
order, pleading or other document required to be delivered to the Agent, the
Agent’s counsel and each Lender pursuant to this Section 6.10 contains any
information deemed “classified” by the Government and/or the dissemination of
any such information to the Agent, the Agent’s counsel and each Lender would
result in the Borrowers violating any Applicable Law, then the Borrowers shall
deliver to the Agent, the Agent’s counsel and each Lender a summary of such
letter, notice, subpoena, court order, pleading or other document containing a
summary thereof, but including as much (but no more than) detail as can be
included therein without violating any Applicable Law.

 

6.11. Security Perfection; Assignment of Claims Act; Payment of Costs. The
Borrowers will execute and deliver and pay the costs of recording and filing
financing statements, continuation statements, termination statements,
assignments and other documents, as the Agent may from time to time deem
necessary or appropriate for the perfection of any liens granted to the Agent or
Lenders pursuant hereto or pursuant to any other Loan Document. On or before the
date which is thirty (30) days from the date of any Government Contract
hereafter entered into, extended or renewed by one or more Borrowers, such
Borrower(s) shall execute all documents necessary or appropriate in order to
comply with the Assignment of Claims Act of 1940, as amended, 31 U.S.C. Section
3727 and 41 U.S.C. Section 15 (the “Government Contract Assignments”) in
connection with each such Government Contract; it being understood and agreed,
however, that no Government Contract Assignment shall be required for any
Government Contract which has a remaining value of less than Five Million and
No/100 Dollars ($5,000,000.00), or a remaining term of less than twelve (12)
months (with no option to extend).

 

38

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All costs and expenses (including, without limitation, reasonable attorneys’
fees and expenses) incurred in connection with the preparation, execution,
delivery and administration of Government Contract Assignments shall be borne
solely by the Borrowers. Additionally, the Borrowers will pay any and all costs
incurred in connection with the transactions contemplated hereby, as well as any
and all taxes (other than the Lenders’ income and franchise taxes), which may be
payable as a result of the execution of this Agreement or any agreement
supplemental hereto, or as a result of the execution and/or delivery of any Note
or other Loan Document.

 

6.12. Defense of Title to Collateral. The Borrowers will at all times defend the
Lenders’, the Agent’s and the Borrowers’ rights in the Collateral, subject to
the Permitted Liens, against all persons and all claims and demands whatsoever,
and will, upon request of the Agent (i) furnish such further assurances of title
as may be required by the Agent, and (ii) do any other acts necessary to
effectuate the purposes and provisions of this Agreement, or as required by law
or otherwise in order to perfect, preserve, maintain or continue the interests
of the Agent and/or Lenders in any Collateral.

 

6.13. Compliance with Law. Each Borrower will conduct its businesses and
operations in compliance in all material respects with (i) all Applicable Laws
and requirements of all federal, state and local regulatory authorities having
jurisdiction, (ii) the provisions of its charter documents, by-laws or similar
corporate formation documents, (iii) all agreements and instruments by which it
or any of its properties may be bound, and (iv) all applicable decrees, orders
and judgments.

 

6.14. Other Collateral Covenants.

 

(a) The Borrowers will, at their own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Agent from time to time such lists,
descriptions and designations of Collateral, warehouse receipts, receipts in the
nature of warehouse receipts, bills of lading, documents of title, vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments, and take such further steps relating to the
Collateral and other property or rights covered by the interests hereby granted
which the Agent deems reasonably appropriate or advisable to perfect, preserve
or protect its security interests in any Collateral.

 

(b) The Borrowers shall promptly notify the Agent in writing if, at any time,
any issuer of uncertificated securities, securities intermediary or commodities
intermediary has issued or holds, or will issue or hold, any financial assets or
commodities to or for the benefit of any Borrower, and the Borrowers shall use
commercially reasonable efforts to obtain authenticated control letters from
such issuer or intermediary, in form and substance reasonably satisfactory to
the Agent, within ten (10) days of the Agent’s demand therefor.

 

(c) If any Borrower is or becomes the beneficiary of a letter of credit in
excess of Five Hundred Thousand and No/100 Dollars ($500,000.00), such Borrower
shall promptly, and in any event within two (2) Business Days after becoming a
beneficiary, notify the Agent thereof and, following the Agent’s request, enter
into a tri-party agreement with the Agent and the issuer and/or confirmation
bank with respect to all Letter of Credit Rights in connection with

 

39

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such letter of credit, assigning such Letter of Credit Rights to the Agent and
directing all payments thereunder to an account designated by the Agent, which
tri-party agreement shall be in form and substance reasonably satisfactory to
the Agent.

 

(d) The Borrowers shall promptly take all steps necessary to grant the Agent
control of all electronic chattel paper in accordance with the UCC and all
“transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce Act.

 

(e) The Borrowers hereby irrevocably authorize the Agent at any time and from
time to time to file in any filing office in any Uniform Commercial Code
jurisdiction any initial financing statements, amendments and continuations
thereto that (i) describe Collateral (x) as all assets of the Borrowers or words
of similar effect (other than assets expressly excluded from the description of
Collateral herein), regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Uniform Commercial Code in
such jurisdiction, or (y) as being of an equal or lesser scope or with greater
detail, and (ii) contain any other information required by part 5 of Article 9
of the Uniform Commercial Code for the sufficiency or filing office acceptance
of any financing statement, continuation or amendment, including (I) whether any
Borrower is an organization, the type of organization and any organization
identification number issued to such Borrower, and (II) in the case of a
financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. The Borrowers agree to furnish any
such information to the Agent promptly upon request. The Borrowers also ratify
their authorization for the Agent to have filed in any Uniform Commercial Code
jurisdiction any initial financing statements, continuations thereof or
amendments thereto if filed prior to the Closing Date.

 

(f) The Borrowers shall promptly, and in any event within three (3) Business
Days after the same is acquired by any Borrower, notify the Agent of any
Commercial Tort Claim (as defined in the UCC) with a value in excess of One
Hundred Thousand and No/100 Dollars ($100,000.00) acquired by a Borrower and
unless otherwise consented to by the Agent, such Borrower shall enter into a
supplement to this Agreement, granting to the Agent a security interest in such
Commercial Tort Claim.

 

(g) If any Borrower retains possession of any Chattel Paper or Instruments with
the Agent’s consent, such Chattel Paper and Instruments shall be marked with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the security interest of Citizens Bank of Pennsylvania, as
Agent.”

 

(h) No Borrower shall reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is incorporated as of the
date hereof without the prior written consent of the Agent.

 

(i) Each Borrower acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement without the prior written consent of the Agent and agrees that it will
not do so without the prior

 

40

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written consent of the Agent, except as may be permitted pursuant to Section
9-509(d)(2) of the UCC.

 

6.15. Financial Covenants of the Borrowers. So long as any Obligation remains
outstanding or this Agreement remains in effect, the Borrowers will comply with
each of the financial covenants set forth below.

 

(a) Fixed Charge Coverage Ratio. The Borrowers and the Non-Borrower Subsidiaries
will maintain on a consolidated basis a Fixed Charge Coverage Ratio of: (i) not
less than 1.15 to 1.00 for each fiscal quarter through the fiscal quarter ending
June 30, 2005; and (ii) not less than 1.25 to 1.00 for the fiscal quarter ending
September 30, 2005 and each fiscal quarter thereafter. For purposes of the
foregoing, “Fixed Charge Coverage Ratio” shall mean, for each measurement
period, the sum of EBITDA, plus real property rent expense and operating lease
expense, divided by the sum of the Borrowers’ and the Non-Borrower Subsidiaries’
real property rent expense and operating lease expense, plus cash interest
expense, plus cash taxes paid, plus required principal payments on debt, plus
capital lease payments. The Fixed Charge Coverage Ratio shall be measured on the
last day of each fiscal quarter throughout the term of the Loan and shall be
calculated on a four (4) quarter rolling basis.

 

(b) Asset Coverage Ratio. The Borrowers and the Non-Borrower Subsidiaries will
maintain on a consolidated basis an Asset Coverage Ratio of not less than 1.00
to 1.00 for each fiscal quarter. For purposes of the foregoing, “Asset Coverage
Ratio” shall mean, for each measurement period, the sum of the Borrowers’ gross
accounts receivable (billed and unbilled), plus unrestricted cash, divided by
the sum of the prior thirty (30) day average outstanding loan balance under the
Facilities, plus the face amount of all outstanding Letters of Credit on the “as
of” date of the calculation, plus (i) from and after the date hereof until the
date which is one (1) year from the date hereof, the greater of: (a) Six Million
and No/100 Dollars ($6,000,000.00), and (b) fifty percent (50%) of the
outstanding balance of the Term Loan on the “as of” date of the calculation,
(ii) from and after the date which is one (1) year from the date hereof until
the date which is two (2) years from the date hereof, the greater of (a) Eight
Million and No/100 Dollars ($8,000,000.00), and (b) eighty percent (80%) of the
outstanding balance of the Term Loan on the “as of” date of the calculation, and
(iii) from and after the date which is two (2) years from the date hereof, the
greater of (a) Six Million and No/100 Dollars ($6,000,000.00) and (b) one
hundred percent (100%) of the outstanding balance of the Term Loan on the “as
of” date of the calculation.

 

(c) Leverage Ratio. The Borrowers and the Non-Borrower Subsidiaries will
maintain on a consolidated basis for each quarter ending during the periods
specified below, a Leverage Ratio of not more than the following:

 

Period

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

 

Required Leverage Ratio

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

From the Closing Date through September 30, 2004

  Less than or equal to 3.50 to 1.00

From and after October 1, 2004

  Less than or equal to 3.00 to 1.00

 

41

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For purposes of the foregoing, “Leverage Ratio” shall mean, for each measurement
period, the ratio of the Borrower’s and the Non-Borrower Subsidiaries Total Debt
to EBITDA. The Leverage Ratio shall be measured on the last day of each fiscal
quarter throughout the term of the Loan.

 

(d) Capital Expenditures. The Borrowers and the Non-Borrower Subsidiaries shall
not, on an aggregate and consolidated basis, make or incur any capital
expenditures (including, but not limited to, expenditures for leasehold
improvements and capitalized costs) during any fiscal year in excess of Four
Million Five Hundred Thousand and No/100 Dollars ($4,500,000.00); provided,
however, that if in any fiscal year the Borrowers’ and the Non-Borrower
Subsidiaries capital expenditures are less than Four Million Five Hundred
Thousand and No/100 Dollars ($4,500,000.00) (a “Carryover Year”), the capital
expenditure limit for the immediately following fiscal year shall be increased
by the amount by which Four Million Five Hundred Thousand and No/100 Dollars
($4,500,000.00) exceeds the amount of capital expenditures made by the Borrowers
and the Non-Borrower Subsidiaries in the Carryover Year, but in no event shall
the amount carried over to any future year exceed Two Million Two Hundred Fifty
Thousand and No/100 Dollars ($2,250,000.00).

 

(e) Continued Profitability. The Borrowers and the Non-Borrower Subsidiaries
shall not, on a consolidated basis, sustain or incur negative Consolidated Net
Income for any fiscal quarter throughout the term of the Loan; it being
understood and agreed that the non-cash charges listed on Schedule B hereto, and
any other non-cash charges pre-approved in writing by the Agent, in its sole and
absolute discretion, may be added back to operating income for the sole purpose
of calculating the Borrowers’ and the Non-Borrower Subsidiaries Consolidated Net
Income.

 

Unless otherwise defined in this Agreement, all financial terms used in this
Section 6.15 shall have the meanings attributed to such terms in accordance with
GAAP; provided that the aggregate amount of EBITDA attributable to the
Non-Borrower Subsidiaries included for purposes of calculating compliance with
this Section 6.15 shall at no time account for more than five percent (5%) of
the total EBITDA of the Borrowers on a consolidated basis for the applicable
period.

 

6.16. Landlord Waivers; Subordination. The Borrowers (other than the UK
Borrowers) shall provide to the Agent, landlord waivers with respect to each
location at which any Borrower (other than a UK Borrower) now or hereafter
stores, keeps or locates its books and records, as well as for each location
where any Borrower’s (other than a UK Borrower’s) assets are now or hereafter
located (other than with respect to those locations set forth on Schedule
6.16(a) hereto). Notwithstanding the foregoing, it is understood and agreed that
on the Closing Date, the applicable Borrowers shall deliver to the Agent
executed landlord waivers relating to its leased properties described on
Schedule 6.16(b) hereto. The failure of the applicable Borrowers to obtain any
such landlord waiver referenced in Schedule 6.16(b) above, shall not constitute
an Event of Default hereunder provided that: (a) the Borrowers shall have
diligently exercised commercially reasonable efforts to obtain such landlord
waiver(s) or, in the alternative, a landlord access letter in the form and
substance attached as Exhibit 9 hereto; and (b) the applicable Borrower has
provided to the Agent a copy of all correspondence between it and the landlord
relating to the landlord waiver or landlord access letter.

 

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6.17. Substitute Notes. Upon request of the Agent, each Borrower shall execute
and deliver to the Agent substitute promissory notes, substantially in the same
form and substance as the Notes issued on the Closing Date, payable to the order
of such person or entity as may be designated by the Agent; it being understood
and agreed, however, that the aggregate maximum principal amount of all
promissory notes which are issued and outstanding (excluding the Swing Line
Note) shall not exceed the Commitment Amount as of the date such substitute
note(s) are issued.

 

6.18. Interest Rate Contracts. The Borrowers may have in effect, from time to
time, interest rate protection agreements (“Interest Rate Contracts”) reasonably
satisfactory to the Agent. Any such Interest Rate Contract must be purchased
from a Lender, an affiliate of a Lender or any financial institution reasonably
acceptable to the Agent. The Borrowers’ obligations under any Interest Rate
Contract purchased from a Lender or an affiliate of a Lender shall be secured by
the Collateral on a pari passu basis. All other Interest Rate Contracts shall be
unsecured in all respects. The Borrowers shall determine to their own
satisfaction whether each such Interest Rate Contract is sufficient to meet the
Borrowers’ needs for interest rate protection, and neither the Agent nor any
Lender shall have any obligation or liability with respect thereto, nor any
obligation to propose, quote or enter into any Interest Rate Contract, unless
such Interest Rate Contract shall be on terms and conditions satisfactory to the
applicable Lender in all respects.

 

ARTICLE 7

NEGATIVE COVENANTS OF THE BORROWERS

 

So long as any Obligation remains outstanding or this Agreement remains in
effect, each Borrower jointly and severally covenants and agrees that, without
the prior written consent of the Agent, the Borrowers will not:

 

7.1. Change of Control; Disposition of Assets; Merger.

 

(a) permit majority ownership or effective control (including the right to elect
a majority of the board of directors) of any Borrower to be sold, assigned or
otherwise transferred, legally or equitably, to any person or entity, except to
another Borrower; or

 

(b) suffer or permit the issuance of any capital stock of the Borrowers (other
than capital stock of the Parent Company); or

 

(c) permit any Borrower to sell, assign, loan, deliver, lease, transfer or
otherwise dispose of property or assets (including, without limitation, stock,
equity or any other type of ownership interests of another Borrower), except for
(i) transfers of assets between Borrowers in which the Agent continues to have a
perfected first priority security interest in and to all such assets
constituting Collateral (after giving effect to such transfer), subject,
however, to Permitted Liens; and (ii) asset dispositions to non-Borrowers
consummated in the ordinary course of the Borrowers’ business, provided that the
fair market value of any and all such asset dispositions does not exceed Five
Hundred Thousand and No/100 Dollars ($500,000.00), in the aggregate, during any
twelve (12) month period; or permit any Borrower to become a party to any
document, instrument or agreement (other than this Agreement, the other Loan
Documents

 

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and the Allied Documents) which prohibits, limits or restricts such Borrower
from assigning, pledging, hypothecating or otherwise encumbering any of its
assets, including, without limitation, any stock of another Borrower; or

 

(d) permit any Borrower or any subsidiary or affiliate of any Borrower to merge
or consolidate with any business, company or enterprise, or acquire or purchase
any business, company or enterprise or acquire or purchase substantially all of
the assets of any business, company or enterprise; it being understood and
agreed, however, that the Agent’s prior written consent shall not be required
for any merger between Borrowers; provided that (i) the Borrowers shall have
provided not less than twenty (20) days prior written notice to the Agent and
Lenders of the proposed merger, and such notice sets forth all of the material
terms of such merger (including, without limitation, the purpose for
consummating such merger), (ii) after giving effect to such merger, the Agent
shall have a perfected first priority security interest in and to all of the
assets of the surviving Borrower constituting Collateral (subject to Permitted
Liens), (iii), within ten (10) days of the effective date of such merger, true,
correct and complete state-certified copies of the articles of merger, plan of
merger and all other documents, instruments and agreements relating thereto
shall have been provided by the Borrowers to the Agent and Lenders, and (iv)
promptly (but in all events within twenty (20) days) following the Agent’s
request, the Borrowers shall have executed, issued and/or delivered to the Agent
such documents, instruments and agreements as the Agent or the Lenders may
reasonably require in connection with or as a result of such merger.

 

7.2. Margin Stocks. Use all or any part of the proceeds of any advance made
hereunder to purchase or carry, or to reduce or retire any loan incurred to
purchase or carry, any margin stocks (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System) or to extend credit to others
for the purpose of purchasing or carrying any such margin stocks.

 

7.3. Change of Operations. Change, in any material respect, the general
character of any Borrower’s business as conducted on the Closing Date, or engage
in any type of business not directly related to or compatible with such business
as presently and normally conducted.

 

7.4. Judgments; Attachments. Suffer or permit any judgment in excess of Five
Hundred Thousand and No/100 Dollars ($500,000.00) against any Borrower or any
attachment against any Borrower’s property (for an amount not fully covered by
insurance) to remain unpaid, undischarged or undismissed for a period of ten
(10) days, unless enforcement thereof shall be effectively stayed or bonded.

 

7.5. Further Assignments; Performance and Modification of Contracts; etc. Except
as may be expressly permitted by the Loan Documents (i) make any further
assignment, pledge or disposition of the Collateral or any part thereof; (ii)
permit any set-off or reduction, delay the timing of any payment under, or
otherwise modify any Material Contract, if such set-off, reduction, delay or
modification (a) would give rise to a Borrowing Base Deficiency, or (b) is
reasonably likely to have a Material Adverse Effect; (iii) create, incur or
permit to exist any lien or encumbrance on any real property now or hereafter
owned by any Borrower; (iv) suffer or permit any amendment or modification to
any Borrower’s corporate governance documents,

 

44

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provided, however, that to the extent any such amendment or modification does
not in any way adversely affect the Agent and/or the Lenders’ rights and
remedies under this Agreement or their security interest in the Collateral, such
Borrower shall only be required to provide a copy of such amendment or
modification to the Agent with thirty (30) days of the implementation of such
amendment or modification; or (v) do or permit to be done anything to impair the
Agent’s security interest in any Collateral or the payments due to any Borrower
thereunder; it being understood that reasonable and customary compromises and
settlements with Account Debtors in the ordinary course of the Borrower’s
business and dispositions or transfers permitted by Section 7.1(c)(ii) of this
Agreement will not constitute a violation of this covenant.

 

7.6. Affect Rights of the Agent or Lenders. At any time do or perform any act or
permit any act to be performed which could reasonably be expected to materially
adversely affect the interests or rights of the Agent or Lenders under any Loan
Document.

 

7.7. Indebtedness; Granting of Security Interests.

 

(a) suffer or permit any Borrower to incur any Indebtedness in excess of One
Million and No/100 Dollars ($1,000,000.00), in the aggregate, per annum, whether
direct or indirect, except for:

 

(i) trade debt and accrued liabilities incurred in the ordinary course of
business;

 

(ii) Indebtedness incurred pursuant to this Agreement;

 

(iii) Indebtedness incurred pursuant to the Term Loan;

 

(iv) the Subordinated Debt;

 

(v) guarantees of Indebtedness of a Borrower otherwise permitted by this Section
7.7.

 

(vi) Indebtedness arising from advances permitted pursuant to Section 7.8(c) of
this Agreement; and

 

(vii) Indebtedness incurred pursuant to interest rate contracts entered into by
the Borrowers in accordance with Section 6.18 of this Agreement.

 

(b) mortgage, assign, pledge, hypothecate or otherwise encumber or permit any
lien, security interest or other encumbrance, including purchase money liens,
whether under conditional or installment sales arrangements or otherwise, to
affect the Collateral or any other assets or properties of any Borrower (except
for Permitted Liens and other liens, security interests or encumbrances
expressly permitted herein), nor shall any Borrower guarantee or otherwise
become obligated for any indebtedness of others; or

 

(c) enter into any agreement or understanding with any person or entity pursuant
to which any Borrower agrees to be bound by a covenant not to encumber all or
any

 

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part of the property or assets of such Borrower, unless such agreement or
understanding is entered into in connection with the granting of purchase money
security interests permitted pursuant to the terms and provisions of this
Agreement, it being understood and agreed that the execution and delivery of the
Allied Documents on the Closing Date shall not constitute a violation of this
covenant.

 

7.8. Dividends; Loans; Advances; Investments and Similar Events.

 

(a) declare or pay any dividends in excess of One Million Two Hundred Thousand
and No/100 Dollars ($1,200,000.00), in the aggregate, per annum, on any
Borrower’s capital stock of any class; it being understood and agreed that such
dividends may be declared and paid only to LLR Equity Partners LP and/or LLR
Equity Partners Parallel LLP, and may only be declared and paid if (i) prior to
and after giving effect to any such payment no Event of Default shall exist, and
no act, event or condition shall have occurred or exist which with notice or the
lapse of time, or both, would constitute an Event of Default and (ii) not less
than fifteen (15) days prior to the declaration or payment of any such dividend,
the Borrowers deliver to the Agent a certificate of the Parent Company duly
executed on its behalf by the Parent Company’s Chief Financial Officer or
another duly authorized executive officer of the Parent Company certifying that,
prior to and after giving effect to any such payment, no Event of Default shall
exist, and no act, event or condition shall have occurred or exist which with
notice or the lapse of time, or both, would constitute an Event of Default
containing detailed calculations of the relevant items used to calculate such
compliance with the financial covenants set forth in Section 6.15, in form and
substance satisfactory to the Agent. Notwithstanding the foregoing, any Borrower
shall be entitled to pay dividends to another Borrower without limit on the
dollar amount thereof, provided that (i) no Event of Default shall exist, and no
act, event or condition shall have occurred or exist which with notice or the
lapse of time, or both, would constitute an Event of Default; and (ii) if any
such dividends are payable to both a Borrower and a non-Borrower minority
shareholder, the aggregate amount of any and all dividends paid or payable to
all non-Borrower minority shareholders shall not exceed One Hundred Thousand and
No/100 Dollars ($100,000.00) per annum;

 

(b) Except with respect to the Parent Company alter or amend any Borrower’s
capital structure, purchase, redeem or otherwise retire any shares of any
Borrower’s capital stock, voluntarily prepay, acquire or anticipate any sinking
fund requirement of any indebtedness, or make any distributions in cash or
assets to any Borrower’s shareholders or any Borrower’s affiliate;

 

(c) Except as set forth in Schedule 7.8 hereto, make any loans, salary advances
or other payments to (i) any shareholders of any Borrower, unless such
shareholder is also a Borrower party to this Agreement in which the Agent has a
perfected security interest in and to all of its assets constituting Collateral
at the time such loan, salary advance or other payment is made; (ii) any
corporation or other enterprise directly or indirectly owned in whole or in part
by any shareholder of any Borrower, unless such corporation or other enterprise
is also a Borrower party to this Agreement in which the Agent has a perfected
security interest in and to all of its assets constituting Collateral at the
time such loan, salary advance or other payment is made; or (iii) any other
person or entity; provided, however, that the Borrowers may pay, make or
continue to have outstanding any or all of the following:

 

(i) normal and customary operating expenses, travel and expense reimbursements
to salaried employees and trade credit extended to customers of the Borrowers in
the ordinary course of business;

 

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(ii) regularly scheduled salary payments to individuals who are also salaried
employees of any Borrower;

 

(iii) loans and working capital advances to a subsidiary of any Borrower which
is not a Borrower hereunder, provided that the aggregate outstanding amount of
all such loans and advances does not at any time exceed One Million and No/100
Dollars ($1,000,000.00);

 

(iv) the loan(s) described on Schedule 7.8 hereto limited to the corresponding
amounts set forth on Schedule 7.8; and

 

(v) Ordinary Course Payments.

 

7.9. Lease Obligations. Except in the ordinary course of business, enter into
any new lease of real or personal property, or modify, amend, restate or renew
any lease of real or personal property in effect as of the Closing Date.

 

7.10. Term Loan and Subordinated Debt. Subject to the terms of the Subordination
Agreements, modify or amend, in any respect, any of the terms of the Term Loan
or the Subordinated Debt; or modify or amend any of the Allied Documents
executed, issued and/or delivered prior to the Closing Date, or make any
voluntary prepayments of amounts owing pursuant to the Junior Facilities.

 

7.11. Transactions with Affiliates. Enter into or otherwise bind any Borrower to
any contract, agreement or other understanding with any person or entity
directly or indirectly related to, affiliated with or under common control or
ownership with such Borrower or any affiliate of such Borrower, except upon fair
and reasonable terms which are at least as favorable to such Borrower as would
be the case in a comparable, arm’s-length transaction with an unaffiliated and
unrelated entity or person.

 

7.12. Sale and Leaseback Transactions. Directly or indirectly, enter into any
arrangement with any person or entity providing for such Borrower to lease or
rent property that such Borrower has sold or will sell or otherwise transfer to
such person or entity.

 

7.13. Fiscal Year/Accounting Method. Permit or cause any Borrower to amend its
fiscal year or its method of accounting.

 

7.14. Lockbox Deposits. Permit or cause any and all payments required to be made
directly to the Agent, pursuant to Section 11.2 of this Agreement, to be made or
directed to any other person or entity, without the prior approval of the Agent.

 

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ARTICLE 8

COLLATERAL ACCOUNTS

 

Each of Opinion Research Corporation, Macro International Inc. and ORC ProTel,
Inc. shall establish a separate collateral account with the Agent (collectively,
the “Collateral Accounts”). Each Borrower shall deposit or cause to be deposited
into a collateral account designated for such Borrower on Schedule C hereto (or
as otherwise designated by the Agent), all checks, drafts, cash and other
remittances received by the Borrowers, and shall deposit such items for credit
to the applicable Collateral Accounts within one (1) Business Day of the receipt
thereof and in precisely the form received. Pending such deposit, the Borrowers
will not commingle any such items of payment with any of their other funds or
property, but will hold them separate and apart.

 

The Borrowers hereby covenant and agree that the Collateral Accounts shall
secure the Obligations and hereby grants, assigns and transfers to or at the
direction of the Agent, for the benefit of the Lenders ratably, a continuing
security interest in all of the Borrowers’ right, title and interest in and to
the Collateral Accounts, whenever created or established. Subject to the terms
of this Agreement or any other Loan Document, the Agent may apply funds in the
Collateral Accounts to any of the Obligations, including, without limitation,
any principal, interest or other payment(s) not made when due, whether arising
under this Loan Agreement and/or any other Loan Document, or any other
Obligation of the Borrowers, without notice to the Borrowers, without regard to
the origin of the deposits in the account, the beneficial ownership of the funds
therein or whether such Obligations are owed jointly with another or severally;
the order and method of such application to be in the sole discretion of the
Agent. The Agent’s right to deduct sums due under the Loan Documents from the
Borrowers’ account(s) shall not relieve the Borrowers from their obligation to
make all payments required by the Loan Documents as and when required by the
Loan Documents, and the Agent shall not have any obligation to make any such
deductions or any liability whatsoever for any failure to do so.

 

ARTICLE 9

DEFAULT AND REMEDIES

 

9.1. Events of Default. Any one of the following events shall be considered an
“Event of Default”:

 

(a) if any Borrower shall fail to pay any interest owing on any of the Notes or
pursuant to any other Obligation within five (5) days of the date when due, or
shall fail to pay any principal owing on any of the Notes or pursuant to any
other Obligation within three (3) days of the date when due, whether by reason
of acceleration or otherwise, or if any Borrower shall fail to pay within five
(5) days of demand, any fees or other sums payable pursuant to this Agreement,
the Note or any other Loan Document; or

 

(b) if a Borrowing Base Deficiency shall occur, and the Borrowers fail, within
two (2) Business Days of such occurrence, without notice or demand therefor, to
make a payment to the Agent in an amount equal to or greater than the Borrowing
Base Deficiency; or

 

(c) if any Borrower shall fail to pay and satisfy in full, within ten (10) days
of the rendering thereof, any judgment against any Borrower in excess of Five
Hundred Thousand and No/100 Dollars ($500,000.00) which is not, to the
reasonable satisfaction of the Agent, fully bonded, stayed, covered by insurance
or covered by appropriate reserves; or

 

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(d) if any warranty or representation set forth in this Agreement or in any
other Loan Document shall be misleading or untrue in any material respect when
made or remade; or

 

(e) if there shall be non-compliance with or a breach of any of the Affirmative
Covenants contained in this Agreement (other than financial covenants set forth
in Section 6.15 of this Agreement), or, any of the Negative Covenants set forth
in Sections 7.7, 7.8 (except with respect to a breach caused by a declaration or
payment to LLR Equity Partners LP and/or LLR Equity Partners Parallel LLP) or
7.11 of this Agreement to the extent that they curable, and such non-compliance
or breach shall continue unremedied after fifteen (15) days written notice from
the Agent, or if any Borrower shall fail to observe or perform any of the
Negative Covenants set forth in Section 7.7, 7.8 (except with respect to a
breach caused by a declaration or payment to LLR Equity Partners LP and/or LLR
Equity Partners Parallel LLP) or 7.11 and, if reasonably capable of cure, the
Borrower shall fail to cure the same within fifteen (15) days after further
notices from the Agent; or

 

(f) if there shall be non-compliance with or a breach of any of the Negative
Covenants contained in this Agreement (other than with respect to those
described in Section 9.1(e) of this Agreement); or

 

(g) if there shall be non-compliance with or a breach of any of the financial
covenants set forth in Section 6.15 of this Agreement; or

 

(h) if, unless otherwise expressly (and specifically) addressed in this Section
9.1, there shall be non-compliance or a breach of any non-monetary covenants or
agreements of any Borrower set forth in the Notes or in any other Loan Document,
and such non-compliance or breach shall continue unremedied beyond (i) fifteen
(15) days following written notice from the Agent, or (ii) such shorter
applicable notice and cure period as may be specified in the applicable Loan
Document; or

 

(i) if (i) without the prior written consent of the Agent, any Borrower shall be
liquidated or dissolved or shall discontinue its business in violation of the
terms of this Agreement; (ii) a trustee or receiver is appointed for any
Borrower or for all or a substantial part of its assets; (iii) any Borrower
makes a general assignment for the benefit of creditors; (iv) any Borrower files
or is the subject of any insolvency proceeding or petition in bankruptcy, which
in the case of an involuntary bankruptcy, remains undismissed for sixty (60)
days; (v) any Borrower shall become insolvent or any Borrower shall at any time
fail generally to pay its debts as such debts become due; or (vi) any
governmental agency or bankruptcy court or other court of competent jurisdiction
shall assume custody or control of the whole or any part of the assets of any
Borrower; or

 

(j) if any action is legally taken by a judgment creditor to levy upon, attach
or subject to any other enforcement proceeding any Borrower’s property or assets
with a value of Five Hundred Thousand and No/100 Dollars ($500,000.00) or more,
in the aggregate, including, without limitation, any deposit accounts, which is
not fully bonded or stayed to the Agent’s and Lenders’ satisfaction; or

 

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(k) the reorganization of any Borrower, without the prior written consent of the
Agent; or

 

(l) if any obligation of any Borrower for the payment of borrowed money, which
involves amounts in excess of Five Hundred Thousand and No/100 Dollars
($500,000.00), whether now existing or hereafter created, incurred or arising,
becomes or is declared to be due and payable prior to the expressed maturity
thereof, whether such obligation is owed to a Lender or any other person or
entity; or

 

(m) if any Borrower is in default under any Material Contract, and the other
party thereto commences exercise of its rights and remedies under such Material
Contract as a consequence of such default (excluding those defaults pursuant to
which the other party thereto has made a monetary claim for less than Five
Hundred Thousand and No/100 Dollars ($500,000.00)); or

 

(n) if (i) any Borrower is debarred or suspended from contracting with any part
of the Government; (ii) a notice of debarment or suspension shall have been
issued to any Borrower; or (iii) a notice of termination for default or the
actual termination for default of any Material Contract shall have been issued
to or received by any Borrower; or (iv) a Government investigation or inquiry
relating to any Borrower and involving fraud, deception, dishonesty or willful
misconduct shall have been commenced in connection with any Material Contract or
any Borrower’s activities; or

 

(o) if a default shall occur under either of the Junior Facilities or any of the
documents executed in connection therewith and such default shall remain uncured
beyond any applicable notice and cure period; or

 

(p) if the Agent or the Required Lenders believe in good faith that there is a
material adverse change in the business, assets, properties, condition
(financial or otherwise) of the Borrowers, in the aggregate.

 

9.2. Remedies. Upon the occurrence of any Event of Default, the Agent, acting on
behalf of the Lenders, may exercise any or all of the following remedies:

 

(a) Withhold disbursement of all or any part of the Loan proceeds;

 

(b) Terminate the Lenders’ obligation to make further disbursements of the Loan
proceeds;

 

(c) Declare all principal, interest and other sums owing on the Obligations to
be immediately due and payable without demand, protest, notice of protest,
notice of default, presentment for payment or further notice of any kind;

 

(d) Without notice, redirect any and all of the Borrowers’ deposits to the
Collateral Accounts;

 

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(e) Without notice, offset and apply against all or any part of the Obligations
then owing by any Borrower to any Lender, any and all money, credits, stocks,
bonds or other securities or property of any Borrower of any kind or nature
whatsoever on deposit with, held by or in the possession of any Lender in any
capacity whatsoever, including, without limitation, any deposits with any Lender
or any of its affiliates, to the credit of or for the account of any Borrower.
The Agent and Lenders are authorized at any time to charge the Obligations
against any Borrower’s account(s), without regard to the origin of deposits to
the account or beneficial ownership of the funds. Any and all amounts obtained
by the Agent or any Lender pursuant to this subsection (e) shall be shared by
all of the Lenders ratably, in accordance with each Lender’s Percentage; it
being expressly acknowledged and agreed that each Lender, as well as the Agent,
shall be entitled to exercise the rights of set-off provided in this subsection
(e) of this Section 9.2;

 

(f) Exercise all rights, powers and remedies of a secured party under the UCC
and/or any other applicable law(s), including, without limitation, the right to
(i) require any Borrower to assemble the Collateral (to the extent that it is
movable) and make it available to the Agent at a place to be designated by the
Agent, and (ii) enter upon any Borrower’s premises, peaceably by the Agent’s own
means or with legal process, and take possession of, render unusable or dispose
of the Collateral on such premises; each Borrower hereby agreeing not to resist
or interfere with any such action. The Agent agrees to give the Borrowers
written notice of the time and place of any public sale of the Collateral or any
part thereof, and the time after which any private sale or any other intended
disposition of the Collateral is to be made, and such notice will be mailed,
postage prepaid, to the principal place of business of the Borrowers, at least
ten (10) days before the time of any such sale or disposition. Each Borrower
hereby authorizes and appoints the Agent and its successors and assigns to (x)
sell the Collateral, and (y) declare that each Borrower assents to the passage
of a decree by a court of proper jurisdiction for the sale of the Collateral.
Any such sale pursuant to (x) or (y) above is to be made in accordance with the
applicable provisions of the laws and rules of procedure of the State of
Maryland or other applicable law; and/or

 

(g) Proceed to enforce such other and additional rights and remedies as the
Agent and/or Lenders may have hereunder and/or under any of the other Loan
Documents, or as may be provided by applicable law.

 

It is expressly understood and agreed that the Lenders and/or the Agent may
exercise their respective rights under this Agreement or under any other Loan
Document without exercising the rights or affecting the security afforded by any
other Loan Document, and it is further understood and agreed that the Agent may
proceed against all or any portion of the Collateral in such order and at such
times as the Agent, in its sole discretion, sees fit; and each Borrower hereby
expressly waives, to the extent permitted by law, all benefit of valuation,
appraisement, marshaling of assets and all exemptions under the laws of the
State of Maryland and/or any other state, district or territory of the United
States. Furthermore, if any Borrower shall default in the performance when due
of any of the provisions of this Agreement, the Agent, without notice to or
demand upon the Borrowers (and without any grace or cure period) and without
waiving or releasing any of the Obligations or any default hereunder, under the
Notes or under any other Loan Document, may (but shall be under no obligation
to) perform the same for each Borrower’s account, and any monies expended in so
doing shall be chargeable to the

 

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Borrowers with interest, at the highest rate of interest payable under the
Notes, plus two percent (2%), and added to the indebtedness secured by the
Collateral.

 

All sums paid or advanced by the Agent in connection with the foregoing or
otherwise in connection with the Loan, and all court costs and expenses of
collection, including without limitation, reasonable attorneys’ fees and
expenses (and fees and expenses resulting from the taking, holding or
disposition of the Collateral) incurred in connection therewith shall be paid by
the Borrowers upon demand and shall become a part of the Obligations secured by
the Collateral. The Borrowers agree to bear the expense of each lien search,
property and judgment report or other form of Collateral ownership investigation
as the Agent, in its discretion, shall deem necessary or desirable to assure or
further assure to the Lenders and/or the Agent their respective interests in the
Collateral.

 

ARTICLE 10

THE AGENT; AGENCY

 

10.1. Appointment. Each Lender hereby affirms its irrevocable appointment of
Citizens Bank to act as the Agent for each such Lender pursuant to the
provisions of this Agreement and the other Loan Documents, and affirms its
irrevocable authorization given to the Agent to take such action, and exercise
such powers and perform such duties as are expressly delegated to or required of
the Agent by the terms hereof or thereof, or are reasonably incidental thereto,
including without limitation, executing documents on behalf of the Lenders, as
agent. Citizens Bank affirms its agreement to act as the Agent on behalf of the
Lenders on the terms and conditions set forth in this Agreement and the other
Loan Documents, subject to its right to resign as provided in Section 10.10.
Each Lender agrees that the rights and remedies granted to the Agent under this
Agreement and the other Loan Documents shall be exercised exclusively by the
Agent, and that no Lender shall have the right individually to exercise any such
right or remedy, except to the extent expressly provided herein or therein.

 

10.2. General Nature of Agent’s Duties. Notwithstanding anything to the contrary
elsewhere in this Agreement or any other Loan Document:

 

(a) The Agent shall have no duties or responsibilities other than those
expressly set forth in this Agreement and the other Loan Documents, and no
implied duties or responsibilities on the part of the Agent shall be read into
this Agreement or any other Loan Document or shall otherwise exist.

 

(b) The duties and responsibilities of the Agent under this Agreement and the
other Loan Documents shall be mechanical and administrative in nature, and the
Agent shall not have a fiduciary relationship in respect of any Lender.

 

(c) The Agent is and shall be solely the agent of the Lenders. The Agent does
not assume, and shall not at any time be deemed to have, any relationship of
agency or trust with or for, or any other duty or responsibility to, any
Borrower or any other person.

 

(d) The Agent shall not have any obligation to take any action hereunder or
under any other Loan Document if the Agent believes in good faith that taking
such action may

 

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conflict with any Applicable Laws, or any provision of this Agreement or any
other Loan Document, or may require the Agent qualify to do business in any
jurisdiction where it is not then so qualified.

 

10.3. Exercise of Powers.

 

(a) The Agent shall have the authority to take any action of the type specified
in this Agreement or any other Loan Document as being within the Agent’s rights,
powers or discretion, as it determines in its sole discretion, except as
provided in subsection (b) below, and except as provided in any other Loan
Document which expressly requires the direction or consent of (i) the Required
Lenders; or (ii) all of the Lenders, in either of which circumstances the Agent
shall not take such action absent such direction or consent. Any action or
inaction pursuant to such direction or consent shall be binding on all of the
Lenders.

 

(b) The Agent shall not in any material respect amend, modify, grant consents or
waive any term or provision of this Agreement or any other Loan Document without
the consent or approval of the Required Lenders, or declare an Event of Default,
provide formal written notice of default to any Borrower or exercise any rights
or remedies against any Borrower without the prior consent of the Required
Lenders. Each Lender agrees that its decision to consent to or reject any
request by the Agent for permission to declare an Event of Default, provide
formal notice thereof to any Borrower and/or exercise any rights or remedies
arising by virtue of such default, shall be made as soon as reasonably
practicable after the Lender has received all relevant information with respect
to such request, but in all events within five (5) Business Days of the receipt
of such information; it being understood and agreed that, unless otherwise
provided herein, the Agent shall exercise any and all rights and
responsibilities on behalf of the Lenders in connection with an Event of
Default. Additionally, only with the consent or approval of all of the Lenders,
the Agent may (a) extend the final maturity of the Loan or any Note, reduce the
interest rate payable on or extend the time of payment for any installment of
principal, interest or fees payable in connection with the Loan, or issue
Letters of Credit having an expiration date beyond the Revolving Facility
Maturity Date (except as otherwise expressly provided in this Agreement) or
cause the aggregate outstanding amount of all such Letters of Credit issued to
exceed Five Million and No/100 Dollars ($5,000,000.00); (b) change the
Percentage of the Commitment Amount of any Lender, (c) release all or a
substantial portion of the Collateral, except in accordance with the provisions
of any applicable Loan Document, (d) amend the definition of the Required
Lenders or expand the definitions of Eligible Billed Government Accounts
Receivable, Eligible Billed Commercial Accounts Receivable, Eligible Billed
Foreign Accounts Receivable, Eligible Unbilled Government Accounts Receivable,
Eligible Unbilled Foreign Accounts Receivable and/or Eligible Unbilled
Commercial Accounts Receivable, (e) consent to the assignment or transfer by any
Borrower of any of its rights or obligations hereunder, (f) amend, modify or
waive any provisions of this Section 10.3, (g) change the manner of application
by the Agent of payments made under the Loan Documents, or (h) change the method
of calculation used in connection with the computation of interest, commissions
or fees. Each Lender agrees that its decision to approve or reject any request
for an amendment or waiver with respect to this Agreement shall be made as soon
as reasonably practicable after the Lender has received all relevant information
with respect to such request.

 

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10.4. General Exculpatory Provisions. Notwithstanding anything to the contrary
elsewhere in this Agreement or any other Loan Document:

 

(a) The Agent, in its capacity as Agent (but not as a Lender), shall not be
liable for any action taken or omitted to be taken by it under or in connection
with this Agreement or any other Loan Document, unless caused by its own gross
negligence or willful misconduct.

 

(b) The Agent shall not be responsible for (i) the execution, delivery,
effectiveness, enforceability, genuineness, validity or adequacy of this
Agreement or any other Loan Document, (ii) any recital, representation,
warranty, document, certificate, report or statement in this Agreement or any
other Loan Document, (iii) any failure of any Borrower or any Lender to perform
any of their respective obligations under this Agreement or any other Loan
Document, (iv) the existence, validity, enforceability, perfection, recordation,
priority, adequacy or value, now or hereafter, of any lien or encumbrance or
other direct or indirect security afforded or purported to be afforded by any of
the Loan Documents, or otherwise from time to time, or (v) caring for,
protecting, insuring or paying any taxes, charges or assessments with respect to
any Collateral.

 

(c) The Agent shall have no obligation to ascertain, inquire or give any notice
relating to (i) the performance or observance of any of the terms or conditions
of this Agreement or any other Loan Document on the part of any Borrower, (ii)
the business, operations, condition (financial or otherwise) or prospects of any
Borrower, or (iii) except to the extent as may be set forth in Article 9 hereof,
the existence of any Event of Default.

 

(d) The Agent shall have no obligation, either initially or on a continuing
basis, to provide any Lender with any notices, reports or information of any
nature, whether in its possession presently or hereafter, except for such
notices, reports and other information expressly required by this Agreement or
any other Loan Document to be furnished by the Agent to such Lender.

 

10.5. Administration by the Agent.

 

(a) The Agent may rely upon any notice or other communication of any nature
(written or oral, including telephone conversations, whether or not such notice
or other communication is made in a manner permitted or required by this
Agreement or any other Loan Document) purportedly made by or on behalf of the
proper party or parties, and the Agent shall not have any duty to verify the
identity or authority of any person giving such notice or other communication.

 

(b) The Agent may consult with legal counsel (including in-house counsel for the
Agent), independent public accountants and any other experts selected by the
Agent from time to time, and the Agent shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.

 

(c) The Agent may conclusively rely upon the truth of the statements and the
correctness of the opinions expressed in any certificates or opinions furnished
to the Agent in

 

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accordance with the requirements of this Agreement or any other Loan Document.
Whenever the Agent shall deem it necessary or desirable that a matter be proved
or established with respect to any Borrower or any Lender, such matter may be
established by a certificate of such Borrower or such Lender, as the case may
be, and the Agent may conclusively rely upon such certificate.

 

(d) The Agent may fail or refuse to take any action unless it shall be
indemnified to its satisfaction from time to time against any and all amounts,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of every kind and nature which may be imposed
on, incurred by or asserted against the Agent by reason of taking or continuing
to take any such action; provided that no Lender shall be obligated to indemnify
the Agent for any portion of such amounts, liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
resulting solely from the gross negligence or willful misconduct of the Agent,
as finally determined by a court of competent jurisdiction.

 

(e) The Agent may perform any of its duties under this Agreement or any other
Loan Document by or through agents or attorneys-in-fact. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

 

(f) The Agent shall not be deemed to have any knowledge or notice of the
occurrence of any Event of Default (other than a default in the payment of
regularly scheduled principal or interest), unless the Agent has received from a
Lender or a Borrower a written notice referring to this Agreement, describing
the Event of Default, and stating that such notice is a “notice of default”. If
the Agent receives such a notice, the Agent shall give prompt notice thereof to
each Lender.

 

(g) The Agent shall provide three (3) Business Days prior notice to the Lenders
of any field audit scheduled to be performed by the Agent pursuant to Section
1.6 of this Agreement. The Lenders shall be entitled to (i) receive copies of
field audits performed by the Agent, and (ii) accompany the Agent to any field
audit, provided that (a) the Agent may, in its discretion, limit the number of
Lenders attending any such field audit and (b) each such Lender receiving copies
of or attending any such field audit must execute an agreement acknowledging
that the Agent is not making any representations or warranties with respect to
any such field audit.

 

10.6. Lenders Not Relying on the Agent or Other Lenders. Each Lender
acknowledges as follows:

 

(a) Neither the Agent nor any other Lender has made any representations or
warranties to it, and no act taken hereafter by the Agent or any other Lender
shall be deemed to constitute any representation or warranty by the Agent or
such other Lender to it.

 

(b) It has, independently and without reliance upon the Agent or any other
Lender, and based upon such documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement and the other Loan Documents.

 

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(c) It will, independently and without reliance upon the Agent or any other
Lender, and based upon such documents and information as it shall deem
appropriate at the time, make its own decisions to take or not take action under
or in connection with this Agreement and the other Loan Documents.

 

10.7. Indemnification. Each Lender agrees to reimburse and indemnify the Agent
and the Agent’s directors, officers, employees and agents (to the extent not
reimbursed by the Borrowers, and without limitation of the obligation of the
Borrowers to do so), ratably in accordance with each Lender’s Percentage, from
and against any and all amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs and disbursements of
every kind or nature (including the reasonable fees and disbursements of counsel
for the Agent or such other person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent or such other person shall be designated a party thereto) that may at
any time be imposed on, incurred by or asserted against the Agent or such other
person as a result of this Agreement, any other Loan Document, any transaction
from time to time contemplated hereby or thereby, or any transaction financed in
whole or in part or directly or indirectly with the proceeds of the Loan;
provided that no Lender shall be obligated to indemnify the Agent or such other
person for any portion of such amounts, losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting solely from the gross negligence or willful misconduct
of the person seeking indemnity, as finally determined by a court of competent
jurisdiction.

 

10.8. Agent in its Individual Capacity; Agent’s Commitment. With respect to its
commitment and the Obligations owing to it, Citizens Bank shall have the same
rights and powers under this Agreement and each other Loan Document as any other
Lender, and may exercise the same as though it was not the Agent. The terms
“Lender,” “holders of Notes” and like terms shall include Citizens Bank in its
individual capacity. Citizens Bank and its affiliates may, without liability to
account for, make loans to, accept deposits from, acquire debt or equity
interests in, act as trustee under indentures of and engage in any other
business with any Borrower and any stockholder, subsidiary or affiliate of any
Borrower, as though Citizens Bank was not the Agent hereunder.

 

10.9. Holders of Notes. The Agent may deem and treat any Lender which is the
payee of a Note as the owner and holder of such Note for all purposes hereof
unless and until written notice evidencing such transfer shall have been filed
with the Agent. Any authority, direction or consent of any person who at the
time of giving such authority, direction or consent was a Lender shall be
conclusive and binding on each present and subsequent holder, transferee or
assignee of any Note or Notes payable to such Lender or issued in exchange
therefor.

 

10.10. Successor Agent. The Agent may resign at any time by giving ten (10) days
prior written notice thereof to the Lenders and Borrowers, subject to
appointment of a successor Agent (and such appointees acceptance of appointment)
as below provided in this Section 10.10. Additionally, the Agent may be removed
for cause by all of the Lenders (other than the Agent, if the Agent is then a
Lender), if such removal is requested in writing (which wording must
specifically identify the “cause” for removal), and ten (10) days’ prior written
notice of removal is provided to the Agent and Borrowers (or Lenders, if
applicable). Upon any such resignation or removal, the Agent shall, on behalf of
the Lenders, immediately appoint, as its successor,

 

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another Lender; provided that such Lender is a commercial bank or trust company
organized under the laws of the United States of America or any State thereof
and has a combined capital and surplus of at least One Billion and No/100
Dollars ($1,000,000,000.00). In such event, the Agent’s resignation or removal
shall not be effective until the successor Agent shall have accepted its
appointment. Upon the acceptance by a successor Agent of its appointment as the
Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all of the properties, rights, powers, privileges and duties of the
former Agent, without further act, deed or conveyance. Upon the effective date
of resignation or removal of the retiring Agent, such Agent shall be discharged
from its duties under this Agreement and the other Loan Documents, but the
provisions of this Agreement shall continue to be binding on and inure to its
benefit as to any actions taken or omitted by it while it was the Agent under
this Agreement. If for any reason, at any time, there is no Agent hereunder,
then during such period, the Required Lenders shall have the right to exercise
the Agent’s rights and perform its duties hereunder, except that (i) all notices
or other communications required or permitted to be given to the Agent shall be
given to each Lender, and (ii) all payments to be made to the Agent shall be
made directly to the Borrowers or the Lender for whose account such payment is
made.

 

10.11. Additional Agents. If the Agent shall from time to time deem it necessary
or advisable to engage other agents for its own protection in the performance of
its duties hereunder or in the interests of the Lenders, then the Agent and
Borrowers shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable, in the opinion of the Agent,
to constitute another commercial bank or trust company, or one or more other
persons approved by the Agent, to act as co-Agent or a separate agent with
respect to any part of the Collateral, with such powers as may be provided in
such supplemental agreement, and with the power to vest in such bank, trust
company or other person (as such co-Agent or separate agent, as the case may
be), any properties, rights, powers, privileges and duties of the Agent under
this Agreement or any other Loan Document.

 

10.12. Calculations. The Agent shall not be liable for any calculation,
apportionment or distribution of payments made by it in good faith. If such
calculation, apportionment or distribution is subsequently determined to have
been made in error, the sole recourse of any Lender to whom payment was due but
not made shall be to recover from the Lenders any payment in excess of the
amount to which they are determined to be entitled, with interest thereon at the
Federal Funds Rate, or, if the amount due was not paid by any Borrower, to
recover such amount from such Borrower, with interest thereon at the rate
provided in the applicable Note.

 

10.13. Funding by the Agent.

 

(a) Except as otherwise provided in this Agreement, the Agent alone shall be
entitled to make all advances in connection with the Loan and shall receive all
payments and other receipts relating to the Loan; it being understood, however,
that the Agent has reserved the right not to advance any amounts to the
Borrowers which the Agent has not received from the Lenders. The Agent will
notify each Lender of the date and amount of any requested advance, and if such
notification is received by 1:00 p.m. Washington, D.C. time on any given
Business Day, the Lenders shall provide the required funds to the Agent no later
than the close of business on such Business Day. Once per week, or within such
shorter time frame as may be requested by

 

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the Agent, the Agent and each Lender shall pay to each other such amounts (the
“Equalization Payments”) as may be necessary to cause each Lender to own its
applicable Percentage of the Loan and otherwise implement the terms and
provisions of this Agreement; it being understood that each Lender shall be
entitled to receive interest on amounts advanced by it only from the date of
such Lender’s advance of funds. The obligation of the Agent and each Lender to
make Equalization Payments shall not be affected by a bankruptcy filing by any
Borrower, the occurrence of any Event of Default or any other act, occurrence or
event whatsoever, whether the same occurs, before, on or after the date on which
an Equalization Payment is required to be made. All Equalization Payments shall
be made by 4:00 p.m. Washington, D.C. time on the date such payment is required,
provided that notice of such Equalization payment shall have been given to the
party obligated to make such payment by 1:00 p.m. Washington, D.C. time;
otherwise such Equalization Payments shall be made on the next Business Day.

 

(b) Unless the Agent shall have been notified in writing by any Lender no later
than the close of business on the Business Day before the Business Day on which
an advance requested by the Borrowers is to be made, that such Lender will not
make its ratable share of such advance, the Agent may assume that such Lender
will make its ratable share of the advance, and in reliance upon such assumption
the Agent may (but in no circumstances shall be required to) make available to
the Borrowers a corresponding amount. If and to the extent that any Lender fails
to make such payment to the Agent when required, such Lender shall pay such
amount on demand (or, if such Lender fails to pay such amount on demand, the
Borrowers shall arrange for the repayment of such amount to the Agent), together
with interest for the Agent’s own account for each day from and including the
date of the Agent’s payment, to and including the date of repayment to the Agent
(before and after judgment). Interest (a) if paid by such Lender (i) for each
day from and including the date of the Agent’s payment to and including the
second Business Day thereafter, shall accrue at the Federal Funds Rate for such
day, and (ii) for each day thereafter, shall accrue at the rate or rates per
annum payable under the Notes; and (b) if paid by the Borrowers, shall accrue at
the rate or rates per annum payable under the Notes. All payments to the Agent
under this Section shall be made to the Agent at its office set forth in the
preamble of this Agreement (or as otherwise directed by the Agent), in dollars,
in immediately available funds, without set-off, withholding, counterclaim or
other deduction of any nature.

 

(c) All borrowings under this Agreement shall be incurred from the Lenders pro
rata on the basis of their respective Percentages (except to the extent advanced
(i) as a Swing Line Loan, or (ii) by the Agent on behalf of any Lender as
provided in subsection (a) or (b) above). It is understood that no Lender shall
be responsible for any other Lender’s failure to meet its obligation to make
advances hereunder, and that each Lender shall be obligated to make advances
required to be made by it hereunder regardless of the failure of any other
Lender to make its advances hereunder.

 

(d) Each payment and prepayment received by the Agent for the account of the
Lenders shall be distributed first to the Swing Line Lender for application to
any Swing Line Outstanding Amounts, and then to each Lender entitled to share in
such payment, ratably in accordance with each Lender’s Percentage.
Notwithstanding the provisions of Section 9.2(e) of this Agreement, any Lender
who has failed to fund its Percentage of any advance under the Loan shall not be
entitled to share in any such payment(s) until such time as the funding
deficiency caused thereby, together with interest thereon (as provided in
subsection (b) above), has been

 

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paid to the Agent in accordance with the terms and conditions of this Agreement.
Payments from the Agent to the Lenders shall be made by wire transfer in
accordance with written instructions provided to the Agent by the Lenders from
time to time. Unless the Agent shall have received notice from the Borrowers
prior to the date on which any payment is due to the Lenders hereunder that the
Borrowers will not make such payment in full, the Agent may assume that the
Borrowers have made such payment in full on such date and the Agent, in reliance
upon such assumption, may cause to be distributed to each Lender on such due
date an amount equal to the amount then due such Lender. If and to the extent
the Borrowers shall not have made such payment in full to the Agent, each Lender
shall repay to the Agent upon its demand therefor such amount distributed to
such Lender, together with interest thereon at the overnight Federal Funds Rate
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent.

 

(e) If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) in excess of such
Lender’s Percentage of payments, such Lender shall forthwith purchase from the
other Lender(s) such participations in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of the other Lender(s); provided, however, if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such
purchase from the other Lender(s) shall be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such Lender’s ratable share
(according to the proportion of (1) the amount of such Lender’s required
repayment, to (2) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount recovered. Each Borrower agrees that any Lender purchasing a
participation from another Lender pursuant to this Section 10.13(e), to the
fullest extent permitted by law, may exercise all of its rights of payment with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.

 

10.14. Benefit of Article. The provisions of this Article 10 are solely for the
benefit of the Agent and Lenders. No Borrower shall have any rights under any of
the provisions of this Article 10; it being understood that the provisions of
this Article 10 are not in limitation of any right, power, duty, obligation or
liability which the Agent would have to or against any Borrower.

 

ARTICLE 11

CERTAIN ADDITIONAL RIGHTS AND

OBLIGATIONS REGARDING THE COLLATERAL

 

11.1. Power of Attorney. Each Borrower hereby reaffirms its irrevocable
appointment of the Agent, as its agent and attorney-in-fact, with power of
substitution, having full power and authority, in its own name, in the name of
any Lender(s), in the name of any Borrower or otherwise (but at the cost and
expense of the Borrowers and without notice to any Borrower), but only after the
occurrence of an Event of Default which remains uncured beyond any applicable
notice and grace period, to (i) notify account debtors obligated on any of the
Receivables to make payments thereon directly to the lockbox referenced in
Section 11.2 of this Agreement, and to take control of the cash and non-cash
proceeds of any such Receivables;

 

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(ii) compromise, extend or renew any of the Collateral constituting Receivables
or deal with any of the Collateral as the Agent may deem advisable; (iii)
release its interest in, make exchanges or substitutions for and/or surrender,
all or any part of any Borrower’s interest in all or any part of the Collateral;
(iv) remove from any Borrower’s place(s) of business all books, records, ledger
sheets, correspondence, invoices and documents relating to or evidencing any of
the Collateral, or without cost or expense to the Agent, make such use of any
Borrower’s place(s) of business as may be reasonably necessary to administer,
control and/or collect the Collateral; (v) repair, alter or supply goods, if
any, necessary to fulfill in whole or in part the purchase order of any Account
Debtor; (vi) demand, collect receipt for and give renewals, extensions,
discharges and releases of all or any part of the Collateral; (vii) institute
and prosecute legal and equitable proceedings to enforce collection of, or
realize upon, all or any part of the Collateral; (viii) settle, renew, extend,
compromise, compound, exchange or adjust claims with respect to all or any part
of the Collateral or any legal proceedings brought with respect thereto; and
(ix) receive and open all mail addressed to any Borrower, and notify the Post
Office authorities to change the address for the delivery of mail to any
Borrower to such address as the Agent may designate; it being understood that
the rights granted to the Agent in this clause (ix), shall not in any way limit
or impair the other rights provided to the Agent and/or Lenders in this
Agreement or any other Loan Document, including, without limitation, their
rights with respect to the Collateral Accounts and the below-referenced lockbox.
Furthermore, each Borrower hereby reaffirms its irrevocable appointment of the
Agent, as its agent and attorney-in-fact, with power of substitution, having
full power and authority, in its own name, in the name of any Lender(s), in the
name of any Borrower or otherwise (but at the cost and expense of the Borrowers
and without notice to any Borrower) and regardless of whether an Event of
Default has occurred or any act, event or condition which with notice or the
lapse of time, or both, would constitute an Event of Default has occurred, to
(a) file financing statements and continuation statements covering the
Collateral and execute the same on behalf of any Borrower; (b) charge against
any banking account of any Borrower any item of payment credited to any
Borrower’s account which is dishonored by the drawee or maker thereof; and/or
(iii) endorse the name of any Borrower upon any items of payment relating to the
Collateral or upon any proof of claim in bankruptcy against any Account Debtor.

 

11.2. Lockbox. Each Borrower hereby authorizes the Agent to receive and collect
any amount or amounts due or to become due on account of any Receivables and, at
its discretion, to apply the same to the repayment of the Notes, and each
Borrower agrees that, as of the date hereof, it has established and shall
continually maintain on terms and conditions satisfactory to the Agent in all
respects, one or more lockboxes (and, if required by the Agent, one or more
blocked accounts) for the collection of Receivables. Except as otherwise may be
approved by the Agent in writing, any checks or other remittances received by
any Borrower in payment of the Receivables shall be held in trust by each
Borrower for the Agent and Lenders. Each Borrower shall, within thirty (30) days
from the date hereof (or within such longer period as may be reasonably required
by any Borrower), direct all of its customers (other than certain customers as
may be approved by the Agent) to make payments directly to the Agent, and/or
include on all of its invoices, a direction to its customer to make all payments
directly to the Agent, at:

 

                    

 

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11.3. Other Agreements. Except as may otherwise be expressly permitted by the
terms of this Agreement, and without limiting any other restrictions or
provisions of this Agreement, each Borrower will (i) on demand, subject to any
requirements imposed by any Government agency, make available in form reasonably
acceptable to the Agent, shipping documents and delivery receipts evidencing the
shipment of goods which gave rise to the sale or lease of inventory or of an
account, contract right or chattel paper, completion certificates or other proof
of the satisfactory performance of services which gave rise to the sale or lease
of inventory or of an account, contract right or chattel paper, and each
Borrower’s copy of any written contract or order from which a sale or lease of
inventory, an account, contract right or chattel paper arose; and (ii) when
requested, advise the Agent when an Account Debtor returns or refuses to retain
any goods, the sale or lease of which gave rise to an account, contract right or
chattel paper, and of any delay in delivery or performance, or claims made in
regard to any sale or lease of inventory, account, contract right or chattel
paper. Upon reasonable notice, all such records will be available for
examination by authorized agents of the Agent.

 

It is expressly understood and agreed, however, that the Agent shall not be
required or obligated in any manner to make any inquiries as to the nature or
sufficiency of any payment received by it or to present or file any claims or
take any other action to collect or enforce a payment of any amounts which may
have been assigned to it or to which it or the Lenders may be entitled hereunder
at any time or times.

 

ARTICLE 12

MISCELLANEOUS

 

12.1. Remedies Cumulative. Each right, power and remedy of the Agent or Lenders
provided for in this Agreement or in any other Loan Document or now or hereafter
existing at law or in equity, by statute or otherwise, shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or in any other Loan Document, or now or
hereafter existing at law or in equity, by statute or otherwise, and the
exercise or beginning of the exercise by the Agent of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Agent of any or all such other rights, powers or remedies.

 

12.2. Waiver. Time is of the essence of this Agreement. No failure or delay by
the Agent to insist upon the strict performance of any term, condition, covenant
or agreement set forth in this Agreement or any other Loan Document, or to
exercise any right, power or remedy consequent upon a breach thereof, shall
constitute a waiver of such term, condition, covenant or agreement or of any
such breach, or preclude the Agent from exercising any such right, power or
remedy at any later time or times. By accepting payment after the due date of
any of the Obligations, neither the Lenders nor the Agent shall be deemed to
have waived either the right to require prompt payment when due of all other
Obligations, or the right to declare a default for failure to make payment of
any such other Obligations.

 

12.3. Notices. Notices to any party shall be in writing and shall be delivered
personally, by certified mail return receipt requested, by nationally-recognized
overnight

 

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delivery service or by facsimile addressed to the parties at the addresses set
forth below or otherwise designated in writing:

 

If to the Borrowers:    Opinion Research Corporation      600 College Road East,
4th Floor      Princeton, NJ 08540      Attention:    Mr. Kevin Croke      Fax:
   (609) 419-1901 with a copy to    Wolf, Block, Schorr and Solis-Cohen LLP     
1650 Arch Street, 22nd Floor      Philadelphia, PA 19103      Attention:   
David Gitlin, Esq.      Fax:    (215) 977-2334 If to the Lenders:    Citizens
Bank of Pennsylvania      8521 Leesburg Pike      Suite 405      Vienna,
Virginia 22182      Attention:    Ms. Criss M. Kennedy      Fax:    (703)
610-6070      and           First Horizon Bank      1650 Tysons Blvd., Suite
1150      McLean, Virginia 22102      Attention:    Mr. Gill Waller      Fax:   
(703) 734-1834 If to the Agent:    Citizens Bank      8521 Leesburg Pike     
Suite 405      Vienna, Virginia 22182      Attention:    Ms. Criss M. Kennedy  
   Fax:    (703) 610-6070

with a copy of all

notices to any Lender

or the Agent to:

   Dickstein Shapiro Morin & Oshinsky LLP      2101 L Street, N.W.     
Washington, D.C. 20037      Attention:    Howard S. Jatlow, Esq.      Fax:   
(202) 887-0689

 

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Any communication hereunder will be deemed given and effective (i) when actually
received, in the case of hand delivery (ii) the next Business Day in the case of
an overnight delivery service, (iii) three (3) Business Days after mailing in
the case of certified mail return receipt requested, or (iv) when completely
sent and received, as evidenced by a transmission report from sender’s facsimile
machine, in the case of facsimile transmission.

 

12.4. Entire Agreement. This Agreement and the other Loan Documents constitute
the entire agreement of the parties with respect to the Loan and shall continue
in full force and effect for so long as any Borrower shall be indebted hereunder
or under any Note, and thereafter until the Agent shall have actually received
written notice of the termination hereof from the Borrowers, all Letters of
Credit shall have been cancelled or expired and all Obligations incurred or
contracted before receipt of such notice shall have been fully paid.

 

12.5. Relationship of the Parties. This Agreement provides for the extension of
financial accommodations by each Lender, in its capacity as lender, to the
Borrowers, in their capacity as borrowers, and for the payment of interest and
repayment of the Obligations by the Borrowers. Certain provisions herein, such
as those relating to compliance with the financial covenants, delivery to the
Agent and Lenders of financial statements, and compliance with other affirmative
and negative covenants are for the benefit of the Agent and Lenders to protect
the Lenders’ interests in assuring repayment of the Obligations. Nothing
contained in this Agreement shall be construed as permitting or obligating the
Lenders or Agent to act as a financial or business advisor or consultant to any
Borrower, as permitting or obligating the Lenders or Agent to control any
Borrower or to conduct any Borrower’s operations, as creating any fiduciary
obligation on the part of any Lender or the Agent to any Borrower, or as
creating any joint venture, agency or other relationship between the parties
other than as explicitly and specifically stated in this Agreement. Each
Borrower acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and
execution of this Agreement and to obtain the advice of such counsel with
respect to all matters contained herein, including, without limitation, the
provision in this Agreement for waiver of trial by jury. Each Borrower further
acknowledges that it is experienced with respect to financial and credit matters
and has made its own independent decision to request the Obligations and execute
and deliver this Agreement.

 

12.6. Waiver of Jury Trial. Each Borrower hereby (a) covenants and agrees not to
elect a trial by jury of any issue triable by a jury, and (b) waives any right
to trial by jury fully to the extent that any such right shall now or hereafter
exist. This waiver of right to trial by jury is separately given by each
Borrower, knowingly and voluntarily, and this waiver is intended to encompass
individually each instance and each issue as to which the right to a jury trial
would otherwise accrue. The Agent is hereby authorized and requested to submit
this Agreement to any court having jurisdiction over the subject matter and the
parties hereto, so as to serve as conclusive evidence of each Borrower’s herein
contained waiver of the right to jury trial. Further, each Borrower hereby
certifies that no representative or agent of the Agent or any Lender (including
the Agent’s counsel) has represented, expressly or otherwise, to the undersigned
that the Agent or Lenders will not seek to enforce this provision waiving the
right to a trial by jury.

 

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12.7. Submission to Jurisdiction; Service of Process; Venue. Any judicial
proceeding brought against any Borrower with respect to this Agreement or any
other Loan Document may be brought in any court of competent jurisdiction in the
State of Maryland, and by execution and delivery of this Agreement, each
Borrower accepts for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid court, and
irrevocably agrees to be bound by any judgment rendered by such court in
connection with this Agreement. Each Borrower irrevocably designates and
appoints Macro International Inc., attention: Frank Quirk, whose address is
11785 Beltsville Drive, Calverton, MD 20705, as its agent to receive on its
behalf service of all process in any such proceeding in any court in the State
of Maryland, such service being hereby acknowledged by each Borrower to be
effective and binding on it in every respect. A copy of any such process so
served shall be mailed by registered or certified mail to the Borrower at the
address to which notices are to be addressed in accordance with this Agreement,
except that any failure to mail such copy shall not affect the validity of
service of process. Each Borrower shall at all times maintain an agent for
service of process pursuant to this provision. If any Borrower fails to appoint
such an agent, or if such agent refuses to accept service, such Borrower hereby
agrees that service upon it by mail shall constitute sufficient notice. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of the Agent or Lenders to bring proceedings
against any Borrower in the courts of any other jurisdiction.

 

12.8. Changes in Capital Requirements. If, after the date hereof, any change in,
or the introduction, adoption, effectiveness, interpretation, reinterpretation
or phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by the Agent or any Lender, or person
controlling the Agent or any Lender, and the Agent determines (in its sole but
reasonable discretion) that the rate of return on its, any Lender’s or such
controlling person’s capital as a consequence of its commitments or the loans
made by the Agent or such Lender is reduced to a level below that which the
Agent, such Lender or such controlling person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Agent to the Borrowers, the Borrowers shall, within thirty
(30) days of receipt of such notice, pay directly to the Agent, for its own
account or for the account of such Lender (as the case may be), additional
amounts sufficient to compensate the Agent, such Lender or such controlling
person for such reduction in rate of return. A statement of the Agent as to any
such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrowers. In determining such amount, the Agent may use any method of
averaging and attribution that it (in its sole but reasonable discretion) shall
deem applicable.

 

12.9. Captions. The paragraph headings of this Agreement are for convenience of
reference only, and in no way define, limit or describe the scope of this
Agreement or the intent of any provision hereof.

 

12.10. Modification and Waiver. Neither this Agreement nor any term, condition,
covenant or agreement hereof may be changed, waived, discharged or terminated
orally, but that may be accomplished only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.

 

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12.11. Transferability.

 

(a) No Borrower shall assign any of its rights, interests or Obligations under
this Agreement.

 

(b) No Lender shall assign its interests under this Agreement to any person or
entity, without the prior written consent of the Agent, and, so long as no Event
of Default has occurred, the Parent Company; provided, however, that the Parent
Company’s consent shall not be required for any sale, transfer or assignment
resulting from an institutional merger or acquisition of or by a Lender. Subject
to obtaining such consent, any Lender may assign its interest, in the ordinary
course of its commercial banking business, at any time, provided that (a) the
purchaser of any such interest is a commercial bank (a “Participating Lender”)
or Eligible Assignee, in either case whose total assets exceed Five Hundred
Million and No/100 Dollars ($500,000,000.00); (b) at least thirty (30) days’
prior written notice of such sale or assignment, which notice must identify the
Participating Lender and/or Eligible Assignee, shall have been issued by such
transferring Lender to the Agent and the Borrowers; (c) the dollar equivalent of
the Percentage of the transferring Lender being assigned equals or exceeds Five
Million and No/100 Dollars ($5,000,000.00); (d) the Agent shall have received a
duly executed Assignment and Acceptance Agreement, in the form attached as
Exhibit 8 hereto; and (e) if the proposed assignee of the transferring Lender is
not an affiliate of the transferring Lender, an assignment fee in the amount of
Three Thousand Five Hundred and No/100 Dollars $3,500.00 shall have been paid to
the Agent to reimburse the Agent for costs and expenses incurred in connection
with the assignment. There shall be no restriction on any Lender selling
participations in such Lender’s interests in the Loan.

 

12.12. Governing Law; Binding Effect. This Agreement shall be governed by the
laws of the State of Maryland and be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

 

12.13. Gender; Number. As used herein, the singular number shall include the
plural, the plural the singular and the use of the masculine, feminine or neuter
gender shall include all genders, as the context may require.

 

12.14. Joint and Several Liability. Each Borrower shall be jointly and severally
liable for the payment and performance of all obligations and liabilities
hereunder.

 

12.15. Materiality. Unless the context clearly indicates to the contrary,
determinations regarding the materiality of any act, event, condition or
circumstance shall be in the reasonable judgment of the Agent.

 

12.16. Reliance on the Agent. Each Borrower shall be entitled to assume that any
and all consents, approvals or notices issued or granted by the Agent pursuant
to the terms and provisions of this Agreement were, to the extent necessary,
authorized by the Required Lenders or all of the Lenders, as applicable.

 

12.17. Taxes. All payments by the Borrowers of principal of and interest on the
Loans, and all other amounts payable hereunder, shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by the Agent’s and/or any

 

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Lender’s net income or receipts (such non-excluded items being called “Taxes”).
In the event that any withholding or deduction from any payment to be made by
the Borrowers hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrowers will:

 

(a) pay directly to the relevant authority the full amount required to be so
withheld or deducted;

 

(b) promptly forward to the Agent an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authority; and

 

(c) pay to the Agent, for its own account or for the account of such Lender (as
the case may be), such additional amount or amounts as is necessary to ensure
that the net amount actually received by the Agent, for its own account or for
the account of such Lender (as the case may be), will equal the full amount the
Agent or such Lender (as applicable) would have received had no such withholding
or deduction been required.

 

Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or any Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrowers will promptly pay such
additional amount (including any penalties, interest or expenses) as is
necessary in order that the net amount received by the Agent or such Lender (as
the case may be) after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount the Agent or such Lender (as the case
may be) would have received had not such Taxes been asserted.

 

If the Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fail to remit to the Agent the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Agent and the Lenders
for any incremental Taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure.

 

12.18. The Patriot Act. Each Lender and the Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the Patriot Act, it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of the
Borrowers and other information that will allow such Lender or the Agent, as
applicable, to identify the Borrowers in accordance with the Patriot Act.

 

12.19. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same document.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, this Agreement has been signed, sealed and delivered as of
the date and year first above written.

 

BORROWERS:

OPINION RESEARCH CORPORATION, a Delaware corporation

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  EVP – Corporate Finance

ORC INC., a Delaware corporation

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  President MACRO INTERNATIONAL INC., a Delaware corporation

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  Asst. Secretary

ORC PROTEL, INC., a Delaware corporation

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  Secretary

 

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

SOCIAL AND HEALTH SERVICES, LTD., a Maryland corporation

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  Secretary

ORC HOLDINGS, LTD., an English company

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  Authorized Signatory O.R.C. INTERNATIONAL LTD, an English company

By:

  /s/    KEVIN P. CROKE        

Name:

  Kevin P. Croke

Title:

  Authorized Signatory

 

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

LENDER(S): CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank

By:

  /s/    CRISS M. KENNEDY        

Name:

  Criss M. Kennedy

Title:

  VP FIRST HORIZON BANK, a division of First Tennessee Bank National Association

By:

  /s/    GILL WALLER        

Name:

  Gill Waller

Title:

  SVP AGENT: CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered bank

By:

  /s/    CRISS M. KENNEDY        

Name:

  Criss M. Kennedy

Title:

  VP