Exhibit 10.1

LOAN AND SECURITY AGREEMENT

dated as of March 14, 2006

among

NCI, INC.

And Its Subsidiaries,

as Borrowers

THE LENDERS FROM TIME TO TIME PARTY HERETO,

SUNTRUST BANK,

as Administrative Agent,

and

SUNTRUST ROBINSON HUMPHREY,

a division of SUNTRUST CAPITAL MARKETS, INC.,

as Lead Arranger and Book Manager

 

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TABLE OF CONTENTS

 

SECTION 1.   Definitions    1 SECTION 2.   Loans.    23

2.1

  Loans and Letters of Credit    23

2.2

  Revolving Loans    24

2.3

  Procedure for Revolving Loan Borrowings    24

2.4

  Swingline Commitment    24

2.5

  Procedure for Swingline Borrowing.    25

2.6

  Letters of Credit.    26

2.7

  Additional Revolving Loans.    31

2.8

  Funding of Borrowings.    33

2.9

  Interest Elections.    33

2.10

  Repayment of Loans.    34

2.11

  Interest on Loans    35

2.12

  Fees.    36

2.13

  Computation of Interest and Fees    37

2.14

  Evidence of Indebtedness.    37

2.15

  Inability to Determine Interest Rates    37

2.16

  Illegality    38

2.17

  Increased Costs.    39

2.18

  Funding Indemnity    40

2.19

  Taxes.    40

2.20

  Optional Reduction and Termination of Commitments.    42

2.21

  Optional Prepayments    42

2.22

  Mandatory Prepayments and Commitment Reductions.    43

2.23

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs.    44

2.24

  Mitigation of Obligations; Replacement of Lenders.    46 SECTION 3.  
Security.    47

3.1

  Security Interest    47

3.2

  Representations and Warranties Concerning the Collateral.    48

3.3

  Covenants Concerning the Collateral.    49

3.4

  Perfection of Security Interest.    51

3.5

  Power of Attorney    54

3.6

  Limitations on Obligations    54 SECTION 4.   Representations and Warranties
   55

4.1

  Incorporation, Good Standing and Due Qualification    55

4.2

  Power and Authority    55

4.3

  Legally Enforceable Agreement    55

4.4

  Financial Statements    56

4.5

  Litigation; Environmental Matters.    56

4.6

  Ownership and Liens    56

4.7

  ERISA    56

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4.8

  Taxes    56

4.9

  Use of Proceeds and Letters of Credit    57

4.10

  Debt    57

4.11

  Debarment and Suspension    57

4.12

  Material Contracts    57

4.13

  Intellectual Property    57

4.14

  True and Complete Information    57

4.15

  Integrated Business    58

4.16

  Employee Relations    58

4.17

  Burdensome Provisions    58

4.18

  Absence of Defaults    58

4.19

  Disclosure    58

4.20

  Survival of Representations and Warranties, Etc    59 SECTION 5.   Affirmative
Covenants    59

5.1

  Maintenance of Existence    59

5.2

  Maintenance of Records    59

5.3

  Maintenance of Properties    59

5.4

  Conduct of Business    59

5.5

  Maintenance of Insurance    59

5.6

  Compliance with Laws    60

5.7

  Right of Inspection    60

5.8

  Reporting Requirements    60

5.9

  Primary Operating Account    63

5.10

  Additional Collateral, etc.    63

5.11

  Further Assurances    64 SECTION 6.   Negative Covenants    65

6.1

  Liens    65

6.2

  Debt    65

6.3

  Mergers, etc    66

6.4

  Leases    66

6.5

  Sale and Leaseback; Synthetic Leases    66

6.6

  Restricted Payments    66

6.7

  Sale of Assets    66

6.8

  Investments, Loans, Etc    66

6.9

  Guaranties, etc    67

6.10

  Acquisitions    67

6.11

  Transactions with Affiliates    67

6.12

  Fiscal Year; Accounting Policies; Organizational Documents; Material Contracts
   67

6.13

  Limitation on Restricted Actions    68

6.14

  Amendment of Subordinated Indebtedness    68 SECTION 7.   Financial Covenants
   68

7.1

  Net Worth    68

 

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7.2

  Senior Funded Debt Ratio    68

7.3

  Fixed Charge Coverage Ratio    68

7.4

  Capital Expenditures    69 SECTION 8.   Conditions of Lending    69

8.1

  Conditions Precedent to Closing    69

8.2

  Conditions Precedent to Each Disbursement    70

8.3

  Conditions to Subsidiaries Becoming Borrowers    71 SECTION 9.   Default.   
72

9.1

  Events of Default    72

9.2

  Remedies upon Default    74 SECTION 10.   The Administrative Agent.    77

10.1

  Appointment of Administrative Agent.    77

10.2

  Nature of Duties of Administrative Agent    78

10.3

  Lack of Reliance on the Administrative Agent    79

10.4

  Certain Rights of the Administrative Agent    79

10.5

  Reliance by Administrative Agent    79

10.6

  The Administrative Agent in its Individual Capacity    79

10.7

  Successor Administrative Agent.    80

10.8

  Authorization to Execute other Loan Documents; Collateral.    80

10.9

  Benefits of Article 10    81 SECTION 11.   Miscellaneous.    81

11.1

  Notices.    81

11.2

  Waiver; Amendments.    83

11.3

  Expenses; Indemnification.    84

11.4

  Successors and Assigns.    86

11.5

  Governing Law; Jurisdiction; Consent to Service of Process.    88

11.6

  WAIVER OF JURY TRIAL    89

11.7

  Right of Setoff    90

11.8

  Counterparts; Integration    90

11.9

  Survival    90

11.10

  Severability    90

11.11

  Confidentiality    91

11.12

  Interest Rate Limitation    91

11.13

  Captions    91

11.14

  Use of Defined Terms    92

11.15

  Accounting Terms    92

11.16

  Patriot Act    92

 

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of the 14th day of March, 2006, is
made by and among NCI, INC., a Delaware corporation (the “Company”), NCI
INFORMATION SYSTEMS, INCORPORATED, a Virginia corporation (“NCI Virginia”), and
SCIENTIFIC AND ENGINEERING SOLUTIONS, INC., a Maryland corporation (“SES”), and
each other Subsidiary (as defined below) that becomes a party to this Agreement
from time to time in accordance with the provisions set forth below (together
with the Company and SES, collectively, the “Borrowers,” and individually, a
“Borrower”), the several banks and other financial institutions from time to
time party hereto (the “Lenders”), SUNTRUST ROBINSON HUMPHREY, a division of
SUNTRUST CAPITAL MARKETS, INC., in its capacity as Lead Arranger and Book
Manager (in such capacity, the “Arranger”), and SUNTRUST BANK, in its capacity
as Administrative Agent for the Lenders (in such capacity, the “Administrative
Agent”).

RECITALS

The Borrowers have requested that the Lenders (a) establish a $60,000,000
revolving credit facility for; (b) establish a $5,000,000 swingline facility
for; and (c) issue letters of credit for the account of, the Borrowers.

The Lenders severally, to the extent of their respective Commitments, as defined
herein, have agreed to provide severally such financing to the Borrowers,
subject to the terms and conditions of this Agreement.

Accordingly, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the Lenders, the Administrative Agent and the Borrowers
agree as follows:

SECTION 1. Definitions. As used in this Agreement, the following terms shall
have the meanings assigned to them below, which meanings shall be equally
applicable to the singular and plural forms of the terms defined.

“AAA Distribution” means any distribution made by either NCI Virginia or the
Company out of NCI Virginia’s accumulated adjustments account with respect to
the cumulative total of undistributed Net Income items generated by NCI Virginia
during the period of the effectiveness of its election to be treated as an S
corporation under the Internal Revenue Code.

“Administrative Agent” shall have the meaning assigned to such term in the
preamble to this Agreement.

“Affiliate” means, with respect to any specified Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person. The term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of common stock, by contract or otherwise.

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“Aggregate Exposure” means, with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender’s
Commitments at such time and (b) thereafter, the amount of such Lender’s
Revolving Commitment then in effect or, if the Revolving Commitments have been
terminated, the amount of such Lender’s Revolving Credit Exposure then
outstanding.

“Aggregate Exposure Percentage” means, with respect to any Lender at any time,
the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at
such time to the Aggregate Exposure of all Lenders at such time.

“Aggregate Revolving Commitment Amount” shall mean the aggregate principal
amount of the Aggregate Revolving Commitments from time to time. On the Closing
Date, the Aggregate Revolving Commitment Amount equals $60,000,000.

“Aggregate Revolving Commitments” shall mean, collectively, all Revolving
Commitments of all Revolving Credit Lenders at any time outstanding.

“Agreement” means this Loan and Security Agreement, as the same may be amended,
modified or supplemented from time to time.

“Applicable Lending Office” shall mean, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender)
designated on the signature page hereto, or such other office of such Lender (or
Affiliate of such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Borrowers as the office by which its Loans are to
be made and maintained.

“Applicable Margin” shall mean the applicable percentage corresponding to the
Senior Funded Debt Ratio set forth below, as calculated by the Administrative
Agent. The Applicable Margin on the Closing Date for (a) Revolving Loans that
are LIBOR Loans or Index Rate Loans, and Swingline Loans that are Index Rate
Loans shall be 1.00%, and (b) Revolving Loans and Swingline Loans that are Base
Rate Loans shall be 0.00%. The Applicable Margin will be adjusted on a quarterly
basis in accordance with the table set forth below:

 

Senior Funded Debt Ratio

  

Applicable Margin for Revolving

LIBOR Loans and Index Rate Loans

and for Swingline Index Rate Loans

  Applicable Margin for
Revolving and Swingline
Base Rate Loans Less than 2.00 to 1.    1.00%   0.00% Equal to or greater than
2.00 to 1, and less than to 2.50 to 1.    1.25%   0.25% Equal to or greater than
2.50 to 1, and less than to 3.00 to 1.    1.50%   0.50% Equal to or greater than
3.00 to 1    1.75%   0.75%

 

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The Applicable Margin will be adjusted to the percentage corresponding to the
applicable Senior Funded Debt Ratio in effect as of the last day of each fiscal
quarter of the Company. The adjustment will become effective as of the first day
of the calendar month next succeeding delivery to the Administrative Agent of
the Company’s financial statements for the last month of each fiscal quarter
pursuant to Section 5.8. No decrease in the Applicable Margin shall become
effective if, at such time, any Default or Event of Default has occurred and is
continuing until such time as such Default or Event of Default is cured or
waived in accordance with the terms of this Agreement and no other Defaults or
Events of Default have occurred and are continuing. If the Company’s financial
statements are not delivered to the Administrative Agent within the specified
time periods, the Applicable Margin may be increased, at the option of the
Administrative Agent, or upon written notice from the Required Lenders to the
Administrative Agent and the Company, to the highest applicable percentage
above, to be effective from the date on which the statements were due through
the date which is three Business Days after the date on which such financial
statements are delivered to the Administrative Agent, whereupon the Applicable
Margin shall again be adjusted to the applicable percentage corresponding to the
Senior Funded Debt Ratio in effect as of the last day of such fiscal quarter of
the Company, with such adjustment becoming effective on such third Business Day.

“Asset Sale” means any Disposition of assets or series of related Dispositions
of assets which yields Net Cash Proceeds to the Company or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.

“Assignment of Claims Act” means, collectively, the Assignment of Claims Act of
1940, as amended, 31 U.S.C. § 3727, 41 U.S.C. § 15, any applicable rules,
regulations and interpretations issued pursuant thereto, and any amendments to
any of the foregoing.

“Assumption Agreement” means an assumption agreement, in form and substance
acceptable to the Administrative Agent, executed by a Subsidiary that becomes a
party to this Agreement in accordance with the provisions of Section 8.3 below,
pursuant to which such Subsidiary agrees to be bound by all of the terms and
conditions of the Loan Documents as though it were an original signatory
thereto.

“Base Rate” shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (ii) the Federal Funds Rate,
as in effect from time to time, plus one-half of one percent (0.50%). The
Administrative Agent’s prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent’s prime lending rate. Each
change in the Administrative Agent’s prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.

 

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“Base Rate Loan” means any Loan or portion thereof with respect to which the
interest rate is calculated by reference to the Base Rate.

“Borrower” and “Borrowers” shall have the meanings assigned to such terms in the
preamble to this Agreement.

“Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and
Type, made, converted or continued on the same date and in the case of LIBOR
Loans, as to which a single Interest Period is in effect, or (ii) a Swingline
Loan.

“Borrowing Availability” means, at any time, the amount by which the Aggregate
Revolving Commitment Amount exceeds the sum of the outstanding the Revolving
Loans, Swingline Loans and LC Exposure.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the laws of the
State, and, with respect to the determination of LIBOR and the Index Rate, or if
such day relates to a Borrowing of, a payment or prepayment of principal or
interest on, a conversion of or into, or an Interest Period for, a LIBOR Loan or
a notice with respect to any of the foregoing, any day on which dealings in
Dollars are carried on in the London interbank market.

“Capital Expenditures” means, for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) which
should be capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries.

“Capital Lease” means any lease that has been or should be capitalized on the
books of the lessee in accordance with GAAP.

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1
by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of

 

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acquisition; (d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term of
not more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

“Cash Flow Available for Fixed Charges” means, means, for any period, EBITDA for
such period, plus Permitted Acquisition EBITDA for such period, minus income
taxes paid in cash during such period, minus Non-Financed Capital Expenditures
for such period, plus non-cash stock compensation expense for such period,
except to the extent that such charges are reserves for future cash charges, all
as determined on a consolidated basis for the Company and its Subsidiaries in
accordance with GAAP.

“Cash Management Swingline Loans” shall have the meaning assigned to such term
in Section 2.5(a).

“Change in Control” shall mean the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Company to any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder in effect on the date hereof), (b) the ownership, directly or
indirectly, beneficially or of record (in a single transaction or a series of
transactions) by any Person or “group” (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), other than Charles K. Narang, of
shares of stock representing the right to vote 20% or more of the total votes on
all matters submitted to a vote of the stockholders of the Company; or
(c) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
current board of directors or (ii) appointed by directors so nominated.

“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any governmental authority after the date of this Agreement, or
(iii) compliance by any Lender (or its Applicable Lending Office) or the Issuing
Bank (or for purposes of Section 2.17(b), by such Lender’s or the Issuing Bank’s
holding company, if applicable) with any request, guideline or directive
(whether or not having the force of law) of any governmental authority made or
issued after the date of this Agreement.

 

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“Class,” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Swingline Commitment.

“Closing” means the initial disbursement of the Loans.

“Closing Date” means the date of the Closing.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and all regulations issued pursuant thereto.

“Collateral” means the following properties, assets and rights (if any) of each
Borrower, wherever located, whether now owned or hereafter acquired or arising,
and all proceeds and products thereof: all personal and fixture property of
every kind and nature including without limitation all goods (including
inventory, equipment and all accessions thereto), instruments (including
promissory notes), documents, accounts (including health-care-insurance
receivables), chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims, securities and all other investment property,
supporting obligations, any other contract rights or rights to the payment of
money, insurance claims and proceeds, tort claims, and all general intangibles
(including all payment intangibles and Intellectual Property).

“Commitment” shall mean a Revolving Commitment or a Swingline Commitment, or any
combination thereof (as the context shall permit or require).

“Commitment Termination Date” shall mean the earliest of (i) five years after
the date of this Agreement, (ii) the date on which the Revolving Commitments are
terminated pursuant to Section 2.20 and (iii) the date on which all amounts
outstanding under this Agreement have been declared or have automatically become
due and payable (whether by acceleration or otherwise), and any extension or
extensions thereof granted by all of the Lenders.

“Company” shall have the meaning assigned to such term in the preamble to this
Agreement.

“Condo Unit” means the condominium unit owned by NCI Virginia and located at
11776 Stratford House Place, #407, Reston, Virginia, 20190.

“Covenant Compliance Certificate” means a certificate executed by a Principal
Officer of the Company, containing a calculation of the financial covenants
contained in Section 7 below and certifying that no Default or Event of Default
has occurred, substantially in the form of Exhibit A attached hereto.

“Customer” means any Person obligated to make payments with respect to a
Receivable or any other Collateral.

 

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“Debt” means, collectively, and includes, without duplication, with respect to
any specified Person, (a) indebtedness or liability for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of assets to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such assets from such Person) or for the deferred
purchase price of property or services; (b) obligations as a lessee under a
Capital Lease or a Synthetic Lease; (c) obligations, contingent or otherwise, to
reimburse the issuer of letters of credit or acceptances; (d) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any other Person or otherwise to assure a
creditor against loss; (e) obligations under Hedging Agreements; (f) obligations
under any foreign exchange contract, currency swap or other similar agreements
or arrangements designed to protect that Person against fluctuations in currency
values; (g) all preferred stock or similar equity interests issued by such
Person which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments, redemption or
acceleration at any time during the term of this Agreement; (h) the amount of
contingent obligations of such Person incurred in connection with acquisitions
(including, without limitation, obligations to make earnout payments or other
contingent payments) required to be shown on a balance sheet in accordance with
GAAP, in each case as determined in accordance with GAAP, (i) obligations
secured by any Lien on property owned by the specified Person, whether or not
the obligations have been assumed, and (j) Off-Balance Sheet Liabilities. The
Debt of any Person shall include the Debt of any partnership or joint venture in
which such Person is a general partner or a joint venturer, except to the extent
that the terms of such Debt provide that such Person is not liable therefor.

“Default” means any condition or event that, with the giving of notice, the
lapse of time, or both, would constitute an Event of Default.

“Default Interest” shall have the meaning assigned to such term in
Section 2.11(d).

“Disposition” means with respect to any assets, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollars” and “$” means the lawful currency of the United States of America.

“Domestic Subsidiary” means any Subsidiary of the Company organized under the
laws of any jurisdiction within the United States of America.

“EBITDA” means, for any Person for any period, (a) consolidated Net Income of
such Person and its Subsidiaries for such period plus, (b) to the extent
deducted to determine such consolidated Net Income, the sum of (1) depreciation
expense, (2) Interest Expense, (3) amortization expense and (4) tax expense,
less (c) to the extent added to determine such consolidated Net Income,
extraordinary or unusual gains or other gains not incurred in the ordinary
course of business, unrealized gains on Hedging Agreements and revenues from
discontinued operations, plus, (d) to the extent deducted to determine such
consolidated Net

 

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Income, extraordinary or unusual losses or other losses not incurred in the
ordinary course of business, unrealized losses on Hedging Agreements and
expenses from discontinued operations.

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any governmental authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
human health and safety matters.

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

“Equity Issuance” means any issuance or sale by a Person of its Capital Stock or
other similar equity security, or any warrants, options or similar rights to
acquire, or securities convertible into or exchangeable for, such Capital Stock
or other similar equity security, for cash, excluding the issuance of Capital
Stock by any Subsidiary to another Subsidiary or to the Company, and excluding
(a) any Capital Stock used as payment for a Permitted Acquisition and (b) any
such securities or rights or options issued by the Company as incentive or bonus
compensation pursuant to incentive or bonus plans for directors, officers and
employees of the Company and its Subsidiaries approved by the Board of Directors
of the Company or upon the exercise of any such options or rights.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all regulations issued pursuant thereto.

“ERISA Affiliate” means with respect to a specified Person, an entity, whether
or not incorporated, which is under common control with the specified Person
within the meaning of §4001 of ERISA or is part of a group which includes the
specified Person and with which the specified Person is treated as a single
employer under §§414(b) or (c) of the Code.

“Event of Default” means any of the events specified as an “Event of Default”
under this Agreement, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.

“Excluded Foreign Subsidiary” means any Foreign Subsidiary in respect of which
either the pledge of all of the Capital Stock of such Subsidiary, or the
business assets of such Subsidiary, are not required by the Administrative Agent
or the Required Lenders as Collateral.

 

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“Excluded Taxes” shall mean with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of a Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Lender is located and (c) in the case of
a Foreign Lender, any withholding tax that (i) is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement, (ii) is imposed on amounts payable to such Foreign Lender at any time
that such Foreign Lender designates a new lending office, other than taxes that
have accrued prior to the designation of such lending office that are otherwise
not Excluded Taxes, or (iii) is attributable to such Foreign Lender’s failure or
inability to comply with Section 2.19(a).

“Existing Loan Agreement” means the Loan and Security Agreement, dated as of
December 23, 2003, as amended by the Amendment to Loan and Security Agreement,
dated as of May 6, 2004, but effective as of December 31, 2003, as amended by
the Second Amendment to Loan and Security Agreement, dated as of March 15, 2005,
but effective as of September 30, 2004, and as amended by the Consent and Third
Amendment to Loan and Security Agreement, dated as of July 25, 2005, by and
among the Borrowers, SunTrust Bank, in its respective capacities as lender,
administrative agent and arranger.

“Federal Funds Rate” shall mean, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the
Federal Funds Rate for such day shall be the average of the quotations for such
day on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent.

“Fixed Charge Coverage Ratio” means, for each period of four consecutive fiscal
quarters ending on the last day of each fiscal quarter of the Company, the ratio
of (a) Cash Flow Available for Fixed Charges for such period to (b) Fixed
Charges for such period. The foregoing shall be determined on a consolidated
basis for the Company and its Subsidiaries in accordance with GAAP.

“Fixed Charges” shall mean, for the Company and its Subsidiaries for any period,
the sum (without duplication) of (a) Interest Expense for such period,
(b) current maturities of long-term Debt, including Capital Leases, as of the
end of such period and payable over the next succeeding period of four fiscal
quarters, and (c) Restricted Payments made during such period, other than any
AAA Distributions made during such period.

“Foreign Lender” shall mean any Lender that is a Foreign Person.

“Foreign Person” shall mean any Person that is not a United States person under
Section 7701(a)(3) of the Code.

 

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“Foreign Subsidiary” means any Subsidiary of the Company that is not a Domestic
Subsidiary.

“Funded Debt” means, for any Person, the sum of the consolidated Debt of such
Person and its Subsidiaries, without duplication, for (a) borrowed money,
(b) the deferred purchase price of property or services, (c) obligations under
repurchase agreements, (d) Capital Lease obligations, (e) the aggregate implied
principal amount of Synthetic Lease obligations of such Person calculated in
accordance with applicable federal income tax laws and regulations, (f) the
amount of any outstanding Debt Guaranteed, (g) contingent or matured
reimbursement obligations for letters of credit issued for the account of such
Person or any Subsidiary of such Person, (h) all preferred stock or similar
equity interests issued by such Person which by the terms thereof could be (at
the request of the holders thereof or otherwise) subject to mandatory sinking
fund payments, redemption or acceleration at any time during the term of this
Agreement, (i) the maximum amount of contingent obligations of such Person
incurred in connection with acquisitions (including, without limitation,
obligations to make earnout payments) that are required to be reflected on a
balance sheet as liabilities in accordance with GAAP, and (j) any Debt incurred
in the context of a partnership or a joint venture in which such Person or any
Subsidiary of such Person is a general partner or a joint venturer except to the
extent that the terms of such Debt provide that such Person is not liable
therefor, in each case determined in accordance with GAAP.

“GAAP” means United States generally accepted accounting principles consistently
applied.

“Government” means the United States of America or any agency or instrumentality
thereof.

“Government Contract” means any contract with the Government under which a
Borrower is a prime contractor or a subcontractor.

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly and including
any obligation, direct or indirect, of the guarantor (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Debt or
other obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued in support of such Debt or obligation; provided, that the term
“Guarantee” shall not include endorsements for collection or deposits in the
ordinary course of business. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which Guarantee is made or, if not so stated or determinable, the
maximum reasonably

 

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anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith. The term
“Guarantee” used as a verb has a corresponding meaning.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature the use, storage or disposal of which is
regulated pursuant to any Environmental Law.

“Hedging Agreement” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts, commodity agreements and other similar agreements or
arrangements designed to protect against fluctuations in interest rates,
currency values or commodity values.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Index Rate” shall mean that rate per annum effective on any Index Rate
Determination Date which is equal to the quotient of:

(i) the rate per annum equal to the offered rate for deposits in U.S. dollars
for a one (1) month period, which rate appears on that page of Bloomberg
reporting service, or such similar service as determined by the Lender, that
displays British Bankers’ Association interest settlement rates for deposits in
U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days
prior to the Index Rate Determination Date; provided, that if no such offered
rate appears on such page, the rate used for such period will be the per annum
rate of interest determined by the Administrative Agent to be the rate at which
U.S. dollar deposits for such period, are offered to the Administrative Agent in
the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the day
which is two (2) Business Days prior to the Index Rate Determination Date,
divided by

(ii) a percentage equal to 1.00 minus the maximum reserve percentages (including
any emergency, supplemental, special or other marginal reserves) expressed as a
decimal in effect on any day to which the Administrative Agent is subject with
respect to any Index Rate Loan pursuant to regulations issued by the Board of
Governors of the Federal Reserve System with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities” under Regulation D). This
percentage will be adjusted automatically on and as of the effective date of any
change in any reserve percentage.

“Index Rate Determination Date” shall mean the Closing Date and the first
Business Day of each calendar month thereafter.

“Index Rate Borrowing” and “Index Rate Loan” when used in reference to any Loan
or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, bears interest at a rate determined by reference to the Index Rate.

 

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“Intellectual Property” means all copyrights (whether registered or
unregistered), copyright registrations, trademarks, servicemarks, patents,
patent applications and licenses to use any of the foregoing.

“Intellectual Property Assignment” means a Collateral Assignment, Patent
Mortgage and Security Agreement, in substantially the form of Exhibit B attached
hereto, as the same may be amended, modified or supplemented from time to time.

“Interest Expense” means, for Person for any period, the sum of the following,
determined on a consolidated basis for such Person and its Subsidiaries in
accordance with GAAP: (a) all interest in respect of Debt (including the
interest component of any payments in respect of Capital Leases and Synthetic
Leases) accrued or capitalized during such period, plus (b) the net amount
payable (or minus the net amount receivable) under any Hedging Agreement during
such period. For purposes hereof other than the determination of consolidated
EBITDA of the Company and its Subsidiaries, Interest Expense for the first three
fiscal quarters to occur after the consummation of a Permitted Acquisition shall
be determined by annualizing Interest Expense such that for the first fiscal
quarter to occur after such consummation, such Interest Expense would be
multiplied by four (4), the first two fiscal quarters would be multiplied by two
(2) and the first three fiscal quarters would be multiplied by one and one-third
(1 1/3).

“Interest Period” shall mean with respect to any LIBOR Borrowing, a period of
one, two, three or six months as selected by the Company in accordance with the
terms of this Agreement; provided, that:

(i) the initial Interest Period for such Borrowing shall commence on the date of
such Borrowing (including the date of any conversion from a Borrowing of another
Type) and each Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period expires;

(ii) if any Interest Period would otherwise end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless, in the case of a LIBOR Borrowing, such Business Day falls in another
calendar month, in which case such Interest Period would end on the next
preceding Business Day;

(iii) any Interest Period in respect of a LIBOR Borrowing which begins on the
last Business Day of a calendar month or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of such calendar month; and

(v) no Interest Period may extend beyond the Commitment Termination Date.

“Issuing Bank” shall mean SunTrust Bank or any other Lender, each in its
capacity as an issuer of Letters of Credit pursuant to Section 2.6.

 

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“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrowers for the issuance of Letters of Credit in an
aggregate face amount not to exceed $750,000.

“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to the
terms of a Letter of Credit.

“LC Documents” shall mean each Letter of Credit Agreement, the Letters of Credit
and all other applications, agreements and instruments executed and delivered by
any Borrower relating to the Letters of Credit.

“LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrowers at such time. The LC Exposure of any Lender shall be its
Revolving Credit Percentage of the total LC Exposure at such time.

“Lenders” shall have the meaning assigned to such term in the preamble to this
Agreement, and shall include, where appropriate, the Swingline Lender; it being
expressly understood and agreed that the Swingline Lender shall not be included
with respect to any determination of Required Lenders.

“Letters of Credit” means any letter of credit issued pursuant to Section 2.6 by
the Issuing Bank for the account of any Borrower, pursuant to the LC Commitment,
whether now outstanding or issued after the date of this Agreement.

“Letter of Credit Agreement” means, collectively and individually, each standard
form of Application and Agreement for Irrevocable Standby Letter of Credit, to
be executed and delivered by the Borrowers to the Issuing Bank in connection
with each Letter of Credit, as any of the same may be amended, modified or
supplemented from time to time.

“LIBOR” means, with respect to any LIBOR Loan for any Interest Period, the rate
per annum obtained by dividing (i) Fixed LIBOR for such Interest Period by
(ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage. For
purposes hereof, the term “Fixed LIBOR” shall mean, for any applicable Interest
Period with respect to any LIBOR Loan, the rate per annum for deposits in
Dollars for a period equal to such Interest Period appearing on the display
designated as Page 3750 on the Dow Jones Markets Service (or such other page on
that service or such other service designated by the British Banker’s
Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two
Business Days prior to the first day of the Interest Period or if such Page 3750
is unavailable for any reason at such time, the rate which appears on the
Reuters Screen ISDA Page as of such date and such time; provided, that if the
Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Interest Period, LIBOR shall mean the rate of
interest determined by the Administrative Agent to be the average of the rates
per annum at which deposits in Dollars are offered to the Administrative Agent
two (2) Business Days preceding the first day of such Interest Period by leading
banks in the London

 

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interbank market as of 10:00 a.m. for delivery on the first day of such Interest
Period, for the number of days comprised therein and in an amount comparable to
the amount of the LIBOR Loan of the Administrative Agent. “Eurodollar Reserve
Percentage” shall mean the aggregate of the maximum reserve percentages
(including, without limitation, any emergency, supplemental, special or other
marginal reserves) expressed as a decimal in effect on any day to which the
Administrative Agent is subject with respect to LIBOR pursuant to regulations
issued by the Board of Governors of the Federal Reserve System (or any
Governmental Authority succeeding to any of its principal functions) with
respect to eurocurrency funding (currently referred to as “eurocurrency
liabilities” under Regulation D). LIBOR Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under Regulation D. The Eurodollar Reserve
Percentage shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage. The Administrative Agent’s determination
of Fixed LIBOR and the Eurodollar Reserve Percentage shall be conclusive and
binding on the Company, its Subsidiaries and the Lenders absent manifest error.

“LIBOR Borrowing” and “LIBOR Loan” when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
bears interest at a rate determined by reference to LIBOR (other than an Index
Rate Loan or an Index Rate Borrowing).

“Lien” means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement, or preferential
arrangement, charge or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
Capital Lease, any Synthetic Lease, any assignment of any Receivable of a
Borrower to an escrow agent for the benefit of a third party) and the filing of
any financing statement under the UCC or comparable law of any jurisdiction to
evidence any of the foregoing).

“Loan Documents” means this Agreement, each Notice of Borrowing, each Revolving
Note, each Assumption Agreement, each Intellectual Property Assignment, each
Mortgage, each Letter of Credit Agreement, each LC Document, each Hedging
Agreement between any Borrower and the Administrative Agent or any Lender or the
Issuing Bank or any Affiliate of the Administrative Agent or any Lender or the
Issuing Bank, any Mortgage and any other document now or hereafter executed or
delivered in connection with the Obligations, in evidence thereof or as security
therefor, including, without limitation, any life insurance assignment, pledge
agreement, security agreement, interest rate swap agreement or similar
agreement, deed of trust, mortgage, guaranty, promissory note or subordination
agreement.

“Loans” means all Revolving Loans and Swingline Loans in the aggregate or any of
them, as the context may require, made by the Lenders to the Borrowers pursuant
to Section 2.1 of this Agreement.

 

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“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or financial condition of the Company and its Subsidiaries
taken as a whole, (b) the ability of the Company or any Subsidiary to perform
its obligations under any Loan Document, (c) the rights of or benefits available
to the Administrative Agent, the Issuing Bank and the Lenders under any Loan
Document, or (d) the legality, validity or enforceability of any of the Loan
Documents.

“Material Contract” means any contract or other arrangement (other than the Loan
Documents), whether written or oral, to which a Borrower or any Subsidiary is a
party (a) requiring payments by any party thereto of more than 5% per annum of
the annual consolidated gross revenues of the Company and its Subsidiaries, or
(b) as to which the breach, nonperformance, cancellation or failure to renew by
any party thereto could reasonably be expected to have a Material Adverse
Effect.

“Minimum Net Worth Compliance Level” means, at any time, (i) 85% of Net Worth as
at the fiscal quarter of the Company ended on September 30, 2005, plus (ii) 50%
of consolidated Net Income of the Company and its Subsidiaries on a cumulative
basis for all succeeding fiscal quarters; provided, that if Net Income is
negative in any fiscal quarter the amount added for such fiscal quarter shall be
zero and such negative Net Income shall not reduce the amount of Net Income
added from any previous fiscal quarter; plus (iii) 100% of the amount by which
the Company’s “total stockholders’ equity” is increased as a result of any
public or private offering of common stock of the Company after September 30,
2005, less (iv) AAA Distributions made subsequent to September 30, 2005.

“Mortgage” means a mortgage or deed of trust made by any Borrower in favor of,
or for the benefit of, the Administrative Agent for the ratable benefit of the
Lenders, in form and substance acceptable to the Administrative Agent, as the
same may be amended, supplemented or otherwise modified from time to time.

“Net Income” means, for any Person for any period, the consolidated gross
revenues of such Person and its Subsidiaries for such period less all
consolidated operating and non-operating expenses (including taxes) of such
Person and its Subsidiaries for such period, all as determined in accordance
with GAAP.

“Net Cash Proceeds” means (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of attorneys’ fees, accountants’ fees, investment banking fees, professional
advisors’ fees, other transaction costs, amounts required to be applied to the
repayment of Debt secured by a Lien on any asset which is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Loan Document)
and other customary fees and expenses actually incurred in connection therewith
and net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale of

 

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equity securities or debt securities or instruments or the incurrence of loans,
the cash proceeds received from such issuance or incurrence, net of attorneys’
fees, investment banking fees, professional advisors’ fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.

“Net Worth” means, as of any date, (i) the total assets of the Company and its
Subsidiaries that would be reflected on the Company’s consolidated balance sheet
as of such date prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Subsidiaries, minus the (ii) sum of (x) the total liabilities of the Company and
its Subsidiaries that would be reflected on the Company’s consolidated balance
sheet as of such date prepared in accordance with GAAP and (y) the amount of any
write-up in the book value of any assets resulting from a revaluation thereof or
any write-up in excess of the cost of such assets acquired reflected on the
consolidated balance sheet of the Company and its Subsidiaries as of such date
prepared in accordance with GAAP

“Non-Financed Capital Expenditures” means, for any Person, Capital Expenditures
other than those financed within 30 days after incurrence with long-term Debt
(other than Revolving Loans or Swingline Loans) incurred by such Person, or
pursuant to a sale and leaseback transaction.

“Notes” shall mean, collectively, the Revolving Notes and the Swingline Note.

“Notice of Borrowing” shall mean a written notice (or telephonic notice promptly
confirmed in writing) constituting a request for a Revolving Loan Borrowing or a
Swingline Loan, containing the specific requirements of Sections 2.3 or 2.5, as
the case may be.

“Notice of Conversion/Continuation” shall mean the notice given by the Company
to the Administrative Agent in respect of the conversion or continuation of an
outstanding Borrowing as provided in Section 2.9(b) hereof.

“Obligations” means (a) the Loans, the LC Disbursements, the Revolving Notes,
the Swingline Note, the Letter of Credit Agreements, all indebtedness and
obligations of a Borrower under this Agreement and the other Loan Documents, and
all other Debt and obligations of a Borrower to the Administrative Agent, the
Issuing Bank or any Lender (including the Swingline Lender) arising out of or
relating to any Loan Document, now existing or hereafter arising, of every kind
and description, direct or indirect, fixed or contingent, liquidated or
unliquidated, due or to become due, secured or unsecured, joint, several or
joint and several, as amended, modified, renewed, extended or increased from
time to time, including without limitation, all principal, interest (including
any interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrowers, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), (b) any overdrafts in any deposit account
maintained by a Borrower with the Administrative Agent or any Lender (including
the Swingline Lender), (c) any obligations arising under any Hedging Agreements
between a Borrower and the Administrative Agent or any Affiliate of the
Administrative Agent, (d) any obligations under any corporate purchasing card or
credit card account established for a Borrower by the Administrative Agent or
any Affiliate of

 

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the Administrative Agent, (e) all reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to the Administrative Agent) incurred pursuant to
this Agreement or any other Loan Document, and (f) all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing,
together with all renewals, extensions, or modifications thereof.

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any mandatory
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not create a liability on the
balance sheet of such Person, (iii) any liability of such Person under any
Synthetic Lease transaction, or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person.

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.

“Payment Office” means the office of the Administrative Agent located at 303
Peachtree Street, N.E., 25th Floor, Atlanta, Georgia 30308, or such other
location as to which the Administrative Agent shall have given written notice to
the Company and the other Lenders.

“Permitted Acquisition” means any transaction consummated in which a Borrower or
a Subsidiary acquires all or substantially all of the assets or outstanding
Capital Stock or equity interests of any Person or any division or business line
of any Person, or merges or consolidates with any Person (with any such
acquisition being referred to a an “Acquired Business” and any such Person,
division or line of business being the “Target”), provided that, unless
otherwise approved by the Required Lenders, (a) at the closing of such
transaction, after giving effect thereto, no Event of Default shall have
occurred and be continuing, (b) the Target has EBITDA for the twelve month
period ending as of the most recent fiscal quarter end prior to the acquisition
date in an amount greater than $0, (c) such acquisition is not a “hostile”
acquisition and has been approved by the Board of Directors and/or shareholders
of the Company and the Target, (d) after giving effect to such acquisition,
there shall be at least $5,000,000 of Borrowing Availability, (e) at least 10
Business Days prior to the consummation of such transaction, the Borrower shall
give written notice of such transaction to the Administrative Agent (the
“Acquisition Notice”), which shall include a reasonably detailed description of
the material terms of such Permitted Acquisition (including, without limitation,
the purchase price and method and structure of payment), (f) a Borrower shall be
the surviving entity of any merger, (g) the Acquired Business shall be in
substantially the same line of business as the Borrowers as provided in
Section 5.4, and shall not be a Foreign Person, (h) the aggregate value of the
sum of current and deferred cash to be paid and issued, plus Debt paid or
assumed, in connection with all transactions (the “Aggregate Acquisition
Consideration”) shall not exceed $40,000,000 in any fiscal year of the Company,
unless otherwise approved by the Administrative Agent and the Required Lenders;
(i) at the time it gives the Acquisition Notice, the Borrower shall deliver to

 

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the Administrative Agent pro forma financial statements for the next succeeding
three-year period giving effect to the acquisition, which shall included
assumptions used and any pro forma adjustments that have been made, which shall
be reasonably acceptable to the Administrative Agent, and shall reflect to the
Administrative Agent’s satisfaction that, without regard to any expense
reductions or other projected synergies attributable to the acquisition, the
Company and its Subsidiaries will continue to be in compliance with all of the
financial covenants set forth in this Agreement and the pro forma Senior Funded
Debt Ratio will not exceed 3.25 to 1, and (j) at the time it gives the
Acquisition Notice, the Borrower shall deliver to the Administrative Agent
(which shall promptly deliver a copy to the Lenders) a certificate, executed by
a Principal Officer of the Company demonstrating in sufficient detail compliance
with the financial covenants contained in Section 7 of the Agreement on a pro
forma basis after giving effect to such acquisition and, further, certifying
that, after giving effect to the consummation of such acquisition, the
representations and warranties of the Borrowers contained in this Agreement will
be true and correct and that the Borrowers, as of the date of such consummation,
will be in compliance with all other terms and conditions contained in this
Agreement, and that the Borrowers believe, in good faith, that there will be
sufficient Borrowing Availability for the Borrowers to meet their ongoing
working capital requirements.

“Permitted Acquisition EBITDA” shall mean, for any period prior to a Permitted
Acquisition, EBITDA of the Target or Targets acquired in such acquisition for
such period, as approved by the Administrative Agent in its reasonable
discretion.

“Permitted Teaming Arrangement” means joint ventures and teaming arrangements
entered into by a Borrower in the ordinary course of business, provided that
such Borrower does not assume or become liable for any Debt or obligations of
any other party to the joint venture or teaming arrangement in connection
therewith.

“Person” means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, governmental
authority, limited liability company or other entity of whatever nature.

“Primary Operating Account” means any deposit account or controlled disbursement
account on which the Company draws to pay all or substantially all of its
operating expenses.

“Principal Officer” means each of the Chief Executive Officer, President, the
Vice President of Finance and the Chief Financial Officer of the Company or any
Subsidiary.

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, Capital Stock.

“Purchase Price Refund” means any amount in excess of $50,000 received by the
Company or any Subsidiary as a result of a purchase price adjustment or similar
event in connection with any acquisition or Disposition by the Company or any
Subsidiary.

 

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“Receivables” means all rights to payments for property sold or licensed or for
services rendered, whether now owned or hereafter acquired by the Company or any
Subsidiary.

“Recovery Event” means any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any asset
of the Company or any of its Subsidiaries in excess of $150,000 in the aggregate
during any fiscal year of the Company.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

“Reinvestment Deferred Amount” means with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by the Company or any of its Subsidiaries
in connection therewith that are not applied to reduce the Revolving Commitments
pursuant to Section 2.22(c) as a result of the delivery of a Reinvestment
Notice.

“Reinvestment Event” means any Asset Sale, Purchase Price Refund or Recovery
Event in respect of which a Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice” means a written notice executed by a Principal Officer at
a time when any Obligations are outstanding stating that no Default or Event of
Default has occurred and is continuing and that the Company (directly or
indirectly through a Subsidiary) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale, Purchase Price Refund or
Recovery Event to acquire equipment or other fixed assets useful in its business
and of the same or similar type as the assets subject to such Asset Sale,
Purchase Price Refund or Recovery Event.

“Reinvestment Prepayment Amount” means with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended prior
to the relevant Reinvestment Prepayment Date to acquire equipment or other fixed
assets useful in the business of the Company (directly or indirectly through a
Subsidiary) and of the same or similar type as the assets subject to such
Reinvestment Event.

“Reinvestment Prepayment Date” means with respect to any Reinvestment Event, the
earlier of (a) the date occurring six months after such Reinvestment Event and
(b) the date on which a Borrower shall have determined not to, or shall have
otherwise ceased to, acquire assets useful in the Borrower’s business with all
or any portion of the relevant Reinvestment Deferred Amount.

“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

 

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“Required Lenders” shall mean, (a) at any time when there are three or fewer
Lenders, not less than two Lenders holding more than 50% of the Aggregate
Exposure of all Lenders, and (b) at any other time, Lenders holding more than
50% of the Aggregate Exposure of all Lenders.

“Restricted Payment” shall mean (a) any dividend or other distribution, direct
or indirect, on account of any shares of any class of Capital Stock of the
Borrowers or any of their Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrowers or any of their Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of the Borrowers or any of their Subsidiaries, now or hereafter
outstanding, (d) any payment or prepayment of principal or premium, if any, or
interest upon the redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to any Subordinated Debt (other than Subordinated
Debt between or among Borrowers or payments on Subordinated Debt permitted by
the Required Lenders), or (e) the payment by the Borrowers or any of their
Subsidiaries of any management or consulting fee to any Person or of any salary,
bonus or other form of compensation to any Person who is directly or indirectly
a significant partner, shareholder, owner or executive officer of any such
Person, to the extent such salary, bonus or other form of compensation has not
been deducted as an expense to determine consolidated Net Income of the Company
and its Subsidiaries.

“Revolving Commitment” shall mean, with respect to each Lender, the obligation
of such Lender to make Revolving Loans to the Borrowers and to participate in
Letters of Credit and Swingline Loans in an aggregate principal amount not
exceeding the amount set forth with respect to such Lender on the signature
pages to this Agreement, or in the case of a Person becoming a Lender after the
Closing Date, the amount of the assigned “Revolving Commitment” as provided in
an assignment and acceptance agreement, acceptable in form and substance to the
Administrative Agent, executed by such Person as an assignee.

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time
and without duplication, the sum of the outstanding principal amount of such
Lender’s Revolving Loans, such Lender’s LC Exposure and such Lender’s Swingline
Exposure.

“Revolving Credit Lender” means each Lender that has a Revolving Commitment or
is the holder of Revolving Credit Exposure.

“Revolving Credit Percentage” means as to any Revolving Credit Lender at any
time, the percentage which such Lender’s Revolving Commitment then constitutes
of the aggregate Revolving Commitments (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender’s Revolving
Credit Exposure then outstanding constitutes of the aggregate principal amount
of the Revolving Credit Exposures of all Lenders then outstanding).

 

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“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline
Lender) to the Borrowers under its Revolving Commitment, which may either be a
Base Rate Loan, an Index Rate Loan or a LIBOR Loan.

“Revolving Note” means a promissory note payable to the order of a requesting
Revolving Credit Lender, in form and substance acceptable to the Administrative
Agent and the requesting Revolving Credit Lender, in the principal amount of
such Revolving Credit Lender’s Revolving Commitment, and evidencing the joint
and several obligations of the Borrowers to repay the Revolving Loans made by
such Revolving Credit Lender, together with interest thereon, and all
extensions, renewals, modifications and amendments of such note, made in
accordance with the terms hereof.

“Senior Funded Debt Ratio” means, at any time, the ratio of (a) consolidated
Funded Debt of the Company and its Subsidiaries then outstanding, excluding
Subordinated Debt, to (b) the sum of (1) consolidated EBITDA of the Company and
its Subsidiaries for the period of four fiscal quarters most recently ended, or,
if such determination is being made at the end of a fiscal quarter of the
Company, for the period of four fiscal quarters then ended, plus, (2) Permitted
Acquisition EBITDA, plus (3) charges for non-cash stock compensation expense for
such period, except to the extent that such charges are reserves for future cash
charges.

“State” means the Commonwealth of Virginia.

“Subordinated Debt” shall mean any Debt of the Company or any Subsidiary
(i) that is expressly subordinated to the Obligations on terms satisfactory to
the Administrative Agent and the Required Lenders, (ii) that matures by its
terms no earlier than six months after the later of the Commitment Termination
Date then in effect with no scheduled principal payments permitted prior to such
maturity, and (iii) that is evidenced by an indenture or other similar agreement
that is in a form satisfactory to the Administrative Agent and the Required
Lenders.

“Subsidiary” as to any Person, means a corporation, partnership, limited
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Company.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $5,000,000.

“Swingline Exposure” shall mean, with respect to each Lender, the principal
amount of the Swingline Loans with respect to which such Lender is legally
obligated either to make a Base Rate Loan or to purchase a participation in
accordance with Section 2.5, which shall equal such Lender’s Revolving Credit
Percentage of all outstanding Swingline Loans.

 

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“Swingline Lender” shall mean SunTrust Bank, or any other Lender that may agree
to make Swingline Loans hereunder.

“Swingline Loan” shall mean a loan made to the Borrowers by the Swingline Lender
under the Swingline Commitment.

“Swingline Note” shall mean the promissory note of the Borrowers payable to the
order of the Swingline Lender in the principal amount of the Swingline
Commitment.

“Swingline Termination Date” shall mean the earliest of (i) five years after the
date of this Agreement, (ii) the date on which the Revolving Commitments are
terminated pursuant to Section 2.20 and (iii) the date on which all amounts
outstanding under this Agreement have been declared or have automatically become
due and payable (whether by acceleration or otherwise) and any extension or
extensions thereof granted by the Required Lenders.

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where the
transaction is considered Debt for borrowed money for federal income tax
purposes but is classified as an operating lease in accordance with GAAP for
financial reporting purposes.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any governmental authority.

“Total Assets” means, for any fiscal year of the Company, the total assets of
the Company and its Subsidiaries that would be reflected on the Company’s
consolidated balance sheet as of the last day of the immediately preceding
fiscal year, prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Subsidiaries.

“Total Revenues” means, for any fiscal year of the Company, the consolidated
gross revenues of the Company and its Subsidiaries for fiscal year, prepared in
accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries.

“Type,” when used in reference to a Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to LIBOR, the Index Rate or the Base Rate.

“UCC” means the Uniform Commercial Code as adopted in the State, and all
amendments thereto.

“Unused Fee” shall mean the applicable quarterly fee corresponding to the Senior
Funded Debt Ratio set forth below, as calculated by the Administrative Agent, as
applied in accordance with Section 2.12(b). The applicable Unused Fee on the
Closing Date shall be 0.15%. The Unused Fee will be adjusted on a quarterly
basis in accordance with the table set forth below:

 

Senior Funded Debt Ratio

   Unused Fee

Less than 2.00 to 1.

   0.15%

Equal to or greater than 2.00 to 1, and less than to 2.50 to 1.

   0.15%

Equal to or greater than 2.50 to 1, and less than to 3.00 to 1.

   0.20%

Equal to or greater than 3.00 to 1

   0.25%

 

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The Unused Fee will be adjusted to the percentage corresponding to the
applicable Senior Funded Debt Ratio in effect as of the last day of each fiscal
quarter of the Company. The adjustment will become effective as of the first day
of the calendar month next succeeding delivery to the Administrative Agent of
the Company’s financial statements for the last month of each fiscal quarter
pursuant to Section 5.8. No decrease in the Unused Fee shall become effective
if, at such time, any Default or Event of Default has occurred and is continuing
until such time as such Default or Event of Default is cured or waived in
accordance with the terms of this Agreement and no other Defaults or Events of
Default have occurred and are continuing. If the Company’s financial statements
are not delivered to the Administrative Agent within the specified time periods,
the Unused Fee may be increased, at the option of the Administrative Agent, or
upon written notice from the Required Lenders to the Administrative Agent and
the Company, to the highest applicable percentage above, to be effective from
the date on which the statements were due through the date which is three
Business Days after the date on which such financial statements are delivered to
the Administrative Agent, whereupon the Unused Fee shall again be adjusted to
the applicable percentage corresponding to the Senior Funded Debt Ratio in
effect as of the last day of such fiscal quarter of the Company, with such
adjustment becoming effective on such third Business Day.

For purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a “Revolving Loan” or “Swingline Loan”) or by Type (e.g., a “LIBOR Loan”,
“Index Rate Loan” or “Base Rate Loan”) or by Class and Type (e.g., “Revolving
LIBOR Loan”). Borrowings also may be classified and referred to by Class (e.g.,
“Revolving Loan Borrowing”) or by Type (e.g., “LIBOR Borrowing”) or by Class and
Type (e.g., “Revolving LIBOR Borrowing”).

SECTION 2. Loans.

2.1 Loans and Letters of Credit. Subject to the terms and conditions of this
Agreement, (a) the Revolving Credit Lenders hereby establish in favor of the
Borrowers a revolving credit facility pursuant to which the Revolving Credit
Lenders severally agree (to the extent of each Revolving Credit Lender’s
Revolving Credit Percentage up to such Revolving Credit Lender’s Revolving
Commitment) to make Revolving Loans to the Borrowers in accordance with
Section 2.2; (b) the Issuing Bank agrees to issue Letters of Credit for the
account of the Borrowers in accordance with Section 2.6; (c) the Swingline
Lender agrees to make Swingline Loans in accordance with Section 2.4; and
(d) each Revolving Credit Lender severally agrees to purchase a participation
interest in the Letters of Credit and the Swingline Loans pursuant to the terms
and conditions hereof; provided, that in no event shall the aggregate amount of
Revolving Credit Exposure exceed at any time the Aggregate Revolving Commitments
from time to time in effect.

 

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2.2 Revolving Loans. Subject to the terms and conditions set forth herein, each
Revolving Credit Lender severally agrees to make Revolving Loans to the
Borrowers, from time to time until the Commitment Termination Date in an
aggregate principal amount at any one time outstanding that will not result in
(a) such Revolving Credit Lender’s Revolving Credit Exposure exceeding such
Revolving Credit Lender’s Revolving Commitment or (b) the aggregate amount of
the Revolving Credit Exposure outstanding exceeding the Aggregate Revolving
Credit Commitments.

2.3 Procedure for Revolving Loan Borrowings. The Company, on behalf of the
Borrowers, shall give the Administrative Agent a Notice of Borrowing with
respect to each Revolving Loan Borrowing (x) prior to 11:00 a.m. on the
requested date of each Base Rate Borrowing or Index Rate Borrowing (which shall
be a Business Day) and (y) prior to 12:00 noon three (3) Business Days prior to
the requested date of each LIBOR Borrowing. Each Notice of Borrowing under this
Section shall be irrevocable and shall specify: (i) the aggregate principal
amount of such Revolving Loan Borrowing, (ii) the date of such Revolving Loan
Borrowing (which shall be a Business Day), (iii) the Type of the Revolving Loans
comprising such Borrowing, and (iv) in the case of a LIBOR Borrowing, the
duration of the initial Interest Period applicable thereto (subject to the
provisions of the definition of Interest Period). Each Revolving Loan Borrowing
shall consist entirely of Base Rate Loans, Index Rate Loans or LIBOR Loans, as
the Company may request, provided, that on the Closing Date all Revolving Loans
shall be Index Rate Loans. Promptly following the receipt of a Notice of
Borrowing in accordance with this Section, the Administrative Agent shall advise
each Revolving Credit Lender of the details thereof and the amount of such
Revolving Credit Lender’s Revolving Loan to be made as part of the requested
Revolving Loan Borrowing. Each Borrower appoints the Company as its agent to
request and receive the proceeds of the Revolving Loans on behalf of all
Borrowers. The Company agrees to distribute the proceeds of the Revolving Loans
among the Borrowers when and as needed by the Borrowers for working capital.
Revolving Loans may be requested by those individuals designated by the Company
from time to time in written instruments delivered to the Administrative Agent;
provided, however, that the Borrowers shall remain liable with respect to any
Revolving Loan disbursed by any Lender in good faith hereunder, even if such
Revolving Loan is requested by an individual who has not been so designated. The
proceeds of each Revolving Loan will be credited to a deposit account maintained
with the Administrative Agent by the Company by 3:00 p.m. on the date of the
requested Borrowing.

2.4 Swingline Commitment. Subject to the terms and conditions set forth herein,
the Swingline Lender agrees to make Swingline Loans to the Borrowers, from time
to time from the Closing Date to the Swingline Termination Date, in an aggregate
principal amount outstanding at any time not to exceed the lesser of (i) the
Swingline Commitment then in effect and (ii) the difference between the
Aggregate Revolving Commitments and the aggregate Revolving Credit Exposures of
all Revolving Credit Lenders; provided, that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
The Borrowers shall be entitled to borrow, repay and reborrow Swingline Loans in
accordance with the terms and conditions of this Agreement.

 

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2.5 Procedure for Swingline Borrowing.

(a) The Swingline Lender agrees to make Swingline Loans to the Company from time
to time in accordance with the treasury and cash management services and
products provided to the Company by the Swingline Lender (the “Cash Management
Swingline Loans”). For other Swingline Loans, the Company, on behalf of the
Borrowers, shall give the Administrative Agent a Notice of Borrowing with
respect to each Swingline Loan prior to 12:00 noon on the requested date of each
Swingline Borrowing. Each Notice of Borrowing under this Section shall be
irrevocable and shall specify: (i) the principal amount of such Swingline Loan,
(ii) the date of such Swingline Loan (which shall be a Business Day), (iii) the
Type of such Swingline Loan and (iv) the account of the Company to which the
proceeds of such Swingline Loan should be credited. The Administrative Agent
will promptly advise the Swingline Lender of each such request and the details
thereof. Each Cash Management Swingline Loan shall be made initially as an Index
Rate Loan, and each other Swingline Loan shall be made as a Base Rate Loan or an
Index Rate Loan. The Swingline Lender will make the proceeds of each Swingline
Loan available to the Borrowers in Dollars in immediately available funds at the
account specified by the Company in the applicable request not later than 2:00
p.m. on the requested date of such Swingline Loan.

(b) The Swingline Lender, at any time and from time to time in its sole
discretion, may, on behalf of the Borrowers (each of which hereby irrevocably
authorizes and directs the Swingline Lender to act on its behalf), give a Notice
of Borrowing with respect to Revolving Loans to the Administrative Agent and the
Company requesting the Revolving Credit Lenders (including the Swingline Lender)
to make Index Rate Loans in an amount equal to the unpaid principal amount of
any Swingline Loan. Each Revolving Credit Lender will make the proceeds of its
Index Rate Loan included in such Borrowing available to the Administrative Agent
for the account of the Swingline Lender in accordance with Section 2.8, which
will be used solely for the repayment of such Swingline Loan.

(c) If for any reason an Index Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then such Swingline Loan shall automatically be
converted to a Index Rate Loan, upon notice from the Swingline Lender to the
Administrative Agent and the Company, and each Revolving Credit Lender (other
than the Swingline Lender) shall purchase an undivided participating interest in
such Swingline Loan in an amount equal to its Revolving Credit Percentage
thereof on the date that such Index Rate Borrowing should have occurred. On the
date of such required purchase, each Revolving Credit Lender shall promptly
transfer, in immediately available funds, the amount of its participating
interest to the Administrative Agent for the account of the Swingline Lender.

(d) Each Revolving Credit Lender’s obligation to make an Index Rate Loan
pursuant to Section 2.5(b) or to purchase the participating interests pursuant
to Section 2.5(c)

 

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shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Revolving Credit Lender or any
other Person may have or claim against the Swingline Lender, any Borrower or any
other Person for any reason whatsoever, (ii) the existence of a Default or an
Event of Default or the termination of any Revolving Credit Lender’s Revolving
Commitment, (iii) the existence (or alleged existence) of any event or condition
which has had or could reasonably be expected to have a Material Adverse Effect,
(iv) any breach of this Agreement or any other Loan Document by any Borrower,
the Administrative Agent or any Revolving Credit Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing: provided, however, that the obligation of each Revolving Credit
Lender to make any such Index Rate Loan or purchase any such participating
interest is subject to the condition that the Swing Line Lender believed in good
faith that all conditions under Section 8.2 were satisfied at the time the Swing
Line Loan was made. If such amount is not in fact made available to the
Swingline Lender by any Revolving Credit Lender, the Swingline Lender shall be
entitled to recover such amount on demand from such Revolving Credit Lender,
together with accrued interest thereon for each day from the date of demand
thereof at the Federal Funds Rate. Until such time as such Revolving Credit
Lender makes its required payment, the Swingline Lender shall be deemed to
continue to have outstanding Swingline Loans in the amount of the unpaid
participation for all purposes of the Loan Documents. In addition, such
Revolving Credit Lender shall be deemed to have assigned any and all payments
made of principal and interest on its Loans and any other amounts due to it
hereunder, to the Swingline Lender to fund the amount of such Revolving Credit
Lender’s participation interest in such Swingline Loans that such Revolving
Credit Lender failed to fund pursuant to this Section, until such amount has
been purchased in full.

2.6 Letters of Credit.

(a) Until the Commitment Termination Date, the Issuing Bank, in reliance upon
the agreements of the other Revolving Credit Lenders pursuant to Section 2.6(d),
agrees to issue, at the request of the Company, Letters of Credit for the
account of the Borrowers on the terms and conditions hereinafter set forth;
provided, that (i) each Letter of Credit shall expire on the earlier of (A) the
date one year after the date of issuance of such Letter of Credit (or in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (B) the date that is five (5) Business Days prior to the
Commitment Termination Date (except pursuant to a clause whereby the Issuing
Bank is entitled to terminate the Letter of Credit on an annual basis by giving
prior written notice to the beneficiary thereof in accordance with the written
terms of such Letter of Credit); (ii) each Letter of Credit shall be in a stated
amount of at least $25,000; and (iii) the Borrowers may not request any Letter
of Credit, if, after giving effect to such issuance (A) the aggregate LC
Exposure would exceed the LC Commitment, or (B) the aggregate Revolving Credit
Exposure of all Lenders would exceed the Aggregate Revolving Commitment Amount.
Upon the issuance of each Letter of Credit each Revolving Credit Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Bank without recourse a participation in such Letter of Credit equal
to such Revolving Credit Lender’s Revolving Credit Percentage of the aggregate
amount available to be drawn under such Letter of Credit. Each issuance of a
Letter of Credit shall be deemed to utilize the Revolving Commitment of each
Revolving Credit Lender by an amount equal to the amount of such participation.

 

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(b) To request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Company shall give the
Issuing Bank and the Administrative Agent irrevocable written notice at least
three (3) Business Days prior to the requested date of such issuance specifying
the date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, extended or renewed, as the case may be), the expiration date of
such Letter of Credit, the amount of such Letter of Credit, the name and address
of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. In addition to the
satisfaction of the conditions precedent to the effectiveness of this Agreement,
the issuance of such Letter of Credit (or any amendment which increases the
amount of such Letter of Credit) will be subject to the further conditions that
such Letter of Credit shall be in such form and contain such terms as the
Issuing Bank shall approve and that the Borrowers shall have executed and
delivered any Letter of Credit Agreement relating to such Letter of Credit as
the Issuing Bank shall reasonably require; provided, that in the event of any
conflict between such Letter of Credit Agreement and this Agreement, the terms
of this Agreement shall control.

(c) At least two Business Days prior to the issuance of any Letter of Credit,
the Issuing Bank will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received such notice and if not, the
Issuing Bank will provide the Administrative Agent with a copy thereof. Unless
the Issuing Bank has received notice from the Administrative Agent on or before
the Business Day immediately preceding the date the Issuing Bank is to issue the
requested Letter of Credit (1) directing the Issuing Bank not to issue the
Letter of Credit because such issuance is not then permitted hereunder because
of the limitations set forth in Section 2.6(a) or (2) that one or more of the
conditions precedent set forth in Section 8 of this Agreement are not then
satisfied, then, subject to the terms and conditions hereof, the Issuing Bank
shall, on the requested date, issue such Letter of Credit in accordance with the
Issuing Bank’s usual and customary business practices.

(d) The Issuing Bank shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Issuing Bank shall notify the Company and the Administrative Agent
of such demand for payment and whether the Issuing Bank has made or will make a
LC Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrowers of their obligations to
reimburse the Issuing Bank and the Revolving Credit Lenders with respect to such
LC Disbursement. The Borrowers shall be irrevocably and unconditionally
obligated to reimburse the Issuing Bank for any LC Disbursements paid by the
Issuing Bank in respect of such drawing upon the Issuing Bank’s written demand
therefor, but otherwise without presentment, demand or other formalities of any
kind. Unless the Company shall have notified the Issuing Bank and the
Administrative Agent prior to 11:00 a.m. on the Business Day immediately prior
to the date on which drawing is honored that the Borrowers intend to reimburse
the Issuing Bank for the amount of such drawing in funds other than from the
proceeds of Revolving Loans, the Borrowers shall be deemed to have timely given
a Notice of

 

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Borrowing to the Administrative Agent requesting the Revolving Credit Lenders to
make a Base Rate Borrowing on the date on which such drawing is honored in an
exact amount due to the Issuing Bank. The Administrative Agent shall notify the
Revolving Credit Lenders of such Borrowing in accordance with Section 2.3, and
each Revolving Credit Lender shall make the proceeds of its Base Rate Loan
included in such Borrowing available to the Administrative Agent for the account
of the Issuing Bank in accordance with Section 2.8. The proceeds of such
Borrowing shall be applied directly by the Administrative Agent to reimburse the
Issuing Bank for such LC Disbursement.

(e) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Revolving Credit Lender (other than the
Issuing Bank) shall be obligated to fund the participation that such Revolving
Credit Lender purchased pursuant to subsection (a) in an amount equal to its
Revolving Credit Percentage of such LC Disbursement on and as of the date which
such Base Rate Borrowing should have occurred. Each Revolving Credit Lender’s
obligation to fund its participation shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation (i) any
setoff, counterclaim, recoupment, defense or other right that such Revolving
Credit Lender or any other Person may have against the Issuing Bank or any other
Person for any reason whatsoever, (ii) the existence of a Default or an Event of
Default or the termination of the Aggregate Revolving Commitments, (iii) any
adverse change in the condition (financial or otherwise) of the Borrowers or any
of their Subsidiaries, (iv) any breach of this Agreement by any Borrower or any
other Revolving Credit Lender, (v) any amendment, renewal or extension of any
Letter of Credit or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing provided, however, that the
obligation of each Revolving Credit Lender to fund any such participation is
subject to the condition that the Issuing Bank believed in good faith that all
conditions under Section 8.2 were satisfied at the time the Letter of Credit was
issued. On the date that such participation is required to be funded, each
Revolving Credit Lender shall promptly transfer, in immediately available funds,
the amount of its participation to the Administrative Agent for the account of
the Issuing Bank. Whenever, at any time after the Issuing Bank has received from
any such Revolving Credit Lender the funds for its participation in a LC
Disbursement, the Issuing Bank (or the Administrative Agent on its behalf)
receives any payment on account thereof, the Administrative Agent or the Issuing
Bank, as the case may be, will distribute to such Revolving Credit Lender its
Revolving Credit Percentage of such payment; provided, that if such payment is
required to be returned for any reason to a Borrower or to a trustee, receiver,
liquidator, custodian or similar official in any bankruptcy proceeding, such
Revolving Credit Lender will return to the Administrative Agent or the Issuing
Bank any portion thereof previously distributed by the Administrative Agent or
the Issuing Bank to it.

(f) To the extent that any Revolving Credit Lender shall fail to pay any amount
required to be paid pursuant to paragraph (d) of this Section 2.6 on the due
date therefor, such Revolving Credit Lender shall pay interest to the Issuing
Bank (through the Administrative Agent) on such amount from such due date to the
date such payment is made at a rate per annum equal to the Federal Funds Rate;
provided, that if such Revolving Credit Lender shall fail to make such payment
to the Issuing Bank within three (3) Business Days of such due date, then,
retroactively to the due date, such Revolving Credit Lender shall be obligated
to pay interest on such amount at the rate for Default Interest.

 

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(g) If any Event of Default shall occur and be continuing, on the Business Day
that the Company receives notice from the Administrative Agent or the Required
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrowers shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the ratable benefit of the Lenders, an
amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided, that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or notice of any kind, upon the
occurrence of any Event of Default with respect to the Borrowers described in
Sections 9.1(g) or 9.1(h). Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrowers under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrowers’ risk and expense, such deposits shall
not bear interest. Interest and profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it had not been reimbursed and to the extent so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated,
with the consent of the Required Lenders, be applied to satisfy other
obligations of the Borrowers under this Agreement. If the Borrowers are required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not so applied as aforesaid)
shall be returned to the Borrowers one Business Day after all Events of Default
have been cured or waived.

(h) Promptly following the end of each fiscal quarter, the Issuing Bank shall
deliver (through the Administrative Agent) to each Lender and the Company a
report describing the aggregate Letters of Credit outstanding at the end of such
fiscal quarter. Upon the request of any Lender from time to time, the Issuing
Bank shall deliver to such Lender any other information reasonably requested by
such Lender with respect to each Letter of Credit then outstanding.

(i) The Borrowers’ obligations to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:

(1) Any lack of validity or enforceability of any Letter of Credit or this
Agreement;

(2) The existence of any claim, set-off, defense or other right which a Borrower
or any Subsidiary or Affiliate of a Borrower may have at any time against a

 

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beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), any Lender
(including the Issuing Bank) or any other Person, whether in connection with
this Agreement or the Letter of Credit or any document related hereto or thereto
or any unrelated transaction;

(3) Any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;

(4) Payment by the Issuing Bank under a Letter of Credit against presentation of
a draft or other document to the Issuing Bank that does not comply with the
terms of such Letter of Credit;

(5) Any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrowers’ obligations hereunder; or

(6) The existence of a Default or an Event of Default.

(j) Neither the Administrative Agent, the Issuing Bank, the Lenders nor any
Related Party of any of the foregoing shall have any liability or responsibility
by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of
any of the circumstances referred to above), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided, that neither the foregoing nor the provisions of 2.6(i)
shall be construed to excuse the Issuing Bank from liability to the Borrowers to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law) suffered by the Borrowers that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts or other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree, that in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

(k) Each Letter of Credit shall be subject to the International Standby
Practices, International Chamber of Commerce Publication No. 590 (1998), as the
same may be amended from time to time, and, to the extent not inconsistent
therewith, the governing law of this Agreement set forth in Section 11.5.

 

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(l) Each Existing Letter of Credit shall be deemed to be a Letter of Credit
issued by SunTrust Bank as the Issuing Bank on the Closing Date.

2.7 Additional Revolving Loans.

(a) From time to time after the Closing Date, the Borrowers may, upon written
notice to the Administrative Agent (who shall promptly provide a copy of such
notice to each Lender), request an increase (the “Increase Request”) in the
Aggregate Revolving Commitment Amount (the amount of any such increase, the
“Additional Revolving Commitment Amount”). The Increase Request shall specify
the amount of the Additional Revolving Commitment Amount and the date on which
the Additional Revolving Commitment Amount is to become effective (the “Increase
Date”) (which shall be a Business Day at least ten Business Days after the
delivery of the Increase Request and at least 30 days prior to the Commitment
Termination Date).

(b) The increase in the Aggregate Revolving Commitment Amount shall be
conditioned upon satisfaction of the following conditions:

(1) after giving effect to such increase, the Aggregate Revolving Commitment
Amount shall not exceed $90,000,000 (less any voluntary reductions pursuant to
Section 2.20);

(2) no Default or Event of Default shall have occurred and be continuing on the
relevant Increase Date or shall result from any Additional Revolving Commitment
Amount;

(3) the representations and warranties of the Borrowers set forth in this
Agreement shall be true and correct on and as of the relevant Increase Date as
if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date); and

(4) One or more existing or new Revolving Credit Lenders shall have agreed to
acquire the Additional Revolving Commitment Amount.

(c) Upon the receipt of the Increase Request, the Administrative Agent shall
direct the Arranger to solicit the acquisition of the Additional Revolving
Commitment Amount by having existing Revolving Credit Lenders increase their
respective Revolving Commitments then in effect, or by adding as new Revolving
Credit Lenders with new Revolving Commitments hereunder Persons who are not then
Revolving Credit Lenders (each a “New Revolving Credit Lender”), with the
approval of the Administrative Agent, which shall not be unreasonably withheld
or delayed, and the Company. Each existing Revolving Credit Lender shall have
the right for a period of ten (10) Business Days following its receipt of the
Increase Request to elect, by written notice to the Borrowers and the
Administrative Agent, to acquire all or any part of the

 

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Additional Revolving Commitment Amount, which notice shall specify the amount
such existing Revolving Credit Lender wishes to acquire (with each existing
Revolving Credit Lender giving such notice being referred to herein as an
“Increasing Revolving Credit Lender” and with such amount specified by such
Increasing Revolving Credit Lender being referred to herein as a “Proposed
Increase Amount”). If the total of the Proposed Increase Amounts exceeds the
Additional Revolving Commitment Amount requested by the Borrowers, then the
Additional Revolving Commitment Amount shall be allocated ratably among the
Increasing Revolving Credit Lenders, with each Increasing Revolving Credit
Lender’s allocation being a fraction, the numerator of which shall be the
Proposed Increase Amount of such Increasing Revolving Credit Lender and the
denominator of which shall be the sum of all of the Proposed Increase Amounts.
No existing Revolving Credit Lender (or any successor thereto) shall have any
obligation to increase its Revolving Commitment or its other obligations under
this Agreement and the other Loan Documents, and any decision by an existing
Revolving Credit Lender to increase its Revolving Commitment shall be made in
its sole discretion independently from any other Revolving Credit Lender. New
Revolving Credit Lenders will be solicited only if the total Proposed Increase
Amounts are less than the Additional Revolving Commitment Amount requested by
the Borrowers. The Borrowers shall cooperate and actively assist the
Administrative Agent and the Arranger in connection with any such solicitation
and shall reimburse the Administrative Agent and the Arranger for any reasonable
out-of-pocket fees or expenses incurred in connection with such solicitation.

(d) An increase in the aggregate amount of the Aggregate Revolving Commitment
Amount pursuant to this Section 2.7 shall become effective upon the receipt by
the Administrative Agent of an agreement in form and substance satisfactory to
the Administrative Agent signed by the Borrowers, the other Loan Parties and
each Increasing Revolving Credit Lender and each New Revolving Credit Lender,
setting forth the new or increased Revolving Commitments of such Revolving
Credit Lenders, together with a replacement or additional Revolving Note, as
applicable, evidencing the new or increased Revolving Commitment of each
affected Revolving Credit Lender, duly executed and delivered by the Borrowers
and such evidence of appropriate corporate authorization on the part of the
Borrowers and the other Loan Parties with respect to the increase in the
Revolving Commitments and such opinions of counsel for the Borrowers and the
other Loan Parties with respect to the increase in the Aggregate Revolving
Commitment Amount as the Administrative Agent may reasonably request.

(e) Upon the acceptance of any such agreement by the Administrative Agent, the
Aggregate Revolving Commitment Amount shall automatically be increased by the
amount of the Revolving Commitments added through such agreement, and this
Agreement shall automatically be deemed amended to reflect the Revolving
Commitments of all Lenders after giving effect to the addition of such Revolving
Commitments.

(f) Upon any increase in the aggregate amount of the Revolving Commitments
pursuant to this Section 2.7 that is not pro rata among all Revolving Credit
Lenders, within five (5) Business Days, the Borrowers shall concurrently prepay
such Revolving Loans in their entirety and, to the extent the Borrowers elect to
do so and subject to the conditions specified in Section 8, the Borrowers shall
reborrow Revolving Loans from the

 

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Revolving Credit Lenders in proportion to their respective Revolving Commitments
after giving effect to such increase, until such time as all outstanding
Revolving Loans are held by the Revolving Credit Lenders in such proportion.

2.8 Funding of Borrowings.

(a) Each Lender will make available each Loan to be made by it hereunder on the
proposed date thereof by wire transfer in immediately available funds by 1:00
p.m. to the Administrative Agent at the Payment Office; provided that the
Swingline Loans will be made as set forth in Section 2.5. The Administrative
Agent will make such Loans available to the Borrowers by promptly crediting the
amounts that it receives, in like funds by 3:00 p.m. on such proposed date, to
an account maintained by the Company with the Administrative Agent or at the
Company’s option, by effecting a wire transfer of such amounts to an account
designated by the Company to the Administrative Agent.

(b) Unless the Administrative Agent shall have been notified by any Lender prior
to the date of a Borrowing in which such Lender is participating that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Borrowing, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such date, and the
Administrative Agent, in reliance on such assumption, may make available to the
Borrowers on such date a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender on the
date of such Borrowing, the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with interest at
the Federal Funds Rate for up to two (2) days and thereafter at the rate
specified for such Borrowing. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent’s demand therefor, the
Administrative Agent shall promptly notify the Company, and the Borrowers shall
immediately pay such corresponding amount to the Administrative Agent together
with interest at the rate specified for such Borrowing. Nothing in this
subsection shall be deemed to relieve any Lender from its obligation to fund its
pro rata share of any Borrowing hereunder or to prejudice any rights which the
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.

(c) No Lender shall be responsible for any default by any other Lender in its
obligations hereunder, and each Lender shall be obligated to make its Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to make its Loans hereunder.

2.9 Interest Elections.

(a) On the Closing Date, each Borrowing shall be an Index Rate Loan. After the
Closing Date, each Borrowing initially shall be of the Type specified in the
applicable Notice of Borrowing, and in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Notice of Borrowing. Thereafter,
the Borrowers may elect to convert such Borrowing into a different Type or to
continue such Borrowing, and in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrowers may
elect different options with respect to different portions of the affected
Borrowing, in which

 

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case each such portion shall be allocated ratably among the Lenders holding
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. Notwithstanding the foregoing, at no
time shall the total number of LIBOR Borrowings outstanding exceed six and the
aggregate principal amount of each LIBOR Borrowing shall be not less than
$500,000 or a larger multiple of $100,000, and the aggregate principal amount of
each Base Rate Borrowing and each Index Rate Borrowing shall not be less than
$500,000 or a larger multiple of $100,000; provided, that Base Rate Loans and
Index Rate Loans made pursuant to Section 2.5 or Section 2.6(d) may be made in
lesser amounts as provided therein. If a Notice of Borrowing does not specify a
Type, the Borrowers shall be deemed to have requested an Index Rate Borrowing.

(b) To make an election pursuant to this Section, the Company shall give the
Administrative Agent prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing (a “Notice of Conversion/Continuation”)
that is to be converted or continued, as the case may be, (x) prior to 12:00
noon one (1) Business Day prior to the requested date of a conversion into a
Base Rate Borrowing or an Index Rate Borrowing and (y) prior to 12:00 noon three
(3) Business Days prior to a continuation of or conversion into a LIBOR
Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify (i) the Borrowing to which such Notice of Continuation/Conversion
applies and if different options are being elected with respect to different
portions thereof, the portions thereof that are to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (iii) whether the
resulting Borrowing is to be a Base Rate Borrowing, an Index Rate Borrowing or a
LIBOR Borrowing; and (iv) if the resulting Borrowing is to be a LIBOR Borrowing,
the Interest Period applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of “Interest Period.” If
any such Notice of Continuation/Conversion requests a LIBOR Borrowing but does
not specify an Interest Period, the Borrowers shall be deemed to have selected
an Interest Period of one month.

(c) If, on the expiration of any Interest Period in respect of any LIBOR
Borrowing, the Company shall have failed to deliver a Notice of
Conversion/Continuation when required by Section 2.9(b), then, unless such
Borrowing is repaid as provided herein, the Borrowers shall be deemed to have
elected to convert such Borrowing to an Index Rate Borrowing. No Borrowing may
be converted into, or continued as, a LIBOR Borrowing if a Default or an Event
of Default exists, unless the Administrative Agent and the Required Lenders
shall have otherwise consented in writing. No conversion of any LIBOR Loans
shall be permitted except on the last day of the Interest Period in respect
thereof, except as required by Section 2.16(ii).

(d) Upon receipt of any Notice of Conversion/Continuation, the Administrative
Agent shall promptly notify each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

2.10 Repayment of Loans.

(a) The outstanding principal amount of all Revolving Loans shall be due and
payable (together with accrued and unpaid interest thereon) on the Commitment
Termination Date.

 

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(b) The principal amount of each Swingline Borrowing shall be due and payable on
the Swingline Termination Date.

2.11 Interest on Loans. The Borrowers shall pay interest on the unpaid principal
amount of each Loan from the date of such Loan until such principal amount shall
be paid in full, at the following rates per annum:

(a) During such periods as such Loan is an Index Rate Loan, at a rate per annum
equal to the Index Rate plus the relevant Applicable Margin in effect from time
to time. The interest rate on Index Rate Loans shall be established based on the
Index Rate in effect on the first Index Rate Determination Date, and shall be
adjusted on each Index Rate Determination Date thereafter to reflect the Index
Rate then in effect.

(b) During such periods as such Loan is a Base Rate Loan, a rate per annum equal
at all times to the Base Rate plus the relevant Applicable Margin in effect from
time to time. The rate at which interest accrues on the unpaid principal balance
of the Base Rate Loans shall be changed effective as of the date of any change
in the Base Rate.

(c) During such periods as such Loan is a LIBOR Loan, at a rate per annum equal
to the LIBOR for the applicable Interest Period plus the relevant Applicable
Margin in effect from time to time. The applicable LIBOR shall remain in effect
until the end of the applicable Interest Period.

(d) While an Event of Default exists or after acceleration, the Borrowers shall
pay interest (“Default Interest”) with respect to (i) all LIBOR Loans at the
rate otherwise applicable for the then-current Interest Period plus an
additional 2% per annum until the earlier of (x) the date such Event of Default
is cured or waived in accordance with the terms of this Agreement and (y) the
last day of such Interest Period, and thereafter so long as such Event of
Default is continuing or after acceleration, at the rate then in effect for Base
Rate Loans, plus an additional 2% per annum, and (ii) with respect to all other
Obligations hereunder, at the rate then in effect for Base Rate Loans, plus an
additional 2% per annum.

(e) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans and Index Rate
Loans shall be payable monthly in arrears on the last day of each calendar month
and on the Commitment Termination Date or the Swingline Termination Date, as the
case may be. Interest on all outstanding LIBOR Loans shall be payable on the
last day of each Interest Period applicable thereto, and, in the case of any
LIBOR Loans having an Interest Period in excess of three months, on each day
which occurs every three months, after the initial date of such Interest Period,
and on the Commitment Termination Date. Interest on any Loan which is converted
into a Loan of another Type or which is repaid or prepaid shall be payable on
the date of such conversion or on the date of any such repayment or prepayment
(on the amount repaid or prepaid) thereof. All Default Interest shall be payable
on demand.

 

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(f) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder and shall promptly notify the Company and the Lenders of
such rate in writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.

2.12 Fees.

(a) The Borrowers shall pay to the Administrative Agent and the Arranger, for
their own respective accounts, fees in the amounts and at the times previously
agreed upon in writing by the Borrowers and the Administrative Agent and the
Arranger.

(b) The Borrowers agree to pay to the Administrative Agent for the account of
each Revolving Credit Lender the applicable Unused Fee, which shall accrue from
the date of this Agreement at the percentage applicable from time to time based
on the Senior Funded Debt Ratio of the Company and its Subsidiaries on the daily
amount of the unused Revolving Commitment of such Lender until the Commitment
Termination Date. Accrued Unused Fees shall be payable in arrears on the last
day of each March, June, September and December of each year and on the
Commitment Termination Date, commencing on the first such date after the date of
this Agreement. For purposes of computing unused fees with respect to the
Revolving Commitments, the Revolving Commitment of each Lender shall be deemed
used to the extent of the outstanding Revolving Loans and LC Exposure of such
Lender.

(c) The Borrowers agree to pay (i) to the Administrative Agent, for the account
of each Revolving Credit Lender, a letter of credit fee with respect to its
participation in each Letter of Credit, which shall accrue at the Applicable
Margin then applicable to Revolving LIBOR Loans, on the average daily amount of
such Revolving Credit Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) attributable to such Letter of
Credit during the period from and including the date of issuance of such Letter
of Credit to but excluding the date on which such Letter of Credit expires or is
drawn in full (including without limitation any LC Exposure that remains
outstanding after the Commitment Termination Date) and (ii) to the Issuing Bank
for its own account a fronting fee, which shall accrue at the rate of 0.25% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) attributable to such
Letter of Credit during the period from and including the date of issuance of
such Letter of Credit to but excluding the date on which such Letter of Credit
expires or is drawn in full (including without limitation any LC Exposure that
remains outstanding after the Commitment Termination Date), as well as the
Issuing Bank’s standard fees with respect to issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder. Accrued
letter of credit and fronting fees shall be payable quarterly in arrears on the
last day of each March, June, September and December, commencing on March 31,
2006, and on the Commitment Termination Date (and if later, the date the LC
Exposure shall be repaid in its entirety).

 

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2.13 Computation of Interest and Fees. Interest with respect to Base Rate Loans
shall be calculated on basis of a year of 365 or 366 days, as applicable, for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. All other
computations of interest and fees hereunder shall be made on the basis of a year
of 360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or fees are
payable (to the extent computed on the basis of days elapsed). Each
determination by the Administrative Agent of an interest amount or fee hereunder
shall be made in good faith and, except for manifest error, shall be final,
conclusive and binding for all purposes.

2.14 Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice appropriate
records evidencing the indebtedness of the Borrowers to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time
under this Agreement. The Administrative Agent shall maintain appropriate
records in which shall be recorded (i) the Revolving Commitment of each Lender,
(ii) the amount of each Loan made hereunder by each Lender, the Class and Type
thereof and the Interest Period applicable thereto, (iii) the date of each
continuation thereof pursuant to Section 2.9, (iv) the date of each conversion
of all or a portion thereof to another Type pursuant to Section 2.9, (v) the
date and amount of any principal or interest due and payable or to become due
and payable from the Borrowers to each Lender hereunder in respect of such Loans
and (vi) both the date and amount of any sum received by the Administrative
Agent hereunder from the Borrowers in respect of the Loans and each Lender’s pro
rata share thereof. The entries made in such records shall be prima facie
evidence of the existence and amounts of the obligations of the Borrowers
therein recorded; provided, that the failure or delay of any Lender or the
Administrative Agent in maintaining or making entries into any such record or
any error therein shall not in any manner affect the obligations of the
Borrowers to repay the Loans (both principal and unpaid accrued interest) of
such Lender in accordance with the terms of this Agreement.

(b) At the request of any Lender (including the Swingline Lender) at any time,
each Borrower agrees that it shall execute and deliver to such Lender a
Revolving Note and, in the case of the Swingline Lender only, a Swingline Note,
payable to the order of such Lender, in the applicable amount of such Lender’s
Commitment.

2.15 Inability to Determine Interest Rates. If prior to the commencement of any
Interest Period for any LIBOR Borrowing or on the Index Rate Determination Date
for any Index Rate Borrowing,

(1) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant interbank market, adequate means do not exist for
ascertaining LIBOR for such Interest Period or the Index Rate on such Index Rate
Determination Date, or

 

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(2) the Administrative Agent shall have received notice from any Lender that the
applicable LIBOR or the Index Rate, as applicable, does not adequately and
fairly reflect the cost to such Lender of making, funding or maintaining its, as
the LIBOR Loans for such Interest Period or its Index Rate Loans, as applicable,

the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Company and to the Lenders as soon as
practicable thereafter. In the case of LIBOR Loans, until the Administrative
Agent shall notify the Company and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) the obligations of the Lenders to make
LIBOR Loans or Index Rate Loans or to continue or convert outstanding Loans as
or into LIBOR Loans or Index Rate Loans shall be suspended and (ii) all such
affected LIBOR Rate Loans shall be converted into Base Rate Loans on the last
day of the then current Interest Period applicable thereto, and all Index Rate
Loans shall automatically be converted to Base Rate Loans, unless, in either
case, the Borrowers prepay such Loans in accordance with this Agreement. Unless
the Company notifies the Administrative Agent at least one Business Day before
the date of any LIBOR Revolving Loan Borrowing for which a Notice of Borrowing
as to such Revolving Loan Borrowing has previously been given that the Borrowers
elect not to borrow on such date, then such Revolving Loan Borrowing shall be
made as a Base Rate Borrowing.

2.16 Illegality. If any Change in Law shall make it unlawful or impossible for
any Lender to make, maintain or fund any LIBOR Loan or Index Rate Loan and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
promptly give notice thereof to the Company and the other Lenders, whereupon
until such Lender notifies the Administrative Agent and the Company that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make LIBOR Loans and Index Rate Loans, or to continue or convert
outstanding Loans as or into LIBOR Loans or Index Rate Loans, shall be
suspended. In the case of the making of a LIBOR Revolving Loan Borrowing or
Index Rate Revolving Loan Borrowing, such Lender’s Revolving Loan shall be made
as a Base Rate Loan as part of the same Revolving Loan Borrowing and if the
affected LIBOR Loan or Index Rate Loan is then outstanding, such Loan shall be
converted to a Base Rate Loan either (i) on the last day of the then current
Interest Period applicable to such LIBOR Loan if such Lender may lawfully
continue to maintain such Loan to such date or (ii) immediately if such Lender
shall determine that it may not lawfully continue to maintain such LIBOR Loan to
such date, and immediately in the case of an Index Rate Loan. Notwithstanding
the foregoing, the affected Lender shall, prior to giving such notice to the
Administrative Agent, designate a different Applicable Lending Office if such
designation would avoid the need for giving such notice and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

 

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2.17 Increased Costs.

(a) If any Change in Law shall:

(1) impose, modify or deem applicable any reserve, special deposit or similar
requirement that is not otherwise included in the determination of LIBOR or the
Index Rate hereunder against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Index Rate or LIBOR) or the Issuing Bank; or

(2) impose on any Lender or on the Issuing Bank or the eurodollar interbank
market any other condition affecting this Agreement or any Index Rate Loans or
LIBOR Loans made by such Lender or any Letter of Credit or any participation
therein;

and the result of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining an Index Rate Loan or a LIBOR
Loan or to increase the cost to such Lender or the Issuing Bank of participating
in or issuing any Letter of Credit or to reduce the amount received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal,
interest or any other amount), then the Borrowers shall promptly pay, upon
written notice from and demand by such Lender on the Company (with a copy of
such notice and demand to the Administrative Agent), to the Administrative Agent
for the account of such Lender, within five Business Days after the date of such
notice and demand, the additional amount or amounts sufficient to compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.

(b) If any Lender or the Issuing Bank shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital (or on the capital of such Lender’s or the Issuing Bank’s
parent company) as a consequence of its obligations hereunder or under or in
respect of any Letter of Credit to a level below that which such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s parent company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the Issuing Bank’s policies or the policies of such Lender’s or the Issuing
Bank’s parent company with respect to capital adequacy) then, from time to time,
within five (5) Business Days after receipt by the Company of written demand by
such Lender (with a copy thereof to the Administrative Agent), the Borrowers
shall pay to such Lender such additional amounts as will compensate such Lender
or the Issuing Bank or such Lender’s or the Issuing Bank’s parent company for
any such reduction suffered. Notwithstanding the foregoing, the affected Lender
shall, prior to giving such notice to the Administrative Agent, designate a
different Applicable Lending Office if such designation would avoid the need for
giving demand hereunder and if such designation would not otherwise be
disadvantageous to such Lender in the good faith exercise of its discretion.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or such Lender’s
or the Issuing Bank’s parent company, as the case may be, specified in paragraph
(a) or (b) of this Section, and the calculation thereof, shall be delivered to
the Company (with a copy to the Administrative Agent) and shall be conclusive,
absent manifest error. The Borrowers shall pay any such Lender or the Issuing
Bank, as the case may be, such amount or amounts within 10 days after receipt
thereof.

 

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2.18 Funding Indemnity. In the event of (a) the payment of any principal of a
LIBOR Loan other than on the last day of the Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion or
continuation of a LIBOR Loan other than on the last day of the Interest Period
applicable thereto, or (c) the failure by the Borrowers to borrow, prepay,
convert or continue any LIBOR Loan on the date specified in any applicable
notice (regardless of whether such notice is withdrawn or revoked), then, in any
such event, the Borrowers shall compensate each Lender, within five (5) Business
Days after written demand from such Lender, for any loss, cost or expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (A) the amount of interest that would have accrued on the
principal amount of such LIBOR Loan if such event had not occurred at LIBOR
applicable to such LIBOR Loan for the period from the date of such event to the
last day of the then current Interest Period therefor (or in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such LIBOR Loan) over (B) the amount of interest that would
accrue on the principal amount of such LIBOR Loan for the same period if LIBOR
were set on the date such LIBOR Loan was prepaid or converted or the date on
which the Borrowers failed to borrow, convert or continue such LIBOR Loan. A
certificate as to any additional amount payable under this Section submitted to
a Borrower by any Lender (with a copy to the Administrative Agent) shall be
conclusive, absent manifest error.

2.19 Taxes.

(a) Any and all payments by or on account of any obligation of the Borrowers
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrowers shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, any Lender or the Issuing Bank (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrowers shall make such deductions
and (iii) the Borrowers shall pay the full amount deducted to the relevant
governmental authority in accordance with applicable law.

(b) In addition, the Borrowers shall pay any Other Taxes to the relevant
governmental authority in accordance with applicable law.

(c) The Borrowers shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within five (5) Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrowers
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties,

 

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interest and reasonable expenses arising therefrom or with respect thereto
(other than penalties, interest and expenses arising from gross negligence,
willful misconduct or a material breach of the material obligations of the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, which
breach continues after notice thereof has been given to such party in breach by
the Borrowers), whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant governmental authority.
A certificate as to the amount of such payment or liability delivered to the
Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrowers to a governmental authority, the Borrowers shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such governmental authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Any Foreign Lender that becomes a party to this Agreement and that is
entitled to an exemption from or reduction of withholding tax under the Code or
any treaty to which the United States is a party with respect to payments under
this Agreement shall deliver to the Borrowers (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrowers as will permit such payments to be made without
withholding or at a reduced rate. Without limiting the generality of the
foregoing, each Foreign Lender agrees that it will deliver to the Administrative
Agent and the Borrowers (or in the case of a Participant, to the Lender from
which the related participation shall have been purchased), as appropriate, two
(2) duly completed copies of (i) Internal Revenue Service Form W-8 ECI, or any
successor form thereto, certifying that the payments received from the Borrowers
hereunder are effectively connected with such Foreign Lender’s conduct of a
trade or business in the United States; or (ii) Internal Revenue Service Form
W-8 BEN, or any successor form thereto, certifying that such Foreign Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest; or
(iii) Internal Revenue Service Form W-8 BEN, or any successor form prescribed by
the Internal Revenue Service, together with a certificate (A) establishing that
the payment to the Foreign Lender qualifies as “portfolio interest” exempt from
U.S. withholding tax under Code section 871(h) or 881(c), and (B) stating that
(1) the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A),
or the obligation of a Borrower hereunder is not, with respect to such Foreign
Lender, a loan agreement entered into in the ordinary course of its trade or
business, within the meaning of that section; (2) the Foreign Lender is not a
10% shareholder of a Borrower within the meaning of Code section 871(h)(3) or
881(c)(3)(B); and (3) the Foreign Lender is not a controlled foreign corporation
that is related to a Borrower within the meaning of Code section 881(c)(3)(C);
or (iv) such other Internal Revenue Service forms as may be applicable to the
Foreign Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender
shall deliver to the Borrowers and the Administrative Agent such forms on or
before the date that it becomes a party to this Agreement (or in the case of a
Participant, on or before the date such Participant purchases the related
participation). In addition, each such Foreign Lender

 

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shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Foreign Lender. Each such Foreign Lender shall
promptly notify the Borrowers and the Administrative Agent at any time that it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrowers (or any other form of certification
adopted by the Internal Revenue Service for such purpose). Each Foreign Lender
agrees to indemnify and hold the Borrowers harmless from any United States
taxes, penalties, interest and other expenses, losses or costs incurred or
payable as a result of the Borrowers’ reliance on the forms and certificates
delivered by such Foreign Lender pursuant to this Section 2.19(e). For any
period for which a Foreign Lender has failed to provide the forms and
certifications contemplated by this Section 2.19(e), such Foreign Lender shall
not be entitled to indemnification under Section 2.19 for any Indemnified Taxes
imposed by the United States which would not have been imposed but for the
failure of such Foreign Lender to provide such forms.

2.20 Optional Reduction and Termination of Commitments.

(a) Unless previously terminated, all Revolving Commitments shall terminate on
the Commitment Termination Date, except that the Swingline Commitment shall
terminate on the Swingline Termination Date.

(b) Upon at least three (3) Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) from the Company to the Administrative
Agent (which notice shall be irrevocable), the Borrowers may reduce the
Aggregate Revolving Commitments in part or terminate the Aggregate Revolving
Commitments in whole, provided, that (i) any partial reduction shall apply to
reduce proportionately and permanently the Revolving Commitment of each
Revolving Credit Lender, (ii) any partial reduction pursuant to this
Section 2.20 shall be in an amount of at least $5,000,000 and any larger
multiple of $1,000,000, and (iii) no such reduction shall be permitted which
would reduce the Aggregate Revolving Commitments to an amount less than the
outstanding Revolving Credit Exposures of all Revolving Credit Lenders. Any such
reduction in the Aggregate Revolving Commitments shall result in a proportionate
reduction (rounded to the next lowest integral multiple of $100,000) in the
Swingline Commitment and the LC Commitment.

2.21 Optional Prepayments. The Borrowers shall have the right at any time and
from time to time to prepay any Borrowing, in whole or in part, by giving
irrevocable written notice (or telephonic notice promptly confirmed in writing)
to the Administrative Agent no later than (i) in the case of prepayment of any
LIBOR Borrowing, 12:00 noon not less than three (3) Business Days prior to any
such prepayment, (ii) in the case of any prepayment of any Base Rate Borrowing
or Index Rate Borrowing, not less than one Business Day prior to the date of
such prepayment, and (iii) in the case of Swingline Borrowings, prior to 12:00
noon on the date of such prepayment, provided that no notice shall be required
for the prepayment of any Cash Management Swingline Loans. Each such notice
shall be irrevocable and shall specify the proposed date of such prepayment and
the principal amount of each Borrowing or portion thereof to be prepaid. Upon
receipt of any such notice, the Administrative Agent shall promptly notify each
affected Lender of the contents thereof and of such Lender’s pro rata share of
any such

 

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prepayment. If such notice is given, the aggregate amount specified in such
notice shall be due and payable on the date designated in such notice, together
with accrued interest to such date on the amount so prepaid in accordance with
Section 2.11; provided, that if a LIBOR Borrowing is prepaid on a date other
than the last day of an Interest Period applicable thereto, the Borrowers shall
also pay all amounts required pursuant to Section 2.18. Each partial prepayment
of any Loan (other than a Swingline Loan) shall be in an amount that would be
permitted in the case of an advance of a Revolving Loan Borrowing of the same
Type pursuant to Section 2.2 or in the case of a Swingline Loan pursuant to
Section 2.4. Each prepayment of a Borrowing shall be applied ratably to the
Loans comprising such Borrowing.

2.22 Mandatory Prepayments and Commitment Reductions.

(a) Upon the occurrence of any Equity Issuance by the Company or any of its
Subsidiaries, the Borrowers shall prepay the Revolving Loans in an amount equal
to the lesser of (x) the then outstanding principal amount of the Revolving
Loans and accrued and unpaid interest thereon and (y) 100% of the Net Cash
Proceeds of such Equity Issuance. Such prepayment shall be made within ten
(10) Business Days after the date of such Equity Issuance and shall be applied
toward the prepayment of the Revolving Loans as set forth in Section 2.22(d).

(b) Upon the incurrence of any Debt (as specified in clauses (a) and (j) of the
definition thereof) by the Company or any of its Subsidiaries (excluding any
Obligations), the Borrowers shall prepay the Revolving Loans in an amount equal
to the lesser of (x) the then outstanding principal amount of the Revolving
Loans and accrued and unpaid interest thereon and (y) 100% of the Net Cash
Proceeds of such Debt. Such prepayment shall be applied within ten (10) Business
Days after the date of such incurrence of Debt toward the prepayment of the
Revolving Loans as set forth in Section 2.22(d).

(c) If on any date the Company or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale, Purchase Price Refund or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof (within ten
(10) Business Days after such Asset Sale, Purchase Price Refund or Recovery
Event), the Borrowers shall prepay the Revolving Loans in an amount equal to the
lesser of (x) the then outstanding principal amount of the Revolving Loans and
accrued and unpaid interest thereon and (y) such Net Cash Proceeds. Such
prepayment shall be applied on the 11th Business Day following such Asset Sale,
Purchase Price Refund or Recovery Event toward the prepayment of the Revolving
Loans as set forth in Section 2.22(d).

(d) Amounts to be applied in connection with prepayments made pursuant to this
Section 2.22 shall be applied to the prepayment of the Revolving Loans, but not
the reduction of the Revolving Commitments. The application of any prepayment
pursuant to this Section 2.22 shall be made, first, to Base Rate Loans, second,
to Index Rate Loans and, third, to LIBOR Loans; provided that if such prepayment
of LIBOR Loans would result in a breakage cost pursuant to Section 2.18(a), the
Company shall have the option to direct the Administrative Agent to invest the
prepayment otherwise required to be made on such LIBOR Loans in

 

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certificates of deposit or money market accounts issued by the bank serving as
the Administrative Agent (but otherwise at the Company’s sole risk) until the
end of the currently effective interest periods for such LIBOR Loans or such
time as such LIBOR Loans may otherwise be prepaid without a breakage cost
pursuant to Section 2.18(a); such investments shall be deemed to be additional
collateral for the Obligations and held on the terms of Section 3 hereof. Each
prepayment of the Loans under this Section shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

(e) If at any time the Revolving Credit Exposure of all Lenders exceeds the
Aggregate Revolving Commitment Amount, as reduced pursuant to Section 2.21 or
otherwise, the Borrowers shall immediately repay Swingline Loans and Revolving
Loans in an amount equal to such excess, together with all accrued and unpaid
interest on such excess amount and any amounts due under Section 2.18. Each
prepayment shall be applied first to the Swingline Loans to the full extent
thereof, second to the Base Rate Loans to the full extent thereof, third to the
Index Rate Loans to the fullest extent thereof, and finally to the LIBOR Loans
to the full extent thereof. If after giving effect to prepayment of all Loans,
the Revolving Credit Exposure of all Lenders exceeds the Aggregate Revolving
Commitment Amount, the Borrowers shall be required to provide cash collateral
for the Letters of Credit pursuant to the foregoing sentence, the Borrowers
shall effect the same by paying to the Administrative Agent, for the benefit of
the Issuing Bank, immediately available funds in an amount equal to the required
amount, which funds shall be retained by the Administrative Agent, for the
benefit of the Issuing Bank, in a cash collateral account until the earlier to
occur of (1) the date the affected Letters of Credit shall have been terminated
or cancelled, and (2) the date the Revolving Credit Exposure of all Lenders no
longer exceeds the Aggregate Revolving Commitment Amount, at which time the cash
collateral shall be paid to the Company.

2.23 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) Each borrowing by the Borrowers from the Lenders hereunder, each payment by
the Borrowers on account of any Unused Fee or Letter of Credit Fee (other than
the fronting fee payable solely to the Issuing Bank) and any reduction of the
Revolving Commitments of the Lenders shall be made pro rata according to the
respective Revolving Credit Percentages of the relevant Lenders. Each payment
(other than prepayments) in respect of principal or interest in respect of the
Loans and each payment in respect of fees payable hereunder shall be applied to
the amounts of such obligations owing to the Lenders pro rata according to the
respective amounts then due and owing to the Lenders.

(b) Each payment (including each prepayment) by the Borrowers on account of
principal of and interest on the Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders. Each payment in respect
of LC Disbursements in respect of any Letter of Credit shall be made to the
Issuing Bank that issued such Letters of Credit.

(c) The Borrowers shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of

 

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amounts payable under Sections 2.17, 2.18 or 2.19, or otherwise) prior to 12:00
noon, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at the Payment Office,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.17,
2.18 and 2.19 and 11.3 shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be made payable for the period of such extension. All payments
hereunder shall be made in Dollars.

(d) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(e) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans that would
result in such Lender receiving payment of a greater proportion of the aggregate
amount of its Loans and participations in LC Disbursements and Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans and participations in LC Disbursements and Swingline Loans; provided, that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Disbursements or Swingline Loans to any assignee
or participant, other than to the Borrowers or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrowers rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of a Borrower in the amount of such participation.

 

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(f) Unless the Administrative Agent shall have received notice from the Company
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrowers will
not make such payment, the Administrative Agent may assume that the Borrowers
have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount or amounts due. In such event, if the Borrowers have not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with generally accepted banking industry rules on interbank
compensation then in effect.

(g) If any Lender shall fail to make any payment required to be made by it
pursuant to Sections 2.5(b), 2.6(c) or 2.6(d), 2.6(e), 2.23(d) or 11.3(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

2.24 Mitigation of Obligations; Replacement of Lenders.

(a) Determination of amounts payable under Sections 2.16, 2.17, 2.18 or 2.19 in
connection with a LIBOR Borrowing shall be calculated as though each Lender
funded its LIBOR Borrowing through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
LIBOR applicable to such LIBOR Borrowing, whether in fact that is the case or
not. If any Lender is unable to make or maintain LIBOR Loans when other Lenders
are able to make or maintain LIBOR Loans, requests compensation under
Section 2.17, or if the Borrowers are required to pay any additional amount to
any Lender or any governmental authority for the account of any Lender pursuant
to Section 2.19, then, upon the Company’s written request to such Lender, such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the sole
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable under Section 2.17 or Section 2.19, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with such designation or assignment requested by the Company.

(b) If any Lender is unable to make or maintain LIBOR Loans when other Lenders
are able to make or maintain LIBOR Loans, requests compensation under
Section 2.17, or if a Borrower is required to pay any additional amount to any
Lender or any governmental

 

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authority for the account of any Lender pursuant to Section 2.19, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set forth in
Section 11.4(b), and the Borrowers shall be obligated to pay the recordation and
processing fee referred to therein) all its interests, rights and obligations
under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender); provided, that (i) the Borrowers shall have
received the prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal amount of all Loans owed to it,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (in the case of such outstanding principal and
accrued interest) and from the Borrowers (in the case of all other amounts),
(iii) the Borrowers shall be liable to such replaced Lender under Section 2.18
(as though Section 2.18 were applicable) if any LIBOR Loan owing to such
replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, and (iv) no Event of Default shall have occurred and be
continuing. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrowers to require such assignment
and delegation cease to apply.

(c) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to Sections 2.17, 2.18 or 2.19 shall not constitute a
waiver of such Lender’s or the Issuing Bank’s right to demand such compensation,
provided that the Borrowers shall not be required to compensate a Lender or the
Issuing Bank pursuant to Sections 2.17, 2.18 or 2.19 for any increased costs
incurred or reductions suffered more than 180 days prior to the date that such
Lender or the Issuing Bank, as the case may be, notifies the Company of the
Change in Law or other event giving rise to such tax, increased costs or
reductions and of such Lender’s or the Issuing Bank’s intention to claim
compensation therefor (except that, if the Change in Law or other event giving
rise to such tax, increased costs or reductions is retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive
effect thereof).

SECTION 3. Security.

3.1 Security Interest. Each Borrower hereby assigns and pledges to the
Administrative Agent, for the ratable benefit of the Lenders, and hereby grants
to the Administrative Agent, for the ratable benefit of the Lenders, a first
priority security interest in all of such Borrower’s right, title and interest
in and to the Collateral (subject to Liens permitted by this Agreement), whether
now owned or hereafter acquired by such Borrower, including all proceeds of any
and all of the foregoing or hereinafter-described Collateral (including, without
limitation, proceeds that constitute property of the types described herein)
and, to the extent not otherwise included, all policies of insurance on any
property of such Borrower and all payments and proceeds under any such insurance
(whether or not the Administrative Agent is the loss payee thereof, for the
ratable benefit of the Lenders), or any indemnity warranty or guaranty payable
by reason of loss or damage to or otherwise with respect to any of the foregoing

 

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Collateral; all cash proceeds of the Collateral; and all books of account and
records, including all computer software relating thereto. This Agreement
secures the payment of all Obligations of the Borrowers now or hereafter
existing or arising. Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the
Obligations and would be owed by each Borrower to the Administrative Agent and
any of the Lenders but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving such Borrower.

3.2 Representations and Warranties Concerning the Collateral.

(a) All items of equipment and inventory of each Borrower with an aggregate book
value in excess of $100,000 are located at the places specified in Schedule 3.2
hereto. During the five years immediately preceding the date of this Agreement,
no Borrower nor any predecessor of any Borrower has used any corporate or
fictitious name other than its current corporate name. No Borrower has any trade
names. The chief executive office and mailing address of each Borrower is
located at 11730 Plaza America Drive, Reston, Virginia 20190. The exact legal
name of each Borrower is that indicated on the signature pages hereof. The
Borrowers are organizations of the types, and are organized in the
jurisdictions, set forth herein. The signature page hereof accurately sets forth
each Borrower’s organizational identification number.

(b) The Borrowers are the legal and beneficial owners of the Collateral free and
clear of any lien, security interest, option or other charge or encumbrance
except for the security interest created by this Agreement or permitted by this
Agreement. No effective financing statement or other document similar in effect
covering all or any part of the Collateral is on file in any recording office,
except those filed in connection with the Existing Agreement as permitted by
this Agreement such as may have been filed in favor of the Administrative Agent,
for the ratable benefit of the Lenders, relating to this Agreement or otherwise
permitted by this Agreement.

(c) The Borrowers have exclusive possession and control of the Collateral.

(d) This Agreement creates a valid security interest in the Collateral, securing
the payment of the Obligations and, when properly perfected, shall constitute a
valid perfected security interest in such Collateral, free and clear of all
Liens except as created or permitted by this Agreement.

(e) Any inventory produced by a Borrower has been produced by such Borrower in
compliance with all requirements of the Fair Labor Standards Act.

(f) Each Borrower represents and warrants as to each and every Receivable
included in assets on the consolidated balance sheet of the Company and its
Subsidiaries that: (1) it is a bona fide existing obligation, valid and
enforceable to the knowledge of the Company against the Customer, for software
installed or licensed, goods sold or leased or services rendered in the ordinary
course of business; (2) it is subject to no dispute, defense or offset in an
amount of greater than $500,000 except as disclosed in writing to the
Administrative Agent or as

 

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reflected or reserved for in the financial statements delivered from time to
time by the Borrowers to the Administrative Agent hereunder; (3) all
instruments, chattel paper and other evidence of indebtedness issued to a
Borrower with respect to any Receivable have been made available to the
Administrative Agent, and, together with all supporting documents delivered to
the Administrative Agent, are genuine, complete, valid and enforceable in
accordance with their terms; (4) it is not subject to any material discount,
allowance or special terms of payment except in the ordinary course of business
or as disclosed in writing to the Administrative Agent; and (5) except as
required by the Assignment of Claims Act, it is not and shall not be subject to
any prohibition or limitation upon assignment.

(g) As of the Closing Date, no Borrower owns in fee any real property, other
than the Condo Unit, or any leasehold estate in any real property with a term
(including all renewal options) of more than 20 years.

3.3 Covenants Concerning the Collateral.

(a) Each Borrower shall promptly inform the Administrative Agent of (1) any
dispute in excess of $500,000 with a Customer and (2) the bankruptcy,
insolvency, receivership, assignment for the benefit of creditors or suspension
of business of any material Customer of which such Borrower has knowledge. No
Borrower shall compromise or discount any Receivable without the prior written
consent of the Administrative Agent except for ordinary trade discounts or
allowances for prompt payment or as otherwise deemed by such Borrower to be in
its best commercial interests.

(b) Upon the occurrence and during the continuation of an Event of Default, upon
demand by the Administrative Agent, each Borrower shall establish and maintain a
lockbox with the Administrative Agent and shall direct all Customers to make
payments on Collateral to such lockbox by printing such direction on all
invoices given to Customers. Each Borrower also shall remit to such lockbox or
deliver to the Administrative Agent all payments on Collateral received by such
Borrower. Such payments shall be remitted or delivered in their original form on
the day of receipt. All notes, checks and other instruments so received by each
Borrower shall be duly endorsed to the order of the Administrative Agent. The
payments remitted to the lockbox and all payments delivered to the
Administrative Agent shall be credited to a cash collateral account maintained
by the Administrative Agent in the name of the Company over which the
Administrative Agent shall have the exclusive power of withdrawal. All collected
funds in such cash collateral account shall be applied to the Obligations by the
Administrative Agent on each Business Day, whether or not the Obligations are
then due.

(c) Upon the occurrence and during the continuation of an Event of Default, to
facilitate direct collection of the Collateral, the Administrative Agent shall
have the right to take over the post office boxes of the Borrowers or make other
arrangements, with which the Borrowers shall cooperate, to receive the mail of
each Borrower.

(d) The Borrowers shall execute all other agreements, instruments and documents
and shall perform all further acts that the Administrative Agent may require
with respect to Receivables owing by the Government to ensure compliance with
the Assignment of

 

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Claims Act, provided that, as long as no Event of Default has occurred and is
continuing, the Administrative Agent has no present intent to require, but
reserves the right to so require, Assignment of Claims Act filings for any
Government Contract.

(e) All of the inventory and equipment of each Borrower will be kept only at the
locations set forth on Schedule 3.2, as amended from time to time upon written
notice from the Company to the Administrative Agent The Borrowers shall give the
Administrative Agent prior written notice before any material inventory or
equipment is moved or delivered to a location other than such designated places
of business, and the lien and security interest of the Administrative Agent for
the ratable benefit of the Lenders will be maintained despite the location of
the inventory or equipment. Without the prior written consent of the
Administrative Agent, no Borrower shall move or deliver inventory or equipment
with a book value in any instance or in the aggregate of $200,000 or more to a
location outside of the United States of America. The foregoing provisions shall
not apply to inventory sold in the ordinary course of business of the Borrowers.

(f) Each Borrower shall have its equipment and inventory insured against loss or
damage by fire, theft, burglary, pilferage, loss in transportation and such
other hazards as the Administrative Agent shall reasonably specify, by insurers
reasonably satisfactory to the Administrative Agent, in amounts reasonably
satisfactory to the Administrative Agent and under policies containing loss
payable clauses satisfactory to the Administrative Agent. Any such insurance
policies, or certificates or other evidence thereof satisfactory to the
Administrative Agent, shall be deposited with the Administrative Agent. Each
Borrower agrees that the Administrative Agent, for the ratable benefit of the
Lenders, shall have a security interest in such policies and the proceeds of
such policies thereof, and if any loss shall occur during the continuation of an
Event of Default, the proceeds relating to the loss or damage of the equipment
or inventory may be applied to the payment of the Obligations or to the
replacement or restoration of the inventory or equipment damaged or destroyed,
as the Administrative Agent may elect or direct. After the occurrence and during
the continuance of an Event of Default, the Administrative Agent shall have the
right to file claims under any insurance policies, to receive, receipt and given
acquittance for any payments that may be made thereunder, and to execute any and
all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect to the collection, compromise, or
settlement of any claims under any of the insurance policies.

(g) Each Borrower, at its expense, will defend the Collateral against any claims
or demands adverse to the Administrative Agent’s security interest and will
promptly pay when due all taxes or assessments levied against such Borrower on
the Collateral, except for Liens created or permitted by this Agreement, or as
contested by such Borrower in good faith and in appropriate proceedings,
provided that the enforcement of any such claim or demand is stayed during the
term of such contest and proceedings.

(h) Each Borrower shall provide the Administrative Agent such information as the
Administrative Agent from time to time reasonably may request with respect to
the Collateral, including, without limitation, statements describing,
designating, identifying and evaluating all Collateral.

 

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3.4 Perfection of Security Interest.

(a) Each Borrower hereby irrevocably authorizes the Administrative Agent, for
the ratable benefit of the Lenders, at any time and from time to time to file in
any Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (1) indicate the Collateral (i) as all assets of such
Borrower or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9A of the Uniform
Commercial Code of the State or such jurisdiction, or (ii) as being of an equal
or lesser scope or with greater detail, and (2) contain any other information
required by part 5 of Article 9A of the Uniform Commercial Code of the State or
such jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether such 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. Each Borrower agrees to furnish any such information to the
Administrative Agent promptly upon request. Each Borrower also ratifies its
authorization for the Administrative Agent to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.

(b) Without providing at least 10 days’ prior written notice to the
Administrative Agent, no Borrower shall change its name, its type of
organization, jurisdiction of organization or other legal structure, its place
of business or, if more than one, chief executive office, or its mailing address
or organizational identification number if it has one. If a Borrower does not
have an organizational identification number and later obtains one, such
Borrower shall forthwith notify the Administrative Agent of such organizational
identification number.

(c) If a Borrower shall at any time hold or acquire any promissory notes or
tangible chattel paper as part of the Collateral, such Borrower shall forthwith
endorse, assign and deliver the same to the Administrative Agent, for the
ratable benefit of the Lenders, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to
time specify.

(d) For each deposit account that a Borrower at any time opens or maintains,
such Borrower shall, at the Administrative Agent’s request, pursuant to a
control agreement in form and substance satisfactory to the Administrative
Agent, cause the depositary bank to agree to comply at any time during the
continuation of an Event of Default with instructions from the Administrative
Agent to such depositary bank directing the disposition of funds from time to
time credited to such deposit account, without further consent of such Borrower.
The Administrative Agent agrees with each Borrower that the Administrative Agent
shall not give any such instructions or withhold any withdrawal rights from such
Borrower, unless an Event of Default has occurred and is continuing or would
occur as a result thereof. The provisions of this paragraph shall not apply to
(i) any deposit account for which a Borrower, the depositary bank

 

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and the Administrative Agent have entered into a cash collateral agreement
specially negotiated among such Borrower, the depositary bank and the
Administrative Agent for the specific purpose set forth therein, (ii) deposit
accounts for which the Administrative Agent is the depositary, (iii) deposit
accounts specially and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of such Borrower’s
salaried employees, and (iv) deposit accounts for which such Borrower is acting
as an agent to distribute funds other than funds of the Borrower to a third
party.

(e) If a Borrower shall at any time hold or acquire any certificated securities,
such Borrower shall, upon the Administrative Agent’s written request therefor,
forthwith endorse, assign and deliver the same to the Administrative Agent to be
held as Collateral for the ratable benefit of the Lenders, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time specify. If any securities now or
hereafter acquired by a Borrower are uncertificated and are issued to such
Borrower or its nominee directly by the issuer thereof, that Borrower shall
immediately notify the Administrative Agent thereof and, at the Administrative
Agent’s request and option, pursuant to an agreement in form and substance
satisfactory to the Administrative Agent, cause the issuer to agree to comply
during the continuation of an Event of Default with instructions from the
Administrative Agent as to such securities, without further consent of such
Borrower or such nominee. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired by a
Borrower are held by such Borrower or its nominee through a securities
intermediary or commodity intermediary, such Borrower shall immediately notify
the Administrative Agent thereof and, at the Administrative Agent’s request,
pursuant to a securities control agreement in form and substance satisfactory to
the Administrative Agent, cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply during the continuation of an
Event of Default with entitlement orders or other instructions from the
Administrative Agent to such securities intermediary as to such securities or
other investment property, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by the
Administrative Agent to such commodity intermediary, in each case without
further consent of such Borrower or such nominee. The Administrative Agent
agrees with each Borrower that the Administrative Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by such Borrower, unless an
Event of Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights not otherwise permitted by the Loan
Documents, would occur. The provisions of this paragraph shall not apply to any
financial assets credited to a securities account for which the Administrative
Agent is the securities intermediary.

(f) If any goods with an aggregate book value in excess of $250,000 are at any
time in the possession of a bailee, each Borrower shall promptly notify the
Administrative Agent thereof and, if requested by the Administrative Agent,
shall promptly obtain an acknowledgement from the bailee, in form and substance
satisfactory to the Administrative Agent, that the bailee holds such Collateral
for the benefit of the Administrative Agent and shall act upon the instructions
of the Administrative Agent, without the further consent of such Borrower. The
Administrative Agent agrees with each Borrower that the Administrative Agent

 

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shall not give any such instructions unless an Event of Default has occurred and
is continuing or would occur after taking into account any action by such
Borrower with respect to the bailee.

(g) If a Borrower at any time holds or acquires an interest in any electronic
chattel paper or any “transferable record,” as that term is defined in
Section 201 of the federal Electronic Signatures in Global and National Commerce
Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, such Borrower shall promptly notify the Administrative
Agent thereof and, at the request of the Administrative Agent, shall take such
action as the Administrative Agent may reasonably request to vest in the
Administrative Agent, for the ratable benefit of the Lenders, control, under
§9-105 of the Uniform Commercial Code, of such electronic chattel paper or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, §16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Administrative Agent agrees with each Borrower that the
Administrative Agent will arrange, pursuant to procedures satisfactory to the
Administrative Agent and so long as such procedures will not result in the
Administrative Agent’s loss of control, for such Borrower to make alterations to
the electronic chattel paper or transferable record permitted under UCC §9-105
or, as the case may be, Section 201 of the federal Electronic Signatures in
Global and National Commerce Act or §16 of the Uniform Electronic Transactions
Act for a party in control to make without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by such Borrower with respect to such electronic chattel paper or
transferable record.

(h) If a Borrower is at any time a beneficiary under a letter of credit now or
hereafter issued in favor of such Borrower, that Borrower shall promptly notify
the Administrative Agent thereof and, at the request of the Administrative
Agent, such Borrower shall, pursuant to an agreement in form and substance
satisfactory to the Administrative Agent, arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the
Administrative Agent, for the ratable benefit of the Lenders, during the
continuation of an Event of Default of the proceeds of any drawing under the
letter of credit, with the Administrative Agent agreeing that the proceeds of
any drawing under the letter to credit are to be applied to the payment of the
Obligations, for the ratable benefit of the Lenders.

(i) If a Borrower shall at any time hold or acquire a commercial tort claim in
excess of $100,000, that Borrower shall promptly notify the Administrative Agent
in a writing signed by such Borrower of the brief details thereof and grant to
the Administrative Agent, for the ratable benefit of the Lenders, in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Administrative Agent.

(j) If required by the Administrative Agent, each Borrower that owns any
Intellectual Property that is registered with the United States Patent and
Trademark Office or the United States Copyright Office, shall execute and
deliver an Intellectual Property Assignment and shall record such Intellectual
Property Assignment with the United States Patent and Trademark Office and the
United States Copyright Office, as applicable.

 

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(k) Each Borrower further agrees to take any other action reasonably requested
by the Administrative Agent to insure the attachment, perfection and first
priority of, and the ability of the Administrative Agent to enforce, the
Administrative Agent’s security interest in any and all of the Collateral, for
the ratable benefit of the Lenders, including, without limitation,
(1) executing, delivering and, where appropriate, filing financing statements
and amendments relating thereto under the Uniform Commercial Code, to the
extent, if any, that such Borrower’s signature thereon is required therefor,
(2) causing the Administrative Agent’s name to be noted as the Lender on any
certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in such Collateral, held
for the ratable benefit of the Lenders, (3) complying with any provision of any
statute, regulation or treaty of the United States as to any Collateral if
compliance with such provision is a condition to attachment, perfection or
priority of, or ability of the Administrative Agent to enforce, the
Administrative Agent’s security interest in such Collateral, held for the
ratable benefit of the Lenders, (4) obtaining governmental and other third party
consents and approvals, including without limitation any consent of any
licensor, lessor or other person obligated on Collateral, (5) obtaining waivers
from mortgagees and landlords in form and substance satisfactory to the
Administrative Agent and (6) taking all actions required by any earlier versions
of the Uniform Commercial Code or by other law, as applicable in any relevant
Uniform Commercial Code jurisdiction, or by other law as applicable in any
foreign jurisdiction.

3.5 Power of Attorney. Each Borrower appoints the Administrative Agent and any
officer, employee or agent of the Administrative Agent, as the Administrative
Agent from time to time may designate, as attorneys-in-fact for a Borrower to
perform all actions necessary or desirable in the discretion of the
Administrative Agent to enforce its security interest in the Collateral, for the
ratable benefit of the Lenders, and to exercise such rights and powers as each
Borrower might exercise with respect to the Collateral, all at the reasonable
cost and expense of the Borrowers. Each Borrower agrees that neither the
Administrative Agent nor any other such attorney-in-fact will be liable for any
acts of omission or commission, nor for any error of judgment or mistake of law
or fact, unless such acts constitute willful misconduct, gross negligence or a
material breach of the material obligations of the Administrative Agent under
this Agreement which breach continues after notice thereof has been given by the
Borrowers. This power is coupled with an interest and is irrevocable so long as
any Obligations are outstanding. The Administrative Agent agrees that it shall
be entitled to exercise its rights under this Section 3.5 only upon the
occurrence and during the continuation of an Event of Default.

3.6 Limitations on Obligations. It is expressly agreed by each Borrower that,
notwithstanding any other provision of this Agreement, each Borrower shall
remain liable under each Receivable and contract giving rise to each Receivable
to observe and perform all the conditions and obligations to be observed and
performed by each Borrower in accordance with and pursuant to the terms and
provisions of each such Receivable and contract. Neither the Administrative
Agent nor any Lender shall have any obligation or liability under any Receivable
or contract by reason of or arising out of this Agreement or the assignment of
such Receivable or contract to the Administrative Agent, for the ratable benefit
of the Lenders, or the receipt by the Administrative Agent, for the ratable
benefit of the Lenders, of any payment relating to the

 

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Receivable pursuant to this Agreement, nor shall the Administrative Agent or any
Lender be required or obligated in any manner to perform or fulfill any of the
obligations of a Borrower under or pursuant to any Receivable or contract, or to
make any payment, or to make any inquiry as to the nature or the sufficiency of
any payment received by it or the sufficiency of any performance by any party
under any Receivable, or to present or file any claim, or to take any action to
collect or enforce any performance or the payment of any amounts that may have
been assigned to it or to which it may be entitled at any time or times.

SECTION 4. Representations and Warranties. Each Borrower represents and warrants
to the Administrative Agent and each Lender that:

4.1 Incorporation, Good Standing and Due Qualification. Each Borrower (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation; (b) has the power and
authority to own its assets and to transact the business in which it is now
engaged or in which it is proposed to be engaged; and (c) is duly qualified as a
foreign corporation or limited liability corporation and in good standing under
the laws of each other jurisdiction in which such qualification is required,
except when the failure to be so qualified would not have a Material Adverse
Effect. As of the date of this Agreement, the Company has no Subsidiaries other
than NCI Virginia and SES, and neither NCI Virginia nor SES has any
Subsidiaries.

4.2 Power and Authority. The execution, delivery and performance by the
Borrowers of the Loan Documents have been duly authorized by all necessary
corporate actions and do not and will not (a) require any consent or approval
of, or filing or registration with, any governmental agency or authority or the
stockholders of a Borrower, other than the filing of financing statements as
required by the UCC, filings required by the Assignment of Claims Act and other
filings contemplated by any of the Loan Documents relating to the creation or
perfection of a Lien on any of the Collateral; (b) contravene a Borrower’s
articles or certificate of incorporation, articles or certificate of
organization, or bylaws or operating agreement, as applicable; (c) result in a
breach of or constitute a default under any material agreement or instrument to
which a Borrower is a party or by which it or its material properties may be
bound or affected; (d) result in or require the creation or imposition of any
Lien upon or with respect to any of the properties now owned or hereafter
acquired by a Borrower, except in favor of the Administrative Agent, for the
ratable benefit of the Lenders; or (e) cause a Borrower to be in default under
any material law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to the Borrower, except, in the cases of
clauses (a), (c) and (e), compliance with, and filings and notices under, the
Assignment of Claims Act and other filings contemplated by any of the Loan
Documents relating to the creation or perfection of a Lien on any of the
Collateral.

4.3 Legally Enforceable Agreement. This Agreement is, and each of the other Loan
Documents when delivered under this Agreement will be, legal, valid and binding
obligations of each Borrower, enforceable against each Borrower in accordance
with their respective terms, subject to bankruptcy, insolvency, reorganization
or similar laws relating to creditors’ rights generally and general principles
of equity.

 

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4.4 Financial Statements. The Company has furnished to the Administrative Agent
and each Lender (a) the audited balance sheet of the Company as of December 31,
2004, and the related statements of income, stockholders’ equity and cash flows
for the fiscal year then ended prepared by Ernst & Young and (b) the unaudited
balance sheet of the Company as of December 31, 2005, and the related unaudited
statement of income for the fiscal quarter and year-to-date period then ending,
certified by a Principal Officer. Such financial statements are complete and
fairly present in all material respects the financial condition of the Company
as of the dates of such statements. Since the dates of such statements, there
has been no material adverse change in the business, assets, liabilities (actual
or contingent), operations or financial condition of the Borrowers.

4.5 Litigation; Environmental Matters.

(a) There is no pending or threatened action, investigation or proceeding
against or affecting a Borrower before any court, governmental agency or
arbitrator, that, in any one case or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

(b) No Borrower (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has, to its knowledge, become subject to any
Environmental Liability, (iii) has received written notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability that, in any one case or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

4.6 Ownership and Liens. Each Borrower has title to all of its assets, including
the Collateral, and none of the Collateral or such assets is subject to any
Lien, except Liens created or permitted by this Agreement or the other Loan
Documents.

4.7 ERISA. No Borrower has incurred any material “accumulated funding
deficiency” within the meaning of § 302 of ERISA or § 412 of the Code, nor has
any Borrower incurred any material liability to the PBGC in connection with any
“employee pension benefit plan” (as defined in § 3(2) of ERISA) established or
maintained by a Borrower. None of the employee pension benefit plans (as defined
above) or “welfare plans” (as defined in § 3(l) of ERISA) of a Borrower, nor any
trusts created thereunder, nor any trustee or administrator thereof, has engaged
in a “prohibited transaction,” as such term is defined in § 406 of ERISA or
§ 4975 of the Code, that could subject a Borrower to any material liability or
tax or penalty on prohibited transactions imposed by such §§ 406 or 4975. None
of the Borrowers nor any ERISA Affiliate of any Borrower is now, or at any time
in the past three (3) years has been, obligated to make contributions to a
“multiemployer plan,” as such term is defined in § 4001(a)(3) of ERISA, with
respect to which the withdrawal of any Borrower or any such ERISA Affiliate at
any time could reasonably be expected to have a Material Adverse Effect. The
only such multiemployer plans to which any Borrower is obligated to make
contributions are those described on Schedule 4.7.

4.8 Taxes. Each Borrower has filed all tax returns (federal, state and local)
required to be filed and has paid all taxes, assessments and governmental
charges and levies shown

 

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thereon to be due, including interest and penalties, except for such taxes being
contested in good faith and as for which reserves are being maintained in
accordance with GAAP.

4.9 Use of Proceeds and Letters of Credit. The Borrowers will use the proceeds
of the Revolving Loans to finance working capital needs, Capital Expenditures,
Permitted Acquisitions and for other general corporate purposes. No part of the
proceeds of any Loan nor any Letter of Credit will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulations T, U or
X. All Letters of Credit will be used for general corporate purposes.

4.10 Debt. No Borrower is in any manner directly or contingently obligated with
respect to any Debt that is not permitted by this Agreement. No Borrower is in
default with respect to any Debt.

4.11 Debarment and Suspension. No event has occurred and, to the knowledge of
the Borrowers, no condition exists that may result in the debarment or
suspension of a Borrower from any contracting with the Government, and no
Borrower nor any Affiliate of a Borrower has been subject to any such debarment
or suspension prior to the date of this Agreement. No Government investigation
or inquiry involving fraud, deception or willful misconduct has been commenced
in connection with any Government Contract of a Borrower or a Subsidiary or any
activities of any Borrower or any Subsidiary.

4.12 Material Contracts. No Borrower, Subsidiary or, to the knowledge of the
Borrowers, any other party thereto is in material default under any Material
Contract that would have a Material Adverse Effect.

4.13 Intellectual Property. As of the date hereof, the Borrowers and the
Subsidiaries do not own or hold any registered copyrights, patents or
trademarks, other than as listed on Schedule 4.13 attached hereto and other than
such Intellectual Property that has not been used by the Borrowers in the past
12 months or from which no revenue in excess of $100,000 has been derived in the
past 12 months. Each Borrower and each Subsidiary owns or has the right to use
under valid license agreements or otherwise all Intellectual Property that is
required or necessary for the conduct of the business of each Borrower and its
Subsidiaries as now conducted to the knowledge of the Borrowers without any
conflict with any rights of any other Person that would have a Material Adverse
Effect.

4.14 True and Complete Information. All factual information (taken as a whole)
previously furnished to the Administrative Agent or any Lender in connection
with this Agreement by the Borrowers and each Subsidiary is, and all factual
(taken as a whole) furnished to the Administrative Agent or any Lender by the
Borrowers and the Subsidiaries after the date of this Agreement will be, true
and accurate in all material respects on the date on which such information is
dated, certified or furnished, and is not, and will not be, incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided.

 

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4.15 Integrated Business. The Borrowers and the Subsidiaries at all times will
be, engaged as an integrated group in providing services and goods to their
respective Customers. The integrated operation will require financing on such a
basis that credit supplied to the Borrowers be made available from time to time
to all Borrowers and Subsidiaries of the Borrowers, as required for the
successful operation of the Borrowers and the Subsidiaries separately, and the
integrated operation as a whole. In that connection, the Borrowers and the
Subsidiaries will request that the Lenders provide the Loans to, and that the
Issuing Bank issue the Letters of Credit for, the Borrowers to finance such
operation. Each Borrower will derive benefit, directly and indirectly, from the
credit so extended to the Borrowers, both in its separate capacity and as a
member of the integrated group.

4.16 Employee Relations. Except for the agreement(s) set forth on Schedule 4.16,
no Borrower is a party to any collective bargaining agreement nor has any labor
union been recognized as the representative of its employees. No Borrower knows
of any pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees.

4.17 Burdensome Provisions. No Borrower is a party to any indenture, agreement,
lease or other instrument, or subject to any corporate or partnership
restriction, governmental approval or applicable law which is so unusual or
burdensome as in the foreseeable future could be reasonably expected to have a
Material Adverse Effect. No Borrower presently anticipates that future
expenditures needed to meet the provisions of any statutes, orders, rules or
regulations of a governmental authority will be so burdensome as to have a
Material Adverse Effect.

4.18 Absence of Defaults. No event has occurred and is continuing which
constitutes a Default or an Event of Default. No event has occurred and is
continuing which constitutes, or which with the passage of time or giving of
notice or both would constitute, a material default or event of default by any
Borrower under contract or judgment, decree or order to which any Borrower is a
party or by which any Borrower or any of its material properties may be bound or
which would require any Borrower to make any payment thereunder prior to the
scheduled maturity date therefor, which could reasonably be expected to have a
Material Adverse Effect.

4.19 Disclosure. The Borrowers have disclosed to the Administrative Agent and
each Lender all agreements, instruments, and corporate or other restrictions to
which the Borrowers or any of their respective Subsidiaries is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. None of the
reports (including without limitation all reports that the Company may be
required to file with the Securities and Exchange Commission), certificates or
other factual information furnished by or on behalf of the Borrowers to the
Administrative Agent or any Lender in connection with the negotiation or
syndication of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by any other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in
light of the circumstances under which they were made, not misleading.

 

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4.20 Survival of Representations and Warranties, Etc. All statements contained
in any certificate, or other instrument delivered by or on behalf of any
Borrower to the Administrative Agent or any Lender pursuant to or in connection
with this Agreement or any of the other Loan Documents (including, but not
limited to, any such statement made in or in connection with any amendment
thereto or any statement contained in any certificate or other instrument
delivered by or on behalf of any Borrower prior to the date hereof and delivered
to the Administrative Agent or any Lender in connection with closing the
transactions contemplated hereby) shall constitute representations and
warranties made by the Borrowers under this Agreement. All representations and
warranties made under this Agreement and the other Loan Documents shall be
deemed to be made at and as of the date hereof, the Closing Date and at and as
of the date of the disbursement of any Loan or issuance of any Letter of Credit,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and accurate on and as of such earlier date). All such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the Loan Documents, the making of the
Loans and the issuance of the Letters of Credit.

SECTION 5. Affirmative Covenants. The Borrowers covenant and agree that so long
as any Lender has a Commitment hereunder or the principal of or interest on any
Loan remains unpaid or any fee or any LC Disbursement remains unreimbursed or
any Letter of Credit remains outstanding:

5.1 Maintenance of Existence. Each Borrower will preserve and maintain its
corporate existence and good standing in the jurisdiction of its formation, and
qualify and remain qualified, as a foreign corporation in each jurisdiction in
which such qualification is required.

5.2 Maintenance of Records. Each Borrower will keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP,
reflecting all financial transactions of such Borrower. The principal records
and books of account, including those concerning the Collateral, shall be kept
at the chief executive office of the Borrowers described above. No Borrower will
move such records and books of account or change its chief executive office or
the name under which it does business without (a) giving the Administrative
Agent at least 30 days’ prior written notice, and (b) filing, or authorizing the
filing by the Administrative Agent of, financing statements reasonably
satisfactory to the Administrative Agent prior to such move or change.

5.3 Maintenance of Properties. Each Borrower will maintain, keep and preserve
all of its properties (tangible and intangible) necessary or useful in the
proper conduct of its business in good working order and condition, ordinary
wear and tear and casualty excepted, in all material respects.

5.4 Conduct of Business. Each Borrower will continue to engage in a business of
substantially the same general type as conducted by it on the date of this
Agreement.

5.5 Maintenance of Insurance. Each Borrower will maintain insurance with
financially sound and reputable insurance companies or associations in such
amounts and

 

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covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated, including, without limitation,
insurance covering the inventory and equipment as required hereby.

5.6 Compliance with Laws. Each Borrower will comply in all respects with all
applicable laws, rules, regulations and orders (including, without limitation,
ERISA and all Environmental Laws) with respect to which non-compliance, in any
one case or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, such compliance to include, without limitation, paying, before
the same become delinquent, all taxes, assessments and governmental charges
imposed upon it or upon its property; provided that the Borrowers shall have the
right to contest the applicability or enforcement of any taxes, assessments and
governmental charges imposed upon it or upon its property subject to the
maintenance of reserves required by GAAP in respect of any such contest.

5.7 Right of Inspection. At any reasonable time and from time to time, with
reasonable notice, each Borrower will permit, except as prohibited by applicable
law, the Administrative Agent or any agent or representative of the
Administrative Agent to audit, examine and verify the Collateral, examine and
make copies of and abstracts from the records and books of account of, and visit
the properties of, each Borrower, and to discuss the affairs, finances and
accounts of each Borrower with any of its officers and directors and each
Borrower’s independent accountants (the Borrowers having the right to notice of
any meeting with their independent accountants and to have a representative of
the Borrowers present at any such meeting), and to discuss the status of
Government Contracts of each Borrower with the applicable contracting officers
of the Borrower. The Administrative Agent agrees to give the Borrowers not fewer
than two days’ prior written notice of taking any action described in the
preceding sentence, and to obtain the Borrowers’ permission prior to contacting
the contracting officer under any Government Contract, provided that if an Event
of Default has occurred and is continuing, the Administrative Agent shall not be
required to give such prior notice or obtain such permission. The Borrowers
agree to reimburse the Administrative Agent for all reasonable audit and
Collateral verification and examination expenses incurred by it with respect to
each audit and Collateral verification of each Borrower conducted by the
Administrative Agent, provided that such reimbursements shall not be required
more frequently than once per calendar year unless an Event of Default has
occurred and is continuing or is uncovered by such audit and Collateral
verification, in which case all of the reasonable expenses of each audit and
verification shall be paid by the Borrowers. If the Administrative Agent uses
employees or Affiliates to perform the audits, the Borrowers’ reimbursement
obligations shall be limited to the reasonable out-of-pocket expenses of the
Administrative Agent that would have been paid to an independent auditing firm
for such audits.

5.8 Reporting Requirements. The Borrowers will furnish to the Administrative
Agent, at each address for the Administrative Agent specified in Section 11.1(a)
(and the Administrative Agent will promptly after receipt provide copies thereof
to each Lender):

(a) Monthly Financial Statements of the Company. As soon as available and in any
event within 30 days after the end of each fiscal month of each fiscal year,
unaudited

 

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financial statements consisting of consolidated and (upon the request of the
Administrative Agent) consolidating balance sheets of the Company and its
Subsidiaries as of the end of such month and consolidated and (upon the request
of the Administrative Agent) consolidating statements of income and changes in
stockholders equity of the Company and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such month, all in reasonable detail and for the report covering the last month
of each quarter, stating in comparative form the respective variances between
such consolidated figures and the Company’s operating plan or budget for such
fiscal year, and all prepared in accordance with GAAP. Such financial statements
shall be certified by a Principal Officer of the Company to fairly present in
all material respects the financial condition of the Company as of the dates of
such statements (subject to year-end adjustments) and shall be accompanied for
the last fiscal month of each fiscal quarter by a Covenant Compliance
Certificate for such period and a list of any outstanding Off-Balance Sheet
Liabilities of the Borrowers;

(b) Annual Financial Statements of the Company. As soon as available and, in any
event, within 120 days after the end of each fiscal year of the Company, audited
financial statements consisting of the consolidated and (upon the request of the
Administrative Agent) consolidating balance sheets of the Company and its
Subsidiaries as of the end of such fiscal year, and consolidated and (upon the
request of the Administrative Agent) consolidating statements of income, changes
in stockholders’ equity and cash flows of the Company and its Subsidiaries for
such fiscal year, all in reasonable detail and all prepared in accordance with
GAAP, accompanied by an unqualified opinion thereon of an independent certified
public accounting firm selected by the Company and acceptable to the
Administrative Agent;

(c) Management Letters. Promptly upon receipt thereof, copies of any reports
submitted to the Company by independent certified public accountants in
connection with examination of the financial statements of the Company made by
such accountants;

(d) Notice of Litigation; Proceedings. Without limiting the obligation of the
Borrowers to give notices of commercial tort claims required by Section 3.4(i),
promptly after the commencement thereof, notice of all actions, suits,
investigations and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting a Borrower and of which such Borrower has notice, that could
reasonably be expected to have a Material Adverse Effect;

(e) Notice of Defaults and Events of Default. As soon as possible and, in any
event, within five days after any Principal Officer of the Borrowers has
knowledge of the occurrence of any Default and Event of Default, a written
notice setting forth the details of such Default or Event of Default and the
action that is proposed to be taken by the Borrowers with respect thereto;

(f) SEC Reports. Promptly after the same are sent or upon their becoming
available, copies of (i) all Securities and Exchange Commission reports of the
Borrowers, (ii) all financial statements, reports, notices and proxy statements
sent or made available by the Parent Borrower to its public equityholders,
(iii) all regular and periodic reports and all registration

 

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statements and prospectuses, if any, filed by any of the Borrowers with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (iv) all press releases and
other written statements made available by any of the Borrowers to the public
concerning material developments in the business of any of the Borrowers;
provided that any such information shall be deemed delivered to the
Administrative Agent upon the filing of such information with the Securities and
Exchange Commission;

(g) Receivables Detail. Within 30 days after the end of each fiscal quarter, a
contract backlog report for such fiscal quarter, reflecting all contracts of the
Borrowers, the work completed and billed under such contracts, the work
remaining to be completed and billed and the type and term of each contract, and
an accounts receivable listing and aging for such fiscal quarter;

(h) Management Changes. Written notice of any new appointments to the offices of
the president, chief executive officer, chairman, chief financial officer or
vice president of finance of any Borrower within 10 days after such appointment;

(i) Annual Operating Budget and Cash Flow. As soon as available, but in any
event within sixty (60) days after the end of each fiscal year, a copy of the
detailed annual operating budget or plan including cash flow projections of the
Company and its Subsidiaries for the next four fiscal quarter period prepared on
a quarterly basis, in form and detail reasonably acceptable to the
Administrative Agent and the Lenders, together with a summary of the material
assumptions made in the preparation of such annual budget or plan;

(j) Notice of Material Adverse Effect. Prompt notice of any change in the
business, assets, liabilities, financial condition or results of operations of a
Borrower or any Subsidiary which has had or could reasonably be expected to have
a Material Adverse Effect;

(k) Material Contracts. Promptly after entering into any Material Contract or
amendment thereof, a notice containing a description of such Material Contract
or amendment (with copies thereof if requested by the Administrative Agent), and
prompt written notice of the termination or breach by any Person of a Material
Contract (to the extent any Borrower has actual knowledge of each termination or
breach if such termination or breach is by a Person other than such Borrower);

(l) Government Contract Audits. Promptly after any Borrower’s receipt thereof,
notice of any final decision of a contracting officer disallowing costs
aggregating more than $250,000, which disallowed costs arise out of any audit of
Government Contracts of any Borrower or could otherwise reasonably be expected
to have a Material Adverse Effect;

(m) Environmental Matters. Notice of the occurrence of any event or any other
development, of which any Borrower or any of its Subsidiaries has notices, by
which any Borrower or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) becomes subject to any
Environmental Liability, (iii) receives notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;

 

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(n) Acquisition Documentation. At the time it provides an Acquisition Notice to
the Administrative Agent, the Company shall deliver to the Administrative Agent
all material documents relating to the acquisition, unaudited fiscal
year-to-date statements of the Target for the two most recent interim periods,
and such additional documentation regarding the acquisition as the
Administrative Agent shall require, to the extent available, including, without
limitation, audited financial statements or a financial review of such Target,
as applicable, for its two most recent fiscal years prepared by independent
certified public accountants, and any due diligence reports (including, but not
limited to, reports prepared by a firm of independent certified public
accountant of nationally recognized standing and customer surveys) prepared by,
or on behalf of, any Borrower with respect to the Target; and

(o) General Information. Such other information respecting the condition or
operations, financial or otherwise, of the Borrowers as the Administrative Agent
and/or any Lender (acting through the Administrative Agent) from time to time
reasonably may request.

5.9 Primary Operating Account. The Company agrees to maintain its Primary
Operating Account with the Administrative Agent.

5.10 Additional Collateral, etc.

(a) With respect to any Property acquired after the Closing Date by the Company
or any of its Subsidiaries (other than (x) any Property described in paragraph
(b) or paragraph (c) of this Section, (y) any Property subject to a Lien
expressly permitted by Section 6.1(c)) and (z) Property acquired by an Excluded
Foreign Subsidiary) as to which the Administrative Agent, for the ratable
benefit of the Lenders, does not have a perfected Lien, the Company or the
applicable Subsidiary shall promptly (i) execute and deliver to the
Administrative Agent such amendments to the Loan Documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in such Property and
(ii) take all actions necessary or advisable to grant to the Administrative
Agent, for the ratable benefit of the Lenders, a perfected first priority
security interest in such Property, including without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by this Agreement or by law or as may be requested by the
Administrative Agent.

(b) With respect to any fee interest in any real property, or any leasehold
estate in any real property with a term (including all renewal options) of more
than 20 years, in each case having a value (together with improvements thereof)
of at least $1,000,000, acquired after the Closing Date by the Company or any of
its Subsidiaries (other than any such real property owned by an Excluded Foreign
Subsidiary subject to a Lien expressly permitted by Section 6.1(c)), the Company
or the applicable Subsidiary shall promptly (i) execute and deliver a first
priority Mortgage in favor of the Administrative Agent, for the ratable benefit
of the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount

 

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at least equal to the purchase price of such real estate (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary), by the Company or any of its Subsidiaries, the
Company or the applicable Subsidiary shall promptly (i) execute and deliver to
the Administrative Agent such amendments to the Loan Documents as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the ratable benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Company or any of its Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Company or such Subsidiary, as the case may be, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

(d) With respect to any new Excluded Foreign Subsidiary created or acquired
after the Closing Date by the Company or any of its Subsidiaries, the Company or
the applicable Subsidiary shall promptly (i) execute and deliver to the
Administrative Agent such amendments to the Loan Documents as the Administrative
Agent deems necessary or advisable in order to grant to the Administrative
Agent, for the ratable benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Company or any of its Subsidiaries (provided that in no event shall more
than 65% of the total outstanding Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Company or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

5.11 Further Assurances. The Company and each of its Subsidiaries shall from
time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take all such actions, as
the Administrative Agent may reasonably request, for the purposes of
implementing or effectuating the provisions of this Agreement and the other Loan
Documents, or of more fully perfecting or renewing the rights of the

 

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Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Company or any
Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any governmental authority, the Company and each of its
Subsidiaries will execute and deliver, or will cause the execution and delivery
of, all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Lender may be required to obtain from the
Company or any of its Subsidiaries for such governmental consent, approval,
recording, qualification or authorization. Without limiting the generality of
the foregoing, the Borrowers will use their commercially reasonable best efforts
to deliver to the Administrative Agent, within 60 days after the date of this
Agreement, an access agreement from the landlord for the Company’s headquarters
location in Reston, Virginia, in form and substance reasonably satisfactory to
the Administrative Agent.

5.12

SECTION 6. Negative Covenants. The Borrowers covenant and agree that so long as
any Lender has a Commitment hereunder or the principal of or interest on any
Loan remains unpaid or any fee or any LC Disbursement remains unreimbursed or
any Letter of Credit remains outstanding:

6.1 Liens. No Borrower will create, incur, assume or permit to exist, any Lien
upon or with respect to any of its properties, now owned or hereafter acquired,
except:

(a) Liens in favor of the Administrative Agent for the ratable benefit of the
Lenders pursuant to this Agreement and the other Loan Documents;

(b) Liens that are incidental to the conduct of the business of a Borrower, are
not incurred in connection with the obtaining of credit and do not materially
impair the value or use of assets of such Borrower, including Liens securing
operating leases for equipment and software entered into by such Borrower in the
ordinary course of its business and on commercially reasonable terms; and

(c) purchase-money Liens, whether now existing or hereafter arising (including
those arising out of a Capital Lease or a Synthetic Lease) on any fixed assets
provided that (1) any property subject to a purchase-money Lien is acquired by
such Borrower in the ordinary course of its respective business and the Lien on
any such property is created contemporaneously with such acquisition, (2) each
such Lien shall attach only to the property so acquired, and (3) the Debt
secured by all such purchase money Liens shall not exceed at any time
outstanding in the aggregate for all of the Borrowers the greater of $1,500,000
or 2.5% of Total Assets.

6.2 Debt. No Borrower will create, incur, assume or permit to exist, any Debt,
except: (a) the Obligations; (b) Subordinated Debt; (c) ordinary trade accounts
payable,

 

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including operating leases for equipment and software entered into by a Borrower
in the ordinary course of its business and on commercially reasonable terms;
(d) Debt of a Borrower or any Subsidiary (including Debt arising out of a
Capital Lease or a Synthetic Lease) secured by purchase-money Liens permitted by
Section 6.1(c) of this Agreement, (e) unsecured Debt issued by a Borrower to a
seller in connection with a Permitted Acquisition or arising out of any
obligations to make earnout payments or other contingent payments in connection
with a Permitted Acquisition, provided that in each case, such Debt shall be
Subordinated Debt.

6.3 Mergers, etc. No Borrower will merge or consolidate with any Person, other
than another Borrower, except in connection with a Permitted Acquisition.

6.4 Leases. No Borrower will create, incur, assume or permit to exist, or permit
any Subsidiary to create, incur, assume or permit to exist, any obligation as
lessee for the rental or hire of any real or personal property, except:
(a) leases in existence on the date of this Agreement, (b) Capital Leases giving
rise to purchase-money Liens permitted by this Agreement; and (c) leases (other
than Capital Leases) that do not in the aggregate require any Borrower or any
Subsidiary to make payments (including taxes, insurance, maintenance and similar
expenses that such Borrower or such Subsidiary is required to pay under the
terms of any lease) in any fiscal year of the Company in excess of $1,500,000 or
2.5% of Total Assets.

6.5 Sale and Leaseback; Synthetic Leases. No Borrower will sell, transfer or
otherwise dispose of, any real or personal property to any Person and
thereafter, directly or indirectly, lease back the same or similar property.

6.6 Restricted Payments. No Borrower or Subsidiary will, directly or indirectly,
declare, order, make or set apart any sum for or pay any Restricted Payment,
except (a) to make dividends payable solely in the form of common stock or
equivalent equity interests of such Person, (b) to make dividends or other
distributions payable to any Borrower (directly or indirectly through
Subsidiaries), (c) to make AAA Distributions, provided that the aggregate amount
of AAA Distributions made subsequent to September 30, 2005, shall not exceed
$10,000,000, and (d) if no Default or Event of Default has occurred and is
continuing, or would occur after giving effect thereto, redemptions or
repurchases of Capital Stock and options therefor held by employees who are
terminating their employment with the Company and its Subsidiaries.

6.7 Sale of Assets. No Borrower will sell, lease, assign, transfer, license or
otherwise dispose of, any of its now owned or hereafter acquired assets, except
for (a) any inventory and Intellectual Property sold, licensed or leased in the
ordinary course of business; (b) the Disposition of the Condo Unit; and (c) the
Disposition of assets (other than such inventory and Intellectual Property) no
longer used or useful in the conduct of its business and not exceeding in the
aggregate for all Borrowers during any fiscal year the greater of $300,000 or
0.50% of Total Assets.

6.8 Investments, Loans, Etc. No Borrower will purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly-owned
Subsidiary prior to such merger), any common stock, evidence of indebtedness,
Capital Stock or other equity interests or

 

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other securities (including any option, warrant, or other right to acquire any
of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any
other interest in, any other Person (all of the foregoing being collectively
called “Investments”), or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person that constitute a
business unit, except:

(a) Cash and Cash Equivalents;

(b) Travel advances or other advances in an aggregate amount not to exceed in
aggregate amount for all Borrowers at any one time outstanding the greater of
$250,000 or 0.40% of Total Assets, and which are made to any employee of a
Borrower in the ordinary course of such Borrower’s business and in furtherance
of such employee’s performance under a contract with a Customer;

(c) Hedging Agreements entered into in the ordinary course of business to hedge
or mitigate risks to which a Borrower is exposed in the conduct of its business
or the management of its liabilities; and

(d) Permitted Acquisitions.

6.9 Guaranties, etc. No Borrower will Guarantee the obligations of any Person,
or permit any such Guarantees to exist.

6.10 Acquisitions. Except for Permitted Acquisitions and Permitted Teaming
Arrangements, no Borrower will form a Subsidiary, become a partner or joint
venturer with any Person, or purchase or acquire all or substantially all of the
assets of any Person, or any Capital Stock of or ownership interest in any other
Person. Upon the acquisition or formation of a Subsidiary by a Borrower, such
Borrower will cause such Subsidiary to execute and deliver to the Administrative
Agent an Assumption Agreement.

6.11 Transactions with Affiliates. No Borrower will enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate, except in the ordinary course of
and pursuant to the reasonable requirements of such Borrower’s business and upon
fair and reasonable terms no less favorable to such Borrower than would be
applicable in a comparable arm’s-length transaction with a Person not an
Affiliate.

6.12 Fiscal Year; Accounting Policies; Organizational Documents; Material
Contracts. No Borrower or Subsidiary will change its fiscal year or, except in
accordance with GAAP or as required to improve internal controls over financial
reporting or otherwise comply with the Sarbanes-Oxley Act of 2002, make any
material change its accounting policies used in preparing the financial
statements and other information described in Section 5.8(a). No Borrower or
Subsidiary will amend, modify or change it articles of incorporation (or
corporate charter or other similar organizational document), operating
agreement, bylaws (or other similar document) or other agreements or documents
with respect to its Capital Stock in any material respect adverse to the
interests of the Lenders without the prior written consent of the Required

 

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Lenders. No Borrower or Subsidiary will, without the prior written consent of
the Administrative Agent, amend, modify, cancel or terminate or fail to renew or
extend or permit the amendment, modification, cancellation or termination of any
of the Material Contracts (other than in the ordinary course of business),
except in the event that such amendments, modifications, cancellations or
terminations could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

6.13 Limitation on Restricted Actions. No Borrower or Subsidiary will, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Borrower on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (b) pay any Debt or other obligation owed to any Borrower, (c) make
loans or advances to any Borrower, (d) sell, lease or transfer any of its
properties or assets to any Borrower, or (e) act as a Borrower and pledge its
assets pursuant to the Loan Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(e) above) for such encumbrances or restrictions
existing under or by reason of (i) this Agreement and the other Loan Documents,
(ii) applicable law or regulations, (iii) any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c); provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, or (iv) any such encumbrance or restriction
consisting of customary non-assignment provisions in leases or licenses
restricting leasehold interests or licenses, as applicable, entered into in the
ordinary course of business.

6.14 Amendment of Subordinated Indebtedness. No Borrower or Subsidiary will,
after the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Subordinated Debt of such Borrower or
Subsidiary if such amendment or modification would add or change any terms in a
manner adverse to the Lenders, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto or change any subordination
provision thereof.

SECTION 7. Financial Covenants. The Borrowers agree that so long as any Lender
has a Commitment hereunder or the principal of or interest on any Loan remains
unpaid or any fee or any LC Disbursement remains unreimbursed or any Letter of
Credit remains outstanding:

7.1 Net Worth. The Company shall maintain as of the last day of each of its
fiscal quarters Net Worth of not less than the Minimum Net Worth Compliance
Level.

7.2 Senior Funded Debt Ratio. The Company shall maintain as of the last day of
each of its fiscal quarters a Senior Funded Debt Ratio of not greater than 3.50
to 1.

7.3 Fixed Charge Coverage Ratio. The Company shall maintain a Fixed Charge
Coverage Ratio for each period of four consecutive fiscal quarters ending on the
last day of each fiscal quarter of the Company, of not less than 1.50 to 1.

 

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7.4 Capital Expenditures. The consolidated Capital Expenditures made in cash by
the Company and its Subsidiaries during any fiscal year shall not exceed the
greater of $2,000,000 or 2.00% of Total Revenues for such fiscal year (the
“Annual Limit”); provided, that if the amount expended in any fiscal year is
less than the Annual Limit for such fiscal year, the shortfall, not to exceed
$1,000,000, may be carried over for expenditure in the next succeeding fiscal
year.

For purposes of computing the financial covenants set forth in Sections 7.2 and
7.3 for any applicable test period, any Permitted Acquisition or permitted
Disposition shall have been deemed to have taken place as of the first day of
such applicable test period (giving effect on such day to the incurrence or
satisfaction of any Funded Debt in connection with such Permitted Acquisition or
Disposition).

SECTION 8. Conditions of Lending. The Closing and the initial disbursement of
the Loans shall be subject to satisfaction of the following conditions precedent
as of the date of execution and delivery of this Agreement:

8.1 Conditions Precedent to Closing. The Closing and the initial disbursement of
the Loans shall be subject to the following conditions precedent:

(a) The Loan Documents shall have been appropriately completed, duly executed by
the parties thereto, recorded where necessary and delivered to the
Administrative Agent.

(b) All legal matters incident to the Loans shall be satisfactory to counsel for
the Administrative Agent, and the Borrowers agree to execute and deliver to the
Administrative Agent such additional documents and certificates relating to the
Loans as the Administrative Agent reasonably may request.

(c) Financing statements in form and substance satisfactory to the
Administrative Agent shall have been properly filed in each office where
necessary to perfect the security interest of the Administrative Agent, for the
ratable benefit of the Lenders, in the Collateral, termination statements shall
have been filed with respect to any other financing statements covering all or
any portion of the Collateral and all taxes and fees with respect to such
recording and filing shall have been paid by the Borrowers.

(d) The Borrowers shall have delivered to the Administrative Agent (1) certified
copies of evidence of all corporate and company actions taken by the Borrowers
to authorize the execution and delivery of the Loan Documents, (2) certified
copies of the articles or certificate of incorporation, bylaws, articles or
certificate of organization and operating agreement of the Borrowers, (3) a
certificate of incumbency for the officers of the Borrowers executing the Loan
Documents, (4) a good standing certificate, dated not more than 30 days prior to
the Closing Date, from the appropriate state official of any state in which the
Borrowers are incorporated or qualified to do business, and (5) such additional
supporting documents as the Administrative Agent or counsel for the
Administrative Agent reasonably may request.

 

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(e) The Administrative Agent shall have received (1) an accounts receivable
aging and a contract status and backlog report for the most recent fiscal month,
in form and substance satisfactory to the Administrative Agent, (2) the
financial statements of the Company for the period ended on January 31, 2006,
and (3) a pro forma Covenant Compliance Certificate as of December 31, 2005,
giving effect to the initial disbursement of the Loans, and certifying that no
Default or Event of Default exists as of the Closing Date, nor would any Default
or Event of Default occur after giving effect thereto.

(f) The Administrative Agent shall have received financing statement, judgment
and tax lien searches reflecting that there are no Liens outstanding against the
Collateral other than those created or permitted by this Agreement or the other
Loan Documents.

(g) The Administrative Agent shall have received evidence that the insurance on
the Collateral required by this Agreement has been obtained and is in full force
and effect.

(h) The Administrative Agent shall have received a written opinion of Pillsbury
Winthrop Shaw Pittman LLP, counsel to the Borrowers, in form and substance
satisfactory to the Administrative Agent.

(i) There shall not have occurred a material adverse change since December 31,
2004, in the business, assets, liabilities (actual or contingent), operations or
financial condition of the Borrowers and their respective Subsidiaries taken as
a whole or in the facts and information regarding such entities as represented
to date.

(j) The absence of any action, suit, investigation or proceeding pending or
threatened in any court or before any arbitrator or governmental authority that
purports (a) to materially and adversely affect the Borrowers or their
respective Subsidiaries, or (b) to affect any transaction contemplated hereby or
the ability of the Borrowers and their respective Subsidiaries or any other
obligor under the guarantees or security documents to perform their respective
obligations under the Loan Documents.

(k) All Debt of the Borrowers under the Existing Loan Agreement shall be paid in
full and the Existing Loan Agreement shall be terminated.

8.2 Conditions Precedent to Each Disbursement. The disbursement and issuance of
each Loan and Letters of Credit shall be subject to the following conditions
precedent:

(a) No Default or Event of Default shall have occurred and be continuing.

(b) No event or condition shall have occurred which has a Material Adverse
Effect.

(c) All representations and warranties of the Borrowers contained in the Loan
Documents shall be true and correct in all material respects at the date of such
disbursement, except for representations and warranties that relate to an
earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date).

 

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(d) No change shall have occurred in any law or regulations thereunder or
interpretations thereof that, in the opinion of counsel for the Administrative
Agent, would make it illegal for the Administrative Agent or any Lender to make
Loans, or for the Issuing Bank to issue Letters of Credit, hereunder.

8.3 Conditions to Subsidiaries Becoming Borrowers. Each Subsidiary of the
Company acquired or formed after the Closing Date shall become a Borrower under
this Agreement and shall satisfy the following conditions upon the acquisition
or formation of such Subsidiary:

(a) The Subsidiary shall execute and deliver to the Administrative Agent an
Assumption Agreement.

(b) The Administrative Agent shall have received an opinion of counsel to the
Subsidiary, addressed to the Administrative Agent, covering such matters as the
Administrative Agent may reasonably request, in form and substance satisfactory
to the Administrative Agent.

(c) Financing statements in form and substance satisfactory to the
Administrative Agent shall have been properly filed in each office where
necessary to perfect the security interest of the Administrative Agent (held for
the ratable benefit of the Lenders) in the Collateral of the Subsidiary,
termination statements shall have been filed with respect to any other financing
statements covering all or any portion of such Collateral (except with respect
to Liens or security interests created or permitted by this Agreement or the
other Loan Documents), all taxes and fees with respect to such recording and
filing shall have been paid by such Subsidiary and the Administrative Agent
shall have received such lien searches or reports as it shall require confirming
that the foregoing filings and recordings have been completed.

(d) The Subsidiary shall have delivered the following documents to the
Administrative Agent, each of which shall be certified as of the date on which
it is to become a Borrower, by its secretary or representative performing
similar functions: (1) copies of evidence of all actions taken by the Subsidiary
to authorize the execution and delivery of the Assumption Agreement and the
other Loan Documents; (2) copies of the articles or certificate of incorporation
and bylaws (or comparable organizational documents) of the Subsidiary; and (3) a
certificate as to the incumbency and signatures of the officers executing the
Loan Documents.

(e) The Administrative Agent shall have received a certificate of good standing
and qualification (or similar instrument) issued by the appropriate state
official of the state of incorporation of the Subsidiary, dated not more than 30
days prior to the date of the applicable Loan Documents.

 

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SECTION 9. Default.

9.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:

(a) Failure of a Borrower to pay any Obligation, including, without limitation,
the principal of or interest on any Note or the Loans, or any reimbursement
obligation in respect of any LC Disbursement or other amounts due under a Letter
of Credit Agreement, when the same shall become due and payable, whether at
maturity, or otherwise, and such failure shall continue for a period of ten days
after written notice from the Administrative Agent or any Lender (which may be a
computer generated late payment notice); or

(b) If a Borrower refuses to permit the Administrative Agent to inspect,
examine, verify or audit the Collateral in accordance with the provisions of
this Agreement; or

(c) Failure of a Borrower to perform or observe any covenant contained in
Section 5.1, Section 6 or Section 7 of this Agreement; or

(d) Failure of a Borrower to perform or observe any other term, condition,
covenant, warranty, agreement or other provision contained in this Agreement
(except any such failure resulting in the occurrence of another Event of Default
described in this Section), within 30 days after the first to occur of (1) the
date on which a Principal Officer obtains actual knowledge of such failure or
(2) receipt of notice from the Administrative Agent or any Lender to the Company
specifying such failure; or

(e) If any representation or warranty made or deemed made by a Borrower in this
Agreement, any Loan Document or any statement or representation made in any
certificate, report or opinion delivered pursuant to this Agreement (including
any Covenant Compliance Certificate or financial statements) or in connection
with any borrowing under this Agreement was materially untrue or is breached in
any material respect; or

(f) Any Borrower shall (i) default in any payment of principal of or interest on
any Debt (other than the Debt hereunder) in a principal amount outstanding of at
least $1,000,000 in the aggregate for the Borrowers beyond the period of grace,
if any, provided in the instrument or agreement under which such Debt was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any Debt (other than the Debt hereunder) in a principal
amount outstanding of at least $1,000,000 in the aggregate for the Borrowers or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Debt or beneficiary or beneficiaries of such Debt (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Debt to become due prior to
its stated maturity; or (iii) any Borrower shall breach or default any Hedging
Agreement with a Lender and shall have failed to cure such breach or default
within any applicable grace or cure period set forth therein such that the
Lender is entitled to terminate such Hedging Agreement; or

(g) Any Borrower makes an assignment for the benefit of creditors, files a
petition in bankruptcy, petitions or applies to any tribunal for any receiver or
any trustee of such Borrower or any substantial part of its property, or
commences any proceeding relating to such Borrower under any reorganization,
arrangement, readjustments of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or

 

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(h) If, within 60 days after the filing of a bankruptcy petition or the
commencement of any proceeding against any Borrower seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, the proceeding
shall not have been dismissed, or, if, within 60 days after the appointment,
without the consent or acquiescence of such Borrower, of any trustee, receiver
or liquidator of such Borrower or of all or any substantial part of the
properties of such Borrower, the appointment shall not have been vacated; or

(i) Any judgment against a Borrower in excess of $1,000,000 or any attachment in
excess of $1,000,000 against any property of a Borrower that remains unpaid,
undischarged, unbonded or undismissed for a period of 30 days, unless and to the
extent that the judgment or attachment is appealed in good faith in a court of
higher jurisdiction and the appeal remains pending or unless such judgment is
insured and the applicable carrier has acknowledged liability therefor; or

(j) If any of the following events shall occur or exist with respect to any
Borrower or any employee benefit plan, pension plan, welfare plan or other plan
established, maintained or to which contributions have been made by any
Borrower, any Affiliate of any Borrower or any other Person that, together with
a Borrower, would be treated as a single employer under § 4001 of ERISA, and
that the same would have a Material Adverse Effect: (1) any prohibited
transaction (as defined in § 406 of ERISA or § 4975 of the Code), (2) any
reportable event (as defined in § 4043 of ERISA and the regulations issued
thereunder), (3) the filing under § 4041 of ERISA of a notice of intent to
terminate any such plan or the termination of such plan, or (4) the institution
of proceedings by the PBGC under § 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such plan; or

(k) If a Borrower fails to give the Administrative Agent or any Lender any
notice required by this Agreement within ten days after a Principal Officer of
such Borrower has knowledge of the occurrence of the event giving rise to the
obligation to give such notice, provided that such failure to give notice shall
not constitute an Event of Default if the applicable Event of Default or breach
is cured within any grace period that otherwise would have been applicable had
the notice been timely given; or

(l) If a Change in Control shall occur; or

(m) If any Borrower or any Subsidiary shall be debarred or suspended from any
contracting with the Government; or if a notice of debarment or notice of
suspension shall have been issued to any Borrower or any Subsidiary; or if 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 any
Subsidiary; or

(n) The Loan Documents shall for any reason (other than any act or omission of
the Administrative Agent or a Lender, including ceasing to maintain possession
of any

 

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Collateral for which continued possession is necessary for perfection) cease to
create a valid and perfected first priority security interest in any of the
Collateral purported to be covered thereby, subject to Liens created or
permitted by this Agreement or any Loan Document, or if any Loan Document ceases
to be in full force and effect; or

(o) The occurrence of a specified event of default under any other Loan Document
and the expiration of all applicable cure periods.

9.2 Remedies upon Default. After the occurrence and during the continuance of an
Event of Default, the following provisions shall be applicable:

(a) The Administrative Agent, at its option, may, and upon the written request
of the Required Lenders, shall, terminate the Commitments (whereupon the
Commitment of each Lender shall terminate immediately), terminate the
obligations of the Lenders to make Loans, and the obligations of the Issuing
Bank to issue Letters of Credit, under this Agreement, and to declare all
Obligations, whether incurred prior to, contemporaneous with or subsequent to
the date of this Agreement, and whether represented in writing or otherwise,
immediately due and payable and may exercise all rights and remedies of the
Lenders against the Borrowers and any Collateral. The Administrative Agent also,
at its option, may, and upon the written request of the Required Lenders, shall,
require the Borrowers to pay (for the benefit of the Issuing Bank), and the
Borrowers agree to pay, to the Administrative Agent (for the benefit of the
Issuing Bank) an amount of cash equal to the aggregate amount of the Letters of
Credit then outstanding, and any amounts paid by the Borrowers shall be held by
the Administrative Agent in a cash collateral account, over which the
Administrative Agent shall have the exclusive power of withdrawal, for the
benefit of the Issuing Bank, as security for the Obligations arising out of the
Letters of Credit and the Letter of Credit Agreements.

(b) The Administrative Agent may foreclose its lien and security interest in the
Collateral, held for the ratable benefit of the Lenders, in any way permitted by
applicable law and shall have, without limitation, the remedies of a secured
party under the UCC. The Administrative Agent may enter the premises of any
Borrower without legal process and without incurring liability to any Borrower
and remove the Collateral to such place or places as the Administrative Agent
may deem advisable, or the Administrative Agent may require the Borrowers to
assemble the Collateral and make the Collateral available to the Administrative
Agent at a convenient place and, with or without having the Collateral at the
time or place of sale, the Administrative Agent may, for the ratable benefit of
the Lenders, sell or otherwise dispose of all or any part of the Collateral
whether in its then condition or after further preparation or processing, either
at public or private sale or at any broker’s board, in lots or in bulk, for cash
or for credit, at any time or place, in one or more sales and upon such terms
and conditions as the Administrative Agent may elect. The Administrative Agent
shall give not less than ten Business Days’ prior written notice to the
Borrowers of the time and place of any public sale of the Collateral or the time
after which the Collateral may be sold in a private sale, which each Borrower
agrees constitutes commercially reasonable notice. At any such sale the
Administrative Agent or any Lender may be the purchaser, subject to the
applicable provisions of the UCC.

 

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(c) The Borrowers shall, at the request of the Administrative Agent, notify
account debtors and other persons obligated on any of the Collateral of the
security interest of the Administrative Agent (held for the ratable benefit of
the Lenders) in any account, chattel paper, general intangible, instrument or
other Collateral and that payment thereof is to be made directly to the
Administrative Agent or to any financial institution designated by the
Administrative Agent as the Administrative Agent’s agent therefor, and the
Administrative Agent may itself, without notice to or demand upon such Borrower,
so notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, such Borrower
shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by such Borrower as
trustee for the Administrative Agent without commingling the same with other
funds of such Borrower and shall turn the same over to the Administrative Agent
in the identical form received, together with any necessary endorsements or
assignments. The Administrative Agent shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Administrative Agent to the Obligations, ratably in favor of the
Lenders, such proceeds to be immediately entered after final payment in cash or
other immediately available funds of the items giving rise to them.

(d) Notwithstanding any other provisions of this Agreement to the contrary,
after the occurrence of an Event of Default and the declaration of the
Obligations to be immediately due and payable in accordance with the provisions
of this Agreement, all amounts collected or received by the Administrative Agent
or any Lender on account of the Obligations or any other amounts outstanding
under any of the Loan Documents or in respect of the Collateral shall be paid
over or delivered as follows:

(1) FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent in connection with enforcing the rights of the Lenders under the Loan
Documents and any advances made by the Administrative Agent with respect to the
Collateral pursuant to Section 9.2(h);

(2) SECOND, to the payment of all reasonable out-of-pocket costs and expenses of
each of the Lenders in connection with enforcing its respective rights under the
Loan Documents or otherwise with respect to the Obligations owing to such Lender
and the reasonable fees of appraisers, investment bankers or other professionals
retained by the Administrative Agent to provide services to sell, collect or
otherwise dispose of the Collateral;

(3) THIRD, to the payment of accrued fees and interest on the Swingline Loans;

(4) FOURTH, to the payment of all of the other Obligations consisting of accrued
fees and interest, and including with respect to any Hedging Agreement between
any Borrower and any Lender, or any Affiliate of a Lender, any fees, premiums
and scheduled periodic payments due under such Hedging Agreement and any
interest accrued thereon;

 

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(5) FIFTH, to the payment of the outstanding principal amount of the Swingline
Loans;

(6) SIXTH, to the payment of the outstanding principal amount of the other
Obligations and the payment or cash collateralization of the outstanding LC
Exposure and including with respect to any Hedging Agreement between any
Borrower and any Lender, or any Affiliate of a Lender, any breakage, termination
or other payments due under such Hedging Agreement and any interest accrued
thereon;

(7) SEVENTH, to all other Obligations and other obligations which shall have
become due and payable under the Loan Documents or otherwise and not repaid
pursuant to clauses “FIRST” through “SIXTH” above; and

(8) EIGHTH, to the payment of the surplus, if any, to whomever may be lawfully
entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Aggregate
Exposure and obligations outstanding under the Hedging Agreements (if any) held
by such Lender (and its Affiliates in the case of Hedging Agreement obligations)
bears to the aggregate then outstanding Aggregate Exposure and obligations
outstanding under the Hedging Agreements between any Borrower and any Lender or
any Affiliate of a Lender of amounts available to be applied pursuant to clauses
“FOURTH” and “SIXTH” above; and (iii) to the extent that any amounts available
for distribution pursuant to clause “SIXTH” above are attributable to the issued
but undrawn amount of outstanding Letters of Credit, such amounts shall be held
by the Administrative Agent in a cash collateral account and applied (A) first,
to reimburse the Issuing Bank from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses “SIXTH” and
“SEVENTH” above in the manner provided in this Section.

(e) To the extent that the Obligations are now or hereafter secured by property
other than the Collateral described herein or by the Guarantee, endorsement or
property of any other Person, the Administrative Agent, at its option, may, and
upon the written request of the Required Lenders, shall, proceed against such
other Guarantee, endorsement or property upon the occurrence of an Event of
Default, and the Administrative Agent shall have the right, in its sole
discretion, to determine which rights, security, liens, security interests or
remedies the Administrative Agent shall at any time pursue, relinquish,
subordinate, modify or take any other action with respect thereto, without in
any way modifying or affecting any of them or any of the Administrative Agent’s
rights hereunder.

(f) Subject to Section 2.23(e), the Administrative Agent is hereby authorized at
any time or from time to time after the demand for payment of the Obligations
pursuant to

 

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Section 9.2(a), without prior notice to the Borrowers (any such notice being
expressly waived by each Borrower), to setoff and apply any deposit (general or
special, time or demand, provisional or final) or investment account at any time
held, including any certificate of deposit, and other indebtedness at any time
owed by the Administrative Agent or any Lender, whether or not any such deposit
or indebtedness is then due, to or for the credit or account of any Borrower
against any and all of the Obligations. The Administrative Agent shall give
written notice of any setoff to the Borrowers.

(g) EACH BORROWER, HAVING KNOWLEDGE THAT IT MAY BE ENTITLED TO NOTICE AND A
HEARING PRIOR TO REPOSSESSION OF THE COLLATERAL, WAIVES ANY RIGHT THAT IT MAY
HAVE TO NOTICE OF FORECLOSURE, TO ANY HEARING THAT MAY BE HELD RELATING TO
FORECLOSURE, AND TO ANY NOTICE THAT MAY BE REQUIRED TO BE GIVEN BY THE
ADMINISTRATIVE AGENT OR ANY LENDER PRIOR TO SUCH HEARING, OTHER THAN THE NOTICES
OR HEARINGS REQUIRED BY THE LOAN DOCUMENTS, THE UCC OR ANY OTHER APPLICABLE LAW.
THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH BORROWER EXPRESSLY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(h) The Administrative Agent itself may perform or comply, or otherwise cause
performance or compliance, for the ratable benefit of the Lenders, with the
obligations of a Borrower contained in this Agreement, including, without
limitation, the obligations of each Borrower to defend and insure the
Collateral. The expenses of the Administrative Agent incurred in connection with
such performance or compliance, together with interest thereon at the Federal
Funds Rate plus 2%, from the date such expenses are paid until the same are
repaid, shall be payable by the Borrowers to the Administrative Agent on demand
and shall constitute Obligations.

SECTION 10. The Administrative Agent.

10.1 Appointment of Administrative Agent.

(a) Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent
and authorizes it to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions set forth in this Article
shall apply to any such sub-agent or attorney-in-fact and the Affiliate of the
Administrative Agent, any such sub-agent and any such attorney-in-fact and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.

 

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(b) The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Required Lenders to act for the Issuing Bank with respect thereto;
provided, that the Issuing Bank shall have all the benefits and immunities
(i) provided to the Administrative Agent in this Article with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term “Administrative Agent” as used in this Article included the Issuing
Bank with respect to such acts or omissions and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.

10.2 Nature of Duties of Administrative Agent. The Administrative Agent shall
not have any duties or obligations except those expressly set forth in this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default or an Event of Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
those discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.2(b)), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it, its sub-agents or
attorneys-in-fact with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.2(b)) or in the absence of its own gross
negligence or willful misconduct or a breach by the Administrative Agent of its
specific and express obligations to the Lenders under this Agreement as
determined by a final non-appealable judgment by a court of competent
jurisdiction. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof (which notice shall include an express reference to such event being a
“Default” or “Event of Default” hereunder) is given to the Administrative Agent
by the Company or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements, or other terms
and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of

 

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any condition set forth in Section 8 or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. The Administrative Agent may consult with legal counsel
(including counsel for the Borrowers) concerning all matters pertaining to such
duties. The Administrative Agent agrees to exercise such care in performing its
duties hereunder as it would for loans for its sole benefit.

10.3 Lack of Reliance on the Administrative Agent. Each of the Lenders, the
Swingline Lender and the Issuing Bank acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each of the Lenders,
the Swingline Lender and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
continue to make its own decisions in taking or not taking of any action under
or based on this Agreement, any related agreement or any document furnished
hereunder or thereunder.

10.4 Certain Rights of the Administrative Agent. If the Administrative Agent
shall request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in connection with this Agreement, the
Administrative Agent shall be entitled to refrain from such act or taking such
act, unless and until it shall have received instructions from such Lenders, and
the Administrative Agent shall not incur liability to any Person by reason of so
refraining in the absence of the Administrative Agent’s own gross negligence or
willful misconduct as determined by a final non-appealable judgment by a court
of competent jurisdiction. Without limiting the foregoing, no Lender shall have
any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders where required by the
terms of this Agreement in the absence of the Administrative Agent’s own gross
negligence or willful misconduct as determined by a final non-appealable
judgment by a court of competent jurisdiction.

10.5 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed, sent or made by
the proper Person. The Administrative Agent may also rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or not taken by it in accordance with the advice of
such counsel, accountants or experts.

10.6 The Administrative Agent in its Individual Capacity. The bank serving as
the Administrative Agent shall have the same rights and powers under this
Agreement and any other Loan Document in its capacity as a Lender as any other
Lender and may exercise or refrain from exercising the same as though it were
not the Administrative Agent; and the terms “Lenders”, “Required Lenders”,
“holders of Notes”, or any similar terms shall, unless the context clearly

 

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otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrowers or any Subsidiary or Affiliate of the Borrowers as
if it were not the Administrative Agent hereunder.

10.7 Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving notice thereof to
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to the
approval by the Company provided that no Event of Default shall exist at such
time. If no successor Administrative Agent shall have been so appointed, and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent, which shall be a commercial bank organized
under the laws of the United States of America or any state thereof or a bank
which maintains an office in the United States, having a combined capital and
surplus of at least $500,000,000.

(b) Upon the acceptance of its appointment as the Administrative Agent hereunder
by a successor, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. If within 45 days after written notice is given of the retiring
Administrative Agent’s resignation under this Section 10.7 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as the
Administrative Agent.

10.8 Authorization to Execute other Loan Documents; Collateral.

(a) Each Lender authorizes the Administrative Agent to enter into each of the
Loan Documents to which it is a party and to take all action contemplated by
such Loan Documents. Each Lender agrees that no Lender, other than the
Administrative Agent acting on behalf of all Lenders, shall have the right
individually to seek to realize upon the security granted by any Loan Document,
it being understood and agreed that such rights and remedies may be exercised
solely by the Administrative Agent for the benefit of the Lenders, upon the
terms of the Loan Documents.

 

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(b) In the event that any Collateral is pledged by any Person as collateral
security for the Obligations, the Administrative Agent is hereby authorized to
execute and deliver on behalf of the Lenders any Loan Documents necessary or
appropriate to grant and perfect a Lien on such Collateral in favor of the
Administrative Agent on behalf of the Lenders.

(c) The Lenders hereby authorize the Administrative Agent, at its option and in
its discretion, to release any Lien granted to or held by the Administrative
Agent upon any Collateral (i) upon termination of the Commitments and payment
and satisfaction of all of the Obligations or the transactions contemplated
hereby; (ii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; (iii) if approved, authorized or ratified in writing
by the Required Lenders, unless such release is required to be approved by all
of the Lenders hereunder; (iv) the release of a Lien granted by a Subsidiary in
the case of the sale of the Subsidiary permitted by the terms of this Agreement;
or (v) the release of any Lien on any assets which are Disposed of in accordance
with the terms of this Agreement. Upon request by the Administrative Agent at
any time, the Lenders will confirm in writing the Administrative Agent’s
authority to release particular types or items of Collateral pursuant to this
Section 10.8(c).

(d) Upon any sale or transfer of assets constituting Collateral which is
expressly permitted pursuant to the terms of any Loan Documents, or consented to
in writing by the Required Lenders, and upon at least ten (10) Business Days’
prior written request by the Company, the Administrative Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Administrative
Agent for the benefit of the Lenders, upon the Collateral that was sold or
transferred; provided, however, that (i) the Administrative Agent shall not be
required to execute any such document on terms which, in the Administrative
Agent’s opinion, would expose the Administrative Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Borrower) in respect of) all interests retained by any Borrower including
(without limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral.

10.9 Benefits of Article 10. None of the provisions of this Article 10 shall
inure to the benefit of any Borrower or of any Person other than Administrative
Agent and each of the Lenders and their respective successors and permitted
assigns. Accordingly, neither the Borrowers nor any Person other than
Administrative Agent and the Lenders (and their respective successors and
permitted assigns) shall be entitled to rely upon, or to raise as a defense, the
failure of the Administrative Agent or any Lenders to comply with the provisions
of this Article 10.

SECTION 11. Miscellaneous.

11.1 Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications to any party
herein to

 

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be effective shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

To the Borrowers:    NCI Information Systems, Incorporated    11730 Plaza
America Drive    Reston, Virginia 20190    Attention: Judith Bjornaas With a
copy of notices of Defaults or Events of Default to:    Pillsbury Winthrop Shaw
Pittman LLP    1600 Tysons Boulevard    McLean, VA 22102    Attention: Craig
Chason, Esq.    Fax: (703) 770-7901 To the Administrative Agent or Swingline
Lender:    SunTrust Bank    8330 Boone Blvd.    Suite 700    Vienna VA
22182-2624    Attention: Linda Bergmann, Vice President    Telecopy Number:
703-442-1613 With a copy to:    SunTrust Bank    Agency Services    303
Peachtree Street, N. E./ 25th Floor    Atlanta, Georgia 30308    Attention: Ms.
Doris Folsom    Telecopy Number: (404) 658-4906 To the Issuing Bank:    SunTrust
Bank    25 Park Place, N. E./Mail Code 3706    Atlanta, Georgia 30303   
Attention: Sharon Anderson    Telecopy Number: (404) 588-8129 To the Swingline
Lender:    SunTrust Bank    Agency Services    303 Peachtree Street, N.E./25th
Floor    Atlanta, Georgia 30308    Attention: Doris Folsom    Telecopy Number:
(404) 658-4906 To any other Lender:    the Applicable Lending Office for such
Lender

 

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(b) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All such
notices and other communications to any party shall be effective when received
by such Person at its address specified in this Section 11.1, or upon refusal to
accept receipt of such notice.

(c) Any agreement of the Administrative Agent and the Lenders herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Administrative Agent and the Lenders shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Company and any other Borrower to give such notice and the
Administrative Agent and Lenders shall not have any liability to the Borrowers
or other Person on account of any action taken or not taken by the
Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The joint and several obligations of the Borrowers to repay
the Loans and all other Obligations hereunder shall not be affected in any way
or to any extent by any failure of the Administrative Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which is
at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in any such telephonic or facsimile notice.

11.2 Waiver; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or any other Loan Document,
and no course of dealing between the Borrowers and the Administrative Agent or
any Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Administrative Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies provided by law. No waiver of any provision
of this Agreement or any other Loan Document or consent to any departure by the
Borrowers therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
the issuance of a Letter of Credit shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default or
Event of Default at the time.

(b) No amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrowers therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Borrowers and the Required Lenders and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment or waiver shall: (i) increase the Commitment
of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or unreimbursed LC Disbursement or reduce the rate
of interest

 

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thereon, or reduce any fees payable hereunder, or change the method of
calculating any of the foregoing, without the written consent of each Lender
affected thereby, (iii) postpone the date fixed for any payment of any principal
of, or interest on, any Loan or unreimbursed LC Disbursement or interest thereon
or any fees hereunder or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date for the termination or reduction of any
Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.23(d) or 2.23(e), or any other provision hereof relating
to pro rata sharing of payments among the Lenders, in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender affected thereby, (v) change any of the provisions of this
Section or the definition of “Required Lenders,” or any other provision hereof
specifying the number or percentage of Lenders which are required to waive,
amend or modify any rights hereunder or make any determination or grant any
consent hereunder, without the consent of each Lender; (vi) release Collateral
securing any of the Obligations or agree to subordinate any Lien in such
Collateral to any other creditor of a Borrower or any Subsidiary without the
consent of each Lender, other than Collateral that the Borrowers are entitled to
sell or otherwise dispose of pursuant to Section 6.7 and other Collateral with
an aggregate value not to exceed $1,000,000 in any fiscal year of the Company;
(vii) consent to any assignment by any Borrower of its rights or obligations
hereunder without the consent of each Lender, (vii) increase the aggregate of
all Commitments (other than pursuant to Section 2.7) without the consent of all
of the Lenders; or (viii) if there are any guarantors of the Obligations at any
time, release any such Guarantor without the consent of all Lenders; provided
further, that no such agreement shall amend, modify or otherwise affect the
rights, duties or obligations of the Administrative Agent, the Swingline Lender
or the Issuing Bank without the prior written consent of such Person. Each
Lender shall reply within ten (10) Business Days after the Administrative
Agent’s written request for approval action to be taken by it or any Lenders
hereunder, or such lesser time as may be reasonably determined by the
Administrative Agent due to time constraints in the Loan Documents and specified
in the request for approval.

11.3 Expenses; Indemnification.

(a) The Borrowers shall pay (i) all reasonable, out-of-pocket costs and expenses
of the Administrative Agent and SunTrust Capital Markets, Inc., including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and SunTrust Capital Markets, Inc., in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers thereof (whether
or not the transactions contemplated in this Agreement or any other Loan
Document shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket costs and expenses (including, without limitation, the
reasonable fees, charges and disbursements of one set of outside counsel for the
Administrative Agent and the Lenders, as selected by the Administrative Agent,
including special insolvency counsel and local counsel, but not separate counsel
for any Lender) incurred by the Administrative Agent, the Issuing Bank or any
Lender in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Loans made or any Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 

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(b) The Borrowers shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender and the Issuing Bank, each Affiliate of such Person, and
the partners, directors, officers, employees, agents and advisors of such Person
and of such Person’s Affiliates (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by a Borrower arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the Issuing
Bank to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Company or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Company or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by a Borrower, and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrowers against an Indemnitee for material breach of such Indemnitee’s
material obligations hereunder or under any other Loan Document which breach
continues after notice thereof has been given to such Indemnitee by the
Borrowers, if the Borrowers have obtained a final and nonappealable judgment in
their favor on such claim as determined by a court of competent jurisdiction.

(c) To the extent that the Borrowers fail to pay any amount required to be paid
to the Administrative Agent, the Issuing Bank or the Swingline Lender under
clauses (a) or (b), each Lender severally agrees to pay to the Administrative
Agent, the Issuing Bank or the Swingline Lender, as the case may be, such
Lender’s Aggregate Exposure Percentage (determined as of the time that the
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided, that the unreimbursed expense or indemnified payment, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in
its capacity as such.

(d) To the extent permitted by applicable law, the parties hereto shall not
assert, and hereby waive, any claim against any other party hereto, on any
theory of liability, for

 

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special, indirect, consequential or punitive damages (as opposed to actual or
direct damages) arising out of, in connection with or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated therein, any Loan or any Letter of Credit or the use of proceeds
thereof.

(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

11.4 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that no Borrower may assign or transfer any of its rights hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by a Borrower without such consent shall be null and void).

(b) Any Lender may at any time assign to one or more assignees all or a portion
of its rights and obligations under this Agreement and the other Loan Documents
(including all or a portion of its Commitment and the Loans, the Swingline
Exposure and LC Exposure at the time owing to or held by it); provided, that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
the Company and the Administrative Agent (and, in the case of an assignment of
all or a portion of a Commitment or any Lender’s obligations in respect of its
LC Exposure or Swingline Exposure, the Issuing Bank and the Swingline Lender)
must give their prior written consent (which consent shall not be unreasonably
withheld or delayed if the assignment is to a commercial bank or financial
institution organized under the laws of the United States or a state thereof),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire amount of the assigning Lender’s Commitment
hereunder or an assignment while an Event of Default has occurred and is
continuing, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date an assignment and acceptance
agreement, in form and substance satisfactory to the Administrative Agent, with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 (unless the Company and the Administrative Agent shall
otherwise consent), (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement and the other Loan Documents with respect to any Commitment
and the Loans related thereto, (iv) the assigning Lender and the assignee shall
execute and deliver to the Administrative Agent an assignment and acceptance
agreement, in form and substance satisfactory to the Administrative Agent,
together with a processing and recordation fee payable by the assigning Lender
or the assignee (as determined between such Persons) in an amount equal to
$3,500, and (v) such assignee, if it is not a Lender, shall deliver to the
Administrative Agent all information reasonably requested by the Administrative
Agent; provided, that any consent of the Company otherwise required hereunder
shall not be required if an Event of Default has occurred and is continuing.
Upon the execution and delivery of the assignment and acceptance agreement and
payment by such assignee to the assigning Lender of an amount equal to the
purchase price agreed between such Persons, and the granting of the consents
required

 

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herein, such assignee shall become a party to this Agreement and any other Loan
Documents to which such assigning Lender is a party and, to the extent of such
interest assigned by such assignment and acceptance agreement, shall have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender shall be released from its obligations hereunder to a corresponding
extent (and, in the case of an assignment and acceptance agreement covering all
of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.17, 2.18, 2.19 and 11.3 with respect to any period of
time during which it was a Lender hereunder). Upon the consummation of any such
assignment hereunder, the assigning Lender, the Administrative Agent and the
Borrowers shall make appropriate arrangements to have new Notes issued if so
requested by either or both the assigning Lender or the assignee. Any assignment
or other transfer by a Lender that does not fully comply with the terms of this
clause (b) shall be treated for purposes of this Agreement as a sale of a
participation pursuant to clause (c) below.

(c) Any Lender may at any time, without the consent of the Borrowers, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other financial institutions (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitment, the Loans owing to
it and its LC Exposure); provided, that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of its obligations
hereunder, and (iii) the Borrowers, the Administrative Agent, the Swingline
Lender, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. Any agreement
between such Lender and the Participant with respect to such participation shall
provide that such Lender shall retain the sole right and responsibility to
enforce this Agreement and the other Loan Documents and the right to approve any
amendment, modification or waiver of this Agreement and the other Loan
Documents; provided, that such participation agreement may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver of this Agreement described in the first proviso of
Section 11.2(b) that affects the Participant. Each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.17 and 2.18 to the
same extent as if it were a Lender hereunder and had acquired its interest by
assignment pursuant to paragraph (b); provided, that no Participant shall be
entitled to receive any greater payment under Sections 2.17 or 2.18 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant unless the sale of such participation is
made with the Company’s prior written consent and such Participant shall be
subject to the provisions of Section 2.24(c). A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.19 unless such Participant agrees, for the benefit of the Borrowers,
to comply with Section 2.19(e) as though it were a Lender hereunder, provided,
that no Participant shall be entitled to receive any greater amount pursuant to
such Section 2.19 than the transferor Lender would have been entitled to receive
in respect of the amount for the participation transferred by such Lender to
such Participant has no such transfer occurred, and such Participant shall be
subject to the provisions of Section 2.24(c).

 

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(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement and its Notes (if any) to secure
its obligations to a Federal Reserve Bank without complying with this Section;
provided, that no such pledge or assignment shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

(e) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle organized or
otherwise formed under the laws of the United States or any State thereof (an
“SPV”), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrowers, the option to provide to the
Borrowers all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrowers pursuant to this Agreement; provided, that
(i) nothing herein shall constitute a commitment by any SPV to make any Loan and
(ii) if an SPV elects not to exercise such option or otherwise fails to provide
all or any part of any Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof. As between the Granting Lender and the SPV,
the Granting Lender shall retain the sole right and responsibility to enforce
this Agreement or any other Loan Document and the right to approve any
amendment, modification or waiver hereof or thereof. The making of a Loan by an
SPV hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if such Loan were made by such Granting Lender. Each party hereto
hereby agrees that no SPV shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPV, it will
not institute against, or join any other person in instituting against, such SPV
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State. Notwithstanding
any provision to the contrary in this Section 11.4, any SPV may (i) with notice
to, but without the prior written consent of, the Borrowers and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by the Company and the Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPV to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPV. As this clause (e) applies to any
particular SPV, this Section may not be amended without the written consent of
such SPV.

11.5 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and the other Loan Documents shall be construed in accordance
with and be governed by the law (without giving effect to the conflict of law
principles thereof) of the State.

 

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(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the non-exclusive jurisdiction of the United States District
Court of the Eastern District of Virginia, and of any state court of the
Commonwealth of Virginia and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions contemplated hereby or thereby, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such Virginia state court
or, to the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrowers or their respective properties in the courts of any jurisdiction.

(c) Each Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding described in paragraph (b) of this Section and brought in any court
referred to in paragraph (b) of this Section. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

(d) Each party to this Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 11.1. Nothing in this Agreement or
in any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by law.

(e) The representations, warranties, covenants and agreements contained in this
Agreement shall be deemed to have been given and undertaken by the Borrowers
jointly and severally.

11.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

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11.7 Right of Setoff. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, each Lender and
the Issuing Bank shall have the right, subject to Section 2.23(e), at any time
or from time to time upon the occurrence and during the continuance of an Event
of Default and the demand for payment of the Obligations pursuant to
Section 9.2(a), without prior notice to the Borrowers, any such notice being
expressly waived by the Borrowers to the extent permitted by applicable law, to
set off and apply against all deposits (general or special, time or demand,
provisional or final) of the Borrowers at any time held or other obligations at
any time owing by such Lender or the Issuing Bank to or for the credit or the
account of the Borrowers against any and all Obligations held by such Lender or
the Issuing Bank, as the case may be, irrespective of whether such Lender or the
Issuing Bank shall have made demand hereunder and although such Obligations may
be unmatured. Each Lender and the Issuing Bank agree promptly to notify the
Administrative Agent and the Borrowers after any such set-off and any
application made by such Lender and the Issuing Bank, as the case may be;
provided, that the failure to give such notice shall not affect the validity of
such set-off and application.

11.8 Counterparts; Integration. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement, the other Loan
Documents, and any separate letter agreement(s) relating to any fees payable to
the Administrative Agent constitute the entire agreement among the parties
hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements and understandings, oral or written, regarding
such subject matters.

11.9 Survival. All covenants, agreements, representations and warranties made by
the Borrowers herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.17, 2.18, 2.19, 11.3, 11.11 and Section 9 shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof. All representations and warranties made
herein, in the certificates, reports, notices, and other documents delivered
pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, and the making of the Loans and the
issuance of the Letters of Credit.

11.10 Severability. Any provision of this Agreement or any other Loan Document
held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to
such jurisdiction, be

 

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ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or unenforceability
of a particular provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

11.11 Confidentiality. Each of the Administrative Agent, the Issuing Bank and
each Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of any information provided to it by the Borrowers or any
Subsidiary, except that such information may be disclosed (i) to any Affiliate
of the Administrative Agent, the Issuing Bank or any such Lender, and their
respective accountants, legal counsel and other professional advisors (provided
that all such Persons shall have agreed in writing to keep such information
confidential in accordance with the terms of this Section), (ii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iii) to the extent requested by any regulatory agency or governmental
authority having jurisdiction over the disclosing Administrative Agent, Issuing
Bank or Lender, (iv) to the extent that such information becomes publicly
available other than as a result of a breach of this Section, (v) in connection
with the exercise of any remedy hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (vi) subject
to provisions substantially similar to this Section 11.11, to any actual or
prospective assignee or Participant, or (vii) with the prior written consent of
the Company. Non-public information with respect to the Borrowers or any
Subsidiary which becomes available to the Administrative Agent, the Issuing
Bank, any Lender or any Affiliate, or their accountants, legal counsel or other
professional advisors, of any of the foregoing from a source other than the
Borrowers may be used by the recipient but not further disclosed, other than in
compliance with to clause (i) above. Any Person required to maintain the
confidentiality of any information as provided for in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord its own confidential information.

11.12 Interest Rate Limitation. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts which may be treated as interest on such Loan under
applicable law (collectively, the “Charges”), shall exceed the maximum lawful
rate of interest (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by a Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by such Lender.

11.13 Captions. The captions of the various sections and paragraphs of this
Agreement have been inserted only for the purposes of convenience; such captions
are not a part of this Agreement and shall not be deemed in any manner to
modify, explain, enlarge or restrict any of the provisions of this Agreement.

 

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11.14 Use of Defined Terms. All terms defined in this Agreement shall have the
defined meanings when used in certificates, reports or other documents made or
delivered pursuant to this Agreement, unless the context shall otherwise
require.

11.15 Accounting Terms. Unless otherwise defined or specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP as in effect from time to
time, applied on a basis consistent (except for such changes approved by the
Company’s independent public accountants) with the most recent audited
consolidated financial statements of the Company delivered pursuant to
Section 5.8(a); provided, that if the Company notifies the Administrative Agent
that the Company wishes to amend any covenant in Section 7 to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Company that the Required Lenders wish to
amend Section 7 for such purpose), then the Company’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Company,
the Administrative Agent and the Required Lenders.

11.16 Patriot Act. The Administrative Agent and each Lender hereby notifies the
Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies each Borrower,
which information includes the name and address of such Borrower and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Borrower in accordance with the Patriot Act. Each
Borrower shall, and shall cause each of its Subsidiaries to, provide to the
extent commercially reasonable, such information and take such other actions as
are reasonably requested by the Administrative Agent or any Lender in order to
assist the Administrative Agent and the Lenders in maintaining compliance with
the Patriot Act.

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective duly authorized representatives all as of the day and year
first above written.

 

BORROWERS: NCI, INC., a Delaware corporation Organizational Identification
Number: 4006180 By:  

/s/ Charles K. Narang

Name:   Charles K. Narang Title:   Chief Executive Officer

NCI INFORMATION SYSTEMS,

INCORPORATED, a Virginia corporation

Organizational Identification Number: 03500824 By:  

/s/ Charles K. Narang

Name:   Charles K. Narang Title:   Chief Executive Officer

SCIENTIFIC AND ENGINEERING

SOLUTIONS, INC., a Maryland corporation

Organizational Identification Number: D04435541 By:  

/s/ Charles K. Narang

Name:   Charles K. Narang Title:   Chief Executive Officer

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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ADMINISTRATIVE AGENT: SUNTRUST BANK, a Georgia banking corporation By:  

/s/ Linda Bergmann

  Linda Bergmann   Vice President

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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LENDER: SUNTRUST BANK, a Georgia banking corporation By:  

/s/ Linda Bergmann

  Linda Bergmann   Vice President

Revolving Commitment: $24,000,000

Applicable Lending Office:

SunTrust Bank

8330 Boone Blvd.

Suite 700

Vienna VA 22182-2624

Attention: Linda Bergmann, Vice President

Telecopy Number: 703-442-1613

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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LENDER:

CITIZENS BANK OF PENNSYLVANIA, a

Pennsylvania state chartered bank

By:  

/s/ Richard Krogmann

  Richard Krogmann   Vice President

Revolving Commitment: $16,500,000

Applicable Lending Office:

Citizens Bank of Pennsylvania

8521 Leesburg Pike, Suite 405

Vienna, Va. 22182

Attention: Richard Krogmann, Vice President

Telecopy Number: 703-610-6070

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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LENDER: BRANCH BANKING AND TRUST COMPANY OF VIRGINIA, a Virginia banking
corporation By:  

/s/ Thatcher L. Townsend III

  Thatcher L. Townsend III   Senior Vice President

Revolving Commitment: $19,500,000

Applicable Lending Office:

Branch Banking and Trust Company of Virginia

8200 Greensboro Drive, Suite 1000

McLean, Virginia 22102

Attention: James E. Davis, Senior Vice President

Telecopy Number: 703-442-5025

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EXHIBIT A

Covenant Compliance Certificate

In connection with the terms of the Loan and Security Agreement, dated as of
March 14, 2006 (as amended, modified or supplemented from time to time, the
“Loan Agreement”), between NCI, Inc, a Delaware corporation (the “Company”), and
its Subsidiaries, SunTrust Bank, a Georgia banking corporation (the
“Administrative Agent”), SunTrust Robinson Humphrey, a division of SunTrust
Capital Markets, Inc., as Lead Arranger and Book Manager, and each Lender and
each other Subsidiary that is, or may become, a party thereto, the undersigned
certifies that the following information is true and correct as of the date of
this Covenant Compliance Certificate:

SECTION 12. No Default or Event of Default has occurred and is continuing.

SECTION 13. Net Worth was $             as of the last day of the fiscal quarter
ended on                     , calculated as set forth on Schedule 1, and thus
exceeded the Minimum Net Worth Compliance Level.

SECTION 14. The Senior Funded Debt Ratio was      to 1 as of the last day of the
fiscal quarter ended on                     , calculated as set forth on
Schedule 2, and thus was in compliance with Section 7.2.

SECTION 15. The Fixed Charge Coverage Ratio for the 4-quarter period ended on
                    ,         was      to 1, calculated as set forth on Schedule
3, and thus was in compliance with Section 7.3.

SECTION 16. During the fiscal year ended on             , consolidated Capital
Expenditures made in cash by the Company and its Subsidiaries did not exceed the
sum of (a) the Annual Limit for such fiscal year plus, if applicable, (b) the
amount by which consolidated Capital Expenditures made in cash by the Company
and its Subsidiaries in the immediately preceding fiscal year was less than the
Annual Limit for such fiscal year, up to $1,000,000, calculated as set forth on
Schedule 4.

Capitalized terms used in this Covenant Compliance Certificate shall have the
same meanings as those assigned to them in the Loan Agreement.

Dated                     ,             .

 

 

Name:

 

 

Title:

 

 

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Schedule 1

Net Worth

 

1. Net Worth    $              2. Minimum Net Worth Compliance Level   

(a) 85% of Net Worth as of September 30, 2005

   $             

(b) 50% of positive consolidated Net Income of the Company and its Subsidiaries
on a cumulative basis since September 30, 2005

   $             

(c) 100% of the amount by which the Borrower’s “total stockholders’ equity” is
increased as a result of any public or private offering of common stock of the
Company after September 30, 2005

   $             

(d) AAA Distributions made subsequent to September 30, 2005

   $             

TOTAL (a+b+c-d)

   $             

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Schedule 2

Senior Funded Debt Ratio

 

1. Consolidated Senior Funded Debt of the Company and its Subsidiaries

  

(a) Borrowed Money

   $             

(b) Deferred purchase price obligations

   $             

(c) Repurchase Agreements

   $             

(d) Capital Lease Obligations

   $             

(e) Obligations constituting the aggregate implied principal amount of Synthetic
Leases

   $             

(f) Guaranties

   $             

(g) Obligations for letters of credit and acceptances

   $             

(h) Preferred stock or similar equity interests subject to mandatory sinking
fund payments, redemption or acceleration on equity

   $             

(i) Contingent acquisition obligations

   $             

(j) Partnership or Joint Venture Debt

   $             

(k) Subordinated Debt

   $             

TOTAL (a+b+c+d+e+f+g+h+i+j-k)

   $              2. Consolidated EBITDA of the Company and its Subsidiaries for
the 4-quarter period ended on                         $             

(a) Net Income

   $             

(b) Taxes

   $             

(c) Depreciation

   $             

(d) Amortization

   $             

(e) Interest Expense

   $             

(f) Extraordinary or unusual losses or other losses not incurred in the ordinary
course of business

   $             

(g) Extraordinary or unusual gains or other gains not incurred in the ordinary
course of business

   $             

(h) Revenues from discontinued operations

   $             

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

(i) Expenses from discontinued operations

   $             

(j) Unrealized losses on Hedging Agreements

   $             

(k) Unrealized gains on Hedging Agreements

   $             

TOTAL (a+b+c+d+e+f-g-h+i+j-k)

   $             

2. Permitted Acquisition EBITDA of the Company and its Subsidiaries for the
4-quarter period ended on             

   $              3. Non-cash stock compensation expense for the 4-quarter
period ended on                     , except to the extent that such charges are
reserves for future cash charges    $             

4. Senior Funded Debt Ratio

  

Consolidated Senior Funded Debt ($            )

Consolidated EBITDA plus Permitted Acquisition EBITDA plus Non-cash

stock compensation expense, except to the extent that such charges

are reserves for future cash charges($            )

     =      to 1

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Schedule 3

Fixed Charge Coverage Ratio

 

1. Cash Flow Available for Fixed Charges

   $             

(a) Consolidated EBITDA plus Permitted Acquisition EBITDA for the 4-quarter
period ended on                      - Calculated as set forth in Schedule 2

   $             

(b) Income Taxes Paid in Cash during such period

   $             

(c) Non-Financed Capital Expenditures for such period

   $             

(d) Non-cash stock compensation expense for such period, except to the extent
that such charges are reserves for future cash charges

   $             

TOTAL (a-b-c+d)

   $             

2. Fixed Charges

   $             

(a) Interest Expense

   $             

(b) Current Maturities of Long-Term Debt, including Capital Leases (all of the
foregoing as of the end of the period and payable over the next succeeding
period of four fiscal quarters)

   $             

(c) Restricted Payments made during such period, other than any AAA
Distributions made during such period

  

TOTAL (a+b+c)

   $             

3. Fixed Charge Coverage Ratio

  

Cash Flow Available for Fixed Charges ($            )

Fixed Charges

     =      to 1

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Schedule 4

Capital Expenditures

 

1. Consolidated Capital Expenditures made in cash by the Company and its
Subsidiaries for the fiscal year ended                 $              2. Total
Revenues for the fiscal year ended on                         $              3.
Consolidated Capital Expenditures made in cash by the Company and its
Subsidiaries for the immediately preceding fiscal year    $              4.
Total Revenues for the immediately preceding fiscal year    $              5.
Annual Limit for the fiscal year ended on                      (greater of
$2,000,000 or 2% of line 2)    $              6. Annual Limit for the
immediately preceding fiscal year (greater of $2,000,000 or 2% of line 4)    $
             7. Permitted carry-forward (amount by which line 3 exceeds line 5,
up to $1,000,000)    $              8. Permitted Capital Expenditures for fiscal
year ended                      (line 5 plus line 7)    $             

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EXHIBIT B

COLLATERAL ASSIGNMENT, PATENT MORTGAGE

AND SECURITY AGREEMENT

This Collateral Assignment, Patent Mortgage and Security Agreement (the
“Assignment”) dated as of the      day of                     ,         , from
                            , a              corporation (the “Assignor”), in
favor of SUNTRUST BANK, a Georgia banking corporation (“Assignee”), as
administrative agent for the Lenders (as such term is defined in the Loan
Agreement).

RECITALS

The Lenders and Assignee (as the Administrative Agent for the Lenders) have
entered into a Loan and Security Agreement, dated as of March 14, 2006 (as
amended, modified or supplemented from time to time, the “Loan Agreement,” the
capitalized terms defined therein and not otherwise defined herein being used
herein as therein defined) with Assignor and each other Borrower.
[Simultaneously herewith, Assignor shall enter into the Assumption Agreement,
dated as of                                 , with the Lenders (as amended,
modified or supplemented from time to time, the “Assumption Agreement”), thereby
becoming a Borrower under the Loan Agreement in accordance with the terms and
conditions thereof, and, by its execution and delivery hereof, an Assignor.] It
is a condition precedent to the making of the Loans and the issuance of Letters
of Credit by Assignee, the Lenders or the Issuing Bank, as applicable, under the
Loan Agreement that Assignor shall have assigned certain property to Assignee
(for the ratable benefit of the Lenders and the Issuing Bank) in accordance with
this Assignment.

NOW, THEREFORE, FOR VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH
ARE ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:

SECTION 17. Assignment, Patent Mortgage and Grant of Security Interest. As
collateral security for the prompt and complete payment and performance of the
Obligations (as defined below), Assignor hereby assigns, transfers, conveys and
grants a security interest and mortgage to Assignee, for the ratable benefit of
the Lenders and the Issuing Bank, as security, but not as an ownership interest,
in and to its entire right, title and interest in, to and under the following
(all of which shall collectively be called the “Collateral”):

17.1 All present and future United States copyright registrations owned by
Assignor, including, without limitation, the registered copyrights listed in
Exhibit A-1 to this Assignment, as amended and supplemented from time to time
(and including all of the exclusive rights afforded a copyright registrant in
the United States under 17 U.S.C. §106 and any exclusive rights owned by
Assignor which may in the future arise by act of Congress or otherwise)
(collectively, the “Registered Copyrights”), and any and all royalties,
payments, and other amounts payable to Assignor in connection with the
Registered Copyrights, together with all renewals and extensions of the
Registered Copyrights, Assignor’s right to recover for all past, present, and
future infringements of the Registered Copyrights, and all Assignor’s computer
programs, computer databases, computer program flow diagrams, source codes,
object codes and all tangible property embodying or incorporating the Registered
Copyrights, and all other rights of every kind whatsoever owned by Assignor
accruing thereunder or pertaining thereto;

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17.2 All present and future accounts, accounts receivable and other rights to
payment arising from, in connection with or relating to the Copyrights;

17.3 All registered patents and like protections owned by Assignor including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents set forth on Exhibit B attached hereto as amended and supplemented
from time to time (collectively, the “Patents”), and any and all royalties,
payments, and other amounts payable to Assignor in connection with the Patents,
together with all renewals and extensions of the Patents, the right of Assignor
to recover for all past, present, and future infringements of the Patents, and
all computer programs, computer databases, computer program flow diagrams,
source codes, object codes and all tangible property of Assignor embodying or
incorporating the Patents, and all other rights of every kind whatsoever
accruing thereunder or pertaining thereto;

17.4 Any federally registered trademark and servicemark rights owned by Assignor
and the entire goodwill of the business of Assignor connected with and
symbolized by such trademarks, including without limitation those set forth on
Exhibit C attached hereto, as amended and supplemented from time to time
(collectively, the “Trademarks”), and any and all royalties, payments, and other
amounts payable to Assignor in connection with the Trademarks, together with all
renewals and extensions of the Trademarks, and the right of Assignor to recover
for all past, present, and future infringements of the Trademarks;

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

17.6 Assignor’s interest in all licenses or other rights granted by Assignor to
use any of the Copyrights, Patents or Trademarks, and all license fees and
royalties owing to Assignor arising from such use to the extent permitted by
such license or rights;

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

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

THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ASSIGNOR’S
OBLIGATIONS TO ASSIGNEE, THE LENDERS AND THE ISSUING BANK.

This Assignment secures the payment of all of the Obligations. Without limiting
the generality of the foregoing, this Assignment secures the payment of all
amounts that constitute part of the Obligations and would be owed by Assignor to
Assignee, the Lenders or the Issuing Bank, as applicable, but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Assignor.

 

2

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SECTION 18. Authorization and Request. Assignor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.

SECTION 19. Covenants and Warranties. Assignor represents, warrants, covenants
and agrees as follows:

19.1 Assignor is now the sole owner of all material items of Collateral, except
for non-exclusive licenses granted by Assignor to its Customers in the ordinary
course of business.

19.2 Listed on Exhibit A are all Copyrights owned by Assignor. Listed on Exhibit
B are all Patents owned by Assignor. Listed on Exhibit C are all Trademarks
owned by Assignor. As of the date hereof, the Assignor does not own or hold any
registered copyrights, patents or trademarks, other than as listed on Exhibits
A, B and C attached hereto and other than such Intellectual Property that has
not been used by the Borrowers in the past 12 months or from which no revenue in
excess of $100,000 has been derived in the past 12 months.

19.3 This Assignment creates, and in the case of after acquired Collateral, this
Assignment will create at the time Assignor first has rights in such after
acquired Collateral, in favor of Assignee, for the ratable benefit of the
Lenders and the Issuing Bank, a valid and perfected first priority security
interest in the Collateral in the United States securing the payment and
performance of the Obligations upon making the filings referred to in clause
(m) below.

SECTION 20. Assignee’s Rights. Assignee (for the ratable benefit of the Lenders
and the Issuing Bank) shall have the right, but not the obligation, to take, at
Assignor’s sole expense, any actions that Assignor is required under this
Assignment to take but which Assignor fails to take, after fifteen (15) days’
notice to Assignor. Assignor shall reimburse and indemnify Assignee (for the
ratable benefit of the Lenders and the Issuing Bank) for all reasonable costs
and reasonable expenses incurred in the reasonable exercise of its rights under
this Section SECTION 20.

SECTION 21. Inspection Rights. Assignor hereby grants to Assignee rights of
inspection with respect to the Collateral, as more particularly set forth in
Section 5.7 of the Loan Agreement.

SECTION 22. Further Assurances; Attorney in Fact. Assignor represents, warrants,
covenants and agrees as follows:

22.1 Assignor will make, execute, acknowledge and deliver, and file and record
in the proper filing and recording places in the United States, all such
instruments, including, appropriate financing and continuation statements and
collateral agreements and filings with the United States Patent and Trademark
Office and the Register of Copyrights, and take all such action as may
reasonably be deemed necessary or advisable, or as requested by Assignee, to
perfect Assignee’s security interest (held for the ratable benefit of the
Lenders and the Issuing Bank) in all Copyrights, Patents and Trademarks and
otherwise to carry out the intent and purposes of this Assignment, or for
assuring and confirming to Assignee (for the ratable benefit of the Lenders and
the Issuing Bank) the grant or perfection of a security interest in all
Collateral.

 

3

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22.2 Upon an Event of Default, Assignor hereby irrevocably appoints Assignee as
its attorney-in-fact, with full authority in the place and stead of Assignor and
in the name of Assignor, Assignee or otherwise, from time to time in Assignee’s
discretion, upon Assignor’s failure or inability to do so, to take any action
and to execute any instrument which Assignee may deem necessary or advisable to
accomplish the purposes of this Assignment, including:

(a) To modify, in its sole discretion, this Assignment without first obtaining
Assignor’s approval of or signature to such modification by amending Exhibit A,
, Exhibit B and Exhibit C, thereof, as appropriate, to include reference to any
right, title or interest in any Copyrights, Patents or Trademarks acquired by
Assignor after the execution hereof or to delete any reference to any right,
title or interest in any Copyrights, Patents or Trademarks in which Assignor no
longer has or claims any right, title or interest; and

(b) To file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the
signature of Assignor where permitted by law.

SECTION 23. Remedies. Upon the occurrence and continuance of an Event of Default
under the Loan Agreement, Assignee shall have the right to exercise, for the
ratable benefit of the Lenders and the Issuing Bank, all the remedies of a
secured party under the UCC, including, without limitation, the right to:

23.1 Require Assignor to assemble any tangible property in which the Collateral
is embodied and in which Assignor has a security interest, held for the ratable
benefit of the Lenders and the Issuing Bank, and to make it available to
Assignee at a place designated by Assignee;

23.2 Exercise any and all rights as beneficial and legal owner of the Collateral
(for the ratable benefit of the Lenders and the Issuing Bank), including,
without limitation, any and all consensual rights and powers with respect to the
Collateral, and

23.3 Without limiting the foregoing paragraphs (a) or (b), the Assignee shall
have the right, for the ratable benefit of the Lenders and the Issuing Bank, to
sell or assign or grant a license to use, or cause to be sold or assigned or
grant a license to use any or all of the Collateral or any part thereof, in each
case, free of all rights and claims of Assignor therein and thereto, except to
the extent such actions would violate restrictions against assignments contained
in any Collateral in which Assignor’s rights arise by contract or license. In
that connection, Assignee shall have the right to cause any or all of the
Collateral to be transferred of record into the name of Assignee or its nominee
(for the ratable benefit of the Lenders and the Issuing Bank) and the right to
impose (i) such limitations and restrictions on the sale or assignment of the
Collateral as Assignee may deem to be necessary or appropriate to comply with
any law, rule or regulation having applicability to such sale or assignment and
(ii) requirements for any necessary governmental approvals. To the extent not
inconsistent with any license or contract under which Assignor’s rights arise,
Assignee (for the ratable benefit of the Lenders and the Issuing Bank) shall
have a nonexclusive, royalty-free license to use the Copyrights, Patents and
Trademarks to the extent reasonably necessary to permit Assignee to exercise its
rights and remedies (for the ratable benefit of the Lenders and the Issuing
Bank) upon the occurrence of an Event of Default. Assignor will pay any expenses
(including reasonable attorney’s fees) incurred by Assignee in connection with
the exercise of any of Assignee’s rights hereunder, including without limitation
any expense incurred in disposing of the Collateral. All of Assignee’s rights
and remedies with respect to the Collateral shall be cumulative.

 

4

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SECTION 24. Release. At such time as Assignors shall completely satisfy all of
the Obligations, Assignee shall execute and deliver to Assignors all assignments
and other instruments as may be reasonably necessary or proper to terminate
Assignee’s security interest (held for the ratable benefit of the Lenders and
the Issuing Bank) and any conditional assignment in the Collateral, subject to
any disposition of the Collateral which may have been made by Assignee (for the
ratable benefit of the Lenders and the Issuing Bank) pursuant to this
Assignment. For the purpose of this Assignment, the Obligations shall be deemed
to continue if any Assignor enters into any bankruptcy or similar proceeding at
a time when any amount paid to Assignee could be ordered to be repaid as a
preference or pursuant to a similar theory, and shall continue until it is
finally determined that no such repayment can be ordered.

SECTION 25. No Waiver. No course of dealing between any Assignor and Assignee,
nor any failure to exercise nor any delay in exercising, on the part of
Assignee, any right, power, or privilege under this Assignment or under the Loan
Agreement or any other agreement, shall operate as a waiver. No single or
partial exercise of any right, power, or privilege under this Assignment or
under the Loan Agreement or any other agreement by Assignee shall preclude any
other or further exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege by Assignee.

SECTION 26. Rights Are Cumulative. All of Assignee’s rights and remedies with
respect to the Collateral whether established by this Assignment, the Loan
Agreement, or any other documents or agreements, or by law shall be cumulative
and may be exercised concurrently or in any order.

SECTION 27. Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.

SECTION 28. Attorneys’ Fees. If any action relating to this Assignment is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.

SECTION 29. Amendments. This Assignment may be amended only by a written
instrument signed by both parties hereto. To the extent that any provision of
this Assignment conflicts with any provision of the Loan Agreement, the
provision giving Assignee greater rights or remedies shall govern, it being
understood that the purpose of this Assignment is to add to, and not detract
from, the rights granted to Assignee under the Loan Agreement. This Assignment,
the Loan Agreement, and the documents relating thereto comprise the entire
agreement of the parties with respect to the matters addressed in this
Assignment.

SECTION 30. Severability. The provisions of this Assignment are severable. If
any provision of this Assignment is held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Assignment in any jurisdiction.

SECTION 31. Counterparts. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.

 

5

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SECTION 32. Governing Law and Jurisdiction. This Assignment shall be governed by
the laws of the Commonwealth of Virginia, without regard for choice of law
provisions. Assignor and Assignee consent to the nonexclusive jurisdiction of
any state or federal court located in Fairfax County, Virginia.

SECTION 33. Confidentiality. In handling any confidential information, Assignee
(and its agents) hereby expressly agree to maintain the confidentiality of such
information in accordance with the provisions of Section 11.11 of the Loan
Agreement.

SECTION 34. WAIVER OF RIGHT TO JURY TRIAL. ASSIGNEE AND ASSIGNOR EACH HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF, OR IN ANY WAY RELATING TO: (a) THIS ASSIGNMENT; OR (b) ANY OTHER PRESENT
OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN ASSIGNEE AND ASSIGNOR; OR (c) ANY
CONDUCT, ACTS OR OMISSIONS OF ASSIGNEE OR ASSIGNOR OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
ASSIGNEE OR ASSIGNOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.

[SIGNATURES ON FOLLOWING PAGE]

 

6

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment on the day
and year first above written.

 

    ASSIGNOR:     ___________________________________________________,    

a                      corporation

Address of Assignor:

         

By:

 

 

 

   

Name:

 

 

 

   

Title:

 

 

    ASSIGNEE:

Address of Assignee:

   

SUNTRUST BANK, a Georgia banking

corporation

8330 Boone Boulevard

   

By:

 

 

Suite 700

   

Name:

 

 

Vienna, Virginia 22182

   

Title:

 

 

 

7

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                     OF                                              

   )  

COUNTY OF                                          

   )

On                                              ,             , before me,
                                                             , Notary Public,
personally appeared                                         
                                        
                                        , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

 

Notary Public

(Seal)

 

 

                         OF                              

  )  

COUNTY OF                                          

  )

On                                                          ,         , before
me,                                                              , Notary
Public, personally appeared                                         
                                        
                                        
                                             , personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

 

Notary Public

(Seal)

 

8

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EXHIBIT “A-1”

REGISTERED COPYRIGHTS

 

REG. NO.

 

REG. DATE

 

COPYRIGHT

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

EXHIBIT “A-2”

UNREGISTERED RIGHTS

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

EXHIBIT “A-3”

DESCRIPTION OF COPYRIGHT LICENSE AGREEMENTS

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

EXHIBIT “B”

PATENTS

 

DOCKET NO.

 

COUNTRY

 

SERIAL NO.

 

FILING DATE

 

STATUS

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

EXHIBIT “C”

TRADEMARKS

 

MARK

 

COUNTRY

 

SERIAL NO.

 

STATUS

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

SCHEDULE 3.2

INVENTORY AND EQUIPMENT LOCATIONS

 

11730 Plaza America Drive

   500 Interstate Park Drive

Reston, VA 20190

  

Suite 509

  

Montgomery, AL 36109

Corporate Centre II

  

17006 Dahlgren Road

16 Executive Drive, Suite 300

  

King George, VA 22482

Fairview Heights, IL 62208

  

74 Washington Ave. North

  

29900 Lorraine

Building 2A-3

  

Suite 2

Battle Creek, MI 49017

  

Warren, MI 48093

109 Gaither Drive

  

Building 1504

Mt. Laurel, NJ 08054

  

Room 100 Main Post

WSMR, NM 88002

  

3150 Presidential Drive

  

175 Oak Ridge Turnpike

Building 4

  

Oak Ridge, TN 37830

Fairborn, OH 45324

  

3850 Presidential Drive

  

10010 Junction Drive

Suite 250

  

Suite 202

Fairborn, OH 45324

  

Annapolis Junction, MD 20701

10010 Junction Drive

  

1857 Paseo San Luis

Suite 115-S

  

Suite 2

Annapolis Junction, MD 20701

  

Sierra Vista, AZ 85635

621 Shrewsbury Avenue

  

811 Park Drive

Suite 221

  

Suite 811

Shrewsbury, NJ 07702

  

Warner Robins, GA 31099

1150 Academy Park Loop

  

Suite 106

  

Colorado Springs, CO 80903

  

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SCHEDULE 4.7

MULTIEMPLOYER PLANS

Bechtel Jacobs Company LLC Workforce Transition Benefit Accounting Services

BJC Management and Integration 401(k) Plan

Wackenhut Services, Inc. Multi-Employer Welfare Agreement (WSI-MEWA)

Wackenhut Services, Inc. Pension Plan for Employees at Oak Ridge, TN

Wackenhut Services, Inc. 401(k) Retirement Plan for Employees at Oak Ridge, TN

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

SCHEDULE 4.13

INTELLECTUAL PROPERTY

Copyright

Copyright for Spectrum System Services, Inc.

TX 4-295-117

TX 4-295-119

TX 4-303-555

TX 4-303-553

TX 4-295-118

All Dated May 17, 1996

Trademark

U.S. registered trademark No. 2,553,487 for the service mark “SES SCIENTIFIC &
ENGINEERING SOLUTIONS, INC.”

Service Mark

Service Mark for the name NCI Information Systems, Inc. Registration
No. 2,432,466 dated March 6, 2001

Third-Party Intellectual Property

None.

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

SCHEDULE 4.16

COLLECTIVE BARGAINING AGREEMENTS

International Association of Machinists and Aerospace Workers, District Lodge #
74.