**EXHIBIT 10.26**

 

AMENDED AND RESTATED REVOLVING CREDIT NOTE

 
| $10,000,000 |   | Rockville, Maryland |
|-------------|--------|---------------------|
|        |   | June 27, 2003  |

 

FOR VALUERECEIVED, PEC SOLUTIONS, INC., a corporation organized under the laws of theState of Delaware (the “Borrower”), promises to pay to the order of BANK OFAMERICA, N. A., a national banking association (the “Lender”), the principalsum of TEN MILLION DOLLARS ($10,000,000) (the “Principal Sum”), or so muchthereof as has been or may be advanced/readvanced to or for the account of theBorrower pursuant to the terms and conditions of the Financing Agreement (ashereinafter defined), together with interest thereon at the rate hereinafterprovided, in accordance with the following:

 

1.                                       Interest.

 

Commencing asof the date hereof and continuing until repayment in full of all sums duehereunder, the unpaid Principal Sum shall bear interest the LIBOR Rate plus twohundred and fifty (250) basis points per annum.  For purposes hereof, the “LIBOR Rate” shall mean the fluctuatingrate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)appearing on Telerate Page 3750 (or any successor page) as the one (1) monthLondon interbank offered rate for deposits in United States Dollars atapproximately 11:00 a.m. (London time) on the second preceding business day, asadjusted from time to time in Lender’s sole discretion for then-applicablereserve requirements, deposit insurance assessment rates and other regulatorycosts.  If for any reason such rate isnot available, the term “LIBOR Daily Floating Rate” shall mean the fluctuatingrate of interest equal to the rate of interest (rounded upwards, if necessaryto the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one(1) month London interbank offered rate for deposits in United States Dollarsat approximately 11:00 a.m. (London time) on the second preceding day, asadjusted from time to time in Lender’s sole discretion for then-applicablereserve requirements, deposit insurance assessment rates and other regulatorycosts; provided, however, if more than one rate is specified on Reuters ScreenLIBO page, the applicable rate shall be the arithmetic mean of all suchrates.  Any change in the rate will takeeffect on the date of such change in the LIBOR Daily Floating Rate as indicatedon Telerate Page 3750.  Interest willaccrue on any non-banking day at the rate in effect on the immediatelypreceding banking day.

 

The rate ofinterest charged under this Note shall change immediately and contemporaneouslywith any change in the LIBOR Rate.  Allinterest payable under the terms of this Note shall be calculated on the basisof a 360-day year and the actual number of days elapsed.

 

2.                                       Payments andMaturity.

 

The unpaidPrincipal Sum, together with interest thereon at the rate provided above, shallbe payable as follows:

 

(a)           Interest only on the unpaidPrincipal Sum shall be due and payable monthly, commencing July 1, 2003,and on the first day of each month thereafter to maturity; and

 

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(b)           Unless sooner paid, the unpaidPrincipal Sum, together with interest accrued and unpaid thereon, shall be dueand payable in full on the Revolving Credit Expiration Date (as defined in theFinancing Agreement).

 

The fact thatthe balance hereunder may be reduced to zero from time to time pursuant to theFinancing Agreement will not affect the continuing validity of this Note or theFinancing Agreement, and the balance may be increased to the Principal Sumafter any such reduction to zero.

 

The Lender isauthorized to deduct any payment due hereunder from the Borrower’s account#00000000079225641 issued by the Lender, on or after the date the payment isdue.

 

3.                                       DefaultInterest.

 

Upon theoccurrence of an Event of Default (as hereinafter defined), the unpaidPrincipal Sum shall bear interest thereafter at a rate three percent (3%) perannum in excess of the fluctuating prime rate of interest established anddeclared by the Lender from time to time until such Event of Default is cured.

 

4.                                       Late Charges.

 

If theBorrower shall fail to make any payment under the terms of this Note withinfifteen (15) days after the date such payment is due, the Borrower shall pay tothe Lender on demand a late charge equal to five percent (5%) of such payment.

 

5.                                       Applicationand Place of Payments.

 

All payments,made on account of this Note shall be applied first to the payment of any latecharge then due hereunder, second to the payment of any prepayment fee then duehereunder, third to the payment of accrued and unpaid interest then duehereunder, and the remainder, if any, shall be applied to the unpaid PrincipalSum.  All payments on account of thisNote shall be paid in lawful money of the United States of America inimmediately available funds during regular business hours of the Lender at itsprincipal office in Rockville, Maryland or at such other times and places asthe Lender may at any time and from time to time designate in writing to theBorrower.

 

6.                                       Prepayment.

 

The Borrowermay prepay the Principal Sum in whole or in part upon ten (10) days priorwritten notice to the Lender without premium or penalty.

 

7.                                       FinancingAgreement and Other Financing Documents.

 

This Note isthe “Revolving Credit Note” described in an Amended and Restated Financing andSecurity Agreement of even date herewith by and between the Borrower and theLender (as amended, modified, restated, substituted, extended and renewed atany time and from time to time, the “Financing Agreement”).  The indebtedness evidenced by this Note isincluded within the meaning of the term “Obligations” as defined in theFinancing Agreement.  The term“Financing Documents” as used in this Note shall mean collectively this Note,the Financing Agreement and any other instrument, agreement, or documentpreviously, simultaneously, or

 

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hereafterexecuted and delivered by the Borrower and/or any other person, singularly orjointly with any other person, evidencing, securing, guaranteeing, or inconnection with the Principal Sum, this Note and/or the Financing Agreement.

 

8.                                       Security.

 

This Note issecured as provided in the Financing Agreement.

 

9.                                       Events ofDefault.

 

The occurrenceof any one or more of the following events shall constitute an event of default(individually, an “Event of Default” and collectively, the “Events of Default”)under the terms of this Note:

 

(a)           The failure of the Borrower topay to the Lender when due any and all amounts payable by the Borrower to theLender under the terms of this Note; or

 

(b)           The occurrence of an event ofdefault (as defined therein) under the terms and conditions of any of the otherFinancing Documents.

 

10.                                 Remedies.

 

Upon theoccurrence of an Event of Default, at the option of the Lender, all amountspayable by the Borrower to the Lender under the terms of this Note shallimmediately become due and payable by the Borrower to the Lender without noticeto the Borrower or any other person, and the Lender shall have all of therights, powers, and remedies available under the terms of this Note, any of theother Financing Documents and all applicable laws.  The Borrower and all endorsers, guarantors, and other parties whomay now or in the future be primarily or secondarily liable for the payment ofthe indebtedness evidenced by this Note hereby severally waive presentment,protest and demand, notice of protest, notice of demand and of dishonor andnon-payment of this Note and expressly agree that this Note or any paymenthereunder may be extended from time to time without in any way affecting theliability of the Borrower, guarantors and endorsers.

 

11.                                 Arbitration andWaiver of Jury Trial.

 

(a)           This paragraph concerns theresolution of any controversies or claims between the Borrower and the Lender,whether arising in contract, tort or by statute, including but not limited tocontroversies or claims that arise out of or relate to: (i) this Note(including any renewals, extensions or modifications); or (ii) any documentrelated to this Note; (collectively a “Claim”).

 

(b)           At the request of the Borroweror the Lender, any Claim shall be resolved by binding arbitration in accordancewith the Federal Arbitration Act (Title 9, U. S. Code) (the “Act”).  The Act will apply even though this Noteprovides that it is governed by the law of a specified state.

 

(c)           Arbitration proceedings willbe determined in accordance with the Act, the rules and procedures for thearbitration of financial services disputes of JAMS/Endispute or any

 

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successorthereof (“JAMS”), and the terms of this paragraph.  In the event of any inconsistency, the terms of this paragraphshall control.

 

(d)           The arbitration shall beadministered by JAMS and conducted in any U. S. state where real or tangiblepersonal property collateral for this credit is located or if there is no suchcollateral, in the Commonwealth of Virginia. All Claims shall be determined by one arbitrator; however, if Claimsexceed $5,000,000, upon the request of any party, the Claims shall be decidedby three arbitrators.  All arbitrationhearings shall commence within ninety (90) days of the demand for arbitrationand close within ninety (90) days of commencement and the award of thearbitrator(s) shall be issued within thirty (30) days of the close of thehearing.  However, the arbitrator(s), upona showing of good cause, may extend the commencement of the hearing for up toan additional sixty (60) days.  Thearbitrator(s) shall provide a concise written statement of reasons for theaward.  The arbitration award may besubmitted to any court having jurisdiction to be confirmed and enforced.

 

(e)           The arbitrator(s) will havethe authority to decide whether any Claim is barred by the statute oflimitations and, if so, to dismiss the arbitration on that basis.  For purposes of the application of thestatute of limitations, the service on JAMS under applicable JAMS rules of anotice of Claim is the equivalent of the filing of a lawsuit.  Any dispute concerning this arbitrationprovision or whether a Claim is arbitrable shall be determined by the arbitrator(s).  The arbitrator(s) shall have the power toaward legal fees pursuant to the terms of this Note.

 

(f)            This paragraph does not limitthe right of the Borrower or the Lender to: (i) exercise self-help remedies,such as but not limited to, setoff; (ii) initiate judicial or non-judicialforeclosure against any real or personal property collateral; (iii) exerciseany judicial or power of sale rights, or (iv) act in a court of law to obtainan interim remedy, such as but not limited to, injunctive relief, writ ofpossession or appointment of a receiver, or additional or supplementaryremedies.

 

(g)           The filing of a court actionis not intended to constitute a waiver of the right of the Borrower or theLender, including the suing party, thereafter to require submittal of the Claimto arbitration.

 

12.                                 Expenses.

 

The Borrowerpromises to pay to the Lender on demand by the Lender all costs and expensesincurred by the Lender in connection with the collection and enforcement ofthis Note, including, without limitation, reasonable attorneys’ fees andexpenses and all court costs.

 

13.           Notices.

 

Any notice,request, or demand to or upon the Borrower or the Lender shall be deemed tohave been properly given or made when delivered in accordance with Section 8.1of the Financing Agreement.

 

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14.           Miscellaneous.

 

Each right,power, and remedy of the Lender as provided for in this Note or any of theother Financing Documents, or now or hereafter existing under any applicablelaw or otherwise shall be cumulative and concurrent and shall be in addition toevery other right, power, or remedy provided for in this Note or any of theother Financing Documents or now or hereafter existing under any applicablelaw, and the exercise or beginning of the exercise by the Lender of any one ormore of such rights, powers, or remedies shall not preclude the simultaneous orlater exercise by the Lender of any or all such other rights, powers, orremedies.  No failure or delay by theLender to insist upon the strict performance of any term, condition, covenant,or agreement of this Note or any of the other Financing Documents, or toexercise any right, power, or remedy consequent upon a breach thereof, shallconstitute a waiver of any such term, condition, covenant, or agreement or ofany such breach, or preclude the Lender from exercising any such right, power,or remedy at a later time or times.  Byaccepting payment after the due date of any amount payable under the terms ofthis Note, the Lender shall not be deemed to waive the right either to requireprompt payment when due of all other amounts payable under the terms of thisNote or to declare an Event of Default for the failure to effect such promptpayment of any such other amount.  Nocourse of dealing or conduct shall be effective to amend, modify, waive,release, or change any provisions of this Note.

 

15.           Partial****Invalidity.

 

In the eventany provision of this Note (or any part of any provision) is held by a court ofcompetent jurisdiction to be invalid, illegal, or unenforceable in any respect,such invalidity, illegality, or unenforceability shall not affect any otherprovision (or remaining part of the affected provision) of this Note; but thisNote shall be construed as if such invalid, illegal, or unenforceable provision(or part thereof) had not been contained in this Note, but only to the extentit is invalid, illegal, or unenforceable.

 

16.           Captions.

 

The captionsherein set forth are for convenience only and shall not be deemed to define,limit, or describe the scope or intent of this Note.

 

17.           Applicable****Law.

 

The Borroweracknowledges and agrees that this Note shall be governed by the laws of theCommonwealth of Virginia, even though for the convenience and at the request ofthe Borrower, this Note may be executed elsewhere.

 

18.           Consent to Jurisdiction.

 

The Borrowerirrevocably submits to the jurisdiction of any state or federal court sittingin the Commonwealth of Virginia over any suit, action, or proceeding arisingout of or relating to this Note or any of the other Financing Documents.  The Borrower irrevocably waives, to thefullest extent permitted by law, any objection that the Borrower may now orhereafter have to the laying of venue of any such suit, action, or proceedingbrought in any such court and any claim that any such suit, action, orproceeding brought in any such court has been brought in an inconvenientforum.  Final judgment in any such suit,action, or proceeding brought in any such court shall be conclusive and bindingupon the Borrower and may be enforced in any court in

 

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which theBorrower is subject to jurisdiction by a suit upon such judgment, provided thatservice of process is effected upon the Borrower as provided in this Note or asotherwise permitted by applicable law.

 

19.           Service of Process.

 

The Borrowerhereby consents to process being served in any suit, action, or proceedinginstituted in connection with this Note by (a) the mailing of a copy thereof bycertified mail, postage prepaid, return receipt requested, to the Borrower and(b) serving a copy thereof upon Commonwealth Legal Services Corporation, 4701Cox Road, Suite 301, Glen Allen, VA 23060-6802, the agent hereby designated andappointed by the Borrower as the Borrower’s agent for service of process.  The Borrower irrevocably agrees that suchservice shall be deemed in every respect effective service of process upon theBorrower in any such suit, action or proceeding, and shall, to the fullestextent permitted by law, be taken and held to be valid personal service uponthe Borrower.  Nothing in this Sectionshall affect the right of the Lender to serve process in any manner otherwisepermitted by law or limit the right of the Lender otherwise to bringproceedings against the Borrower in the courts of any jurisdiction orjurisdictions.

 

**20.          WAIVER OF TRIAL BY JURY.**

 

**THEBORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDINGTO WHICH THE BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR INANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE FINANCING DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVERCONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCHACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TOTHIS NOTE.**

 

**THISWAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE BORROWER, AND THEBORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEENMADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAYMODIFY OR NULLIFY ITS EFFECT.  THEBORROWER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THISNOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OFITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVERWITH COUNSEL.**

 

21.           No Novation.

 

This Note, isintended as a replacement of, and is in substitution for, that certain  Revolving Credit Note dated April 30,2001 and that certain Promissory Note dated April 30, 2001, each asamended, modified, substituted, extended, and renewed from time to time, fromthe Borrower, as maker, payable to the order of Lender (collectively, the“Original Note”), but is not intended as a novation of the Original Note or anyof the Obligations evidenced by the Original Note.  All references in the Financing Agreement or any of the otherFinancing Documents to the Note shall mean the Original Note, as amended andrestated in accordance with the provisions of this Note.

 

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IN WITNESSWHEREOF, the Borrower has caused this Note to be executed under seal by itsduly authorized officers as of the date first written above.

 
| WITNESS OR  ATTEST:   | PEC  SOLUTIONS, INC. |
|-----------------------|----------------------|
|                  |                 |
|                  |                 |
| /s/ SHARON  L. CLARKE |                 | By: | /s/ STUART  A. LLOYD | (SEAL) |
|                  |                 |   | Name: STUART  A. LLOYD |
|                  |                 |   | Title: | SENIOR VICE  PRESIDENT,  CHIEF FINANCIAL OFFICER |
|                       |                      |  |  |  |  |

 

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