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Exhibit 10.20 REVOLVING NOTE
(LIBOR and/or Prime) $10,000,000.00
    
    655787/00003
Irvine, California
April 27, 2004
 On May 1, 2005 (Termination Date), SM&A,a California corporation
(Borrower), promises to pay to the order of City National Bank, a national
banking association (CNB), at its office in this city, in United States
Dollars and in immediately available funds, the principal sum of Ten Million
and no/100 Dollars ($10,000,000.00)(Revolving Credit Commitment) or so much
thereof as may be advanced and then outstanding, plus interest on the unpaid
balance, until fully repaid, at a rate computed on the basis of a 360-day year,
actual days elapsed, at the rates, times and in accordance with the terms set
forth below. As provided herein, the principal of this Note may be borrowed, repaid and
reborrowed from time to time prior to the Termination Date, provided at the
time of any borrowing no Event of Default (as hereinafter defined) exists, and
provided further that the total borrowings outstanding at any one time shall
not exceed the lesser of (i) the Revolving Credit Commitment or (ii) the
Revolving Credit Commitment, less Letters of Credit issued and outstanding
under that certain Agreement for Issuance of Letters of Credit of even date
herewith between Borrower and CNB. Each borrowing and repayment shall be noted
in the books and records of CNB. The excess of borrowings over repayments
shall evidence the principal balance due hereon from time to time and at any
time. Borrowings hereunder shall be conclusively presumed to have been made to
or for the benefit of Borrower when made as noted in such books and records. For purposes of this Note, the following definitions shall apply: "Business Day means a day that CNBs Head Office is open and conducts a
substantial portion of its business. "Eurocurrency Reserve Requirement means the aggregate (without
duplication) of the rates (expressed as a decimal) of reserves (including,
without limitation, any basic, marginal, supplemental, or emergency reserves)
that are required to be maintained by banks during the Interest Period under
any regulations of the Board of Governors of the Federal Reserve System, or any
other governmental authority having jurisdiction with respect thereto,
applicable to funding based on so-called Eurocurrency Liabilities, including
Regulation D (12 CFR 204). "Interest Period means the period commencing on the date a LIBOR Loan is
made (including the date a Prime Loan is converted to a LIBOR Loan, or a LIBOR
Loan is renewed as a LIBOR Loan, which, in the latter case, shall be the last
day of the expiring Interest Period) and ending on the first day of the month
occurring prior to or on the date which is one (1), two (2), three (3), six
(6), nine (9), twelve (12) months thereafter, as selected by the Borrower;
provided, however, no Interest Period may extend beyond the Termination Date. "LIBOR Base Rate means the British Bankers Association definition of the
London InterBank Offered Rates as made available by Bloomberg LP, or such other
information service available to CNB, for the applicable monthly period upon
which the Interest Period is based for the LIBOR Loan selected by Borrower and
as quoted by CNB on the Business Day Borrower requests a LIBOR Loan or on the
last Business Day of an expiring Interest Period. "LIBOR Interest Rate means the rate per year (rounded upward to the next
one-sixteenth (1/16th) of one percent (0.0625%), if necessary) determined by
CNB to be the quotient of (a) the LIBOR Base Rate divided by (b) one minus the
Eurocurrency Reserve Requirement for the Interest Period; which is expressed by
the following formula: LIBOR Base Rate   "LIBOR Loan means any Loan tied to the LIBOR Interest Rate. "Loan(s) means a borrowing under this Note. "Prime Loan means any Loan tied to the Prime Rate. A Loan hereunder
shall be a Prime Loan any time it is not a LIBOR Loan. 1




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Exhibit 10.20 "Prime Rate means the rate most recently announced by CNB at its
principal office in Beverly Hills, California, as its Prime Rate. Any change
in the interest rate resulting from a change in the Prime Rate shall be
effective on the day on which each change in the Prime Rate is announced by
CNB. 1. Interest on Loans. Each Loan shall bear interest from disbursement until
due (whether at stated maturity, by acceleration or otherwise) at a rate equal
to, at Borrowers option, either (a) for a LIBOR Loan, the LIBOR Interest Rate
plus two and one quarter of one percent (2.250%) per annum, or (b) for a Prime
Loan, the fluctuating Prime Rate minus one half of one percent (-.500%) per
annum. Interest on the Loans shall accrue daily and be payable (a) monthly, in
arrears, on the first day of thenext month, commencing on the first such date
following disbursement; and (b) if a LIBOR Loan, upon any prepayment of any
LIBOR Loan (to the extent accrued on the amount prepaid.) Anything herein to
the contrary notwithstanding, all principal and interest remaining unpaid on
the Termination Date shall be immediately due and payable. 2. Procedure for LIBOR Loans.Borrower may request that a Loan be a LIBOR
Loan, if herein allowed (including conversion of a Prime Loan to a LIBOR Loan,
or continuation of a LIBOR Loan as a LIBOR Loan upon the expiration of the
Interest Period). Borrowers request shall be irrevocable, shall be made to
CNB, orally or in writing or using the form Notice of Borrowing/Interest
Selection form attached hereto as Exhibit A, no earlier than two (2)
Business Days before and no later than 1:00 p.m. Pacific Time on the date the
LIBOR Loan is to be made, and shall specify the Interest Period, the amount of
the LIBOR Loan, and such other information as CNB requests. If Borrower fails
to select a LIBOR Loan in accordance herewith, the Loan shall be a Prime Loan,
and any LIBOR Loan shall be deemed a Prime Loan upon expiration of the Interest
Period. 3. Availability of LIBOR Loans.Notwithstanding anything herein to the
contrary, each LIBOR Loan must be in the minimum amount of $500,000.00 and
increments of $100,000.00. Borrower may not have more than five (5) LIBOR
Loans outstanding at any one time under the Revolving Credit Commitment.
Borrower may have Prime Loans and LIBOR Loans outstanding simultaneously. 4. Prepayment of Principal.Borrower may prepay the principal amount
outstanding on a Prime Loan at any time and in any amount without a prepayment
fee. Borrower may not make a partial principal prepayment on a LIBOR Loan.
Borrower may prepay the full outstanding principal balance on a LIBOR Loan
prior to the end of the Interest Period, provided, however, that such
prepayment is accompanied by a fee (LIBOR Prepayment Fee) equal to the
amount, if any, by which (a) the additional interest which would have been
earned by CNB had the LIBOR Loan not been prepaid exceeds (b) the interest
which would have been recoverable by CNB by placing the amount of the LIBOR
Loan on deposit in the LIBOR market for a period starting on the date on which
it was prepaid and ending on the last day of the applicable Interest Period.
CNBs calculation of the LIBOR Prepayment Fee shall be conclusive absent
manifest error. 5. Suspension of LIBOR Loans.In the event CNB, on any Business Day, is unable
to determine the LIBOR Base Rate applicable for a new, continued, or converted
LIBOR Loan for any reason, or any law, regulation, or governmental order, rule
or determination, makes it unlawful for CNB to make a LIBOR Loan, Borrowers
right to select LIBOR Loans shall be suspended until CNB is again able to
determine the LIBOR Base Rate or make LIBOR Loans, as the case may be. During
such suspension, new Loans, outstanding Prime Loans and LIBOR Loans whose
Interest Periods terminate may only be Prime Loans. 6. Late Charge.Borrower shall pay to CNB a late charge of 5% or $10.00,
whichever is greater, of any payment not received by CNB on or before the 10th
day after the payment is due. The occurrence of any of the following with respect to any Borrower or
guarantor of this Note or any general partner of such Borrower or guarantor
shall constitute an Event of Default hereunder:  1.
    
    Failure to make any payment of principal or interest when due under this
Note;  2.
    
    Filing of a petition by or against any of such parties under any
provision of the Bankruptcy Code;  3.
    
    Appointment of a receiver or an assignee for the benefit of creditors;  4.
    
    Commencement of dissolution or liquidation proceedings or the
disqualification (under any applicable law or regulation) of any of such
parties which is a corporation, partnership, joint venture or any other
type of entity;  5.
    
    Death or incapacity of any of such parties which is an individual; 2




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Exhibit 10.20  6.
    
    Revocation of any guaranty of this Note, or any guaranty of this Note
becomes unenforceable as to any future advances under this Note;  7.
    
    Any financial statement provided by any of such parties to CNB is false
or materially misleading;  8.
    
    Any material default in the payment or performance of any obligation, or
any default under any provision of any contract or instrument pursuant to
which any of such parties has incurred any obligation for borrowed money,
any purchase obligation or any other liability of any kind to any person
or entity, including CNB;  9.
    
    Any sale or transfer of all or a substantial part of the assets of any of
such parties other than in the ordinary course of business; or  10.
    
    Any violation, breach or default under this Note, any letter agreement,
guaranty, security agreement, deed of trust, subordination agreement or
any other contract or instrument executed in connection with this Note or
securing this Note. Upon the occurrence of any Event of Default, CNB, at its option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, protest or notice of
dishonor, all of which are expressly waived by Borrower, and CNB shall have no
obligation to make any further advances hereunder. Borrower agrees to pay all
costs and expenses, including reasonable attorneys fees, expended or incurred
by CNB (or allocable to CNBs in-house counsel) in connection with the
enforcement of this Note or the collection of any sums due hereunder and
irrespective of whether suit is filed. Upon the occurrence of any Event of Default (and without constituting a
waiver of the Event of Default), and until the Event of Default has been cured,
the outstanding principal (and interest, to the extent permitted by law) shall
bear additional interest at a fluctuating rate equal to five percent (5%) per
annum higher than the interest rate as determined above; provided, however, for
purposes hereof, a LIBOR Loan shall be treated as a Prime Loan upon the
termination of the Interest Period. This Note and all matters related hereto shall be governed by the laws of
the State of California. If this Note is executed by more than one Borrower,
all obligations are joint and several. SM&A,a California corporationBy:
    /s/ Steven S. MyersSteven S. Myers, COB/CEO By:
    /s/ Cathy L. WoodCathy L. Wood, CFO/Secretary BANK USE ONLY 3




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EXHIBIT A NOTICE OF BORROWING/INTEREST SELECTION This Notice of Borrowing/Interest Selection (Notice) is executed and
delivered by SM&A,a California corporation (Borrower), to City National
Bank, a national banking association (CNB), pursuant to that Revolving Note
(Note) in the principal sum of $10,000,000.00, dated April 27, 2004, executed
by Borrower in favor of CNB. Any terms not defined herein shall have the
meanings defined in the Note or the Interest Rate Provision. 1. Request for a Loan.Borrower requests a Loan under the Note as follows:  1.1
    
    Interest Selection- State LIBOR or Prime: __________________________  1.2
    
    Principal Amount of Loan: $__________________________ (If LIBOR Loan, minimum of $500,000.00)  1.3
    
    LIBOR Loan- Effective Date of Interest Period: __________________________, 20_______  1.4
    
    LIBOR Loan  Interest Period: _____________ month(s) (1, 2, 3, 6, 9 or 12 months only) 2. Conversion to LIBOR Loan.Borrower requests conversion of the outstanding Prime Loan to a LIBOR Loan.  2.1
    
    Effective Date of Conversion: __________________________, 20_______  2.2
    
    Principal Amount of Conversion: $__________________________ [minimum of $500,000.00]  2.3
    
    Interest Period: ________________ month(s) [1, 2, 3, 6, 9 or 12 months only] 3. Renewal of LIBOR Loan.Borrower requests renewing an outstanding LIBOR
Loan as follows:  3.1
    
    Principal Amount of Renewal of LIBOR Loan: $__________________
[minimum of $500,000.00] (Amount of LIBOR Loan not renewed as a LIBOR
Loan will be a Prime Loan)  3.2
    
    Date of Renewal: ______________________________, 20_______[last date of current Interest Period]  3.3
    
    Interest Period: _________ month(s) [1, 2, 3, 6, 9 or 12 months only] 4. Conversion to Prime Loan.LIBOR Loans shall automatically convert to a
Prime Loan at the end of an Interest Period if CNB fails to timely receive a
Notice for an outstanding LIBOR Loan. 5. Warranty.In connection with the action requested herein, Borrower hereby
represents and warrants to CNB that, as of the date of such request, no Event
of Default has occurred and is continuing. This Notice is executed on ___________________________, 20________. SM&A,a California corporationBy:Steven S. Myers, COB/CEO By:
    
    
    
Cathy L. Wood, CFO/Secretary