<PAGE>

                                                                 EXHIBIT 10.26

      REVOLVING LINE OF CREDIT LOAN AGREEMENT AND SECURITY AGREEMENT

      THIS REVOLVING LINE OF CREDIT LOAN AGREEMENT AND SECURITY AGREEMENT
("Agreement") is made as of May 27, 1999, by and among Dunn Computer
Corporation, a Virginia corporation, Dunn Computer Corporation, a Delaware
corporation, International Data Products, Corp., STMS, Inc., Puerto Rico
Industrial Manufacturing Operations Acquisition, Corp., and Dunn Computer
Operating Company (collectively, the "Borrower"), having an address at c/o Dunn
Computer Corporation, 1306 Squire Court, Sterling, Virginia 20166, and First
Union Commercial Corporation, a North Carolina corporation, having an address of
1970 Chain Bridge Road, McLean, VA 22102 (the "Lender").

                                    RECITALS

      1. The Borrower has applied to the Lender for a revolving loan facility in
the maximum principal amount of Fifteen Million Dollars ($15,000,000.00) to be
used by the Borrower for working capital and to finance the performance of
Government Contracts, payments under which are to be assigned to Lender as
security for the revolving loan facility.

      2. The Lender is willing to make the Revolving Loan on the terms and
conditions hereinafter set forth.

                                   AGREEMENTS

      NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:

      ARTICLE 1. DEFINITIONS.

      1.1 Defined Terms. Certain capitalized terms not otherwise defined herein
are used in this Agreement with the following meanings, unless the
context otherwise requires:

      "Account" means collectively and includes any of the following, whether
now owned or hereafter acquired by the Borrower: all present and future rights
to payments for goods sold or leased or for services rendered, whether or not
represented by instruments or chattel paper, and whether or not earned by
performance; all present and future rights to payments arising out of the
licensing of computer software and systems; all accounts, contract rights,
chattel paper, instruments and documents; proceeds of any letter of credit of
which the Borrower is a beneficiary; all forms of obligations whatsoever owed to
the Borrower, together with all instruments and documents of title representing
any of the foregoing; all rights in any returned or repossessed goods; all
rights, security and guaranties with respect to any of the foregoing, including,
without limitation, any right of stoppage in transit; together with all property
included within the definitions of "accounts", "chattel paper", "documents" and
"instruments" set forth in the UCC.
<PAGE>

      "Advance" means an advance of funds under the Revolving Loan.

      "Affiliate" means, with respect to any specified Person, any other Person
which, 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, directly or indirectly, of the power to
direct or cause the direction of management and policies of a Person, whether
through ownership of common stock, by contract, or otherwise.

      "Agreement" means this Revolving Line of Credit Loan Agreement and
Security Agreement as the same may be amended, modified or supplemented from
time to time.

      "Assignment" means a direct assignment of Payments under Government
Contracts, pursuant to and in compliance with the Assignment of Claims Act.

      "Assignment of Claims Act" means Title 31, United States Code ss. 3727,
and Title 41, United States Code ss. 15, as revised or amended, and any rules or
regulations issued pursuant thereto, and also shall be deemed to include any
other laws, rules or regulations governing the assignment of payments under
Government Contracts or claims against a Government.

      "Billed" means that Borrower has submitted an invoice to a Customer
requesting payment for goods or services provided by Borrower.

      "Borrower" means Dunn Computer Corporation, a Virginia corporation, Dunn
Computer Corporation, a Delaware corporation, International Data Products,
Corp., STMS, Inc., Puerto Rico Industrial Manufacturing Operations Acquisition,
Corp., and Dunn Computer Operating Company. The term "Borrower" shall refer to
each such Person or to all of them, as the context may require, and the
representations and obligations hereunder of the Persons comprised by the term
"Borrower" shall be joint and several. For purposes of testing compliance with
the financial covenants hereinafter, the negative covenants hereinafter, the
unused fee provided hereinafter, and pricing under the Revolving Note that is
based on the Borrower's financial performance, financial information concerning
the Borrower shall mean financial information for Dunn Computer Corporation, a
Virginia corporation, and its wholly owned subsidiaries (and wholly owned
subsidiaries of subsidiaries) stated on a consolidated basis.

      "Borrowing Base" means at the time in question the sum of: (a) ninety
percent (90%) of the Borrower's Eligible Government Accounts; plus (b) eighty
percent (80%) of Borrower's Eligible Commercial Accounts; plus (c) thirty
percent (30%) of the Borrower's Eligible Inventory; provided that the part of
the Borrowing Base attributable to Inventory shall not exceed the lesser of Four
Million Dollars ($4,000,000.00) or 26.7% of the entire Borrowing Base. In the
absence of manifest error, Lender's determination of the amount of the Borrowing
Base shall be conclusive.


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<PAGE>

      "Borrowing Base Certificate" means a certificate substantially in the form
of Exhibit 1.1 attached hereto (or such subsequent form as the Lender shall
require).

      "Borrowing Date" means the date on which an Advance is made.

      "Business Day(s)" means any day that is not a Saturday, Sunday or banking
holiday in the Commonwealth of Virginia.

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

      "Cash Collateral Account" means an account to be established by Lender in
Borrower's name, with the Lender, for the purpose of receiving Payments, which
shall constitute part of the Collateral unless and until disbursed to the
Borrower or applied for the Borrower's account in accordance with this
Agreement.

      "Closing Date" means May 27, 1999.

      "Code" means the Internal Revenue Code of the United States, as amended.

      "Collateral" means all of the following kinds of property now owned or
hereafter acquired by the Borrower:

            a.    all Accounts;

            b.    all payments or rights to payment due or to become due under
                  any Government Contract to which the Borrower is a party;

            c.    all deposit accounts and other obligations or indebtedness
                  owed to Borrower from whatever source arising;

            d.    all rights to receive any payment in money or in kind;

            e.    all contract rights (except contract rights under Government
                  Contracts other than rights to payments due or to become due);

            f.    all Inventory;

            g.    all property, plant and Equipment;

            h.    all chattel paper;

            i.    all General Intangibles;


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<PAGE>

            j.    all books and records and computer hardware, software
                  (including, to the extent assignable, the Borrower's right to
                  used software licensed to the Borrower) and systems;

            k.    all policies of insurance and the proceeds thereof;

            1.    all additions and accessions to and replacements of the
                  collateral described above; and

            m.    all products and proceeds of all of the collateral described
                  above.

      "Commercial Accounts" means all Accounts due from Customers other than the
Government.

      "Contra Account" means an Account due from an account debtor to which the
Borrower owes money.

      "Customer" means any governmental entity (federal, state, county,
municipal or otherwise) or business entity (corporation, association,
partnership, limited liability company or partnership, sole proprietorship or
otherwise) or individual to which Borrower provides goods or services for
compensation; however, certain individual agencies of the United States
Government and certain branches of certain major corporations, as determined by
the Lender in its sole discretion, shall be treated as Customers in their own
right, separate and distinct from other such agencies or branches and from the
United States Government or the corporation of which they are a part.

      "Debt" means collectively and includes (a) indebtedness or liability for
borrowed money, or for the deferred purchase price of property or services; (b)
obligations as a lessee under a Capital Lease; (c) obligations 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 Person, or otherwise to assure a creditor against
loss; and (e) obligations secured by any lien or Encumbrance on property owned
by the Borrower, whether or not the obligations have been assumed.

      "EBIT" means the Borrower's earnings before interest and taxes.

      "EBITDA" means the Borrower's earnings before interest, taxes,
depreciation and amortization.


                                       4
<PAGE>

      "Eligible" when used to describe an Account, means that the Account
conforms to the following criteria:

                  1.    the Account has been Billed;

                  2.    in the case of a Commercial Account, less than
                        ninety-one (91) days have passed from the original
                        billing date;

                  3.    in the case of a Government Account, less than one
                        hundred and twenty-one (121) days have passed from the
                        original billing date;

                  4.    at Lender's option, in the case of a Government Account
                        payable by the United States or any of its departments
                        or agencies, Borrower has made an Assignment of all
                        Payments due or to become due under the Government
                        Contract giving rise to the Account;

                  5.    the Account arose from a bona fide sale of goods or
                        services to a Customer; the goods or services have been
                        delivered or provided to the Customer; Borrower
                        possesses receipts from the Customer acknowledging
                        delivery of the goods or performance of the services;
                        and Customer has not returned or rejected the goods or
                        services;

                  6.    the Account is based upon an enforceable written order
                        or contract for goods or services;

                  7.    the Borrower's title to the Account is absolute and is
                        not subject to any prior assignment, claim, escrow
                        agreement or amendment; lien or security interest, and
                        Borrower otherwise has the full and unqualified right
                        and power to assign and grant a security interest in the
                        Account to the Lender;

                  8.    the amount shown on the books of Borrower and on any
                        invoice, certificate, schedule or statement delivered to
                        the Lender is owing to Borrower;

                  9.    the Account is not subject to any claim of reduction,
                        counterclaim, set-off, recoupment or other defense in
                        law or equity, or any claim for credits, allowances or
                        adjustments


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<PAGE>

                        by the Customer because of returned, inferior or damaged
                        goods, unsatisfactory services or for any other reason;

                  10.   the Customer has not notified Borrower of any material
                        dispute concerning any of the goods or services giving
                        rise to the Account, nor made claim that the goods or
                        services fail to conform to the requirements of the
                        Customer's order or contract, nor notified Borrower to
                        cure any default under the Customer's order or contract;

                  11.   the Account does not arise out of a Customer's contract
                        or order that by its terms forbids or makes void or
                        unenforceable the Borrower's assignment of the Account
                        to the Lender;

                  12.   Borrower has not received any note, trade acceptance
                        draft or other instrument tendered in payment of the
                        Account;

                  13.   Borrower has not received any notice of the death of the
                        Customer or any partner in a Customer that is a
                        partnership; nor has Borrower received any notice of
                        dissolution, termination of existence, insolvency,
                        business failure, appointment of a receiver for any part
                        of the property of, assignment for the benefit of
                        creditors by, or the filing of a petition in bankruptcy
                        or the commencement of any proceeding under any
                        bankruptcy or insolvency laws by or against the
                        Customer;

                  14.   the Customer is not incorporated in any jurisdiction
                        outside the United States and is not conducting its
                        business primarily outside the United States;

                  15.   Borrower is not indebted in any manner to the Customer;

                  16.   no bond has been issued or is contemplated with respect
                        to the goods or services furnished by the Borrower or
                        with respect to the project or contract for which those
                        goods or services were furnished; and

                  17.   the Account is not an Ineligible Account; and

when used to describe Inventory, shall mean the cost of the Borrower's
Inventory, less such part of the Inventory that Lender determines to be
ineligible and less a reserve for obsolescence, to be


                                       6
<PAGE>

determined by the Lender. Ineligible Inventory shall include, but shall not be
limited to, work-in-process, Inventory on consignment and any other Inventory
that the Lender believes is of doubtful value as collateral or as to which
Lender believes that its ability to realize on the value of the Inventory is
insecure.

      In the event of any dispute, under the foregoing criteria, as to whether
an Account is, or has ceased to be, an Eligible Account, or whether Inventory
is, or has ceased to be, Eligible Inventory, the Lender's judgment shall
control.

      "Encumbrance" means any mortgage, pledge, deed of trust, assignment,
security interest, hypothecation, lien or charge of any kind (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction), except any statutory lien for taxes
not yet due and payable.

      "Environmental Laws" mean all laws relating to Hazardous Wastes, Toxic
Substances or materials that might be emitted, released or discharged into the
environment or other laws or regulations protecting the environment.

      "Ending Date" means June 1, 2002.

      "Equipment" means collectively and includes all of the following, whether
now owned or hereafter acquired by the Borrower: equipment and fixtures,
including, without limitation, computer hardware, computer software and systems,
furniture, machinery, vehicles and trade fixtures, together with any and all
accessories, accessions, parts and appurtenances thereto, substitutions therefor
and replacements thereof, together with all other such items which are included
within the definitions of "equipment" and "fixtures" as set forth in the UCC.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.

      "ERISA Affiliate" means an entity, whether or not incorporated, which is
under common control with the Borrower or any of its subsidiaries within the
meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes the Borrower or any of its subsidiaries and which is treated as a
single employer under Sections 414(b), (c), (m), or (o) of the Code.

      "Event of Default" means any one of the events specified as an "Event of
Default" under this Agreement.


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<PAGE>

      "Fixed Charge Coverage Ratio" means the sum of EBITDA and rent expense,
less taxes paid, less capital expenditures and less cash dividends; divided by
sum of: (i) the current portion of the Borrower's long term debt, (ii) current
period capital lease payments, (iii) interest expense, and (iv) rent expense.

      "GAAP" means generally accepted accounting principals in the United States
of America.

      "General Intangibles" means collectively and includes all of the
following, whether now owned or hereafter acquired by the Borrower: choses in
action, causes of action and all other intangible property of every kind and
nature, including, without limitation, corporate or other business records,
inventions, designs, patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, registrations, copyrights,
licenses, franchises, customer lists, tax refunds, tax refund claims, rights of
claims against carriers and shippers, leases and rights to indemnification,
together with all property which is included within the definition of "general
intangibles" as set forth in the UCC or in GAAP.

      "Government" means the government for the United States of America or the
departments or agencies of the United States, the government of any state, the
government of the District of Columbia or any departments or agencies of any
state or of the District of Columbia.

      "Government Accounts" means all Accounts arising out of any Government
Contract.

      "Government Contracts" means all contracts with a Government, including
all renewals, extensions, modifications, change orders and amendments thereof
and thereto.

      "Hazardous Wastes" mean all waste materials subject to regulation under
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. ss. 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 et seq., or applicable state law and any other applicable federal,
state or local laws and their regulations now in force or hereafter enacted
relating to hazardous wastes.

      "Ineligible Accounts" shall include the following Accounts:

                  1.    Accounts that do not conform with the criteria set forth
                        for Eligible Accounts;

                  2.    An Account owing by any account debtor for which the
                        Lender has deemed fifty percent (50%) or more of the
                        account debtor's other Accounts to be non-Eligible;
                        however, for purposes of this category of Ineligible
                        Accounts, each Government Contract shall be treated as
                        an individual Customer; provided, that if more than
                        fifty


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<PAGE>

                        percent (50%) of all Accounts owed by the District of
                        Columbia and any of its agencies or departments are or
                        become Ineligible, then all Accounts owed by the
                        District of Columbia and any of its agencies or
                        departments shall be deemed Ineligible.

                  3.    The last payment due on a Government Account, unless
                        such Government Account arises from a Government
                        Contract which is a "fixed price contract" (as defined
                        in the Federal Acquisition Regulations) which does not
                        include any provision for progress payments, incentive
                        arrangements or price redetermination;

                  4.    Government Accounts arising under Government Contracts
                        which contain an express prohibition against assignment
                        of Borrower's rights to Payment;

                  5.    Contra Accounts;

                  6.    Accounts receivable from Affiliates of subsidiaries of
                        the Borrower;

                  7.    Unbilled Accounts, including, but not limited to,
                        progress payments, retainages, milestones and final
                        payments; or

                  8.    Any Account deemed in good faith by the Lender, in the
                        exercise of its sole and absolute discretion, to be an
                        Ineligible Account because of uncertainty as to the
                        creditworthiness of the Customer or because the Lender
                        otherwise considers in good faith the collateral value
                        thereof to the Lender to be impaired or its ability to
                        realize such value to be insecure.

However, Borrower may request in writing that Lender regard as Eligible any
Account that would otherwise be classified an Ineligible Account. Lender may
grant or deny any such request in its sole discretion.

        "Intellectual Property" shall mean all patents, licenses, trade names,
trademarks, copyrights, inventions, service marks, trademark registrations,
service mark registrations and copyright registrations, whether domestic or
foreign and applications for any of the foregoing, and all proprietary
technology, know-how, trade secrets or other intellectual property rights owned
or used by the Borrower or any subsidiary in the operation of their respective
businesses.


                                       9
<PAGE>

      "Inventory" means collectively and includes all of the following, whether
now owned or hereafter acquired by the Borrower: all goods held or intended for
sale or lease by the Borrower, or furnished or to be furnished under contracts
of service, all raw materials, work in process, finished goods, materials and
supplies of every nature used or usable in connection with the manufacture,
packing, shipping, advertising or sale of any such goods, together with all
property included within the definition of "inventory" set forth in the UCC.

      "Item" means any "item" as defined in Section 4-104 of the Uniform
Commercial Code, to include, without exclusion or limitation, checks, drafts,
money orders or other media by which Payment may be made.

      "Lender" means First Union Commercial Corporation and its successors and
assigns.

      "Letter of Credit" means a standby letter of credit issued by the Lender
for the account of the Borrower under this Agreement.

      "Letter of Credit Agreement" means the Lender's standard form of
reimbursement agreement in effect from time to time that Lender requires as a
condition for each letter of credit that Lender issues to one of its customers.

      "Letter of Credit Sublimit" means Five Million Dollars ($5,000,000.00).

      "Loan" means the Revolving Loan.

      "Loan Documents" mean this Agreement, the Revolving Note, or any other
document executed by the Borrower or any other Person evidencing, securing,
guaranteeing or relating to the Revolving Loan, and, without limiting the
generality of the foregoing, include a separate letter agreement, of even date,
providing, among other things, that Accounts and Inventory of International Data
Products, Corp., and Puerto Rico Industrial Manufacturing Operations
Acquisition, Corp. shall not be included in the Borrowing Base until certain
conditions have been satisfied.

      "LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit; plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by Lender but not
reimbursed.

      "Margin" means the percentage interest rate shown on the Performance
Pricing Grid to be added to the LIBOR Rate (as defined in the Revolving Note) or
the Reference Rate (as defined in the Revolving Note) to determine the rate of
interest payable at any time under the Revolving Note. The Margin regarding the
LIBOR Rate shall be as stated in the applicable column of the "LIBOR + row" of
the Performance Pricing Grid, and the Margin regarding the Reference Rate


                                       10
<PAGE>

shall be as stated in the applicable column of the "Reference Rate +" row of the
Performance Pricing Grid.

      "Maximum Revolving Commitment Amount" means Fifteen Million Dollars
($15,000,000.00), which amount may be reduced, at the Borrower's option, as
hereinafter provided.

      "Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Sections 3(37) or 4001(a)(3) of ERISA.

      "Multiple Employer Plan" means a Plan which the Borrower or any of its
subsidiaries or any ERISA Affiliate and at least one employer other than the
Borrower or any of its subsidiaries or any ERISA Affiliate are contributing
sponsors.

      "Operating Account" means a demand deposit account to be established by
the Borrower with the Lender for the Borrower's use in connection with its
business operations.

      "Payment" or "Payments" means any check, draft, cash or any other
remittance or credit in payment or on account of any or all of the Accounts.

      "Performance Pricing Grid" means the following table (part of which is
also contained in the Revolving Note):

<TABLE>
<CAPTION>
==============================================================================================================
                                Level 1                        Level 2                          Level 3
--------------------------------------------------------------------------------------------------------------
<S>                     <C>                    <C>                                   <C>
Total Debt / EBITDA      Ratio less than 2.Ox   2.Ox less than Ratio less than 3.Ox    Ratio greater than 3.Ox
--------------------------------------------------------------------------------------------------------------
Commitment Fee                  .375%                           .375%                          0.500%
--------------------------------------------------------------------------------------------------------------
LIBOR +                         1.75%                           2.00%                           2.50%
--------------------------------------------------------------------------------------------------------------
Reference Rate +                0.50%                           0.75%                            1.0%
==============================================================================================================
</TABLE>

      "PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereto.

      "Person" means any individual, partnership, association, trust,
corporation, limited liability company or partnership, or other entity.

      "Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrower or any
of its subsidiaries or any


                                       11
<PAGE>

ERISA Affiliate is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.

      "Reportable Event" means a "reportable event" as defined in Section 4043
of ERISA with respect to which the notice requirements to the PBGC have not been
waived.

      "Revolving Loan" means the Revolving Loan facility made available by
Lender to Borrower in the maximum principal amount of Fifteen Million Dollars
($15,000,000.00) evidenced by the Revolving Note.

      "Revolving Note" means the Borrower's promissory note, of even date, in
the amount of Fifteen Million Dollars ($15,000,000.00), payable to the order of
the Lender, and evidencing Borrower's obligation to repay the Revolving Loan.

      "Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.

      "Tangible Net Worth" means the Borrower's total assets, less its total
liabilities. In determining Tangible Net Worth, total assets shall exclude
obligations of officers, directors, employees, affiliates, shareholders or
subsidiaries of the Borrower; General Intangibles, goodwill and any investments
by Borrower in corporations, limited liability companies or partnerships,
partnerships, joint ventures or any other entities.

      "Termination Event" means (i) with respect to any Plan, the occurrence of
a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal of the Borrower or any
of its subsidiaries or any ERISA Affiliate from a Multiple Employer Plan during
a plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 404 1(a)(2) or 4041A of ERISA; (iv)
the institution of proceedings to terminate or the actual termination of a Plan
by the PBGC under Section 4042 of ERISA; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of the Borrower or any of its subsidiaries or any ERISA Affiliate
from a Multiemployer Plan.

      "Total Debt" means all of the Borrower's Debt.

      "Toxic Substances" mean any materials which have been shown to have
significant adverse effects on human health or which are subject to regulation
under the Toxic Substances Control Act, 15 U.S.C.ss. 2601 et seq., applicable
state law, or any other applicable federal, state or local laws now in force or
hereafter enacted relating to toxic substances. "Toxic Substances"


                                       12
<PAGE>

includes, but is not limited to, asbestos, polychlorinated biphenyls (PCBs),
petroleum products, and lead-based paints.

      "Unbilled" means that Borrower has not submitted an invoice to a Customer
requesting payment for goods or services provided by Borrower.

      1.2 Accounting Terms. Accounting terms used in this Agreement but not
defined in this Agreement shall have the meanings given to them in accordance
with GAAP in effect on the date of this Agreement. Except as otherwise provided
in this Agreement, all financial computations made pursuant to this Agreement
and all financial reports provided to the Lender shall be made in accordance
with GAAP, consistently applied. Except as otherwise provided in this Agreement,
whenever this Agreement refers to a balance sheet, financial statement or the
information contained in a balance sheet or other financial statement, the
Agreement shall be construed to refer to most recent consolidated balance sheet
or other financial statement provided to the Lender.

      1.3 Use of Defined Terms. All terms defined in this Agreement shall have
the same defined meanings when used in any certificate, report or other document
made or delivered in connection with this Agreement, unless otherwise set forth
therein.

      1.4 UCC Terms. Terms that incorporate definitions provided in the Uniform
Commercial Code ("UCC") of a particular state have the meanings ascribed to them
in the Uniform Commercial Code as adopted in that state. Terms not otherwise
defined herein and not incorporating a definition under the Uniform Commercial
Code of any particular state, but which are defined in the Uniform Commercial
Code as adopted by the Commonwealth of Virginia, shall have the meanings
ascribed to them under the Uniform Commercial Code as adopted by the
Commonwealth of Virginia.

      ARTICLE 2. LOAN.

      2.1 Revolving Line of Credit. The Lender agrees to extend the Revolving
Loan to Borrower, subject to the terms and conditions of this Agreement. Until
the Ending Date, Borrower may borrow, repay and reborrow Advances in accordance
with this Agreement.

                  A.          Amount of Credit. In no event shall the principal
                        outstanding under the Revolving Loan plus the amount of
                        LOC Obligations exceed the lesser of (i) the Borrowing
                        Base or (ii) the Maximum Revolving Commitment Amount.

                  B.          Reduction of Maximum Revolving Commitment Amount.
                        The Borrower shall have the option of reducing the
                        Maximum Revolving Commitment Amount,


                                       13
<PAGE>

                        in integral multiples of One Million Dollars
                        ($1,000,000.00), on ten (10) business days' written
                        notice to the Lender; provided that Borrower shall
                        immediately make any Mandatory Prepayment (as
                        hereinafter provided) required as a consequence of the
                        reduction in the Maximum Revolving Commitment Amount. If
                        the Maximum Revolving Commitment Amount is so reduced,
                        it may not thereafter be increased without the Lender's
                        written consent.

                  C.         Mandatory Prepayments. If the principal outstanding
                        under the Revolving Loan plus the aggregate amount of
                        LOC Obligations ever exceeds the lesser of (i) the
                        Maximum Revolving Commitment Amount or (ii) the
                        Borrowing Base, then the Borrower shall make an
                        immediate payments of principal under the Revolving Loan
                        in an amount sufficient that the principal outstanding
                        under the Revolving Loan plus the aggregate amount of
                        outstanding LOC Obligations does not exceed the lesser
                        of (i) the Maximum Revolving Commitment Amount or (ii)
                        the Borrowing Base. Borrower shall make additional
                        mandatory prepayment of principal under the Revolving
                        Loan in amounts equal to the proceeds of any sales of
                        the Borrower's assets outside the ordinary course of
                        business.

                  D.          Procedure for Advances. Borrower may request
                        Advances by telephone through its designated employee or
                        employees as hereinafter provided. Each Advance request
                        must be received by Lender not later than 1:00 p.m.
                        (Eastern Standard time) on the date the Advance is to be
                        made and must specify the amount of the Advance;
                        however, any request for an Advance that is to bear
                        interest at the LIBOR-Based Rate (as defined in the
                        Revolving Note) must be received by Lender not later
                        than 1:00 p.m. (Eastern Standard time) on the second
                        Business Day prior to the date on which the Advance is
                        to be made. Lender shall deposit the Advance into the
                        Operating Account if Borrower is entitled to the Advance
                        subject to the terms and conditions of this Agreement.

                  E.          Letter of Credit Subfacility. Lender shall issue
                        Letters of Credit for the account of the Borrower from
                        time


                                       14
<PAGE>

                        to time upon request from the Closing Date until the
                        Ending Date, subject to the following terms and
                        conditions:

                        (1)         the aggregate amount of LOC Obligations
                              shall at no time exceed the Letter of Credit
                              Sublimit;

                        (2)         any request for a Letter of Credit to be
                              issued must be delivered and received by Lender
                              not later than five (5) business days prior to the
                              date that Borrower wishes to have the Letter of
                              Credit issued;

                        (3)         no Letter of Credit shall have an original
                              expiry date more than one year from the date of
                              issuance or extending beyond the Ending Date;

                        (4)         the form of each Letter of Credit must be
                              satisfactory to the Lender, in its sole judgment.
                              At Lender's option, Letters of Credit shall be
                              subject to The Uniform Customs and Practice for
                              Documentary Credits, as published as of the date
                              of issue by the International Chamber of Commerce
                              (Publication No. 500 or the most recent
                              publication, the "UCP");

                        (5)         issuance of the Letter of Credit shall not
                              cause the sum of: (i) LOC Obligations; plus (ii)
                              the principal amount outstanding under the
                              Revolving Note to exceed the lesser of the Maximum
                              Revolving Commitment Amount or the Borrowing Base;

                        (6)         Lender shall not be required to issue any
                              Letter of Credit if any circumstance exists that
                              would entitle Lender not to honor a request for an
                              Advance under the Revolving Loan;

                        (7)         Borrower shall execute and deliver to Lender
                              a Letter of Credit Agreement pertaining to the
                              Letter of Credit;


                                       15
<PAGE>

                        (8)         Upon notice from Lender of any drawing under
                              any Letter of Credit, and the Borrower shall
                              immediately reimburse Lender for the amount of the
                              drawing, plus interest from the date of the
                              drawing at the highest rate of interest then in
                              effect under the Revolving Note. The Borrower's
                              obligation to reimburse the Lender for any drawing
                              under a Letter of Credit shall be absolute and
                              unconditional, irrespective of any rights of
                              set-off, counterclaim or defense to payment the
                              Borrower may claim or have against the Lender, the
                              beneficiary of the Letter of Credit or any other
                              Person;

                        (9)         Unless the Borrower makes reimbursement from
                              another source on the day of the drawing under any
                              Letter of Credit, the Borrower shall be deemed to
                              have requested an Advance under the Revolving Loan
                              in the amount of the drawing, and (i) Lender, at
                              its option, may make such an Advance (irrespective
                              of whether Borrower would then be entitled to an
                              Advance under the terms of this Agreement) and
                              apply the proceeds of the Advance to satisfy the
                              Borrower's obligation to reimburse Lender for the
                              amount drawn on the Letter of Credit; and (ii) any
                              such Advance shall be repayable, with interest, in
                              accordance with the terms and conditions of the
                              Revolving Note;

                        (10)        If any of the LOC Obligations remains
                              outstanding on the Ending Date, Borrower shall
                              make a cash deposit with Lender in an amount equal
                              to the aggregate amount of such LOC Obligations.
                              Such deposit will secure the Borrower's obligation
                              to reimburse Lender for any drawing under any
                              Letter of Credit on or after the Ending Date, and
                              Lender shall be entitled to hold such deposit
                              until L I all LOC Obligations have terminated or,
                              if any drawing is made under any Letter of Credit,
                              to apply the deposit, or part of it, to reimburse
                              the Lender for the amount of the drawing. If
                              Borrower fails to make such a deposit, the
                              Lender will be deemed to have made an Advance
                              under the Revolving Note immediately prior to the
                              Ending


                                       16
<PAGE>

                              Date in an amount equal to the aggregate amount of
                              the LOC Obligations, and the Advance will serve as
                              the deposit required under this paragraph.
                              Borrower shall repay the Advance, with interest,
                              in accordance with the Revolving Note, and
                              Borrower's obligation to repay the Advance will be
                              secured by the Collateral to the same extent as
                              any other Advance under the Revolving Note; and

                        (11)        The provisions of the Letter of Credit
                              Agreement pertaining to each Letter of Credit are
                              deemed incorporated into this Agreement by this
                              reference and shall be binding upon the Lender and
                              Borrower as if fully set forth herein. If a
                              conflict exists between the terms of the Letter of
                              Credit Agreement and any other Loan Document, the
                              terms of the Letter of Credit Agreement shall
                              control with respect to the Letter of Credit
                              issued pursuant to that Letter of Credit Agreement
                              but not as to other matters governed by this
                              Agreement or such Loan Document.

                  F.          Use of Revolving Loan Proceeds. The proceeds of
                        the Revolving Loan shall be used for working capital and
                        to finance the performance of Government Contracts, and
                        for no other purpose.

                  G.          Revolving Loan Fees. Borrower promises to pay
                        Lender the following fees in consideration of entering
                        into this Agreement. These fees are in addition to
                        interest payable under the Revolving Note:

                        (1)         an up front fee of three-eighths of one
                              percent (0.375 %) of the Maximum Revolving
                              Commitment Amount, which shall be payable on the
                              Closing Date.

                        (2)         an unused fee calculated for each day by
                              multiplying the unused portion of the Maximum
                              Revolving Commitment Amount during that day by the
                              annual commitment fee rate set forth in the
                              Performance Pricing Grid, divided by 360. The
                              unused fee shall be payable quarterly, in arrears,


                                       17
<PAGE>

                              commencing on the first day of the Borrower's
                              first fiscal quarter after the Closing Date. The
                              unused fee payable at the end of each quarter
                              shall be the sum of the unused fees for each day
                              during that quarter.

                        (3)         a letter of credit fee calculated for each
                              day by multiplying the aggregate face amount of
                              each Letter of Credit outstanding on that day by
                              the Margin that would be in effect if the Borrower
                              elected a LIBOR-based interest rate under the
                              Revolving Loan, divided by 360. The letter of
                              credit fee shall be payable quarterly, in arrears,
                              commencing on the first day of the Borrower's
                              first fiscal quarter after the Closing Date. The
                              letter of credit fee payable at the end of each
                              quarter shall be the sum of the unused fees for
                              each day during that quarter. In addition, the
                              Borrower shall pay Lender's customary
                              administrative fee charged in connection with each
                              Letter of Credit.

                        (4)         a fee of Five Thousand Dollars ($5,000.00)
                              for each examination performed by the Lender or
                              its agents, for up to two (2) field examinations
                              per year. However, the Lender shall have the right
                              to perform such additional field examinations at
                              any time, in its sole discretion. Each additional
                              field examination will be at Lender's own expense
                              if no Event of Default has occurred and remains
                              uncured at the time of the additional field
                              examination, but shall be at the Borrower's
                              expense if an Event of Default has occurred and
                              remains uncured at the time of the additional
                              field examination.

      ARTICLE 3. CONDITIONS PRECEDENT TO LOAN.

      3.1 Conditions Precedent to Initial Advance. The obligation of the Lender
to make any Advance under the Revolving Loan is subject to the satisfaction (in
the sole judgment of the Lender) of all of the following conditions on or before
the Closing Date:

            A.           Representations and Warranties; Compliance. All
                  representations and warranties made by Borrower in or in
                  connection with this Agreement or any of the other Loan


                                       18
<PAGE>

                  Documents or otherwise made in writing in connection with this
                  Agreement shall be true and correct on the Closing Date, and
                  the Borrower shall have performed all of the promises or
                  undertakings under this Agreement and satisfied all of the
                  conditions of this Agreement that the Borrower was required to
                  perform or to satisfy as of the Closing Date.

            B.           Documents Concerning the Borrower. Borrower shall
                  deliver to the Lender copies of all documents requested by the
                  Lender, including a complete, correct and current copy of the
                  Borrower's Articles of Incorporation, certified by the
                  Secretary of State of the Borrower's state of incorporation; a
                  complete, correct and current copy of its Bylaws, certified by
                  Borrower's corporate secretary; a complete, correct and
                  current copy of all resolutions of Borrower's Board of
                  Directors authorizing the execution, delivery and performance
                  of this Agreement and of the other Loan Documents, certified
                  by Borrower's corporate secretary; and appropriate
                  certificates of incumbency for those officers of Borrower
                  executing this Agreement or any of the other Loan Documents,
                  certified by Borrower's corporate secretary and president. In
                  addition, the following documents and materials shall have
                  been delivered to the Lender, and must be satisfactory to the
                  Lender in form and substance:

                        (1)      all supporting documentation with regard to the
                             Borrower, the Revolving Loan as the Lender may
                             require;

                        (2)      such additional information, instruments,
                             opinions, documents, certificates and reports
                             relating to the Borrower or the Collateral as the
                             Lender may deem necessary;

                        (3)      such lien releases or termination statements
                             as Lender may deem necessary to remove any
                             Encumbrances on the Collateral;

                        (4)      such lien releases or termination statements as
                             and results of a field examination conducted by the
                             Lender or by a certified public accounting firm
                             engaged by the Lender.


                                       19
<PAGE>

            C.          Executed Note and Loan Documents. Borrower shall deliver
                  to the Lender, fully executed: this Agreement, the Revolving
                  Note, UCC-1 Financing Statements and such other documents,
                  instruments and certificates as the Lender may reasonably
                  require, in form and substance satisfactory to the Lender. All
                  taxes, fees and charges with respect to the preparation,
                  filing and recording of the Loan Documents shall have been
                  paid by Borrower.

            D.          Financing Statements. All Financing Statements deemed
                  necessary by the Lender to perfect its security interest in
                  the Collateral or any other collateral securing the Loan shall
                  have been filed in such recording offices as Lender may
                  require.

            E.          Legal Opinion. Borrower shall deliver to the Lender a
                  written opinion or opinions of legal counsel for Borrower
                  dated the Closing Date and addressed to the Lender, which
                  opinions must be in form and content satisfactory to the
                  Lender. Without limiting the generality of the foregoing, the
                  opinion or opinions must address the Borrower's organization,
                  existence, power, good standing and authority and as to the
                  validity, binding effect and enforceability of the Loan
                  Documents, including the existence, validity, enforceability,
                  attachment, perfection, and binding effect of any security
                  interest, lien or assignment being granted by Borrower or
                  other person providing Collateral to Lender with respect to
                  the Collateral.

            F.          Accounts with the Lender. The Borrower shall have
                  established the Cash Collateral Account and an Operating
                  Account with the Lender.

            G.          Compliance with Covenants. Borrower shall establish to
                  Lender's satisfaction that the Advance will not cause Borrower
                  to cease to comply with Borrower's financial covenants as set
                  forth hereinafter.

            H.          Borrowing Base Certificate. Borrower shall deliver to
                  the Lender a Borrowing Base Certificate dated the Closing Date
                  with supporting schedules attached thereto, including without
                  limitation, current Accounts Receivable and Accounts Payable
                  reports.

      3.2 Future Advances. The obligation of the Lender to make any Advance
under the Revolving Loan subsequent to the Closing Date is further conditional
on:


                                       20
<PAGE>

            A.          the Lender's determination, in its sole judgment, that
                  the conditions precedent to the first Advance are satisfied as
                  of the Borrowing Date for the subsequent Advance;

            B.          the Lender's receipt of a Borrowing Base Certificate,
                  executed by a duly authorized officer of the Borrower with
                  supporting updated schedules attached thereto;

            C.          all representations and warranties contained herein
                  shall be true and correct at the date of such disbursement;

            D.          the Lender's good faith determination, in its sole
                  discretion, that no material adverse change has occurred in
                  the financial condition of the Borrower from that disclosed in
                  the most recent financial statements furnished to the Lender
                  prior to the Closing Date; and

            E.          no Event of Default has occurred and remains uncured,
                  and no event has occurred or circumstance exists which, with
                  the passage of time or the giving of notice or both, would
                  constitute an Event of Default.

      3.3 Lender's Right To Rely On Communications. Borrower shall provide the
Lender with written notice designating employees or agents of the Borrower who
are authorized to communicate with Lender on the Borrower's behalf regarding
Advances and other matters pertaining to this Agreement. The Borrower authorizes
the Lender to accept, rely upon, act upon and comply with, any verbal or written
instructions, requests, confirmations and orders of any employee or agent so
designated by the Borrower. The Borrower acknowledges that the transmission
between the Borrower and the Lender of any such instructions, requests,
confirmations and orders involves the possibility of errors, omissions, mistakes
and discrepancies and agrees to adopt such internal measures and operational
procedures as Borrower deems necessary to protect its interests. The Borrower
hereby assumes all risk of loss arising out of: (i) the Lender's acceptance,
reliance on, compliance with or observation of any such instructions, requests,
confirmations or orders; and (ii) any such errors, omissions, mistakes and
discrepancies, except those caused by the Lender's gross negligence or willful
misconduct. Borrower agrees to indemnify Lender and to hold Lender harmless for
and from all claims, demands, suits, actions, judgments, decrees, losses or
damages, including reasonable attorneys fees and reasonable expenses, that
Lender may incur as a result of the foregoing events or occurrences for which
the Borrower has assumed the risk of loss.


                                       21
<PAGE>

      ARTICLE 4. SECURITY.

      4.1 Grant of Security Interest. As security for (i) the payment of the
Loan, and any other extensions of credit, loans, Letters of Credit, interest
rate swap or other hedging transactions (including, without limiting the
generality of the foregoing, interest rate swap termination fees) or other
financial accommodations now or hereafter made by the Lender for the benefit of
the Borrower, and (ii) for any other liability or obligation of Borrower to
Lender whether now or hereafter existing, of every kind and description, whether
or not evidenced by notes or other instruments, and whether or not such
liability or obligations are direct or indirect, fixed or contingent, liquidated
or unliquidated, the Borrower hereby assigns, grants and conveys to the Lender a
security interest in the Collateral. The Borrower further agrees that the Lender
shall have in respect of the Collateral all of the rights and remedies of a
secured party under the Uniform Commercial Code, other applicable law and this
Agreement. The Borrower covenants and agrees to execute and deliver such
financing statements and other instruments and filings or perform any and all
acts as are necessary in the opinion of the Lender to perfect, maintain and
protect the security interest hereby granted. The Borrower shall not dispose of
the Collateral, or any part thereof, other than in the ordinary course of its
business or as otherwise may be permitted by this Agreement. With regard to
Collateral that constitutes Inventory or Equipment, the Borrower further
covenants as follows:

            A.          The Lender's security interest shall extend and attach
                  to Inventory which is presently in existence and is owned by
                  the Borrower or in which the Borrower purchases or acquires an
                  interest at any time and from time to time in the future,
                  whether such Inventory is in transit or in the Borrower's
                  constructive, actual or exclusive occupancy or possession or
                  not, and wherever the same may be located, including, without
                  limitation, all Inventory which may be located at the premises
                  of the Borrower or upon the premises of any carriers,
                  forwarding agents, truckers, warehousemen, vendors, selling
                  agents, finishers, convertors or other third parties who may
                  have possession of the Inventory.

            B.          Upon sale, exchange, lease or disposition of the
                  Inventory or Equipment, the security interest of the Lender
                  shall without break in continuity and without further
                  formality or act continue in and attach to all cash and
                  non-cash proceeds of such sale, exchange, lease or
                  disposition, including Inventory returned or rejected by
                  customers or repossessed by either the Borrower or the Lender.
                  As to any such sale, exchange, lease or disposition, the
                  Lender shall have all of the rights of an


                                       22
<PAGE>

                  unpaid seller, including stoppage in transit, replevin,
                  detinue and reclamation.

      4.2 Certain Rights of the Lender. The Lender shall have the right, but not
the obligation, (i) to pay any taxes or levies on the Collateral or any costs to
repair or to preserve the Collateral; and (ii) to cure any defaults by Borrower
on contracts by the Borrower intended to give rise to Accounts. Such payments
and the costs of curing such defaults shall constitute Advances under the
Revolving Note and shall be secured pursuant to this Agreement, irrespective of
whether the Borrower would then be entitled to such Advances under this
Agreement.

      4.3 Financing Statements. At the request of the Lender, Borrower will join
with the Lender in executing financing statements, continuation statements and
other documents with respect to the Collateral pursuant to the Uniform
Commercial Code or otherwise, in form satisfactory to the Lender, and Borrower
will pay the cost of filing the same in all public offices wherever the Lender
deems filing to be necessary or desirable. Borrower agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement, provided however,
that it shall not limit the obligations of Borrower as previously set forth
herein. Borrower grants the Lender the right, at the Lender's option, to file
any or all such financing statements, continuation statements and other
documents pursuant to the Uniform Commercial Code and otherwise, without
Borrower's signature, and irrevocably appoints the Lender as Borrower's
attorney-in-fact to execute any such statements and documents in Borrower's name
and to perform all other acts which the Lender deems appropriate to perfect and
to continue the security interests conferred by this Agreement; however, Lender
agrees not to exercise such powers as attorney-in-fact for the Borrower unless
an Event of Default has occurred and remains uncured or there exists any event
or circumstance that, with the giving of notice, the passage of time or both,
would constitute an Event of Default.

      4.4 Records of Collateral; Information. Borrower at all times will
maintain accurate books and records covering the Collateral. Borrower
immediately will mark all books and records with an entry showing the absolute
assignment of and granting of a security interest in all Collateral to Lender,
and hereby grants the Lender the right to audit the books and records of
Borrower relating to Collateral at any time and from time to time. Borrower
shall (i) promptly furnish the Lender with any information with respect to
Collateral requested by Lender; (ii) allow the Lender or its representatives to
inspect the Collateral, during ordinary business hours and any other reasonable
time, and wherever located, and to inspect and copy, or furnish the Lender or
its representatives with copies of all records relating to the Collateral;
(iii) furnish the Lender or its representatives such information as the Lender
may request to identify the Collateral, at the time ~ I and in the form
requested by Lender; and (iv) deliver upon request to Lender shipping and
delivery receipts evidencing the shipment of goods and invoices evidencing the
receipt of the Collateral and payment for the Collateral.


                                       23
<PAGE>

      4.5 No Release. No injury to the Collateral, loss or destruction of the
Collateral, failure to perfect or to continue the perfection of Lender's
security interest in the Collateral, or release of Lender's security interest in
the Collateral, or any part of it, shall relieve Borrower of any obligation
under this Agreement or under any of the other Loan Documents. Borrower
expressly waives all defenses based on suretyship or impairment of collateral,
and shall not be released or discharged of any obligation under the Loan
Documents, in whole or in part, by Lender's failure to protect or preserve the
Collateral. No Person, in deciding to enter into this Loan Agreement, has relied
on the execution of this Loan Agreement or the granting of a security interest
in Collateral by any other Person. Each Person comprised by the term Borrower
waives notice of any change in financial condition of any Person liable for the
Loans or any part thereof, and agrees that maturity of the Loans or any part
thereof may be accelerated in accordance with the terms of this Agreement,
extended or renewed one or more times by Lender in its discretion, without
notice to the Person and without affecting Lender's security interest in the
Collateral. Lender shall not be required to bring any action against any other
Person or to resort to any other security or to any balance of any deposit
account as a condition of enforcing its rights against any of the Collateral.

      4.6 Indemnification. In any suit, proceeding or action brought by or
against the Lender relating to the Collateral, the Borrower will defend,
indemnify and keep the Lender harmless from and against all expense, loss or
damage (including reasonable attorneys' fees) suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction of liability whatsoever of
account debtor or other obligor of the Borrower. The foregoing obligation of the
Borrower to indemnify the Lender shall survive the payment of the Loans and the
termination of this Agreement.

      4.7 Assignment of Payments Under Certain Government Contracts and
Government Accounts. On the Closing Date, and thereafter upon the creation of
any Government Contract or Government Account with the United States or any
department or agency of the United States, Borrower shall, at Lender's option,
execute and deliver to the Lender specific Assignments of Payments due or to
become due with respect to any Government Account designated by the Lender.
Borrower shall execute and deliver any and all documents and take any and all
steps necessary to provide the Lender with an Assignment. The separate
Assignment to the Lender of a right to payment under specific Government
Contracts, as contemplated under this Section, shall not be deemed to limit the
Lender's security interest to Payments under those particular Government
Contracts and the related Government Accounts, but rather the Lender's security
interest, as stated above, shall extend to Payments under any and all Government
Contracts and the related Government Accounts and proceeds thereof, now or
hereafter owned or acquired by Borrower.

      4.8 Additional Remedy for Failure to Assign Payments. Borrower
acknowledges that the Lender will be irreparably harmed if Borrower fails to
assign Payments due or to become due under any Government Contract when required
by this Agreement, and that the Lender shall have no adequate remedy at law.
Therefore, the Borrower agrees that the Lender shall be entitled, in


                                       24
<PAGE>

addition to all other remedies allowed by law or under this Agreement, to
injunctive or other equitable relief to compel Borrower's compliance with the
provisions of this Agreement requiring the Borrower to assign Payments due or to
become due under any Government Contract.

      ARTICLE 5. BORROWER'S REPRESENTATIONS AND WARRANTIES.

      To induce the Lender to enter into this Agreement and to extend the
Revolving Loan to Borrower, Borrower makes the following representations and
warranties to the Lender. These representations and warranties are continuing,
and each request for an Advance shall be deemed to be an affirmation of these
representations and warranties as of the date of the most recent Borrowing Base
Certificate submitted prior to the request.

      5.1 Corporate Authority; Subsidiaries. Borrower (i) is a corporation duly
organized, validly existing, and in good standing under the laws of its state of
incorporation, (ii) is qualified to do business as a foreign corporation and is
in good standing in all jurisdictions where its activities or ownership of
property require such qualification, if failure so to qualify would have
material adverse effect on the Borrower's business, creditworthiness or ability
to perform its obligations under this Agreement, and (iii) has the full and
unrestricted power and authority, corporate and otherwise, to own, operate and
lease its properties, to carry on its business as currently conducted, to
execute and deliver and perform the Loan Documents, to incur the obligations
provided for herein and therein, and to perform the transactions contemplated
hereby and thereby (including without limitation, the creation of the lien and
security interest in favor of the Lender in the Collateral), and to execute and
deliver the Assignments, all of which have been duly and validly authorized by
all proper and necessary action (all of which actions are in full force and
effect). Borrower has no subsidiaries other than those previously disclosed in
writing to the Lender. Each of the Persons comprised by the term Borrower
maintains it chief executive office at the location stated in Exhibits 5.1-1
through 5.1-6 attached hereto and made a part hereof; further, International
Data Products, Corp. has terminated all business operations at its former office
located at 20 Firstfield Road, Gaithersburg, Maryland, has not conducted
business operations in that former office or at any other office in the State of
Maryland subsequent to June, 1998.

      5.2 Approvals. Borrower has provided Lender with a true and accurate
certificate of a Resolution of the Borrower's Board of Directors authorizing the
loan transactions contemplated by this Agreement. No further approval, consent
or other action by the stockholders of Borrower, by any governmental authority
or by any other Person is or will be necessary to permit the valid execution,
delivery or performance by Borrower of this Agreement or any of the other Loan
Documents.

      5.3 Binding Effect, No Violations. Each of the Loan Documents, upon its
execution and delivery, will constitute a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms. The
execution, delivery and performance of the


                                       25
<PAGE>

Loan Documents will not (i) violate, conflict with or constitute a default (with
due notice, lapse of time or both) under any law, regulation, order or any other
requirement of any court, tribunal, arbitrator or governmental authority, any
terms of the Articles or Certificate of Incorporation or Bylaws of Borrower, or
any contract, agreement or other arrangement binding upon or affecting Borrower
or any of its properties, or (ii) result in the creation, imposition or
acceleration of any indebtedness or any Encumbrance of any nature upon, or with
respect to, Borrower or any of its properties, except such Encumbrances in favor
of Lender.

      5.4 Litigation. Except as set forth in Exhibit 5.4 attached hereto and
made a part hereof, there is no claim, litigation, proceeding or investigation
pending or, to the best of the Borrower's knowledge, threatened or reasonably
anticipated against or affecting Borrower, its properties or business, this
Agreement, any of the other Loan Documents, or any of the transactions
contemplated hereby or thereby, before or by any court, tribunal, arbitrator or
governmental authority, and there is no possibility of any judgment, liability
or award which reasonably may be expected to result in any material adverse
change in the business, operations, prospects, properties or assets or
condition, financial or otherwise, of Borrower. Borrower is not in default with
respect to any judgment, order, writ, injunction, decree, rule, award or
regulation of any court, governmental instrumentality or agency, commission,
board, bureau, arbitrator or arbitration panel.

      5.5 Title to and Condition of Assets. The Borrower has good, valid and
marketable title to all of its properties and assets (whether real or personal),
and, except as set forth in Exhibit 5.5 attached hereto and made a part hereof,
there exist no Encumbrances on any of Borrower's properties or assets, including
without limitation, the Collateral. All personal property of Borrower is in good
operating condition and repair, and is suitable and adequate for the uses for
which it is being used. Upon the execution and delivery of this Agreement, and
upon the filing of financing statements or the Lender's taking possession of the
Collateral, as the case may be, the Lender will have a good, valid and perfected
first priority lien and security interest in the Collateral, subject to no
Encumbrance in favor of any other Person, except such Encumbrances as set forth
in Exhibit 5.5 under the heading "Permitted Encumbrances". As to Encumbrances
set forth in Exhibit 5.5.under the heading "Federal Tax Liens", Borrower hereby
represents that, to the best of its knowledge and belief and to the knowledge
and belief of the Persons named in Section 7.3 of this Agreement, all taxes
secured by such Encumbrances have been paid in full, and Borrower further
covenants that it will promptly commence and diligently pursue any and all
actions necessary to have such Encumbrances released if at any time such
Encumbrances could materially affect the operations of the Borrower as
determined in the sole and absolute discretion of the Lender.

      5.6 Loan Application. The statements made and the documents delivered by
Borrower to the Lender in connection with its application for the Revolving
Loan and in connection with this Agreement and the other Loan Documents are
true, correct and complete, in all material respects, omit no material facts,
are not misleading, and present fairly the condition (financial or otherwise) of
Borrower.


                                       26
<PAGE>

      5.7 No Change. No change in the business, operations, properties or
condition (financial or otherwise) of Borrower, or any other event, has occurred
since the date of the most recent financial statements submitted to the Lender
by Borrower, which, in Lender's good faith judgment, would adversely affect the
ability of Borrower to perform or comply with all terms, conditions and
agreements to be performed or complied with by Borrower under this Agreement or
under any of the other Loan Documents, or to perform the transactions
contemplated by this Agreement or the other Loan Documents.

      5.8 Taxes. Borrower has timely filed all tax returns and reports required
by any governmental authority to be filed by Borrower, and such returns and
reports are true and correct. Borrower has paid all taxes, assessments and other
government charges imposed upon it or its income, profits or properties, or upon
any part thereof, other than those presently payable without penalty or interest
and Borrower has timely filed all claims for material refunds to which Borrower
is entitled. The amounts reserved as a liability for income and other taxes
payable in the most recent financial statements of Borrower provided to the
Lender are sufficient for the payment of all unpaid federal, state, county and
local income, excise, property and other taxes, whether or not disputed, of
Borrower accrued for or applicable to the period and on the dates of such
financial statements and all years and periods prior thereto, and for which
Borrower may be liable in its own right or as a transferee of the assets of, or
as successor to, any other Person.

      5.9 No Default. No Event of Default, and no event which with notice, lapse
of time or other condition would constitute an Event of Default, has occurred
and is continuing.

      5.10 Compliance with Laws, Governance Documents and Agreements. Borrower
has complied and is in full compliance with all applicable laws, ordinances,
rules, regulations, orders and other requirements of any governmental authority
or arbitrator, and with all terms and conditions of its Governance Documents,
and with each agreement binding upon or affecting Borrower or any of its
properties. Borrower is not in default with respect to any Debt. Borrower will
take all necessary actions to remain in full compliance with such laws,
ordinances, rules, regulations, orders and any other requirements, the
Governance Documents and all other agreements. Should Borrower be deemed by any
governmental authority or deem itself to be in violation of any relevant law,
ordinance, rule, regulation, orders or other requirement, Governance Document or
agreement, Borrower shall notify the Lender promptly of such violation and take
all necessary remedial actions. Without limiting the generality of the
foregoing, Borrower represents to Lender that: (1) Borrower has previously
disclosed to Lender all of Borrower's activities that involve the use,
manufacturing, storage, disposal, emission, discharge, generation or
transportation of Hazardous Wastes, Toxic Substances or other materials
regulated by Environmental Laws; (2) Borrower has complied and is in full
compliance with all Environmental Laws; (3) Borrower maintains in full
force and effect all permits required by z Environmental Laws; and (4) there
exists no pending or threatened litigation, order, ruling, notice or
investigation regarding the Borrower's use, manufacturing, storage, disposal,
emission, discharge generation or transportation of Hazardous Wastes or Toxic
Substances or regarding any violation or alleged violation of any Environmental
Laws.


                                       27
<PAGE>

        5.11 Licenses and Contracts. All franchises, licenses, trademarks, trade
names, copyrights, patents, permits, certificates, consents, approvals,
authorizations, agreements and contracts necessary to operate Borrower's
business as it currently is being operated and to own or lease Borrower's
property have been obtained, are in effect, have been complied with in all
material respects by Borrower, are free from challenge, and are fully assignable
to the Lender for the purpose of securing the Revolving Loan. Borrower has no
knowledge and has not received any notice to the effect that any product it
manufactures or sells, or any service it renders, or any process, method,
know-how, trade secret, part or material it employs in the manufacture of any
product it makes or sells or any service it renders, or the marketing or use by
it or another of any such product or service, may infringe any trademark, trade
name, copyright, patent, trade secret or legally protected right of any other
Person.

      5.12 Intellectual Property. The Borrower owns all right, title and
interest in and to all Intellectual Property used in and material to the
operation of its business or, for such Intellectual Property that is not owned,
possesses adequate licenses or other legally enforceable rights to use the same.
The Borrower has no reason to believe that any valid basis exists upon which a
claim adversely affecting any such Intellectual Property may be asserted against
the Borrower or any subsidiary. To the best knowledge of the Borrower, no Person
is infringing upon the Intellectual Property used by the Borrower or any
subsidiary material to the operation of their respective businesses. The
Borrower has taken appropriate steps to protect the secrecy, confidentiality and
value of its and all subsidiaries' rights in and to such Intellectual Property
and to prevent others from using such Intellectual Property without consent.

      5.13 Disclosure. No representation or warranty of Borrower contained in
this Agreement or any of the Loan Documents and no written statement of fact
furnished or to be furnished by Borrower to the Lender pursuant to this
Agreement or any of the Loan Documents, when viewed together, contains or will
contain any untrue statement of a fact material to the financial condition of
Borrower, or omits or will omit to state any material fact necessary in order to
make the statements contained herein or therein, or furnished herewith or
therewith, not misleading.

        5.14 Trade Name; Merger. Except as set forth in Exhibit 5.14 attached
hereto and made a part hereof, during the five years immediately preceding the
date of this Agreement: (i) neither the Borrower nor any predecessor of the
Borrower has used any corporate or fictitious name other than its current
corporate name; (ii) Borrower has not changed its name, or been the surviving
entity in a merger or acquired any business; and (iii) Borrower has utilized no
trade names in the conduct of its business.

      5.15 Payment of Employees and Subcontractors. Borrower is not in default
with regard to the payment of any employee or subcontractor.

      5.16 ERISA Borrower is in compliance with Borrower's obligations under
ERISA. Without limiting the generality of the foregoing:


                                       28
<PAGE>

            A.          During the five-year period prior to the date on which
                  this representation is made or deemed made; (i) no Termination
                  Event has occurred, and, to the best of the Borrower's
                  knowledge, no event or condition has occurred or exists as a
                  result of which any Termination Event could reasonably be
                  expected to occur, with respect to any Plan; (ii) no
                  "accumulated funding deficiency," as such term is defined in
                  Section 302 of ERISA and Section 412 of the Code, whether or
                  not waived, has occurred with respect to any Plan; (iii) each
                  Plan has been maintained, operated and funded in compliance
                  with its own terms and in material compliance with the
                  provisions of ERISA, the Code, and any other applicable
                  federal or state laws; and (iv) no lien in favor of the PBGC
                  or a Plan has arisen or is reasonably likely to arise on
                  account of any Plan.

            B.          The actuarial present value of all "benefit liabilities"
                  under each Single Employer Plan (determined within the meaning
                  of Section 40l(a)(2) of the Code, utilizing the actuarial
                  assumptions used to fund such Plans), whether or not vested,
                  did not, as of the last annual valuation date prior to the
                  date on which this representation is made or deemed made,
                  exceed the current value of the assets of such Plan allocable
                  to such accrued liabilities.

            C.          Neither the Borrower nor any of its subsidiaries nor any
                  ERISA Affiliate has incurred, or, to the best of the
                  Borrower's knowledge, are reasonably expected to incur any
                  withdrawal liability under ERISA to any Multiemployer Plan or
                  Multiple Employer Plan. Neither the Borrower, any of its
                  subsidiaries nor any ERISA Affiliate has received any
                  notification that any Multiemployer Plan is in reorganization
                  (within the meaning of Section 4241 of ERISA), is insolvent
                  (within the meaning of Section 4245 of ERISA), or has been
                  terminated (within the meaning of Title IV of ERISA), and no
                  Multiemployer Plan is, to the best knowledge of the Borrower,
                  reasonably expected to be in reorganization, insolvent or
                  terminated.

            D.          No prohibited transaction (within the meaning of Section
                  406 of ERISA or Section 4975 of the Code) or breach of
                  fiduciary responsibility has occurred with respect

                                       29
<PAGE>

                  to a Plan which has subjected or may subject the Borrower or
                  any of its subsidiaries or any ERISA Affiliate to any
                  liability under Sections 406, 409, 502(i), or 502(l) of ERISA
                  or Section 4975 of the Code, or under any agreement or other
                  instrument pursuant to which the Borrower or any of its
                  subsidiaries or any ERISA Affiliate has agreed or is required
                  to indemnify any person against any such liability.

      5.17 Government Contracts. Borrower is not currently in default as to the
terms of any Government Contract, and no Government Contract has been canceled
or terminated by the Government in the past ten years. No Government Contract
for which Payments have been assigned to the Lender as Collateral is dependent
on appropriations, except as previously disclosed to the Lender in writing.

      5.18 No Debarment. Borrower is not subject to any pending or threatened
debarment proceedings.

      5.19 Assignment of Payments. Borrower has the right to assign to Lender
all Payments due or to become due under each of Borrower's Government Contract,
and there exists no uncancelled prior Assignment of Payments under any of
Borrower's Government Contracts.

      5.20 Assignment of Claims Act. Borrower is now in compliance and hereby
covenants and agrees that Borrower will in the future comply with any and all of
the requirements of the Assignment of Claims Act, where such statutes are
applicable to any Government Contract, and shall take all such other action as
may be necessary to facilitate the assignment and perfection of the Lender's
interest in Payments under any Government Contract.

      ARTICLE 6. BORROWER'S AFFIRMATIVE COVENANTS.

      Until all obligations of Borrower under this Agreement and the other Loan
Documents are paid in full and performed, Borrower covenants and agrees that it
shall:

      6.1 Payment of Revolving Loan. Punctually make the payments on the
Revolving Loan at the times and places and in the manner specified in the
Revolving Note.

      6.2 Corporate Existence. Preserve, maintain and keep in full force and
effect its corporate existence and good standing in the jurisdiction of its
incorporation.

      6.3 Corporate Rights and Franchises; Qualification; Orderly Conduct of
Business. Preserve, maintain and keep in full force and effect all franchises,
licenses, permits, certificates, consents, approvals, authorizations, agreements
and contracts material to the operation of Borrower's business as it currently
is being conducted, whether now existing or hereafter granted 30


                                       30
<PAGE>

to or obtained by Borrower; qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is necessary or
desirable in view of its activities and ownership of property; continue to
engage in a business of the same general type as now conducted by it; and
conduct such business in an orderly, efficient and regular manner consistent
with the conduct of its business prior to the date of this Agreement.

      6.4 Taxes, Charges and Obligations. Pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, profits, properties or any part thereof, prior to the date on which
penalties attach thereto, as well as all claims which, if unpaid, might become
an Encumbrance upon any properties of Borrower, and pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of the indebtedness and other obligations of whatever nature of
Borrower; however, Borrower shall not be required to pay any such tax,
assessment, charge, levy, claim, indebtedness or obligation so long as (i) the
validity thereof is being contested by Borrower in good faith and by proper
proceedings, (ii) Borrower sets aside on its books adequate reserves therefor,
and (iii) in the case where any such tax, assessment, charge, claim or levy
might become an Encumbrance upon any item of the Collateral or any part thereof,
Borrower makes arrangements acceptable to the Lender to secure the payment
thereof.

      6.5 Maintenance of Property. Preserve and keep all property used or useful
in its business, including without limitation, the Collateral, in good repair,
working order and condition, and from time to time make all necessary or
desirable repairs, renewals and replacements thereof.

      6.6 Insurance. Maintain and keep in full force and effect, with
financially sound and reputable insurance companies acceptable to the Lender,
insurance in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which Borrower operates (but in any event, casualty
insurance covering the Borrower's tangible personal property and real estate for
their full insurable value and comprehensive public liability insurance coverage
with limits of not less than One Million Dollars ($1,000,000.00) for any one
occurrence and Three Million Dollars ($3,000,000.00) for the aggregate of all
occurrences during a policy period of no more than one (1) year), all such
insurance policies to be in form and substance satisfactory to the Lender. If
requested by the Lender, Borrower shall also procure, maintain and keep in full
force and effect business interruption insurance in an amount, in form and
issued by companies acceptable to the Lender in all respects. All liability
insurance policies shall name the Lender as an additional insured, and all
casualty insurance or business interruption insurance policies shall name Lender
as the loss payee. All insurance policies shall prohibit cancellation (including
cancellation for nonpayment of premium) or reduction of coverage except with
thirty (30) days' prior written notice to and consent of the Lender. At least
thirty (30) days prior to the expiration date of each and every insurance policy
required by this Agreement, Borrower shall obtain and deliver to the Lender a
renewal or substitution policy in form and substance satisfactory to the Lender.


                                       31
<PAGE>

      6.7 Contract Obligations. Perform in accordance with its terms every
contract, agreement, obligation or other arrangement to which Borrower is a
party or by which it or any of its property is bound including, without limiting
the generality of the foregoing, Government Contracts. In the event that any
default or performance deficiency occurs, Borrower shall notify the Lender
promptly in writing. Borrower shall provide the Lender promptly with copies of
any cure notices or stop work notices it may receive from the Government on any
Government Contract and detail the proposed corrective action.

      6.8 Compliance with Laws. Comply with all applicable laws, regulations,
orders and other requirements of any court, tribunal, arbitrator or governmental
authority, non-compliance with which could have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of
Borrower. Without limiting the generality of the foregoing, Borrower shall: (1)
comply strictly and in all respects with all Environmental Laws affecting the
Borrower or its property; (2) promptly forward to the Lender copies of all
orders, notices, permits, applications or other communications and reports
finding or alleging that Borrower or its property does not comply with any of
the Environmental Laws; (3) promptly provide a proposed response action, or plan
with respect to any failure to comply with Environmental Laws; and (4) defend
the Lender, indemnify the Lender, and hold the Lender harmless from and against
any claims, demands, suits, actions, judgements, decrees, losses or damages,
including reasonable attorneys' fees, arising out of the failure of Borrower of
any of its properties to comply with any of the Environmental Laws.

      6.9 Books and Records. Keep and maintain at its chief executive offices
adequate and proper records and books of account, in which complete entries are
made in accordance with GAAP, consistently applied, and in accordance with all
laws, regulations, orders and other requirements of any court, tribunal,
arbitrator or governmental authority, reflecting all financial and other
transactions of Borrower normally and customarily included in records and books
of account of companies engaged in the same or similar businesses and activities
as Borrower.

      6.10 Access to Borrower's Properties, Books and Records. Permit the Lender
and any agents or representatives thereof to visit and inspect the Borrower's
properties to examine and make copies and abstracts from any of Borrower's books
and records at any and all reasonable times and as often as the Lender or such
agents or representatives may in good faith request, and to discuss the
business, operations, properties and condition (financial and otherwise) of
Borrower with any of the officers, directors, agents or representatives
(including without limitation, the independent certified public accountants) of
Borrower. In addition to having the right to perform field audits of the
Borrower's books and records, Lender shall have the right, but not the
obligation, to contact the contracting officer under any Government Contract
directly to determine Borrower's contract performance status on the Government
Contract.

      6.11 Financial and Other Statements. Furnish to the Lender:



                                       32
<PAGE>

            A.          Annual Financial Statements. As soon as available, but
                  in no event more than ninety (90) days after the close of each
                  of the Borrower's fiscal years, audited financial statements
                  for that year, stating the Borrower's financial condition. The
                  financial statements shall be prepared by an independent
                  certified public accountant acceptable to Lender, in
                  accordance with GAAP consistently applied. The financial
                  statements must be acceptable to Lender in form and substance,
                  and shall contain such detail as Lender may require. The
                  financial statements shall include a consolidated and
                  consolidating balance sheet and income statement as of the end
                  of such fiscal year, a profit and loss statement and a cash
                  flow statement.

            B.          Annual Opinion of Accountant. As soon as available but
                  in no event more than ninety (90) days after the close of each
                  of the Borrower's fiscal years, an opinion of the independent
                  certified public accountant who prepared the Borrower's annual
                  financial statements. The opinion shall be acceptable to
                  Lender in form and substance and shall contain no
                  qualification that is unacceptable to Lender.

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

            D.          Budgets and projections. Within ninety twenty (90) days
                  after the close of each of the Borrower's fiscal years,
                  projections and budgets for the upcoming fiscal year, which
                  projections shall include a pro-form balance sheet, cash flow
                  statement and profit and loss statement.

            E.          Quarterly Financial Statements. As soon as available,
                  but in no event more than forty-five (45) days after the close
                  of each of the Borrower's fiscal quarters, Borrower-prepared
                  financial statements for that quarter, stating the
                  Borrower's financial condition. The financial statements shall
                  be prepared in accordance with GAAP consistently applied. The
                  financial statements must be acceptable to Lender in form and
                  substance, and shall


                                       33
<PAGE>

                  contain such detail as Lender may require. The financial
                  statements shall include a consolidated and consolidating
                  balance sheet and income statement as of the end of such
                  quarter, a profit and loss statement and a cash flow
                  statement.

            F.          Borrowing Base Certificates. Borrower shall submit a
                  fully completed Borrowing Base Certificate not later than
                  fifteen (15) days after the end of each month, stating the
                  Borrowing Base as of the last day of the preceding month. At
                  Lender's request, the Borrower shall furnish to the Lender
                  such schedules, certificates, lists, records, reports,
                  information and documents to enable the Lender to verify the
                  Borrowing Base.

            G.          Monthly Reports. Borrower shall deliver to the Lender:

                  (1)         as soon as available, but not later than fifteen
                        (15) days after the end of each month, balance sheets
                        and profit and loss statements, with supporting
                        schedules,

                  (2)         as soon as available, but not later than fifteen
                        (15) days after the end of each month, an accounts
                        receivable aging schedule in intervals of not more than
                        30 days,

                  (3)         as soon as available, but not later than fifteen
                        (15) days after the end of each month, an accounts
                        payable report,

                  (4)         as soon as available, but not later than fifteen
                        (15) after the end of each month, a report itemizing the
                        Borrower's Inventory,

                  (5)         Reports to SEC. Copies of all public filings
                        required by the Securities and Exchange Commission
                        (including forms 10-K and 10-Q and any proxy statements)
                        within one week of the filing.

            H.          Government Contract Audits. Provide written notice to
                  Lender that Borrower has received the results of

                                              34
<PAGE>
                  any and all audits by the Defense Contract Audit Agency, or
                  any other government agency, conducted before the award of a
                  contract, before the final payment on a contract, or at any
                  other time, said notice to be delivered to Lender within
                  thirty (30) days of Borrower's receipt of such audit results.
                  Upon request by Lender, Borrower shall deliver all written
                  results of such audits to Lender with ten (10) days of a
                  request by Lender.

            I.          Additional Reports and Information. With reasonable
                  promptness, such additional information, reports or statements
                  as the Lender may from time to time request.

            J.          Compliance Certificate. With the Borrowing Base
                  Certificates to be provided pursuant to this Agreement,
                  Borrower shall deliver a certificate signed by a principal
                  financial officer of the Borrower stating whether any Event of
                  Default has occurred, or any event which, upon notice or lapse
                  of time or both, would constitute an Event of Default.

      6.12 Accounts. Upon the creation of Accounts, or from time to time as the
Lender may require, Borrower shall deliver to the Lender schedules of all
outstanding Accounts. Such schedules shall be in form and detail satisfactory to
the Lender, shall show the age of such Accounts in intervals not greater than
thirty (30) days, and shall contain such other information and be accompanied by
such supporting documents as the Lender may from time to time prescribe.
Borrower also shall deliver to the Lender copies of Borrower's invoices,
evidences of shipment or delivery and such other schedules and information as
the Lender may reasonably require. The items to be provided under this Section
are to be prepared and delivered to the Lender from time to time solely for its
convenience in maintaining records of the Collateral, and Borrower's failure to
give any of such items to the Lender shall not affect, terminate, modify or
otherwise limit the Lender's security interest granted in the Accounts. Without
limiting the generality of the foregoing, Borrower shall promptly notify the
Lender when Borrower obtains any new Government Contract or Government Account
for which Payments are to be specifically assigned to the Lender pursuant to
this Agreement, and Borrower shall furnish to the Lender, upon request, a copy
of each Government Contract of Borrower and a copy of each amendment thereto or
modification thereof which changes the price of such contract or the amount
funded to pay for such contract, except to the extent that furnishing such
copies may be prohibited by government security regulations. Borrower shall use
its best efforts and shall take any and all steps necessary to collect its
Accounts, including without limitation, the filing and pursuit of legal
action in furtherance of said collection efforts. Borrower shall use its best
efforts and shall take any and all steps necessary to collect its
Accounts, including without limitation, the filing and pursuit of legal action
in furtherance of said collection efforts.


                                       35
<PAGE>

        6.13 Collateral. Maintain all tangible Collateral in good condition;
insure insurable Collateral for its full replacement cost under an insurance
policy acceptable to Lender that names Lender as loss payee; execute, deliver
and file, or cause the execution, delivery and filing of, any and all documents
(including without limitation, financing statements and continuation
statements), necessary or desirable for the Lender to create, perfect, preserve,
validate or otherwise protect a first priority lien and security interest in the
Collateral; maintain, or cause to be maintained, at all times, the Lender's
first priority lien and security interest in the Collateral; provided, however,
Lender shall have a second priority lien and security interest in the Collateral
listed on Exhibit 5.5 under the heading "Permitted Encumbrances"; immediately
upon learning thereof, report to the Lender any reclamation, return or
repossession of any goods forming a part of the Collateral, any claim or dispute
asserted by any debtor or other obligor owing an obligation to Borrower, and any
other matters affecting the value or enforceability or collectibility of any of
the Collateral; defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein adverse to the
Lender, and pay all costs and expenses (including reasonable attorneys' fees and
reasonable expenses) incurred in connection with such defense; at Borrower's
sole cost and expense (including reasonable attorneys' fees and reasonable
expenses), settle any and all claims, demands and disputes, and indemnify and
protect the Lender against any liability, loss or expenses arising from any such
claims, demands or disputes or out of any such reclamation, return or
repossession of goods forming a part of the Collateral; however, if an Event of
Default shall have occurred, the Lender shall have the right at all times to
settle, compromise, adjust or litigate all claims and disputes directly with the
Customer or other obligor owing an obligation to Borrower upon such terms and
conditions as the Lender deems advisable, and all costs and expenses thereof
(including reasonable attorneys' fees and reasonable expenses) shall be incurred
for the account of Borrower and shall constitute a part of the obligations owed
to the Lender and secured pursuant to this Agreement. The Borrower's Equipment
shall be kept and maintained at the locations of the Borrower's offices as set
forth in Exhibits 5.1-1 through 5.1-6 Borrower shall not relocate or move the
Equipment without the Lender's prior written consent, which shall not be
unreasonably withheld. If Lender consents to the relocation of certain
Equipment, Borrower shall execute all documents or financing statements and take
such action as Lender may request to assure that Lender's first priority
security interest in the equipment continues to be perfected under the Uniform
Commercial Code or other applicable laws of the jurisdiction to which the
Equipment is moved.

      6.14 Financial Covenants. Maintain:

            A.          Tangible Net Worth. Borrower shall maintain at all times
                  a Tangible Net Worth (hereinafter defined) equal to the sum
                  of(i) 75% of cumulative positive net income for all fiscal
                  quarters ending June 30, 1998 and thereafter; plus (ii) 75% of
                  the net proceeds from the issuance or sale by the Borrower of
                  any of its own equity securities; plus


                                       36
<PAGE>

                  (iii) $13,000,000.00. This covenant will be tested quarterly.

            B.          Total Debt to EBITDA. Borrower shall maintain at all
                  times a ratio of Total Debt to EBITDA of not greater than 4.0
                  to 1.0 through March 31, 2000; thereafter, Borrower shall
                  maintain a ratio of total debt to EBITDA of not greater than
                  3.5 to 1.0. This ratio will be tested quarterly and measured
                  on a rolling four quarter basis. In computing EBITDA for the
                  quarters ending March 31, 1999 through December 31, 1999, the
                  Lender shall not include acquisition integration costs in the
                  amount of Five Hundred Sixty-Four Thousand, Seven Hundred and
                  Seventy-Six Dollars ($564,776.00), as disclosed in the
                  Borrower's form 10-K dated as of October 31, 1998.

      Fixed Charge Coverage Ratio. Borrower shall maintain at all times a Fixed
Charge Coverage Ratio (hereinafter defined) of not less than 1.50 to 1.00. This
ratio will be tested quarterly and measured on a rolling four quarter basis.

      Unless otherwise expressly provided in this Agreement, if the Borrower
comprises a parent corporation and its subsidiaries, the covenants herein
relating to the financial condition of the Borrower refer to the financial
condition of the parent corporation and those subsidiaries stated on a
consolidated basis.

      6.15 Notice of Litigation, Default and Loss. Give immediate notice to the
Lender upon the occurrence of any Event of Default or event which with notice or
lapse of time or otherwise would constitute an Event of Default, and of any loss
or damage to any of the Collateral. Borrower also shall give immediate notice to
the Lender of any action, suit or proceeding at law or in equity or by or before
any governmental instrumentality or agency (domestic or foreign), commission,
board, bureau, arbitrator or arbitration panel which, if adversely determined,
could materially impair or affect the right of Borrower to carry on its business
substantially as now conducted or could materially affect its respective
business, operations, prospects, properties, assets (including the Collateral)
or condition, financial or otherwise. Immediately upon becoming aware that the
holder of any Debt or Encumbrance has given notice or taken any action with
respect to a claimed breach, default or event of default, a written notice shall
be given by Borrower to Lender specifying the notice given or action taken by
such holder and the nature of the claimed breach, default or event of default by
the Borrower thereunder, and the action being taken or proposed to be taken with
respect thereto.

      6.16 Proxy Statements, Etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which the


                                       37
<PAGE>

Borrower files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange.

      6.17 ERISA. Give prompt notice to Lender of any of the following: (i) of
any event or condition, including, but not limited to, any Reportable Event,
that constitutes, or might reasonably lead to, a Termination Event; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA
or otherwise of any withdrawal liability assessed against the Borrower, any of
its subsidiaries or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the meaning of
Title IV of ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower or any of
its subsidiaries or ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding standard set
forth in ERJSA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a material adverse effect on the
Borrower's financial condition; together, with a description of any such event
or condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by Borrower with respect thereto.
Promptly upon request, the Borrower shall furnish to Lender such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report return (Form 5500 series), as well
as all schedules and attachments thereto required to file with the Department of
Labor or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERJSA). Such notice shall be given in any event within five (5) business days
after the occurrence of any event that Borrower is required to report to Lender
under this clause.

      6.18 Place of Business; Location of Records. Each of the Persons comprised
by the Borrower maintains its chief executive office at the place identified in
Exhibits 5.1-1 through 5.1-6 and keeps its books and records at that office.
Each such Person shall provide Lender with fourteen (14) days' prior written
notice of any change in the location of its chief executive office or the place
at which it keeps its books and records.

      6.19 Computer Systems: Year 2000 Compliance. The Borrower shall take all
action necessary to assure that the Borrower's computer based systems are able
to operate and effectively process data including dates for after January 1,
2000. At the request of Lender, Borrower shall provide Lender with assurance
acceptable to Lender of Borrower's Year 2000 compatibility.

      6.20 Payments to Borrower. If Borrower has assigned Payments under any
Government Contract to the Lender, remit to the Lender promptly any Payments
erroneously sent directly to Borrower by the Government, and until so remitted,
hold those Payments in trust for the Lender.


                                       38
<PAGE>

      ARTICLE 7. BORROWER'S NEGATIVE COVENANTS.

      Until all obligations of Borrower under this Agreement and the other Loan
Documents are paid in full and performed, Borrower covenants and agrees that it
shall not, unless the Lender otherwise consents in advance in writing:

      7.1 Indebtedness and Contingent Obligations. Contract for any additional
Debt; or agree to assume, guarantee, indorse or otherwise in any way be or
become responsible or liable, directly or indirectly, for the obligation of any
other Person. However, notwithstanding the foregoing sentence, Borrower may
incur trade debt in the ordinary course of business, and Borrower may incur an
aggregate amount of up to Three Million Dollars ($3,000,000.00) in purchase
money financing from the date of this Agreement to the Ending Date for the
purpose of financing the acquisition of Equipment for use in the Borrower's
business operations.

      7.2 Encumbrances. Create, incur, assume or suffer to exist any Encumbrance
in addition to those Encumbrances set forth under the heading "Permitted
Encumbrances" in Exhibit 5.5 upon any of its properties or assets (including
without limitation, the Collateral), whether now owned or hereafter acquired;
provided, however, that may grant first purchase money security interests on
Equipment purchased with the Three Million Dollars ($3,000,000.00) in purchase
money financing allowed under the previous section.

      7.3 Fundamental Changes. Amend its Articles or Certificate of
Incorporation by any amendment which would adversely affect Borrower's ability
to perform or comply with any of the terms, conditions or agreements to be
performed or complied with by Borrower hereunder or to perform any of the
transactions contemplated hereby; change its name, ownership or key management
(said key management to include Thomas P. Dunne and John D. Vazzana, whose
current offices, positions and responsibilities shall not be changed materially
while this Agreement is in effect); convert its organizational form into another
entity form or establish any new entity to perform the business or similar
business of Borrower; reorganize, consolidate or merge with any other
corporation; or purchase, lease or otherwise acquire all or substantially all of
the assets of any other entity, including shares of stock of other corporations,
except that Borrower may own notes and other receivables acquired in the
ordinary course of business.

      7.4 Transfer of Assets. Sell, lease, assign, pledge or otherwise dispose
of any of its properties, stock or assets (including without limitation, the
Collateral), whether now owned or hereafter acquired, except in the ordinary
course of business and for fair market value.

      7.5 Investments. Purchase or hold any stock, or evidence of indebtedness
of any other person or entity except investments in direct obligations of the
United States Government and certificates of deposit of United States commercial
banks insured by the Federal Deposit Insurance Corporation.


                                       39
<PAGE>

      7.6 Loans. Make any loan or advance to any person, except reasonable
advances for business expenses of Borrower's employees that would be
reimbursable under Borrower's existing expense reimbursement policy.

      7.7 Repurchase of Securities. Purchase, redeem or otherwise acquire any of
its own capital stock or purchase, acquire, redeem, retire or make any payment
on account of the principal of any indebtedness of Borrower, except at the
stated maturity of such indebtedness, and except payments of indebtedness
incurred under this Agreement.

      7.8 Use of Proceeds. Use, or allow the use of, the proceeds of the
Revolving Loan for any purpose which would cause this Agreement to violate any
Regulations of the Board of Governors of the Federal Reserve System; or for any
purpose other than the purposes or purposes specified hereinabove.

      7.9 Other Agreements. Enter into any agreement or undertaking containing
any provision which would be violated or breached by Borrower's performance of
its obligations under the Loan Documents.

      7.10. Sale and Leaseback. Enter into any arrangement whereby Borrower
sells or transfers all or any substantial part of its fixed assets then owned by
it and thereupon, or within one (1) year thereafter, rents or leases the assets
so sold or transferred from the purchaser or transferor (or their respective
successors in interest).

      7.11 Dividends. Declare or pay dividends on account of any class of stock
in the Borrower, or make any distribution of assets to Borrower's stockholders,
whether in cash, assets or obligations of Borrower.

      7.12 Transactions with Affiliates. Except as specifically permitted by the
terms of this Agreement, 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 the Borrower's business and upon fair and
reasonable terms no less favorable to the Borrower than would be applicable in a
comparable arm's-length transaction with a Person not an Affiliate.

      ARTICLE 8. COLLECTION AND DEPOSIT PAYMENTS.

      8.1 Cash Collateral Account. Borrower shall cause all Payments to be
deposited into the Cash Collateral Account. In furtherance of this covenant,
Borrower shall instruct all Customers to make all Payments either by electronic
funds transfer directly to the Cash Collateral Account or by check to a post
office box or other collection facility under Lender's control for deposit
into the Cash Collateral Account. If any Payments are made directly to the
Borrower or otherwise come into the Borrower's possession, the Borrower shall
not commingle any such Payment with the Borrower's other funds or property, but
shall hold the Payment


                                       40
<PAGE>

separate and apart in trust for the Lender and shall promptly deliver the
Payment to the Lender (appropriately endorsed, if the Payment is in the form of
a check) for deposit into the Cash Collateral Account. Interest (if any) earned
on sums on deposit in the Cash Collateral Account shall be added to the Cash
Collateral Account. The Borrower hereby appoints the Lender and any officer,
employee or agent of the Lender as the Lender may from time to time designate as
attorneys-in-fact for the Borrower to endorse and sign the name of the Borrower
on all checks, drafts, money orders or other Items delivered to the Lender for
deposit into the Cash Collateral Account. The Cash Collateral Account shall
constitute part of the Collateral, and funds on deposit in the Cash Collateral
Account shall be disbursed to the Borrower only by a disbursement to the
Operating Account as provided hereafter in this Agreement.

      8.2 Release of Funds from Cash Collateral Account. If no Event of Default
has occurred and remains uncured, and there exists no event, occurrence or
circumstance that, with the giving of notice or the passage of time or both,
would constitute an Event of Default, funds on deposit in the Cash Collateral
Account shall be withdrawn by the Lender on the Business Day next following the
day on which the Lender considers such funds to be collected funds, and shall be
applied as follows: (1) first, to unpaid late charges under the Revolving Note;
(2) second, to reimburse any amounts advanced by the Lender to cure defaults
under this Agreement; (3) third, to any unpaid fees due and payable under the
Agreement; (4) fourth, to accrued interest due and payable under the Revolving
Note; (5) fifth, to unpaid principal indebtedness under the Revolving Note; and
(6) sixth, the balance, if any, to the Borrower's Operating Account. Borrower
retains sole responsibility for assuring that Borrower's Operating Account
contains sufficient funds to pay any Items that may be presented for payment
from the Operating Account.

      ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.

      9.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:

            A.          Borrower shall fail to pay, when due, any sum payable
                  under the Revolving Note, and such failure shall continue for
                  five (5) Business Days after Lender has sent Borrower written
                  notice of the nonpayment; or

            B.          any representation or warranty made by or on behalf of
                  Borrower herein or in any of the other Loan Documents which,
                  in the Lender's judgment, shall prove to have been materially
                  incorrect or misleading or breached in any respect on or as of
                  any date as of which made; or

            C.          a decree or order for relief of Borrower shall be
                  entered by a court of competent jurisdiction in any
                  involuntary case involving Borrower under any bankruptcy,

                                              41
<PAGE>
                  insolvency or similar law now or hereafter in effect, or a
                  receiver, liquidator or other similar agent for Borrower or
                  for any substantial part of Borrower's assets or property
                  shall be appointed, or the winding up or liquidation of
                  Borrower's affairs shall be ordered, or any action by any
                  creditor (other than the Lender) of Borrower preparatory to or
                  for the purpose of commencing any such involuntary case,
                  appointment, winding up or liquidation shall be taken, and
                  such proceeding shall not have been dismissed within thirty
                  (30) days after the date it commenced; or

            D.          Borrower shall commence a voluntary case under any
                  bankruptcy, insolvency or similar law now or hereafter in
                  effect, or Borrower shall consent to the entry of an order for
                  relief in an involuntary case under any such law or to the
                  appointment of or taking possession by a receiver, liquidator
                  or other similar agent for Borrower or for any substantial
                  part of Borrower's assets or property, or Borrower shall make
                  any general assignment for the benefit of creditors, or
                  Borrower shall take any action preparatory to or otherwise in
                  furtherance of any of the foregoing, or Borrower shall fail
                  generally to pay its debts as such debts come due; or

            E.          there shall be a default or event of default under any
                  indebtedness or obligation of Borrower to any third party in
                  excess of Two Hundred and Fifty Thousand Dollars ($250,000.00)
                  that causes that third party to declare such indebtedness or
                  other obligation due prior to its scheduled date of maturity;
                  or

            F.          one or more judgments or decrees in an aggregate amount
                  of more than Five Hundred Thousand Dollars ($500,000.00) at
                  any time shall be entered against Borrower (not paid or fully
                  covered by insurance) and all such judgments or decrees have
                  not been vacated, discharged, stayed or bonded pending appeal
                  within thirty (30) days from the entry thereof, or any
                  attachment or garnishment shall be issued against Borrower or
                  Borrower's property; or

            G.          any material change in the business, operations,
                  property, assets or condition (financial or otherwise) of


                                       42
<PAGE>

                  Borrower shall occur which adversely affects the ability of
                  Borrower to meet and carry out its obligations under this
                  Agreement or any of the other Loan Documents or to perform the
                  transactions contemplated herein or thereby, the materiality
                  of such change to be determined by the Lender in good faith;
                  or

            H.           any investigative proceeding, audit or other action
                  shall be initiated by or on behalf of any Customer, which is
                  based upon a claim or contest with respect to any Government
                  Contract or Government Account that, if adversely determined
                  to the Borrower, would have a material adverse effect on the
                  Borrower's financial condition, as determined by the Lender in
                  its sole discretion; or

            I.          the issuance to the Borrower of any cure notice,
                  show-cause notice, or notice of whole or partial termination,
                  for default or alleged default, under any material contract
                  which is either a Government Contract or is a subcontract (at
                  any tier) which is related to a contract between a third party
                  and the Government; or

            J.          with respect to the Borrower, the occurrence of any
                  debarment or suspension from contracting or subcontracting
                  with the Government; or

            K.          any material default by Borrower occurs under the terms
                  of any Government Contract or any breach in Borrower's
                  performance obligations occurs under any Government Contract;
                  or

            L.          any Government Contract is terminated for default; or

            M.          any loss, theft, damage or destruction of any material
                  portion of the Collateral for which there is either no
                  insurance coverage or for which, in the opinion of the Lender,
                  there is insufficient insurance coverage; or

            N.          Thomas P. Dunne ceases to own not less than 20% of the
                  issued and outstanding common stock in Dunn Computer
                  Corporation, a Virginia corporation, or Dunn


                                       43
<PAGE>

                  Computer Corporation, a Virginia corporation, ceases to own
                  100% of the issued and outstanding stock in any of the
                  following: Dunn Computer Corporation, a Delaware corporation,
                  International Data Products, Corp., STMS, Inc., Puerto Rico
                  Industrial Manufacturing Operations Acquisition, Corp., Dunn
                  Computer Operating Company, or any other subsidiary now or
                  hereafter wholly owned by it;

            0.          any of the following events or conditions shall occur:
                  (1) any "accumulated funding deficiency," as such term is
                  defined in Section 302 of ERISA and Section 412 of the Code,
                  whether or not waived, shall exist with respect to any Plan,
                  or any lien shall arise on the assets of the Borrower or any
                  of its subsidiaries or any ERISA Affiliate in favor of the
                  PBGC or a Plan; (2) a Termination Event shall occur with
                  respect to a Single Employer Plan, which, in the Lender's
                  opinion, is likely to result in the termination of such Plan
                  for purposes of Title IV of ERISA; (3) a Termination Event
                  shall occur with respect to a Multiemployer Plan or Multiple
                  Employer Plan, which in the Lender's opinion, is likely to
                  result in (i) the termination of such Plan for purposes of
                  Title IV of ERISA, or (ii) the Borrower or any of its
                  subsidiaries or any ERISA Affiliate incurring any liability in
                  connection with a withdrawal from, reorganization of (within
                  the meaning of Section 4241 of ERISA), or insolvency or
                  (within the meaning of Section 4245 of ERISA) such Plan; or
                  (4) any prohibited transaction (within the meaning of Section
                  406 of ERISA or Section 4975 of the Code) or breach of
                  fiduciary responsibility shall occur which may subject the
                  Borrower or any of its subsidiaries or any ERISA Affiliate to
                  any liability under Section 406, 409, 502(i), or 502(1) of
                  ERISA or Section 4975 of the Code, or under any agreement or
                  other instrument pursuant to which the Borrower or any of its
                  subsidiaries or any ERISA Affiliate has agreed or is required
                  to indemnify any person against any such liability; or

            P.          Borrower shall fail to observe or perform any other
                  term, covenant or agreement contained in this Agreement or in
                  any other Loan Document to be observed or performed on its
                  part and such default shall continue


                                       44
<PAGE>

                                     unremedied for a period of ten (10)
                                     Business Days after written notice of the
                                     existence of such default is given by
                                     Lender.

      9.2 Rights and Remedies of the Lender. Upon the occurrence of any Event of
Default, the Lender may, at its option, exercise any one or more of the
following rights and remedies:

            A.          Declare this Agreement and the Lender's obligation to
                  make or extend any Advances on the Revolving Loan to be
                  terminated, and declare the entire unpaid principal amounts of
                  the Revolving Loan, all interest accrued and unpaid thereon,
                  and all other amounts payable under this Agreement and the
                  other Loan Documents to be accelerated, and to be immediately
                  due and payable (except that upon the occurrence of an Event
                  of Default arising out of voluntary or involuntary bankruptcy
                  proceedings in which the Borrower is the debtor, such
                  acceleration shall occur automatically and immediately without
                  any declaration or other action on the part of the Lender)
                  whereupon the Revolving Loan, all such accrued interest, and
                  all such amounts shall become and be immediately due and
                  payable, without presentment, demand, protest or further
                  notice of any kind, all of which are hereby expressly waived
                  by Borrower, anything contained herein or in any of the other
                  Loan Documents to the contrary notwithstanding;

            B.          Take possession or control of, store, lease, operate,
                  manage, sell or otherwise dispose of all or any part of the
                  Collateral in accordance with the remedies provided to secured
                  parties under the Uniform Commercial Code, this Agreement, the
                  Loan Documents or other applicable law. In taking possession
                  of the Collateral, the Lender may enter the Borrower's
                  premises and otherwise proceed without legal process, and the
                  Borrower shall on the Lender's demand, promptly assemble and
                  make the Collateral available to the Lender at a place
                  designated by the Lender. The Lender shall be entitled to
                  immediate possession of all books and records evidencing or
                  pertaining to any of the Collateral;

            C.          Notify any or all Customers to make any Payments due to
                  Borrower from such Customers directly to the

                                              45
<PAGE>

                  Lender. To facilitate direct collection, Borrower hereby
                  appoints the Lender and any officer or employee of the Lender,
                  as the Lender may from time to time designate, as
                  attorney-in-fact for Borrower to (i) receive, open and dispose
                  of all mail addressed to Borrower and take therefrom any
                  Payments on or proceeds of Accounts; (ii) take over Borrower's
                  post office boxes or make such other arrangements, in which
                  Borrower shall cooperate, to receive Borrower's mail,
                  including notifying the post office authorities to change the
                  address for delivery of mail addressed to Borrower to such
                  address as the Lender shall designate; (iii) endorse the name
                  of Borrower in favor of the Lender upon any and all checks,
                  drafts, money orders, notes, acceptances or other evidences of
                  payment or Collateral that may come into the Lender's
                  possession; (iv) sign and endorse the name of Borrower on any
                  invoice or bill of lading relating to any of the Accounts, on
                  verifications of Accounts sent to any Customer, to drafts
                  against any Customer, to assignments of Accounts, and to
                  notices to any Customer; and (v) do all acts and things
                  necessary to carry out this Agreement and the transactions
                  contemplated hereby, including signing the name of Borrower on
                  any instruments required by law in connection with the
                  transactions contemplated hereby and on financing statements
                  as permitted under the Uniform Commercial Code of any
                  appropriate state. Borrower hereby ratifies and approves all
                  acts of such attorneys-in-fact within the scope of this
                  Agreement, and neither the Lender nor any other such
                  attorney-in-fact shall be liable for any acts of commission or
                  omission, or for any error of judgment or mistake of fact or
                  law of any such attorney-in-fact, except in cases of gross
                  negligence or willful misconduct. This power, being coupled
                  with an interest and given to secure an obligation, is
                  irrevocable so long as the Revolving Loan remains unsatisfied,
                  or any Loan Document remains effective, as solely determined
                  by the Lender;

            D.          In the Lender's own name, or in the name of Borrower,
                  demand, collect, receive, sue for and give receipts and
                  releases for, any and all amounts due on Accounts, but
                  the Lender shall not, under any circumstances, be liable for
                  any error or omission or delay of any kind occurring in the
                  settlement, collection or


                                       46
<PAGE>

                  payment of any Accounts or any instrument received in payment
                  thereof or for any damage resulting therefrom;

            E.          Endorse as the agent of Borrower any chattel paper,
                  documents or instruments forming all or any part of the
                  Collateral;

            F.          Make formal application for the transfer of all of
                  Borrower's permits, licenses, approvals, agreements and the
                  like relating to the Collateral or to Borrower's business to
                  the Lender or to any assignee of the Lender or to any
                  purchaser of any of the Collateral;

            G.          Obtain appointment of a receiver for all or any of the
                  Collateral, Borrower hereby consenting to the appointment of
                  such a receiver and agreeing not to oppose any such
                  appointment. Any receiver so appointed shall have such powers
                  as may be conferred by the appointing authority including any
                  or all of the powers, rights and remedies which the Lender is
                  authorized to exercise by the Loan Documents, and shall have
                  the right to incur such obligations and to issue such
                  certificates therefor as the appointing authority shall
                  authorize;

            H.          Borrower acknowledges that any failure to comply with
                  its obligation regarding the Collateral, including (without
                  limiting the generality of the foregoing) granting of
                  Assignments and collection of the Accounts, shall cause
                  irreparable harm to the Lender for which the Lender has no
                  adequate remedy at law, and agrees that the Lender shall be
                  entitled to specific performance, an injunction or other
                  equitable relief to enforce the Borrower's obligations under
                  this Agreement; and

      Take any other action which the Lender deems necessary or desirable to
protect and realize upon its security interest in the Collateral;

      In addition to the foregoing, and not in substitution therefor, exercise
any one or more of the rights and remedies exercisable by the Lender under other
provisions of this Agreement, under any of the other Loan Documents, or provided
by applicable law (including, without limiting the generality of the foregoing,
the Uniform Commercial Code).


                                       47
<PAGE>

      9.3 Application of Proceeds. Any proceeds from the collection or sale or
other disposition of the Collateral shall be applied in the following order of
priority:

      First, to the payment of all reasonable expenses of collecting, storing,
leasing, operating, managing, selling or disposing of the Collateral, and to the
payment of all sums which the Lender may be required or may elect to pay, if
any, for taxes, assessments, insurance and other charges upon such Collateral or
any part thereof, and of all other payments which the Lender may be required or
authorized to make under any provision of this Agreement or of any other Loan
Document (including in each such case legal costs and reasonable attorneys' fees
and reasonable expenses);

      Second, to the payment of all obligations on the Revolving Loan under this
Agreement, and under the other Loan Documents, and to the payment of any other
obligations due to the Lender, in such order as the Lender may determine in its
sole discretion; and

      Third, to the payment of any surplus then remaining to Borrower, unless
otherwise provided by law or directed by a court of competent jurisdiction;
provided that Borrower shall be liable for any deficiency if the proceeds of the
Collateral are insufficient to satisfy all obligations due to the Lender.

      9.4 Collection/Enforcement Costs. Borrower shall pay all costs and
expenses incurred by Lender in connection with the enforcement of its rights
under this Agreement and the other Loan Documents, including without limitation,
legal costs and reasonable attorneys' fees (whether or not suit is instituted)
and arbitration fees and costs, and in connection with the collection of any
sums from Borrower.

      ARTICLE 10. MISCELLANEOUS PROVISIONS.

      10.1 Additional Actions and Documents. Borrower shall take or cause to be
taken such further actions, shall execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments, and shall
obtain such consents as may be necessary or as the Lender may reasonably request
in order fully to effectuate the purposes, terms and conditions of this
Agreement and the other Loan Documents, whether before, at or after the closing
of transactions contemplated hereby and thereby or the occurrence of an Event of
Default hereunder.

      10.2 Expenses. Borrower shall, whether or not the transactions
contemplated hereby are consummated, (i) reimburse the Lender and save the
Lender harmless against liability for the payment of all out-of-pocket expenses
arising in connection with the preparation, execution, delivery, enforcement of,
or the preservation or exercise of any rights (including the right to collect
and dispose of the Collateral) under this Agreement or any of the other Loan
Documents, including without limitation, the fees and expenses of an audit
by employees or agents of the Lender, of counsel to the Lender and with respect
to any arbitration fees and costs, the fees and


                                       48
<PAGE>

expenses of audits to be subject to the limitations provided above in Section
2.1 (g)(4); and (ii) pay, and hold the Lender and each subsequent holder of the
Note harmless from and against, any and all present and future stamp taxes or
similar document taxes or recording taxes and any and all charges with respect
to or resulting from any delay in paying, or failure to pay, such taxes.

      10.3 Notices. All notices, demands, requests or other communications
provided for herein or in the other Loan Documents shall be in writing and shall
be deemed to be effective one (1) day after dispatch if sent by telegram,
mailgram, Federal Express or any other commercially recognized overnight
delivery service or two (2) days after dispatch if sent by registered or
certified mail, return receipt requested and addressed as follows:

If to Borrower:

Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Attention:      John Vazanna

with a copy to:

Wallace Christner, Esquire
Trip Nesbitt, Esquire
Venable, Baetjer, Howard & Civiletti, LLP
1201 New York Avenue, N.W., Suite 1000
Washington, D.C. 20005

If to Lender:

First Union Commercial Corporation
1970 Chain Bridge Road
McLean, VA 22102
Attention:Michael J. Landini, Vice President

With copy to:
James Bruce Davis, Esquire
Bean, Kinney & Korman, P.C.
2000 N. l4th Street, Suite 100
Arlington, Virginia 22201

If the Borrower comprises more than one Person, notice to the Borrower at the
address specified above in this section for Dunn Computer Corporation, a
Virginia corporation, shall constitute notice to all such Persons, and each
Person signing below as the Borrower hereby irrevocably

                                       49
<PAGE>
appoints Dunn Computer Corporation, a Virginia corporation, as that Person's
agent to receive notices from the Lender under this Agreement or the other Loan
Documents.

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication thereafter may be so given, served or sent.
Each notice, demand, request or communication which is mailed, delivered or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent or received for all purposes at such time as it is delivered: (i)
to the United States Postal Service, in the case of a notice given by certified
mail; (ii) to Federal Express or any other commercially recognized overnight
delivery service, in accordance with the terms and procedures for such delivery

Any notices required under the Uniform Commercial Code with respect to the sale
or other disposition of the Collateral shall be deemed reasonable if mailed by
the Lender to the persons entitled thereto at their last known address at least
five (5) days prior to disposition of the Collateral and, in the case of a
private sale of Collateral, need state only that the Lender intends to negotiate
such a sale.

      10.4 Severability. If fulfillment of any provision of the Loan Documents
or performance of any transaction related thereto, at the time such fulfillment
or performance shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled or performed shall be
reduced to the limit of such validity; and if any clause or provision contained
in any Loan Document operates or would operate prospectively to invalidate any
Loan Document, in whole or in part, then such clause or provision only shall be
held ineffective, as though not herein or therein contained, and the remainder
of the Loan Documents shall remain operative and in full force and effect.

      10.5 Survival. It is the express intention and agreement of the parties
hereto that all covenants, agreements, statements, representations, warranties
and indemnities made by Borrower in the Loan Documents shall survive the
execution and delivery of the Loan Documents and the making of all Advances and
extensions of credit thereunder.

      10.6 Waivers. No waiver by the Lender of, or consent by the Lender to, a
variation from the requirements of any provision of the Loan Documents shall be
effective unless made in a written instrument duly executed on behalf of the
Lender by its duly authorized officer, and any such waiver shall be limited
solely to those rights or conditions expressly waived.

      10.7 Rights Cumulative. The rights and remedies of the Lender described in
any of the Loan Documents are cumulative and not exclusive of any other rights
or remedies which the Lender or the then holder of the Revolving Note otherwise
would have at law or in equity or otherwise. No notice to or demand on Borrower
in any case shall entitle Borrower to any other notice or demand in similar or
other circumstances.


                                       50
<PAGE>

      10.8 Entire Agreement; Modification; Benefit. This Agreement, the exhibits
hereto, and the other Loan Documents constitute the entire agreement of the
parties hereto with respect to the matters contemplated herein, supersede all
prior oral and written agreements with respect to the matters contemplated
herein, and may not be modified, deleted or amended except by written instrument
executed by the parties. All terms of this Agreement and of the other Loan
Documents shall be binding upon, and shall inure to the benefit of and be
enforceable by, the parties hereto and their respective successors and assigns;
however, Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Lender. Lender may assign its
rights and obligations hereunder in accordance with Section 10.17 hereinafter.

      10.9 Setoff In addition to any rights or remedies of the Lender provided
by law, upon the occurrence of any Event of Default hereunder, or any event or
circumstance which, with the giving or notice or the passage of time or both,
would constitute an Event of Default hereunder, the Lender is irrevocably
authorized, at any time or times without prior notice to Borrower, to set off,
appropriate and apply any and all deposits, credits, indebtedness or claims at
any time held or owing by the Lender to or for the credit or the account of
Borrower, in such amounts as the Lender may elect, against and on account of the
obligations and liabilities of Borrower to the Lender hereunder or under any of
the other Loan Documents, whether or not the Lender has made any demand for
payment, and although such obligations and liabilities may be contingent or
unmatured.

      10.10 Construction. This Agreement and the other Loan Documents, the
rights and obligations of the parties hereto, and any claims or disputes
relating thereto shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia (excluding the choice of law rules thereof)
except that security interests in Accounts shall be governed, as to each of the
Persons comprised by the Borrower who owns an Account, by the laws of the state
in which such Person, as owner of the Accounts, maintains its chief executive
office. Each party hereto hereby acknowledges that all parties hereto
participated equally in the negotiation and drafting of this Agreement and that,
accordingly, no court construing this Agreement shall construe it more
stringently against one party than against the other.

      10.11 Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the Person may require.

      10.12 Headings. Article, section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement I I 2 for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof

      10.13 Payments. If any payment or performance of any of the obligations
under this Agreement or any of the other Loan Documents becomes due on a day
other than a Business


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<PAGE>

Day, the due date shall be extended to the next succeeding Business Day, and
interest thereon (if applicable) shall be payable at the then applicable rate
during such extension.

      10.14 Execution. To facilitate execution, this Agreement and any of the
other Loan Documents may be executed in as many counterparts as may be required;
and it shall not be necessary that the signature of, or on behalf of, each
party, or the signatures of all persons required to bind any party, appear on
each counterpart; but it shall be sufficient that the signature of, or on behalf
of, each party, or the signatures of the persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement or any other Loan Document to produce or account for any particular
number of counterparts; but rather any number of counterparts shall be
sufficient so long as those counterparts contain the respective signatures of,
or on behalf of, all of the parties hereto.

      10.15 Consent to Jurisdiction. Subject to any provision of this Agreement
requiring that disputes be submitted to arbitration, the Borrower irrevocably
consents to the jurisdiction of any state or federal court sitting in the
Commonwealth of Virginia over any suit, action, or proceeding arising out of or
relating to this Agreement or the other Loan Documents. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that the Borrower
may now or hereafter have to the laying of venue of any such suit, action, or
proceeding brought in any such court, or any claim that any such suit, action,
or proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action, or proceeding brought in any
such court shall be conclusive and binding upon the Borrower.

      10.16 Service of Process. The Borrower consents to process being served in
any suit, action or proceeding by mailing a copy thereof by registered or
certified mail postage prepaid, return receipt requested, to the Borrower's
address specified in or designated in this Agreement. The Borrower agrees that
such service (i) shall be deemed in every respect effective service of process
upon the Borrower in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to the Borrower. Nothing in this Section shall affect
the right of the Lender to serve process in any manner permitted by law, or
limit any right that the Lender may have to bring proceedings against the
Borrower in the courts of any jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.

      10.17 Sale of Loan Documents; Disclosure of Information. Borrower hereby
consents to and agrees that Lender may disclose to any Person any and all
information connected with or related to the Revolving Loan or other Loan
Documents for the purpose of selling the Loan  Documents. The information
which may be disclosed by Lender includes but is not limited to all Loan
Documents, credit files and correspondence files and all other writings and oral
communications which Lender wishes to disclose, in its sole and absolute
discretion. Borrower also hereby consents to and agrees that Lender may sell any
or all of the Loan Documents


                                       52
<PAGE>

pursuant to such terms and conditions as may be acceptable to Lender in its sole
and absolute discretion, to any interested Person, and nothing in this Agreement
or the other Loan Documents shall prevent, delay or otherwise impede or effect
the right of Lender to immediately sell the Loan Documents on such terms as it
deems acceptable; however, notwithstanding the foregoing, if no Event of Default
has occurred, Lender shall provide the Borrower with not less than sixty (60)
days prior written notice of any sale of the Loan Documents if the purchaser
will be a Person other than: (i) First Union National Bank; (ii) any current or
future subsidiary of First Union National Bank; (iii) any current or future
subsidiary of the Lender; or (iv) any corporation that owns 100% of the stock in
First Union National Bank or First Union Commercial Corporation.

      10.18 WAIVER OF JURY TRIAL. BORROWER AND THE LENDER HEREBY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LITIGATION BETWEEN THE
LENDER AND BORROWER ARISING OUT OF THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED THEREBY OR WITH RESPECT TO THE CONDUCT OF THE RELATIONSHIP BETWEEN
BORROWER AND LENDER. THE PARTIES MAKE THIS WAIVER KNOWINGLY, WILLINGLY AND
VOLUNTARILY FOR THE PURPOSE OF EXPEDITING THE RESOLUTION OF ANY DISPUTES THAT
MAY ARISE BETWEEN THEM AND REDUCING THE COST OF RESOLVING SUCH DISPUTES. THE
PARTIES WARRANT AND REPRESENT TO EACH OTHER THAT EACH OF THEM HAS BEEN ADVISED
BY INDEPENDENT LEGAL COUNSEL OF THE CONSEQUENCES OF THIS WAIVER PRIOR TO SIGNING
THIS AGREEMENT.

      10.19 ARBITRATION. UPON DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE OR
AFTER INSTITUTION OF ANY JUDICIAL PROCEEDING, ANY CONTROVERSY OR CLAIM ARISING
OUT OF OR RELATING TO THE LOAN DOCUMENTS BETWEEN PARTIES HERETO (A "DISPUTE")
SHALL BE RESOLVED BY BINDING ARBITRATION CONDUCTED UNDER AND GOVERNED BY THE
COMMERCIAL FINANCIAL DISPUTES ARBITRATION RULES (THE "ARBITRATION RULES") OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA") AND THE FEDERAL ARBITRATION ACT.
DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS, COUNTERCLAIMS, A DISPUTE
AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, CLAIMS BROUGHT AS CLASS
ACTIONS, OR CLAIMS ARISING FROM DOCUMENTS EXECUTED IN THE FUTURE. A JUDGMENT
UPON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. NOTWITHSTANDING
THE FOREGOING, THIS ARBITRATION PROVISION DOES NOT APPLY TO DISPUTES UNDER
OR RELATED TO SWAP AGREEMENTS. ALL ARBITRATION HEARINGS SHALL BE CONDUCTED IN
THE CITY OR COUNTY WHERE THE LENDER'S OFFICE, AS FIRST STATED ABOVE, IS LOCATED,
OR AT SUCH OTHER PLACE AS THE PARTIES MAY IN WRITING AGREE. A HEARING SHALL
BEGIN WITHIN 90 DAYS OF DEMAND FOR ARBITRATION AND ALL HEARINGS SHALL CONCLUDE
WITHIN 120 DAYS OF DEMAND FOR ARBITRATION.


                                       53
<PAGE>

THESE TIME LIMITS MAY NOT BE EXTENDED UNLESS A PARTY SHOWS CAUSE FOR EXTENSION
AND THEN FOR NO MORE THAN A TOTAL OF 60 DAYS. THE EXPEDITED PROCEDURES SET FORTH
IN RULE 51, ET SEQ., OF THE ARBITRATION RULES SHALL APPLY TO DISPUTES IN WHICH
THE CLAIM IS LESS THAN $1,000,000.00. ARBITRATORS SHALL BE LICENSED ATTORNEYS
SELECTED FROM THE COMMERCIAL FINANCIAL DISPUTE ARBITRATION PANEL OF THE AAA. THE
PARTIES DO NOT WAIVE APPLICABLE FEDERAL OR STATE SUBSTANTIVE LAW EXCEPT AS
PROVIDED HEREIN. NOTWITHSTANDING THE PRECEDING BINDING ARBITRATION PROVISIONS,
THE PARTIES AGREE TO PRESERVE WITHOUT DIMINUTION, CERTAIN REMEDIES THAT ANY
PARTY MAY EXERCISE BEFORE OR AFTER AN ARBITRATION PROCEEDING IS BROUGHT. THE
PARTIES SHALL HAVE THE RIGHT TO PROCEED IN ANY COURT OF PROPER JURISDICTION OR
BY SELF HELP TO EXERCISE OR PROSECUTE THE FOLLOWING REMEDIES, AS APPLICABLE: (1)
ALL RIGHTS TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY OR OTHER SECURITY
BY EXERCISING A POWER OF SALE OR UNDER APPLICABLE LAW BY JUDICIAL FORECLOSURE
INCLUDING A PROCEEDING TO CONFIRM THE SALE; (2) ALL RIGHTS OF SELF HELP,
INCLUDING WITHOUT LIMITATION, PEACEFUL OCCUPATION OF REAL PROPERTY AND
COLLECTION OF RENTS, SETOFF, AND PEACEFUL POSSESSION OF PERSONAL PROPERTY; (3)
OBTAINING PROVISIONAL OR ANCILLARY REMEDIES INCLUDING INJUNCTIVE RELIEF,
SEQUESTRATION, GARNISHMENT, ATTACHMENT, APPOINTMENT OF RECEIVER AND FILING AN
INVOLUNTARY BANKRUPTCY PROCEEDING. ANY CLAIM OR CONTROVERSY WITH REGARD TO ANY
PARTY'S ENTITLEMENT TO SUCH REMEDIES IS A DISPUTE. THE PARTIES AGREE THAT THEY
SHALL NOT HAVE A REMEDY OF PUNITIVE OR EXEMPLARY DAMAGES AGAINST OTHER PARTIES
IN ANY DISPUTE, AND THEY HEREBY WAIVE ANY RIGHT OR CLAIM TO PUNITIVE OR
EXEMPLARY DAMAGES THEY MAY NOW HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY DISPUTE WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION OR
JUDICIALLY.

      IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or
have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove set forth.

                                    DUNN COMPUTER CORPORATION, a Virginia
                                    corporation


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                        Thomas P. Dunne
                                        President


                                       54
<PAGE>

                                    DUNN COMPUTER CORPORATION, a Delaware
                                    corporation


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                        President

                                    INTERNATIONAL DATA PRODUCTS, CORP.


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                        President

                                    STMS, INC.


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                        Thomas P. Dunne
                                        President

                                    PUERTO RICO INDUSTRIAL MANUFACTURING
                                    OPERATIONS ACQUISITION, CORP.


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                        Thomas P. Dunne
                                        President

                                    DUNN COMPUTER OPERATING COMPANY


                                    By: /s/ Thomas P. Dunne
                                        ------------------------
                                       Thomas P. Dunne
                                       President

                                    FIRST UNION COMMERCIAL CORPORATION


                                    By: /s/ Michael J. Landini
                                        ------------------------
                                        Michael J. Landini
                                        Vice President

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