a5595833-ex102.htm


     

    Exhibit
      10.2

     

    
      


      SECURITY
        AGREEMENT

      


      THIS
        SECURITY AGREEMENT (this
“Agreement”),
        dated as of January 25, 2008, among MAXIMUS, INC., a Virginia
        corporation (the “Borrower”) and each
        subsidiary of the Borrower hereafter a party hereto (Borrower and each
        Subsidiary hereafter becoming a party hereto shall be collectively known
        as the
“Grantors”, and
        individually as a “Grantor”), in favor
        of SUNTRUST BANK, a
        Georgia banking corporation, as the Administrative Agent (the “Administrative
        Agent”), on its behalf and on behalf of the other banks and lending
        institutions (the “Lenders”) from
        time
        to time party to the Revolving Credit Agreement, dated as of the date hereof,
        by
        and among the Borrower, the Lenders, the Administrative Agent, and SunTrust
        Bank, as Swingline Lender and Issuing Bank (as amended, restated, supplemented,
        or otherwise modified from time to time, the “Credit
        Agreement”).

       

      W
        I T N E S S E T
        H:

      


      WHEREAS,
        pursuant to the
        Credit Agreement, the Lenders have agreed to establish a revolving credit
        facility on behalf of the Borrower; and

       

      WHEREAS,
        it is a condition
        precedent to the obligations of the Administrative Agent, the Issuing Bank,
        the
        Swingline Lender, and the Lenders under the Credit Agreement that the Grantors
        enter into this Agreement to secure all obligations of the Borrower under
        the
        Credit Agreement, secure the obligations of each Subsidiary of the Borrower
        under the Subsidiary Guaranty Agreement and all other Loan Documents to which
        each Grantor is a party, and to secure all Hedging Obligations owed to the
        Administrative Agent, any Lender or any of their affiliates to the extent
        expressly permitted by the Credit Agreement, and the Grantors desire to satisfy
        such condition precedent.

       

      NOW,
        THEREFORE, in
        consideration of the premises and mutual covenants herein contained and for
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, the parties hereto agree as follows:

       

      Section
        1.01 Definitions.  Capitalized
        terms defined in the Credit Agreement and not otherwise defined herein, when
        used in this Agreement shall have the respective meanings provided for in
        the
        Credit Agreement.  The following additional terms, when used in this
        Agreement, shall have the following meanings:

       

      “Account
        Debtor” shall
        mean any person or entity that is obligated under an Account.

       

      “Accounts”
shall
        mean
        all “accounts” (as defined in the UCC) now owned or hereafter acquired by any
        Grantor or in which any Grantor has or acquires any rights.

       

      “Chattel
        Paper” shall
        mean all “chattel paper” (as defined in the UCC) owned or acquired by any
        Grantor or in which any Grantor has or acquires any rights.

       

      "Collateral"
        shall
        mean, collectively, all of the following:

       

      
         

        
          
            	 	
                    (i)

                  	
                    all
                      Accounts;

                  


          

           

          
            
               

            

            
               

              
                

              

            

            
               

            

          

           

          
            	 	 	 
	 	
                    (ii)

                  	
                    all
                      Chattel Paper;

                  
	 	 	 
	 	
                    (iii)

                  	
                    all
                      Deposit Accounts;

                  
	 	 	 
	 	
                    (iv)

                  	
                    all
                      Documents;

                  
	 	 	 
	 	
                    (v)

                  	
                    all
                      Equipment;

                  
	 	 	 
	 	
                    (vi)

                  	
                    all
                      Intellectual Property;

                  
	 	 	 
	 	
                    (vii)

                  	
                    all
                      General Intangibles;

                  
	 	 	 
	 	
                    (viii)

                  	
                    all
                      Instruments;

                  
	 	 	 
	 	
                    (ix)

                  	
                    all
                      Inventory;

                  
	 	 	 
	 	
                    (x)

                  	
                    all
                      Investment Property;

                  
	 	 	 
	 	
                    (xi)

                  	
                    all
                      Software;

                  
	 	 	 
	 	
                    (xii)

                  	
                    all
                      money, cash or cash equivalents;

                  
	 	 	 
	 	
                    (xiii)

                  	
                    all
                      other Goods and personal property, whether tangible or
                      intangible;

                  
	 	 	 
	 	
                    (xiv)

                  	
                    all
                      Supporting Obligations and Letter-of-Credit Rights of any
                      Grantor;

                  
	 	 	 
	 	
                    (xv)

                  	
                    all
                      books and records pertaining to any of the Collateral (including,
                      without
                      limitation, credit files, computer programs, printouts and
                      other computer
                      materials and records but excluding customer lists);

                  
	 	 	 
	 	
                    (xvi)

                  	
                    the
                      Pledged Notes and the instruments and other documents representing
                      the
                      Pledged Notes; and

                  
	 	 	 
	 	
                    (xvii)

                  	
                    to
                      the extent not otherwise included, all other property of any
                      Grantor and
                      all products and Proceeds of all or any of the Collateral described
                      in
                      clauses (i) through (xvi) hereof;

                  
	 	 	 
	 	
                    provided,
                      that Collateral shall not include any Excluded
                      Property.

                  


          

           

        

      

      “Copyright
        License”
shall mean any and all rights of any Grantor under any written agreement
        granting any right to use any Copyright or Copyright registration.

       

      “Copyrights”
shall
        mean all of the following now owned or hereafter acquired by any Grantor
        or in
        which any Grantor now has or hereafter acquires any rights: (a) all copyrights
        and general intangibles of like nature (whether registered or unregistered),
        all
        registrations and recordings thereof, and all applications in connection
        therewith, including all registrations, recordings and applications in the
        United States Copyright Office or in any similar office or agency of the
        United
        States, any state or territory thereof, or any other country or any political
        subdivision thereof, and (b) all reissues, extensions or renewals
        thereof.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      “Deposit
        Accounts”
shall mean all “deposit accounts” (as defined in Article 9 the UCC) now owned or
        hereafter acquired by any Grantor or in which any Grantor has or acquires
        any
        rights, or other receipts, of any Grantor covering, evidencing or representing
        rights or interest in such deposit accounts.

       

      “Documents”
shall
        mean
        all “documents” (as defined in the UCC) now owned or hereafter acquired by any
        Grantor or in which any Grantor has or acquires any rights, or other receipts,
        of any Grantor covering, evidencing or representing Goods.

       

      “Equipment”
shall
        mean
        all “equipment” (as defined in the UCC) now owned or hereafter acquired by any
        Grantor and wherever located.

       

      "Excluded
        Property"
        shall mean (i) any lease, license, contract, Equipment, General Intangible,
        Copyright License, Trademark License, Patent License, property right or
        agreement to which any Grantor is a party or any of its rights or interests
        thereunder if and only for so long as the grant of a security interest hereunder
        shall constitute or result in a material breach or default under any such
        lease,
        license, contract, Equipment, General Intangible, Copyright License, Trademark
        License, Patent License, property right or agreement  or would give
        rise to a right to terminate any such Equipment, General Intangible, Copyright
        License, Trademark License, Patent License (other than to the extent that
        any
        such term would be rendered ineffective pursuant to Sections 9-406, 9-407,
        9-408
        or 9-409 of the UCC of any relevant jurisdiction or any other applicable
        law or
        principles of equity); provided, however, that such security interest shall
        attach immediately to any portion of such lease, license, contract, Equipment,
        General Intangible, Copyright License, Trademark License, Patent License,
        property rights or agreement that does not result in any of the consequences
        specified above, (ii) any rights or property to the extent that any valid
        enforceable law or regulation applicable to such rights or property prohibits
        the creation of a security interest therein, (iii) any Capital Stock not
        constituting Collateral as a result of Section 3(b), and (iv) any Capital
        Stock
        not constituting Collateral as a result of Section 3(c).

       

      “Event
        of Default”
shall have the meaning set forth for such term in Section 7 hereof.

       

      “General
        Intangibles”
shall mean all “general intangibles” (as defined in the UCC) now owned or
        hereafter acquired by any Grantor or in which any Grantor has or acquires
        any
        rights and, in any event, shall include all right, title and interest in
        or
        under all contracts, all customer lists, Licenses, Copyrights, Trademarks,
        Patents, and all applications therefor and reissues, extensions or renewals
        thereof, rights in Intellectual Property, interests in partnerships, joint
        ventures and other business associations, licenses, permits, copyrights,
        trade
        secrets, proprietary or confidential information, inventions (whether or
        not
        patented or patentable), technical information, procedures, designs, knowledge,
        know-how, software, data bases, data, skill, expertise, experience, processes,
        models, drawings, materials and records, goodwill (including the goodwill
        associated with any Trademark or Trademark License), all rights and claims
        in or
        under insurance policies (including insurance for fire, damage, loss and
        casualty, whether covering personal property, real property, tangible rights
        or
        intangible rights, all liability, life, key man and business interruption
        insurance, and all unearned premiums), uncertificated securities, choses
        in
        action, deposit, checking and other bank accounts, rights to receive tax
        refunds
        and other payments, rights of indemnification, all books and records,
        correspondence, credit files, invoices, tapes, cards, computer runs, domain
        names, prospect lists, customer lists and other papers and
        documents.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      "Goods"
        shall mean all
        "goods" (as defined in the UCC) now owned or hereafter acquired by any Grantor
        or in which any Grantor has or acquires any rights.

       

      “Instruments”
shall
        mean all “instruments” (as defined in the UCC) now owned or hereafter acquired
        by any Grantor or in which any Grantor has or acquires any rights.

       

      “Intellectual
        Property” shall mean all of the following now owned or hereafter acquired
        by any Grantor or in which any Grantor has or acquires any rights: (a) all
        Patents, patent rights and patent applications, Copyrights and copyright
        applications, Trademarks, trademark rights, trade names, trade name rights,
        service marks, service mark rights, applications for registration of trademarks,
        trade names and service marks, fictitious names registrations and trademark,
        trade name and service mark registrations, and all derivations thereof; and
        (b)
        Patent Licenses, Trademark Licenses, Copyright Licenses and other licenses
        to
        use any of the items described in the preceding clause (a).

       

      “Inventory”
shall
        mean
        all “inventory” (as defined in the UCC) now owned or hereafter acquired by any
        Grantor or in which any Grantor has or acquires any rights.

       

      “Investment
        Property”
shall mean all “investment property” (as defined in the UCC) now owned or
        hereafter acquired by any Grantor or in which any Grantor has or acquires
        any
        rights and, in any event, shall include all “certificated securities”,
“uncertificated securities”, “security entitlements”, “securities accounts”,
“commodity contracts” and “commodity accounts” (as all such terms are defined in
        the UCC) of each Grantor.

       

      “Letter-of-Credit
        Rights” shall mean “letter-of-credit rights” (as defined in the UCC), now
        owned or hereafter acquired by any Grantor.

       

      “License”
shall
        mean
        any Copyright License, Patent License, Trademark License or other license
        of
        rights or interests of each Grantor in Intellectual Property.

       

      “Patent
        License” shall
        mean any written agreement now owned or hereafter acquired by any Grantor
        or in
        which any Grantor has or acquires any rights granting any right with respect
        to
        any property, process or other invention on which a Patent is in
        existence.

       

      “Patents”
shall
        mean
        all of the following now owned or hereafter acquired by any Grantor or in
        which
        any Grantor has or acquires any rights: (a) all letters patent of the United
        States or any other country, all registrations and recordings thereof, and
        all
        applications for letters patent of the United States or any other country,
        including registrations, recordings and applications in the United States
        Patent
        and Trademark Office or in any similar office or agency of the United States,
        any State or Territory thereof, or any other country; and (b) all reissues,
        continuations, continuations-in-part and extensions thereof.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Pledged
        Notes” means
        the promissory notes, endorsed by the applicable Grantor, and instruments
        described on Schedule IV attached hereto other than Excluded
        Property.

      


      “Proceeds”
shall
        mean
        all “proceeds” (as defined in Section 9-102(a)(64) of the UCC).

       

      “Secured
        Obligations”
shall mean (i) with respect to the Borrower, all Obligations of the
        Borrower,
        (ii) with respect to any Grantor, all Guaranteed Obligations (as such term
        is
        defined in the Subsidiary Guaranty) of each such Grantor under the Subsidiary
        Guaranty Agreement.

       

      “Secured
        Parties”
shall mean the Administrative Agent, the Lenders, the Specified Hedge Providers and the
        Specified Treasury
        Management Providers.

       

       “Security
        Interests”
shall mean the security interests granted to the Administrative Agent
        on its
        behalf and on behalf of the Secured Parties pursuant to Section 3, as well
        as
        all other security interests created or assigned as additional security for
        the
        Secured Obligations pursuant to the provisions of this Agreement.

       

      “Significant
        Intellectual
        Property” means Intellectual Property that is material to the business
        operations of the Grantors, taken as a whole.

       

      “Software”
shall
        mean
        all “software” (as defined in the UCC), now owned or hereafter acquired by any
        Grantor.

       

      “Specified
        Hedge
        Provider” means each party to a Hedging Transaction incurred to limit
        interest rate or fee fluctuation with respect to the Loans and Letters of
        Credit
        if at the date of entering into such Hedging Transaction such person was
        a
        Lender or an Affiliate of a Lender and such person executes and delivers
        to the
        Administrative Agent a letter agreement in form and substance acceptable
        to the
        Administrative Agent pursuant to which such person (i) appoints the
        Administrative Agent as its agent under the applicable Loan Documents and
        (ii)
        agrees to be bound by the provisions of Article 9 and 10 of the Credit
        Agreement.

       

      “Specified
        Treasury
        Management Provider” means each Lender or an Affiliate of a Lender that
        offers products of the type described in the definition of “Treasury Management
        Obligations” contained in the Credit Agreement and such person executes and
        delivers to the Administrative Agent a letter agreement in form and substance
        acceptable to the Administrative Agent pursuant to which such person (i)
        appoints the Administrative Agent as its agent under the applicable Loan
        Documents and (ii) agrees to be bound by the provisions of Article 9 and
        10 of
        the Credit Agreement.

       

      "Supporting
        Obligations" means all “supporting obligations” (as defined in the
        UCC).

       

      "Termination
        Time"
        means the time that all Secured Obligations (other than (i) Obligations related
        to Hedging Obligations except to the extent due on or prior to the Termination
        Time, (ii) Obligations related to Treasury Management Services except to
        the
        extent due on or prior to the Termination Time and (iii) Unasserted Contingent
        Obligations) have been paid in full in cash, all Commitments have been
        terminated or otherwise reduced to zero and all LC Exposure has either been
        cash
        collateralized or back stopped by one or more letters of credit in form
        acceptable to the Issuing Lender and in an amount equal to 103% of such LC
        Exposure.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Trademark
        License”
shall mean any written agreement now owned or hereafter acquired by
        any Grantor
        or in which any Grantor has or acquires any such rights granting to any Grantor
        any right to use any Trademark.

       

      “Trademarks”
shall
        mean all of the following now owned or hereafter acquired by any Grantor
        or in
        which any Grantor has or acquires any such rights: (i) all trademarks, trade
        names, corporate names, company names, business names, fictitious business
        names, trade styles, service marks, logos, other source or business identifiers,
        prints and labels on which any of the foregoing have appeared or appear,
        designs
        and general intangibles of like nature (whether registered or unregistered),
        now
        owned or existing or hereafter adopted or acquired, all registrations and
        recordings thereof, and all applications in connection therewith, including,
        without limitation, registrations, recordings and applications in the United
        States Patent and Trademark Office or in any similar office or agency of
        the
        United States, any State thereof or any other country or any political
        subdivision thereof, (ii) all reissues, extensions or renewals thereof and
        (iii)
        all goodwill associated with or symbolized by any of the foregoing.

       

      “UCC”
shall
        mean the
        Uniform Commercial Code as in effect, from time to time, in the State of
        New
        York; provided
        that if by reason of mandatory provisions of law, the perfection or the effect
        of perfection or non-perfection of the Security Interests in any Collateral
        is
        governed by the Uniform Commercial Code as in effect in a jurisdiction other
        than New York, “UCC” shall mean the Uniform Commercial Code as in effect in such
        other jurisdiction for purposes of the provisions hereof relating to such
        perfection or effect of perfection or non-perfection.

       

      “Unasserted
        Contingent
        Obligations” mean, at any time, Secured Obligations for taxes, costs,
        indemnifications, reimbursements, damages and other liabilities and contingent
        payments in respect of Treasury Management Obligations or obligations described
        in clause (d) of the definition of "Obligations" in the Credit Agreement
        (excluding contingent reimbursement obligations in respect of amounts that
        may
        be drawn under outstanding letters of credit or contingent payments that
        may be
        payable upon termination of a Hedging Agreement), in each case, in respect
        of
        which no assertion of liability (whether oral or written) and no claim or
        demand
        for payment (whether oral or written) has been made (and, in the case of
        Secured
        Obligations for indemnification, no notice for indemnification has been issued
        by the indemnitee) at such time.

       

      “United
        States” or
“U.S.”
shall
        mean the United States of America, any of the fifty states thereof, and the
        District of Columbia.

       

      SECTION
        2. Representations
        and Warranties.  Each Grantor
        represents and warrants to the Administrative Agent, for the benefit of Secured
        Parties, as follows:

       

      (a) Such
        Grantor has rights in and the power to transfer each item of the Collateral
        upon
        which it purports to grant a Lien hereunder and has good and marketable title
        to
        all of its Collateral, free and clear of any Liens other than Liens expressly
        permitted under Section 7.2 of the Credit Agreement.

       

      (b) Other
        than
        financing statements, security agreements, or other similar or equivalent
        documents or instruments with respect to Liens expressly permitted under
        Section
        7.2 of the Credit Agreement, no financing statement, mortgage, security
        agreement or similar or equivalent document or instrument evidencing a Lien
        on
        all or any part of the Collateral is on file or of record in any
        jurisdiction.  None of the Collateral is in the possession of a Person
        (other than any Grantor) asserting any claim thereto or security interest
        therein (except Liens permitted by Section 7.2 of the Credit Agreement),
        except
        that the Administrative Agent or its designee may have possession of Collateral
        as contemplated hereby.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (c) When
        the
        UCC financing statements in appropriate form are filed in the offices specified
        on Schedule I
        attached hereto, the Security Interests shall constitute valid and perfected
        security interests in the Collateral, prior to all other Liens and rights
        of
        others therein except for the Liens expressly permitted under Section 7.2
        of the
        Credit Agreement, to the extent that a security interest therein may be
        perfected by filing pursuant to the UCC, assuming the proper filing and indexing
        thereof.

       

      (d) All
        Collateral is insured in accordance with the requirements of Section 5.8
        of the
        Credit Agreement.

       

      (e) None
        of
        the Collateral constitutes, or is the Proceeds of, “farm products” (as defined
        in the UCC).

       

      (f) As
        of the
        Closing Date, Schedule
        II correctly sets forth each Grantor’s state of organization, taxpayer
        identification number, organizational identification number and correct legal
        name indicated on the public record of such Grantor’s jurisdiction of
        organization which shows such Grantor to be organized.

       

      (g) As
        of the
        Closing Date, the Perfection Certificate, which is attached hereto as Schedule III,
        correctly sets forth (i) all names and tradenames that each Grantor has
        used within the last five (5) years and the names of all Persons that have
        merged into or been acquired by each Grantor, (ii) the chief executive
        offices of each Grantor over the last five (5) years, (iii) all other
        locations in which tangible assets of each Grantor are located, (iv) the
        name of each bank at which each Grantor maintains Deposit Accounts, the state
        or
        other jurisdiction of location of each such bank, and the account numbers
        for
        each Deposit Account, (v) all letters of credit with a stated amount of in
        excess of $1,000,000 under which each Grantor is a beneficiary, (vi) all
        third parties with possession of any Inventory or Equipment with a fair market
        value in excess of $500,000 of each Grantor and (vii) each Grantor’s
        mailing address.

       

      (h) With
        respect to the Accounts of the Grantors:  (i) there has been no
        development or event in respect of the validity or enforcement of any Account
        or
        Accounts or the amount payable thereunder as shown on the applicable Grantor’s
        books and records and all invoices and statements delivered to the
        Administrative Agent with respect thereto, which individually or in the
        aggregate has had or could be reasonably expected to have a Material Adverse
        Effect and (ii) the right to receive payment under each Account is assignable
        except where the Account Debtor with respect to such Account is the United
        States government or any State government or any agency, department or
        instrumentality thereof, to the extent the assignment of any such right to
        payment is prohibited or limited by applicable law, regulations, administrative
        guidelines or contract, which individually or in the aggregate has had or
        could
        be reasonably expected to have a Material Adverse Effect.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (i) With
        respect to any Inventory, the representations and warranties of each Grantor
        set
        forth in its respective Perfection Certificate are true and correct in all
        material respects, as of the Closing Date.

       

      (j) As
        of the
        Closing Date, such Grantor does not have any interest in, or title to, any
        registered Patent, Trademark or Copyright that constitutes Significant
        Intellectual Property except as set forth in the Perfection
        Certificate.  This Agreement is effective to create a valid and
        continuing Lien on and, upon filing of the Copyright Security Agreements
        (as
        hereinafter defined) with the United States Copyright Office and filing of
        the
        Patent Security Agreements (as hereinafter defined) and the Trademark Security
        Agreements (as hereinafter defined) with the United States Patent and Trademark
        Office, perfected security interests in favor of the Administrative Agent
        in
        such Grantor’s Patents, Trademarks and Copyrights that are registered in the
        United States and such perfected security interests are enforceable as such
        as
        against any and all creditors of and purchasers from such
        Grantor.  Upon filing of the Copyright Security Agreements with the
        United States Copyright Office and filing of the Patent Security Agreements
        and
        the Trademark Security Agreements with the United States Patent and Trademark
        Office and the filing of appropriate financing statements listed on Schedule
        I
        hereto, all action necessary or desirable to protect and perfect the
        Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights
        shall have been duly taken.  Notwithstanding anything to the contrary
        contained in this Agreement, the Administrative Agent shall only require
        perfection of its security interests in, or other registration with respect
        to,
        any Patent, Trademark or Copyright registered, or eligible to be registered,
        with a country other than the United States or any political subdivision
        thereof, to the extent that (i) such Patent, Trademark or Copyright constitutes
        Significant Intellectual Property and (ii) the Administrative Agent determines,
        in its sole discretion, that such Patent, Trademark or Copyright, and the
        registration thereof in such other country or political subdivision thereof,
        is
        material to the applicable Grantor’s business, taken as a whole.

       

      (k) Each
        of
        the Pledged Notes purported to be pledged hereunder is the legal, valid and
        binding obligation of the obligor thereof, enforceable in accordance with
        its
        terms; each of the Pledged Notes has been duly authorized, authenticated
        or
        issued and delivered by the issuer thereof, and no such issuer is in default
        thereunder[]. Except as disclosed on Schedule IV hereto,
        none of the Pledged Notes are subordinated in right of payment to other
        indebtedness (except for the Secured Obligations) or subject to the terms
        of an
        indenture.

       

      SECTION
        3. The
        Security Interests.

       

      (a) In
        order
        to secure the full and punctual payment and performance of the Secured
        Obligations in accordance with the terms of the Credit Agreement, each Grantor
        hereby pledges, assigns, hypothecates, sets over and conveys to the
        Administrative Agent on its behalf and on behalf of the Secured Parties and
        grants to the Administrative Agent on its behalf and on behalf of the Secured
        Parties a continuing security interest in and to, all of its rights in and
        to
        all Collateral now or hereafter owned or acquired by such Grantor or in which
        such Grantor now has or hereafter has or acquires any rights, and wherever
        located.  The Security Interests are granted as security only and
        shall not subject the Administrative Agent or any Secured Party to, or transfer
        to the Administrative Agent or any Secured Party, or in any way affect or
        modify, any obligation or liability of the Grantor with respect to any
        Collateral or any transaction in connection therewith.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)           
        Notwithstanding anything herein to the contrary, the Collateral shall exclude
        an
        interest in more than sixty-five percent (65%) of the Capital Stock of any
        Foreign Subsidiary.

       

      (c)           
        Notwithstanding anything herein to the contrary, the Collateral shall not
        include any Capital Stock owned by any Grantor to the extent such Capital
        Stock
        is validly pledged by such Grantor pursuant to the terms of the Pledge
        Agreement.

       

      (d)           
        Notwithstanding anything herein to the contrary, this Agreement shall not
        operate as a sale, transfer, conveyance or other assignment to Administrative
        Agent of any applications by any Grantor to register Trademarks under section
        1(b) of the Lanham Act, unless and until an amendment to allege use is filed
        pursuant to section 1(c) of the Lanham Act or a verified statement of use
        is
        filed pursuant to section 1(d) of the Lanham Act, but rather, until such
        time as
        an amendment to allege use or a verified statement of use is filed, this
        Agreement shall operate only to create a security interest for collateral
        purposes in favor of Administrative Agent on such Trademark application as
        Collateral for the Obligations.

       

      SECTION
        4. Further
        Assurances;
        Covenants.

       

      (a) General.

       

      (i) No
        Grantor
        shall change the location of its chief executive office or principal place
        of
        business unless it shall have given the Administrative Agent fifteen (15)
        days’
prior notice thereof, as well as executed and delivered to the Administrative
        Agent all financing statements and financing statement amendments which the
        Administrative Agent may request in connection therewith.

       

      (ii) No
        Grantor
        shall change its name, organizational identification number, identity or
        jurisdiction or form of organization in any manner unless it shall have given
        the Administrative Agent thirty (30) days’ prior written notice thereof, and
        executed and delivered to the Administrative Agent all financing statements
        and
        financing statement amendments which the Administrative Agent may reasonably
        request in connection therewith.  No Grantor shall merge or
        consolidate into, or transfer any of the Collateral to, any other Person
        other
        than another Grantor, other than as permitted by the Credit
        Agreement.

       

      (iii) Each
        Grantor hereby authorizes the Administrative Agent, its counsel or its
        representative, at any time and from time to time, to file financing statements
        and amendments that describe the collateral covered by such financing statements
        as “all assets of the Grantor”, “all personal property of the Grantor” or words
        of similar effect, in such jurisdictions as are necessary or desirable in
        order
        to perfect the security interests granted by such Grantor under this
        Agreement.  Each Grantor will, from time to time, at its expense,
        execute, deliver, file and record any statement, assignment, instrument,
        document, agreement or other paper and take any other action (including,
        without
        limitation, any filings with the United States Patent and Trademark Office,
        Copyright or Patent filings and any filings of financing or continuation
        statements under the UCC) that from time to time may be necessary, or that
        the
        Administrative Agent may reasonably request, in order to create, preserve,
        upgrade in rank (to the extent required hereby), perfect (to the extent required
        hereby), confirm or validate the Security Interests or to enable the
        Administrative Agent to obtain the full benefits of this Agreement, or to
        enable
        the Administrative Agent to exercise and enforce any of its rights, powers
        and
        remedies hereunder with respect to any of its Collateral.  Each
        Grantor hereby authorizes the Administrative Agent to execute and file financing
        statements, financing statement amendments or continuation statements on
        behalf
        of such Grantor.  Each Grantor agrees that a carbon, photographic,
        photostatic or other reproduction of this Agreement or of a financing statement
        is sufficient as a financing statement.  Grantors shall pay the costs
        of, or incidental to, any recording or filing of any financing statements,
        financing statement amendments or continuation statements necessary in the
        sole
        discretion of the Administrative Agent, to perfect the Administrative Agent
        and
        Secured Parties’ security interest in the Collateral.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (iv) No
        Grantor
        shall (A) sell, transfer, lease, exchange, assign or otherwise dispose of,
        or
        grant any option, warrant or other right with respect to, any of its Collateral
        other than sales of assets permitted under the Credit Agreement; or (B) create,
        incur or suffer to exist any Lien with respect to any Collateral, except
        for the
        Liens expressly permitted under the Credit Agreement.

       

      (v) Each
        Grantor will, promptly upon request, provide to the Administrative Agent
        all
        information and evidence it may reasonably request concerning the Collateral,
        to
        enable the Administrative Agent to enforce the provisions of this
        Agreement.

       

      (vi) Each
        Grantor shall take all actions necessary or reasonably requested by the
        Administrative Agent in order to maintain the perfected (to the extent such
        perfection is required by the terms hereof) status of the Security
        Interests.

       

      (vii) Unless
        authorized by the Administrative Agent, no Grantor shall file any amendment
        to
        or termination of a financing statement naming any Grantor as debtor and
        the
        Administrative Agent as secured party, or any correction statement with respect
        thereto, in any jurisdiction until the Termination Time.

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b) Accounts,
        Etc.

       

      (i) Upon
        the
        occurrence and during the continuance of any Event of Default, each Grantor
        shall, at the request and option of the Administrative Agent, notify Account
        Debtors and other Persons obligated on the Accounts or any of the Collateral
        of
        the security interest of Administrative Agent in any Account or other Collateral
        and that payment thereof is to be made directly to the  Administrative
        Agent, and may itself, if an Event of Default shall have occurred and be
        continuing, without notice to or demand upon any Grantor, so notify Account
        Debtors and other Persons obligated on Collateral.  After the making
        of such a request or the giving of any such notification, each Grantor shall
        hold any proceeds of collection of the Accounts and such other Collateral
        received by such Grantor as trustee for the  Administrative Agent
        without commingling the same with other funds of such Debtor and shall turn
        the
        same over to the  Administrative Agent in the identical form received,
        together with any necessary endorsements or assignments.  The
        Administrative Agent shall apply the proceeds of collection of the Accounts
        and
        other Collateral received by the Administrative Agent to the Obligations
        in
        accordance with the provisions of the Credit Agreement, such proceeds to
        be
        immediately credited after final payment in cash or other immediately available
        funds of the items giving rise to them..

       

      (ii) Each
        Grantor will perform under and comply with the provisions of Section 5.4 and Section
        5.5 of the
        Credit Agreement.

       

      (iii) Anything
        herein to the contrary notwithstanding, each of the Grantors shall remain
        liable
        under each of its Accounts, contracts and agreements to observe and perform
        all
        the conditions and obligations to be observed and performed by it thereunder,
        all in accordance with the terms of any agreement giving rise to each such
        Account or the terms of such contract or agreement.  Neither the
        Administrative Agent nor any Lender shall have any obligation or liability
        under
        any Account (or any agreement giving rise thereto), contract or agreement
        by
        reason of or arising out of this Agreement or the receipt by the Administrative
        Agent or any Lender of any payment relating to such Account, contract or
        agreement pursuant hereto, nor shall the Administrative Agent or any Lender
        be
        obligated in any manner to perform any of the obligations of any Grantor
        under
        or pursuant to any Account (or any agreement giving rise thereto), contract
        or
        agreement, to make any payment, to make any inquiry as to the nature or the
        sufficiency of any payment received by it or as to the sufficiency of any
        performance by any party under any Account (or any agreement giving rise
        thereto), contract or agreement, to present or file any claim, to take any
        action to enforce any performance or to collect the payment of any amounts
        which
        may have been assigned to it or to which it may be entitled at any time or
        times.

       

      (iv) At
        any
        time and from time to time during the continuance of an Event of Default,
        the
        Administrative Agent shall have the right, but not the obligation, to make
        test
        verifications of the Accounts in any manner and through any medium that it
        reasonably considers advisable, and the Grantors shall furnish all such
        assistance and information as the Administrative Agent may reasonably require
        in
        connection with such test verifications.  During the continuance of an
        Event of Default, the Administrative Agent in its own name or in the name
        of
        others may communicate with Account Debtors on the Accounts to verify with
        them
        to the Administrative Agent’s reasonable satisfaction the existence, amount and
        terms of any Accounts.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (c) Patents,
        Trademarks,
        Etc.  Each Grantor shall notify the Administrative Agent at the
        time that the Borrower is required to deliver a Compliance Certificate of
        the
        occurrence of each of the following (i) such Grantor’s acquisition after the
        date of this Agreement of any Significant Intellectual Property and (ii)
        a
        Responsible Officer of such Grantor obtaining knowledge, or reason to know,
        that
        any application or registration relating to any Significant Intellectual
        Property owned by or licensed to such Grantor is reasonably likely to become
        abandoned or dedicated, or of any material adverse determination or development
        (including, without limitation, the institution of, or any such determination
        or
        development in, any proceeding in the United States Copyright Office, the
        United
        States Patent and Trademark Office or any court) regarding such Grantor’s
        ownership of any Significant Intellectual Property, its right to register
        the
        same, or to keep and maintain the same.  Each Grantor will,
        contemporaneously herewith, execute and deliver to the Administrative Agent
        the
        Patent Security Agreement, Trademark Security Agreement and Copyright Security
        Agreement in the forms of Exhibit A, Exhibit
        B and Exhibit
        C hereto, as
        necessary, and shall execute and deliver to the Administrative Agent any
        other
        document required to acknowledge or register or perfect in the United States
        the
        Administrative Agent’s interest in any part of the Intellectual
        Property.  Notwithstanding anything to the contrary contained in this
        Agreement, the Administrative Agent shall only require perfection of its
        security interests in, or other registration with respect to, any Patent,
        Trademark or Copyright registered, or eligible to be registered, with a country
        other than the United States or any political subdivision thereof, to the
        extent
        that (i) such Patent, Trademark or Copyright constitutes Significant
        Intellectual Property and (ii) the Administrative Agent determines, in its
        reasonable discretion, that such Patent, Trademark or Copyright, and the
        registration thereof in such other country or political subdivision thereof,
        is
        material to the applicable Grantor’s business, as a whole.

       

      (d) Deposit
        Accounts, Chattel
        Paper, Investment Property and Letters of Credit.

       

      (i) If
        an
        Event of Default exists and is continuing, each Grantor will use commercially
        reasonable efforts to grant Administrative Agent "control" over its Deposit
        Accounts promptly upon request of Administrative Agent.

       

      (ii) No
        Grantor
        shall become the beneficiary of any Letters of Credit having a stated amount
        of
        in excess of $1,000,000, unless such Grantor shall use commercially reasonable
        efforts to cause the issuer of such Letter of Credit to consent to the
        assignment.

       

      (iii) Each
        Grantor, at any time and from time to time, will (a) take such steps as the
        Administrative Agent may reasonably request from time to time for the
        Administrative Agent to obtain “control” of any Investment Property that is
        Collateral (other than a Securities Account (as defined in the UCC)), except
        after the occurrence of an Event of Default) with a fair market value in
        excess
        of $500,000 or electronic Chattel Paper with a fair market value in excess
        of
        $500,000, with any agreements establishing control to be in form and substance
        reasonably satisfactory to the Administrative Agent, and (b) otherwise to
        insure
        the continued perfection and priority of the Administrative Agent’s security
        interest in any of the Collateral described in clause (a) and of the
        preservation of its rights therein.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (e) Commercial
        Tort
        Claims.  If any Grantor shall at any time acquire a “commercial
        tort claim” (as such term is defined in the UCC) with a claim for damages that
        could reasonably be expected to be in excess of Five Hundred Thousand Dollars
        ($500,000), such Grantor shall promptly notify the Administrative Agent thereof
        in a writing, providing a reasonable description and summary thereof, and
        shall
        execute a supplement to this Agreement granting a security interest in such
        commercial tort claim to the Administrative Agent.

       

      (f) Maintenance
        of Properties;
        Insurance.  Each Grantor shall maintain and insure the
        Collateral in accordance with the provisions of Section 5.8 of the
        Credit Agreement.  

       

      SECTION
        5. Reporting
        and Recordkeeping.  Each Grantor
        covenants and agrees with the Administrative Agent that from and after the
        date
        of this Agreement and until the Secured Obligations have been indefeasibly
        paid
        in full in cash:

       

      (a) Maintenance
        of Records
        Generally.  Each Grantor will keep and maintain at its own cost
        and expense records of its Collateral in accordance with the provisions of
Section 5.6 of the
        Credit Agreement. Upon reasonable prior notice, each Grantor will mark its
        books
        and records pertaining to its Collateral to evidence this Agreement and the
        Security Interests. Upon reasonable prior notice, all Chattel Paper will
        be
        marked with the following legend: “This writing and the obligations evidenced or
        secured hereby are subject to the security interest of SunTrust Bank, as
        Administrative Agent.”  For the Administrative Agent’s further
        security, each Grantor agrees that the Administrative Agent shall have a
        security interest in all of such Grantor’s books and records pertaining to its
        Collateral and, upon the occurrence and during the continuation of any Event
        of
        Default, such Grantor shall deliver and turn over full and complete copies
        of
        any such books and records to the Administrative Agent or to its representatives
        at any time on demand of the Administrative Agent.  Upon reasonable
        notice from the Administrative Agent, each Grantor shall permit any
        representative of the Administrative Agent, to inspect such books and records
        and will provide photocopies thereof to the Administrative Agent.

       

      (b) Notices
        of Material Events;
        Special Provisions Regarding Government Receivables;

       

      (i) Each
        Grantor will furnish to the Administrate Agent notices of material events
        in
        accordance with Section 5.2 of the
        Credit Agreement.

       

      (ii) After
        the
        occurrence of an Event of Default, if any Account, arises out of a contract
        with
        the United States of America, or any department, agency, subdivision or
        instrumentality thereof, or of any state (or department, agency, subdivision
        or
        instrumentality thereof) where such state has a state assignment of claims
        act
        or other law comparable to the Federal Assignment of Claims Act, such Grantor
        will take any action required or requested by the Administrative Agent to
        give
        notice of the Administrative Agent’s security interest in such Accounts under
        the provisions of the Federal Assignment of Claims Act or any comparable
        law or
        act enacted by any state or local governmental authority.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (c) Further
        Identification of
        Collateral.  Each Grantor will if so requested by the
        Administrative Agent furnish to the Administrative Agent, as often as the
        Administrative Agent reasonably requests but in no event more frequently
        than
        once per calendar quarter and without limit after the occurrence and during
        the
        continuance of an Event of Default, statements and schedules further identifying
        and describing the Collateral and such other reports in connection with the
        Collateral as the Administrative Agent may reasonably request, all in reasonable
        detail.

       

      (d) Other
        Notices.  In addition to the notices required by Section
        5(b) hereof,
        each Grantor will advise the Administrative Agent promptly, but in no event
        later than thirty (30) days after the occurrence thereof, in reasonable detail,
        (i) of any Lien or claim made or asserted against any of the Collateral
        that is not expressly permitted by the terms of the Credit Agreement, and
        (ii)
        of the occurrence of any other event which would have a material adverse
        effect
        on the aggregate value of the Collateral or on the validity, perfection or
        priority of the Security Interests.

       

      SECTION
        6. General
        Authority.  Each Grantor hereby irrevocably appoints, so long
        as any Obligations remain outstanding, the Administrative Agent its true
        and
        lawful attorney, with full power of substitution, in the name of such Grantor,
        the Administrative Agent or otherwise, for the sole use and benefit of the
        Administrative Agent on its behalf and on behalf of the Secured Parties,
        but at
        such Grantor’s expense, to exercise, at any time (subject to the proviso below)
        all or any of the following powers:

       

      (i) to
        file
        the financing statements, financing statement amendments and continuation
        statements referred to in Section 4(a)(iii),

       

      (ii) to
        demand,
        sue for, collect, receive and give acquittance for any and all monies due
        or to
        become due with respect to any Collateral or by virtue thereof,

       

      (iii) to
        settle,
        compromise, compound, prosecute or defend any action or proceeding with respect
        to any Collateral,

       

      (iv) to
        sell,
        transfer, assign or otherwise deal in or with the Collateral or the proceeds
        or
        avails thereof, as fully and effectually as if the Administrative Agent were
        the
        absolute owner thereof, and

       

      (v) to
        extend
        the time of payment of any or all thereof and to make any allowance and other
        adjustments with reference to the Collateral;

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      provided,
however,
        that the
        powers described in clauses (ii), (iii), (iv) and (v) above may be exercised
        by
        the Administrative Agent only if an Event of Default then exists and is
        continuing.

      


      SECTION
        7. Events
        of
        Default.  Each of the
        following specified events shall constitute an Event of Default under this
        Agreement:

       

      (a) The
        existence or occurrence of any “Event of Default” as provided under the terms of
        the Credit Agreement;

       

      (b) 
        Any
        representation or warranty made by or on behalf of any Grantor under or pursuant
        to this Agreement shall have been false or misleading in any material respect
        when made; or

       

      (c) Any
        Grantor shall fail to observe or perform any covenant or agreement set forth
        in
        this Agreement other than those referenced in paragraphs (a) and (b) above,
        and
        if such failure is capable of being remedied, such failure shall remain
        unremedied for thirty (30) days after notice from the Administrative
        Agent.

       

      SECTION
        8. Remedies
        upon Event of
        Default.

       

      (a) If
        any
        Event of Default has occurred and is continuing, the Administrative Agent
        may,
        without further notice, exercise all rights and remedies under this Agreement
        or
        any other Loan Document or that are available to a secured creditor under
        the
        UCC or that are otherwise available at law or in equity, at any time, in
        any
        order and in any combination, including to collect any and all Secured
        Obligations from the Grantors, and, in addition, the Administrative Agent
        may
        sell the Collateral or any part thereof at public or private sale, for cash,
        upon credit or for future delivery, and at such price or prices as the
        Administrative Agent may deem satisfactory.  The Administrative Agent
        shall give the Borrower not less than ten (10) days’ (or such longer period as
        may be afforded by the UCC) prior written notice of the time and place of
        any
        sale or other intended disposition of Collateral, except any Collateral which
        is
        perishable or threatens to decline speedily in value or is of a type customarily
        sold on a recognized market.  Each Grantor agrees that any such notice
        constitutes "reasonable notification" within the meaning of Section 9-611
        of the UCC (to the extent such Section or any successor provision under the
        UCC
        is applicable).

       

      (b) The
        Administrative Agent may be the purchaser of any or all of the Collateral
        so
        sold at any public sale (or, if such Collateral is of a type customarily
        sold in
        a recognized market or is of a type which is the subject of widely distributed
        standard price quotations or if otherwise permitted under applicable law,
        at any
        private sale) and thereafter hold the same, absolutely, free from any right
        or
        claim of whatsoever kind.  Each Grantor agrees during an Event of
        Default to execute and deliver such documents and take such other action
        as the
        Administrative Agent deems necessary or advisable in order that any such
        sale
        may be made in compliance with law.  Upon any such sale the
        Administrative Agent shall have the right to deliver, assign and transfer
        to the
        purchaser thereof the Collateral so sold.  Each purchaser at any such
        sale shall hold the Collateral so sold to it absolutely, free from any claim
        or
        right of any kind, including any equity or right of redemption of the
        Grantors.  To the extent permitted by law, each Grantor hereby
        specifically waives all rights of redemption, stay or appraisal which it
        has or
        may have under any law now existing or hereafter adopted.  The notice
        (if any) of such sale shall (1) in case of a public sale, state the time
        and
        place fixed for such sale, and (2) in the case of a private sale, state the
        day
        after which such sale may be consummated.  To the extent permitted by
        applicable law, any such public sale shall be held at such time or times
        within
        ordinary business hours and at such place or places as the Administrative
        Agent
        may fix in the notice of such sale.  At any such sale Collateral may
        be sold in one (1) lot as an entirety or in separate parcels, as the
        Administrative Agent may determine.  To the extent permitted by
        applicable law, the Administrative Agent shall not be obligated to make any
        such
        sale pursuant to any such notice.  The Administrative Agent may,
        without notice or publication (other than any notices required by this Section 8 or by
        applicable law), adjourn any public or private sale or cause the same to
        be
        adjourned from time to time by announcement at the time and place fixed for
        the
        sale, and such sale may be made at any time or place to which the same may
        be so
        adjourned.  In case of any sale of all or any part of the Collateral
        on credit or for future delivery, such Collateral so sold may be retained
        by the
        Administrative Agent until the selling price is paid by the purchaser thereof,
        but the Administrative Agent shall not incur any liability in case of the
        failure of such purchaser to take up and pay for such Collateral so sold
        and, in
        case of any such failure, such Collateral may again be sold upon like
        notice.  The Administrative Agent, instead of exercising the power of
        sale herein conferred upon it, may proceed by a suit or suits at law or in
        equity to foreclose the Security Interests and sell Collateral, or any portion
        thereof, under a judgment or decree of a court or courts of competent
        jurisdiction.  The Grantors shall remain liable for any
        deficiency.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (c) For
        the
        purpose of enforcing any and all rights and remedies under this Agreement,
        the
        Administrative Agent may (i) require any Grantor to, and each Grantor agrees
        that it will, at the joint and several expense of the Grantors, and upon
        the
        request of the Administrative Agent, forthwith assemble all or any part of
        its
        Collateral as directed by the Administrative Agent and make it available
        at a
        place designated by the Administrative Agent which is, in the Administrative
        Agent’s opinion, reasonably convenient to the Administrative Agent and such
        Grantor, whether at the premises of such Grantor or otherwise, (ii) to the
        extent permitted by applicable law, enter, with or without process of law
        and
        without breach of the peace, any premise where any such Collateral is or
        may be
        located and, without charge or liability to the Administrative Agent, seize
        and
        remove such Collateral from such premises, (iii) have access to and use such
        Grantor’s books and records, computers and software (subject to the terms of
        applicable licenses) relating to the Collateral, and (iv) prior to the
        disposition of any of the Collateral, store or transfer such Collateral without
        charge in or by means of any storage or transportation facility owned or
        leased
        by such Grantor, process, repair or recondition such Collateral or otherwise
        prepare it for disposition in any manner and to the extent the Administrative
        Agent deems appropriate and, in connection with such preparation and
        disposition, use without charge any trademark, trade name, copyright, patent
        or
        technical process used such Grantor.

       

      (d) Without
        limiting the generality of the foregoing, if any Event of Default has occurred
        and is continuing:

       

      (i) the
        Administrative Agent may (without assuming any obligations or liability
        thereunder), at any time and from time to time, enforce (and shall have the
        exclusive right to enforce) against any licensee or sublicensee all rights
        and
        remedies of any Grantor in, to and under any Licenses and take or refrain
        from
        taking any action under any thereof, and each Grantor hereby releases the
        Administrative Agent from, and agrees to hold the Administrative Agent free
        and
        harmless from and against any claims arising out of, any lawful action so
        taken
        or omitted to be taken with respect thereto except for the
        Administrative Agent’s gross negligence or willful misconduct as determined by a
        final and nonappealable decision of a court of competent jurisdiction;
        and

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (ii) upon
        request by the Administrative Agent, each Grantor agrees to execute and deliver
        to the Administrative Agent powers of attorney, in form and substance
        satisfactory to the Administrative Agent, for the implementation of any lease,
        assignment, license, sublicense, grant of option, sale or other disposition
        of
        any Intellectual Property, in each case subject to the terms of the applicable
        License.  In the event of any such disposition pursuant to this
        Section, each Grantor shall supply its know-how and expertise relating to
        the
        manufacture and sale of the products bearing Trademarks or the products or
        services made or rendered in connection with Patents or Copyrights, and its
        customer lists and other records relating to such Intellectual Property and
        to
        the distribution of said products, to the Administrative Agent.

       

      SECTION
        9. Limitation
        on Duty of Administrative Agent in Respect of Collateral.  Beyond reasonable
        care in the custody thereof, the Administrative Agent shall have no duty
        as to
        any Collateral of any Grantor in its possession or control or in the possession
        or control of any agent or bailee or any income thereon or as to the
        preservation of rights against prior parties or any other rights pertaining
        thereto.  The Administrative Agent shall be deemed to have exercised
        reasonable care in the custody of the Collateral of the Grantors in its
        possession if such Collateral is accorded treatment substantially equal to
        that
        which it accords its own property, and the Administrative Agent shall not
        be
        liable or responsible for any loss or damage to any of the Grantors’ Collateral,
        or for any diminution in the value thereof, by reason of the act or omission
        of
        any warehouseman, carrier, forwarding agency, consignee or other agent or
        bailee
        selected by the Administrative Agent in good faith.

       

      SECTION
        10. Application
        of Proceeds. The
        proceeds of any sale of, or other realization upon, all or any part of the
        Collateral of the Grantors shall be applied by the Administrative Agent in
        the
        manner set forth in Section 8.2 of the
        Credit Agreement.

       

      SECTION
        11. Concerning
        the Administrative Agent.  The provisions
        of
        Article 9 of the Credit Agreement shall inure to the benefit of the
        Administrative Agent in respect of this Agreement and shall be binding upon
        the
        parties to the Credit Agreement in such respect.  In furtherance and
        not in derogation of the rights, privileges and immunities of the Administrative
        Agent therein set forth:

       

      (a) The
        Administrative Agent is authorized to take all such action as is provided
        to be
        taken by it as the Administrative Agent hereunder or otherwise permitted
        under
        the Credit Agreement and all other action reasonably incidental
        thereto.  As to any matters not expressly provided for herein or
        therein, the Administrative Agent may request instructions from the Lenders
        and
        shall act or refrain from acting in accordance with written instructions
        from
        the Required Lenders or, in the absence of such instructions, in accordance
        with
        its discretion.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (b) The
        Administrative Agent shall not be responsible for the existence, genuineness
        or
        value of any of the Grantors’ Collateral or for the validity, perfection,
        priority or enforceability of the Security Interests, whether impaired by
        operation of law or by reason of any action or omission to act on its
        part.  The Administrative Agent shall have no duty to ascertain or
        inquire as to the performance or observance of any of the terms of this
        Agreement by the Grantors.

       

      SECTION
        12. Appointment
        of Co-Administrative Agents.  At any time
        or
        times, in order to comply with any legal requirement in any jurisdiction,
        the
        Administrative Agent may appoint another bank or trust company or one (1)
        or
        more other Persons reasonably acceptable to the Required Lenders and, so
        long as
        no Event of Default has occurred or is continuing, the Borrower, either to
        act
        as co-agent or co-agents, jointly with the Administrative Agent, or to act
        as
        separate agent or agents on behalf of the Administrative Agent and the Lenders
        with such power and authority as may be necessary for the effectual operation
        of
        the provisions hereof and specified in the instrument of appointment (which
        may,
        in the discretion of the Administrative Agent, include provisions for the
        protection of such co-agent or separate agent similar to the provisions of
Section 11
        hereof).

       

      SECTION
        13. Expenses.  In
        the event that
        any Grantor fails to comply with the provisions of the Credit Agreement,
        this
        Agreement or any other Loan Document, such that the value of any of its
        Collateral or the validity, perfection, rank or value of the Security Interests
        are thereby diminished or potentially diminished or put at risk, the
        Administrative Agent may, but shall not be required to, effect such compliance
        on behalf of such Grantor, and the Grantors shall jointly and severally
        reimburse the Administrative Agent for the reasonable and actual costs thereof
        on demand.  All insurance expenses and all expenses of protecting,
        storing, warehousing, appraising, insuring, handling, maintaining and shipping
        such Collateral, any and all excise, stamp, intangibles, transfer, property,
        sales, and use taxes imposed by any state, federal, or local authority or
        any
        other governmental authority on any of such Collateral, or in respect of
        periodic appraisals and inspections of such Collateral, or in respect of
        the
        sale or other disposition thereof, shall be borne and paid by the Grantors
        jointly and severally; and if the Grantors fail promptly to pay any portion
        thereof when due, the Administrative Agent may, at its option, but shall
        not be
        required to, pay the same and charge the Grantors’ accounts therefor, and the
        Grantors agree jointly and severally to reimburse the Administrative Agent
        therefor on demand.  All sums so paid or incurred by the
        Administrative Agent for any of the foregoing and any and all other sums
        for
        which the Grantors may become liable hereunder and all reasonable costs and
        expenses (including reasonable attorneys’ fees, legal expenses and court costs)
        incurred by the Administrative Agent in enforcing or protecting the Security
        Interests or any of its rights or remedies thereon shall be payable by the
        Grantors on demand and shall bear interest (after as well as before judgment)
        until paid at the default rate of interest set forth in the Credit Agreement
        and
        shall be additional Secured Obligations hereunder.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      SECTION
        14. Termination
        of Security Interests; Release of Collateral.  Upon the
        Termination Time, the Security Interests shall terminate and all rights to
        the
        Collateral shall revert to the Grantors.  Upon any such termination of
        the Security Interests or release of such Collateral, the Administrative
        Agent
        will promptly upon the Grantor’s request and contemporaneously with any
        refinancing of the Obligations, at the expense of the Borrower, execute and
        deliver to the Borrower such documents as the Grantors shall reasonably request,
        but without recourse or warranty to the Administrative Agent, including but
        not
        limited to written authorization to file termination statements to evidence
        the
        termination of the Security Interests in such Collateral.

       

      SECTION
        15. Notices.  All
        notices,
        requests and other communications to the Grantors or the Administrative Agent
        hereunder shall be delivered in the manner required by the Credit Agreement
        and
        shall be sufficiently given to the Administrative Agent or any Grantor if
        addressed or delivered to them at, in the case of the Administrative Agent
        and
        the Borrower, its addresses and telecopier numbers specified in the Credit
        Agreement and in the case of any other Grantors, at their respective addresses
        and telecopier numbers provided in the Subsidiary Guaranty
        Agreement.  All such notices and communications shall be deemed to
        have been duly given at the times set forth in the Credit
        Agreement.

       

      SECTION
        16. No
        Waiver; Remedies Cumulative.  No failure
        or
        delay on the part of the Administrative Agent in exercising any right or
        remedy
        hereunder, and no course of dealing between any Grantor on the one hand and
        the
        Administrative Agent or any holder of any Note on the other hand shall operate
        as a waiver thereof, nor shall any single or partial exercise of any right
        or
        remedy hereunder or any other Loan Document preclude any other or further
        exercise thereof or the exercise of any other right or remedy hereunder or
        thereunder.  The rights and remedies herein and in the other Loan
        Documents are cumulative and not exclusive of any rights or remedies which
        the
        Administrative Agent would otherwise have.  No notice to or demand on
        the Grantors not required hereunder in any case shall entitle any Grantor
        to any
        other or further notice or demand in similar or other circumstances or
        constitute a waiver of the rights of the Administrative Agent to any other
        or
        further action in any circumstances without notice or demand.

       

      SECTION
        17. Successors
        and Assigns.  This Agreement
        is
        for the benefit of the Administrative Agent and the Lenders and their permitted
        successors and assigns, and in the event of an assignment of all or any of
        the
        Secured Obligations, the rights hereunder, to the extent applicable to the
        indebtedness so assigned, may be transferred with such
        indebtedness.  This Agreement shall be binding on the Grantors and
        their successors and assigns; provided, however,
        that no
        Grantor may assign any of its rights or obligations hereunder without the
        prior
        written consent of the Administrative Agent and the Lenders.

       

      SECTION
        18. Amendments.  No
        amendment or
        waiver of any provision of this Agreement, nor consent to any departure by
        the
        Grantors herefrom, shall in any event be effective unless the same shall
        be in
        writing and signed by the Administrative Agent, and then such waiver or consent
        shall be effective only in the specific instance and for the specific purpose
        for which given.

       

      SECTION
        19. Governing
        Law; Waiver of
        Jury Trial.

       

      (a) THIS
        AGREEMENT AND THE RIGHTS AND SECURED OBLIGATIONS OF THE PARTIES HEREUNDER
        SHALL
        BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW
        YORK, EXCEPT TO THE EXTENT THAT PERFECTION (AND THE EFFECT OF PERFECTION
        AND
        NONPERFECTION) AND CERTAIN REMEDIES MAY BE GOVERNED BY THE LAWS OF ANY
        JURISDICTION OTHER THAN NEW YORK.  THIS AGREEMENT WILL BE DEEMED TO BE
        A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
        (INCLUDING FOR SUCH PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
        OBLIGATIONS LAW OF THE STATE OF NEW YORK).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      (b) GRANTORS
        IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR THEMSELF AND THEIR PROPERTY,
        TO THE
        NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
        UNITED
        STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION
        OR
        PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
        DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR FOR RECOGNITION
        OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY
        IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
        SUCH
        ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
        OR, TO THE EXTENT PERMITTED BY APPLICABLE LAW, SUCH FEDERAL
        COURT.  EACH GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
        OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
        BY
        SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
        AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
        ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO
        BRING
        ANY ACTION OR PROCEEDING  RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
        DOCUMENT AGAINST SUCH GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY
        JURISDICTION.

       

      (c) EACH
        GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT
        MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION
        OR PROCEEDING DESCRIBED IN PARAGRAPH (B) OF THIS SECTION AND BROUGHT IN ANY
        COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH GRANTOR
        IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
        DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
        IN ANY SUCH COURT.

       

      (d) EACH
        GRANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN THE MANNER PROVIDED
        FOR NOTICES IN THE CREDIT AGREEMENT.  NOTHING IN THIS AGREEMENT OR IN
        ANY OTHER LOAN DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
        PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

      

      SECTION
        20. Severability.
        In case any provision in or
        obligation under this Agreement shall be invalid, illegal or unenforceable,
        in
        whole or in part, in any jurisdiction, the validity, legality and enforceability
        of the remaining provisions or obligations, or of such provision or obligation
        in any other jurisdiction, shall not in any way be affected or impaired
        thereby.

       

      SECTION
        21. Counterparts.  This
        Agreement
        may be executed in any number of counterparts and by the different parties
        hereto on separate counterparts, each of which when so executed and delivered
        shall be an original, but all of which shall together constitute one (1)
        and the
        same instruments.

       

      SECTION
        22. Headings
        Descriptive.  The headings
        of
        the several sections and subsections of this Agreement are inserted for
        convenience only and shall not in any way affect the meaning or construction
        of
        any provision of this Agreement.

       

      SECTION
        23. Additional
        Subsidiaries.  Pursuant to Section
        5.11 of the
        Credit Agreement, each Subsidiary that that is required to become a Subsidiary
        Loan Party after the date of the Credit Agreement is required to enter into
        this
        Agreement as a Grantor upon becoming such a Subsidiary Loan
        Party.  Upon execution and delivery after the date hereof by the
        Administrative Agent and such Subsidiary of an instrument in the form of
        Exhibit
        D, such Subsidiary shall become a Grantor hereunder with the same force and
        effect as if originally named as a Grantor herein.  The execution and
        delivery of any instrument adding an additional Grantor as a party to this
        Security Agreement shall not require the consent of any other Grantor
        hereunder.  The rights and obligations of each Grantor hereunder shall
        remain in full force and effect notwithstanding the addition of any new Grantor
        as a party to this Security Agreement.

       

       

      [Signature
        Page
        Follows]

       

       

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      IN
        WITNESS
        WHEREOF, Grantor has caused this Agreement to be duly executed and delivered
        by
        their duly authorized officers as of the day and year first above
        written.

      
 

      
        
          	 	
                  MAXIMUS,
                    INC., a
                    Virginia corporation

                	 
	 	 	 	 
	 	
                  By:

                	
                  /s/
                    Richard A. Montoni

                	 
	 	
                  Name:

                	
                  Richard
                    A. Montoni

                	 
	 	
                  Title:

                	
                  President
                    and CEO

                	 
	 	 	 	 
	 	
                  MAXIMUS
                    FEDERAL SERVICES,
                    INC., a Virginia corporation

                	 
	 	 	 
	 	
                  By:

                	
                  /s/
                    David A. Richardson

                	 
	 	
                  Name:

                	
                  David
                    A. Richardson

                	 
	 	
                  Title:

                	
                  Vice
                    President

                	 


        

      

      


       

      


      
        [SIGNATURE
          PAGE TO SECURITY AGREEMENT]