Document:

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                                                                   EXHIBIT 10.31

UNION BANK OF CALIFORNIA

                     COMMERCIAL PROMISSORY NOTE (Base Rate)

                                                            Iris Tse / SR / 5787
Debtor Name
Sparta, Inc., a Delaware corporation

Debtor Address                       Office         Loan Number
23041 Avenida De La Carlota #325     45061          850-832-775-8  0080-00-0-000
Laguna Hills, CA 92653

                                     Maturity Date  Amount
                                     July 1, 2005   $6,000,000.00

Date     September 22, 2003                                       $ 6,000,000.00

FOR VALUE RECEIVED, on July 1, 2005, the undersigned ("Debtor") promises to pay
to the order of UNION BANK OF CALIFORNIA, NA ("Bank"), as indicated below, the
principal sum of Six Million and 00/100ths Dollars ($ 6.000.000.00) or so much
thereof as is disbursed, together with interest on the balance of such principal
from time to time outstanding, at the per annum rate or rates and at the times
set forth below.

1.       INTEREST PAYMENTS. Debtor shall pay interest on the 1st day of each
month commencing October 1, 2003. Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year of
360 days, for actual days elapsed. If any interest rate defined in this note
ceases to be available from Bank for any reason, then said interest rate shall
be replaced by the rate then offered by Bank, which, in the sole discretion of
Bank, most closely approximates the unavailable rate.

         (a)      BASE INTEREST RATE. At Debtor's option, amounts outstanding
         hereunder in minimum amounts of $100,000 shall bear interest at a rate,
         based on an index selected by Debtor, which is 2% per annum in excess
         of Bank's LIBOR Rate for the Interest Period selected by Debtor,
         acceptable to Bank.

         No Base Interest Rate may be changed, altered or otherwise modified
         until the expiration of the Interest Period selected by Debtor. The
         exercise of interest rate options by Debtor shall be as recorded in
         Bank's records, which records shall be prima facie evidence of the
         amount borrowed under either interest option and the interest rate;
         provided, however, that failure of Bank to make any such notation in
         its records shall not discharge Debtor from Its obligations to repay in
         full with interest all amounts borrowed. In no event shall any Interest
         Period extend beyond the maturity date of this note.

         To exercise this option, Debtor may, from time to time with respect to
         principal outstanding on which a Base Interest Rate is not accruing,
         and on the expiration of any Interest Period with respect to principal
         outstanding on which a Base Interest Rate has been accruing, select an
         index offered by Bank for a Base Interest Rate Loan and an Interest
         Period by telephoning an authorized lending officer of Bank located at
         the banking office identified below prior to 10:00 a.m., Pacific time,
         on any Business Day and advising that officer of the selected index,
         the Interest Period and the Origination Date selected (which
         Origination Date, for a Base Interest Rate Loan based on the LIBOR
         Rate, shall follow the date of such selection by no more than two (2)
         Business Days).

         Bank will mail a written confirmation of the terms of the selection to
         Debtor promptly after the selection is made. Failure to send such
         confirmation shall not affect Bank's rights to collect Interest at the
         rate selected. If, on the date of the selection, the index selected is
         unavailable for any reason, the selection

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         shall be void. Bank reserves the right to fund the principal from any
         source of funds notwithstanding any Base Interest Rate selected by
         Debtor.

         (b)      VARIABLE INTEREST RATE. All principal outstanding hereunder
         which is not bearing interest at a Base Interest Rate shall bear
         interest at the Reference Rate, which rate shall vary as and when the
         Reference Rate changes.

At any time prior to the maturity date of this note, subject to the provisions
of paragraph 4 below, Debtor may borrow, repay and reborrow hereunder so long as
the total outstanding at anyone time does not exceed the principal amount of
this note.

Debtor shall pay all amounts due under this note in lawful money of the United
States at Bank's Orange County Corporate Banking Office or such other office as
may be designated by Bank, from time to time.

2.       LATE PAYMENTS. If any payment required by the terms of this note shall
remain unpaid ten days after same is due, at the option of Bank, Debtor shall
pay a fee of $100 to Bank.

3.       INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option
of Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5 %) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.

4.       PREPAYMENT.

         (a)      Amounts outstanding under this note bearing interest at a rate
         based on the Reference Rate may be prepaid in whole or in part at any
         time, without penalty or premium. Debtor may prepay amounts outstanding
         under this note bearing interest at a Base Interest Rate in whole or in
         part provided Debtor has given Bank not less than five (5) Business
         Days prior written notice of Debtor's intention to make such prepayment
         and pays to Bank the prepayment fee due as a result. The prepayment fee
         shall also be paid, if Bank, for any other reason, including
         acceleration or foreclosure, receives all or any portion of principal
         bearing Interest at a Base Interest Rate prior to its scheduled payment
         date. The prepayment fee shall be an amount equal to the present value
         of the product of: (i) the difference (but not less than zero) between
         (a) the Base Interest Rate applicable to the principal amount which is
         being prepaid, and (b) the return which Bank could obtain if it used
         the amount of such prepayment of principal to purchase at bid price
         regularly quoted securities issued by the United States having a
         maturity date most closely coinciding with the relevant Base Rate
         Maturity Date and such securities were held by Bank until the relevant
         Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator
         of which is the number of days in the period between the date of
         prepayment and the relevant Base Rate Maturity Date and the denominator
         of which is 360; and (iii) the amount of the principal so prepaid
         (except in the event that principal payments are required and have been
         made as scheduled under the terms of the Base Interest Rate Loan being
         prepaid, then an amount equal to the lesser of (A) the amount prepaid
         or (B) 50% of the sum of (1) the amount prepaid and (2) the amount of
         principal scheduled under the terms of the Base Interest Rate Loan
         being prepaid to be outstanding at the relevant Base Rate Maturity
         Date). Present value under this note is determined by discounting the
         above product to present value using the Yield Rate as the annual
         discount factor.

         (b)      In no event shall Bank be obligated to make any payment or
         refund to Debtor, nor shall Debtor be entitled to any setoff or other
         claim against Bank, should the return which Bank could obtain under
         this prepayment formula exceed the interest that Bank would have
         received if no prepayment had occurred. All prepayments shall include
         payment of accrued interest on the principal amount so prepaid and
         shall be applied to payment of interest before application to
         principal. A determination by Bank as to the prepayment fee amount, if
         any, shall be conclusive.

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         (c)      Bank shall provide Debtor a statement of the amount payable on
         account of prepayment. Debtor acknowledges that (i) Bank establishes a
         Base Interest Rate upon the understanding that it apply to the Base
         Interest Rate Loan for the entire Interest Period, and (ii) Bank would
         not lend to Debtor without Debtor's express agreement to pay Bank the
         prepayment fee described above.

         DEBTOR   INITIAL HERE: /s/ RCS /s/ DES

5.       DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include,
but not be limited to, any of the following: (a) the failure of Debtor to make
any payment required under this note when due; (b) any breach, misrepresentation
or other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgement, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.

6.       ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note
are not paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, (including the allocated costs of Bank's in-house
counsel and legal staff) incurred by Bank in the negotiation, documentation and
modification of this note and all related documents and in the collection or
enforcement of any amount outstanding hereunder. Debtor and any Obligor, for the
maximum period of time and the full extent permitted by law, (a) waive
diligence, presentment, demand, notice of nonpayment, protest, notice of
protest, and notice of every kind; (b) waive the right to assert the defense of
any statute of limitations to any debt or obligation hereunder; and (c) consent
to renewals and extensions of time for the payment of any amounts due under this
note. If this note is signed by more than one party, the term "Debtor" includes
each of the undersigned and any successors in interest thereof; all of whose
liability shall be joint and several. Any married person who signs this note
agrees that recourse may be had against the separate property of that person for
any obligations hereunder. The receipt of any check or other item of payment by
Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank. Bank may delay the credit of such payment based upon Bank's
schedule of funds availability, and interest under this note shall accrue until
the funds are deemed collected. In any action brought under or arising out of
this note, Debtor and any Obligor, including their successors and assigns,
hereby consent to the jurisdiction of any competent court within the State of
California, as provided in any alternative dispute resolution agreement executed
between Debtor and Bank, and consent to service of process by any means
authorized by said state's law. The term "Bank" includes, without limitation,
any holder of this note. This note shall be construed in accordance with and
governed by the laws of the State of California. This note hereby incorporates
any alternative dispute resolution agreement previously, concurrently or
hereafter executed between Debtor and Bank.

7.       DEFINITIONS. As used herein, the following terms shall have the
meanings respectively set forth below: "Base Interest Rate" means a rate of
interest based on the LlBOR Rate. "Base Interest Rate Loan" means

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amounts outstanding under this note that bear interest at a Base Interest Rate.
"Base Rate Maturity Date" means the last day of the Interest Period with respect
to principal outstanding under a Base Interest Rate Loan. "Business Day" means a
day on which Bank is open for business for the funding of corporate loans, and,
with respect to the rate of interest based on the LlBOR Rate, on which dealings
in U.S. dollar deposits outside of the United States may be carried on by Bank.
"Interest Period" means with respect to funds bearing interest at a rate based
on the LlBOR Rate, any calendar period of 1, 3, 6, 9 or 12 months. In
determining an Interest Period, a month means a period that starts on one
Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month. Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR Rate" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Debtor and
for an amount equal to the amount of principal covered by Debtor's interest rate
selection, plus Bank's costs, including the cost, if any, of reserve
requirements. "Origination Date" means the first day of the Interest Period.
"Reference Rate" means the rate announced by Bank from time to time at its
corporate headquarters as its Reference Rate. The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.

DEBTOR:

Sparta, Inc., a Delaware corporation

By: /s/ Robert Sepucha
    -----------------------------
    Robert Sepucha, President/CEO

By: /s/ David E. Schreiman
    --------------------------
    David E. Schreiman, VP/CFOExhibit 10.1

 

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered
into as of September 1, 2003, by and between THE KEITH COMPANIES, INC., a
California corporation (“Borrower’), and WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Bank”).

RECITALS

     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of September 4, 2001, as amended from time to time (“Credit Agreement”).

     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:

     1. Section 1.1(a) is hereby amended by (i) deleting “June 15, 2004” as the
last day on which Bank will make Acquisition Advances and Working Capital
Advances under the Line of Credit, and by substituting for said date “June 15,
2005,” and (ii) deleting “ September 2, 2003” as the last day on which Bank
will make Equipment Advances under the Line of Credit, and by substituting for
said date “June 15, 2005,” with such change to be effective upon the execution
and delivery to Bank of a promissory note substantially in the form of Exhibit
A attached hereto (which promissory note shall replace and be deemed the Line
of Credit Note defined in and made pursuant to the Credit Agreement) and all
other contracts, instruments and documents required by Bank to evidence such
change.

     2. Section 1.1(b) is hereby amended to read as follows:

	          	
	 	     "(b) Borrowing and Repayment. Borrower may from time to time
during the term of the Line of Credit with respect to Working
Capital Advances and Acquisition Advances, borrow, partially or
wholly repay its outstanding borrowings, and reborrow, and, with
respect to Equipment Advances, borrow, partially or wholly repay
its outstanding borrowings, but not reborrow, subject to all of the
limitations, terms and conditions contained herein or in the Line
of Credit Note; provided however, that the total outstanding
borrowings under the Line of Credit shall not at any time exceed
the maximum principal amount available thereunder, as set forth
above.”

     3. The first sentence in Section 1.1(d) is hereby deleted in its
entirety, and the
following substituted therefor:

	          	
	 	     "(d) Letter of Credit Subfeature. As a subfeature under the
Line of Credit, Bank agrees from time to time during the term
thereof to issue or cause an affiliate to issue standby letters of
credit for the account of Borrower (each, a “Letter of Credit” and
collectively, “Letters of Credit”); provided, however, that the
aggregate undrawn

1

 

	          	
	 	amount of all outstanding Letters of Credit shall
not at any time exceed One Million Dollars ($1,000,000.00).”

     4. Section 4.9(c) is hereby deleted in its entirety, and the following
substituted therefor:

	          	
	 	     "(c) Net income after taxes not less than $1.00 on an annual
basis, determined as of each fiscal year end, and net profit from
operations, excluding any charge for goodwill impairment, not less
than $1.00 on a quarterly basis, determined as of each fiscal
quarter end.”

     5. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.

     6. Borrower hereby remakes all representations and warranties contained in
the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event
of Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

	 	 	 	 	 	 	 
	THE KEITH COMPANIES, INC
	 	
WELLS FARGO BANK,

NATIONAL ASSOCIATION

	 
	By:
	 	
/s/ Gary C. Campanaro

	 	By:

	 	/s/ Stephanie Juneau

	 
	 	

	 	 
	 	

	 
	 	
      Gary C. Campanaro

	 	 
	 	      Stephanie Juneau

	 
	Title:
	 	
      Chief Financial Officer

	 	Title:

	 	      Vice President

	 
	 	

	 	 
	 	

2

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