Document:

Exhibit 10.1

 

FIRST AMENDMENT
TO
AMENDED AND RESTATED

CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this “Amendment”),
dated as of February 27, 2006, is by and among SI INTERNATIONAL, INC., a
Delaware corporation, (the “Parent Borrower”), those Domestic
Subsidiaries of the Parent Borrower identified as a “Subsidiary Borrower” on
the signature pages hereto (individually a “Subsidiary Borrower”
and collectively the “Subsidiary Borrowers”; the Subsidiary Borrowers,
together with the Parent Borrower, individually a “Borrower” and
collectively the “Borrowers”), the Lenders party hereto and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”).

 

WITNESSETH

 

WHEREAS, the Borrowers, the lenders party thereto (the “Lenders”), and
the Administrative Agent have entered into that certain Amended and Restated
Credit Agreement dated as of February 9, 2005 (as previously amended and
modified and as further amended, modified, restated or supplemented from time
to time, the “Credit Agreement”; capitalized terms used herein shall
have the meanings ascribed thereto in the Credit Agreement unless defined
herein);

 

WHEREAS, the Borrowers have requested certain amendments to the Credit Agreement
as more fully set forth herein; and

 

WHEREAS, the Required Lenders and the Term Loan Lenders have agreed to amend the
Credit Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

ARTICLE I 

AMENDMENTS TO CREDIT AGREEMENT

 

1.1                               Definition.

 

(a)                                  Applicable Percentage:  The
pricing grid in the definition of “Applicable Percentage” is hereby amended and
restated in its entirety to read as follows:

 

1

 

	
   

  	
   

  	
   

  	
   

  	
  Revolving Loans

  	
   

  	
  Initial Term Loan

  	
   

  	
  New Term Loan

  	
   

  
	
  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Base
  Rate Margin

  	
   

  	
  LIBOR
  Margin & 

  L/C Fee

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Base 

  Rate
  Margin

  	
   

  	
  LIBOR Margin

  	
   

  	
  Base 

  Rate
  Margin

  	
   

  	
  LIBOR Margin

  	
   

  
	
  I

  	
   

  	
  >
  2.75 to

  	
   

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  0.500

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
  1.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  >
  2.25 to

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.500

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
  1.0 but
  <

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.75 to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  >
  1.75 to

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  0.375

  	
  %

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
  1.0 but
  <

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.25 to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  <
  1.75 to

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  0.375

  	
  %

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
  1.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(b)                                 Permitted Acquisition: Clauses (f) and (g) of the
definition of “Permitted Acquisition” set forth in Section 1.1 of the
Credit Agreement are hereby amended and restated in their entirety to read as
follows:

 

(f) the cash consideration (excluding cash consideration
consisting of Net Cash Proceeds from an Equity Issuance) for any individual
acquisition or any series of related acquisitions shall not exceed (i) if
the Leverage Ratio is equal to or greater than 2.0 to 1.0 after giving pro
forma effect to such acquisition, $40,000,000 and (ii) if the Leverage
Ratio is less than 2.0 to 1.0 after giving pro forma effect to such
acquisition, $70,000,000;  provided,
however, up to $60,000,000 in cash consideration shall be permitted in
connection with the Zen Technology Acquisition,

 

(g) the cash consideration (excluding cash consideration
consisting of Net Cash Proceeds from an Equity Issuance) for all acquisitions
after the First Amendment Effective Date shall not exceed $150,000,000 in the
aggregate during the term of this Agreement,

 

(c)                                  Replaced Definitions. The following definitions set forth in Section 1.1
of the Credit Agreement are hereby amended and restated in their entirety to
read as follows:

 

“Term Loan” means
the Initial Term Loan and/or the New Term Loan, as appropriate.

 

“Term Loan Commitment
Percentage” shall mean the Initial Term Loan Commitment Percentage and/or
the New Term Loan Commitment Percentage, as applicable, in each case as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6.

 

2

 

“Term Loan Commitment”
shall mean, with respect to each Term Loan Lender, the commitment of such Term
Loan Lender to make its portion of (a) the Initial Term Loan in a
principal amount equal to such Term Loan Lender’s Initial Term Loan Commitment
Percentage of the Initial Term Loan Committed Amount and/or (b) the New
Term Loan in a principal amount equal to such Term Loan Lender’s New Term Loan
Commitment Percentage of the New Term Loan Committed Amount, as appropriate.

 

“Term Loan Committed
Amount” shall mean the Initial Term Loan Committed Amount and/or the New
Term Loan Committed Amount, as appropriate.

 

“Term Loan Lender”
shall mean, as of the date of any determination, any Lender holding a Term Loan
Commitment and/or a portion of any outstanding Term Loan on such date.

 

“Term Note” or “Term
Notes” shall mean the promissory notes of the Borrowers in favor of each of
the Term Loan Lenders requesting such a note evidencing the portion of the Term
Loan provided pursuant to Sections 2.2(d) and 2.2A(d) by such Term
Loan Lender, individually or collectively, as appropriate, as such promissory
notes may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time.

 

(d)                                 New Definitions: The following new definitions are added to Section 1.1
of the Credit Agreement in alphabetical order:

 

“First Amendment
Effective Date” shall mean February 27, 2006.

 

“Initial Term Loan”
shall have the meaning set forth in Section 2.2(a).

 

“Initial Term Loan
Commitment Percentage” shall mean for any Initial Term Loan Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1
(a) as of the Closing Date.

 

“Initial Term Loan
Committed Amount” shall have the meaning set forth in Section 2.2(a).

 

“Initial Term Loan
Lender” shall mean any Lender providing all or a portion of the Initial
Term Loan.

 

“Lender Consent”
shall mean, with respect to any Lender, the consent executed by such Lender
authorizing the Administrative Agent to enter into on its behalf the First
Amendment to Amended and Restated Credit Agreement, dated as of the First
Amendment Effective Date, which consent shall set forth the New

 

3

 

Term Loan Commitment Percentage of such Lender and the
portion of the New Term Loan to be funded by such Lender, if any, a copy of
which shall have been delivered to the Parent Borrower.

 

“New Term Loan” shall have the meaning set forth in Section 2.2A(a).

 

“New Term Loan Commitment Percentage” shall mean, for
any New Term Loan Lender, the percentage identified as its New Term Loan
Commitment Percentage in its Lender Consent.

 

“New Term Loan Committed Amount” shall have the
meaning set forth in Section 2.2A(a).

 

“New Term Loan Lender” shall mean a Lender that makes
all or a portion of the New Term Loan, together with its successors and
permitted assigns pursuant to Section 9.6.

 

“Zen Technology” shall mean Zen Technology, Inc.,
a Virginia corporation.

 

“Zen Technology Acquisition” shall mean the
acquisition of Zen Technology pursuant to the Zen Technology Acquisition
Documents.

 

“Zen Technology Acquisition Documents” shall mean the
Zen Technology Stock Purchase Agreement and each other agreement executed and
delivered by the Borrowers in connection with the consummation of the Zen
Technology Acquisition, each as amended, modified or supplemented.

 

“Zen Technology Stock Purchase Agreement” shall mean
the Stock Purchase Agreement, dated as of February 8, 2006, among the
Parent Borrower, as buyer, Zen Technology and Donald E. Reed, Leslie W. Butler,
Barbara M. Reed and Cindy Andre, as sellers.

 

1.2                               Initial Term Loan.  Section 2.2 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 2.2                                   Initial Term Loan Facility.

 

(a)                               Initial Term Loan. Subject to the terms and
conditions hereof and in reliance upon the representations and warranties set
forth herein, each Initial Term Loan Lender severally, but not jointly, agrees
to make available to the Borrowers on the Closing Date such Initial Term Loan
Lender’s Initial Term Loan Commitment Percentage of a term loan in Dollars (the
“Initial Term Loan”) in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS ($100,000,000) (the
“Initial Term Loan Committed Amount”) for the purposes set forth in Section 3.11.
The

 

4

 

Initial Term Loan may consist of Alternate Base Rate Loans
or LIBOR Rate Loans, or a combination thereof, as the Parent Borrower may
request; provided, however, the Initial Term Loan made on the
Closing Date may consist of LIBOR Rate Loans if the Parent Borrower requests
such LIBOR Rate Loan in writing on the third Business Day prior to the Closing
Date and delivers a funding indemnity letter acceptable to the Administrative
Agent on or prior to such third Business Day. Amounts repaid on the Initial
Term Loan may not be reborrowed.

 

(b)                               Repayment of Initial Term
Loan.  The principal amount of the Initial Term Loan
shall be repaid in twenty-four (24) consecutive quarterly installments as
follows:

 

	
  Principal
  Amortization 

  Payment Date

  	
   

  	
  Initial Term Loan Principal 

  Amortization Payment

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  250,000

  	
   

  

 

5

 

	
  Principal Amortization

  Payment Date 

  	
   

  	
  Initial Term Loan Principal

  Amortization Payment 

  	
   

  
	
  June 30,
  2010 

  	
   

  	
  $

  	
  250,000 

  	
   

  
	
  September 30,
  2010 

  	
   

  	
  $

  	
  250,000 

  	
   

  
	
  December 31,
  2010 

  	
   

  	
  $

  	
  250,000 

  	
   

  
	
  Term
  Loan Maturity Date 

  	
   

  	
  The remaining unpaid principal amount of the Initial Term Loan

  	
   

  

 

(c)                                Interest on the Initial
Term Loan. Subject to the provisions of Section 2.9, the Initial Term Loan
shall bear interest as follows:

 

(i)                                  Alternate Base Rate Loans. During such periods as
the Initial Term Loan shall be comprised of Alternate Base Rate Loans, each
such Alternate Base Rate Loan shall bear interest at a per annum rate equal to
the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii)                              LIBOR Rate Loans. During such periods as
the Initial Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR
Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR
Rate plus the Applicable Percentage.

 

Interest on the Initial Term Loan shall be payable in
arrears on each Interest Payment Date.

 

(d)                               Term Notes.  The Borrower’s obligation to pay each Initial
Term Loan Lender’s portion of the Initial Term Loan shall be evidenced, upon
such Initial Term Loan Lender’s request, by a Term Note made payable to such
Initial Term Loan Lender in substantially the form of Schedule 2.2.  The Borrower covenants and agrees to pay the Initial
Term Loan in accordance with the terms of this Credit Agreement and the Term Note
or Term Notes.

 

1.3                               New Term Loan.  A new Section 2.2A is hereby added to the Credit Agreement to read as
follows:

 

Section 2.2A                           New Term Loan Facility.

 

(a)                                  New Term Loan. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein, each
New Term Loan Lender severally, but not jointly, agrees to make available to
the Borrowers on the First Amendment Effective Date such New Term Loan Lender’s
New Term Loan Commitment Percentage of a term loan in Dollars (the “New Term
Loan”) in the aggregate principal amount of ONE HUNDRED TWENTY-NINE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($129,250,000) (the “New Term Loan Committed Amount”)

 

6

 

for the purposes set forth
in Section 3.11. The New Term Loan may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Parent Borrower may
request; provided, however, the New Term Loan made on the First
Amendment Effective Date may consist of LIBOR Rate Loans if the Parent Borrower
requests such LIBOR Rate Loan in writing on the third Business Day prior to the
First Amendment Effective Date and delivers a funding indemnity letter
acceptable to the Administrative Agent on or prior to such third Business Day.
Amounts repaid on the New Term Loan may not be reborrowed. For the avoidance of
doubt, the New Term Loan shall replace and refinance the Initial Term Loan, and
the Initial Term Loan, and all obligations thereunder (other than
indemnification obligations that pursuant to the express terms of the Credit
Documents survive the termination of the Initial Term Loan), shall be
terminated upon the borrowing of the New Term Loan and the immediate repayment
of the Initial Term Loan with the proceeds thereof.

 

(b)                               Repayment of New Term Loan.  The principal amount of the New Term Loan
shall be repaid in twenty-one (21) consecutive quarterly installments as
follows:

 

 

	
  Principal
  Amortization 

  Payment Date

  	
   

  	
  New Term Loan Principal

  Amortization Payment

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  323,125

  	
   

  

 

7

 

	
  Principal Amortization 

  Payment Date

  	
   

  	
  New Term Loan Principal Amortization Payment

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  323,125

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  The
  remaining unpaid principal amount of the New Term Loan

  	
   

  

 

(c)                                Interest on the New Term Loan.  Subject to the provisions of Section 2.9,
the New Term Loan shall bear interest as follows:

 

(i)                                  Alternate Base Rate Loans. During such periods as
the New Term Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate equal to the
sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii)                              LIBOR Rate Loans. During such periods as
the New Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate
plus the Applicable Percentage.

 

Interest on the New Term Loan shall be payable in arrears on
each Interest Payment Date.

 

(d)                               Term Notes.  The Borrower’s obligation to pay each New Term
Loan Lender’s portion of the New Term Loan shall be evidenced, upon such New
Term Loan Lender’s request, by a Term Note made payable to such New Term Loan
Lender in substantially the form of Schedule 2.2A.  The Borrower covenants and agrees to pay the New
Term Loan in accordance with the terms of this Credit Agreement and the Term Note
or Term Notes.

 

1.4                               Purpose of Loan.  Section 3.11 (a) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

 

(a)                               (i) with respect to
the Revolving Loans, the Initial Term Loan and Swingline Loans, to (A) finance
the Shenandoah Acquisition, (B) finance Permitted Acquisitions, (C) pay
certain costs, fees and expenses in connection with the Shenandoah Acquisition
and any Permitted Acquisition, (D) refinance certain existing Indebtedness
of the Borrowers, (E) pay fees and expenses owing to the Lenders and the
Administrative Agent in connection with this Agreement and (F) provide for
working capital, capital expenditures and other general corporate purposes of
the Borrowers, and (ii) with respect to the New Term Loan,

 

8

 

(A)  first to
refinance the Initial Term Loan, (B) second to pay fees and expenses owing
to the Lenders and the Administrative Agent in connection with this Agreement
and the First Amendment hereto dated as of February 27, 2006, (C) third
to finance the Zen Technology Acquisition and pay any fees and expenses related
to the Zen Technology Acquisition and (D) fourth to provide for working
capital, capital expenditures and other general corporate purposes of the
Borrowers; and

 

1.5                              Leverage Ratio.  The Leverage Ratio table in Section 5.9(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

	
  Period

  	
   

  	
  Maximum Ratio

  	
   

  
	
  First Amendment Effective Date through fiscal
  quarter ending June 30, 2006

  	
   

  	
  3.75 to 1.00

  	
   

  
	
  July 1, 2006 through fiscal quarter ending
  June 29, 2007

  	
   

  	
  3.50 to 1.00

  	
   

  
	
  June 30, 2007 through fiscal quarter ending
  June 27, 2008

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  June 28, 2008 and thereafter

  	
   

  	
  2.75 to 1.00

  	
   

  

 

1.6                               Subordinated Indebtedness.  Section 6.1(h) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

(h)                               (i) subordinated
Indebtedness (on substantially the terms of the subordinated Indebtedness with
respect to the Bridge Acquisition or the Zen Technology Acquisition or on such
other terms and conditions as are satisfactory to the Required Lenders)
consisting of seller notes, earnout obligations or deferred payments incurred
in connection with Permitted Acquisitions that constitutes all or a portion of
the Total Consideration for such Permitted Acquisitions and (ii) Indebtedness
assumed in connection with Permitted Acquisitions (including Indebtedness of a
Person existing at the time such Person becomes a Subsidiary) that constitutes
all or a portion of the Total Consideration for such Permitted Acquisitions, so
long as such Indebtedness was not incurred in contemplation of any such
Permitted Acquisition; provided that the total Indebtedness in clauses (i) and
(ii) above shall not exceed $30,000,000 outstanding at any time during the
term of this Agreement and not more than $15,000,000 of such Indebtedness may
be of the type described in clause (ii);

 

1.7                               Restricted Payments.  Section 6.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

Section 6.10                            Restricted Payments.

 

Each of the Borrowers will not, nor will it permit any
Subsidiary to, directly or indirectly, declare, order, make or set apart any
sum for or pay any Restricted Payment, except:

 

(a)                               to make dividends payable
solely in the form of common stock or equivalent equity interests of such
Person;

 

9

 

(b)                               to make dividends or other
distributions payable to any Borrower (directly or indirectly through
Subsidiaries);

 

(c)                                to make earn-out and other
deferred payments with respect to:

 

(i) the Bridge Acquisition, the
Shenandoah Pass-Through Obligations or any other Permitted Acquisition (other
than the Zen Technology Acquisition) at any time (including payment in full) so
long as (A) no Default or Event of Default exists (other than as a result
of a cross-default to the Subordinated Debt that is triggered by a payment
default under the Subordinated Debt or any other default under the Subordinated
Debt that has been cured or waived before, or on condition of, the payment) or
would result from any such payment, (B) after giving effect to any such
payment (other than the Shenandoah Pass-Through Obligations), (1) the
Borrowers are in compliance with all financial covenants set forth in Section 5.9
on a pro forma basis, (2) the Borrowers shall have no less than
$10,000,000 of availability under the Revolving Committed Amount and (3) the
Leverage Ratio of the Parent Borrower and its Subsidiaries as of the end of the
most recent fiscal quarter shall be at least 0.25 less than the then applicable
level set forth in Section 5.9(a), and (C) on and after the First
Amendment Effective Date, (1) such earn-out and other deferred payments
with respect to the Bridge Acquisition shall not exceed $2,250,000 and (2) no
earn-out or other deferred payments shall be made with respect to the
Shenandoah Pass-Through Obligations; and

 

(ii) the Zen Technology
Acquisition on or after May      , 2007 (including
payment in full) so long as (A) no Default or Event of Default exists
(other than as a result of a cross-default to the Subordinated Debt that is
triggered by a payment default under the Subordinated Debt or any other default
under the Subordinated Debt that has been cured or waived before, or on
condition of, the payment) or would result from any such payment, (B) after
giving effect to any such payment, the Borrowers are in compliance with all
financial covenants set forth in Section 5.9 on a pro forma basis and (C) such
earn-out and other deferred payments shall not exceed $6,000,000; and

 

(d)                               to make other Restricted
Payments not contemplated by the foregoing subsections of this Section 6.10
in an aggregate amount not to exceed $10,000,000 during any twelve month
period; provided that, both before and after giving effect to any
Restricted Payment pursuant to this Section 6.10(d), on a proforma basis,(i)
no Default or Event of Default shall exist, (ii) the Borrowers shall be in
compliance with all financial covenants set forth in Section 5.9, (iii)
the Leverage Ratio of the Parent Borrower and its Subsidiaries as of the end of
the most recent fiscal quarter shall be at least 0.25 less than the then
applicable level

 

10

 

set forth in Section 5.9(a) and (iv) the
Borrowers shall have no less than $5,000,000 of availability under the
Revolving Committed Amount.

 

1.8                               Term Note. A new Schedule 2.2A is hereby added to
the Credit Agreement to read as attached hereto.

 

ARTICLE II

CONDITIONS TO EFFECTIVENESS

 

2.1                               Closing Conditions. This Amendment shall become effective as of
the First Amendment Effective Date upon satisfaction of the following
conditions (in form and substance reasonably acceptable to the
Administrative Agent):

 

(a)                                  Executed Documents.  Receipt
by the Administrative Agent of (i) counterparts of this Amendment executed
by a duly authorized officer of each party hereto, (ii) for the account of
each New Term Loan Lender requesting a Term Note, a Term Note, and (iii) Lender
Consents executed by the New Term Loan Lenders and the Required Lenders.

 

(b)                                 Authority Documents. Receipt by the Administrative Agent of:

 

(i)            Borrower
Certificates. A certificate for each Borrower, certified by an officer of
such Borrower as of the First Amendment Effective Date, certifying that the (i) articles
of incorporation, partnership agreement or other charter documents of such
Borrower, (ii) resolutions of the board of directors or other comparable
governing body of such Borrower authorizing the execution and delivery hereof,
and (iii) the bylaws or other operating agreement of such Borrower, which
were delivered to the Administrative Agent in connection with the closing of the
Credit Agreement, have not been rescinded or modified, have been in full force
and effect since the Closing Date and are in full force and effect as of the
First Amendment Effective Date.

 

(ii)           Good Standing.
Copies of certificates of good standing, existence or its equivalent with
respect to each Borrower certified as of a recent date by the appropriate
Governmental Authorities of the state of incorporation and each other state in
which the failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect.

 

(iii)          Incumbency.
An incumbency certificate of each Borrower certified by a secretary or
assistant secretary of such Borrower to be true and correct as of the First
Amendment Effective Date.

 

(c)                                  Consents.  The Administrative Agent shall have received
evidence that all governmental, 
shareholder and material third party consents and approvals necessary in
connection with the Zen Technology Acquisition and this Amendment have been
obtained and all applicable waiting periods have expired without any action
being taken by any authority that

 

11

 

could
restrain, prevent or impose any material adverse conditions on the Zen
Technology Acquisition or this Amendment or that could seek to threaten any of
the foregoing.

 

(d)                                 Zen Technology Acquisition. The Zen Technology Acquisition Documents
shall be reasonably satisfactory to the Administrative Agent and all conditions
to closing the Zen Technology Acquisition shall be fulfilled in accordance with
the terms of the Zen Technology Acquisition Documents without any material
amendment or waiver thereof except as approved by the Administrative Agent.

 

(e)                                  Bankruptcy. There shall be no bankruptcy or insolvency proceedings with respect
to any Borrower or Zen Technology.

 

(f)                                    Material Adverse Effect.  Since December 31, 2004, (i) no
Material Adverse Effect shall have occurred and (ii) no material adverse
effect shall have occurred on the business, operations, property or financial
condition of Zen Technology.

 

(g)                                 Litigation.  There shall not exist any material pending
litigation, investigation, bankruptcy or insolvency, injunction, order or claim
with respect to any Borrower or Zen Technology, the Zen Technology Acquisition,
this Amendment or any of the other Credit Documents, that has not been settled,
dismissed, vacated, discharged or terminated prior to the First Amendment
Effective Date.

 

(h)                                 Solvency Certificate. The Administrative Agent shall have
received an officer’s certificate prepared by the chief financial officer of
the Parent Borrower as to the financial condition, solvency and related matters
of each Borrower and Zen Technology, in each case after giving effect to the
Zen Technology Acquisition and the New Term Loan, in substantially the form of
Schedule 4.1-3 to the Credit Agreement.

 

(i)                                     Legal Opinions of Counsel. The Administrative Agent shall have
received opinions of legal counsel for the Borrowers, dated the First Amendment
Effective Date and addressed to the Administrative Agent and the Lenders, which
opinions shall provide, among other things, that this Amendment has been duly
authorized, executed and delivered by each of the Borrowers, this Amendment is
a valid, binding and enforceable obligation of the Borrowers and the execution
and delivery of this Amendment by the Borrowers and the consummation of the
transactions contemplated thereby will not violate the corporate instruments
and Material Contracts of the Borrowers, and shall otherwise be in form and
substance acceptable to the Administrative Agent.

 

(j)                                     Projections; Officer’s Certificate. The Administrative Agent shall have
received from the Parent Borrower updated financial projections (giving effect
to the Zen Technology Acquisition) and an officer’s certificate, in each case
in form and substance reasonably satisfactory to the Administrative Agent,
demonstrating that, after giving effect to the Amendment and the New Term Loan,
the Borrowers will be in compliance with the financial covenants set forth in Section 5.9
of the Credit Agreement.

 

12

 

(k)                                  Fees and Expenses. The Borrower shall have paid in full (i) all
fees set forth in that certain Fee Letter dated January 25, 2006 and (ii) all
reasonable out-of-pocket fees and expenses of the Administrative Agent in
connection with the preparation, execution and delivery of this Amendment,
including without limitation, the reasonable fees and expenses of Moore &
Van Allen PLLC.

 

(1)                                  Miscellaneous. All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.

 

ARTICLE III

COVENANTS

 

3.1                               Zen Technology Covenants. Immediately after the closing of the Zen
Technology Acquisition, Borrowers shall, and shall cause Zen Technology to,
deliver to the Administrative Agent the following:

 

(a)                                 Executed Documents.  Counterparts
of a Joinder Agreement executed by duly authorized officers of Zen Technology,
the Borrower and the Administrative Agent (the “Zen  Technology
Joinder Agreement”).

 

(b)                                 Authority Documents.

 

(i)                                     Borrower Certificates. A certificate for Zen Technology, certified
by an officer of Zen Technology as of the date of the Zen Technology Joinder
Agreement, certifying that the (i) articles of incorporation, partnership
agreement or other charter documents of Zen Technology, (ii) resolutions
of the board of directors or other comparable governing body of Zen Technology
authorizing the execution and delivery of the Zen Technology Joinder Agreement,
and (iii) the bylaws or other operating agreement of Zen Technology, which
were delivered to the Administrative Agent in connection with the closing of
the Zen Technology Joinder Agreement, have not been rescinded or modified, and
are in full force and effect as of the date of the Zen Technology Joinder
Agreement.

 

(ii)                                  Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to Zen Technology certified as of a
recent date by the appropriate Governmental Authorities of its state of
incorporation and each other state in which the failure to so qualify and be in
good standing could reasonably be expected to have a Material Adverse Effect.

 

(iii)                               Incumbency. An incumbency certificate of Zen Technology certified by a secretary
or assistant secretary of Zen Technology to be true and correct as of the First
Amendment Effective Date.

 

13

 

(c)                                  Collateral Documentation. With respect to Zen Technology, the
documentation contemplated by Sections 4.1(d), (e) and (f) of the
Credit Agreement, each in form and substance satisfactory to the
Administrative Agent.

 

(d)                                 Legal Opinion of Counsel.  An
opinion of legal counsel for Zen Technology, dated the date of the Zen
Technology Joinder Agreement and addressed to the Administrative Agent and the
Lenders, which opinion shall provide, among other things, that the Zen
Technology Joinder Agreement has been duly authorized, executed and delivered
by Zen Technology, the Zen Technology Joinder Agreement is a valid, binding and
enforceable obligation of Zen Technology and the execution and delivery of the
Zen Technology Joinder Agreement by Zen Technology and the consummation of the
transactions contemplated thereby will not violate the corporate instruments
and Material Contracts of Zen Technology, and shall otherwise be in form and
substance acceptable to the Administrative Agent and the Lenders.

 

ARTICLE IV

MISCELLANEOUS

 

4.1                               Amended Terms.  On and after the First Amendment Effective Date, all references to the
Credit Agreement in each of the Credit Documents shall hereafter mean the
Credit Agreement as amended by this Amendment. Except as specifically amended
hereby or otherwise agreed, the Credit Agreement is hereby ratified and
confirmed and shall remain in full force and effect according to its terms.

 

4.2                               Reaffirmation of
Representations and Warranties.   The Borrowers hereby affirm that (a) the representations and
warranties set forth in the Credit Agreement and the other Credit Documents (i) that
contain a materiality qualification shall be true and correct as of the date
hereof (except for those which expressly relate to an earlier date) and (ii) that
do not contain a materiality qualification shall be true and correct in all
material respects as of the date hereof (except for those which expressly
relate to an earlier date), (b) no Default or Event of Default exists on
and as of the date hereof and after giving effect to this Amendment, (c) the
execution and delivery by each of the Borrowers of this Amendment and the
performance by each of the Borrowers of its agreements and obligations under
this Amendment and the Credit Agreement (i) are within the corporate power
of each of the Borrowers, (ii) have been duly authorized by all necessary
corporate proceedings of each of the Borrowers, (iii) do not conflict with
or result in any breach or contravention of any provision of law, statute, rule or
regulation to which any of the Borrowers is subject or any judgment, order,
writ, injunction, license or permit applicable to any Borrower, and (iv) do
not conflict with the terms of any provision of the articles of incorporation
or other charter document and the bylaws of any Borrower, or any material
agreement or other material instrument binding upon, any Borrower, (d) this
Amendment and the other Credit Documents constitute the legal, valid and
binding obligations of the Borrowers party hereto and thereto, enforceable
against them in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability, and (e) the articles of
incorporation or other charter document and the bylaws of each of Borrowers

 

14

 

have
not been amended or modified since the Closing Date.

 

4.3                               Reaffirmation of
Liens/Obligations.  Each Borrower (i) acknowledges and
consents to all of the terms and conditions of this Amendment, (ii) affirms
all of its obligations under the Credit Documents and (iii) agrees that
this Amendment and all documents executed in connection herewith do not operate
to reduce or discharge such Borrower’s obligations under the Credit Agreement
or the other Credit Documents. Each Borrower affirms the Liens and security
interests created and granted by it in the Credit Documents (including, but not
limited to, the Pledge Agreement, the Security Agreement and the Mortgage
Instruments) and agrees that this Amendment shall in no manner adversely affect
or impair such Liens and security interests. Each of the Borrowers acknowledges
and agrees that as of the date hereof it has no claims, counterclaims, offsets
or defenses to the Credit Documents and the performance of such Borrower’s
obligations thereunder or if such Borrower did have any such claims,
counterclaims, offsets or defenses to the Credit Documents or such obligations,
the same are hereby waived, relinquished and released in consideration of the
requisite Lenders’ execution and delivery of this Amendment. Each Borrower
hereby releases the Administrative Agent and the Lenders, and their respective
officers, employees, representatives, agents, counsel and directors from any
and all actions, causes of action, claims, demands, damages and liabilities of
whatever kind or nature, in law or in equity, to the extent that any of the
foregoing arises from any action or failure to act on or prior to the date
hereof.

 

4.4                               Credit Document; No Other
Changes.  This Amendment shall constitute a Credit
Document.  Except as modified hereby, all
of the terms and provisions of the Credit Agreement and the other Credit
Documents (including schedules and exhibits thereto) shall remain in full force
and effect.

 

4.5                               Counterparts; Delivery by
Facsimile.  This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original and together shall constitute the same agreement. It shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart. Delivery of an executed counterpart to
this Amendment by facsimile shall be effective as an original and shall
constitute a representation that an original will be delivered.

 

4.6                               Governing Law, Etc.  THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA WITHOUT GIVING EFFECT TO ANY SUCH LAW THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NORTH CAROLINA
TO THIS AMENDMENT. The consent to jurisdiction, service of process, and waivers
of jury trial and consequential damages provisions set forth in Sections 9.14
and 9.17 of the Credit Agreement are hereby incorporated by references, mutatis mutandis.

 

4.7                               Entirety.  This Amendment and the other Credit Documents embody the entire
agreement between the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.

 

15

 

4.8                               No Actions, Claims, Etc.  As of the date hereof, each of the Borrowers hereby acknowledges and
confirms that it has no knowledge of any actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in
equity, by it against the Administrative Agent, the Lenders, or the
Administrative Agent’s or the Lenders’ respective officers, employees,
representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act, under the Credit Agreement on or
prior to the date hereof.

 

4.9                               Incremental Facility.  The
parties hereto acknowledge that the New Term Loan does not constitute an
Additional Loan or an Incremental Facility.

 

4.10                        Further Assurances.  The Borrowers agree to promptly take such reasonable action, upon the
request of the Administrative Agent, as is necessary to carry out the intent of
this Amendment.

 

16

 

 

IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above written.

 

 

	
  PARENT
  BORROWER:

  	
   

  	
  SI
  INTERNATIONAL, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Executive
  Vice President, Chief Financial Officer and

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
  SUBSIDIARY

  	
   

  
	
  BORROWERS:

  	
  SI
  INTERNATIONAL TELECOM CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SI
  INTERNATIONAL APPLICATION DEVELOPMENT,

  
	
   

  	
  INC.,

  
	
   

  	
  a
  Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SI
  INTERNATIONAL ENGINEERING, INC.,

  a Colorado corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SI
  INTERNATIONAL CONSULTING, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  

 

 

	
   

  	
  SI
  INTERNATIONAL LEARNING, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MATCOM
  INTERNATIONAL CORP.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SI
  INTERNATIONAL TECHNOLOGY SERVICES, INC.

  f/k/a Materials, Communication and Computers, Inc.,

  a North Carolina corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRIDGE
  TECHNOLOGY CORPORATION,

  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHENANDOAH
  ELECTRONIC INTELLIGENCE, INC.,

  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  

 

 

	
   

  	
  SI
  INTERNATIONAL SEIT, INC. f/k/a SEI

  TECHNOLOGY, INC.,

  a Virginia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Dunn

  	
   

  
	
   

  	
   

  	
  Thomas
  E. Dunn,

  
	
   

  	
   

  	
  Chief
  Financial Officer and Treasurer

  

 

 

	
  ADMINISTRATIVE
  AGENT:

  	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Administrative Agent on behalf of itself and the other

  Lenders

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura Douglas

  	
   

  
	
   

  	
  Name:

  	
  Laura Douglas

  
	
   

  	
  Title:

  	
  AVP

  
						

 

 

Schedule 2.2A

 

[FORM OF] NEW TERM NOTE

 

        , 2005

 

FOR
VALUE RECEIVED, the undersigned, SI INTERNATIONAL, INC., a Delaware
corporation (the “Parent Borrower”) and the Subsidiary Borrowers, hereby
unconditionally promise to pay, on each principal amortization date set forth
in Section 2.2A(b) of the Credit Agreement referred to below, to the
order
of               (the
“Lender”) at the office of Wachovia Bank, National Association located
at Charlotte Plaza, 201 South College Street, CP-8, Charlotte, North Carolina
28288-0680, in lawful money of the United States of America and in immediately
available funds, the portion of the New Term Loan principal amortization
payment owing to the Lender and corresponding to such principal amortization
date. On the Term Loan Maturity Date, the remaining unpaid principal amount of
the New Term Loan made by the Lender to the undersigned pursuant to Section 2.2
of the Credit Agreement referred to below shall be repaid in full. The
undersigned further agrees to pay interest in like money at such office on the
unpaid principal amount hereof and, to the extent permitted by law, accrued
interest in respect hereof from time to time from the date hereof until payment
in full of the principal amount hereof and accrued interest hereon, at the
rates and on the dates set forth in the Credit Agreement.

 

The
holder of this Note is authorized to endorse the date and amount of each
payment of principal and interest with respect to the New Term Loan evidenced
by this Note and the portion thereof that constitutes a LIBOR Rate Loan or an
Alternate Base Rate Loan on Schedule I annexed hereto and made a part hereof,
or on a continuation thereof which shall be attached hereto and made a part hereof,
which endorsement shall constitute prima facie evidence of the accuracy
of the information endorsed subject to manifest error; provided, however,
that the failure to make any such endorsement shall not affect the obligations
of the undersigned under this Note.

 

This
Note is one of the Term Notes referred to in the Amended and Restated Credit
Agreement, dated as of February 9, 2005, by and among the Parent Borrower,
the Domestic Subsidiaries of the Parent Borrower from time to time party
thereto (the “Subsidiary Borrowers”), the Lenders from time to time
parties thereto and Wachovia Bank, National Association, as Administrative
Agent (as amended by the First Amendment to Amended and Restated Credit
Agreement dated as
of                ,
2006 (the “First Amendment”) and as further amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
and is entitled to the benefits thereof. Terms used herein but not otherwise
defined herein shall have the meanings provided in the Credit Agreement. [This Note amends and restates, and is in substitution
for, that certain Term Note dated on or about February 9, 2005 payable to
the order of the Lender.] Nothing herein is intended to extinguish,
cancel or impair the lien priority or effect of any Security Document with
respect to any Borrower’s obligations hereunder or under any other Credit
Document.

 

Upon
the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided
therein. In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to principal and
interest, all costs of collection, including reasonable attorneys’ fees.

 

 

All
parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

 

This
Note shall be governed by, and construed and interpreted in accordance with,
the laws of the State of North Carolina.

 

	
  PARENT
  BORROWER:

  	
   

  	
  SI
  INTERNATIONAL, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARY

  	
   

  
	
  BORROWERS:

  	
  SI
  INTERNATIONAL TELECOM CORPORATION,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  SI
  INTERNATIONAL APPLICATION DEVELOPMENT, INC.,

  
	
   

  	
  a
  Maryland corporation

  
	
   

  	
  SI
  INTERNATIONAL ENGINEERING, INC.,

  
	
   

  	
  a
  Colorado corporation

  
	
   

  	
  SI
  INTERNATIONAL CONSULTING, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  SI
  INTERNATIONAL LEARNING, INC.,

  
	
   

  	
  a
  Maryland corporation

  
	
   

  	
  MATCOM
  INTERNATIONAL CORP.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
  SI
  INTERNATIONAL TECHNOLOGY SERVICES, INC., f/k/a

  
	
   

  	
  Materials,
  Communication and Computers, Inc.,

  
	
   

  	
  a
  North Carolina corporation

  
	
   

  	
  BRIDGE
  TECHNOLOGY CORPORATION,

  
	
   

  	
  a
  Virginia corporation

  
	
   

  	
  SHENANDOAH
  ELECTRONIC INTELLIGENCE, INC.,

  
	
   

  	
  a
  Virginia corporation

  
	
   

  	
  SI
  INTERNATIONAL SEIT, INC. f/k/a SEI TECHNOLOGY,

  
	
   

  	
  INC.,

  
	
   

  	
  a
  Virginia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  of
  each of the foregoing Subsidiary Borrowers

  
											

 

 

SCHEDULE I

to

New Term Note

 

LOANS AND PAYMENTS OF PRINCIPAL

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Principal

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amount

  	
   

  	
  Type

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Paid

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  of

  	
   

  	
  of

  	
   

  	
  Interest

  	
   

  	
  Interest

  	
   

  	
  Maturity

  	
   

  	
  Or

  	
   

  	
  Principal

  	
   

  	
  Notation

  	
   

  
	
  Date

  	
   

  	
  Loan

  	
   

  	
  Loan(1)

  	
   

  	
  Rate

  	
   

  	
  Period

  	
   

  	
  Date

  	
   

  	
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(1)                                  The type of Loan may be represented by “L”
for LIBOR Rate Loans or “ABR” for Alternate Base Rate Loans.Exhibit 10.1

 

 

 

February 28, 2006

 

Mr. Peter Bell

c/o The Wing Sail Company

14707 Le Grande Drive

Addison, TX 75001

 

Re:    October 1, 2005 Stock Purchase Agreement (“Agreement”) with Earth Biofuels,
Inc.

 

Dear Mr. Bell:

 

This letter agreement (herein so called) is intended to supplement the
provisions of the referenced Agreement.

 

In order to effect a closing of the transaction contemplated by the
Agreement, the parties agree to the following:

 

1.               The Wing Sail
Company (“Wing Sail”) has provided
financial statements which are deemed sufficient for purposes of effecting a
closing of the transaction contemplated by the Agreement (the “Financial Statements”).

 

2.               The net worth of
Wing Sail (as reflected in the Financial Statements) for purposes of determining
the number of restricted shares of Earth Biofuels, Inc. (“Buyer”)
to be delivered to Mr. Peter Bell, as seller (“Seller”),
is agreed to be $333,390. Accordingly, the net worth is 55.56% of the target
net worth of $600,000 (calculated as $333,390 ÷ $600,000 = .5556).

 

3.               The number of
shares of Buyer (the “Closing Shares”)
to be delivered to Seller at closing is 6,667,800 (calculated as 12,000,000 x
..5556 = 6,667,800).

 

4.               Provided that the
remaining terms of this letter agreement have been satisfied, as acknowledged
in a writing to such effect executed by Buyer, Buyer shall deliver the Closing
Shares to Seller within 2 business thereafter.

 

5.               The Wing Sail
payable to Colin Bell (in the amount of approximately $140,000) shall have been
paid in full and Colin Bell shall have delivered to Buyer a writing to the
effect that such amount has been “paid in full.”  Also, the Wing Sail payable to Peter Bell (in
the amount of approximately $60,000) shall have been paid in full and Peter
Bell shall have delivered to Buyer a writing to the effect that such amount has
been “paid in full.”

 

6.               All Wing Sail
accounts payable that are more than 90 days past due, as reflected in the
Financial Statements as of September 30, 2005 and/or other records of Wing Sail
since the date of such Financial Statements, shall have been paid in full. If
such accounts payable have not paid in full, the amount of such accounts

 

3001 knox street • suite 403 • dallas texas
75205

214.389.9800 • 214.389.9805 facsimile

 

 

payable shall be offset against amounts due under the promissory note
set forth in the following numbered paragraph. Wing Sail shall provide a full
accounting of all expenses from January 1, 2006 to date (that are not reflected
in the Financial Statements), which have been charged to Wing Sail. The full
amount of such expenses shall be offset against amounts due under the
promissory note set forth in the following numbered paragraph. Wing Sail shall
have properly accounted (in the sole discretion of Buyer) for disposition of
the $277,000 amount paid to Wing Sail by the United States Treasury. Any amount
of such payment which has not been properly so accounted for, shall be offset
against amounts due under the promissory note set forth in the following
numbered paragraph.

 

7.               Wing Sail shall
have prepared and executed a promissory note payable to Seller in the principal
amount of $150,000, upon terms satisfactory to Buyer.

 

8.               Wing Sail shall
have opened a new bank account with JP Morgan Chase, for which the sole
signatories shall be Dennis McLaughlin, as Chairman, and Tommy Johnson, as
Director.

 

9.               The signatories for
all Wing Sail bank accounts (including those at NetBank) shall have been
changed to include only Dennis McLaughlin, as Chairman, and Tommy Johnson, as
Director.

 

10.         The balances in all Wing
Sail bank accounts (including those at NetBank) shall have been transferred to
the new JP Morgan Chase account. Following a transition period determined by
Dennis McLaughlin and Tommy Johnson, the NetBank account shall be closed.

 

11.         Wing Sail shall provide
to Buyer, a “snapshot” of NetBank account balances as of February 10, 2006, and
as of February 13, 2006.

 

12.         Wing Sail shall have
executed and delivered to all Wing Sail creditors, written notice that all
future payments from such creditors are to be directed to the new JP Morgan
Chase account, accompanied by wire transfer instructions.

 

13.         This letter agreement
shall serve as the form of settlement statement contemplated by section 2.2(c)
of the Agreement.

 

14.         Section 3.3 of the
Agreement is deleted in its entirety.

 

15.         Peter Bell hereby resigns
as an officer and director of Wing Sail.

 

16.         The parties agree that
within a reasonable time following the execution of this letter agreement (but
no later than March 1, 2006), Wing Sail will offer an employment agreement to
Peter Bell on substantially the following terms:  two-year term commencing October 1, 2005, at
an annual salary of $80,000; commission structure premised upon growth in
annual net profits of Wing Sail; noncompetition provision appropriate for a
sale of Wing Sail to Buyer.

 

This letter agreement shall be governed by the laws of the State of
Texas.

 

 

If the foregoing represents the substance of our agreement, please so
indicate by signing in the space provided below and providing an executed copy
to my attention.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tommy Johnson

  
	
   

  	
  Earth Biofuels, Inc.

  

 

 

AGREED:

 

 

 

	
   

  	
   

  
	
  Peter Bell, individually

  
	
   

  
	
   

  
	
  The Wing Sail Company

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Peter Bell

  
	
   

  	
  Chief Executive Officer

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