PROMISSORY NOTE
$10,000,000.00 September 11, 1998
Los Angeles, California
FOR VALUE RECEIVED, SM & A CORPORATION, a California
corporation (the "BORROWER"), promises to pay to the order of IMPERIAL BANK (the
"BANK") on the Maturity Date (as defined in the Credit Agreement referred to
below) the principal amount of Ten Million Dollars ($10,000,000.00), or, if
less, the aggregate amount of Revolving Loans (as defined in the Credit
Agreement) made by the Bank to the Borrower pursuant to the Credit Agreement
outstanding on the Maturity Date. All unpaid amounts of principal and interest
shall be due and payable in full on September 10, 2001.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from the date hereof until paid at the rates and at the
times which shall be determined in accordance with the provisions of the Credit
Agreement. Any interest not paid when due shall be compounded and shall
thereafter accrue interest at the rates and at the times which shall be
determined in accordance with the provisions of the Credit Agreement.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same day funds
at the office of the Bank located at 695 Town Center Drive, Suite 100, Costa
Mesa, California 92626, or at such other place as shall be designated in writing
for such purpose in accordance with the terms of the Credit Agreement. Until
notified of the transfer of this Note, the Borrower shall be entitled to deem
the Bank or such person who has been so identified by the transferor in writing
to the Borrower as the holder of this Note, as the owner and holder of this
Note. Each of the Bank and any subsequent holder of this Note agrees that before
disposing of this Note or any part hereof, it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid on the schedule attached hereto, if any; provided, however,
that the failure to make notation of any payment made on this Note shall not
limit or otherwise affect the obligation of the Borrower hereunder with respect
to payments of principal or interest on this Note.
This Note is referred to in, and is entitled to the benefits
of, that certain Credit and Security Agreement dated as of September 11, 1998
(as amended from time to time, the "CREDIT AGREEMENT") between the Borrower on
the one hand, and on the other hand, the financial institutions (including the
Bank) signatory thereto ("Lenders") and Mellon Bank, N.A., as agent for the
Lenders (in such capacity, "Agent"). The Credit Agreement, among other things,
(i) provides for the making of advances (the "LOANS") by the Bank to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Loan being evidenced by this Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
The terms of this Note are subject to amendment only in the
manner provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision
of this Note or the Credit Agreement shall alter or impair the obligation of the
Borrower, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all reasonable costs and
expenses, including reasonable attorneys' fees, incurred in the collection and
enforcement of this Note. The Borrower hereby consents to renewals and
extensions of time at or after the maturity hereof, without notice, and, subject
to the Credit Agreement, hereby waives diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered by its duly authorized officer, as of the date and the
place first above-written.
SM & A CORPORATION,
a California corporation
By: /S/ Ronald A. Hunn
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Name: Ronald A. Hunn
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Title: V.P., C.F.O. and Sec.
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SCHEDULE OF
TRANSACTIONS ON
NOTE
Amount of Amount of Interest Paid Principal Notation
Loan Made Principal Paid Interest Paid Through Balance Made By
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