FORM OF TAX INDEMNIFICATION AGREEMENT

TAX INDEMNIFICATION AGREEMENT





This TAX INDEMNIFICATION AGREEMENT (the "Agreement") is entered into effective the ___day of _____, 1997, between Deltek Systems, Inc., a Virginia corporation (the "Company") and the stockholders of the Company listed on Exhibit A attached hereto (the "Stockholders") (the Company and each Stockholder are hereinafter referred to individually as a "party" and collectively as the "parties").



WHEREAS, the Company is undertaking a public offering of its stock in order to raise additional equity capital for the expansion of the Company's business operations (the "Public Offering");



WHEREAS, the Company and the Stockholders have entered into this Agreement as a condition to the closing of the Public Offering;



WHEREAS, the Company was classified as an S corporation until _____, 1997, after which it will be classified as a C corporation;



WHEREAS, the Stockholders are stockholders of the Company; and



WHEREAS, the Company and the Stockholders wish to provide for a tax indemnification agreement in connection with the Company's termination as an S corporation.



NOW, THEREFORE, the parties agree as follows:





ARTICLE I

TERMINATION OF S STATUS



The Company is revoking its status as an S corporation under Section 1362 of the Internal Revenue Code of 1986, as amended (the "Code"), effective as of _____, 1997 (the "Termination Date"). The Company is also revoking its status as an S corporation in all states in which it is a qualifying S corporation effective as of such date. The Company also intends to elect to allocate its income for its current taxable year prior to the Termination Date using its normal tax accounting method (rather than the pro rata allocation method) in accordance with Treasury Regulation Section 1.1362-3(b) ("Accounting Election"). The Stockholders hereby approve such revocation and Accounting Election and agree to take all necessary steps to effect such revocation and Accounting Election.















ARTICLE II



2.1 Liability for Taxes Incurred for Taxable Periods Prior to the Termination Date. The Stockholders covenant and agree that: (a) the Stockholders have duly included, or will duly include, in their own federal and state income tax returns all items of income, gain, loss, deduction, or credit of the Company for any taxable period ending prior to the Termination Date (including the short taxable period ending the day before the Termination Date) during which the Company was an S corporation, and (b) the Stockholders shall pay or reimburse the Company for any and all taxes the Company is required to pay for all such taxable periods ending prior to the Termination Date; provided that the Company shall be responsible for (i) the deferred tax liability arising out of the revocation of the Company's S corporation status that will be recorded as a charge to income tax provision on the Company's financial statements in the quarter during which the Termination Date occurs and (ii) any taxes for such taxable periods in any states where the Company had either not made a comparable election or was not otherwise entitled to be treated as a S corporation or other pass-thru entity.



2.2 Filing of Tax Returns. The Company covenants and agrees that: (a) the Company shall be responsible for and shall effect the filing of all federal, state, foreign and local returns for the Company (and all composite state income returns on behalf of the Stockholders) with respect to any and all taxable ...