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PLEDGE AGREEMENT

Security Agreement

PLEDGE AGREEMENT | Document Parties: DYNAMICS RESEARCH CORP | Bank of America, N.A. | BROWN BROTHERS HARRIMAN & CO | DYNAMICS RESEARCH CORPORATION | TD Bank, NA You are currently viewing:
This Security Agreement involves

DYNAMICS RESEARCH CORP | Bank of America, N.A. | BROWN BROTHERS HARRIMAN & CO | DYNAMICS RESEARCH CORPORATION | TD Bank, NA

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Title: PLEDGE AGREEMENT
Governing Law: Massachusetts     Date: 8/5/2008
Industry: Computer Networks     Sector: Technology

PLEDGE AGREEMENT, Parties: dynamics research corp , bank of america  n.a. , brown brothers harriman & co , dynamics research corporation , td bank  na
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Exhibit 10.2

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (this “ Agreement ”) is dated as of the 1 st day of August, 2008 by and between DYNAMICS RESEARCH CORPORATION, a Massachusetts corporation (the “ Pledgor ”), and BROWN BROTHERS HARRIMAN & CO. , a New York general partnership with offices at 40 Water Street, Boston, Massachusetts, for itself and as Administrative Agent for each of the Lenders (defined below) which are and which may become parties to the Loan Agreement (defined below) (the “ Secured Party ”).  The Secured Party, in its capacity as Agent for the Lenders hereunder, is sometimes hereinafter referred to as the “ Agent ”, which term shall also be deemed to include any other party acting as agent for the Lenders hereunder.

 

Preliminary Statement

 

WHEREAS, the Pledgor and certain of its affiliates (such affiliates, together with the Pledgor, being referred to herein singly as a “ Borrower ” or collectively, the “ Borrowers ”) and the Agent, TD Bank, N.A., as Documentation Agent and Bank of America, N.A., as Syndication Agent (collectively, the “ Lenders ” and each a “ Lender ”) have entered into that certain Forth Amended and Restated Loan Agreement of even date herewith (as amended, modified, extended and/or supplemented from time to time, the “ Loan Agreement ”; capitalized terms used but not defined herein shall have the meanings given to such terms in the Loan Agreement) pursuant to which the Lenders have agreed, subject to the terms and conditions set forth therein, to make certain loans to the Borrowers (collectively, the “ Loans ”); such Loans are evidenced by the Borrowers’ Revolving Credit Notes and Term Notes of even date herewith payable to the Lenders (as such Notes may be amended, modified, supplemented and/or extended from time to time, singly and collectively, the “ Note ”); and

 

WHEREAS, the obligation of the Agent and the Lenders to enter into the Loan Agreement and make the Loans described therein is subject to the conditions, among others, that the Pledgor shall execute and deliver this Agreement and grant to the Secured Party the pledge and security interest hereinafter described;

 

NOW, THEREFORE, in consideration of the willingness of the Secured Party and the Lenders to enter into the Loan Agreement and, subject to the terms and conditions set forth therein, to make Loans to the Borrowers pursuant to the Loan Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows:

 

1.            Security Interest .  The Pledgor hereby deposits with and pledges to the Secured Party, for the benefit of the Lenders, (i) the shares of capital stock (the “ Pledged Stock ”) and (ii) the membership interests (the “ Pledged Interests ”), in each case as listed in Schedule I attached hereto (collectively, with the Pledged Stock and any additional securities or collateral now or hereafter pledged hereunder, the “ Pledged Collateral ”).  The Pledgor hereby grants to the Secured Party, for the benefit of the Lenders, a security interest in and lien on all of the Pledged Collateral, together with all rights to distributions or other payments arising therefrom or related thereto, and all options, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributable in respect of or in exchange for any or all of the Pledged Collateral,  as security for the due and punctual payment and performance of the Secured Obligations described in Section 2 hereof.  Simultaneously with the execution of this Agreement, the Pledgor shall deliver to the Secured Party the original certificates evidencing the Pledged

 

 

 

 

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Stock and the Pledged interests (if certificated), together with stock powers executed in blank.  Notwithstanding any provision contained in this Agreement to the contrary, upon the payment in full of the Secured Obligations (as defined below), this Agreement and the security interest granted hereunder shall immediately and automatically terminate and have no further force or effect.

 

2.            Secured Obligations .  The security interest hereby granted shall secure the due and punctual payment and performance of the Liabilities (as defined in the Loan Agreement) of the Pledgor (herein called the “ Secured Obligations ”).

 

3.            Special Warranties and Covenants of the Pledgor .  The Pledgor hereby warrants and covenants to the Secured Party and each Lender that:

 

 

a.

The Pledged Collateral is duly and validly pledged with the Secured Party, for the benefit of the Lenders, in accordance with law and the Pledgor warrants and will defend the Secured Party’s right, title and security interest in and to the Pledged Collateral against the claims and demands of all persons whomsoever.

 

 

b.

The Pledgor has good title to the Pledged Collateral, free and clear of all claims, mortgages, pledges, liens, security interests and other encumbrances of every nature whatsoever except as created and granted hereby or as may be expressly set forth and permitted under the Loan Agreement.

 

 

c.

To the knowledge of the Pledgor, all of the Pledged Stock has been duly and validly issued and is fully paid and nonassessable.

 

 

d.

The Pledged Stock includes all of the presently issued and outstanding capital stock of each subsidiary of the Pledgor.

 

 

e.

The Pledged Interests includes one hundred percent (100%) of the equity interest of Kadix.

 

 

f.

If Pledgor acquires any additional shares of capital stock (including, without limitation, from the issuance of any additional shares of capital stock of any subsidiary of the Pledgor), any additional membership interests or any other investment property or securities, after the date hereof, the same shall constitute Pledged Collateral and shall be deposited and pledged with the Secured Party, for the benefit of the Lenders, as provided in Section 1 hereof simultaneously with such acquisition.

 

 

g.

The Pledgor will not sell, convey or otherwise dispose of any of the Pledged Collateral except to the extent permitted in the Loan Agreement, nor will the Pledgor create, incur or permit to exist any pledge, mortgage, lien, charge, encumbrance or any security interest whatsoever with respect to any of the Pledged Collateral or the proceeds thereof, other than liens on and security interests in the Pledged Collateral created hereby or which are otherwise expressly permitted under the Loan Agreement.

 

 

h.

Other than the UCC financing statements delivered and filed by Agent and in connection with securing the Collateral, there is no financing statement (or similar statement or

 

 

 

 

 

 

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registration under the laws of any jurisdiction) now on file or registered in any public office covering any interest of Pledgor or any other Person in the Pledged Collateral.

 

 

i.

The statements contained in the Preliminary Statement of this Agreement are true and correct.

 

 

j.

With respect to the Pledged Interests, Pledgor represents and warrants that the Lead Borrower has, and has caused the operating agreement of Kadix Systems, LLC, a Virginia limited liability company (“ Kadix ”), to reflect, that Kadix has opted into Article 8 of the UCC; provided , however , that the Pledged Interests hereunder shall be deemed ‘securities’ solely for purposes of UCC compliance and Pledgor acknowledges and agrees that the act of opting into Article 8 of the UCC alone does not categorize said Pledged Interests as “securities” under any federal investment company laws or federal or state securities laws.

 

4.            Distributions .  Upon the dissolution, winding up, liquidation or reorganization of any company whose capital stock or membership interests are included in the Pledged Collateral, whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of any such company or otherwise, if any sum shall be paid or any property shall be distributed upon or with respect to any of the Pledged Collateral and an Event of Default shall have occurred and be continuing, then such sum shall be paid over to the Secured Party to be held as collateral security for the Secured Obligations.  In case any dividend or distribution shall be declared on any of the Pledged Collateral, or any share of stock or fraction thereof shall be issued pursuant to any stock split involving any of the Pledged Collateral, or any distribution of capital (including cash dividends) shall be made on any of the Pledged Collateral, or any property shall be distributed upon or with respect to the Pledged Collateral pursuant to a recapitalization or reclassification, the shares or other property so distributed shall be delivered to the Secured Party to be held as collateral security for the Secured Obligations.

 

5.            Rights and Remedies of Secured Party .  Upon the occurrence and continuance of any Event of Default, such default not having previously been remedied or cured within any applicable grace or cure periods, the Secured Party shall have the following rights and remedies:

 

 

a.

All rights and remedies provided by law, including, without limitation, those provided by the Massachusetts Uniform Commercial Code;

 

 

b.

All rights and remedies provided in this Agreement; and

 

 

c.

All rights and remedies provided in the Loan Agreement, the Note, or in any other Loan Document, and any other agreement, document or instrument pertaining to the Secured Obligations.

 

6.            Right to Transfer into Name of Secured Party, etc .  In case there shall exist an Event of Default that shall be continuing after applicable grace and cure periods, but subject to the provisions of the Uniform Commercial Code or other applicable law, the Secured Party may cause all or any of the Pledged Collateral to be transferred into its name or into the name of its nominee or nominees.  So long as no Event of Default shall exist and be continuing, the Pledgor shall be entitled to exercise as the Pledgor

 

 

 

 

 

 

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shall deem fit, but in a manner not inconsistent with the terms hereof or of the Secured Obligations, the voting power with respect to the Pledged Collateral.

 

7.            Right of Secured Party to Exercise Voting Power, etc .  In case there shall exist an Event of Default, which shall not have been remedied or cured, the Secured Party, until such Event of Default has been remedied or cured in accordance with the Loan Agreement:

 

 

a.

shall be entitled to exercise the voting power with respect to the Pledged Collateral, to receive and retain, as collateral security for the Secured Obligations any and all dividends or other distributions at any time and from time to time declared or made upon any of the Pledged Collateral, and to exercise any and all rights of payment, conversion, exchange, subscription or any o


 
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