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
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:
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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.
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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.
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To the
knowledge of the Pledgor, all of the Pledged Stock has been duly
and validly issued and is fully paid and nonassessable.
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The Pledged
Stock includes all of the presently issued and outstanding capital
stock of each subsidiary of the Pledgor.
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The Pledged
Interests includes one hundred percent (100%) of the equity
interest of Kadix.
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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.
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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.
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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.
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The statements
contained in the Preliminary Statement of this Agreement are true
and correct.
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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.
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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:
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All rights and
remedies provided by law, including, without limitation, those
provided by the Massachusetts Uniform Commercial Code;
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All rights and
remedies provided in this Agreement; and
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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.
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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
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:
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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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