Exhibit 10-2
 
Execution Copy
 
AMENDMENT NO. 4 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 4, dated as of December 31, 2012 (this "Amendment No. 4"), to
that certain Credit Agreement referred to below is entered into by and among
Dynamics Research Corporation, a Massachusetts corporation (the "Borrower"), the
Guarantors, each Lender party hereto, and Bank of America, N.A., as
administrative agent (in such capacity, the "Administrative Agent"), Swing Line
Lender and an L/C Issuer.
STATEMENT OF PURPOSE
The Borrower is a party to that certain Credit Agreement, dated as of June 30,
2011, by and among the Borrower, each financial institution party thereto as a
lender (collectively, the "Lenders" and, each individually, a "Lender") and Bank
of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer
(as amended by that certain Amendment No. 1 to Credit Agreement, dated September
16, 2011, that certain Amendment No. 2 to Credit Agreement, dated June 29, 2012,
that certain Amendment No. 3 to Credit Agreement, dated August 8, 2012, and as
otherwise further amended, restated, supplemented or modified prior to the date
hereof, the "Credit Agreement").
The Borrower now requests that the Credit Agreement be amended in order to grant
certain accommodations to and for the benefit of the Borrower, all as more
particularly described herein.
Subject to the terms and conditions of this Amendment No. 4, the Administrative
Agent and the Lenders party hereto have agreed to grant such requests of the
Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1.                          Capitalized Terms.  All capitalized
undefined terms used in this Amendment No. 4 (including, without limitation, in
the Statement of Purpose hereto) shall have the meanings assigned thereto in the
Credit Agreement.  This Amendment No. 4 shall be a "Loan Document" for all
purposes of the Credit Agreement and the other Loan Documents.
SECTION 2.                          Amendments.  The parties hereto hereby agree
that as of the Amendment No. 4 Effective Date (as defined below) the Credit
Agreement is hereby amended by:

(i)            adding the following new defined terms to Section 1.01 thereof in
proper alphabetical order:

"2012/2013 Junior Payment" means, collectively, one or more payments of the
Indebtedness evidenced by the Subordinated Note Documents in an aggregate amount
not to exceed the sum of (a) $17,000,000 plus (b) accrued and unpaid cash
interest on the principal amount of such Indebtedness so paid, which such
payments are made on or prior to January 31, 2013, so long as (i) no more than
an aggregate of $2,000,000 of such payment or payments shall be applied to, or
comprised of, fees, interest that was previously capitalized and added to the
principal of such Indebtedness, premiums and other non-principal amounts of such
Indebtedness (other than accrued and unpaid cash interest), (ii) no Default or
Event of Default shall exist and be continuing at the time of each such payment
or would result therefrom, (iii) no more than an aggregate amount of $1,000,000
of all such payments shall be financed by the proceeds of Indebtedness and (iv)
the Borrower shall have delivered to the Administrative Agent a Compliance
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Certificate for the most recent fiscal quarter end preceding each such payment
for which financial statements are available demonstrating, in form and
substance reasonably satisfactory to the Administrative Agent, that the Borrower
is in compliance (as of the date of such payment and immediately after giving
effect thereto and any Indebtedness incurred in connection therewith) with each
covenant contained in Section 7.11.
"Additional Junior Payment" means, collectively, one or more payments of the
Indebtedness evidenced by the Subordinated Note Documents in an aggregate amount
not to exceed the sum of (a) $44,000,000 less the aggregate amount (inclusive of
fees, interest that was previously capitalized and added to the principal of
such Indebtedness, premiums and other non-principal amounts (other than payments
of accrued cash interest)) paid with respect to 2012/2013 Junior Payments plus
(b)  accrued and unpaid cash interest on the principal amount of such
Indebtedness referred to in clause (a), which such payments are made no earlier
than the fifth Business Day following the receipt of the financial statements
for the fiscal reporting periods ending June 30, 2013 required by Section 6.01
and the related Compliance Certificate required by Section 6.02, so long as (i)
the aggregate amount of such payment or payments that is applied to, or
comprised of, fees, interest that was previously capitalized and added to the
principal of such Indebtedness, premiums and other non-principal amounts (other
than accrued and unpaid cash interest) of such Indebtedness shall not exceed
$4,000,000 less the aggregate amount of all 2012/2013 Junior Payments that is or
was applied to, or comprised of, fees, interest that was previously capitalized
and added to the principal of such Indebtedness, premiums and other
non-principal amounts (other than payments of accrued cash interest) of such
Indebtedness, (ii) in the event that any such payment shall result in the
repayment in full of all Indebtedness under the Subordinated Note Documents and
termination of all obligations of the Borrower and its Subsidiaries under the
Subordinated Note Documents the Administrative Agent shall receive evidence
thereof in form and substance satisfactory to the Administrative Agent, (iii) no
more than an aggregate amount of $1,000,000 of all such payments shall be
financed by the proceeds of Indebtedness, (iv) no Default or Event of Default
shall exist and be continuing at the time of each such payment or would result
therefrom, and (v) the Borrower shall have delivered to the Administrative Agent
a Compliance Certificate for the most recent fiscal quarter end or fiscal year
end, as the case may be, preceding each such payment for which financial
statements are available demonstrating, in form and substance reasonably
satisfactory to the Administrative Agent, that the Borrower is in compliance (as
of the date of such payment and immediately after giving effect thereto and any
Indebtedness incurred in connection therewith) with each covenant contained in
Section 7.11.
 "Junior Payments" means, collectively, (a) the 2012/2013 Junior Payment and (b)
the Additional Junior Payment.

(ii)            amending and restating the following definitions under Section
1.01 thereof in their entireties:

 "Consolidated Interest Expense" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum, in each case determined in
accordance with GAAP and without duplication, of interest expense (including,
without limitation, interest expense attributable to Capital Leases, all net
payment obligations pursuant to Swap Contracts, any make whole premiums or other
premiums paid or payable in connection with the repayment of the Indebtedness
evidenced by the Subordinated Note Documents pursuant to a Junior Payment and
any write offs of any deferred financing fees, costs and
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expense which the Borrower may incur in connection with the repayment of the
Indebtedness evidenced by the Subordinated Note Documents pursuant to a Junior
Payment) for such period.
"Eurodollar Rate" means:
(a)            for any Interest Period with respect to a Eurodollar Rate Loan,
the rate per annum equal to (i) the British Bankers Association LIBOR Rate or
the successor thereto if the British Bankers Association is no longer making a
LIBOR rate available ("LIBOR"), as published by Reuters (or such other
commercially available source providing quotations of LIBOR as may be designated
by the Administrative Agent from time to time) at approximately 11:00 a.m.,
London time, two London Banking Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period or, (ii) if such rate is
not available at such time for any reason, the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted and with a
term equivalent to such Interest Period would be offered by Bank of America's
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two London Banking Days prior
to the commencement of such Interest Period; and
(b)            for any interest calculation with respect to a Base Rate Loan on
any date, the rate per annum equal to (i) LIBOR, at approximately 11:00 a.m.,
London time determined two London Banking Days prior to such date for Dollar
deposits being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the date of determination
in same day funds in the approximate amount of the Base Rate Loan being made or
maintained and with a term equal to one month would be offered by Bank of
America's London Branch to major banks in the London interbank eurodollar market
at their request at the date and time of determination.

"Excess Cash Flow" means, for any fiscal year of the Borrower, the excess (if
any) of (a) the sum (for such fiscal year) of (i) Consolidated EBITDA and (ii)
the amount by which Working Capital decreased during such fiscal year over (b)
the sum (for such fiscal year) of (i) Consolidated Interest Expense actually
paid in cash by the Borrower and its Subsidiaries, (ii) scheduled principal
repayments, to the extent actually made, of Term Loans pursuant to Section
2.07(c), (iii) all income taxes actually paid in cash by the Borrower and its
Subsidiaries, (iv) Capital Expenditures, Investments pursuant to Section 7.02(j)
or (k), Permitted Acquisitions and Junior Payments in each case, actually made
by the Borrower and its Subsidiaries in such fiscal year (other than to the
extent such Capital Expenditure, Investment, Permitted Acquisition or Junior
Payment is made with the proceeds of insurance, Dispositions, sales or issuance
of Indebtedness or Equity Interests or Extraordinary Receipts or other amounts
that would not be included in the calculation of Consolidated EBITDA), (v)
Transaction Costs paid in cash by the Borrower and its Subsidiaries during such
fiscal year and (vi) the amount by which Working Capital increased during such
fiscal year.
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(iii)            adding a period to the end of the definition of "Term Loan
Facility" in Section 1.01 thereof.

(iv)            deleting the word "Revolving" from the header to Section 2.02
thereof.

(v)            deleting the "(i)" and corresponding header in the second
paragraph of subsection (b) of Section 2.12 thereof.

(vi)            adding the following phrase at the end of Section 6.11(b)
thereof:

, and to finance one or more of the Junior Payments, to the extent otherwise
permitted hereunder and under the other Loan Documents

(vii)            adding in the following phrase in subsection (f) of Section
7.03 thereof immediately after the words "Subordinated Note Documents" in the
third line thereof:

"less the principal amount of all Junior Payments"

(viii)            deleting subsections (b) and (c) in Section 7.11 thereof in
their entireties and replacing them with the following:

(b)            Consolidated Senior Leverage Ratio.  Permit the Consolidated
Senior Leverage Ratio as of the last day of any fiscal quarter of the Borrower
ending during the periods specified below to be greater than the ratio set forth
below opposite such period:
Four Fiscal Quarters Ending
Maximum
Consolidated Senior
Leverage Ratio
Closing Date through June 29, 2012
3.50 to 1.00
June 30, 2012 through September 29, 2014
3.00 to 1.00
September 30, 2014 through September 29, 2015
2.50 to 1.00
September 30, 2015 and each fiscal quarter thereafter
2.00 to 1.00

(c)            Consolidated Fixed Charge Coverage Ratio.  Permit the
Consolidated Fixed Charge Coverage Ratio as of the last day of any fiscal
quarter of the Borrower ending during the periods specified below to be less
than the ratio set forth below opposite such period:
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Four Fiscal Quarters Ending
Minimum Consolidated Fixed Charge Coverage
Ratio
Closing Date through December 30, 2012
1.25 to 1.00
December 31, 2012 through March 30, 2015
1.10 to 1.00
March 31, 2015 through March 30, 2016
1.15 to 1.00
March 31, 2016 and each fiscal quarter thereafter
1.20 to 1.00

(ix)            adding the following sentence to the end of Section 7.14
thereof:

Notwithstanding anything contained in this Section 7.14 to the contrary, it is
understood and agreed that the Borrower shall be permitted to make the Junior
Payments and to amend, modify, waive or supplement any of the terms of the
Subordinated Note Documents in connection therewith, in each case subject to the
terms and conditions of the Subordination Agreement.
SECTION 3.                          Conditions Precedent to Effectiveness.
(a)            This Amendment No. 4 shall be effective upon the satisfaction of
each of the following conditions (such date, the "Amendment No. 4 Effective
Date"):
(i)            Executed Amendment. The Administrative Agent shall have received
counterparts of this Amendment No. 4 executed by the Borrower, the Guarantors,
the Administrative Agent and the requisite Lenders.
(ii)            Amendment to Subordinated Note Agreement.  Contemporaneously
with the effectiveness of this Amendment No. 4, the Borrower and the
Subordinated Noteholders shall have entered into an amendment to the
Subordinated Note Agreement (the "Subordinated Debt Amendment") on terms
substantially similar to those of this Amendment No. 4 in form and substance
satisfactory to the Administrative Agent.
(iii)            Amendment to Subordination Agreement.  Contemporaneously with
the effectiveness of this Amendment No. 4, the Borrower, the Guarantors, the
Subordinated Noteholders and the Administrative Agent shall have entered into an
amendment to the Subordination Agreement on terms in form and substance
satisfactory to the Administrative Agent.
(iv)            Amendment Fee.  The Borrower shall have paid to the
Administrative Agent (or its applicable affiliates), for the account of each
Lender that executes and delivers this Amendment No. 4 to the Administrative
Agent (or its counsel) on or prior to 5:00 p.m. (Eastern time) on December 28,
2012, a consent fee in an aggregate amount equal to 0.25% times the sum of (i)
the Revolving Commitments (determined as of the date hereof immediately prior to
the satisfaction of the conditions to effectiveness of this Amendment No. 4) of
all such Lenders plus (ii) the aggregate outstanding principal amount of the
Term Loans (determined as of the date
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hereof immediately prior to the satisfaction of the conditions to effectiveness
of this Amendment No. 4) of all such Lenders.
(v)            Payment of Fees and Expenses.  The Borrower shall have paid all
out-of-pocket expenses incurred by the Administrative Agent (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent) with respect to this Amendment No. 4 and all other invoiced fees, charges
and disbursements of counsel for the Administrative Agent outstanding as of the
date hereof.
(vi)            Other Closing Documents.  The Administrative Agent shall have
received such other instruments, documents and certificates as the
Administrative Agent shall reasonably request in connection with the execution
of this Amendment No. 4.
(b)              For purposes of determining compliance with the conditions
specified in this Section 3, each Lender that has signed this Amendment No. 4
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the date hereof
specifying its objection thereto.
SECTION 4.                          Effect of the Agreement.  Except as
expressly provided herein, the Credit Agreement and the other Loan Documents
shall remain unmodified and in full force and effect.  Except as expressly set
forth herein, this Amendment No. 4 shall not be deemed (a) to be a waiver of, or
consent to, a modification or amendment of, any other term or condition of the
Credit Agreement or any other Loan Document, (b) to prejudice any other right or
rights which the Administrative Agent or the Lenders may now have or may have in
the future under or in connection with the Credit Agreement or the other Loan
Documents or any of the instruments or agreements referred to therein, as the
same may be amended, restated, supplemented or otherwise modified from time to
time, (c) to be a commitment or any other undertaking or expression of any
willingness to engage in any further discussion with the Borrower or any other
Person with respect to any waiver, amendment, modification or any other change
to the Credit Agreement or the Loan Documents or any rights or remedies arising
in favor of the Lenders or the Administrative Agent, or any of them, under or
with respect to any such documents or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement
by and among the Borrower, on the one hand, and the Administrative Agent or any
other Lender, on the other hand.  References in the Credit Agreement to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein", and
"hereof") and in any Loan Document to the Credit Agreement shall be deemed to be
references to the Credit Agreement as modified hereby.
SECTION 5.                          Representations and Warranties.  By its
execution hereof, each Loan Party hereby represents and warrants as follows:
(a)            such Loan Party has the right, power and authority and has taken
all necessary corporate and other action to authorize the execution, delivery
and performance of this Amendment No. 4 and each other document executed in
connection herewith to which it is a party in accordance with their respective
terms;
(b)            this Amendment No. 4 and each other document executed in
connection herewith have been duly executed and delivered by its duly authorized
officers, and each such document constitutes the legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies;
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(c)            each representation and warranty contained in the Credit
Agreement and the other Loan Documents is true, correct and complete in all
material respects as of the date hereof as if fully set forth herein, except for
any representation and warranty made as of an earlier date, which representation
and warranty shall remain true, correct and complete in all material respects as
of such earlier date; provided that any representation or warranty that is
qualified by materiality or by reference to Material Adverse Effect shall be
true, correct and complete in all respects as of the applicable date; and
(d)            no Default has occurred and is continuing as of the date hereof
or would result after giving effect to the transactions contemplated by this
Amendment No. 4.
SECTION 6.                          Reaffirmation, Ratification and
Acknowledgment.  Each Loan Party (a) agrees that the transactions contemplated
by this Amendment No. 4 shall not limit or diminish the obligations of such
Person under, or release such Person from any obligations under, the Collateral
Agreement, the Guaranty, the Subordination Agreement and each other Collateral
Document to which it is a party, (b) confirms and reaffirms its obligations
under the Collateral Agreement, the Guaranty, the Subordination Agreement and
each other Collateral Document to which it is a party and (c) agrees that the
Collateral Agreement, the Guaranty, the Subordination Agreement and each other
Collateral Document to which it is a party remain in full force and effect and
are hereby ratified and confirmed.
SECTION 7.                          Miscellaneous.
(a)            Counterparts.  This Amendment No. 4 may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
(b)            Governing Law.  This Amendment No. 4, unless otherwise expressly
set forth herein, shall be governed by, construed and enforced in accordance
with the laws of the State of New York, without reference to the conflicts or
choice of law principles thereof.
(c)            Electronic Transmission.  A facsimile, telecopy or other
reproduction of this Amendment No. 4 may be executed by one or more parties
hereto, and an executed copy of this Amendment No. 4 may be delivered by one or
more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes.  At the request of any party hereto, all
parties hereto agree to execute an original of this Amendment No. 4 as well as
any facsimile, telecopy or other reproduction hereof.
(d)            Entire Agreement. This Amendment No. 4 is the entire agreement,
and supersedes any prior agreements and contemporaneous oral agreements, of the
parties concerning its subject matter.
(e)            Successors and Assigns.  This Amendment No. 4 shall be binding on
and inure to the benefit of the parties and their heirs, beneficiaries,
successors and assigns.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to be
duly executed by their respective authorized officers as of the day and year
first above written.

BORROWER:

DYNAMICS RESEARCH CORPORATION,
as Borrower
By:
/s/ David Keleher
 
Name:
David Keleher
 
Title:
SVP & CFO
 

 
Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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GUARANTORS:

DRC INTERNATIONAL CORPORATION
By:
/s/ David Keleher
 
Name:
David Keleher
 
Title:
VP Finance & CFO
 

H.J. FORD ASSOCIATES, INC.
By:
/s/ David Keleher
 
Name:
David Keleher
 
Title:
Treasurer & CFO
 

 
KADIX SYSTEMS, LLC
By:
/s/ David Keleher
 
Name:
David Keleher
 
Title:
Treasurer & CFO
 

 
HIGH PERFORMANCE TECHNOLOGIES, INC.
By:
/s/ David Keleher
 
Name:
David Keleher
 
Title:
Treasurer & CFO
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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BANK OF AMERICA, N.A.,
as Administrative Agent
By:
/s/ Charlene Wright-Jones
 
Name:
Charlene Wright-Jones
 
Title:
Vice President
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender
By:
/s/ Chris Busconi
 
Name:
Chris Busconi
 
Title:
SVP
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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BROWN BROTHERS HARRIMAN & CO.,
as a Lender
 
By:
/s/ Amy Lyons
 
Name:
Amy Lyons
 
Title:
Senior Vice President
 

 
Amendment No. 4
to
Dynamics Research Corporation Credit Agreement
 

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PNC BANK, NATIONAL ASSOCIATION,
as a Lender

By:
/s/ Douglas T. Brown
 
Name:
Douglas T. Brown
 
Title:
Senior Vice President

 
 
Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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SUNTRUST BANK,
as a Lender
 
By:
/s/ William W. Palmer
 
Name:
William W. Palmer
 
Title:
Senior Vice President
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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ARES CREDIT STRATEGIES FUND II, L.P., as a Lender

By: ARES CSF OPERATING MANAGER II LLC, its Manager

 
By:
/s/ Mitchell Goldstein
 
Name:
Mitchell Goldstein
 
Title:
Authorized Signatory
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement

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ARES CREDIT STRATEGIES FUND III, L.P., as a Lender

By: ARES CSF III INVESTMENT MANAGEMENT LLC, its Manager

 
By:
/s/ Mitchell Goldstein
 
Name:
Mitchell Goldstein
 
Title:
Authorized Signatory
 

Amendment No. 4
to
Dynamics Research Corporation Credit Agreement