Exhibit 10.2

PLEDGE AGREEMENT
 
THIS PLEDGE AGREEMENT (this “Agreement”) is dated as of the 1st 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
 

 
 
-1-

--------------------------------------------------------------------------------

 

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

 

 

 
-2-

--------------------------------------------------------------------------------

 

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
 

 

 
-3-

--------------------------------------------------------------------------------

 

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 other rights, privileges or options pertaining to the Pledged Collateral as
if it were the absolute owner thereof, including, without limitation, the right
to exchange, at its discretion, any and all of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Pledgor or, upon the exercise of any such right, privilege or option
pertaining to the Pledged Collateral, and in connection therewith, to deposit
and deliver any and all of the Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Secured Party may determine, all without liability except
to account for property actually received, but the Secured Party shall have no
duty to exercise any of the aforesaid rights, privileges or options and shall
not be responsible for any failure to do so or delay in so doing; and

 
 
b.
whether or not an Event of Default has occurred, with respect to any action,
decision, determination or election by Lead Borrower that the Pledged Interests
be, or cease to be a “security” as defined in Article 8 of the UCC and all other
matters related to any such action, decision, determination or election
(collectively, an “Article 8 Matter”), shall be appointed as Pledgor’s true and
lawful proxy, for and in Pledgor’s name, place and stead to vote the Pledged
Interests in Kadix by Pledgor, whether directly or indirectly, beneficially or
of record, now owned or hereafter acquired, with respect to such Article 8
Matters.  The proxy granted and appointed herein shall include the right to sign
Pledgor’s name (as a member of Kadix) to any consent, certificate or other
document relating to an Article 8 Matter and the Pledged Interests that
applicable law may permit or require, to cause the Pledged Interests to be voted
in accordance with the preceding sentence.  Pledgor hereby represents and
warrants that there are no other proxies and powers of attorney with respect to
an Article 8 Matter and the Pledged Interests that Pledgor may have granted or
appointed.  Pledgor will not give a subsequent proxy or power of attorney or
enter into any other voting agreement with respect to the Pledged Interests with
respect to any Article 8 Matter and any attempt to do so with respect to an
Article 8 Matter shall be void and of no effect.

 
8.           Right of Secured Party to Dispose of Collateral, etc.  Upon the
occurrence and during the continuance of an Event of Default, such Event of
Default not having previously been remedied or cured within any applicable grace
or cure periods, the Secured Party shall have the right, unless the Event of
Default shall have been remedied or cured in accordance with the Loan Agreement
prior to taking any such actions, at any time or times thereafter to sell,
resell, assign and deliver all or any of the Pledged
 

 

 
-4-

--------------------------------------------------------------------------------

 

Collateral in one or more parcels at any exchange or broker’s board or at public
or private sale.  The Secured Party will give the Pledgor at least ten (10)
days’ prior written notice in accordance with Section 17 hereof of the time and
place of any public sale thereof or of the time after which any private sale or
any other intended disposition thereof is to be made.  Any such notice shall be
deemed to meet any requirement hereunder or under any applicable law (including
the Uniform Commercial Code) that reasonable notification be given of the time
and place of such sale or other disposition.  Such notice may be given without
any demand of performance or other demand, all such demands being hereby
expressly waived by the Pledgor.  All such sales shall be conducted in a
commercially reasonable manner and shall be at such commercially reasonable
price or prices as the Secured Party shall deem best and either for cash or on
credit or for future delivery (without assuming any responsibility for credit
risk).  At any such sale or sales the Secured Party may purchase any or all of
the Pledged Collateral to be sold thereat upon such terms as the Secured Party
may deem best.  Upon any such sale or sales the Pledged Collateral so purchased
shall be held by the purchaser absolutely free from any claims or rights of
whatsoever kind or nature, including any equity of redemption and any similar
rights, all such equity of redemption and any similar rights being hereby
expressly waived and released by the Pledgor.  In the event any consent,
approval or authorization of any governmental agency will be necessary to
effectuate any such sale or sales, the Pledgor shall execute, and hereby agree
to cause the Pledgor to execute, all such applications or other instruments as
may be required.  The proceeds of any such sale or sales, together with any
other additional collateral security at the time received and held hereunder,
shall be received and applied pursuant to Section 10-3 of the Loan Agreement.
 
The Pledgor recognizes that the Secured Party may be unable to effect a public
sale of all or a part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, but may be compelled to
resort to one or more private sales to a restricted group of purchasers, each of
whom will be obligated to agree, among other things, to acquire such Pledged
Collateral for its own account, for investment and not with a view to the
distribution or resale thereof.  The Pledgor acknowledges that private sales so
made may be at prices and upon other terms less favorable to the seller than if
such Pledged Collateral were sold at public sales, and that the Secured Party
has no obligation to delay sale of any such Pledged Collateral for the period of
time necessary to permit such Pledged Collateral to be registered for public
sale under the Securities Act of 1933.  The Pledgor agrees that any such private
sales shall not be deemed to have been made in a commercially unreasonable
manner solely because they shall have been made under the foregoing
circumstances.
 
9.           Collection of Amounts Payable on Account of Pledged Collateral,
etc.  Upon the occurrence and during the continuance of any Event of Default,
the Secured Party may, but without obligation to do so, demand, sue for and/or
collect any money or property at any time due, payable or receivable, to which
it may be entitled hereunder, on account of or in exchange for any of the
Pledged Collateral and shall have the right, for and in the name, place and
stead of the Pledgor, to execute endorsements, assignments or other instruments
of conveyance or transfer with respect to all or any of the Pledged Collateral.
 
10.           Care of Pledged Collateral in Secured Party’s Possession.  Beyond
the exercise of reasonable care to assure the safe custody of the Pledged
Collateral while held hereunder, the Secured Party shall have no duty or
liability to collect any sums due in respect thereof or to protect or preserve
rights pertaining thereto, and shall be relieved of all responsibility for the
Pledged Collateral upon surrendering the same to the Pledgor.
 

 

 
-5-

--------------------------------------------------------------------------------

 

11.           Waivers, etc.  The Pledgor hereby waives presentment, demand,
notice, protest and, except as is otherwise provided herein, in the Loan
Agreement or in any other Loan Document, all other demands and notices in
connection with this Agreement or the enforcement of the Secured Party’s rights
hereunder or in connection with any Secured Obligations or any Pledged
Collateral; consents to and waives notice of the granting of renewals,
extensions of time for payment or other indulgences to the Pledgor, any other
Borrower, or to any third party, or substitution, release or surrender of any
collateral security for any Secured Obligation, the addition or release of
persons primarily or secondarily liable on any Secured Obligation or on any
collateral security for any Secured Obligation, the acceptance of partial
payments on any Secured Obligation or on any collateral security for any Secured
Obligation and/or the settlement or compromise thereof.  No delay or omission on
the part of the Secured Party in exercising any right hereunder shall operate as
a waiver of such right or of any other right hereunder.  Any waiver of any such
right on any one occasion shall not be construed as a bar to or waiver of any
such right on any future occasion.  The Pledgor further waives any right it may
have under the constitution of The Commonwealth of Massachusetts (or under the
constitution of any other state in which any of the Pledged Collateral may be
located), or under the Constitution of the United States of America, to notice
(other than any requirement of notice provided herein) or to a judicial hearing
prior to the exercise of any right or remedy provided by this Agreement to the
Secured Party and waives its right, if any, to set aside or invalidate any sale
duly consummated in accordance with the foregoing provisions hereof on the
grounds (if such be the case) that the sale was consummated without a prior
judicial hearing.  The Pledgor’s waivers under this Section have been made
voluntarily, intelligently and knowingly and after the Pledgor has been apprised
and counseled by its attorneys as to the nature thereof and its possible
alternative rights.
 
12.           Termination; Assignment, etc.  This Agreement and the security
interest in the Pledged Collateral created hereby shall terminate when all of
the Secured Obligations have been paid and finally discharged in full in cash
(provided that the Lenders are no longer obligated to make Loans under the Loan
Agreement).  For all purposes of this Agreement, no Event of Default shall be
deemed to have been cured or waived except as expressly provided in the Loan
Agreement.  No waiver by the Secured Party or any Lender or by any other holder
of Secured Obligations of any default shall be effective unless in writing nor
operate as a waiver of any other default or of the same default on a future
occasion.
 
13.           Reinstatement.  Notwithstanding the provisions of Section 13, this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by the Lenders or the Secured Party in
respect of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Lenders or the Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Pledgor or any other Borrower
or upon the appointment of any intervenor or conservator of, or trustee or
similar official for, the Pledgor or any other Borrower or any substantial part
of their respective properties, or otherwise, all as though such payments had
not been made.
 
14.           Governmental Approvals, etc.  Upon the exercise by the Secured
Party of any power, right, privilege or remedy pursuant to this Agreement which
requires any consent, approval, qualification or authorization of any
governmental authority or instrumentality, the Pledgor will execute and deliver,
or will cause the execution and delivery of, all applications, certificates,
instruments and other documents and papers that the Secured Party may be
required to obtain for such governmental consent, approval, qualification or
authorization.
 

 

 
-6-

--------------------------------------------------------------------------------

 

15.           Notices.  Except as otherwise provided herein, all notices to the
Pledgor or to the Secured Party shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes hereof if given or served in
the manner provided for in the Loan Agreement.
 
16.           Miscellaneous.  This Agreement shall inure to the benefit of and
be binding upon the Secured Party, the Lenders and the Pledgor and their
respective successors and assigns permitted under the Loan Agreement (provided
that the Pledgor shall have no right to assign its rights and duties hereunder),
and the term “Lenders” shall be deemed to include any other holder or holders of
any of the Secured Obligations and the term “Secured Party” shall be deemed to
include any successor agent for the Lenders.  In case any provision in this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.  This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
 
17.           Governing Law; Jurisdiction, Waiver of Jury Trial.
 
 
a.
This Agreement and all rights and obligations hereunder, including matters of
construction, validity, and performance, shall be governed by the law of The
Commonwealth of Massachusetts.

 
 
b.
Consent to Jurisdiction.

 
 
i.
The Pledgor agrees that any legal action, proceeding, case, or controversy
against the Pledgor with respect to this Agreement or any other Loan Document
may be brought in the Superior Court of Suffolk County Massachusetts or in the
United States District Court, District of Massachusetts, sitting in Boston,
Massachusetts, as the Agent may elect in the Agent’s sole discretion.  By
execution and delivery of this Agreement, the Pledgor, for itself and in respect
of its property, accepts, submits, and consents generally and unconditionally,
to the jurisdiction of the aforesaid courts.

 
 
ii.
The Pledgor WAIVES personal service of any and all process upon it, and
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
certified mail, postage prepaid, to the Pledgor at the Pledgor’s address for
notices as specified herein, such service to become effective five (5) Business
Days after such mailing.

 
 
iii.
The Pledgor WAIVES any objection based on forum non conveniens and any objection
to venue of any action or proceeding instituted under this Agreement and
consents to the granting of such legal or equitable remedy as is deemed
appropriate by the Court.

 
 
iv.
Nothing herein shall affect the right of the Agent to bring legal actions or
proceedings in any other competent jurisdiction.

 

 

 
-7-

--------------------------------------------------------------------------------

 

 
v.
The Pledgor agrees that any action commenced by the Pledgor asserting any claim
arising under or in connection with this Agreement or any other Loan Document
shall be brought solely in the Superior Court of Suffolk County Massachusetts or
in the United States District Court, District of Massachusetts, sitting in
Boston, Massachusetts, and that such Courts shall have exclusive jurisdiction
with respect to any such action.

 
 
c.
The Pledgor makes the following waiver knowingly, voluntarily, and
intentionally, and understands that the Agent and the Lenders in the
establishment and maintenance of their respective relationships with the Pledgor
contemplated by the within Agreement, is relying thereon.  THE PLEDGOR, TO THE
EXTENT ENTITLED THERETO, WAIVES ANY PRESENT OR FUTURE RIGHT OF THE PLEDGOR, OR
OF ANY GUARANTOR OR ENDORSER OF THE PLEDGOR OR OF ANY OTHER PERSON LIABLE TO THE
AGENT OR THE LENDERS ON ACCOUNT OF OR IN RESPECT TO THE LIABILITIES, TO A TRIAL
BY JURY IN ANY CASE OR CONTROVERSY IN WHICH THE AGENT OR THE LENDERS IS OR
BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE
AGENT OR ANY LENDER OR IN WHICH THE AGENT OR ANY LENDER IS JOINED AS A PARTY
LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT TO, ANY
RELATIONSHIP AMONGST OR BETWEEN THE PLEDGOR, ANY SUCH PERSON, THE AGENT AND ANY
LENDER (AND THE AGENT AND THE LENDERS LIKEWISE WAIVE THE RIGHT TO A JURY IN ANY
TRIAL OF ANY SUCH CASE OR CONTROVERSY).

 

{REMAINDER OF PAGE LEFT INTENTIONALLY BLANK}
 

 

 
-8-

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.

 
BROWN BROTHERS HARRIMAN & CO.,
 
for itself and as Agent for all Lenders
         
By:
/s/ Daniel G. Head, Jr.
   
Name:
Daniel G. Head, Jr.
   
Title:
S.V.P.
                   
DYNAMICS RESEARCH CORPORATON
             
By:
/s/ David Keleher
   
Name:
David Keleher
   
Title:
Senior Vice President - Finance,
     
CFO and Treasurer
 

 
 

 
[Pledge Agreement Signature Page] 

--------------------------------------------------------------------------------

 

SCHEDULE I
(to Pledge Agreement)

PLEDGED STOCK

   
Description
No. of Shares
Percentage of Ownership
Certificate No(s).
DRC International Corporation
2500
100%
2
H.J. Ford Associates, Inc.
61,656
100%
1
Kadix Systems, LLC
100 Units
100%
3
                       

    1098232.1

 

 
-10- 

--------------------------------------------------------------------------------