State Street Bank and Trust Company
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Subordination Agreement
AND NEGATIVE PLEDGE/SALE AGREEMENT
Dated September 30, 1997
Name of Borrower
▇▇▇▇▇▇ ▇▇▇▇▇▇ CONSULTING, INC
Names of Subordinated Lenders
▇▇▇▇▇▇ BAILLY, INC
SUBORDINATION AGREEMENT
AND NEGATIVE PLEDGE/SALE AGREEMENT
WHEREAS ▇▇▇▇▇▇ ▇▇▇▇▇▇ Consulting, Inc., a corporation organized under the laws
of Delaware having its usual place of business in Arlington, VA (hereinafter
called the "Borrower"), is indebted to the undersigned lenders (hereinafter
called the "Subordinated Lenders") in the aggregate amount of ($ ) evidenced by
the note (s) of the Borrower in the several amounts and dated and payable as
follows:
Amount Dated Payable
WHEREAS, the Borrower and the Subordinated Lenders have requested STATE
STREET BANK and TRUST COMPANY (hereinafter called the "Bank") to grant to the
Borrower--a loan or advance an additional loan or advance - a renewal or an
extension of time for the payment of the Borrower's indebtedness to the Bank
--but the Bank is unwilling to grant such request unless the Subordinated
Lenders shall subordinate in the manner and to the extent hereinafter provided
the above mentioned indebtedness of the Borrower to the Subordinated Lenders and
any and all other indebtedness and other obligations of the Borrower to the
Subordinated Lenders whether now existing or hereafter incurred (all of which
indebtedness and obligations present and future are hereinafter called the
"Subordinated Indebtedness"): *
NOW, THEREFORE, in consideration of the premises and as an inducement to
the Bank to grant to the Borrower a loan or advance, or additional loans or
advances, or a renewal or an extension of time, as the case may be (the
undersigned waiving notice of any such action), and in consideration of the
granting thereof, the Subordinated Lenders hereby severally and jointly agree
with the Bank to subordinate, and each of them does hereby subordinate, the
Subordinated Indebtedness to any and all indebtedness and other liabilities of
the Borrower to the Bank now owing or existing or hereafter owing or arising,
including principal, interest and expenses of collection, and, for the
consideration aforesaid, the Subordinated Lenders for themselves, their
executors, administrators, successors and assigns, severally and jointly agree
with the Bank that--
1. They will not at any time, until all indebtedness and liabilities of
the Borrower to the Bank then existing have been paid in full, demand, accept or
receive from the Borrower any payment of principal on account of the
Subordinated Indebtedness, nor will they demand, accept or receive any
collateral for the Subordinated Indebtedness, nor will they assert against the
Borrower any right of setoff or of subrogation, nor will they transfer or assign
any or all of the Subordinated Indebtedness.
2. They may receive interest on the Subordinated Indebtedness if and so
long as the Borrower shall not be in default in respect of any indebtedness or
other liability of the Borrower to the Bank, but they will not demand or consent
to any increase in the rate of such interest.
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3. In the event of any receivership, insolvency or bankruptcy
proceedings instituted by or against the Borrower, or assignment or trust
mortgage of any assets of the Borrower for the benefit of its creditors, or
execution sale of any of its assets, or proceedings for reorganization of, or
readjustment of debt by, the Borrower, or marshaling of assets of the Borrower,
or proceedings, whether or not judicial, for liquidation, dissolution or other
winding up of the Borrower, or any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or otherwise,
of all or any part of the assets of the Borrower occurring for any reason, they
will, in any such case, assign and pay over or deliver to the Bank, to the
extent necessary to satisfy the then existing indebtedness and liabilities of
the Borrower to the Bank in full with interest (plus expenses of collection),
any and all dividends, payments and other distributions with respect to the
Subordinated Indebtedness to which they would be entitled, of any kind or
character, either in cash, property or securities, to be held by the Bank and
applied by it for its own account to the extent of its rights hereunder.
*Without limiting the generality of the foregoing, the term "Subordinated
Indebtedness" shall include the joint and several indebtedness and obligations
of the Borrower and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Consulting, Inc. to the Bank.
4. In order to carry out the terms and intent of this undertaking more
effectively, they will do all acts necessary or convenient to preserve for the
Bank the benefits of this Subordination Agreement and will execute all
agreements which the Bank may request for that purpose, and they hereby assign,
transfer and set over to the Bank their claims against the Borrower arising on
account of the Subordinated Indebtedness and, without imposing upon the Bank any
duty with respect to preservation, protection or enforcement of the claims
arising on account of the Subordinated Indebtedness, constitute and appoint the
Bank their true and lawful attorney for the following purposes:
(a) To collect any dividends, payments or other distributions
which would otherwise be payable to, or receivable by, them on any liquidation,
dissolution or other winding up of the Borrower or any liquidation or
distribution of any part of the assets of the Borrower or in any proceedings
affecting the Borrower under any bankruptcy or insolvency laws or any laws
relating to the relief of debtors, readjustment, composition or extension of
indebtedness, or reorganization or dissolution of the Borrower, or execution
sale on, or marshaling of, assets of the Borrower.
(b) To prove their claim in any such proceedings.
(c) To accept or reject, to the extent to which they would be
entitled to accept or reject, any plan of reorganization or arrangement in any
such proceedings.
(d) To accept any new securities or other property to which they
would otherwise be entitled under any such plan of reorganization or arrangement
or other proceedings.
(e) And in general to do any act in connection with any of such
proceedings which they might otherwise do, it being understood that the Bank
shall account to them for any dividends or payments received in excess of the
amount necessary to satisfy the claims of the Bank in full with interest and
expenses of collection.
5. If requested by Bank, they will all They herewith deposit with the
Bank the all note(s) listed above evidencing Subordinated Indebtedness to be
held by the Bank until all indebtedness and other liabilities of the Borrower to
the Bank shall have been paid in full.
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6. No action which the Bank, or the Borrower with or without the consent
of the Bank, may take, or refrain from taking with respect to any indebtedness
and other liabilities of the Borrower to the Bank or any note or agreement
representing the same, or any collateral therefor, or any agreement or
agreements (including guaranties) in connection therewith, shall affect this
Subordination Agreement or the obligations of the Subordinated Lenders
hereunder. If all indebtedness and other liabilities of the Borrower to the Bank
are at any time or times hereafter paid or performed in full and thereafter the
Borrower again becomes indebted or otherwise obligated to the Bank, the
provisions of this Subordination Agreement shall apply to said new indebtedness
or other liabilities unless before the same arc incurred the Subordinated
Lenders notify the Bank in writing to the contrary.
7. In the event that the Bank shall transfer any indebtedness or other
liabilities of the Borrower to the Bank to which the Subordinated Indebtedness
is hereby subordinated, the transferee thereof and successive transferees
thereafter shall have the same rights hereunder as the Bank, it being intended
that the benefits of this Subordination Agreement shall attach to and follow
said indebtedness or other liabilities irrespective of changes in the ownership
thereof.
8. In the event that this Subordination Agreement is with a single
Subordinated Lender all references herein to the Subordinated Lenders shall mean
such single Subordinated Lender.
9. Rider A attached hereto is incorporated herein and is a part hereof.
IN WITNESS WHEREOF, the undersigned, intending the same to take effect as a
sealed instrument, have executed this instrument as of the 30th day of
September, 1997.
▇▇▇▇▇▇ BAILLY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: VP, CFO, Treasurer and Secretary
The undersigned, designated as the Borrower in the above Subordination
Agreement, hereby agrees not to make any payments or take any other action
contrary to the provisions of said Agreement.
▇▇▇▇▇▇ BAILLY CONSULTING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Senior VP, CFO, Treasurer and Secretary
(Title)
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Rider A to Subordination Agreement and
Negative Pledge/Sale Agreement ("Agreement")
(a) The provisions of this Rider A are incorporated in and made a part
of the above referenced Agreement for all purposes thereof.
(b) The undersigned, ▇▇▇▇▇▇ Bailly, Inc., being the Subordinated Lender
referred to in the Agreement (the "Subordinated Lender"), hereby represents,
warrants, covenants and agrees to and for the benefit of the Bank as follows:
(i) The Subordinated Lender owns, beneficially and of record,
all of the outstanding shares of capital stock of the Borrower, free of any
assignment, pledge, lien, security interest, charge, option or other
encumbrance.
(ii) So long as the Agreement shall continue in effect, the
Subordinated Lender will not sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock of the Borrower (or options to acquire
any such shares), nor will the Subordinated Lender permit the Borrower to issue
any additional shares of its capital stock or reissue any treasury shares (or
options to acquire any such shares), whether now or hereafter authorized, unless
such shares are issued to the Subordinated Lender.
HAGLLR BAILLY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Vice President, CFO, Treasurer and Secretary
(Title)
