Providence Equity Partners VI L.P. Providence Equity Partners VI-A L.P. c/o Providence Equity L.L.C. Nine West 57th Street, Suite 4700 New York, NY 10019
Exhibit (d)(2)
EXECUTION VERSION
Providence Equity Partners VI L.P.
Providence Equity Partners VI-A L.P.
c/o Providence Equity L.L.C.
Nine West 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Providence Equity Partners VI-A L.P.
c/o Providence Equity L.L.C.
Nine West 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
March 31, 2011
Sterling Parent Inc.
c/o Providence Equity Partners LLC
Nine West 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
c/o Providence Equity Partners LLC
Nine West 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
| Re: | Equity Financing Commitment |
Ladies and Gentlemen:
This letter agreement sets forth the commitment of Providence Equity Partners VI L.P. and
Providence Equity Partners VI-A L.P., each a Delaware limited partnership (collectively, the
“Investors”), subject to the terms and conditions hereof, to purchase equity interests of
Sterling Parent Inc., a Delaware corporation (“Parent”), in connection with the acquisition
(the “Acquisition”) of SRA International, Inc., a Delaware corporation (the
“Company”), through the merger of Sterling Merger Inc., a Delaware corporation (“Merger
Sub”), with and into the Company pursuant to the Agreement and Plan of Merger, dated as of the
date hereof, among Parent, the Company and Merger Sub (the “Merger Agreement”).
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in
the Merger Agreement.
1. Upon the terms and subject to the conditions set forth herein, each Investor hereby commits
to purchase, directly or indirectly, at or immediately prior to the Effective Time equity interests
of Parent for an aggregate purchase price equal to the dollar amount set forth next to such
Investor’s name on Schedule A (in each case, such Investor’s “Commitment”), solely
for the purpose of allowing Parent and/or Merger Sub to fund a portion of the aggregate Merger
Consideration and to pay related fees and expenses upon the consummation of the Acquisition. Each
Investor’s obligation to fund in connection with the Acquisition shall in no event exceed in the
aggregate such Investor’s Commitment. The obligation of each Investor to fund any portion of its
Commitment may be reduced by such Investor on a dollar for dollar basis for purchases by
co-investors (including Affiliates of any Investor) of equity interests of Parent; provided
that no such action shall reduce the amount of the Commitment or otherwise affect the obligations
of each Investor under this letter agreement.
2. The Investors’ obligations under this letter agreement, including the obligation of the
Investors to fund their respective Commitments, is subject to (a) the execution and delivery of the
Merger Agreement by the Company, (b) the satisfaction or waiver by Parent (with the prior written
approval of the Investors) of each of the conditions to Parent’s and Merger Sub’s obligations to
consummate the transactions contemplated by the Merger Agreement (other than those conditions that
by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of
such conditions at the Closing), (c) the concurrent or substantially concurrent consummation of the
Merger in accordance with the terms of the Merger Agreement, (d) the Debt Financing (or, in the
case Alternate Debt Financing has been obtained in accordance with Section 5.12(c) of the Merger
Agreement, such Alternative Debt Financing) has been funded or would be funded simultaneously in
accordance with the terms thereof at the Closing
March 31, 2011
Page 2
Page 2
if the Commitment is funded at the Closing and (e) the consummation of any Rollover Investment
at Closing.
3. The obligation of the Investors to fund their respective Commitments shall automatically
and immediately terminate upon the earliest to occur of (a) the Effective Time (at which time the
obligation shall be discharged), (b) the valid termination of the Merger Agreement in accordance
with its terms, (c) the Company or any of its Affiliates, security holders or agents asserting or
filing, directly or indirectly, (i) any claim under or Action with respect to the Limited Guarantee
(as hereinafter defined) against any Guarantor or any Guarantor Affiliate (in each case, as defined
in the Limited Guarantee) or (ii) any other claim under or Action against any Guarantor or any
Guarantor Affiliate in connection with this letter agreement, the Limited Guarantee, the Merger
Agreement, the Debt Commitment Letter or any transaction contemplated hereby or thereby or
otherwise relating thereto, other than, in any such case, Retained Claims (as defined in the
Limited Guarantee) expressly reserved against such Guarantor or Guarantor Affiliates in accordance
with Section 4(c) of the Limited Guarantee and as set forth in Section 6 of this letter agreement,
subject in each case to all of the terms, conditions and limitations herein and therein or (d)
subject to the immediately following proviso, the occurrence of any event which, by the terms of
the Limited Guarantee, terminates any Guarantor’s obligations or liabilities under the Limited
Guarantee; provided that the obligations of Investors to fund their obligations hereunder shall not
terminate as a result of the termination of the Limited Guarantee as a result of the Effective Time
having occurred. The Commitment set forth herein shall not be assignable by Parent without each
Investor’s prior written consent, and the granting of such consent in a given instance shall be
solely in the discretion of the Investors and, if granted, shall not constitute a waiver of this
requirement as to any subsequent assignment. Any transfer in violation of the preceding sentence
shall be null and void.
4. Other than as required by law (including as may be required in connection with any filing
with the SEC in connection with the Merger) or the rules of any national securities exchange, each
of the parties agree that it will not, nor will it permit its advisors or Affiliates to, disclose
to any person or entity the contents of this letter agreement, other than to the Company and its
advisors who are instructed to maintain the confidentiality of this letter agreement in accordance
herewith.
5. Notwithstanding anything that may be expressed or implied in this letter agreement or any
document or instrument delivered in connection herewith, each party hereto, by its acceptance of
the benefits hereof, covenants, agrees and acknowledges that no Person other than the Investors has
obligations hereunder and that, notwithstanding that each Investor is a partnership, no Person has
any remedy, recourse or right of recovery against, or contribution from any Investor Affiliate,
through any Investor, Parent, Merger Sub or otherwise, whether by or through attempted piercing of
the corporate veil or similar action, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute, regulation or applicable law, by or through a claim
by or on behalf of such Investor, Parent or Merger Sub against any Investor Affiliate, or
otherwise, except for Parent’s rights against each Investor under this letter agreement. For
purposes of this letter agreement, the term “Investor Affiliate” means (i) any former,
current or future general or limited partner, stockholder, holder of any equity, partnership or
limited liability company interest, officer, member, manager, director, employee, agent,
controlling person, assignee or Affiliate of any Investor (other than Parent and Merger Sub) or
(ii) any former, current or future general or limited partner, stockholder, holder of any equity,
partnership or limited liability company interest, officer, member, manager, director, employee,
agent, attorney, controlling person, assignee or Affiliate (other than any Investor, Parent and
Merger Sub) of any of the foregoing.
6. Concurrently with the execution and delivery of this letter agreement, the Investors are
executing and delivering to the Company a Limited Guarantee related to certain of Parent’s monetary
obligations under the Merger Agreement (the “Limited Guarantee”). The Company’s remedies
against the Guarantors (as defined in the Limited Guarantee) solely with respect to Retained
Guarantee Claims
March 31, 2011
Page 3
Page 3
(as defined in the Limited Guarantee), against Parent and Merger Sub solely with respect to
Retained Merger Agreement Claims (as defined in the Limited Guarantee), and, in the case of Parent,
Retained Equity Commitment Claims (as defined in the Limited Guarantee) and against Providence
Equity Partners L.L.C. solely with respect to Retained NDA Claims (as defined in the Limited
Guarantee), the Company’s rights to specific performance under this letter agreement and the
Company’s remedies against Parent and Sub under the Merger Agreement shall be the sole and
exclusive remedies available to the Company and all of its Affiliates against any Guarantor or any
Guarantor Affiliate (as defined in the Limited Guarantee) in respect of any liabilities or
obligations arising under, or in connection with, the Merger Agreement, or the transactions
contemplated thereby, including in the event Parent or Merger Sub breaches its obligations under
the Merger Agreement whether or not Parent’s or Merger Sub’s breach is caused by any Investor’s
breach of its obligations under this letter agreement. Notwithstanding anything to the contrary
set forth in this Paragraph 6, Paragraph 15 of this letter agreement or in the Limited Guarantee,
the Company, as the express third party beneficiary hereunder on the terms, and subject to the
conditions, set forth in Paragraph 15 of this letter agreement, may cause Parent and Merger Sub to,
or to directly, cause the Commitment to be funded as, and only to the extent, permitted by the
exercise of the Company’s rights under Section 8.7(b) of the Merger Agreement and on the terms, and
subject to the conditions, set forth in Paragraph 15 of this letter agreement.
7. Each party acknowledges and agrees that (a) this letter agreement is not intended to, and
does not, create any agency, partnership, fiduciary or joint venture relationship between or among
any of the parties hereto and neither this letter agreement nor any other document or agreement
entered into by any party hereto relating to the subject matter hereof shall be construed to
suggest otherwise and (b) the obligations of each Investor under this letter agreement are solely
contractual in nature. Notwithstanding anything to the contrary contained in this letter
agreement, the liability of each Investor hereunder shall be several, not joint and several, and no
Investor shall be liable for any amounts hereunder in excess of its respective Commitment.
8. Parent agrees to indemnify and to hold harmless each Investor and each Investor Affiliate
(collectively, the “Indemnified Persons”) from and against any and all actions, suits,
proceedings (including any investigations or inquiries), losses, claims, damages, liabilities or
expenses of any kind or nature whatsoever which may be suffered, incurred by or asserted against or
involve the Indemnified Persons as a result of or arising out of or in any way related to the
transactions described in this letter agreement, the Limited Guarantee, the Debt Commitment Letter
or the Merger Agreement, provided, however, that the foregoing shall not apply to
any losses, claims, damages, liabilities or expenses of an Indemnified Person to the extent found
by a final decision of a court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Indemnified Person. Parent further agrees to pay or
reimburse to any Indemnified Person upon demand any legal or other expenses incurred by the
Indemnified Person in connection with investigating, defending, or preparing to defend any such
action, suit, claim or proceeding (including any inquiry or investigation), provided,
however, that the foregoing shall not apply to any such legal or other expenses of an
Indemnified Person to the extent found by a final decision of a court of competent jurisdiction to
have resulted solely from the gross negligence or willful misconduct of such Indemnified Person.
The provisions of this Section 8 are independent of all other obligations of Parent hereunder and
shall survive termination or expiration of the commitment embodied in this letter. Parent agrees
that no Indemnified Person shall be required to (but at its sole election, may) seek
indemnification from any other Person or Persons with respect to any matter for which such
Indemnified Person is entitled to indemnification hereunder and agrees, for the benefit of the
Investors and each Investor Affiliate to waive any right to contribution from any such Investor or
Investor Affiliate; provided that the foregoing shall not be deemed to limit or waive any
contractual rights that Parent may have against any Investor or Investor Affiliate. PARENT HEREBY
ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES, LOSSES,
DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO
March 31, 2011
Page 4
Page 4
HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE
OF ANY INVESTOR OR ANY OTHER INDEMNIFIED PERSON.
9. This letter agreement may not be amended or otherwise modified without the prior written
consent of Parent and the Investors; provided that no amendment of this Agreement shall
affect any right of the Company hereunder or reduce the aggregate Commitment of the Investors
without the prior written consent of the Company.
10. This letter agreement and all actions (whether at law, in contract or in tort) that may be
based upon, arise out of or relate to this letter agreement, or the negotiation, execution or
performance hereof shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of law.
11. Each party to this letter agreement, by its execution hereof, hereby (i) irrevocably
submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or to the
extent such Court does not have subject matter jurisdiction, the Superior Court of the State of
Delaware, for the purpose of any Action relating to this letter agreement, or for recognition and
enforcement of any judgment in respect thereof, (ii) waives to the extent not prohibited by
applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that any such action brought in
one of the above-named courts should be dismissed on grounds of forum non conveniens, should be
transferred or removed to any court other than one of the above-named courts, or should be stayed
by reason of the pendency of some other proceeding in any other court other than one of the
above-named courts, or that this letter agreement or the subject matter hereof may not be enforced
in or by such court, and (iii) agrees not to commence any such action other than before one of the
above-named courts. Notwithstanding the previous sentence, a party to this letter agreement may
commence any action in a court other than the above-named courts solely for the purpose of
enforcing an order or judgment issued by one of the above-named courts.
12. Each party to this letter agreement agrees that for any action between the parties arising
in whole or in part under or in connection with this letter agreement, such party will bring
actions only in the Court of Chancery of the State of Delaware, or to the extent such Court does
not have subject matter jurisdiction, the Superior Court of the State of Delaware. Each such party
further waives any claim and will not assert that venue should properly lie in any other location
within the selected jurisdiction.
13. Each party to this letter agreement hereby (i) consents to service of process in any
action between the parties arising in whole or in part under or in connection with this letter
agreement in any manner permitted by Delaware law, (ii) agrees that service of process made in
accordance with clause (i) or made by registered or certified mail, return receipt requested, at
its address specified on the first page of this letter agreement, will constitute good and valid
service of process in any such action, and (iii) waives and agrees not to assert (by way of motion,
as a defense, or otherwise) in any such action any claim that service of process made in accordance
with clause (i) or (ii) does not constitute good and valid service of process.
14. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO
March 31, 2011
Page 5
Page 5
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
(II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (III) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.
15. This letter agreement shall inure to the benefit of and be binding upon Parent and the
Investors. Each Investor acknowledges that the Company has relied on this letter agreement and,
accordingly, that the Company is an express third party beneficiary hereof, entitled to enforce
such provisions in accordance with their terms and to seek any remedy for breach thereof on the
terms and conditions set forth herein; provided that the Company shall be entitled to
specifically enforce the obligations of each Investor to directly cause each Investor to fund,
directly or indirectly, the Commitment and to take any and all actions as may be necessary or
appropriate to cause the Commitment to be funded only as and the extent permitted, in each case,
pursuant to Section 8.7(b) of the Merger Agreement and when all of the conditions set forth in
Paragraph 2 have been satisfied, and the Company shall have no other rights or remedies hereunder.
In no event shall any of Parent’s creditors (other than the Company, but in the case of the Company
only on the terms, and subject to the limitations, set forth in this Paragraph 15 of this letter
agreement or Section 8.7(b) of the Merger Agreement) have any right to enforce this letter
agreement or to cause Parent to enforce this letter agreement.
16. Each Investor hereby represents and warrants, with respect to itself, to Parent and the
Company that: (a) it has all limited partnership power and authority to execute, deliver and
perform this letter agreement, (b) the execution, delivery and performance of this letter agreement
by the undersigned has been duly and validly authorized and approved by all necessary limited
partnership action, and no other proceedings or actions on the part of the undersigned are
necessary therefor, (c) this letter agreement has been duly and validly executed and delivered by
it and constitutes a valid and legally binding obligation of it, enforceable against the
undersigned in accordance with its terms, (d) the amount of the Commitment is equal to or less than
the maximum amount that such Investors are collectively permitted to invest in any one portfolio
investment pursuant to the terms of its constituent documents, (e) it has uncalled capital
commitments equal to or in excess of the amount of its respective Commitment and (f) the execution,
delivery and performance by the undersigned of this letter agreement do not and will not (i)
violate the organizational documents of the undersigned or (ii) result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation, any material contract to which the
undersigned is a party, in any case, for which the violation, default or right would be reasonably
likely to prevent or materially impede, interfere with, hinder or delay the consummation by such
Investor of the transactions contemplated by this letter agreement on a timely basis. Each
Investor acknowledges that the Company has specifically relied on the accuracy of the
representations and warranties contained in this Paragraph 16 and in the event of any breach hereof
the Company shall have specific right to enforce and seek appropriate damages, relating to any
breach of this Paragraph 16.
17. This letter agreement and any signed agreement or instrument entered into in connection
with this letter agreement, and any amendments or waivers hereto or thereto, to the extent signed
and delivered by means of a facsimile machine or by e-mail delivery of a “.pdf” format data file,
shall be treated in all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original signed version thereof
delivered in person. No party hereto or to any such agreement or instrument shall raise the use of
a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this
letter agreement or any amendment hereto or the fact that any signature or agreement or instrument
was transmitted or communicated through
March 31, 2011
Page 6
Page 6
the use of a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense to
the formation of a contract and each party hereto forever waives any such defense.
18. This letter agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior arrangements and understandings with respect
thereto.
19. This letter agreement may be executed in one or more counterparts, and by the different
parties to each such agreement in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this letter agreement by
facsimile shall be as effective as delivery of a manually executed counterpart of any such letter
agreement.
[Signature Pages Follow]
| Very truly yours, | ||||||
| PROVIDENCE EQUITY PARTNERS VI L.P. | ||||||
| By: | Providence Equity GP VI L.P. | |||||
| Its: | General Partner | |||||
| By: | Providence Equity Partners VI L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxxxxxx
|
|||||
| Title: Authorized Signatory | ||||||
| PROVIDENCE EQUITY PARTNERS VI-A L.P. | ||||||
| By: | Providence Equity GP VI L.P. | |||||
| Its: | General Partner | |||||
| By: | Providence Equity Partners VI L.L.C. | |||||
| Its: | General Partner | |||||
| By: | /s/ Xxxxx X. Xxxxxxxxxx
|
|||||
| Title: Authorized Signatory | ||||||
Accepted and agreed as of the date first written above:
STERLING PARENT INC.
By:
|
/s/ Xxxxxxxxxxx X. Xxxxxx
|
|||
| Title: Vice-President, Secretary and Treasurer |
Schedule A
| Investor | Commitment | |||
Providence Equity Partners VI L.P. |
$ | 390,735,438 | ||
Providence Equity Partners VI-A L.P. |
$ | 134,416,957 | ||
