EXHIBIT 10.3
STOCK PLEDGE AGREEMENT
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THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of April 10,
2000, is entered into among SM&A Corporation, a California corporation
("Pledgor"), and Mellon Bank, N.A. as agent for the hereinafter defined Secured
Party (in such capacity, together with its successors, if any, in such capacity,
"Agent"), with reference to the following:
WHEREAS, Pledgor beneficially owns the specified number of shares
identified as Pledged Shares in the Persons identified as Issuers on Schedule A
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attached hereto (or any addendum thereto);
WHEREAS, Pledgor and Secured Party are parties to that certain Amended
and Restated Credit Agreement (as amended, supplemented, or otherwise modified
from time to time, the "Loan Agreement"), dated as of June 7, 1999, pursuant to
which Secured Party has agreed to make certain financial accommodations to
Pledgor;
WHEREAS, Pledgor and Secured Party are contemporaneously herewith
entering into that certain Amendment Number One to Amended and Restated Credit
Agreement, dated as of the date hereof;
WHEREAS, to induce Secured Party to make the financial accommodations
provided to Pledgor pursuant to the Loan Agreement, Pledgor desires to pledge,
grant, transfer, and assign to Secured Party a security interest in the
Collateral (as hereinafter defined) to secure the Secured Obligations (as
hereinafter defined), as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. Definitions And Construction.
(a) Definitions.
All initially capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed thereto in the Loan Agreement. As used
in this Agreement:
"Agent" shall have the meaning ascribed thereto in the preamble to
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this Agreement.
"Agreement" shall mean this Stock Pledge Agreement.
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"Chief Executive Office" shall mean where Pledgor is deemed located
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pursuant to (S)9103(3)(d) of the Code.
"Co-Agent" shall mean Xxxxx Fargo Bank, N.A.
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"Collateral" shall mean the Pledged Shares, the Future Rights, and the
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Proceeds, collectively.
"Future Rights" shall mean: (a) all shares of stock (other than
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Pledged Shares) of the Issuers, and all securities convertible or exchangeable
into, and all warrants, options, or other rights to purchase, shares of stock of
the Issuers; (b) to the extent of Pledgor's interest therein, all shares of, all
securities convertible or exchangeable into, and all warrants, options, or other
rights to purchase shares of stock of any Person in which Pledgor, after the
date of this Agreement, acquires a direct equity interest, irrespective of
whether such Person is or becomes a Subsidiary of Pledgor; and (c) the
certificates or instruments representing such additional shares, convertible or
exchangeable securities, warrants, and other rights and all dividends, cash,
options, warrants, rights, instruments, and other property or proceeds from time
to time received, receivable, or otherwise distributed in respect of or in
exchange for any or all of such shares.
"Holder" and "Holders" shall have the meanings ascribed thereto in
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Section 3 of this Agreement.
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"Issuers" shall mean each of the Persons identified as an Issuer on
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Schedule A attached hereto (or any addendum thereto), and any successors
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thereto, whether by merger or otherwise.
"Lenders" shall mean, individually and collectively, each of the
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financial institutions listed on the signature pages of the Loan Agreement,
together with their respective successors and assigns.
"Lien" shall mean any lien, mortgage, pledge, assignment (including
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any assignment of rights to receive payments of money), security interest,
charge, or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof, or any agreement to
give any security interest).
"Loan Agreement" shall have the meaning ascribed thereto in the
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recitals to this Agreement.
"Pledged Shares" shall mean all of the shares identified as Pledged
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Shares on Schedule A attached hereto (or any addendum thereto).
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"Pledgor" shall have the meaning ascribed thereto in the preamble to
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this Agreement.
"Proceeds" shall mean all proceeds (including proceeds of proceeds) of
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the Pledged Shares and Future Rights including all: (a) rights, benefits,
distributions, premiums, profits, dividends, interest, cash, instruments,
documents of title, accounts, contract rights, inventory, equipment, general
intangibles, deposit accounts, chattel paper, and other property from time to
time received, receivable, or otherwise distributed in respect of or in exchange
for, or as a replacement of or a substitution for, any of the Pledged Shares,
Future Rights, or
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proceeds thereof (including any cash, stock, or other securities or instruments
issued after any recapitalization, readjustment, reclassification, merger or
consolidation with respect to the Issuers and any security entitlements, as
defined in (S)8102(17) of the Code, with respect thereto); (b) "proceeds," as
such term is used in (S)9306 of the Code; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of delivery) payable from
time to time with respect to any of the Pledged Shares, Future Rights, or
proceeds thereof; (d) payments (in any form whatsoever) made or due and payable
to Pledgor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Pledged Shares,
Future Rights, or proceeds thereof; and (e) other amounts from time to time paid
or payable under or in connection with any of the Pledged Shares, Future Rights,
or proceeds thereof.
"Secured Obligations" shall mean all loans, Revolving Loans, Swing
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Line Loans, debts, principal, interest (including any interest that, but for the
provisions of the Bankruptcy Code, would have accrued), premiums, liabilities
(including all amounts charged to the Borrower's Loan Account pursuant hereto),
obligations, fees, charges, costs, or Lender Group Expenses (including any fees
or expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties owing by the
Borrower to the Lender Group or the Issuing Bank of any kind and description
(whether pursuant to or evidenced by the Loan Documents or pursuant to any other
agreement between the Lender Group or the Issuing Bank and the Borrower, and
irrespective of whether for the payment of money), whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including any debt, liability, or obligation owing from the Borrower to
others that the Lender Group or the Issuing Bank may have obtained by assignment
or otherwise, and further including all interest not paid when due and all
Lender Group Expenses that the Borrower is required to pay or reimburse by the
Loan Documents, by law, or otherwise.
"Secured Party" shall mean, individually and collectively, the
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Lenders, Agent, and Co-Agent.
"Securities Act" shall have the meaning ascribed thereto in Section
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9(c) of this Agreement.
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(b) Construction.
(i) Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, the part includes the whole, the term "including"
is not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms in this Agreement refer
to this Agreement as a whole and not exclusively to any particular provision of
this Agreement. Article, section, subsection, exhibit, and schedule references
are to this Agreement unless otherwise specified. All of the exhibits or
schedules attached to this Agreement shall be deemed incorporated herein by
reference. Any reference to any of the
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following documents includes any and all alterations, amendments, restatements,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable: this Agreement, the Loan Agreement, or any of the other Loan
Documents.
(ii) Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Secured Party or
Pledgor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by both of the parties and their respective
counsel and shall be construed and interpreted according to the ordinary meaning
of the words used so as to fairly accomplish the purposes and intentions of the
parties hereto.
(iii) In the event of any direct conflict between the
express terms and provisions of this Agreement and of the Loan Agreement, the
terms and provisions of the Loan Agreement shall control.
2. Pledge. As security for the prompt payment and performance of the Secured
Obligations in full by Pledgor when due, whether at stated maturity, by
acceleration or otherwise (including amounts that would become due but for the
operation of the provisions of the Bankruptcy Code), Pledgor hereby pledges,
grants, transfers, and assigns to Agent, for the benefit of Secured Party, a
security interest in all of Pledgor's right, title, and interest in and to the
Collateral.
3. Delivery and Registration of Collateral.
(a) All certificates or instruments representing or evidencing the
Collateral shall be promptly delivered by Pledgor to Agent or Agent's designee
pursuant hereto at a location designated by Agent and shall be held by or on
behalf of Agent pursuant hereto, and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Agent.
(b) Upon the occurrence and during the continuance of an Event of
Default, Agent, on behalf of Secured Party, shall have the right, at any time in
its discretion and without notice to Pledgor, to transfer to or to register on
the books of the Issuers (or of any other Person maintaining records with
respect to the Collateral) in the name of Agent, for the benefit of Secured
Party, or any of Agent's nominees any or all of the Collateral. In addition,
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
(c) If, at any time and from time to time, any Collateral (including
any certificate or instrument representing or evidencing any Collateral) is in
the possession of a Person other than Agent or Pledgor (a "Holder"), then
Pledgor shall immediately, at Agent's option, either cause such Collateral to be
delivered into Agent's possession, or execute and deliver to such Holder a
written notification/instruction, and take all other steps necessary to perfect
the security interest of Agent, for the benefit of Secured Party, in such
Collateral, including obtaining from such Holder a written acknowledgement that
such Holder holds
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such Collateral for Agent, all pursuant to (S)9115 of the Code or other
applicable law governing the perfection of the security interest of Agent, for
the benefit of Secured Party, in the Collateral in the possession of such
Holder. Each such notification/instruction and acknowledgement shall be in form
and substance satisfactory to Agent.
(d) Any and all Collateral (including dividends, interest, and other
cash distributions) at any time received or held by Pledgor shall be so received
or held in trust for Secured Party, shall be segregated from other funds and
property of Pledgor and shall be forthwith delivered to Agent, for the benefit
of Secured Party, in the same form as so received or held, with any necessary
endorsements; provided that cash dividends or distributions received by
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Pledgor, if and to the extent they are not prohibited by the Loan Agreement, may
be retained by Pledgor in accordance with Section 4 and used in the ordinary
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course of Pledgor's business.
(e) If at any time and from time to time any Collateral consists of
an uncertificated security or a security in book entry form, then Pledgor shall
immediately cause such Collateral to be registered or entered, as the case may
be, in the name of Agent, for the benefit of Secured Party, or otherwise cause
the security interest of Agent, for the benefit of Secured Party, thereon to be
perfected in accordance with applicable law.
4. Voting Rights and Dividends.
(a) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of the Loan Documents and shall be
entitled to receive and retain any cash dividends or distributions paid in
respect of the Collateral.
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of Pledgor to exercise the voting and other consensual
rights or receive and retain cash dividends or distributions that it would
otherwise be entitled to exercise or receive and retain, as applicable pursuant
to Section 4(a), shall cease, and all such rights shall thereupon become vested
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in Agent, for the benefit of Secured Party, who shall thereupon have the sole
right to exercise such voting or other consensual rights and to receive and
retain such cash dividends and distributions for the benefit of Secured Party.
Pledgor shall execute and deliver (or cause to be executed and delivered) to
Agent all such proxies and other instruments as Agent may reasonably request for
the purpose of enabling Agent to exercise the voting and other rights which it
is entitled to exercise and to receive the dividends and distributions that it
is entitled to receive and retain pursuant to the preceding sentence.
5. Representations and Warranties. Pledgor represents, warrants, and covenants
as follows:
(a) Pledgor has taken all steps it deems necessary or appropriate to
be informed on a continuing basis of changes or potential changes affecting the
Collateral (including rights of conversion and exchange, rights to subscribe,
payment of dividends,
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reorganizations or recapitalization, tender offers and voting rights), and
Pledgor agrees that Secured Party shall have no responsibility or liability for
informing Pledgor of any such changes or potential changes or for taking any
action or omitting to take any action with respect thereto;
(b) All information herein or hereafter supplied to Secured Party by
or on behalf of Pledgor in writing with respect to the Collateral is, or in the
case of information hereafter supplied will be, accurate and complete in all
material respects;
(c) Pledgor is and will be the sole legal and beneficial owner of the
Collateral (including the Pledged Shares and all other Collateral acquired by
Pledgor after the date hereof) free and clear of any adverse claim, Lien, or
other right, title, or interest of any party, other than the Liens in favor of
Agent for the benefit of Secured Party;
(d) This Agreement, and the delivery to Agent of the Pledged Shares
representing Collateral (or the delivery to all Holders of the Pledged Shares
representing Collateral of the notification/instruction referred to in Section 3
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of this Agreement), creates a valid, perfected, and first priority security
interest in one hundred percent (100%) of the Pledged Shares in favor of Agent,
for the benefit of Secured Party, securing payment of the Secured Obligations,
and all actions necessary to achieve such perfection have been duly taken;
(e) Schedule A to this Agreement is true and correct and complete
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in all material respects; without limiting the generality of the foregoing: (i)
all the Pledged Shares are in certificated form, and, except to the extent
registered in the name of Agent, for the benefit of Secured Party, or Agent's
nominee pursuant to the provisions of this Agreement, are registered in the name
of Pledgor; and (ii) the Pledged Shares as to each of the Issuers constitute at
least the percentage of all the fully diluted issued and outstanding shares of
stock of such Issuer as set forth in Schedule A to this Agreement;
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(f) There are no presently existing Future Rights or Proceeds owned
by Pledgor;
(g) The Pledged Shares have been duly authorized and validly issued
and are fully paid and nonassessable; and
(h) Neither the pledge of the Collateral pursuant to this Agreement
nor the extensions of credit represented by the Secured Obligations violates
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
6. Further Assurances.
(a) Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action that may be necessary or reasonably desirable, or
that Agent may request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to
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enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, Pledgor will: (i) at the request of Agent, xxxx conspicuously each of
its records pertaining to the Collateral with a legend, in form and substance
reasonably satisfactory to Agent, indicating that such Collateral is subject to
the security interest granted hereby; (ii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or reasonably desirable, or as Agent may request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby; (iii) allow inspection of the Collateral by Agent or Persons
designated by Agent; and (iv) appear in and defend any action or proceeding that
may affect Pledgor's title to or the security interest of Agent, for the benefit
of Secured Party, in the Collateral.
(b) Pledgor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Pledgor where permitted by law. A
carbon, photographic, or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Pledgor will furnish to Agent, for the benefit of Secured Party,
upon the request of Agent: (i) a certificate executed by an authorized officer
of Pledgor, and dated as of the date of delivery to Agent, itemizing in such
detail as Agent may request, the Collateral which, as of the date of such
certificate, has been delivered to Agent by Pledgor pursuant to the provisions
of this Agreement; and (ii) such statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Agent may request.
7. Covenants of Pledgor. Pledgor shall:
(a) Perform each and every covenant in the Loan Documents applicable
to Pledgor;
(b) At all times keep at least one complete set of its records
concerning substantially all of the Collateral at its Chief Executive Office as
set forth in Schedule B hereto, and not change the location of its Chief
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Executive Office or such records without giving Secured Party at least thirty
(30) days prior written notice thereof;
(c) To the extent it may lawfully do so, use its best efforts to
prevent the Issuers from issuing Future Rights or Proceeds, except for cash
dividends and other distributions, if any, that are not prohibited by the terms
of the Loan Agreement to be paid by any Issuer to Pledgor; and
(d) Upon receipt by Pledgor of any material notice, report, or other
communication from any of the Issuers or any Holder relating to all or any part
of the Collateral, deliver such notice, report or other communication to Agent
as soon as possible, but in no event later than five (5) days following the
receipt thereof by Pledgor.
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8. Agent as Pledgor's Attorney-in-Fact.
(a) Pledgor hereby irrevocably appoints Agent as Pledgor's attorney-
in-fact, with full authority in the place and stead of Pledgor and in the name
of Pledgor, Agent, or otherwise, from time to time at Agent's discretion, to
take any action and to execute any instrument that Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(i) upon the occurrence and during the continuance of an Event of Default, to
receive, endorse, and collect all instruments made payable to Pledgor
representing any dividend, interest payment or other distribution in respect of
the Collateral or any part thereof to the extent permitted hereunder and to give
full discharge for the same and to execute and file governmental notifications
and reporting forms; (ii) to issue any notifications/instructions Agent deems
necessary pursuant to Section 3 of this Agreement; or (iii) to arrange for the
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transfer of the Collateral on the books of any of the Issuers or any other
Person to the name of Agent or to the name of Agent's nominee.
(b) In addition to the designation of Agent as Pledgor's attorney-in-
fact in subsection (a), Pledgor hereby irrevocably appoints Agent as Pledgor's
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agent and attorney-in-fact to make, execute and deliver any and all documents
and writings which may be necessary or appropriate for approval of, or be
required by, any regulatory authority located in any city, county, state or
country where Pledgor or any of the Issuers engage in business, in order to
transfer or to more effectively transfer any of the Pledged Shares or otherwise
enforce Secured Party's rights hereunder.
9. Remedies upon Default. Upon the occurrence and during the continuance of an
Event of Default:
(a) Agent, on behalf of Secured Party, may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Code (irrespective of whether the Code applies to the affected
items of Collateral), and Agent, on behalf of Secured Party, may also without
notice (except as specified below) sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker's board
or at any of Agent's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Agent may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. To the maximum extent
permitted by applicable law, any one or more members of Secured Party may be the
purchaser of any or all of the Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply all or any part of the Secured Obligations owing to such
members of Secured Party as a credit on account of the purchase price of any
Collateral payable at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Pledgor,
and Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay, or appraisal that it now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted. Pledgor
agrees that, to the extent
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notice of sale shall be required by law, at least ten (10) calendar days notice
to Pledgor of the time and place of any public sale or the time after which a
private sale is to be made shall constitute reasonable notification. Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. To the maximum extent permitted by law, Pledgor hereby waives any
claims against Secured Party arising because the price at which any Collateral
may have been sold at such a private sale was less than the price that might
have been obtained at a public sale, even if Agent accepts the first offer
received and does not offer such Collateral to more than one offeree.
(b) Pledgor hereby agrees that any sale or other disposition of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, or other financial institutions in the City of Los
Angeles, California in disposing of property similar to the Collateral shall be
deemed to be commercially reasonable.
(c) Pledgor hereby acknowledges that the sale by Agent of any
Collateral pursuant to the terms hereof in compliance with the Securities Act of
1933 as now in effect or as hereafter amended, or any similar statute hereafter
adopted with similar purpose or effect (the "Securities Act"), as well as
applicable "Blue Sky" or other state securities laws may require strict
limitations as to the manner in which Agent or any subsequent transferee of the
Collateral may dispose thereof. Pledgor acknowledges and agrees that in order to
protect Secured Party's interest it may be necessary to sell the Collateral at a
price less than the maximum price attainable if a sale were delayed or were made
in another manner, such as a public offering under the Securities Act. Pledgor
has no objection to sale in such a manner and agrees that Secured Party shall
have no obligation to obtain the maximum possible price for the Collateral.
Without limiting the generality of the foregoing, Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default, Agent, on behalf
of Secured Party, may, subject to applicable law, from time to time attempt to
sell all or any part of the Collateral by a private placement, restricting the
bidders and prospective purchasers to those who will represent and agree that
they are purchasing for investment only and not for distribution. In so doing,
Agent may solicit offers to buy the Collateral or any part thereof for cash,
from a limited number of investors deemed by Agent, in its reasonable judgment,
to be institutional investors or other responsible parties who might be
interested in purchasing the Collateral. If Agent shall solicit such offers,
then the acceptance by Agent of one of the offers shall be deemed to be a
commercially reasonable method of disposition of the Collateral.
(d) If Agent, on behalf of Secured Party, shall determine to exercise
its right to sell all or any portion of the Collateral pursuant to this Section,
Pledgor agrees that, upon request of Agent, Pledgor will, at its own expense:
(i) use its best efforts to execute and deliver, and
cause the Issuers and the directors and officers thereof to execute and deliver,
all such instruments and
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documents, and to do or cause to be done all such other acts and things, as may
be necessary or, in the opinion of Agent, advisable to register such Collateral
under the provisions of the Securities Act, and to cause the registration
statement relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectuses which, in the
opinion of Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(ii) use its best efforts to qualify the Collateral
under the state securities laws or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by Agent;
(iii) cause the Issuers to make available to their
respective security holders, as soon as practicable, an earnings statement which
will satisfy the provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver, or cause the officers and
directors of the Issuers to execute and deliver, to any person, entity or
governmental authority as Agent may choose, any and all documents and writings
which, in Agent's reasonable judgment, may be necessary or appropriate for
approval, or be required by, any regulatory authority located in any city,
county, state or country where Pledgor or the Issuers engage in business, in
order to transfer or to more effectively transfer the Pledged Shares or
otherwise enforce Secured Party's rights hereunder; and
(v) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Pledgor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
(e) PLEDGOR EXPRESSLY WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW:
(i) ANY CONSTITUTIONAL OR OTHER RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME
AGENT DISPOSES OF ALL OR ANY PART OF THE COLLATERAL AS PROVIDED IN THIS SECTION;
(ii) ALL RIGHTS OF REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR MAY AT ANY
TIME IN THE FUTURE HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING OR
HEREAFTER ENACTED; AND (iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS
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SECTION, ANY REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.
10. Application of Proceeds. Upon the occurrence and during the continuance of
an Event of Default, any cash held by Secured Party as Collateral and all cash
proceeds received by
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Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral pursuant to the exercise by Secured Party
of its remedies as a secured creditor as provided in Section 9 shall be applied
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from time to time by Secured Party as provided in the Loan Agreement.
11. Duties of Secured Party. The powers conferred on Secured Party hereunder
are solely to protect its interests in the Collateral and shall not impose on it
any duty to exercise such powers. Except as provided in Section 9207 of the
Code, Secured Party shall have no duty with respect to the Collateral or any
responsibility for taking any necessary steps to preserve rights against any
Persons with respect to any Collateral.
12. Choice of Law and Venue. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR,
AT THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER COURT IN WHICH SECURED PARTY
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF PLEDGOR AND SECURED PARTY
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12.
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13. Amendments; Etc. No amendment or waiver of any provision of this Agreement
nor consent to any departure by Pledgor herefrom shall in any event be effective
unless the same shall be in writing and signed by Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of Secured Party to exercise,
and no delay in exercising any right under this Agreement, any other Loan
Document, or otherwise with respect to any of the Secured Obligations, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under this Agreement, any other Loan Document, or otherwise with respect
to any of the Secured Obligations preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided for in this Agreement
or otherwise with respect to any of the Secured Obligations are cumulative and
not exclusive of any remedies provided by law.
14. Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and shall be delivered in the manner set forth in the Loan Agreement.
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15. Continuing Security Interest. This Agreement shall create a continuing
security interest in the Collateral and shall: (i) remain in full force and
effect until the indefeasible payment in full of the Secured Obligations,
including the cash collateralization, expiration, or cancellation of all Secured
Obligations, if any, consisting of letters of credit, and the full and final
termination of any commitment to extend any financial accommodations under the
Loan Agreement; (ii) be binding upon Pledgor and its successors and assigns; and
(iii) inure to the benefit of Secured Party and its successors, transferees, and
assigns. Upon the indefeasible payment in full of the Secured Obligations,
including the cash collateralization, expiration, or cancellation of all Secured
Obligations, if any, consisting of letters of credit, and the full and final
termination of any commitment to extend any financial accommodations under the
Loan Agreement, the security interests granted herein shall automatically
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Agent will, at Pledgor's expense, execute and deliver to
Pledgor such documents as Pledgor shall reasonably request to evidence such
termination. Such documents shall be prepared by Pledgor and shall be in form
and substance reasonably satisfactory to Agent.
16. Security Interest Absolute. To the maximum extent permitted by law, all
rights of Secured Party, all security interests hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any of the Secured
Obligations or any other agreement or instrument relating thereto, including any
of the Loan Documents;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any of the Loan Documents, or any
other agreement or instrument relating thereto;
(c) any exchange, release, or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty for all or any of the Secured Obligations; or
(d) any other circumstances that might otherwise constitute a defense
available to, or a discharge of, Pledgor.
To the maximum extent permitted by law, Pledgor hereby waives any right to
require Secured Party to: (A) proceed against or exhaust any security held from
Pledgor; or (B) pursue any other remedy in Secured Party's power whatsoever.
17. Headings. Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
18. Severability. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of
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the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
19. Counterparts; Telefacsimile Execution. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, or binding effect hereof.
20. Waiver of Marshaling. Each of Pledgor and Agent acknowledges and agrees
that in exercising any rights under or with respect to the Collateral: (i)
Secured Party is under no obligation to marshal any Collateral; (ii) may, in its
absolute discretion, realize upon the Collateral in any order and in any manner
it so elects; and (iii) may, in its absolute discretion, apply the proceeds of
any or all of the Collateral to the Secured Obligations in any order and in any
manner it so elects. Pledgor and Agent waive any right to require the marshaling
of any of the Collateral.
21. Waiver of Jury Trial.
PLEDGOR AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
PLEDGOR AND AGENT REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Signature page to follow.]
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IN WITNESS WHEREOF, Pledgor and Agent have caused this Agreement to be
duly executed and delivered by their officers thereunto duly authorized as of
the date first written above.
MELLON BANK, N.A.,
as Agent
By
-------------------------------
Title:
---------------------------
SM&A CORPORATION,
a California corporation
By
-------------------------------
Title:
---------------------------
S-1
SCHEDULE A
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: SM&A Corporation
Pledged Shares
--------------
Former Name, if Pledgor's Jurisdiction of
Issuer Number of Class Certificate any, in which Percentage Incorporation
----- Shares ----- Number(s) Certificate Issued Ownership ---------------
--------- ----------- ------------------ ----------
Xxxxxx Xxxxx & Associates, Inc. 100 Common 1 n/a 100% California
Systems Integration Software, Inc. 1,000 Common 1 n/a 100% California
SM&A Corporation (East) 100 Common 1 n/a 100% California
SCHEDULE B
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: SM&A Corporation, a California corporation
Address of Chief Executive Office:
0000 XxxXxxxxx Xxxxx
0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
B-1
