EXECUTIONVERSION
MANAGEMENTSTOCKHOLDERS AGREEMENT
OF
STERLINGHOLDCO INC.
Dated as of February 9, 2012
Table of Contents
| Section 1. | Restrictions onTransfer | 1 | |
| (a) | RestrictionsonTransfer | 1 | |
| Section 2. | Other ProvisionsRelating to Transfer2 | 2 | |
| (a) | Legends;Securities Law Compliance | 2 | |
| (b) | Transfersin Violationof Agreement | 2 | |
| Section 3. | VotingProxy | 3 | |
| Section 4. | Rightofthe Company andtheProvidence Shareholdersto Purchasefrom Management Stockholders ("CallRight") | 3 | |
| 3 | |||
| (a) | Right to Purchase | 3 | |
| (b) | Notice | 4 | |
| (c) | Available Shares | 4 | |
| (d) | Closing | 5 | |
| Section 5. | PurchasePrice | 5 | |
| (a) | Fair Market Value | 5 | |
| (b) | InitialValue | 6 | |
| Section 6. | ProhibitedPurchases | 6 | |
| Section 7. | Drag-Along Rights | 7 | |
| (a) | Participation | 7 | |
| (b) | Sale Notice | 8 | |
| (c) | Sharestobe Sold | 8 | |
| (d) | OtherTransactions | 8 | |
| (e) | Cooperation | 8 | |
| (f) | Notice | 8 | |
| Section 8. | Tag-AlongRights | 8 | |
| (a) | Participation | 8 | |
| (b) | Sale Notice | 9 | |
| (c) | Participation Notice; Shares to be Sold | 9 | |
| (d) | Cooperation | 9 | |
| (e) | Nonparticipation; Deadline for Completion of Sale | 10 | |
| ii |
| Section 9. | RegistrationRights | 10 | |
| (a) | Piggyback Rights | 10 | |
| (b) | RegistrationExpenses | 11 | |
| (c) | RestrictionsonPublicSale by Stockholders Following a Qualified Public Offering | 11 | |
| Section10. | Representationsand Warranties | 12 | |
| (a) | Power and Authority | 12 | |
| (b) | Execution and Delivery | 12 | |
| (c) | NoConflict | 12 | |
| (d) | NoOther Agreements | 12 | |
| Section 11. | Further Assurances, etc | 12 | |
| Section12. | Notices | 12 | |
| Section13. | Governing Law, etc | 13 | |
| (a) | Governing Law | 13 | |
| (b) | Waiver of Jury Trial | 14 | |
| (c) | Severability | 14 | |
| (d) | Remedies | 14 | |
| Section 14. | Entire Agreement; Amendment and Waiver | 14 | |
| (a) | Entire Agreement | 14 | |
| (b) | AmendmentandWaiver | 15 | |
| Section 15. | Successors and Assigns; No Third-Party Beneficiaries | 15 | |
| (a) | Successors and Assigns Generally | 15 | |
| (b) | No Third-Party Beneficiaries | 15 | |
| Section 16. | Termination | 15 | |
| (a) | Ceasing Ownership | 15 | |
| (b) | Qualified Public Offerings | 15 | |
| Section17. | Headings | 15 | |
| Section18. | Counterparts and Facsimile Signatures | 15 | |
| Section19. | Definitions | 16 | |
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This MANAGEMENT STOCKHOLDERS AGREEMENT, dated as ofFebruary 9, 2012 (this"Agreement"),is entered into by and among Sterling Holdco Inc., a Delaware corporation (the"Company"),Providence Equity Partners VI L.P.andProvidenceEquityPartners VI-A, L.P., each a Delaware limited partnership (together,"Providence"),and the current and former employees of the Company and its Subsidiaries who hereafter acquire or are otherwise issued Shares and become parties to this Agreement (collectively, the"Management Stockholders").Capitalized terms used herein without definition are as defined in Section 19 below.
RECITALS:
WHEREAS, the Company's direct wholly ownedsubsidiary, SterlingParent Inc.,a Delaware corporation("Parent"),and Sterling Merger Inc., a Delaware corporation and direct wholly ownedsubsidiaryof Parent("Merger Sub"),previouslyenteredintoanAgreement and Plan of Merger, dated as of March 31,2011(the"Merger Agreement"),withSRAInternational, Inc., a Delaware corporation("SRA"),pursuant to which, at the effective time of the merger (which occurred on July 20,2011),Merger Sub merged withandinto SRA, withSRAcontinuing as the surviving corporation (the"Acquisition");
WHEREAS,followingthe consummation of the transactions contemplated by the Merger Agreement, the Company adopted the Sterling Holdco Inc.StockIncentive Plan (the"Plan")under which certain employees of the Company and its Subsidiaries would be issued options to purchasesharesof commonstockof the Company, par value $0.01 pershare("Shares");and
WHEREAS, the Company, Providence,andeach Management Stockholder who joins this Agreement intend hereby toestablishtheir rights and obligations in respect of the Management Stockholder's acquisition, holding, and disposition of Shares.
NOW, THEREFORE, in consideration ofthemutual covenants and obligationssetforth in this Agreement, the parties hereto agree asfollows:
Section1. Restrictions on Transfer.
(a) Restrictions on Transfer.Each ManagementStockholderherebyagrees thatsuch ManagementStockholdershall not, without the prior written approval of the Company, transfer,sell,assign, option, pledge,hypothecate,or otherwise dispose of orencumber(each of the foregoing, a"Transfer")any of his or herSharesat any time other than(i)Transfers ofSharesto Permitted Transferees,(ii)following a Qualified Public Offering (subjecttoapplicable andcustomaryunderwriterrestrictions),Transfers pursuant toSection9(Registration Rights)hereof, or(iii)asrequired pursuant to Section 7(Drag-Along Rights)hereof and permitted pursuant toSection8(Tag-Along Rights)
hereof.
Section 2. Other Provisions Relating to Transfer.
(a) Legends;SecuritiesLawCompliance.Eachcertificate representing Sharesowned byanyManagementStockholdershallbear the followinglegends:
| (i) | THESECURITIESREPRESENTED BYTHISCERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TOANEFFECTIVE REGISTRATIONSTATEMENT UNDERTHESECURITIESACT OF1933,AS AMENDED, AND MAY NOT BE TRANSFERRED,SOLD,PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OFUNLESS() (A) SUCH DISPOSITION IS PURSUANT TO ANEFFECTIVEREGISTRATIONSTATEMENTUNDER THESECURITIESACT OF 1933,AS AMENDED,(B) THE HOLDER HEREOFSHALLHAVE DELIVERED TOTHECOMPANY AN OPINION OF COUNSEL, WHICH OPINIONANDCOUNSELSHALLBE REASONABLYSATISFACTORYTOTHECOMPANY, TO THEEFFECTTHATSUCHDISPOSITION ISEXEMPTFROM THE PROVISIONS OF SECTION 5 OFSUCHACT OR(C)ANO-ACTIONLETTER FROM THESECURITIESAND EXCHANGE COMMISSION, REASONABLY SATISFACTORY TO COUNSEL FOR THECOMPANY, SHALLHAVE BEEN OBTAINED WITHRESPECTTOSUCHDISPOSITION AND(y)SUCH DISPOSITION IS PURSUANT TO REGISTRATION UNDER ANY APPLICABLESTATE SECURITIESLAWS OR ANEXEMPTIONTHEREFROM. |
| (ii) | THESECURITIESREPRESENTED BY THISCERTIFICATE ARE SUBJECTTOTRANSFER,VOTING AND OTHER RESTRICTIONSSET FORTHIN A MANAGEMENTSTOCKHOLDERS AGREEMENT,DATEDASOFFEBRUARY9,2012,AMONG THE COMPANY AND OTHER PARTIES THERETO,ACOPY OF WHICH IS ON FILE WITH THESECRETARYOF THE COMPANY. |
Inaddition, certificatesrepresentingShares shallbearanylegendsrequired byapplicablestatelaw.Each ManagementStockholder agrees that,inadditiontocomplying withthe restrictions on Transfersetforth elsewhere inthisAgreement,suchManagementStockholderwill not Transfer anyShares(orsolicitany offerstobuy, purchase, or otherwise acquire or takeapledge of anyShares)in violation ofthe SecuritiesAct, applicable statesecuritiesor "bluesky"laws,or any rules or regulations thereunder,and suchManagementStockholderwill not Transferany Sharesunless theconditions set forthin the legend required by clause(i)of thisSection2(a) aresatisfied.
(b) Transfers inViolationofAgreement.Any Transfer orattemptedTransfer ofany Sharesinviolationof thisAgreement shallbevoid,nosuch Transfer shallbe recorded on the Company's books and thepurportedtransferorshallinstead continue to be treated as the owner ofsuchShares for all purposes hereof.
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Section 3. Voting Proxy.Byenteringinto this Agreement,theManagementStockholderhereby irrevocably grants to andappointsProvidence(to actby unanimousconsent)assuchManagement Stockholder's proxy andattorney-in-fact(with full power ofsubstitution),forandin the name, place, and stead ofsuchManagementStockholder, to voteor act by unanimous written consent with respect tosuchManagement Stockholder's Shares. The Management Stockholder hereby affirms thattheirrevocable proxy set forth in thisSection3shallbe valid until the consummation ofaPublic Offering and isgiven to securethe performance of the obligations ofsuchManagement Stockholder underthisAgreement.TheManagementStockholderfurtheraffirms that theproxy herebygranted shallbe irrevocableand shallbe deemed coupledwith aninterestand shall extendfor the term of this Agreement, or,ifearlier, until the last date permitted by law. Except as expressly contemplated by thisSection 3,the ManagementStockholderhas notgranteda proxytoany Person toexercise therights of such ManagementStockholderunder this Agreement or any other agreement relating to theSharesto whichsuchManagementStockholderis a party.
Section4. Right of the Company and the Providence Shareholders toPurchase from Management Stockholders("Call Right'').
(a) Right to Purchase.Subjecttoall subsectionsof thisSection4, theCompany shallhavetheright to purchase fromeachManagementStockholder, andeachsuchManagementStockholdershall havetheobligationtosell totheCompany,anyor allSharesheld bysuchManagementStockholderand any orall SharesheldbyPermittedTransfereesofsuchManagement Stockholder (it being understoodthat any suchManagementStockholder'sPermittedTransferees shallcomply with allapplicableprovisions of thisSection4)upon suchManagementStockholder'stermination ofemploymentwith the Company or anySubsidiary:
(i) at the Fair Market Value (as defined inSection5) ofsuch Shares if suchManagementStockholder's employmentwith theCompany and any Subsidiarythatemploys suchindividual terminates asa resultof (A)thetermination bythe Company andany such Subsidiary(or bytheCompany on behalf of anysuch Subsidiary)ofsuchManagementStockholder's employmentwithoutCause;(B)the death or Disability ofsuchManagementStockholder;or (C) the voluntary resignation ofsuchManagement Stockholder (including for Good Reason); or
(ii) at thelesser of theFairMarket Value and the Initial Value(asdefinedin Section 5)ofsuch SharesifsuchManagementStockholder's employment withthe Company andany Subsidiarythatemploys suchindividualisterminated bytheCompany and any such Subsidiary(or bythe Companyon behalfof such Subsidiary)forCause at any time.
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(b) Notice.If theCompanydesires to purchase any orall of the Shares from a Management Stockholder, and, as applicable, suchManagementStockholder'sPermittedTransferee(s), it shall delivera writtennotice (the"CallNotice")tosuchManagementStockholder and, as applicable, anyPermitted Transferees ofsuchManagementStockholder, within six monthsandfive businessdaysafterthedateofterminationofemployment (includingby reason ofvoluntary resignation,death or Disability) ofsuch Management Stockholder(the date ofsuch termination,the"TerminationDate").TheCallNoticeshallsetforth thenumberof Shares tobe acquired fromsuchManagementStockholder and, as applicable, anyPermittedTransfereesofsuchManagementStockholder,theaggregate consideration to bepaid forsuch Shares andthe timeand place fortheclosingof therepurchasetransaction.Notwithstanding theforegoing,with respectto theCompany'spurchaseof Shares acquired atany time by such ManagementStockholderpursuantto an exercise of any stockoptions or otherequity award,theCall Noticerequired by thisSection 4(b) shall be given by the Companynotearlierthansixmonthsandone day nor laterthan eight months afterthe date onwhich suchManagementStockholder acquired such Shares,in which casesuchtime periodshall beused in lieu of thesix months andfive business days referredtointhefirst sentence ofthis Section4(b).
(c) Available Shares.
(i) Ifforanyreason the Company doesnotelectto purchaseallof theShares pursuant to and withintheapplicabletimeframesset forthinSection 4(a),Providenceshall be entitled,in themanner setforth in thisSection 4,topurchasetheShares that theCompany has notelectedto purchase (the"AvailableShares").Assoonas practicable,but inany eventwithin30daysafterthe Company determines thatthere will beAvailableShares, the Company shalldeliverwritten notice("AvailabilityNotice")to Providence setting forth thenumber of Available Shares and the priceforeach such Available Share.
(ii) Providencemay purchaseanyorallof theAvailable Shares by delivering written noticeto theCompany within 20daysafterthereceiptof theAvailability Noticefrom theCompany(such20-day period, the"ElectionPeriod").
(iii) As soonas practicable, but inany event within 5business days afterthe expiration oftheElectionPeriod,the Company will, if necessary, notifytheappropriate Management Stockholders and, as applicable,anyPermittedTransferees of such ManagementStockholder, astothe number of Shares beingpurchasedfrom suchManagementStockholders and, as applicable, anyPermitted Transferees of such Management Stockholder, by Providence (the"Supplemental Call Notice").The Supplemental Call Notice will set forth the number of Shares the Company and Providence, as applicable, will acquire from such Management Stockholder and, as applicable, any Permitted Transferees of such Management Stockholder, the aggregate consideration to be paid for such Shares, and the time and place of the closing of the repurchase transaction.
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(d) Closing.Subject to Section 6, the closing of any repurchase transaction contemplated by this Section 4 will take place on the date designated by the Company in the Call Notice or the Supplemental Call Notice, as the case may be, which date will not be more than 90 days after the delivery of such notice. Subject to Section 6, the Company and Providence, as the case may be, will pay for the Shares to be purchased pursuant to this Section 4 by delivery of a check payable to the appropriate Management Stockholder and, as applicable, any Permitted Transferees of such Management Stockholder, or by wire transfer of immediately available funds to an account designated by such Management Stockholder in the aggregate amount of the purchase price for such Shares.The Company and Providence, as the case may be, will receive customary representations and warranties from each seller regarding the sale of the Shares, including but not limited to the representation that such seller has good and marketable title to the Shares to be transferred free and clear of all liens, claims, and other encumbrances.
Section 5. Purchase Price.
(a) Fair Market Value.
(i) If no Public Offering has occurred, the"Fair Market Value"of any Share shall be equal to the value most recently established by the Board, adjusted, if deemed necessary or advisable by the Board, for significant developments occurring since the date such value was established by the Board. Following a Public Offering, the Fair Market Value, on any date of determination shall mean the closing price for a Share as reported on a national exchange for or a nationally recognized system of price quotation for such date or, if there is no such closing price for such date, for the most recent date with respect to which such closing price is available. In the event that there are no Share transactions reported on such exchange or system on such date, Fair Market Value shall mean the closing price on the immediately preceding date on which Share transactions were so reported.
(ii) The Fair Market Value of any Share to be purchased pursuant to Section 4(a) shall be determined as of the Termination Date (including by reason of voluntary resignation, death, or Disability);providedthat the Fair Market Value of any Share acquired by a Management Stockholder pursuant to the exercise of any stock options shall be determined as of the date that is six months and one dayafterthe acquisition ofsuch Sharesifsuchdate is later thanthedatespecifiedin the immediately preceding clause; andprovided, further,thatin noevent will suchdatebelaterthanthedateoftheclosing ofany repurchasedetermined pursuant toSection 4(d).Inall events,theFairMarket Valueshallbe determined inamanner consistent withSection409A of the Code.
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(b) Initial Value.The"InitialValue"of anyShareactually purchased (including,withoutlimitation,purchasedupontheexercise ofa stockoption)shallequal the price paid bythe relevantManagementStockholderforany such Share,lessthe amountofdividendsand other distributionspaidin respect ofsuch Shareafter theClosing.Unless determined otherwise by the Board, the"InitialValue" of anyShare grantedto a ManagementStockholder withoutpayment ofconsideration shallbezero.
Section6. Prohibited Purchases.Notwithstandinganythingto thecontraryherein,theCompanyshall notbe permitted to purchaseany SharesofCommon Stockfrom a ManagementStockholderhereunder to the extent(a)the Company isprohibitedfrom purchasingsuch Sharesby applicable law or byanydebt instruments oragreements, includinganyamendment, renewal,extension, substitution, refinancing, replacement, or other modification thereof, which have beenentered intoorwhichmay beenteredinto by theCompanyoranyof itsSubsidiaries,including those to finance theacquisitionoftheCompany on theClosingDate, and anyfutureacquisitions by the Company or recapitalizations oftheCompany (the"FinancingDocuments");(b)an eventof default has occurred (or, with notice or the lapse of time or both, would occur)underany Financing Documentandis (or would be)continuing;or(c)the purchaseof such Shares wouldor, in the view of the Board (excludingsuch Management Stockholder),might result in theoccurrenceofan eventof default underany FinancingDocument orcreate a conditionthatwouldormight, withnotice or lapse of time or both, resultin such an eventof default. IfSharesthat theCompanyhas the right topurchaseon any dateexceed thetotalamount permittedto be purchased onsuchdate pursuant to thepreceding sentence(the"Maximum Amount"),theCompany shallpurchase onsuchdate only thatnumberofSharesup to the MaximumAmount(ifany)(andshallnot berequired topurchase more than the Maximum Amount) insuch amountsas the Boardshallingoodfaithdetermine,applying the following order of priority:
(i) First,the Sharesof all ManagementStockholderswhoseSharesarebeing purchased bytheCompany by reason of termination ofemploymentdue to death or Disabilityand, totheextentthatthenumber of Sharesthatthe Companyisobligated to purchase fromsuchManagementStockholders(but forthis Section6)exceedsthe MaximumAmount, such Sharespro rataamong such Management Stockholderson the basis ofthe numberofSharesheld byeachofsuchManagementStockholdersthattheCompany hastherightto purchase;
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(ii) Second,to the extent that the Maximum Amount is in excess of the amount the Company purchases pursuant to clause(a)above, the Shares of all Management Stockholders whose Shares are being purchased by the Company by reason of termination of employment without Cause or due to resignation for Good Reason up to the Maximum Amount (as reduced by shares described in clause(a)to be purchased) and, to the extent that the number of Shares that the Company is obligated to purchase from such Management Stockholders (but for this Section 6) exceeds the Maximum Amount (as reduced by shares described in clause(a)to be purchased), such Shares pro rata among such Management Stockholders on the basis of the number of Shares held by each of such Management Stockholders that the Company has the right to purchase; and
(iii) Third,to the extent the Maximum Amount is in excess of the amounts the Company purchases pursuant to clauses(a)and(b)above, the Shares of all other Management Stockholders whose Shares are being purchased by the Company up to the Maximum Amount (as reduced by Shares described in clauses(a)and(b)to be purchased) and, to the extent that the number of Shares that the Company is obligated to purchase from such Management Stockholders (but for this Section 6) exceeds the Maximum Amount (as reduced by Shares described in clauses(a)and(b)to be purchased), the Shares of such Management Stockholders in such order of priority and in such amounts as the Board (excluding such Management Stockholders and other members of the Board who are designees of the Management Stockholders) in its sole discretion shall in good faith determine to be appropriate under the circumstances.
Notwithstanding anything to the contrary contained in this Agreement, if the Company is unable to make any payment when due to any Management Stockholder under this Agreement by reason of this Section 6, the Company shall have the option to either(i)make such payment at the earliest practicable date permitted under this Section 6 or(ii)pay the purchase price for such Shares with a subordinated note that is fully subordinated in right of payment and exercise of remedies to the lenders' rights under the Financing Documents.
Section 7. Drag-Along Rights.
(a) Participation.If at any time Providence proposes to Transfer Shares in a transaction or series of related transactions (including, without limitation, by way of stock sale, merger, consolidation, or otherwise) and such transaction would result in a Change in Control, then Providence may require the participation of the Management Stockholders in such sale in the manner set forth in this Section 7.
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(b) Sale Notice.Providence shall exercise its respective rights pursuant to this Section 7 by delivering to the Company and the Management Stockholders a written notice of the proposed sale no later than 15 days prior to the proposed closing thereof. Such notice shall make reference to the Management Stockholders' obligations hereunder and shall describe in reasonable detail:(i) the number of Shares to be Transferred by Providence;(ii)the Person or entity to whom such Shares are proposed to be Transferred;(iii)the terms and conditions of the Transfer, including the consideration to be paid; and(iv) the proposed date, time, and location of the closing of the Transfer.
(c) Shares to be Sold.Each Management Stockholder shall be required to sell in any sale subject to this Section 7 that number of Shares equal to the product of(i)the number of Shares then held by such Management Stockholder and(ii)a fraction, the numerator of which shall be the number of Shares Providence proposes to Transfer in such sale pursuant to this Section 7 and the denominator of which shall be the number of Shares then held by Providence; it being understood and agreed that the Management Stockholders shall sell such Shares pro rata in satisfaction of their obligations under this Section 7(c).
(d) Other Transactions.If Providence approves a merger, consolidation, recapitalization, sale of all or substantially all the assets of the Company, or any transaction that results in a Change in Control, the Management Stockholders shall consent to and cooperate fully with respect thereto and, without limiting the generality of the foregoing, shall not in any way object to, or exercise any appraisal rights in connection with, such merger, consolidation, recapitalization, sale of assets, or other Change in Control transaction.
(e) Cooperation.The Management Stockholders shall fully cooperate with Providence and shall take all reasonably necessary actions to effectuate any Transfer of Shares, merger, consolidation, recapitalization, sale of assets, or other Change in Control transaction described in this Section 7, including, without limitation, entering into agreements and delivering certificates and instruments, all consistent with agreements being entered into and certificates and instruments being delivered by Providence, except with respect to representations, warranties, covenants, and indemnities that are customarily made on an individual basis.
(f) Notice.Promptly after completion of any sale or other transaction pursuant to this Section 7, Providence shall notify the Management Stockholders of such completion and shall furnish evidence of such sale or other transaction (including time of completion) and the terms thereof as the Management Stockholders may reasonably request.
Section 8. Tag-Along Rights.
(a) Participation.Except as required by Section 7(a), if at any time Providence proposes to sell Shares to any Person, including, without limitation, by way of stock sale, merger, consolidation, or otherwise, and such transaction would result in a Change in Control, then the Management Stockholders shall be permitted to participate in such sale in accordance with this Section 8.
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(b) Sale Notice.Providence shall deliver to the Company and each other Stockholder a written notice (a"Sale Notice")of a proposed sale (a"Proposed Sale")subject to this Section 8, no later than 30 days prior to the proposed closing thereof. Such notice shall make reference to the Management Stockholder's rights hereunder and shall describe in reasonable detail:(i) the number of Shares to be sold (the"Tag-Along Shares");(ii)the Person to whom such Shares are proposed to be sold;(iii)the terms and conditions of the Proposed Sale, including the consideration to be paid; and(iv)the proposed date, time, and location of the closing of the Proposed Sale.
(c) Participation Notice; Shares to be Sold.Each Management Stockholder shall exercise his or her right to participate in the Proposed Sale by delivering to Providence a written notice (a"Participation Notice")stating his or her election to do so and specifying the number of Shares to be sold by him or her no later than 10 days after receipt of the Sale Notice. The maximum number of Shares that the Management Stockholder will be permitted to include in a Proposed Sale will be the product of(i)the number of Shares then held by each Management Stockholder and(ii)a fraction, the numerator of which shall be the number of Tag-Along Shares and the denominator of which shall be the number of Shares then held by Providence and all other Stockholders; it being understood and agreed that each Management Stockholder shall sell such Shares for the same consideration, pursuant to the same sale agreement as applies to the Shares to be sold by Providence and all other Stockholders.
(d) Cooperation.Upon delivering a Participation Notice, each Management Stockholder will, if requested by Providence, execute and deliver a custody agreement and power of attorney in form and substance reasonably satisfactory to Providence (a"Custody Agreement and Power of Attorney")with respect to the Shares which are to be included in the Proposed Sale pursuant to this Section 8. The Custody Agreement and Power of Attorney will provide, among other things, that the Management Stockholder executing it will deliver to and deposit in custody with the custodian and attorney-in-fact named therein a certificate or certificates representing such Shares (duly endorsed in blank by the registered owner or owners thereof or accompanied by duly executed stock powers in blank) and irrevocably appoint said custodian and attorney-in-fact as the Management Stockholder's agent and attorney-in-fact with full power and authority to act under a custody agreement and power of attorney on behalf of the Management Stockholder with respect to the matters specified therein. The Management Stockholder participating in a sale pursuant to this Section 8 shall fully cooperate with Providence and shall take all reasonably necessary actions to effectuate such sale, including, without limitation, entering into agreements and delivering certificates and instruments, all consistent with agreements being entered into and certificates and instruments beingdelivered by Providence,exceptwith respect to individual representations,warranties, covenants,andindemnities customarilymade onanindividual basis. Without limiting thegeneralityof andsubjectto theexception setforth in the foregoing, the ManagementStockholdersparticipatingin a salepursuant to thisSection8shall makeoragreeto thesamerepresentations,covenants,indemnities,andagreements as Providence;providedthattheliabilities thereunder (including underany general indemnity) shallbe borne on a pro rata basis based on theconsiderationto bereceivedbyeach Stockholder.
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(e) Nonparticipation;Deadlinefor Completionof Sale.Failure by any ManagementStockholderto provide a ParticipationNoticewithin 15 days afterreceipt ofa Sale Notice shallbe deemed to constitutean electionbysuchManagementStockholder nottoexercisehis or herrightspursuanttothisSection8,andProvidenceshallhave 180 daysfollowingtheexpirationofsuch15-day period in which tosell notmore thanthe numberofSharesdescribed in theSaleNotice,on termsnot more favorable to Providence thanthose set forthinthe Sale Notice.Ifatthe end of such180-dayperiod,Providence has notcompleted such Proposed Sale,Providence may not theneffect a sale of SharespursuanttothisSection8(e) without again fully complyingwith the provisions of thisSection8.Such180-day periodmaybeextendedto theextentreasonably necessary to complywithany regulatory requirements applicableto theProposedSale.
Section9. Registration Rights.
(a) Piggyback Rights.If theCompany, at anytime followinganunderwritten public offering by the Company, proposesto register Sharesunder theSecurities Actoranyotherapplicable securitieslaws(together withtheSecurities Act, the"SecuritiesLaws")for its ownaccount(including,butnotlimited to,a ShelfRegistrationStatement,but other thanpursuantto(i)a registration onForm S-4orS-8orany successorform or(ii)aregistration of securities thatarea combinationofdebt and equity),then the Companyshall give promptwrittennoticetothe Management Stockholders regarding suchproposedregistration.Upon thewritten requestofanyManagementStockholder madewithin 15 days after the receipt ofany such notice(which requestshall specifythe number ofSharesintended to be disposed of bysuchManagementStockholder andtheintendedmethod ormethods ofdispositionthereof), the Company shalluse its best effortstoeffect the registrationunderthe Securities Actofall Shares that such Management Stockholder has so requested toberegistered, inaccordancewithsuch intendedmethod or methods of disposition;providedthat:
(i) the Company shallnot include anySharesinsuch proposed registration to the extentthattheBoardshall havedetermined, afterconsultation with the managing underwriter for such offering, thattheir inclusionwouldmateriallyand adverselyaffecttheoffering price,providedthatinthe eventof anysuch determination,theCompany shall give the affectedManagementStockholders notice of such determination in lieu of the notice otherwise required by the first sentence of this Section 9(a);
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(ii) if, at any time after giving written notice (pursuant to this Section 9(a)) of its intention to register Shares and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine, for any reason, not to register such Shares, the Company may, at its election, give written notice of such determination to each Management Stockholder and, thereupon, shall not be obligated to register any Shares in connection with such registration (but shall nevertheless pay the Registration Expenses in connection therewith); and
(ii) if, inconnection with a registration pursuant to this Section 9(a), the managing underwriter of such registration (or, in the case of an offering that is not underwritten, a nationally recognized investment banking firm) shall advisethe Company in writing (with a copy to any Management Stockholder requesting registration of Shares) that the number of Shares requested and otherwise proposed to be included in such registration exceeds the number that can be sold in such offering without materially and adversely affecting the offering price of the Shares being sold in such registration, then, in the case of any registration pursuant to this Section 9(a), the Company shall include in such registration the number of shares that the Company is so advised can be sold in such offering without such material adverse effect, first, of the Shares, if any, being sold by the Company, and second, of the Shares of the Management Stockholders, on a pro rata basis (based on the number of Shares owned by each such Management Stockholder).
(b) Registration Expenses.The Company will pay all Registration Expenses in connection with each registration of Shares requested pursuant to this Section 9.
(c) Restrictions on Public Sale by Stockholders Following a Qualified Public Offering.Following the consummation of any underwritten Qualified Public Offering, for so long as the number of Shares held by Providence and its Affiliates, on the one hand, or the Management Stockholders, on the other hand, in the aggregate represents more than 5% of the outstanding Shares, each such Stockholder agrees to enter into a customary letter agreement with underwriters providing such Stockholder will not effect any public sale or distribution of Shares during the 180 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Securities and Exchange Commission with respect to the pricing of such underwritten offering;providedthat(i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Company or the officers, directors, or any other stockholder of the Company on whom a restriction is imposed, and(ii)the restrictions set forth in this Section 9(c) shall not apply to any shares that are included in such underwritten offering by such Stockholder.
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Section 10. Representations and Warranties.Each Management Stockholder represents and warrants to the Company and each other Management Stockholder that, as of the date hereof:
(a) Power and Authority.Such Management Stockholder has the power, authority, and capacity to execute, deliver, and perform this Agreement.
(b) Execution and Delivery.This Agreement has been duly and validly executed and delivered by such Management Stockholder and constitutes a valid and legally binding obligation of such Management Stockholder.
(c) No Conflict.The execution, delivery, and performance of this Agreement by such Management Stockholder do not and will not conflict with, violate the terms of, or result in the acceleration of any obligation under any material contract, commitment, or other material instrument to which such Management Stockholder is a party or by which such Management Stockholder is bound.
(d) No Other Agreements.Except for this Agreement, such Management Stockholder has not entered into or agreed to be bound by any other agreements or arrangements of any kind with any other party with respect to the Shares, including, but not limited to, agreements or arrangements with respect to the acquisition or disposition of Shares or any interest therein or the voting of the Shares (whether or not such agreements and arrangements are with the Company or other Management Stockholders). In the event of any inconsistency between any provision of any such agreement and the provisions of this Agreement, the provisions of this Agreement shall be given full effect to the exclusion of any such inconsistent provision.
Section 11. Further Assurances, etc.Each party hereto shall do and perform or cause to be done and performed all such further acts and things, including, without limitation, voting its Shares, and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto may reasonably request in order to carry out the intent and purposes of this Agreement.
Section 12. Notices.All notices, requests, demands, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if(a)personally delivered,(b)sent by reputable next-day or overnight mail courier service (charges prepaid), or(c) sent by facsimile, to the address or facsimile number below, or to such other address or facsimile number as the party entitled to notice shall hereafter designate in accordance with the terms hereof:
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| (A) | If to the Company: |
| Sterling Holdco, Inc. | |
| c/o Providence Equity Partners L.L.C. | |
| 50 Kennedy Plaza | |
| 18th Floor | |
| Providence, Rhode Island 02903 | |
| Fax: +1 (401) 751-1790 | |
| Attention: Christopher C. Ragona | |
| with a copy to: | |
| SRA International, Inc. | |
| 4300 Fair Lakes Court | |
| Fairfax, Virginia 22033 | |
| Fax: +1 (703) 803-1509 | |
| Attention: General Counsel | |
| (B) | If to Providence: |
| Providence Equity Partners L.L.C. | |
| 50 Kennedy Plaza | |
| 18th Floor | |
| Providence, Rhode Island 02903 | |
| Fax: +1 (401) 751-1790 | |
| Attention: Christopher C. Ragona | |
| with a copy to: | |
| Debevoise & Plimpton LLP | |
| 919 Third Avenue | |
| New York, New York 10022 | |
| Attention: Jonathan F. Lewis | |
| Telephone: +1 (212) 909-6000 | |
| Facsimile: +1 (212) 909-6836 | |
Section 13. Governing Law, etc.
(a) Governing Law.This Agreement and the rights and obligations of the parties hereunder and the Persons subject hereto shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware without giving effect to conflicts of laws rules that would require the application of the laws of another jurisdiction.
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(b) Waiver of Jury Trial.EACH PARTYTOTHIS AGREEMENT 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 HEREBYIRREVOCABLYAND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BYJURYIN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATINGTOTHIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH SUCH PARTY CERTIFIES AND ACKNOWLEDGES THAT(A)NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHERPARTYWOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THEIMPLICATIONSOFTHISWAIVER,(C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND(D) EACH SUCH PARTY HAS BEENINDUCEDTO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.
(c) Severability.IfanyprovisionofthisAgreementis held bya court of competentjurisdictiontobeinvalid or unenforceable in anyjurisdiction,such holding shallnotaffect the validity or enforceability of the remainder of this Agreement in such jurisdiction or the validity or enforceability of this Agreement, including such provision, in any otherjurisdiction,and such provision shall be interpreted,revised, or applied in a manner that renders it valid and enforceable to the fullest extent possible.
(d) Remedies.The Company andtheManagement Stockholders agree that money damages or other remedy at law would notbea sufficient or adequate remedy for any breach or violation of, or adefaultunder, this Agreementbythem and that, in addition to all other remedies available to them, each ofthemshall be entitled to aninjunctionrestraining such breach, violation, or default orthreatenedbreach, violation, or default and to any other equitable relief, including, without limitation, specific performance, withoutbondor other securitybeingrequired.
Section 14. Entire Agreement; Amendment and Waiver.
(a) Entire Agreement.This Agreement constitutestheentire agreement and understanding of the parties hereto with respect to the matters referred to herein and supersedes all prior agreements, understandings, or representations, written or oral, among the parties with respect to such matters.
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(b) Amendment and Waiver.Except as otherwiseprovidedherein, no amendment, alteration, or modification of this Agreement or waiver of anyprovisionofthisAgreementshallbeeffective againsttheCompany orthe ManagementStockholders unless such amendment, alteration,modification,orwaiver isapprovedinwriting by(i)the Company, and(ii)Providence;providedthatnoamendment, alteration, or modification shalluniquelyand adversely affecttherights or obligations of(a)a particular Management Stockholderona discriminatorybasis withoutsuch Management Stockholder's consentor(b)theManagement Stockholders as aclassunderthisAgreement without the consentofa majority ininterestof the Management Stockholders. The failureofanypartyto enforce anyprovisionofthisAgreement shall notbeconstrued as a waiver of suchprovisionand shall not affecttherightofsuch party thereaftertoenforce each provision ofthisAgreementinaccordance withitsterms.
Section15. SuccessorsandAssigns; No Third-PartyBeneficiaries.
(a) Successors and Assigns Generally.ThisAgreement shallbe binding uponand inure to the benefit of the successors and permitted assigns oftheparties hereto.
(b) No Third-Party Beneficiaries.Nothinginthis Agreement is intendedtoor shall confer any rights orbenefitsupon any Personother than theparties hereto.
Section16. Termination.
(a) Ceasing Ownership.Any Management Stockholder who ceases to own any Shares or any interest therein, shall cease to be a party to this Agreement andthereaftershallhaveno rights or obligations hereunder;provided, however,that aTransferof Shares not explicitly permitted under this Agreement shall not relieve aManagementStockholder of any of its obligations.
(b) Qualified PublicOfferings.All rights and obligationshereundershallterminateupontheearlierof(i)the consummationofa Qualified Public Offering, exceptthattheprovisionsregarding registrationrightsin Section 9 shall continue to apply following a termination pursuantto this clause(i)and(ii)a ChangeinControl oftheCompany.
Section 17. Headings.Theheadingsof this Agreement are inserted for convenienceonlyand do not constitute a part ofthisAgreement.
Section 18. Counterparts and Facsimile Signatures.This Agreement maybeexecutedinone or more counterparts and each of such counterparts shallbedeemed to be an original for all purposes, and all of such counterparts shalltogetherconstitute one andthesame document. Any signature required for the execution of this Agreement may be in the form of either an original signature or a facsimiletransmissionbearing the signature of anypartyto this Agreement. No objection shall be raised as to the authenticity of any signatureduesolely tothefactthatsaid signature was transmitted via facsimile.
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Section 19. Definitions.For purposes of this Agreement,thefollowing terms have the indicated meanings:
"Acquisition"is defined in therecitalstothis Agreement.
"Affiliate"means, with respect to any Person, any other Person directly or indirectly controlling,controlledby,or under common control with,suchfirst Person.Asusedin thisdefinition oftheterm"Affiliate," "control"(including the terms"controlled by" and "undercommon control with")meansthe possession,directlyor indirectly, ofthepower to direct orcausethe direction of the management policies ofaPerson byreasonof ownership of voting securities, bycontract,or otherwise.
"Agreement"is defined in the preamble to this Agreement.
"AvailabilityNotice"isdefined inSection4(c)(i).
"Available Shares"is defined inSection4(c)(i).
"Board'means the Board of Directors of the Company.
"Call Right"is definedin Section4.
"CallNotice"is definedinSection 4(b).
"Cause"means(i)therefusal or neglect of the ManagementStockholderto performsubstantiallyhis or heremployment-relatedduties;(ii)the ManagementStockholder'spersonal dishonesty, incompetence, willful misconduct, or breach offiduciaryduty;(iii)the ManagementStockholder'sconviction of orenteringa plea ofguiltyor nolo contendere (or any applicableequivalentthereof) toa crime constituting afelony (or a crime or offense of equivalent magnitude in any jurisdiction) or his or her willful violation ofanyother law, rule, or regulation (other than a trafficviolationor other offense orviolationoutside of the course ofemploymentthat in no wayadversely affectsthe Company or anySubsidiaryor its reputation or the ability of the Management Stockholder toperform his or heremployment relatedduties or torepresenttheCompanyor anySubsidiary);or(iv)the materialbreachby the ManagementStockholderof anycovenantoragreementwith the Company orany Subsidiary,or any writtenpolicyoftheCompany or anySubsidiary,nottodiscloseanyinformationpertaining tothe Company or any Subsidiary or not to compete or interfere with the Company or anySubsidiary;providedthat with respectto anyManagementStockholderwho is party toan employment agreementwith the Company orany Subsidiary, "Cause" shall havethe meaningspecifiedinsuchManagementStockholder's employment agreement.
"Closing"means the date on which the transactionscontemplatedby the Merger Agreementwereconsummated.
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"Change in Control"means a transaction or series of transactions (other than a Public Offering):(i) involving the sale, transfer, or other disposition by Providence to one or more persons or entities that are not, immediately prior to such sale, affiliates of the Company or the Providence Entities, of all or substantially all of the Shares beneficially owned by Providence as of the date of such transaction; or(ii)involving the sale, transfer, or other disposition of all or substantially all of the assets of the Company and the Subsidiaries, taken as a whole, to one or more persons or entities that are not, immediately prior to such sale, transfer, or other disposition, affiliates of the Company or Providence.
"Code"means the Internal Revenue Code of 1986, as amended.
"Company"is defined in the preamble to this Agreement.
"Custody Agreement and Power of Attorney"is defined in Section 8(d).
"Disability"means a physical or mental impairment that renders a Management Stockholder unable to perform the essential functions of the Management Stockholder's position even with reasonable accommodation (that does not impose an undue hardship on the Company), and which has lasted at least 60 consecutive days;providedthat with respect to any Management Stockholder who is party to an employment agreement with the Company or any Subsidiary, "Disability" shall have the meaning specified in such Management Stockholder's employment agreement. A physician selected by the Company or its insurers shall make the determination of the existence of a Disability.
"Election Period'is defined in Section 4(c)(ii).
"Financing Documents"is defined in Section 6.
"Good Reason"means, with respect to any Management Stockholder who is party to an employment agreement with the Company or any Subsidiary, the meaning specified in such Management Stockholder's employment agreement.
"Management Stockholder"is defined in the preamble to this Agreement.
"Maximum Amount"is defined in Section 6.
"Merger Agreement"is defined in the recitals to this Agreement.
"Merger Sub"is defined in the recitals to this Agreement.
"Participation Notice"is defined in Section 8(c).
"Parent"is defined in the recitals to this Agreement.
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"Permitted Transferee"means withrespect toa ManagementStockholder, suchManagementStockholder'sspouse or any lineal ancestor or descendant ofsuchManagementStockholder.
"Person"meansanyindividual,corporation,partnership, firm, jointventure, association,limited liabilitycompany,joint-stockcompany,trust,estate,unincorporated organization,governmentalor regulatory body or other legalentity.
"Proposed Sale"isdefined inSection8(b).
"Providence"is defined in the preamble tothis Agreement.
"Public Offering"means a public offeringpursuantto aneffectiveregistrationstatementfiledwiththeSecuritiesandExchangeCommission thatcovers Sharesthat,afterthe closing ofsuchpublic offering, willbetraded on the New YorkStockExchange,theAmericanStock Exchange,orthe National AssociationofSecuritiesDealersAutomatedQuotationSystemorany comparablenon-U.S.exchangeorsystem.
"QualifiedPublicOffering"means a Public Offering ofShares either(a)where the Company hasreceived netproceeds ofat least$200 million (measuredasof the time of issuance); or(b)whichconstitutesatleast15% of the Company's outstandingShares(measuredasof the date of determination) aftergiving effecttosuchoffering (including theunderwriters' exerciseofanyover-allotment option).
"Registration Expenses"meansanyandall feesandexpensesincident to the performance bythe Companyofitsobligations underSection9, includingwithout limitation(i)all Securities and Exchange Commission, FinancialIndustry RegulatoryAuthority,Inc.,orother registration andfilingfees, or the registrationand filingfees ofanyother U.S. or non-U.S.stock exchange;(ii)all feesand expenses ofcomplyingwithsecuritiesor bluesky laws(including reasonable fees and disbursements ofcounselfor the underwritersin connectionwith blueskyqualifications ofthe Shares);(iii)allprinting, messenger,and delivery expenses;(iv)allfees andexpensesincurred inconnection with thelisting ofthe Sharesonany securities exchangeandall ratingagency fees;(v)the feesand disbursements of counselfor theCompany andof its independent public accountants, including the expenses of anyspecial audits and/or "cold comfort"letters required by or incident tosuch performance andcompliance;(vi)any fees anddisbursementsof underwriters customarily paid by the issuers orsellersofsecurities,including liability insurance if the Companyso desiresorifthe underwriterssorequire, andthereasonable fees andexpensesofany special experts retainedinconnectionwiththerequested registration,butexcludingunderwritingdiscountsand commissions and transfertaxes,if any; and(vii)the costsandexpensesof the Companyrelatingtoanalyst andinvestor presentations or any "roadshow"undertakenin connection with any registrationand/ormarketingofthe Shares.
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"Sale Notice"is defined inSection8(b).
"Securities Act"means theSecurities Actof1933,as amended, orany successorfederalstatute, and therulesandregulations thereunder whichshallbein effectatthe time. Any referencetoa particular sectionthereofshallinclude areference to the corresponding section, ifany, ofany such successorfederalstatute, andthe rulesand regulationsthereunder.
"Securities Laws"isdefined inSection 9(a).
"Shares"is defined in therecitalsto thisAgreement.
"ShelfRegistrationStatement"means a registrationstatementto permit theCompany to sell Shares on adelayedor continuousbasispursuanttoRule 415 undertheSecurities Act (oranysimilarrule that maybeadoptedby the Securities andExchangeCommission) in accordancewith the intendedmethodormethodsof disposition bythe Company.
"SRA"is defined in the recitals tothisAgreement.
"Stockholders"means Providence, theManagementStockholders, andthe"Rollover Stockholders" and "Investor Stockholders," as suchterms aredefinedin theAmendedandRestated StockholdersAgreement, datedasof October 17, 2011, amongProvidenceand variousotherpartiesthereto.
"Subsidiary"means, as to any Person(i)any corporation of which a majorityofthe securities entitledtovote generally in the electionofdirectorsthereof,at thetimeas of which any determination isbeingmade, are owned by such Person, either directly or indirectly, and(ii)any joint venture, general or limited partnership,limited liabilitycompany or otherlegalentityinwhich such Person is the record orbeneficialowner,directlyorindirectly,of a majorityof thevoting interestsorthe general partner.
"Supplemental Call Notice"isdefined in Section 4(c)(iii).
"Tag-Along Shares"is defined inSection 8(b).
"Termination Date"is definedinSection 4(b).
"Transfer"isdefined in Section 1(a).
[Signature Page Follows]
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IN WITNESS WHEREOF,theparties have executed this Agreement as of the datefirstabove written.
| STERLING HOLDCO INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| PROVIDENCE EQUITY PARTNERS VI L.P. | ||
| By: | ||
| Name: | ||
| Title: | ||
| PROVIDENCEEQUITYPARTNERSVI- A L.P. | ||
| By: | ||
| Name: | ||
| Title: | ||
[SignaturePageto Sterling HoldcoManagementStockholdersAgreement]
