EXHIBIT 10.31
PROFESSIONAL SERVICES AGREEMENT
THIS PROFESSIONAL SERVICES AGREEMENT (this "AGREEMENT"), dated as
of September __, 2001, between GTCR Golder Rauner, L.L.C., a Delaware limited
liability company ("GTCR"), and DigitalNet, Inc., a Delaware corporation (the
"COMPANY").
WHEREAS, the Company is a wholly owned subsidiary of DigitalNet
Holdings, Inc., a Delaware corporation (the "PARENT");
WHEREAS, GTCR Fund VII, L.P., a Delaware limited partnership ("GTCR
FUND VII"), and GTCR Co-Invest, L.P., a Delaware limited partnership
("CO-INVEST") (each an "INVESTOR" and collectively, the "INVESTORS"), will
purchase (the "INVESTMENT") pursuant to that certain Purchase Agreement (the
"PURCHASE AGREEMENT") of even date herewith between the Parent, the
Investors, the J. Sunny Bajaj Trust, the Rueben Bajaj Trust and the Bajaj
Family Limited Partnership and Pearlstein Family, LLC, a portion of the
Company's Common Stock, par value $0.001 per share (the "COMMON STOCK"), and
Class A Preferred Stock, par value $0.01 per share (the "CLASS A PREFERRED"
and together with the Common Stock, the "STOCK");
WHEREAS, the Company desires to receive financial and management
consulting services from GTCR, and obtain the benefit of the experience of
GTCR in business and financial management generally and its knowledge of the
Company and the Company's financial affairs in particular; and
WHEREAS, in connection with the Investment, GTCR is willing to
provide financial and management consulting services to the Company and the
compensation arrangements set forth in this Agreement are designed to
compensate GTCR for such services.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, GTCR and the Company hereby agree as follows:
1. ENGAGEMENT. The Company hereby engages GTCR as a financial and
management consultant, and GTCR hereby agrees to provide financial and
management consulting services to the Company and its subsidiaries, all on
the terms and subject to the conditions set forth below.
2. SERVICES OF GTCR. GTCR hereby agrees during the term of this
engagement to consult with the Company's board of directors (the "Board") and
management of the Company and its subsidiaries in such manner and on such
business and financial matters as may be reasonably requested from time to
time by the Board, including but not limited to:
(i) corporate strategy
(ii) budgeting of future corporate investments;
(iii) acquisition and divestiture strategies; and
(iv) debt and equity financings.
3. PERSONNEL. GTCR shall provide and devote to the performance of
this Agreement such partners, employees and agents of GTCR as GTCR shall deem
appropriate for the furnishing of the services required thereby.
4. PLACEMENT FEES. At the time of any purchase of Stock by the
Investors pursuant to Section 1B of the Purchase Agreement or otherwise, the
Company shall pay to GTCR a placement fee in immediately available funds
equal to one percent (1.0%) of the amount paid by the Investors to the Parent
in connection with such purchase.
If any individual payment to GTCR pursuant to Section 4 would be less than
$10,000, then such payment shall be held by the Company until such time as
the aggregate of such payments equals or exceeds $10,000.
5. MANAGEMENT FEE. Commencing on the date of the Initial Closing
(as defined in the Purchase Agreement) and until the date six months after
the date of the Initial Closing, the Company shall pay to GTCR an annual
management fee of $200,000 and thereafter during the remaining term of this
Agreement, the Company shall pay to GTCR an annual management fee of $300,000.
Such management fee shall be payable in equal monthly installments.
6. EXPENSES. The Company shall promptly reimburse GTCR for such
reasonable travel expenses, legal fees and other out-of-pocket fees and
expenses as have been or may be incurred by GTCR, its directors, officers
and employees in connection with the Closing (as defined in the Purchase
Agreement), in connection with any financing of the Parent, the Company or
any of their subsidiaries, and in connection with the rendering of any other
services hereunder (including, but not limited to, fees and expenses incurred
in amending Company-related meetings).
7. TERM. This Agreement will continue from the date of the Initial
Closing (as defined in the Purchase Agreement) until the earlier of (i) GTCR
Fund VII, Co-Invest and their respective affiliates ceasing to own in the
aggregate at least 50% of the Investor Common (as defined in the Purchase
Agreement) issued or transferred to such persons, (ii) a Sale of the Company
(as defined in the Purchase Agreement), or (iii) a Public Offering (as
defined in the Purchase Agreement). No termination of this Agreement, whether
pursuant to this paragraph or otherwise, shall affect the Company's
obligations with respect to the fees, costs and expenses incurred by GTCR in
rendering services hereunder and not reimbursed by the Company as of the
effective date of such termination.
8. LIABILITY. Neither GTCR nor any of its affiliates, partners,
employees or agents shall be liable to the Parent, the Company or their
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement,
2
Unless such loss, liability, damage or expense shall be proven to result
directly from the gross negligence or willful misconduct of GTCR.
9. INDEMNIFICATION. The Company agrees to indemnify and hold
harmless GTCR, its partners, affiliates, officers, agents and employees
against and from any and all loss, liability, suits, claims, costs, damages
and expenses (including attorney's fees) arising from their performance
hereunder, except as a result of their gross negligence or intentional
wrongdoing.
10. GTCR AN INDEPENDENT CONTRACTOR. GTCR and the Company agree that
GTCR shall perform services hereunder as an independent contractor, retaining
control over and responsibility for its own operations and personnel. Neither
GTCR nor its directors, officers, or employees shall be considered employees or
agents of the Parent or any of its subsidiaries as a result of this Agreement
nor shall any of them have authority to contract in the name of or bind the
Parent or any of its subsidiaries, except as expressly agreed to in writing by
the Company.
11. NOTICES. Any notice, report or payment required or permitted to be
given or made under this Agreement by one party to the other shall be deemed to
have been duly given or made if personally delivered or, if mailed, when mailed
by registered or certified mail, postage prepaid, to the other party at the
following addresses (or at such other address as shall be given in writing by
one party to the other):
IF TO GTCR:
----------
GTCR Golder Rauner, L.L.C.
6100 Sears Tower
Chicago, IL 60606-6402
Attention: Philip A. Canfield
WITH A COPY TO:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
IF TO THE COMPANY:
-----------------
DigitalNet, Inc.
6700A Rockledge Drive, Suite 525
Bethesda, MD 20817
Attention: Ken S. Bajaj
3
<Page>
WITH COPIES TO:
--------------
GTCR Golder Rauner, L.L.C.
6100 Sears Tower
Chicago, IL 60606-6402
Attention: Philip A. Canfield
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue
Washington, D.C. 20004
Attention: Richard A. Steinwurtzel
12. ENTIRE AGREEMENT: MODIFICATION. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way. The provisions of this Agreement may be amended, modified and waived
only with the prior written consent of the Company and GTCR.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach of that provision or any other provision
hereof.
14. ASSIGNMENT. Neither GTCR nor the Company may assign its rights
or obligations under this Agreement without the express written consent of the
other, except that GTCR may assign its rights and obligations to an affiliate of
GTCR.
15. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and permitted assigns of the parties.
16. COUNTERPARTS. This Agreement may be executed and delivered by each
party hereto in separate counterparts (including by means of telecopied
signature pages), each of which when so executed and delivered shall be deemed
an original and both of which taken together shall constitute one and the same
agreement.
17. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
* * * * *
4
<Page>
IN WITNESS WHEREOF, GTCR and the Company have caused this
Professional Services Agreement to be duly executed and delivered on the date
and year first above written.
GTCR GOLDER RAUNER, L.L.C.
By: /s/ BRUCE V. RAUNER
-------------------------
Name: BRUCE V. RAUNER
-------------------------
Its: Principal
-------------------------
DIGITALNET, INC.
By: /s/ KEN S. BAJAJ
-------------------------
Name: Ken S. Bajaj
-------------------------
Its: Chief Executive Officer
-------------------------
5