Bridge Loan Agreement

EXHIBIT 10.22


================================================================================


BRIDGE LOAN AGREEMENT


dated as of November 26, 2002


by and among


DIGITALNET, INC.,


DIGITALNET HOLDINGS, INC.,


and


BANC OF AMERICA MEZZANINE CAPITAL LLC


and


THE OTHER LENDERS PARTY HERETO


================================================================================


TABLE OF CONTENTS


SECTION PAGE ------- ---- ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS................................................................................1
1.01 Defined Terms..................................................................................................1
1.02 Other Interpretive Provisions..................................................................................17
1.03 Accounting Terms...............................................................................................18
1.04 Rounding.......................................................................................................18
1.05 References to Agreements and Laws..............................................................................19
1.06 Times of Day...................................................................................................19 ARTICLE II. BRIDGE LOAN SECURITIES.........................................................................................19
2.01 Authorization and Issuance of the Bridge Loan Securities.......................................................19 ARTICLE III. PURCHASE AND SALE.............................................................................................19
3.01 Purchase and Sale of Bridge Loan Securities....................................................................19 ARTICLE IV. BRIDGE LOAN TERMS..............................................................................................20
4.01 Repayment of Principal.........................................................................................20
4.02 Repayments of Interest.........................................................................................20
4.03 Mandatory Prepayments of the Bridge Notes......................................................................21
4.04 Optional Prepayments of the Bridge Notes.......................................................................22
4.05 Mandatory Offer to Prepay upon a Change of Control.............................................................22
4.06 Direct Payment.................................................................................................23
4.07 Taxes..........................................................................................................23
4.08 Subordination..................................................................................................25 ARTICLE V. CONDITIONS PRECEDENT TO CLOSING.................................................................................25
5.01 Conditions To Closing..........................................................................................25 ARTICLE VI. REPRESENTATIONS AND WARRANTIES.................................................................................31
6.01 Existence, Qualification and Power; Compliance with Laws.......................................................31
6.02 Authorization; No Contravention................................................................................31
6.03 Governmental Authorization; Other Consents.....................................................................32
6.04 Binding Effect.................................................................................................32
6.05 Financial Statements; No Material Adverse Effect...............................................................32
6.06 Litigation.....................................................................................................33
6.07 No Default.....................................................................................................33
6.08 Ownership of Property; Liens...................................................................................33
6.09 Environmental Compliance.......................................................................................34
6.10 Insurance......................................................................................................34
6.11 Taxes..........................................................................................................35
6.12 ERISA Compliance...............................................................................................35
6.13 Certain Federal Regulations....................................................................................36
6.14 Disclosure.....................................................................................................36
6.15 Compliance with Laws...........................................................................................36
6.16 Intellectual Property; Licenses, Etc...........................................................................37
6.17 Employee Relations.............................................................................................37
6.18 Material Government Contracts..................................................................................37
6.19 Burdensome Provisions..........................................................................................37
6.20 Survival of Representations and Warranties, Etc................................................................38
6.21 Authorized and Issued Capital..................................................................................38


i


6.22 Organizational and Governing Documents.........................................................................38
6.23 Compliance with Securities Laws................................................................................39
6.24 No Brokers.....................................................................................................39
6.25 Transactions with Affiliates...................................................................................39
6.26 Use of Proceeds................................................................................................39 ARTICLE VIA. REPRESENTATIONS AND WARRANTIES OF THE LENDERS.................................................................39 ARTICLE VII. AFFIRMATIVE COVENANTS.........................................................................................41
7.01 Financial Statements...........................................................................................41
7.02 Certificates; Other Information................................................................................42
7.03 Notices........................................................................................................43
7.04 Payment of Obligations.........................................................................................43
7.05 Preservation of Existence, Etc.................................................................................44
7.06 Maintenance of Properties......................................................................................44
7.07 Maintenance of Insurance.......................................................................................44
7.08 Compliance with Laws...........................................................................................44
7.09 Environmental Laws.............................................................................................44
7.10 Compliance with ERISA..........................................................................................45
7.11 Compliance With Agreements.....................................................................................45
7.12 Books and Records..............................................................................................45
7.13 Inspection Rights..............................................................................................46
7.14 Use of Proceeds................................................................................................46
7.15 Additional Subsidiaries........................................................................................46
7.16 Proceeds of Equity or Indebtedness; Escrow and Indemnification Payments........................................46
7.17 Further Assurances.............................................................................................47
7.18 Board Observation Rights.......................................................................................47
7.19 Remarketing Cooperation........................................................................................47
7.20 Modifications of Financial Covenants...........................................................................49 ARTICLE VIII. NEGATIVE COVENANTS...........................................................................................49
8.01 Liens..........................................................................................................49
8.02 Investments....................................................................................................50
8.03 Indebtedness...................................................................................................53
8.04 Fundamental Changes............................................................................................55
8.05 Dispositions...................................................................................................55
8.06 Restricted Payments............................................................................................57
8.07 Limitations on Exchange and Issuance of Capital Stock..........................................................58
8.08 Change in Nature of Business...................................................................................58
8.09 Accounting Changes; Organizational Documents...................................................................58
8.10 Transactions with Affiliates...................................................................................58
8.11 Burdensome Agreements..........................................................................................59
8.12 Use of Proceeds................................................................................................59
8.13 Modifications of Senior Credit Documents.......................................................................59
8.14 Amendments, Payments and Prepayments of Junior Indebtedness....................................................60
8.15 Acquisition Documents..........................................................................................60
8.16 Equity Purchase Agreement......................................................................................60
8.17 Financial Covenants............................................................................................60
8.18 Capital Expenditures...........................................................................................61


ii


8.19 Anti-Layering..................................................................................................62
8.20 Limitations on Sponsor Participations in the Senior Indebtedness...............................................62 ARTICLE IX. GUARANTY OF HOLDINGS...........................................................................................62
9.01 Guaranty of Obligations........................................................................................62
9.02 Nature of Guaranty.............................................................................................63
9.03 Waivers........................................................................................................63
9.04 Modification of Bridge Loan Documents, Etc.....................................................................64
9.05 Demand by Required Lenders.....................................................................................65
9.06 Remedies.......................................................................................................65
9.07 Reinstatement..................................................................................................65
9.08 Payments.......................................................................................................66
9.09 No Subrogation.................................................................................................66
9.10 Guaranty Subordinated..........................................................................................66 ARTICLE X. EVENTS OF DEFAULT AND REMEDIES..................................................................................66
10.01 Events of Default..............................................................................................66
10.02 Remedies Upon Event of Default.................................................................................69
10.03 Other Remedies.................................................................................................69
10.04 Rescission of Acceleration.....................................................................................69 ARTICLE XI. SUBORDINATION..................................................................................................70
11.01 Bridge Notes Subordinated to the Senior Indebtedness...........................................................70
11.02 No Payment on Bridge Notes in Certain Circumstances; Remedies Standstill.......................................70
11.03 Bridge Notes Subordinated to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization.....................................................................73
11.04 Noteholders to Be Subrogated to Rights of Holders of Senior Indebtedness.......................................73
11.05 Subdebt Obligations of the Borrower Unconditional..............................................................74
11.06 Subordination Rights Not Impaired by Acts or Omissions of the Borrower or Holders
of the Senior Indebtedness.....................................................................................74
11.07 Not to Prevent Events of Default...............................................................................74
11.08 Amendments.....................................................................................................75
11.09 Insolvency.....................................................................................................75
11.10 Proofs of Claim................................................................................................75
11.11 IPO. 75 ARTICLE XII. MISCELLANEOUS.................................................................................................76
12.01 Entire Agreement...............................................................................................76
12.02 Reimbursement of Expenses......................................................................................76
12.03 Survival of Agreements and Representations and Warranties......................................................76
12.04 No Waiver......................................................................................................77
12.05 Binding Effect; Participations.................................................................................77
12.06 Initial Holder.................................................................................................77
12.07 Loss of Securities; Reissue of Securities in Lesser Denominations..............................................77
12.08 Communications.................................................................................................78
12.09 Legend.........................................................................................................78
12.10 Confidentiality; Public Announcements..........................................................................78
12.11 Governing Law..................................................................................................79
12.12 Headings.......................................................................................................79
12.13 Multiple Originals.............................................................................................79


iii


12.14 Amendment or Waiver............................................................................................80
12.15 Waiver of Jury Trial...........................................................................................80
12.16 Consent to Jurisdiction and Service of Process.................................................................80
12.17 Indemnification................................................................................................81
12.18 Regulatory Requirements........................................................................................82 ARTICLE XIII. EXTENSION OPTION.............................................................................................82
13.01 Extension Option...............................................................................................82
13.02 Modifications to Agreement Upon Exercise of Extension Option...................................................82 ARTICLE XIV. ROLLOVER NOTES OPTION.........................................................................................83
14.01 Rollover Option................................................................................................83


iv


EXHIBITS AND SCHEDULES


SCHEDULES


3.01 Issue Price
6.01 Jurisdictions of Organization and Qualification
6.05 Material Indebtedness
6.12(a) ERISA Matters
6.12(d) Transactions Subject to ERISA Sections 4069 or 4212(c)
6.16 Intellectual Property Matters
6.17 Employee Relations
6.18 Material Government Contracts
6.21 Capitalization
6.24 Broker's Fees
6.25 Affiliate Transactions
6.26 Use of Proceeds
8.01 Existing Liens
8.03 Existing Indebtedness
12.08 Addresses


EXHIBITS


1.01(a) Form of Subsidiary Guaranty Agreement
2.01(a) Form of Bridge Note
2.01(b) Form of Closing Warrant
2.01(c) Form of Escrow Warrant
7.02(b) Form of Compliance Certificate
14.01(a) Form of Rollover Investment Agreement
14.01(b) Rollover Term Sheet


v


BRIDGE LOAN AGREEMENT


THIS BRIDGE LOAN AGREEMENT ("AGREEMENT") is made and entered into as of November 26, 2002, among DIGITALNET, INC., a Delaware corporation (the "BORROWER"), DIGITALNET HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), and BANC OF AMERICA MEZZANINE CAPITAL LLC ("BAMC") and the other lenders from time to time a party hereto (collectively, along with BAMC, the "LENDERS" and individually, a "LENDER").


STATEMENT OF PURPOSE


Holdings and the Borrower has requested that the Lenders provide a bridge loan facility, and the Lenders are willing to do so on the terms and conditions set forth herein.


AGREEMENT


In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:


I. ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS


1.01 Defined Terms.


As used in this Agreement, the following terms shall have the meanings set forth below:


"ACQUISITION" means the acquisition of one hundred percent (100%) of the issued and outstanding membership interest of the Target by the Borrower and the other transactions contemplated by the Acquisition Agreement and the other Acquisition Documents.


"ACQUISITION AGREEMENT" means the Purchase Agreement dated as of September 27, 2002, by and among Holdings, the Borrower, GetronicsWang Co. L.L.C., and the Target, as amended, restated, supplemented or otherwise modified pursuant to the terms and conditions set forth in this Agreement; PROVIDED that BAMC shall have approved any material amendment, supplement or other modification thereto (including, without limitation, the waiver of any material condition to closing).


"ACQUISITION DOCUMENTS" means the Acquisition Agreement and all exhibits and schedules thereto and each other document, instrument, certificate and agreement executed or delivered by Holdings, the Borrower or any Subsidiary thereof in connection with the Acquisition Agreement or otherwise referred to therein or contemplated thereby (other than the Bridge Loan Documents and the Senior Credit Documents), all as amended, restated, supplemented or otherwise modified pursuant to the terms and conditions set forth in this Agreement.


"AFFILIATE" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "CONTROL" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.


"AGENT" shall mean Bank of America, N.A. and its successors and assigns, in its capacity as Administrative Agent appointed under the Senior Credit Agreement.


"AGREEMENT" means this Bridge Loan Agreement, as amended, restated, supplemented or otherwise modified from time to time.


"ATTORNEY COSTS" means and includes all reasonable fees, out of pocket expenses and disbursements of any law firm or other external counsel.


"ATTRIBUTABLE INDEBTEDNESS" means, on any date, in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.


"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in SECTION 5.01(b)(i).


"BAMC" means Banc of America Mezzanine Capital, LLC and its successors and assigns.


"BLOCKED FEES" has the meaning set forth in SECTION 8.10.


"BOARD OBSERVER" has the meaning set forth in Section 7.18.


"BORROWER" has the meaning set forth in the introductory paragraph hereto.


"BRIDGE LOAN DOCUMENTS" means this Agreement, the Bridge Notes, the Registration Agreement, the Subsidiary Guaranty Agreement, the Warrants, the Stockholders Agreement, the Escrow Agreement, the Fee Letter, the Warrant Letter Agreement and the exhibits and schedules attached to any of the aforementioned documents and any other documents entered into in connection therewith.


"BRIDGE LOAN OBLIGATIONS" means all advances to, and debts, liabilities, fees, commissions, obligations, covenants and duties of, any Loan Party arising under any Bridge Loan Document or otherwise with respect to any Bridge Note, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.


"BRIDGE LOAN SECURITIES" means the Bridge Notes, the Closing Warrant and the Escrow Warrant.


"BRIDGE NOTES" has the meaning set forth in SECTION 2.01, as the same may be modified, supplemented, restated and/or amended from time to time in accordance with the terms hereof and thereof.


"BRIDGE REDEMPTION PRICE" means the principal amount of Bridge Notes being repaid plus accrued and unpaid interest on the principal repaid.


"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York City, New York.


2


"CAPITAL ASSET" means, with respect to Holdings and its Subsidiaries, any asset that should, in accordance with GAAP, be classified and accounted for as a capital asset on a consolidated balance sheet of Holdings and its Subsidiaries.


"CAPITAL EXPENDITURES" means with respect to Holdings and its Subsidiaries for any period, the aggregate cost of all Capital Assets acquired by Holdings and its Subsidiaries during such period, as determined in accordance with GAAP MINUS, to the extent included in the foregoing, expenditures made by Holdings and its Subsidiaries during such period (i) with the proceeds of insurance or a condemnation claim to restore or replace property or assets to the condition of such property or assets immediately prior to any damage, loss, destruction or condemnation of the same, (ii) pursuant to SECTION 8.02(f), (iii) with the proceeds of indemnification with respect to a loss of Capital Assets, (iv) as a tenant in the nature of leasehold improvements, to the extent reimbursed by the landlord or (v) in connection with the trade-in of property or assets pursuant to SECTION 8.05(c).


"CAPITAL STOCK" means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalent (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether or limited), (d) in the case of a limited liability company, membership interests and (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of the issuing Person.


"CHANGE OF CONTROL" means, ...