KRATOS DEFENSE & SECURITY SOLUTIONS, INC.,
as Issuer,
THE GUARANTORS HEREAFTER PARTIES HERETO,
as Guarantors
and
WILMINGTON TRUST, NATIONAL ASSOCIATION, (as successor by merger to WILMINGTON TRUST FSB),
as Trustee and Collateral Agent
_______________________________
SIXTH SUPPLEMENTAL INDENTURE
Dated as of July 27, 2011
Supplementing the Indenture, Dated as of May 19, 2010 (as further amended or supplemented)
_______________________________
Providing for the
Amendment to the Terms of 10% Senior Secured Notes due 2017
THIS SIXTH SUPPLEMENTAL INDENTURE, dated as of July 27, 2011 (the “Sixth Supplemental Indenture”), is by and among KRATOS DEFENSE & SECURITY SOLUTIONS, INC., a corporation duly incorporated and existing under the laws of the State of Delaware (the “Company”), the guarantors listed on Exhibit A hereto (the “Guarantors”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, (as successor by merger to WILMINGTON TRUST FSB), as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”).
Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to thereto in the Indenture (as defined below).
RECITALS
WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture (the “Original Indenture”), dated as of May 19, 2010, providing for the initial issuance by the Company of its Initial Notes (as defined below);
WHEREAS, Section 2.02 of the Original Indenture provides that the Company may, subject to compliance with Section 4.08 of the Original Indenture, issue Additional Notes in an unlimited amount under the Original Indenture;
WHEREAS, the Company has heretofore executed and delivered to the Trustee and Collateral Agent the First Supplemental Indenture, dated as of February 7, 2011, among the Company, the guarantors party thereto and Wilmington Trust FSB, as Trustee and Collateral Agent (the “First Supplemental Indenture”), to the Original Indenture, for the purpose of amending the Original Indenture to amend Section 4.08(a) in the Original Indenture, to permit the issuance of Additional Notes in connection with the acquisition of Herley Industries, Inc., as permitted by Section 9.02 of the Original Indenture;
WHEREAS, certain subsidiaries of the Company have heretofore executed and delivered to the Trustee and Collateral Agent the Supplemental Indenture, dated as of April 1, 2011, among certain of the subsidiary guarantors of the Company party thereto and Wilmington Trust FSB, as Trustee and Collateral Agent (the “Second Supplemental Indenture”), to the Original Indenture, for the purpose of adding additional subsidiary guarantors of the Company as guarantors of the Indenture;
WHEREAS, the Company has heretofore executed and delivered to the Trustee and Collateral Agent the Third Supplemental Indenture, dated as of April 15, 2011, among the Company, the guarantors party thereto and Wilmington Trust FSB, as Trustee and Collateral Agent (the “Third Supplemental Indenture”), to the Original Indenture, for the purpose of issuing $285.0 million aggregate principal amount of Additional Notes (the “April 2011 Additional Notes”) which constitute the same series of notes as the Initial Notes;
WHEREAS, certain subsidiaries of the Company have heretofore executed and delivered to the Trustee and Collateral Agent the Supplemental Indenture, dated as of April 18, 2011, among certain of the subsidiary guarantors of the Company party thereto and Wilmington Trust FSB, as Trustee and Collateral Agent (the “Fourth Supplemental Indenture”), to the Original Indenture, for the purpose of adding additional subsidiary guarantors of the Company as guarantors of the Indenture;
WHEREAS, certain subsidiaries of the Company have heretofore executed and delivered to the Trustee and Collateral Agent the Supplemental Indenture, dated as of July 27, 2011, among certain of the subsidiary guarantors of the Company party thereto and Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Trustee and Collateral Agent (the “Fifth Supplemental Indenture” and, collectively with the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture, the “Indenture”), to the Original Indenture, for the purpose of adding additional subsidiary guarantors of the Company as guarantors of the Indenture;
WHEREAS, in connection with the Company’s acquisition of Integral Systems, Inc., a Maryland corporation, the Company intends to issue $115.0 million aggregate principal amount of Additional Notes (the “New Notes”) pursuant to this Sixth Supplemental Indenture to the Indenture which will constitute the same series of notes as the Initial Notes and the April 2011 Additional Notes;
WHEREAS, Section 9.01 of the Indenture provides that the Company and the Guarantors and the Trustee or Collateral Agent, as applicable, may amend, modify or supplement the Indenture, the Notes, the Guarantees and the Collateral Agreements without the consent of Holders (as defined in the Indenture) to cure any ambiguity, defect or inconsistency contained therein or to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any such Holder under the Indenture, the Notes, the Guarantees or the Collateral Agreements, in accordance with the limitations set forth in the Indenture; and
WHEREAS, all things necessary to make the New Notes (as defined below), when executed by the Company and authenticated and delivered by the Trustee and issued upon the terms and subject to the conditions set forth herein and in the Indenture, the valid and binding and legal obligations of the Company and the Guarantors and to make this Sixth Supplemental Indenture a valid, binding and legal agreement of the Company and the Guarantors, have been done.
NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the benefit of the others and for the equal and ratable benefit of the Holders of the Notes (as defined below), as follows:
AGREEMENTS
ARTICLE I
DEFINITIONS
Section 1.1 All capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. The rules of interpretation set forth in the Indenture shall be applied here as if set forth in full herein.
“Initial Notes” means the $225.0 million aggregate principal amount of Notes issued under the Indenture on May 19, 2010.
“April 2011 Additional Notes” means the $285.0 million aggregate principal amount of Additional Notes (other than the Initial Notes) issued pursuant to the Third Supplemental Indenture to the Indenture, as part of the same series of the Initial Notes.
“New Notes” means the $115.0 million aggregate principal amount of Additional Notes (other than the Initial Notes and the April 2011 Additional Notes) issued under this Sixth Supplemental Indenture, as part of the same series of the Initial Notes and the April 2011 Additional Notes.
“Notes” means the Company’s 10% Senior Secured Notes due 2017. The Initial Notes, the April 2011 Additional Notes and the New Notes will form part of the same series for all purposes under the Indenture, and unless the context otherwise requires, all references to the Notes will include the Initial Notes, the April 2011 Additional Notes and the New Notes.
ARTICLE II
AUTHORIZATION AND ISSUANCE OF NEW NOTES
Section 2.1 The Company will be entitled, upon delivery of an Officers’ Certificate and an Opinion of Counsel, and subject to their compliance with Section 4.08 of the Indenture, to issue the New Notes under this Sixth Supplemental Indenture which will have identical terms as, and be pari passu with, the Initial Notes and the April 2011 Additional Notes, except that, similar to the April 2011 Additional Notes, the New Notes will be subject to transfer restrictions under the applicable securities laws and will have different CUSIP and ISIN numbers from their issuance until the date on which the Exchange Offer with respect to the New Notes is consummated, at which time the Company will cause the New Notes to have the same CUSIP and ISIN numbers as the Initial Notes . The Initial Notes, the April 2011 Additional Notes and the New Notes issued will be treated as a single class for all purposes under the Indenture and this Sixth Supplemental Indenture.
Section 2.2 With respect to the New Notes, the Company has set forth in an authentication order in accordance with Section 2.02 of the Indenture, a copy of which will be delivered to the Trustee, (i) the aggregate principal amount of such New Notes to be authenticated and delivered pursuant to this Sixth Supplemental Indenture, (ii) the date the New Notes are to be authenticated and (iii) whether the New Notes are to be Initial Notes, Exchange Notes or Additional Notes.
ARTICLE III
EXECUTION AND AUTHENTICATION OF NEW NOTES
Section 3.1 The Trustee will, upon receipt of a written order of the Company in the form of an Officers’ Certificate (which Officers’ Certificate shall certify that the issuance of the New Notes is in compliance with Section 4.08 of the Indenture), authenticate New Notes for issue that may be validly issued under this Sixth Supplemental Indenture.
ARTICLE IV
AMENDMENTS TO INDENTURE; EFFECTIVENESS OF AMENDMENTS
Section 4.1 Amendments to the Indenture.
(a) The definition of “Registration Rights Agreement” under Section 1.01 of the Indenture is hereby deleted in its entirety and replaced with the following:
“ “Registration Rights Agreement” means, with respect to the Initial Notes bearing CUSIP Nos. 5007BAA6, U50103AA5, 50077BAB4), the Registration Rights Agreement, dated as of the Issue Date, between the Company, the Guarantors and the Initial Purchasers, as the same may be amended from time to time in accordance with the terms thereof, with respect to the Additional Notes bearing CUSIP Nos. 50077BAD0, U50103AB3, 50077BAE8 , the Registration Rights Agreement, dated as of March 25, 2011, among the Company, the guarantors party thereto, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and Oppenheimer & Co. Inc. and with respect to the Additional Notes bearing CUSIP Nos. 50077B AF5 , U50103 AC1, 50077B AG3, the Registration Rights Agreement, dated as of July 27, 2011, among the Company, the guarantors party thereto, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and B. Riley & Co., LLC.”
Section 4.2 Effectiveness of this Sixth Supplemental Indenture. This Sixth Supplemental Indenture is entered into pursuant to and consistent with Section 2.02 and Section 9.01 of the Indenture. Upon the execution of this Sixth Supplemental Indenture by the Company, the Guarantors, the Trustee and the Collateral Agent, the Indenture shall be amended and supplemented in accordance herewith, and this Sixth Supplemental Indenture shall form a part of the Indenture for all purposes and each holder of Notes shall be bound thereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1 Confirmation of the Original Indenture. The Original Indenture, as heretofore supplemented and amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and this Sixth Supplemental Indenture, as well as the Notes, are in all respects ratified and confirmed and all the terms shall remain in full force and effect. This Sixth Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes, heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby and all terms and conditions of each shall be read together as though they constitute a single instrument, except that in the case of conflict the provisions of this Sixth Supplemental Indenture shall control.
Section 5.2 Governing Law. This Sixth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in said state.
Section 5.3 Successors. All agreements of the Company in this Sixth Supplemental Indenture shall bind their respective successors. All agreements of the Trustee and Collateral Agent in this Sixth Supplemental Indenture shall bind its successors.
Section 5.4 Duplicate Originals. All parties may sign any number of copies of this Sixth Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement. The exchange of copies of this Sixth Supplemental Indenture and of signature pages by facsimile or pdf shall constitute effective execution and delivery of this Sixth Supplemental Indenture. Signatures of the parties hereto transmitted by facsimile or pdf shall be deemed to be their original signatures for all purposes.
Section 5.5 Severability. In case any one or more of the provisions in this Sixth Supplemental Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.
Section 5.6 Trustee Not Responsible for Recitals. The recitals contained herein shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Sixth Supplemental Indenture.
Section 5.7 Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed as of the day and year written above.
KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
AI METRIX, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
AIRORLITE COMMUNICATIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
AVTEC SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
CHARLESTON MARINE CONTAINERS INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
CVG, INCORPORATED
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
DALLASTOWN REALTY I, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of
Gichner Holdings, Inc., sole
member of Dallastown Realty I, LLC
DALLASTOWN REALTY II, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Dallastown Realty I, LLC, sole member of Dallastown Realty II, LLC
DEFENSE SYSTEMS, INCORPORATED
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DEI SERVICES CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DIGITAL FUSION SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DIGITAL FUSION, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
DIVERSIFIED SECURITY SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
DTI ASSOCIATES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
GENERAL MICROWAVE CORPORATION (DBA HERLEY NEW YORK)
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
GENERAL MICROWAVE ISRAEL CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
GICHNER HOLDINGS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
GICHNER SYSTEMS INTERNATIONAL, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
GICHNER SYSTEMS GROUP, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HAVERSTICK CONSULTING, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HAVERSTICK GOVERNMENT SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Delaware corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Colorado corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Virginia corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a New Jersey corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a California corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HENRY BROS. ELECTRONICS, LLC,
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of
Henry Bros. Electronics, Inc.,
sole member of Henry Bros.
Electronics, LLC
HERLEY INDUSTRIES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HERLEY-CTI, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HERLEY-RSS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
HGS HOLDINGS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
INTEGRAL SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
IRIS ACQUISITION SUB LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of
Kratos Defense & Security
Solutions, Inc., sole member of
Iris Acquisition Sub LLC
JMA ASSOCIATES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS DEFENSE ENGINEERING SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS PUBLIC SAFETY & SECURITY SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS MID-ATLANTIC, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS SOUTHEAST, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS SOUTHWEST L.P.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of
Kratos Texas, Inc., General
Partner of Kratos Southwest L.P.
KRATOS TEXAS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
LUMISTAR, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
LVDM, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
MADISON RESEARCH CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
MICRO SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
MSI ACQUISITION CORP.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
NATIONAL SAFE OF CALIFORNIA, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
NEWPOINT TECHNOLOGIES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
POLEXIS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
REAL TIME LOGIC, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
REALITY BASED IT SERVICES, LTD.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
ROCKET SUPPORT SERVICES, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of HGS
Holdings, Inc., sole managing
member of Rocket Support
Services LLC
SAT CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
SHADOW I, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
SHADOW II, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
SHADOW III, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
SCT ACQUISITION, LLC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of
Charlestown Marine Containers
Inc., sole member of SCT
Acquisition, LLC
SCT REAL ESTATE, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer of SCT
Acquisition, LLC, sole member
of SCT Real Estate, LLC
STAPOR RESEARCH, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
SUMMIT RESEARCH CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
KRATOS TECHNOLOGY & TRAINING SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
WFI NMC CORP.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and
Chief Financial Officer
WILMINGTON TRUST, NATIONAL ASSOCIATION, as successor by merger to WILMINGTON TRUST FSB), as Trustee and Collateral Agent
By: /s/ Jane Schweiger
Name: Jane Schweiger
Title: Vice President
EXHIBIT A
Guarantors
|
COMPANY:
|
JURISDICTION OF FORMATION:
|
|
AIRORLITE COMMUNICATIONS, INC.
|
NEW JERSEY
|
|
AVTEC SYSTEMS, INC.
|
VIRGINIA
|
|
CHARLESTON MARINE CONTAINERS INC.
|
DELAWARE
|
|
CVG, INCORPORATED
|
VIRGINIA
|
|
DALLASTOWN REALTY II, LLC
|
DELAWARE
|
|
DALLASTOWN REALTY I, LLC
|
DELAWARE
|
|
DEFENSE SYSTEMS, INCORPORATED
|
VIRGINIA
|
|
DEI SERVICES CORPORATION
|
FLORIDA
|
|
DIGITAL FUSION SOLUTIONS, INC.
|
FLORIDA
|
|
DIGITAL FUSION, INC.
|
DELAWARE
|
|
DIVERSIFIED SECURITY SOLUTIONS, INC.
|
NEW YORK
|
|
DTI ASSOCIATES, INC.
|
VIRGINIA
|
|
GENERAL MICROWAVE CORPORATION
|
NEW YORK
|
|
GENERAL MICROWAVE ISRAEL CORPORATION
|
DELAWARE
|
|
GICHNER HOLDINGS, INC.
|
DELAWARE
|
|
GICHNER SYSTEMS INTERNATIONAL, INC.
|
DELAWARE
|
|
GICHNER SYSTEMS GROUP, INC.
|
DELAWARE
|
|
HAVERSTICK CONSULTING, INC.
|
INDIANA
|
|
HAVERSTICK GOVERNMENT SOLUTIONS, INC.
|
OHIO
|
|
HENRY BROS. ELECTRONICS, INC.
|
DELAWARE
|
|
HENRY BROS. ELECTRONICS, INC.
|
NEW JERSEY
|
|
HENRY BROS. ELECTRONICS, INC.
|
CALIFORNIA
|
|
HENRY BROS. ELECTRONICS, INC.
|
COLORADO
|
|
HENRY BROS. ELECTRONICS, INC.
|
VIRGINIA
|
|
HENRY BROS. ELECTRONICS, LLC
|
ARIZONA
|
|
HERLEY INDUSTRIES, INC.
|
DELAWARE
|
|
HERLEY-CTI, INC.
|
DELAWARE
|
|
HERLEY-RSS, INC.
|
DELAWARE
|
|
HGS HOLDINGS, INC.
|
INDIANA
|
|
INTEGRAL SYSTEMS, INC.
|
MARYLAND
|
|
IRIS ACQUISITION SUB LLC
|
MARYLAND
|
|
JMA ASSOCIATES, INC.
|
DELAWARE
|
|
KRATOS DEFENSE ENGINEERING SOLUTIONS, INC.
|
DELAWARE
|
|
KRATOS PUBLIC SAFETY & SECURITY SOLUTIONS, INC.
|
DELAWARE
|
|
KRATOS MID-ATLANTIC, INC.
|
DELAWARE
|
|
KRATOS SOUTHEAST, INC.
|
GEORGIA
|
|
KRATOS SOUTHWEST L.P.
|
TEXAS
|
|
MADISON RESEARCH CORPORATION
|
ALABAMA
|
|
MSI ACQUISITION CORP.
|
DELAWARE
|
|
MICRO SYSTEMS, INC.
|
FLORIDA
|
|
NEWPOINT TECHNOLOGIES, INC.
|
DELAWARE
|
|
NATIONAL SAFE OF CALIFORNIA, INC.
|
CALIFORNIA
|
|
REAL TIME LOGIC, INC.
|
COLORADO
|
|
REALTY BASED IT SERVICES, LTD.
|
MARYLAND
|
|
ROCKET SUPPORT SERVICES LLC
|
INDIANA
|
|
SAT CORPORATION
|
CALIFORNIA
|
|
SCT ACQUISITION, LLC
|
DELAWARE
|
|
SCT REAL ESTATE, LLC
|
DELAWARE
|
|
SHADOW I, INC.
|
CALIFORNIA
|
|
SHADOW II, INC.
|
CALIFORNIA
|
|
SHADOW III, INC.
|
CALIFORNIA
|
|
STAPOR RESEARCH, INC.
|
VIRGINIA
|
|
SUMMIT RESEARCH CORPORATION
|
ALABAMA
|
|
KRATOS TECHNOLOGY & TRAINING SOLUTIONS, INC.
|
|
CALIFORNIA
|
$115,000,000
KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
10% Senior Secured Notes due 2017
REGISTRATION RIGHTS AGREEMENT
July 27, 2011
JEFFERIES & COMPANY, INC.
520 Madison Avenue
New York, New York 10022
KEYBANC CAPITAL MARKETS INC.
127 Public Square
Cleveland, Ohio 44114
B. RILEY & CO., LLC
11100 Santa Monica Blvd. Suite 800
Los Angeles, California 90025
Ladies and Gentlemen:
Kratos Defense & Security Solutions, Inc, a Delaware corporation (the “Issuer”) is issuing and selling to Jefferies & Company, Inc. (“Jefferies”), KeyBanc Capital Markets Inc. (“KeyBanc”) and B. Riley & Co., LLC (“B. Riley” and, together with Jefferies and KeyBanc, the “Initial Purchasers”), upon the terms set forth in the Purchase Agreement, dated July 14, 2011, by and among the Issuer, the subsidiary guarantors named therein and the Initial Purchasers (the “Purchase Agreement”), $115,000,000 aggregate principal amount of its 10% Senior Secured Notes due 2017 issued by the Issuer (each, a “Note” and collectively, the “Notes”). As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Issuer and the Subsidiary Guarantors listed in the signature pages hereto agree with the Initial Purchasers, for the benefit of the Holders (as defined below) of the Notes (including, without limitation, the Initial Purchasers), as set forth below. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers in the Purchase Agreement. The parties hereto hereby agree as follows:
Capitalized terms that are used herein without definition and are defined in the Purchase Agreement shall have the respective meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
Additional Interest: See Section 4(a).
Advice: See Section 6(w).
Agreement: This Registration Rights Agreement, dated as of the Closing Date, among the Issuer, the Subsidiary Guarantors and the Initial Purchasers.
Applicable Period: See Section 2(e).
Business Day: A day that is not a Saturday, a Sunday or a day on which banking institutions in the City of New York are authorized or required by law or executive order to be closed.
Closing Date: July 27, 2011.
Collateral Agreements: Shall have the meaning set forth in the Indenture.
Day: Unless otherwise expressly provided, a calendar day.
Effectiveness Date: The 180th day after the Closing Date, or if such date is not a Business Day, the next succeeding Business Day.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: Senior Secured Notes due 2017 of the Issuer, identical in all material respects to the Notes, including the related guarantees thereof, except for references to series and restrictive legends.
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: The 90th day after the Closing Date, or if such date is not a Business Day, the next succeeding Business Day.
FINRA: Financial Industry Regulatory Authority.
Holder: Any beneficial holder of Registrable Notes.
Indemnified Party: See Section 8(c).
Indemnifying Party: See Section 8(c).
Indenture: The Indenture, dated as of May 19, 2010, among the Issuer, the Subsidiary Guarantors and Wilmington Trust FSB, as trustee and collateral agent, pursuant to which the Notes are being issued, as amended or supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 6(o).
Issuer: See the introductory paragraph to this Agreement.
Lien: Shall have the meaning set forth in the Indenture.
Losses: See Section 8(a).
Notes: See the introductory paragraph to this Agreement.
Participating Broker-Dealer: See Section 2(e).
Person: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm, government or agency or political subdivision thereof, or other legal entity.
Private Exchange: See Section 2(f).
Private Exchange Notes: See Section 2(f).
Prospectus: The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Notes covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraph to this Agreement.
Records: See Section 6(o).
Registrable Notes: The Notes and Private Exchange Notes, in each case, that may not be sold without restriction under federal or state securities laws.
Registration Statement: Any registration statement of the Issuer and the Subsidiary Guarantors filed with the SEC under the Securities Act (including, but not limited to, the Exchange Registration Statement, the Shelf Registration and any subsequent Shelf Registration) that covers any of the Registrable Notes pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of an issuer or such securities being free of the registration and prospectus delivery requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
Rule 430A: Rule 430A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities: The Notes, the Exchange Notes and the Private Exchange Notes, if any.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(j).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
Subsidiary Guarantor: Each subsidiary of the Issuer that guarantees the obligations of the Issuer under the Notes and Indenture.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the trustee under any indenture governing the Exchange Notes and Private Exchange Notes (if any).
Underwritten Registration or Underwritten Offering: A registration in which securities of the Issuer are sold to an underwriter for reoffering to the public.
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(a)
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Unless the Exchange Offer would not be permitted by applicable laws or a policy of the SEC, the Issuer shall (and shall cause each Subsidiary Guarantor to) (i) prepare and file with the SEC promptly after the date hereof, but in no event later than the Filing Date, a registration statement (the “Exchange Registration Statement”) on an appropriate form under the Securities Act with respect to an offer (the “Exchange Offer”) to the Holders of Notes, to issue and deliver to such Holders, in exchange for the Notes, a like principal amount of Exchange Notes, (ii) use its commercially reasonable efforts to cause the Exchange Registration Statement to be declared effective as promptly as practicable after the filing thereof, but in no event later than the Effectiveness Date, (iii) use its commercially reasonable efforts to keep the Exchange Registration Statement effective until the consummation of the Exchange Offer in accordance with its terms, and (iv) commence the Exchange Offer and use its commercially reasonable efforts to issue on or prior to thirty (30) Business Days after the date on which the Exchange Registration Statement is declared effective, Exchange Notes in exchange for all Notes tendered prior thereto in the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the SEC.
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(b)
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The Exchange Notes shall be issued under, and entitled to the benefits of, (i) the Indenture or a trust indenture that is identical to the Indenture (other than such changes as are necessary to comply with any requirements of the SEC to effect or maintain the qualifications thereof under the TIA) and (ii) the Collateral Agreements.
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(c)
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Interest on the Exchange Notes and Private Exchange Notes will accrue from the last interest payment due date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the date of original issue of the Notes. Each Exchange Note and Private Exchange Note shall bear interest at the rate set forth thereon; provided, that interest with respect to the period prior to the issuance thereof shall accrue at the rate or rates borne by the Notes from time to time during such period.
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(d)
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The Issuer may require each Holder, as a condition to participation in the Exchange Offer, to represent (i) that any Exchange Notes received by it will be acquired in the ordinary course of its business, (ii) that at the time of the commencement and consummation of the Exchange Offer such Holder has not entered into any arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of the Securities Act, (iii) that if such Holder is an “affiliate” of the Issuer within the meaning of Rule 405 of the Securities Act, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable to it, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Notes and (v) if such Holder is a Participating Broker-Dealer, that it will deliver a Prospectus in connection with any resale of the Exchange Notes.
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(e)
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The Issuer shall (and shall cause each Subsidiary Guarantor to) include within the Prospectus contained in the Exchange Registration Statement a section entitled “Plan of Distribution” reasonably acceptable to the Initial Purchasers which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer for its own account in exchange for the Notes that were acquired by it as a result of market-making or other trading activity (a “Participating Broker-Dealer”), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the judgment of the Initial Purchasers, represent the prevailing views of the staff of the SEC. Such “Plan of Distribution” section shall also allow, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including, to the extent so permitted, all Participating Broker-Dealers, and include a statement describing the manner in which Participating Broker-Dealers may resell the Exchange Notes. The Issuer shall use its commercially reasonable efforts to keep the Exchange Registration Statement effective and to amend and supplement the Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such Persons must comply with such requirements in order to resell the Exchange Notes (the “Applicable Period”).
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(f)
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If, upon consummation of the Exchange Offer, any Initial Purchaser holds any Notes acquired by such Initial Purchaser and having the status of an unsold allotment in the initial distribution, the Issuer (upon the written request from such Initial Purchaser) shall, simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to such Initial Purchaser, in exchange (the “Private Exchange”) for the Notes held by such Initial Purchaser, a like principal amount of Senior Secured Notes that are identical to the Exchange Notes except for the existence of restrictions on transfer thereof under the Securities Act and securities laws of the several states of the United States (the “Private Exchange Notes”) (and which are issued pursuant to the same indenture as the Exchange Notes). The Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
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(g)
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In connection with the Exchange Offer, the Issuer shall (and shall cause each Subsidiary Guarantor to):
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(i)
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mail to each Holder a copy of the Prospectus forming part of the Exchange Registration Statement, together with an appropriate letter of transmittal that is an exhibit to the Exchange Offer Registration Statement, and any related documents;
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(ii)
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keep the Exchange Offer open for not less than twenty (20) Business Days after the date notice thereof is mailed to the Holders (or longer if required by applicable law);
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(iii)
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utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, the City of New York, which may be the Trustee or an affiliate thereof;
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(iv)
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permit Holders to withdraw tendered Registrable Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer shall remain open; and
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(v)
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otherwise comply in all material respects with all applicable laws.
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(h)
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As soon as practicable after the close of the Exchange Offer or the Private Exchange, as the case may be, the Issuer shall (and shall cause each Subsidiary Guarantor to):
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(i)
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accept for exchange all Registrable Notes validly tendered pursuant to the Exchange Offer or the Private Exchange, as the case may be, and not validly withdrawn;
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(ii)
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deliver to the Trustee for cancellation all Registrable Notes so accepted for exchange; and
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(iii)
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cause the Trustee to authenticate and deliver promptly to each Holder tendering such Registrable Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange.
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(i)
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The Exchange Notes and the Private Exchange Notes may be issued under (i) the Indenture or (ii) an indenture identical to the Indenture (other than such changes as are necessary to comply with any requirements of the SEC to effect or maintain the qualification thereof under the TIA), which in either event will provide that the Exchange Notes will not be subject to the transfer restrictions set forth in the Indenture, that the Private Exchange Notes will be subject to the transfer restrictions set forth in the Indenture, and that the Exchange Notes, the Private Exchange Notes and the Notes, if any, will be deemed one class of security (subject to the provisions of the Indenture) and entitled to participate in all the security granted by the Issuer and the Subsidiary Guarantors pursuant to the Collateral Agreements and in any Subsidiary Guarantee (as such terms are defined in the Indenture) on an equal and ratable basis.
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(j)
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If: (i) prior to the consummation of the Exchange Offer, the Holders of a majority in aggregate principal amount of Registrable Notes determines in its or their reasonable judgment that (A) the Exchange Notes would not, upon receipt, be tradeable by the Holders thereof without restriction under the Securities Act and the Exchange Act and without material restrictions under applicable Blue Sky or state securities laws, or (B) the interests of the Holders under this Agreement, taken as a whole, would be materially adversely affected by the consummation of the Exchange Offer; (ii) applicable interpretations of the staff of the SEC would not permit the consummation of the Exchange Offer prior to the Effectiveness Date; (iii) subsequent to the consummation of the Private Exchange, any Holder of Private Exchange Notes so requests; (iv) the Exchange Offer is not consummated for any reason within the timeframe set forth in Section 2(a)(iv); or (v) in the case of (A) any Holder not permitted by applicable law or SEC policy to participate in the Exchange Offer, (B) any Holder participating in the Exchange Offer that receives Exchange Notes that may not be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuer within the meaning of the Securities Act) or (C) any broker-dealer that holds Notes acquired directly from the Issuer or any of its affiliates and, in each such case contemplated by this clause (v), such Holder notifies the Issuer within six months of consummation of the Exchange Offer, then the Issuer shall promptly (and in any event within five Business Days) deliver to the Holders (or in the case of an occurrence of any event described in clause (v) of this Section 2(j), to any such Holder) and the Trustee notice thereof (the “Shelf Notice”) and shall as promptly as possible thereafter file an Initial Shelf Registration pursuant to Section 3.
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If a Shelf Notice is delivered pursuant to Section 2(j), then this Section 3 shall apply to all Registrable Notes. Otherwise, upon consummation of the Exchange Offer in accordance with Section 2, the provisions of Section 3 shall apply solely with respect to (i) Notes held by any Holder thereof not permitted to participate in the Exchange Offer, (ii) Notes held by any broker-dealer that acquired such Notes directly from the Issuer or any of its affiliates and (iii) Exchange Notes that are not freely tradeable as contemplated by Section 2(j)(v) hereof, provided in each case that the relevant Holder has duly notified the Issuer within six months of the Exchange Offer as required by Section 2(j)(v).
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(a)
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Initial Shelf Registration. The Issuer shall (and shall cause each Subsidiary Guarantor to), as promptly as practicable, file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the “Initial Shelf Registration”). If the Issuer (and any Subsidiary Guarantor) has not yet filed an Exchange Registration Statement, the Issuer shall (and shall cause each Subsidiary Guarantor to) file with the SEC the Initial Shelf Registration on or prior to the Filing Date and shall use its commercially reasonable efforts to cause such Initial Shelf Registration to be declared effective under the Securities Act on or prior to the Effectiveness Date. Otherwise, the Issuer shall (and shall cause each Subsidiary Guarantor to) use its commercially reasonable efforts to file with the SEC the Initial Shelf Registration within thirty (30) days of the delivery of the Shelf Notice and shall use its commercially reasonable efforts to cause such Shelf Registration to be declared effective under the Securities Act as promptly as practicable thereafter (but in no event more than ninety (90) days after delivery of the Shelf Notice). The Initial Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners reasonably designated by them (including, without limitation, one or more underwritten offerings). The Issuer and Subsidiary Guarantors shall not permit any securities other than the Registrable Notes to be included in any Shelf Registration. The Issuer shall (and shall cause each Subsidiary Guarantor to) use its commercially reasonable efforts to keep the Initial Shelf Registration continuously effective under the Securities Act until the date which is two years from the Closing Date (subject to extension pursuant to the last paragraph of Section 6(w) (the “Effectiveness Period”), or such shorter period ending when (i) all Registrable Notes covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration (ii) a Subsequent Shelf Registration covering all of the Registrable Notes covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration has been declared effective under the Securities Act or (iii) there cease to be any outstanding Registrable Notes.
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(b)
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Subsequent Shelf Registrations. If the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below) ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), the Issuer shall (and shall cause each Subsidiary Guarantor to) use its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend such Shelf Registration in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file (and cause each Subsidiary Guarantor to file) an additional “shelf” Registration Statement pursuant to Rule 415 covering all of the Registrable Notes (a “Subsequent Shelf Registration”). If a Subsequent Shelf Registration is filed, the Issuer shall (and shall cause each Subsidiary Guarantor to) use its commercially reasonable efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective. As used herein the term “Shelf Registration” means the Initial Shelf Registration and any Subsequent Shelf Registrations.
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(c)
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Supplements and Amendments. The Issuer shall promptly supplement and amend any Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Shelf Registration or by any underwriter of such Registrable Notes.
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(d)
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Provision of Information. No Holder of Registrable Notes shall be entitled to include any of its Registrable Notes in any Shelf Registration pursuant to this Agreement unless such Holder furnishes to the Issuer and the Trustee in writing, within twenty (20) days after receipt of a written request therefor, such information as the Issuer and the Trustee after conferring with counsel with regard to information relating to Holders that would be required by the SEC to be included in such Shelf Registration or Prospectus included therein, may reasonably request for inclusion in any Shelf Registration or Prospectus included therein, and no such Holder shall be entitled to Additional Interest pursuant to Section 4 hereof unless and until such Holder shall have provided such information.
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(a)
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The Issuer and each Subsidiary Guarantor acknowledges and agrees that the Holders of Registrable Notes will suffer damages if the Issuer or any Subsidiary Guarantor fails to fulfill its material obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuer and the Subsidiary Guarantors agree to pay additional cash interest on the Notes (“Additional Interest”) under the circumstances and to the extent set forth below (each of which shall be given independent effect):
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(i)
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if neither the Exchange Registration Statement nor the Initial Shelf Registration has been filed on or prior to the applicable Filing Date, Additional Interest shall accrue on the Notes over and above any stated interest at a rate of 0.25% per annum of the principal amount of such Notes for the first ninety (90) days immediately following the applicable Filing Date, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent ninety (90) day period;
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(ii)
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if neither the Exchange Registration Statement nor the Initial Shelf Registration is declared effective on or prior to the applicable Effectiveness Date, Additional Interest shall accrue on the Notes over and above any stated interest at a rate of 0.25% per annum of the principal amount of such Notes for the first ninety (90) days immediately following the applicable Effectiveness Date, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent ninety (90) day period;
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(iii)
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if (A) the Issuer (and any Subsidiary Guarantor) has not exchanged Exchange Notes for all of the Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to thirty (30) Business Days after the Effectiveness Date, (B) the Exchange Registration Statement ceases to be effective at any time prior to the time that the Exchange Offer is consummated, (C) if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time prior to the second anniversary of its effective date (other than such time as all Notes have been disposed of thereunder) and is not declared effective again within thirty (30) days, or (D) pending the announcement of a material corporate transaction, event, occurrence or other item the Issuer issues a written notice pursuant to Section 6(e)(v) or (vi) that a Shelf Registration Statement or Exchange Registration Statement is unusable and the aggregate number of days in any 365-day period for which all such notices issued or required to be issued, have been, or were required to be, in effect exceeds ninety (90) days in the aggregate or thirty (30) days consecutively, in the case of a Shelf Registration statement, or fifteen (15) days in the aggregate in the case of an Exchange Registration Statement, then Additional Interest shall accrue on the Notes, over and above any stated interest, at a rate of 0.25% per annum of the principal amount of the Notes commencing on (w) the 31st Business Day after the Effectiveness Date, in the case of (A) above, or (x) the date the Exchange Registration Statement ceases to be effective without being declared effective again within thirty (30) days, in the case of clause (B) above, or (y) the day such Shelf Registration ceases to be effective in the case of (C) above, or (z) the day the Exchange Registration Statement or Shelf Registration ceases to be usable in case of clause (D) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each such subsequent 90-day period;
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provided, however, that the maximum Additional Interest rate on the Notes may not exceed at any one time in the aggregate 1.00% per annum; and provided further, that (1) upon the filing of the Exchange Registration Statement or Initial Shelf Registration (in the case of (i) above), (2) upon the effectiveness of the Exchange Registration Statement or Initial Shelf Registration (in the case of (ii) above), or (3) upon the exchange of Exchange Notes for all Notes tendered (in the case of (iii)(A) above), or upon the effectiveness of the Exchange Registration Statement that had ceased to remain effective (in the case of clause (iii)(B) above), or upon the effectiveness of a Shelf Registration which had ceased to remain effective (in the case of (iii)(C) above), Additional Interest on the Notes as a result of such clause (or the relevant subclause thereof) or upon the usability of such Registration Statement or Exchange Registration Statement (in the case of clause (iii)(D) above), as the case may be, shall cease to accrue.
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(b)
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The Issuer shall notify the Trustee within three Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”). Any amounts of Additional Interest due pursuant to clause (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash, on the dates and in the manner provided in the Indenture and whether or not any cash interest would then be payable on such date, commencing with the first such semi-annual date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Notes, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360.
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The Issuer agrees that it will not effect any public or private sale or distribution (including a sale pursuant to Regulation D under the Securities Act) of any securities the same as or similar to those covered by a Registration Statement filed pursuant to Section 2 or 3 hereof (other than Additional Notes (as defined in the Indenture) issued under the Indenture), or any securities convertible into or exchangeable or exercisable for such securities, during the ten (10) days prior to, and during the ninety (90) day period beginning on, the effective date of any Registration Statement filed pursuant to Sections 2 and 3 hereof unless the Holders of a majority in the aggregate principal amount of the Registrable Notes to be included in such Registration Statement consent, if the managing underwriter thereof so requests in writing.
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6.
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Registration Procedures
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In connection with the filing of any Registration Statement pursuant to Sections 2 or 3 hereof, the Issuer shall (and shall cause each Subsidiary Guarantor to) effect such registrations to permit the sale of such securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuer hereunder, the Issuer shall (and shall cause each Subsidiary Guarantor to):
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(a)
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prepare and file with the SEC as soon as practicable after the date hereof but in any event on or prior to the Filing Date, the Exchange Registration Statement or if the Exchange Registration Statement is not filed because of the circumstances contemplated by Section 2(j), a Shelf Registration as prescribed by Section 3, and use its commercially reasonable efforts to cause each such Registration Statement to be declared effective and remain effective as provided herein; provided that, if (1) a Shelf Registration is filed pursuant to Section 3 or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, before filing any Registration Statement or Prospectus or any amendments or supplements thereto the Issuer shall (and shall cause each Subsidiary Guarantor to), if requested, furnish to and afford the Holders of the Registrable Notes to be registered pursuant to such Shelf Registration Statement, each Participating Broker-Dealer, the managing underwriters, if any, and each of their respective counsel, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least three Business Days prior to such filing); provided that if the provision of such documents to such Holders would cause the Issuer or any Subsidiary Guarantor to be in violation of Regulation FD of the Exchange Act, neither the Issuer nor any Subsidiary Guarantor shall be required to furnish such documents to such Holders unless such Holders enter into a confidentiality agreement with the Issuer with respect thereto in form and substance reasonably satisfactory to the Issuer. The Issuer and each Subsidiary Guarantor shall not file any such Registration Statement or Prospectus or any amendments or supplements thereto in respect of which the Holders must provide information for the inclusion therein without the Holders being afforded an opportunity to review such documentation if the holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement, or any such Participating Broker-Dealer, as the case may be, the managing underwriters, if any, or any of their respective counsel shall reasonably object in writing on a timely basis. A Holder shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Securities Act.
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(b)
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provide an indenture trustee for the Registrable Notes, the Exchange Notes or the Private Exchange Notes, as the case may be, and cause the Indenture (or other indenture relating to the Registrable Notes) to be qualified under the TIA not later than the effective date of the first Registration Statement; and in connection therewith, to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its commercially reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.
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(c)
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prepare and file with the SEC such pre-effective amendments and post-effective amendments to each Shelf Registration or Exchange Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus. The Issuer and each Subsidiary Guarantor shall not, during the Applicable Period, voluntarily take any action that would result in selling Holders of the Registrable Notes covered by a Registration Statement or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period, unless such action is required by applicable law, rule or regulation or permitted by this Agreement.
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(d)
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furnish to such selling Holders and Participating Broker-Dealers who so request in writing (i) upon the Issuer’s receipt, a copy of the order of the SEC declaring such Registration Statement and any post effective amendment thereto effective, (ii) such reasonable number of copies of such Registration Statement and of each amendment and supplement thereto (in each case including any documents incorporated therein by reference and all exhibits), (iii) such reasonable number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and each amendment and supplement thereto, and such reasonable number of copies of the final Prospectus as filed by the Issuer and each Subsidiary Guarantor pursuant to Rule 424(b) under the Securities Act, in conformity with the requirements of the Securities Act and each amendment and supplement thereto, and (iv) such other documents (including any amendments required to be filed pursuant to clause (c) of this Section), as any such Person may reasonably request in writing. The Issuer and the Subsidiary Guarantors hereby consent to the use of the Prospectus by each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto.
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(e)
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if (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, the Issuer shall notify in writing the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, the managing underwriters, if any, and each of their respective counsel promptly (but in any event within two Business Days) (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective (including in such notice a written statement that any Holder may, upon request, obtain, without charge, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any Prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes the representations and warranties of the Issuer and any Subsidiary Guarantor contained in any agreement (including any underwriting agreement) contemplated by Section 6(n) hereof cease to be true and correct, (iv) of the receipt by the Issuer or any Subsidiary Guarantor of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition of any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in, or amendments or supplements to, such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement and the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (vi) of any reasonable determination by the Issuer or any Subsidiary Guarantor that a post-effective amendment to a Registration Statement would be appropriate and (vii) of any request by the SEC for amendments to the Registration Statement or supplements to the Prospectus or for additional information relating thereto.
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(f)
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use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use its commercially reasonable efforts to obtain the withdrawal of any such order at the earliest possible date.
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(g)
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if (A) a Shelf Registration is filed pursuant to Section 3, (B) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period or (C) reasonably requested in writing by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information or revisions to information therein relating to such underwriters or selling Holders as the managing underwriters, if any, or such Holders or any of their respective counsel reasonably request in writing to be included or made therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Issuer has received notification of the matters to be incorporated in such Prospectus supplements or post-effective amendment.
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(h)
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prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use its commercially reasonable efforts to register or qualify, and to cooperate with the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer or any managing underwriter or underwriters, if any, reasonably request in writing; provided that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Issuer and each Subsidiary Guarantor agree to cause its counsel to perform Blue Sky investigations and file any registrations and qualifications required to be filed pursuant to this Section 6(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; provided that neither the Issuer nor any Subsidiary Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject.
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(i)
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if (A) a Shelf Registration is filed pursuant to Section 3 or (B) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is requested to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company, and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or Holders may reasonably request.
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(j)
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use its commercially reasonable efforts to cause the Registrable Notes covered by any Registration Statement to be registered with or approved by such governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter, if any, to consummate the disposition of such Registrable Notes, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Issuer shall (and shall cause each Subsidiary Guarantor to) cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals; provided that neither the Issuer nor any existing Subsidiary Guarantor shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any jurisdiction where it is not then so subject or (C) subject itself to taxation in any such jurisdiction where it is not then so subject.
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(k)
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if (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 6(e)(v) or 6(e)(vi) hereof, as promptly as practicable, prepare and file with the SEC, at the expense of the Issuer and the Subsidiary Guarantors, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, if SEC review is required, use its commercially reasonable efforts to cause such post-effective amendment to be declared effective as soon as possible.
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(l)
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use its commercially reasonable efforts to cause the Registrable Notes covered by a Registration Statement to be rated with such appropriate rating agencies, if so requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or the managing underwriter or underwriters, if any.
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(m)
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prior to the initial issuance of the Exchange Notes, (i) provide the Trustee with one or more certificates for the Registrable Notes in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Exchange Notes.
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(n)
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if a Shelf Registration is filed pursuant to Section 3, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings of debt securities similar to the Notes, as may be appropriate in the circumstances) and take all such other actions in connection therewith (including those reasonably requested in writing by the managing underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Notes being sold) in order to expedite or facilitate the registration or the disposition of such Registrable Notes, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, (i) make such representations and warranties to the Holders and the underwriters, if any, with respect to the business of the Issuer and its subsidiaries as then conducted, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Notes, as may be appropriate in the circumstances, and confirm the same if and when reasonably required; (ii) obtain an opinion of counsel to the Issuer and the Subsidiary Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the Holders of a majority in aggregate principal amount of the Registrable Notes being sold), addressed to each selling Holder and each of the underwriters, if any, covering the matters customarily covered in opinions of counsel to the Issuer and the Subsidiary Guarantors requested in underwritten offerings of debt securities similar to the Notes, as may be appropriate in the circumstances; (iii) obtain “cold comfort” letters and updates thereof (which letters and updates (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters) from the independent certified public accountants of the Issuer and the Subsidiary Guarantors (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuer or of any business acquired by the Issuer for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to the Notes, as may be appropriate in the circumstances, and such other matters as reasonably requested in writing by the underwriters; and (iv) deliver such documents and certificates as may be reasonably requested in writing by the Holders of a majority in aggregate principal amount of the Registrable Notes being sold and the managing underwriters, if any, to evidence the continued validity of the representations and warranties of the Issuer and its subsidiaries made pursuant to clause (i) above and to evidence compliance with any conditions contained in the underwriting agreement or other similar agreement entered into by the Issuer or any Subsidiary Guarantor.
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(o)
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if (1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus contained in an Exchange Registration Statement filed pursuant to Section 2 is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the “Inspectors”), at the offices where normally kept, during reasonable business hours, all financial and other records and pertinent corporate documents of the Issuer and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuer and its subsidiaries to supply all information reasonably requested in writing by any such Inspector in connection with such Registration Statement. Each Inspector shall agree in writing that it will keep the Records confidential and not disclose any of the Records unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such Registration Statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) the information in such Records is public or has been made generally available to the public other than as a result of a disclosure or failure to safeguard by such Inspector or (iv) disclosure of such information is, in the reasonable written opinion of counsel for any Inspector, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, related to, or involving this Agreement, or any transaction contemplated hereby or arising hereunder. Each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer unless and until such is made generally available to the public. Each Inspector, each selling Holder of such Registrable Notes and each such Participating Broker-Dealer will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Issuer and, to the extent practicable, use its commercially reasonable efforts to allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential at its expense.
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(p)
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comply with all applicable rules and regulations of the SEC and make generally available to the security holders of the Issuer with regard to any Applicable Registration Statement earning statements satisfying the provisions of section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than forty-five (45) days after the end of any twelve (12) month period (or ninety (90) days after the end of any twelve (12) month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuer after the effective date of a Registration Statement, which statements shall cover said twelve (12) month periods.
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(q)
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upon consummation of a Private Exchange, obtain an opinion of counsel to the Issuer and the Subsidiary Guarantors (in form, scope and substance reasonably satisfactory to Jefferies), addressed to the Trustee for the benefit of all Holders participating in the Private Exchange to the effect that (i) the Issuer and the Subsidiary Guarantors have duly authorized, executed and delivered the Private Exchange Notes and the Indenture, (ii) the Private Exchange Notes and the Indenture constitute legal, valid and binding obligations of the Issuer and the Subsidiary Guarantors, enforceable against the Issuer and the Subsidiary Guarantors in accordance with their respective terms, except as such enforcement may be subject to customary United States and foreign exceptions and (iii) all obligations of the Issuer and the Subsidiary Guarantors under the Private Exchange Notes and the Indenture are secured by Liens (as defined in the Indenture) on the assets securing the obligations of the Issuer and the Subsidiary Guarantors under the Notes, Indenture and Collateral Agreements to the extent and as discussed in the Registration Statement.
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(r)
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if the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by the Holders to the Issuer and the Subsidiary Guarantors (or to such other Person as directed by the Issuer and the Subsidiary Guarantors) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Issuer and the Subsidiary Guarantors shall mark, or caused to be marked, on such Registrable Notes that the Exchange Notes or the Private Exchange Notes, as the case may be, are being issued as substitute evidence of the indebtedness originally evidenced by the Registrable Notes; provided that in no event shall such Registrable Notes be marked as paid or otherwise satisfied.
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(s)
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cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with FINRA.
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(t)
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use its commercially reasonable efforts to cause all Securities covered by a Registration Statement to be listed on each securities exchange, if any, on which similar debt securities issued by the Issuer are then listed.
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(u)
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use its commercially reasonable efforts to take all other steps reasonably necessary to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby.
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(v)
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the Issuer may require each seller of Registrable Notes or Participating Broker-Dealer as to which any registration is being effected to furnish to the Issuer such information regarding such seller or Participating Broker-Dealer and the distribution of such Registrable Notes as the Issuer may, from time to time, reasonably request in writing. The Issuer may exclude from such registration the Registrable Notes of any seller who fails to furnish such information within a reasonable time (which time in no event shall exceed thirty (30) days, subject to Section 3(d) hereof) after receiving such request. Each seller of Registrable Notes or Participating Broker-Dealer as to which any registration is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make the information previously furnished by such seller not materially misleading.
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(w)
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each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon receipt of any notice from the Issuer of the happening of any event of the kind described in Section 6(e)(ii), 6(e)(iv), 6(e)(v), or 6(e)(vi), such Holder will forthwith discontinue disposition of such Registrable Notes covered by a Registration Statement and such Participating Broker-Dealer will forthwith discontinue disposition of such Exchange Notes pursuant to any Prospectus and, in each case, forthwith discontinue dissemination of such Prospectus until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(k), or until it is advised in writing (the “Advice”) by the Issuer and the Subsidiary Guarantors that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto and, if so directed by the Issuer and the Subsidiary Guarantors, such Holder or Participating Broker-Dealer, as the case may be, will deliver to the Issuer all copies, other than permanent file copies, then in such Holder's or Participating Broker-Dealer's possession, of the Prospectus covering such Registrable Notes current at the time of the receipt of such notice. In the event the Issuer and the Subsidiary Guarantors shall give any such notice, the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each Participating Broker-Dealer shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 6(k) or (y) the Advice.
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(a)
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All fees and expenses incident to the performance of or compliance with this Agreement by the Issuer and the Subsidiary Guarantors shall be borne by the Issuer and the Subsidiary Guarantors, whether or not the Exchange Offer or a Shelf Registration is filed or becomes effective, including, without limitation, (i) all registration and filing fees, including, without limitation, (A) fees with respect to filings required to be made with FINRA in connection with any underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws as provided in Section 6(h) hereof (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the Holders are located, in the case of the Exchange Notes, or (y) as provided in Section 6(h), in the case of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter or underwriters, if any, or by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Registration Statement or by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery expenses incurred in connection with the performance of their obligations hereunder, (iv) fees and disbursements of counsel for the Issuer, the Subsidiary Guarantors and, subject to 7(b), the Holders, (v) fees and disbursements of all independent certified public accountants referred to in Section 6 (including, without limitation, the expenses of any special audit and “cold comfort” letters required by or incident to such performance), (vi) rating agency fees and the fees and expenses incurred in connection with the listing of the Securities to be registered on any securities exchange, (vii) Securities Act liability insurance, if the Issuer and the Subsidiary Guarantors desire such insurance, (viii) fees and expenses of all other Persons retained by the Issuer and the Subsidiary Guarantors, (ix) fees and expenses of any “qualified independent underwriter” or other independent appraiser participating in an offering pursuant to Section 3 of Schedule E to the By-laws of FINRA, but only where the need for such a “qualified independent underwriter” arises due to a relationship with the Issuer and the Subsidiary Guarantors, (x) internal expenses of the Issuer and the Subsidiary Guarantors (including, without limitation, all salaries and expenses of officers and employees of the Issuer or the Subsidiary Guarantors performing legal or accounting duties), (xi) the expense of any annual audit, (xii) the fees and expenses of the Trustee and the Exchange Agent and (xiii) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, securities sales agreements, indentures and any other documents necessary in order to comply with this Agreement.
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(b)
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The Issuer and the Subsidiary Guarantors shall reimburse the Holders for the reasonable fees and disbursements of not more than one counsel chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in any Registration Statement. The Issuer and the Subsidiary Guarantors shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of the Exchange Notes or Private Exchange Notes in exchange for the Notes; provided that the Issuer shall not be required to pay taxes payable in respect of any transfer involved in the issuance or delivery of any Exchange Note or Private Exchange Note in a name other than that of the Holder of the Note in respect of which such Exchange Note or Private Exchange Note is being issued. The Issuer and the Subsidiary Guarantors shall reimburse the Holders for fees and expenses (including reasonable fees and expenses of counsel to the Holders) relating to any enforcement of any rights of the Holders under this Agreement.
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(a)
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Indemnification by the Issuer and the Subsidiary Guarantors. Each of the Issuer and the Subsidiary Guarantors jointly and severally agrees to indemnify and hold harmless each Holder of Registrable Notes, Exchange Notes or Private Exchange Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, each Person, if any, who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) and the officers, directors and partners of each such Holder, Participating Broker-Dealer and controlling person, to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees as provided in this Section 8) and expenses (including, without limitation, reasonable costs and expenses incurred in connection with investigating, preparing, pursuing or defending against any of the foregoing) (collectively, “Losses”), as incurred, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus, or in any amendment or supplement thereto, or in any preliminary prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Losses are solely based upon information relating to such Holder or Participating Broker-Dealer and furnished in writing to the Issuer and the Subsidiary Guarantors (or reviewed and approved in writing) by such Holder or Participating Broker-Dealer or their counsel expressly for use therein; provided, however, that the Issuer and the Subsidiary Guarantors will not be liable to any Indemnified Party (as defined below) under this Section 8 to the extent Losses were solely caused by an untrue statement or omission or alleged untrue statement or omission that was contained or made in any preliminary prospectus and corrected in the Prospectus or any amendment or supplement thereto if (i) the Prospectus does not contain any other untrue statement or omission or alleged untrue statement or omission of a material fact that was the subject matter of the related proceeding, (ii) any such Losses resulted from an action, claim or suit by any Person who purchased Registrable Notes or Exchange Notes which are the subject thereof from such Indemnified Party and (iii) it is established in the related proceeding that such Indemnified Party failed to deliver or provide a copy of the Prospectus (as amended or supplemented) to such Person with or prior to the confirmation of the sale of such Registrable Notes or Exchange Notes sold to such Person if required by applicable law, unless such failure to deliver or provide a copy of the Prospectus (as amended or supplemented) was a result of noncompliance by the Issuer with Section 6 of this Agreement. Each of the Issuer and the Subsidiary Guarantors also agrees to indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers, directors, agents and employees and each Person who controls such Persons (within the meaning of Section 5 of the Securities Act or Section 20(a) of the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders or the Participating Broker-Dealer.
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(b)
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Indemnification by Holder. In connection with any Registration Statement, Prospectus or form of prospectus, any amendment or supplement thereto, or any preliminary prospectus in which a Holder is participating, such Holder shall furnish to the Issuer and the Subsidiary Guarantors in writing such information as the Issuer and the Subsidiary Guarantors reasonably request for use in connection with any Registration Statement, Prospectus or form of prospectus, any amendment or supplement thereto, or any preliminary prospectus and shall indemnify and hold harmless the Issuer, the Subsidiary Guarantors, their respective directors and each Person, if any, who controls the Issuer and the Subsidiary Guarantors (within the meaning of Section 15 of the Securities Act and Section 20(a) of the Exchange Act), and the directors, officers and partners of such controlling persons, to the fullest extent lawful, from and against all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading to the extent, but only to the extent, that such losses are finally judicially determined by a court of competent jurisdiction in a final, unappealable order to have resulted solely from an untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact contained in or omitted from any information so furnished in writing by such Holder to the Issuer and the Subsidiary Guarantors expressly for use therein. Notwithstanding the foregoing, in no event shall the liability of any selling Holder be greater in amount than such Holder’s Maximum Contribution Amount (as defined below).
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(c)
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Conduct of Indemnification Proceedings. If any proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the party or parties from which such indemnity is sought (the “Indemnifying Party” or “Indemnifying Parties”, as applicable) in writing; provided, that the failure to so notify the Indemnifying Parties shall not (i) relieve such Indemnifying Party from any obligation or liability unless and only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event, relieve the Indemnifying Party from any obligations to any Indemnified Party.
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The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party, within twenty (20) Business Days after receipt of written notice from such Indemnified Party of such proceeding, to assume, at its expense, the defense of any such proceeding, provided, that an Indemnified Party shall have the right to employ separate counsel in any such proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or parties unless: (1) the Indemnifying Party has agreed to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such proceeding or shall have failed to employ counsel reasonably satisfactory to such Indemnified Party; or (3) the named parties to any such proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party or any of its affiliates or controlling persons, and such Indemnified Party shall have been advised by counsel that there may be one or more defenses available to such Indemnified Party that are in addition to, or in conflict with, those defenses available to the Indemnifying Party or such affiliate or controlling person (in which case, if such Indemnified Party notifies the Indemnifying Parties in writing that it elects to employ separate counsel at the expense of the Indemnifying Parties, the Indemnifying Parties shall not have the right to assume the defense and the reasonable fees and expenses of such counsel shall be at the expense of the Indemnifying Party; it being understood, however, that, the Indemnifying Party shall not, in connection with any one such proceeding or separate but substantially similar or related proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such Indemnified Party).
No Indemnifying Party shall be liable for any settlement of any such proceeding effected without its written consent, which shall not be unreasonably withheld, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such proceeding, each Indemnifying Party jointly and severally agrees, subject to the exceptions and limitations set forth above, to indemnify and hold harmless each Indemnified Party from and against any and all Losses by reason of such settlement or judgment. The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement unless such judgment or settlement (i) includes as an unconditional term thereof the giving by the claimant or plaintiff to each Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such proceeding for which such Indemnified Party would be entitled to indemnification hereunder (whether or not any Indemnified Party is a party thereto) and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.
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(d)
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Contribution. If the indemnification provided for in this Section 8 is unavailable to an Indemnified Party or is insufficient to hold such Indemnified Party harmless for any Losses in respect of which this Section 8 would otherwise apply by its terms (other than by reason of exceptions provided in this Section 8), then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall have a joint and several obligation to contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such statement or omission. The amount paid or payable by an Indemnified Party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any proceeding, to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in Section 8(a) or 8(b) was available to such party.
|
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(d), a selling Holder shall not be required to contribute, in the aggregate, any amount in excess of such Holder's Maximum Contribution Amount. A selling Holder's “Maximum Contribution Amount” shall equal the excess of (i) the aggregate proceeds received by such Holder pursuant to the sale of such Registrable Notes or Exchange Notes over (ii) the aggregate amount of damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(d) are several in proportion to the respective principal amount of the Registrable Securities held by each Holder hereunder and not joint. The Issuer’s and Subsidiary Guarantors’ obligations to contribute pursuant to this Section 8(d) are joint and several.
The indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
The Issuer covenants that it shall (a) file the reports required to be filed by it (if so required) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuer is not required to file such reports, it will, upon the written request of any Holder of Registrable Notes, make publicly available other information necessary to permit sales pursuant to Rule 144 and 144A and (b) take such further action as any Holder may reasonably request in writing, all to the extent required from time to time to enable such Holder to sell Registrable Notes without registration under the Securities Act pursuant to the exemptions provided by Rule 144 and Rule 144A. Upon the request of any Holder, the Issuer shall deliver to such Holder a written statement as to whether it has complied with such information and requirements.
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10.
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Underwritten Registrations of Registrable Notes
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If any of the Registrable Notes covered by any Shelf Registration is to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering; provided, however, that such investment banker or investment bankers and manager or managers must be reasonably acceptable to the Issuer.
No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.
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(a)
|
Remedies. In the event of a breach by either the Issuer or any of the Subsidiary Guarantors of any of their respective obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights provided herein, in the Indenture or, in the case of the Initial Purchasers, in the Purchase Agreement, or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Issuer and the Subsidiary Guarantors agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by either the Issuer or any of the Subsidiary Guarantors of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, the Issuer shall (and shall cause each Subsidiary Guarantor to) waive the defense that a remedy at law would be adequate.
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(b)
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No Inconsistent Agreements. The Issuer and each of the Subsidiary Guarantors have not entered, as of the date hereof, and the Issuer and each of the Subsidiary Guarantors shall not enter, after the date of this Agreement, into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Securities in this Agreement or otherwise conflicts with the provisions hereof. The Issuer and each of the Subsidiary Guarantors have not entered and will not enter into any agreement with respect to any of its securities that will grant to any Person piggy-back rights with respect to a Registration Statement.
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(c)
|
Adjustments Affecting Registrable Notes. The Issuer shall not, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders to include such Registrable Notes in a registration undertaken pursuant to this Agreement.
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(d)
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Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes in circumstances that would adversely affect any Holders of Registrable Notes; provided, however, that Section 8 and this Section 11(d) may not be amended, modified or supplemented without the prior written consent of each Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being tendered pursuant to the Exchange Offer or sold pursuant to a Notes Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being tendered or being sold by such Holders pursuant to such Notes Registration Statement.
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(e)
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Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, next-day air courier or telecopier:
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|
(i)
|
if to a Holder of Securities or to any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar of the Notes, with a copy in like manner to Jefferies as follows:
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Jefferies & Company, Inc.
520 Madison Avenue
New York, New York 10022
Attention: General Counsel
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(ii)
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if to the Initial Purchasers, at the address specified in Section 11(e)(1);
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(iii)
|
if to the Issuer or any Subsidiary Guarantor, as follows:
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Kratos Defense & Security Solutions, Inc.
4820 Eastgate Mall
San Diego, California 92121
Attention: Eric Demarco
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
4747 Executive Drive, 12th Floor
San Diego, California 92121
Attention: Deyan Spiridonov
All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the United States mail, postage prepaid, if mailed, one business day after being deposited in the United States mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier guaranteeing overnight delivery; and when receipt is acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee under the Indenture at the address specified in such Indenture.
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(f)
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Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including, without limitation and without the need for an express assignment, subsequent Holders of Securities.
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(g)
|
Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
|
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(h)
|
Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
|
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(i)
|
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW. THE ISSUER AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR THEIR AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUER AND THE SUBSIDIARY GUARANTORS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUER AND THE SUBSIDIARY GUARANTORS IRREVOCABLY CONSENT, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUER AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER AND THE SUBSIDIARY GUARANTORS IN ANY OTHER JURISDICTION.
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(j)
|
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
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(k)
|
Securities Held by the Issuer or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Securities is required hereunder, Securities held by the Issuer or its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
|
|
(l)
|
Third Party Beneficiaries. Holders and Participating Broker-Dealers are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Persons.
|
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(m)
|
Entire Agreement. This Agreement, together with the Purchase Agreement, the Indenture and the Collateral Agreements, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understanding, correspondence, conversations and memoranda between the Initial Purchasers on the one hand and the Issuer and the Subsidiary Guarantors on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby.
|
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
|
|
KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
|
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
AI METRIX, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
AIRORLITE COMMUNICATIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
AVTEC SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
CHARLESTON MARINE CONTAINERS INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
CVG, INCORPORATED
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DALLASTOWN REALTY I, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Gichner Holdings, Inc., sole member of Dallastown Realty I, LLC
DALLASTOWN REALTY II, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Dallastown Realty I, LLC, sole member of Dallastown Realty II, LLC
DEFENSE SYSTEMS, INCORPORATED
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DEI SERVICES CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DIGITAL FUSION SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DIGITAL FUSION, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DIVERSIFIED SECURITY SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
DTI ASSOCIATES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
GENERAL MICROWAVE CORPORATION (DBA HERLEY NEW YORK)
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
GENERAL MICROWAVE ISRAEL CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
GICHNER HOLDINGS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
GICHNER SYSTEMS INTERNATIONAL, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
GICHNER SYSTEMS GROUP, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HAVERSTICK CONSULTING, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HAVERSTICK GOVERNMENT SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Delaware corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Colorado corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a Virginia corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a New Jersey corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, INC.,
a California corporation
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HENRY BROS. ELECTRONICS, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Henry Bros. Electronics, Inc., sole member of Henry Bros. Electronics, LLC
HERLEY INDUSTRIES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HERLEY-CTI, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HERLEY-RSS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
HGS HOLDINGS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
INTEGRAL SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
IRIS ACQUISITION SUB LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Kratos Defense & Security Solutions, Inc., sole member of Iris Acquisition Sub LLC
JMA ASSOCIATES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS DEFENSE ENGINEERING SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS PUBLIC SAFETY & SECURITY SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS MID-ATLANTIC, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS SOUTHEAST, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS SOUTHWEST L.P.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Kratos Texas, Inc., General Partner of Kratos Southwest L.P.
KRATOS TEXAS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
LUMISTAR, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
LVDM, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
MADISON RESEARCH CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
MICRO SYSTEMS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
MSI ACQUISITION CORP.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
NATIONAL SAFE OF CALIFORNIA, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
NEWPOINT TECHNOLOGIES, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
POLEXIS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
REAL TIME LOGIC, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
REALITY BASED IT SERVICES, LTD.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
ROCKET SUPPORT SERVICES, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of HGS Holdings, Inc., sole managing member of Rocket Support Services LLC
SAT CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
SHADOW I, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
SHADOW II, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
SHADOW III, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
SCT ACQUISITION, LLC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of Charlestown Marine Containers Inc., sole member of SCT Acquisition, LLC
SCT REAL ESTATE, LLC
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer of SCT Acquisition, LLC, sole member of SCT Real Estate, LLC
STAPOR RESEARCH, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
SUMMIT RESEARCH CORPORATION
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
KRATOS TECHNOLOGY & TRAINING SOLUTIONS, INC.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
WFI NMC CORP.
By: /s/ Deanna H. Lund
Name: Deanna H. Lund
Title: Executive Vice President and Chief Financial Officer
ACCEPTED AND AGREED TO:
JEFFERIES & COMPANY, INC.
By: /s/ Kevin Lockhart_______
Name: Kevin Lockhart
Title: Managing Director
KEYBANC CAPITAL MARKETS INC.
By: /s/ Eric Peiffer________________
Name: Eric Peiffer
Title: Managing Director
B. RILEY & CO., LLC
By: /s/ Tom Kelleher________
Name: Tom Kelleher
Title: CEO
Published Transaction CUSIP Number: 50077GAA5
Published Revolver CUSIP Number: 50077GAB3
CREDIT AND SECURITY AGREEMENT
among
KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
as Borrower
THE LENDERS NAMED HEREIN
as Lenders
and
KEYBANK NATIONAL ASSOCIATION
as Lead Arranger, Sole Book Runner and Administrative Agent
____________________
dated as of May 19, 2010,
as amended and restated as of July 27, 2011
_____________________
Page
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ARTICLE I. DEFINITIONS
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2
|
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Section 1.1. Definitions
|
2
|
|
Section 1.2. Accounting Terms
|
37
|
|
Section 1.3. Terms Generally
|
37
|
|
ARTICLE II. AMOUNT AND TERMS OF CREDIT
|
37
|
|
Section 2.1. Amount and Nature of Credit
|
37
|
|
Section 2.2. Revolving Credit Commitment
|
38
|
|
Section 2.3. Interest
|
43
|
|
Section 2.4. Evidence of Indebtedness
|
45
|
|
Section 2.5. Notice of Credit Event; Funding of Loans
|
45
|
|
Section 2.6. Payment on Loans and Other Obligations
|
47
|
|
Section 2.7. Prepayment
|
48
|
|
Section 2.8. Commitment and Other Fees
|
49
|
|
Section 2.9. Modifications to Commitment
|
49
|
|
Section 2.10. Computation of Interest and Fees
|
51
|
|
Section 2.11. Mandatory Payments
|
51
|
|
Section 2.12. Establishment of Reserves
|
52
|
|
Section 2.13. Addition of Borrowing Base Company
|
52
|
|
Section 2.14. Record of Advances; Application of Collections
|
52
|
|
Section 2.15. Protective Advances
|
54
|
|
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR LOANS; INCREASED CAPITAL; TAXES
|
54
|
|
Section 3.1. Requirements of Law
|
54
|
|
Section 3.2. Taxes
|
56
|
|
Section 3.3. Funding Losses
|
57
|
|
Section 3.4. Eurodollar Rate Lending Unlawful; Inability to Determine Rate
|
57
|
|
Section 3.5. Discretion of Lenders as to Manner of Funding
|
58
|
|
ARTICLE IV. CONDITIONS PRECEDENT
|
58
|
|
Section 4.1. Conditions to Each Credit Event
|
58
|
|
Section 4.2. Certain Closing Deliveries Under Original Credit Agreement
|
59
|
|
Section 4.3. Closing Deliveries Under Restated Credit Agreement
|
60
|
|
Section 4.4. Post-Closing Conditions
|
63
|
|
ARTICLE V. COVENANTS
|
64
|
|
Section 5.1. Insurance
|
64
|
|
Section 5.2. Money Obligations
|
64
|
|
Section 5.3. Financial Statements, Collateral Reporting and Information
|
65
|
|
Section 5.4. Financial Records
|
68
|
|
Section 5.5. Franchises; Change in Business
|
68
|
|
Section 5.6. ERISA Pension and Benefit Plan Compliance
|
68
|
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Section 5.7. Financial Covenants
|
69
|
|
Section 5.8. Borrowing
|
70
|
|
Section 5.9. Liens
|
71
|
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Section 5.10. Regulations T, U and X
|
72
|
|
Section 5.11. Investments, Loans and Guaranties
|
73
|
|
Section 5.12. Merger and Sale of Assets
|
74
|
|
Section 5.13. Acquisitions
|
75
|
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Section 5.14. Notice
|
76
|
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Section 5.15. Restricted Payments
|
77
|
|
Section 5.16. Environmental Compliance
|
78
|
|
Section 5.17. Affiliate Transactions
|
78
|
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Section 5.18. Use of Proceeds
|
79
|
|
Section 5.19. Corporate Names and Locations of Collateral
|
79
|
|
Section 5.20. Subsidiary Guaranties, Security Documents and Pledge of Stock or Other Ownership Interest
|
79
|
|
Section 5.21. Collateral
|
80
|
|
Section 5.22. Government Contracts
|
83
|
|
Section 5.23. Commercial Tort Claims
|
83
|
|
Section 5.24. Returns of Inventory
|
83
|
|
Section 5.25. Acquisition, Sale and Maintenance of Inventory
|
83
|
|
Section 5.26. Property Acquired Subsequent to the Closing Date and Right to Take Additional Collateral
|
83
|
|
Section 5.27. Restrictive Agreements
|
84
|
|
Section 5.28. Other Covenants and Provisions
|
84
|
|
Section 5.29. Pari Passu Ranking
|
85
|
|
Section 5.30. Guaranty Under Material Indebtedness Agreement
|
85
|
|
Section 5.31. Senior Notes Documents
|
85
|
|
Section 5.32. Amendment of Organizational Documents
|
85
|
|
Section 5.33. Fiscal Year of the Borrower
|
85
|
|
Section 5.34. Further Assurances
|
85
|
|
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
|
86
|
|
Section 6.1. Corporate Existence; Subsidiaries; Foreign Qualification
|
86
|
|
Section 6.2. Corporate Authority
|
86
|
|
Section 6.3. Compliance with Laws and Contracts
|
86
|
|
Section 6.4. Litigation and Administrative Proceedings
|
87
|
|
Section 6.5. Title to Assets
|
87
|
|
Section 6.6. Liens and Security Interests
|
87
|
|
Section 6.7. Tax Returns
|
88
|
|
Section 6.8. Environmental Laws
|
88
|
|
Section 6.9. Locations
|
88
|
|
Section 6.10. Continued Business
|
88
|
|
Section 6.11. Employee Benefits Plans
|
89
|
|
Section 6.12. Consents or Approvals
|
90
|
|
Section 6.13. Solvency
|
90
|
|
Section 6.14. Financial Statements
|
90
|
|
Section 6.15. Regulations
|
90
|
|
Section 6.16. Material Agreements
|
90
|
|
Section 6.17. Intellectual Property
|
91
|
|
Section 6.18. Insurance
|
91
|
|
Section 6.19. Deposit and Securities Accounts
|
91
|
|
Section 6.20. Accurate and Complete Statements
|
91
|
|
Section 6.21. Senior Notes Documents
|
91
|
|
Section 6.22. Investment Company; Other Restrictions
|
91
|
|
Section 6.23. Assigned Government Contracts
|
92
|
|
Section 6.24. Pledged Notes
|
92
|
|
Section 6.25. Pledged Securities
|
92
|
|
Section 6.26. Defaults
|
92
|
|
ARTICLE VII. SECURITY
|
93
|
|
Section 7.1. Security Interest in Collateral
|
93
|
|
Section 7.2. Cash Management System
|
93
|
|
Section 7.3. Collections and Receipt of Proceeds by the Administrative Agent
|
95
|
|
Section 7.4. Administrative Agent’s Authority Under Pledged Notes
|
96
|
|
Section 7.5. Commercial Tort Claims
|
96
|
|
Section 7.6. Use of Inventory and Equipment
|
96
|
|
ARTICLE VIII. EVENTS OF DEFAULT
|
97
|
|
Section 8.1. Payments
|
97
|
|
Section 8.2. Special Covenants
|
97
|
|
Section 8.3. Other Covenants
|
97
|
|
Section 8.4. Representations and Warranties
|
97
|
|
Section 8.5. Cross Default
|
97
|
|
Section 8.6. ERISA Default
|
98
|
|
Section 8.7. Change in Control
|
98
|
|
Section 8.8. Judgments
|
98
|
|
Section 8.9. Material Adverse Change
|
98
|
|
Section 8.10. Security
|
98
|
|
Section 8.11. Validity of Loan Documents
|
99
|
|
Section 8.12. Solvency
|
99
|
|
ARTICLE IX. REMEDIES UPON DEFAULT
|
99
|
|
Section 9.1. Optional Defaults
|
100
|
|
Section 9.2. Automatic Defaults
|
100
|
|
Section 9.3. Letters of Credit
|
100
|
|
Section 9.4. Offsets
|
100
|
|
Section 9.5. Equalization Provisions
|
101
|
|
Section 9.6. Collateral
|
101
|
|
Section 9.7. Other Remedies
|
102
|
|
Section 9.8. Application of Proceeds
|
102
|
|
ARTICLE X. THE ADMINISTRATIVE AGENT
|
103
|
|
Section 10.1. Appointment and Authorization
|
103
|
|
Section 10.2. Note Holders
|
104
|
|
Section 10.3. Consultation With Counsel
|
104
|
|
Section 10.4. Documents
|
104
|
|
Section 10.5. Administrative Agent and Affiliates
|
104
|
|
Section 10.6. Knowledge or Notice of Default
|
104
|
|
Section 10.7. Action by Administrative Agent
|
105
|
|
Section 10.8. Release of Collateral or Guarantor of Payment
|
105
|
|
Section 10.9. Delegation of Duties
|
105
|
|
Section 10.10. Indemnification of Administrative Agent
|
106
|
|
Section 10.11. Successor Administrative Agent
|
106
|
|
Section 10.12. Fronting Lender
|
107
|
|
Section 10.13. Swing Line Lender
|
107
|
|
Section 10.14. Administrative Agent May File Proofs of Claim
|
107
|
|
Section 10.15. No Reliance on Administrative Agent’s Customer Identification Program
|
107
|
|
Section 10.16. Other Agents
|
108
|
|
ARTICLE XI. MISCELLANEOUS
|
108
|
|
Section 11.1. Lenders’ Independent Investigation
|
108
|
|
Section 11.2. No Waiver; Cumulative Remedies
|
108
|
|
Section 11.3. Amendments, Waivers and Consents
|
108
|
|
Section 11.4. Notices
|
110
|
|
Section 11.5. Costs, Expenses and Documentary Taxes
|
110
|
|
Section 11.6. Indemnification
|
111
|
|
Section 11.7. Obligations Several; No Fiduciary Obligations
|
111
|
|
Section 11.8. Execution in Counterparts
|
111
|
|
Section 11.9. Binding Effect; Borrower’s Assignment
|
112
|
|
Section 11.10. Lender Assignments
|
112
|
|
Section 11.11. Sale of Participations
|
114
|
|
Section 11.12. Replacement of Affected Lenders
|
114
|
|
Section 11.13. Patriot Act Notice
|
115
|
|
Section 11.14. Severability of Provisions; Captions; Attachments
|
115
|
|
Section 11.15. Investment Purpose
|
115
|
|
Section 11.16. Entire Agreement
|
115
|
|
Section 11.17. Confidentiality
|
116
|
|
Section 11.18. Limitations on Liability of the Fronting Lender
|
116
|
|
Section 11.19. General Limitation of Liability
|
117
|
|
Section 11.20. No Duty
|
117
|
|
Section 11.21. Legal Representation of Parties
|
117
|
|
Section 11.22. Governing Law; Submission to Jurisdiction
|
117
|
|
Section 11.23. Legend
|
118
|
|
Jury Trial Waiver
|
Signature Page 119
|
|
Exhibit A
|
Form of Revolving Credit Note
|
|
Exhibit B
|
Form of Swing Line Note
|
|
Exhibit C
|
Form of Borrowing Base Certificate
|
|
Exhibit D
|
Form of Notice of Loan
|
|
Exhibit E
|
Form of Compliance Certificate
|
|
Exhibit F
|
Form of Assignment and Acceptance Agreement
|
|
Exhibit G
|
Form of Instrument of Assignment
|
|
Exhibit H
|
Form of Notice of Assignment of Claims
|
| |
|
|
Schedule 1
|
Commitments of Lenders
|
|
Schedule 2
|
Guarantors of Payment
|
|
Schedule 2.2
|
Existing Letters of Credit
|
|
Schedule 3
|
Borrowing Base Companies
|
|
Schedule 4
|
Pledged Securities
|
|
Schedule 5
|
Real Property
|
|
Schedule 5.3
|
Monthly and Quarterly Reporting Periods
|
|
Schedule 5.8
|
Indebtedness
|
|
Schedule 5.9
|
Liens
|
|
Schedule 5.11
|
Permitted Foreign Subsidiary Loans, Guaranties and Investments
|
|
Schedule 5.17
|
Affiliate Transactions
|
|
Schedule 6.1
|
Corporate Existence; Subsidiaries; Foreign Qualification
|
|
Schedule 6.4
|
Litigation and Administrative Proceedings
|
|
Schedule 6.5
|
Real Estate Owned by the Companies
|
|
Schedule 6.9
|
Locations
|
|
Schedule 6.11
|
Employee Benefits Plans
|
|
Schedule 6.16
|
Material Agreements
|
|
Schedule 6.17
|
Intellectual Property
|
|
Schedule 6.18
|
Insurance
|
|
Schedule 6.19
|
Deposit and Securities Accounts
|
|
Schedule 6.23
|
Assigned Government Contracts
|
|
Schedule 7.4
|
Pledged Notes
|
|
Schedule 7.5
|
Commercial Tort Claims
|
This CREDIT AND SECURITY AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this “Agreement”) is made effective as of May 19, 2010, as amended and restated as of July 27, 2011 among:
(a) KRATOS DEFENSE & SECURITY SOLUTIONS, INC., a Delaware corporation (the “Borrower”);
(b) the lenders listed on Schedule 1 hereto and each other Eligible Transferee, as hereinafter defined, that from time to time becomes a party hereto pursuant to Section 2.9(b) or 11.10 hereof (collectively, the “Lenders” and, individually, each a “Lender”); and
(c) KEYBANK NATIONAL ASSOCIATION, a national banking association, as the lead arranger, sole book runner and administrative agent for the Lenders under this Agreement (the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrower, the Administrative Agent and the lenders named therein entered into that certain Credit and Security Agreement, dated as of May 19, 2010 (as amended, the “Original Credit Agreement”);
WHEREAS, this Agreement amends and restates in its entirety the Original Credit Agreement and, upon the effectiveness of this Agreement, the terms and provisions of the Original Credit Agreement shall be superseded hereby. All references to “Credit Agreement” contained in the Loan Documents, as defined in the Original Credit Agreement, delivered in connection with the Original Credit Agreement shall be deemed to refer to this Agreement. Notwithstanding the amendment and restatement of the Original Credit Agreement by this Agreement, the obligations outstanding (including, but not limited to, the letters of credit issued and outstanding) under the Original Credit Agreement as of July 27, 2011 shall remain outstanding and constitute continuing Obligations hereunder. Such outstanding Obligations and the guaranties of payment thereof shall in all respects be continuing, and this Agreement shall not be deemed to evidence or result in a novation or repayment and re-borrowing of such Obligations. In furtherance of, and without limiting, the foregoing, from and after the date hereof and except as expressly specified herein, the terms, conditions, and covenants governing the obligations outstanding under the Original Credit Agreement shall be solely as set forth in this Agreement, which shall supersede the Original Credit Agreement in its entirety;
WHEREAS, it is the intent of the Borrower, the Administrative Agent and the Lenders that the provisions of this Agreement be effective commencing on the Closing Date; and
WHEREAS, the Borrower, the Administrative Agent and the Lenders desire to contract for the establishment of credits in the aggregate principal amounts hereinafter set forth, to be made available to the Borrower upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
“Account” means an account, as that term is defined in the U.C.C.
“Account Debtor” means an account debtor, as that term is defined in the U.C.C., or any other Person obligated to pay all or any part of an Account in any manner and includes (without limitation) any Guarantor thereof.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person (other than a Company), or any business or division of any Person (other than a Company), (b) the acquisition of in excess of fifty percent (50%) of the outstanding capital stock (or other equity interest) of any Person (other than a Company), or (c) the acquisition of another Person (other than a Company) by a merger, amalgamation or consolidation or any other combination with such Person.
“Additional Commitments” means that term as defined in Section 2.9(b) hereof.
“Additional Lender” means an Eligible Transferee that shall become a Lender during the Commitment Increase Period pursuant to Section 2.9(b) hereof.
“Additional Lender Assumption Agreement” means an additional lender assumption agreement, in form and substance satisfactory to the Administrative Agent, wherein an Additional Lender shall become a Lender.
“Additional Lender Assumption Effective Date” means that term as defined in Section 2.9(b) hereof.
“Administrative Agent” means that term as defined in the first paragraph hereof.
“Administrative Agent Fee Letter” means the Administrative Agent Fee Letter between the Borrower and the Administrative Agent, dated as of the Closing Date, as the same may from time to time be amended, restated or otherwise modified.
“Advance Record” means that term as defined in Section 2.14(a) hereof.
“Advantage” means any payment (whether made voluntarily or involuntarily, by offset of any deposit or other indebtedness or otherwise) received by any Lender in respect of the Obligations, if such payment results in that Lender having less than its pro rata share (based upon its Commitment Percentage) of the Obligations then outstanding.
“Affected Lender” means a Defaulting Lender, an Insolvent Lender or a Downgraded Lender.
“Affiliate” means any Person, directly or indirectly, controlling, controlled by or under common control with a Company, and “control” (including the correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the power, directly or indirectly, to direct or cause the direction of the management and policies of a Company, whether through the ownership of voting securities, by contract or otherwise.
“Agent” means the Administrative Agent.
“Agreement” means that term as defined in the first paragraph hereof.
“Applicable Commitment Fee Rate” means:
(a) for the period from the Closing Date through August 31, 2011, seventy-five (75.00) basis points; and
(b) commencing September 1, 2011, the Average Monthly Revolving Credit Availability for the most recently completed calendar month shall be used to establish the number of basis points that will go into effect on September 1, 2011 and thereafter, as provided below:
|
Average Monthly Revolving Credit Availability
|
Applicable Commitment Fee Rate
|
|
Less than or equal to $25,000,000
|
50.00 basis points
|
|
Greater than $25,000,000
|
75.00 basis points
|
After September 1, 2011, changes to the Applicable Commitment Fee Rate shall be effective on the first day of each calendar month and shall be based on the Average Monthly Revolving Credit Availability for the most recently completed calendar month. Anything in this definition to the contrary notwithstanding, if the Revolving Amount is reduced for any reason, the Dollar amounts set forth in the foregoing pricing matrix shall also be correspondingly reduced by the amount of any such reduction in the Revolving Amount. The above pricing matrix does not modify or waive, in any respect, the rights of the Administrative Agent and the Lenders to charge the Default Rate, or the rights and remedies of the Administrative Agent and the Lenders pursuant to Articles VIII and IX hereof.
“Applicable Margin” means:
(a) for the period from the Closing Date through August 31, 2011, three hundred (300.00) basis points for Eurodollar Loans and one hundred (100.00) basis points for Base Rate Loans; and
(b) commencing September 1, 2011, the Average Monthly Revolving Credit Availability for the most recently completed calendar month shall be used to establish the number of basis points that will go into effect on September 1, 2011 and thereafter, as provided below:
|
Average Monthly Revolving Credit Availability
|
Applicable Basis
Points for Eurodollar Loans
|
Applicable Basis
Points for
Base Rate Loans
|
|
Less than $10,000,000
|
375.00
|
175.00
|
|
Greater than or equal to $10,000,000 and less than or equal to $25,000,000
|
350.00
|
150.00
|
|
Greater than $25,000,000
|
300.00
|
100.00
|
After September 1, 2011, changes to the Applicable Margin shall be effective on the first day of each calendar month and shall be based on the Average Monthly Revolving Credit Availability for the most recently completed calendar month. Anything in this definition to the contrary notwithstanding, if the Revolving Amount is reduced for any reason, the Dollar amounts set forth in the foregoing pricing matrix shall also be correspondingly reduced by the amount of any such reduction in the Revolving Amount. The above pricing matrix does not modify or waive, in any respect, the rights of the Administrative Agent and the Lenders to charge the Default Rate, or the rights and remedies of the Administrative Agent and the Lenders pursuant to Articles VIII and IX hereof.
“Assigned Government Contract” means all Government Contracts that (a) are for an amount in excess of Five Hundred Thousand Dollars ($500,000), or (b) pursuant to the terms of Section 5.22 hereof, are required to be subject to an Instrument of Assignment and Notice of Assignment of Claims.
“Assignment Agreement” means an Assignment and Acceptance Agreement in the form of the attached Exhibit F.
“Authorized Officer” means a Financial Officer or other individual authorized by a Financial Officer in writing (with a copy to the Administrative Agent) to handle certain administrative matters in connection with this Agreement.
“Available Liquidity” means, at any date, the sum of (a) the aggregate unrestricted and unencumbered cash on hand of the Borrower and the other Borrowing Base Companies held at financial institutions located in the United States that are Lenders, plus (b) the Revolving Credit Availability.
“Average Monthly Revolving Credit Availability” means, for any calendar month, the average daily Revolving Credit Availability in effect during such calendar month.
“Bailee’s Waiver” means a bailee’s waiver, in form and substance satisfactory to the Administrative Agent, delivered by a Credit Party in connection with this Agreement, as such waiver may from time to time be amended, restated or otherwise modified.
“Bank Product Agreements” means those certain cash management services and other agreements entered into from time to time between a Company and the Administrative Agent or a Lender (or an affiliate of a Lender) in connection with any of the Bank Products.
“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by a Company to the Administrative Agent or any Lender (or an affiliate of a Lender) pursuant to or evidenced by the Bank Product Agreements.
“Bank Products” means a service or facility extended to a Company by the Administrative Agent or any Lender (or an affiliate of a Lender) for (a) credit cards and credit card processing services (b) debit and purchase cards, (c) ACH transactions, and (d) cash management, including controlled disbursement accounts or services.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now or hereafter in effect, or any successor thereto, as hereafter amended.
“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate on such day, (b) one-half of one percent (0.50%) in excess of the Federal Funds Effective Rate on such day, and (c) one hundred (100.00) basis points in excess of the London Interbank Offered Rate on such day for loans in Eurodollars with an Interest Period of one month (or, if such day is not a Business Day, such rate as calculated on the most recent Business Day). Any change in the Base Rate shall be effective immediately from and after such change in the Base Rate.
“Base Rate Loan” means a Revolving Loan described in Section 2.2(a) hereof, that shall be denominated in Dollars and on which the Borrower shall pay interest at a rate based on the Derived Base Rate.
“Borrower” means that term as defined in the first paragraph hereof.
“Borrowing Base” means an amount equal to the total of the following:
(a) up to eighty-five percent (85%) of the aggregate amount due and owing on Eligible Accounts Receivable of the Borrowing Base Companies; plus
(b) the lesser of (i) up to seventy percent (70%) of the aggregate amount due and owing on Eligible Unbilled Receivables of the Borrowing Base Companies, or (ii) Fifteen Million Dollars ($15,000,000); plus
(c) the lesser of (i) up to ten percent (10%) of the aggregate of the cost or market value (whichever is lower), as determined on an average cost method basis (or first-in first-out basis) in accordance with GAAP, of the Eligible Inventory of the Borrowing Base Companies, or (ii) Seven Million Five Hundred Thousand Dollars ($7,500,000); minus
(d) Reserves, if any;
provided that, anything herein to the contrary notwithstanding, the Administrative Agent shall at all times have the right to modify or reduce such percentages or dollar amount caps from time to time, in its reasonable credit judgment.
“Borrowing Base Certificate” means a Borrowing Base Certificate, in the form of the attached Exhibit C.
“Borrowing Base Company” means each Company listed on Schedule 3 hereto, and each additional Company that shall become a Borrowing Base Company pursuant to Section 2.13 hereof.
“Business Day” means a day that is not a Saturday, a Sunday or another day of the year on which national banks are authorized or required to close in Cleveland, Ohio, and, in addition, if the applicable Business Day relates to a Eurodollar Loan, is a day of the year on which dealings in deposits are carried on in the London interbank Eurodollar market.
“Capital Distribution” means a payment made, liability incurred or other consideration given by a Company to any Person that is not a Company, (a) for the purchase, acquisition, redemption, repurchase, payment or retirement of any capital stock or other equity interest of such Company, or (b) as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of such Company) in respect of such Company’s capital stock or other equity interest.
“Capitalized Lease Obligations” means obligations of the Companies for the payment of rent for any real or personal property under leases or agreements to lease that, in accordance with GAAP, have been or should be capitalized on the books of the lessee and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Collateral Account” means a commercial Deposit Account designated “cash collateral account” and maintained by the Credit Parties with the Administrative Agent, without liability by the Administrative Agent or the Lenders to pay interest thereon, from which account the Administrative Agent, on behalf of the Lenders, shall have the exclusive right to withdraw funds until all of the Secured Obligations are paid in full.
“Cash Equivalents” means:
(a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s or Moody’s;
(c) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a short-term commercial paper rating of at least A-1 from Standard and Poor’s or at least P-1 from Moody’s;
(d) certificates of deposit or bankers’ acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined net capital and surplus of not less than Two Hundred Fifty Million Dollars ($250,000,000);
(e) repurchase obligations with a term of not more than seven days for underlying securities of the types described in subpart (a) above entered into with any bank meeting the qualifications specified in subpart (d) above; and
(f) investments in money market funds which invest exclusively in assets satisfying the requirements of subparts (a) through (e) above.
“Cash Security” means all cash, instruments, Deposit Accounts, Securities Accounts and other cash equivalents, whether matured or unmatured, whether collected or in the process of collection, upon which a Credit Party presently has or may hereafter have any claim, wherever located, including but not limited to any of the foregoing that are presently or may hereafter be existing or maintained with, issued by, drawn upon, or in the possession of the Administrative Agent or any Lender.
“Change in Control” means (a) the acquisition of, or, if earlier, the shareholder or director approval of the acquisition of, ownership or voting control, directly or indirectly, beneficially (within the meaning of Rules 13d-3 and 13d-5 of the Exchange Act) or of record, on or after the Closing Date, by any Person or group (within the meaning of Sections 13d and 14d of the Exchange Act), of shares representing more than thirty-five percent (35%) of the aggregate ordinary Voting Power represented by the issued and outstanding equity interests of the Borrower; (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors or other governing body of the Borrower by Persons who were neither (i) nominated by the board of directors or other governing body of the Borrower nor (ii) appointed by directors so nominated; (c) the Borrower shall cease to own one hundred percent (100%) of each other Borrowing Base Company; or (d) the occurrence of a change in control, or other term of similar import used therein, as defined in any Senior Notes Document or Material Indebtedness Agreement.
“Closing Available Liquidity” means, as of the Closing Date, the sum of (a) the aggregate unrestricted and unencumbered cash on hand of the Credit Parties (calculated after giving effect to the Integral Acquisition) held at financial institutions located in the United States, plus (b) Revolving Credit Availability, provided that, for purposes of calculating the Revolving Credit Availability under Section 4.3(k), Revolving Credit Exposure shall include, without duplication, (i) any fees and expenses due under Section 4.3(n) hereof, and (ii) the Borrower’s initial credit request under the Revolving Credit Commitment.
“Closing Date” means July 27, 2011.
“Closing Revolving Amount” means Sixty-Five Million Dollars ($65,000,000).
“Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.
“Collateral” means (a) all of the Borrower’s existing and future (i) personal property, (ii) Accounts, Investment Property, instruments, contract rights, chattel paper, documents, supporting obligations, letter-of-credit rights, Pledged Securities, Pledged Notes (if any), Government Contracts, Commercial Tort Claims, General Intangibles, Inventory and Equipment, (iii) funds now or hereafter on deposit in one or more Cash Collateral Accounts, if any, and (iv) Cash Security; (b) the Real Property; and (c) Proceeds of any of the foregoing.
“Collection” means any payment made from an Account Debtor to a Credit Party including, but not limited to, cash, checks, drafts and any other form of payment.
“Columbia Property” means the real property located at 6721 Columbia Gateway Drive, Columbia, Maryland 21046.
“Commercial Tort Claim” means a commercial tort claim, as that term is defined in the U.C.C. Schedule 7.5 hereto lists all Commercial Tort Claims of the Credit Parties in existence as of the Closing Date.
“Commitment” means the obligation hereunder of the Lenders, during the Commitment Period, to make Loans and to participate in Swing Loans and the issuance of Letters of Credit pursuant to the Revolving Credit Commitment, up to the Total Commitment Amount.
“Commitment Increase Period” means the period from the Closing Date to the date that is six months prior to the last day of the Commitment Period.
“Commitment Percentage” means, for each Lender, the percentage set forth opposite such Lender’s name under the column headed “Commitment Percentage”, as listed in Schedule 1 hereto (taking into account any assignments pursuant to Section 11.10 hereof).
“Commitment Period” means the period from the Closing Date to July 26, 2016, or such earlier date on which the Commitment shall have been terminated pursuant to Article IX hereof.
“Companies” means the Borrower and all Subsidiaries.
“Company” means the Borrower or a Subsidiary.
“Compliance Certificate” means a Compliance Certificate in the form of the attached Exhibit E.
“Confidential Information” means all confidential or proprietary information about the Companies that has been furnished by any Company to the Administrative Agent or any Lender, whether furnished before or after the Closing Date and regardless of the manner in which it is furnished, but does not include any such information that (a) is or becomes generally available to the public other than as a result of a disclosure by the Administrative Agent or such Lender not permitted by this Agreement, (b) was available to the Administrative Agent or such Lender on a nonconfidential basis prior to its disclosure to the Administrative Agent or such Lender, or (c) becomes available to the Administrative Agent or such Lender on a nonconfidential basis from a Person other than a Company.
“Consideration” means, in connection with an Acquisition, the aggregate consideration paid or to be paid, including borrowed funds, cash, deferred payments, the issuance of securities or notes, the assumption or incurring of liabilities (direct or contingent), the payment of consulting fees or fees for a covenant not to compete and any other consideration paid or to be paid for such Acquisition.
“Consolidated” means the resultant consolidation of the financial statements of the Borrower and its Subsidiaries in accordance with GAAP, including principles of consolidation consistent with those applied in preparation of the consolidated financial statements referred to in Section 6.14 hereof.
“Consolidated Capital Expenditures” means, for any period, the amount of capital expenditures of the Borrower, as determined on a Consolidated basis.
“Consolidated Depreciation and Amortization Charges” means, for any period, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of the Borrower for such period, as determined on a Consolidated basis.
“Consolidated EBITDA” means, for any period, as determined on a Consolidated basis, (a) Consolidated Net Income for such period plus, without duplication, the aggregate amounts deducted in determining such Consolidated Net Income in respect of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and Amortization Charges, (iv) non-cash losses or charges, (v) losses with respect to Kratos Southeast, Inc. (a discontinued operation sold during the 2010 fiscal year of the Borrower), in an aggregate amount not to exceed One Million Three Hundred Eighty-One Thousand Dollars ($1,381,000), (vi) losses with respect to other discontinued operations (as defined consistent with GAAP), in an aggregate amount not to exceed Four Million Dollars ($4,000,000), (vii) non-recurring transaction costs incurred in connection with the SCT Acquisition and the HBE Acquisition, in an aggregate amount not to exceed One Million Six Hundred Ninety-Eight Thousand Eight Hundred Ninety-Five Dollars ($1,698,895), (viii) non-recurring transaction costs incurred in connection with the Herley Acquisition, in an aggregate amount not to exceed Eleven Million Dollars ($11,000,000), (ix) non-recurring transaction costs incurred in connection with the Integral Acquisition, in an aggregate amount not to exceed Seven Million Dollars ($7,000,000), and (x) other non-recurring cash costs or charges incurred in connection with the Integral Acquisition, including for severance payments, corporate overhead reduction, discontinued business operations of the Integral Systems Managed Services business, and the subleasing of the Columbia Property, in an aggregate amount not to exceed Thirteen Million Dollars ($13,000,000); minus (b) to the extent included in Consolidated Net Income for such period, non-cash gains.
“Consolidated Fixed Charges” means, for any period, as determined on a Consolidated basis, the aggregate, without duplication, of (a) Consolidated Interest Expense, and (b) principal payments on Consolidated Funded Indebtedness (including, without limitation, performance based contingent obligations incurred in connection with an Acquisition and payments on Capitalized Lease Obligations); provided that, for purposes of calculating Consolidated Fixed Charges, principal payments on Consolidated Funded Indebtedness shall exclude (i) optional prepayments of the Revolving Loans, (ii) payments of the Indebtedness of HBE made at the time of the HBE Acquisition, in an aggregate amount not to exceed Three Million Three Hundred Ten Thousand Eight Hundred Ninety-Eight Dollars ($3,310,898), (iii) payments of the Indebtedness of Herley made at the time of the Herley Acquisition, in an aggregate amount not to exceed One Million Nine Hundred Sixty-Five Thousand ($1,965,000), and (iv) payments of Indebtedness of Integral made at the time of the Integral Acquisition in an aggregate amount not to exceed Forty Million Dollars ($40,000,000).
“Consolidated Funded Indebtedness” means, at any date, all Indebtedness (including, but not limited to, short-term, long-term and Subordinated Indebtedness, if any) of the Borrower, as determined on a Consolidated basis.
“Consolidated Income Tax Expense” means, for any period, all provisions for taxes based on the gross or net income of the Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), as determined on a Consolidated basis.
“Consolidated Interest Expense” means, for any period, the interest expense (including, without limitation, the “imputed interest” portion of Capitalized Lease Obligations, synthetic leases and asset securitizations, if any, and excluding deferred financing costs) of the Borrower for such period, as determined on a Consolidated basis.
“Consolidated Net Income” means, for any period, the net income (loss) of the Borrower for such period, as determined on a Consolidated basis.
“Consolidated Net Worth” means, at any date, the stockholders’ equity of the Borrower, determined as of such date on a Consolidated basis.
“Consolidated Unfunded Capital Expenditures” means, for any period, Consolidated Capital Expenditures that are not directly financed by the Companies with long-term Indebtedness (other than Revolving Loans) or Capitalized Lease Obligations, as determined on a Consolidated basis.
“Contract Account Debtor” means, with respect to a Government Contract or a Government Subcontract, as determined on a contract by contract basis, an Account Debtor or any other Person obligated to pay all or any part of an Account in any manner and includes (without limitation) any Guarantor thereof.
“Control Agreement” means a Deposit Account Control Agreement or a Securities Account Control Agreement.
“Controlled Disbursement Account” means a commercial Deposit Account designated “controlled disbursement account” and maintained by one or more Credit Parties with the Administrative Agent or another Lender, without liability by the Administrative Agent or such Lender to pay interest thereon.
“Controlled Group” means a Company and each Person required to be aggregated with a Company under Code Section 414(b), (c), (m) or (o).
“Credit Event” means the making by the Lenders of a Loan, the conversion by the Lenders of a Base Rate Loan to a Eurodollar Loan, the continuation by the Lenders of a Eurodollar Loan after the end of the applicable Interest Period, the making by the Swing Line Lender of a Swing Loan, or the issuance (or amendment or renewal) by the Fronting Lender of a Letter of Credit.
“Credit Party” means the Borrower and any Subsidiary or other Affiliate that is a Guarantor of Payment.
“Default” means an event or condition that constitutes, or with the lapse of any applicable grace period or the giving of notice or both would constitute, an Event of Default, and that has not been waived by the Required Lenders (or, if required hereunder, all of the Lenders) in writing.
“Default Rate” means (a) with respect to any Loan or other Obligation for which a rate is specified, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto, and (b) with respect to any other amount, if no rate is specified or available, a rate per annum equal to two percent (2%) in excess of the Derived Base Rate from time to time in effect.
“Defaulting Lender” means a Lender, as reasonably determined by the Administrative Agent, that (a) has failed (which failure has not been cured) to fund any Loan or any participation interest in Letters of Credit required to be made hereunder in accordance with the terms hereof (unless such Lender shall have notified the Administrative Agent and the Borrower in writing of its good faith determination that a condition under Section 4.1 hereof to its obligation to fund any Loan shall not have been satisfied); (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit; (c) has failed, within three Business Days after receipt of a written request from the Administrative Agent or the Borrower to confirm that it will comply with the terms of this Agreement relating to its obligation to fund prospective Loans or participations in Letters of Credit, and such request states that the requesting party has reason to believe that the Lender receiving such request may fail to comply with such obligation, and states such reason; or (d) has failed to pay to the Administrative Agent or any other Lender when due an amount owed by such Lender to the Administrative Agent or any other Lender pursuant to the terms of this Agreement, unless such amount is subject to a good faith dispute or such failure has been cured. Any Defaulting Lender shall cease to be a Defaulting Lender when the Administrative Agent determines, in its reasonable discretion, that such Defaulting Lender is no longer a Defaulting Lender based upon the characteristics set forth in this definition.
“Deposit Account” means a deposit account, as that term is defined in the U.C.C.
“Deposit Account Control Agreement” means each Deposit Account Control Agreement among a Credit Party, the Administrative Agent and a depository institution, dated prior to, on or after the Closing Date, to be in form and substance satisfactory to the Administrative Agent, as the same may from time to time be amended, restated or otherwise modified.
“Derived Base Rate” means a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Base Rate Loans plus the Base Rate.
“Derived Eurodollar Rate” means a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Eurodollar Loans plus the Eurodollar Rate.
“Disposition” means the lease, transfer or other disposition of assets (whether in one or more than one transaction) by a Company.
“Dodd-Frank Act” means the Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) signed into law on July 21, 2010, as amended from time to time.
“Dollar” or the $ sign means lawful money of the United States of America.
“Domestic Subsidiary” means a Subsidiary that is not a Foreign Subsidiary.
“Dormant Subsidiary” means, as of any date of determination, a Company that (a) is not a Credit Party or an equity holder of a Credit Party, (b) has aggregate assets of less than One Million Dollars ($1,000,000), (c) generated less than Two Million Dollars ($2,000,000) in annual revenue during the most recently completed fiscal year of the Borrower, and (d) has no direct or indirect Subsidiaries (i) with aggregate assets, for such Company and all such Subsidiaries, of more than One Million Dollars ($1,000,000), or (ii) that generated, in the aggregate, for such Company and all such Subsidiaries, more than Two Million Dollars ($2,000,000) in annual revenue during the most recently completed fiscal year of the Borrower.
“Downgraded Lender” means a Lender that has a non-credit enhanced senior unsecured debt rating below investment grade from either Moody’s, Standard & Poor’s or any other nationally recognized statistical rating organization recognized as such by the SEC that has been designated by the Administrative Agent, in its reasonable discretion, as a Downgraded Lender. Any Downgraded Lender shall cease to be a Downgraded Lender when the Administrative Agent determines, in its reasonable discretion, that such Downgraded Lender is no longer a Downgraded Lender based upon the characteristics set forth in this definition.
“EBITDA” means, for any period, in accordance with GAAP, (a) Net Income for such period, plus the aggregate amounts deducted in determining such Net Income in respect of (i) income taxes, (ii) interest expense, (iii) depreciation and amortization charges, and (iv) non-cash losses or charges; minus (b) to the extent included in Net Income for such period, non-cash gains.
“Eligible Account Receivable” means an Account that is an account receivable (i.e., each specific invoice) of a Borrowing Base Company that, at all times until it is collected in full, continuously meets the following requirements:
(a) is not subject to any claim for credit, allowance or adjustment by the Account Debtor or any defense, dispute, set-off, chargeback or counterclaim;
(b) arose in the ordinary course of business of such Borrowing Base Company from the performance (fully completed) of services or bona fide sale of goods that have been shipped to the Account Debtor, and not more than ninety (90) days have elapsed since the invoice date;
(c) is not owing from an Account Debtor with respect to which such Borrowing Base Company has received any notice or has any knowledge of such Account Debtor’s insolvency, bankruptcy or financial impairment, or that such Account Debtor has suspended normal business operations, dissolved, liquidated or terminated its existence;
(d) is not subject to an assignment, pledge, claim, mortgage, lien or security interest of any type except those granted to or in favor of the Administrative Agent, for the benefit of the Lenders, and the Indenture Agent, for the benefit of the Senior Noteholders;
(e) does not relate to any goods repossessed, lost, damaged, rejected or returned, or acceptance of which has been revoked or refused;
(f) is not evidenced by a promissory note or any other instrument or by chattel paper;
(g) has not been determined by the Administrative Agent to be unsatisfactory in any respect, in the exercise of its reasonable credit judgment;
(h) is not a Government Account Receivable (other than an Eligible Government Account Receivable);
(i) is not owing from an Affiliate, an equity holder or an employee of such Borrowing Base Company;
(j) is not a Foreign Account Receivable, except for the amount of such Foreign Account Receivable that is fully insured by an insurer acceptable to the Administrative Agent or backed by a letter of credit issued by, or a guaranty from, a financial institution acceptable to the Administrative Agent, in each case in form and substance acceptable to the Administrative Agent in its reasonable credit judgment;
(k) (i) does not arise from a Government Contract with an Account Debtor that has failed to pay more than fifty oercent (50%) of the aggregate amount
of its accounts receivable then outstanding under such Govenment Contract within ninety (90) days of their respective invoice dates;
(ii) does not arise from a Government Subcontract with an Account Debtor that has failed to pay more than fifty percent (50%) of the aggregate amount of its accounts receivable then outstanding under such Government Subcontract within ninety (90) days of their respective invoice dates; and
(iii) with respect to Accounts that do not arise from Government Contracts or Government Subcontracts, is not owing from an Account Debtor that has failed to pay more than twenty-five percent (25%) of the aggregate amount of all of its then outstanding accounts receivable within ninety (90) days of their respective invoice dates;
(l) with respect to:
(i) an Account Debtor (other than (A) the United States or any of its departments, agencies or instrumentalities, or (B) an Investment Grade Account Debtor) that, together with its affiliates, owes one or more Borrowing Base Companies more than twenty-five percent (25%) of all accounts receivable of the Borrowing Base Companies, is not the portion of the Accounts that represents the amount in excess of twenty-five percent (25%) of such accounts receivable; and
(ii) an Investment Grade Account Debtor (other than the United States or any of its departments, agencies or instrumentalities) that, together with its affiliates, owes one or more Borrowing Base Companies more than fifty percent (50%) of all accounts receivable of the Borrowing Base Companies, is not the portion of the Accounts that represents the amount in excess of fifty percent (50%) of such accounts receivable;
(m) is an Account in which the Administrative Agent, for the benefit of the Lenders, has a valid and enforceable first priority security interest;
(n) has not arisen in connection with sales of goods that were shipped or delivered to an Account Debtor on consignment, a sale or return basis, a guaranteed sale basis, a bill and hold basis, or on the basis of any similar understanding;
(o) is not subject to any provision prohibiting assignment of the right to payment or requiring notice of or consent to such assignment (except provisions that are not enforceable under the Uniform Commercial Code in the applicable jurisdiction);
(p) is not owing from an Account Debtor (other than the United States or any of its departments, agencies or instrumentalities) located in a state that requires that such Borrowing Base Company, in order to sue such Account Debtor in such state’s courts or otherwise enforce its remedies against such Account Debtor through judicial process, to either (i) qualify to do business in such state or (ii) file a report with the taxation division of such state for the then current year, unless, in each case, such Borrowing Base Company has fulfilled such requirements to the extent applicable for the then current year or fulfilled such other requirements that permits such Borrowing Base Company to bring suit or otherwise enforce its remedies against such Account Debtor through judicial process;
(q) is not an Account with respect to which any of the representations, warranties, covenants and agreements contained in this Agreement or any of the Loan Documents are not or have ceased to be complete and correct, or have been breached;
(r) is not an Account that represents a progress billing (other than an Eligible Government Account Receivable or an Eligible Government Subcontract Account Receivable);
(s) is not owing by any state or any department, agency, or instrumentality thereof unless such Borrowing Base Company has complied with any applicable statutory or regulatory requirements thereof in respect of the security interest of the Administrative Agent, for the benefit of the Lenders, as granted hereunder;
(t) is not, other than with respect to a Government Account Receivable or a Government Subcontract Account Receivable, owing from an Account Debtor that is also a supplier to or creditor of any Borrowing Base Company to the extent of the amount owing to such supplier or creditor; and
(u) does not represent a manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling any Borrowing Base Company to discounts on future purchases therefrom.
“Eligible Government Account Receivable” means a Government Account Receivable of a Borrowing Base Company that, at all times until it is collected in full, continuously meets the following requirements:
(a) with respect to a Government Prior Approval Contract, the contracting officer (or the authorized representative of such contracting officer) for such Government Account Receivable has approved the payment of such Government Account Receivable;
(b) all customary and required procedures have been followed by such Borrowing Base Company to ensure the accuracy and legitimacy of such Government Account Receivable;
(c) is not relating to a Government Contract that includes a provision that prohibits the assignment of amounts due under such contract;
(d) an Instrument of Assignment and a Notice of Assignment of Claims have been delivered to the Administrative Agent with respect to such Government Account Receivable;
(e) no Company has received notice or has knowledge (or reason to believe) that the Account Debtor with respect to such Government Account Receivable does not intend to pay such Government Account Receivable (or any other Government Account Receivable relating to the same Government Contract) in accordance with the invoice with respect thereto, in accordance with the terms of the Government Contract, or in accordance with the information that the Borrower has provided to the Administrative Agent with respect to such Government Account Receivable;
(f) no Company has received a “Cure Notice”, “Show Cause” or other similar notice with respect to such Government Account Receivable (or any other Government Account Receivable relating to the same Government Contract); and
(g) such Government Account Receivable meets all of the requirements of an Eligible Account Receivable other than subparts (h), (l), (p), (r) and (t) of the Eligible Account Receivable definition.
“Eligible Government Subcontract Account Receivable” means a Government Subcontract Account Receivable of a Borrowing Base Company that, at all times until it is collected in full, continuously meets the following requirements:
(a) the customer with respect to such Government Subcontract Account Receivable has approved the payment of such Government Subcontract Account Receivable;
(b) no Company has received a notice of default or other similar notice with respect to such Government Subcontract Account Receivable; and
(c) such Government Subcontract Account Receivable meets all of the requirements of an Eligible Account Receivable other than subparts (h), (r) and (t) of the Eligible Account Receivable definition.
“Eligible Inventory” means all Inventory of a Borrowing Base Company in which the Administrative Agent, for the benefit of the Lenders, has a valid and enforceable first security interest, except Inventory that:
(a) is in-transit or located outside of the United States;
(b) is in the possession of a bailee, consignee or other third party, unless (i) reserves, satisfactory to the Administrative Agent, have been established with respect thereto; or (ii) (A) with respect to a consignee, processor or bailee, an acknowledged consignment letter, Processor’s Waiver or Bailee’s Waiver, as the case may be, has been received by the Administrative Agent, (B) such third party is listed on Schedule 6.9 hereto, as amended from time to time, or the Administrative Agent has received prior written notice of such third party location, (C) if required by the Administrative Agent, proper notice has been given to all secured parties of such third party that have filed U.C.C. Financing Statements claiming a security interest in such third party’s inventory, and (D) with respect to a consignee or processor, such Borrowing Base Company has filed appropriate U.C.C. Financing Statements to protect its interest therein, in form and substance satisfactory to the Administrative Agent;
(c) is located on facilities leased by a Borrowing Base Company, unless an acknowledged Landlord’s Waiver has been received (or waived in writing) by the Administrative Agent, or reserves, satisfactory to the Administrative Agent, have been established with respect thereto;
(d) is slow-moving, damaged, defective or obsolete;
(e) consists of (i) goods not held for sale, such as labels, maintenance items, supplies and packaging, or held for return to vendors, or (ii) Inventory used in connection with research and development;
(f) is held for return to vendors;
(g) is subject to a Lien in favor of any Person other than the Administrative Agent, for the benefit of the Lenders, and the Indenture Agent, for the benefit of the Senior Noteholders;
(h) has not been subject to a field examination by the Administrative Agent (or agent thereof); or
(i) is determined by the Administrative Agent to be unsatisfactory in any respect, in its reasonable credit judgment.
“Eligible Transferee” means a commercial bank, financial institution or other “accredited investor” (as defined in SEC Regulation D) that is not the Borrower, a Subsidiary or an Affiliate.
“Eligible Unbilled Receivable” means, for any date, an Account of a Borrowing Base Company that, (a) if it had been billed prior to the end of the immediately preceding month, would have met all of the requirements for an Eligible Account Receivable, and (b) is to be billed within ten days after the end of such immediately preceding month.
“Environmental Disclosure Letter” means that certain letter from the Borrower to the Administrative Agent, dated as of the Original Closing Date, concerning certain environmental disclosures.
“Environmental Laws” means all provisions of law (including the common law), statutes, ordinances, codes, rules, guidelines, policies, procedures, orders-in-council, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by a Governmental Authority or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning environmental health or safety and protection of, or regulation of the discharge of substances into, the environment.
“Environmental Permits” means all permits, licenses, authorizations, certificates, approvals or registrations required by any Governmental Authority under any Environmental Laws.
“Equipment” means equipment, as that term is defined in the U.C.C.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.
“ERISA Event” means (a) the existence of a condition or event with respect to an ERISA Plan that presents a risk of the imposition of an excise tax or any other liability on a Company or of the imposition of a Lien on the assets of a Company; (b) the engagement by a Controlled Group member in a non-exempt “prohibited transaction” (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that could result in liability to a Company; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or occurrence or existence of any event or condition that makes likely the involvement of, a Multiemployer Plan in any reorganization under ERISA Section 4241; (g) the failure of an ERISA Plan (and any related trust) that is intended to be qualified under Code Sections 401 and 501 to be so qualified or the failure of any “cash or deferred arrangement” under any such ERISA Plan to meet the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy any requirements of law applicable to an ERISA Plan; (j) the commencement, existence or threatening of a claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (k) any incurrence by or any expectation of the incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan, other than as required by ERISA Section 601, et. seq. or Code Section 4980B.
“ERISA Plan” means an “employee benefit plan” (within the meaning of ERISA Section 3(3)) that a Controlled Group member at any time sponsors, maintains, contributes to, has liability with respect to or has an obligation to contribute to such plan.
“Eurocurrency Liabilities” shall have the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“Eurodollar” means a Dollar denominated deposit in a bank or branch outside of the United States.
“Eurodollar Loan” means a Revolving Loan described in Section 2.2(a) hereof, that shall be denominated in Dollars and on which the Borrower shall pay interest at a rate based upon the Derived Eurodollar Rate.
“Eurodollar Rate” means, with respect to a Eurodollar Loan, for any Interest Period, a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the nearest 1/16th of 1%) by dividing (a) the rate of interest, determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00 A.M. (London time) two Business Days prior to the beginning of such Interest Period pertaining to such Eurodollar Loan, as listed on British Bankers Association Interest Rate LIBOR 01 or 02 as provided by Reuters or Bloomberg (or, if for any reason such rate is unavailable from Reuters or Bloomberg, from any other similar company or service that provides rate quotations comparable to those currently provided by Reuters or Bloomberg) as the rate in the London interbank market for Dollar deposits in immediately available funds with a maturity comparable to such Interest Period, provided that, in the event that such rate quotation is not available for any reason, then the Eurodollar Rate shall be the average (rounded upward to the nearest 1/16th of 1%) of the per annum rates at which deposits in immediately available funds in Dollars for the relevant Interest Period and in the amount of the Eurodollar Loan to be disbursed or to remain outstanding during such Interest Period, as the case may be, are offered to the Administrative Agent (or an affiliate of the Administrative Agent, in the Administrative Agent’s discretion) by prime banks in any Eurodollar market reasonably selected by the Administrative Agent, determined as of 11:00 A.M. (London time) (or as soon thereafter as practicable), two Business Days prior to the beginning of the relevant Interest Period pertaining to such Eurodollar Loan; by (b) 1.00 minus the Reserve Percentage.
“Event of Default” means an event or condition that shall constitute an event of default as defined in Article VIII hereof.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Taxes” means, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its overall net income or branch profits, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Administrative Agent or such Lender, as the case may be, is organized or in which its principal office is located, or, in the case of any Lender, in which its applicable lending office is located.
“Existing Letter of Credit” means that term as defined in Section 2.2(b)(vii) hereof.
“Federal Funds Effective Rate” means, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the Closing Date.
“Financial Officer” means any of the following officers: chief executive officer, president, corporate controller, chief financial officer or treasurer. Unless otherwise qualified, all references to a Financial Officer in this Agreement shall refer to a Financial Officer of the Borrower.
“Fixed Charge Coverage Ratio” means, as determined for the most recently completed four Quarterly Reporting Periods of the Borrower, the ratio of (a) (i) Consolidated EBITDA, minus (ii) Consolidated Unfunded Capital Expenditures, minus (iii) Consolidated Income Tax Expense paid in cash, minus (iv) Capital Distributions (other than cash contributions to a 401(k) plan or pursuant to an employee stock purchase plan, other employee benefit plan, or officer and director equity purchase plan that have been deducted in determining Consolidated Net Income for such period); to (b) Consolidated Fixed Charges.
“Foreign Account Receivable” means an Account that arises out of contracts with or orders from an Account Debtor that is not a resident of the United States or Canada.
“Foreign Benefit Plan” means each material plan, fund, program or policy established under the law of a jurisdiction other than the United States (or a state or local government thereof), whether formal or informal, funded or unfunded, insured or uninsured, providing employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which one or more Companies have any liability with respect to any employee or former employee, but excluding any Foreign Pension Plan.
“Foreign Pension Plan” means a pension plan required to be registered under the law of a jurisdiction other than the United States (or a state or local government thereof), that is maintained or contributed to by one or more Companies for their employees or former employees.
“Foreign Subsidiary” means a Subsidiary that is organized under the laws of any jurisdiction other than the United States, any State thereof or the District of Columbia.
“Fronting Lender” means, as to any Letter of Credit transaction hereunder, the Administrative Agent as issuer of the Letter of Credit, or, in the event that the Administrative Agent shall be unable to issue a Letter of Credit, such other Lender as shall agree to issue the Letter of Credit in its own name, but in each instance on behalf of the Lenders hereunder.
“GAAP” means generally accepted accounting principles in the United States as then in effect, which shall include the official interpretations thereof by the Financial Accounting Standards Board, applied on a basis consistent with the past accounting practices and procedures of the Borrower.
“General Intangibles” means (a) general intangibles, as that term is defined in the U.C.C.; and (b) choses in action, causes of action, intellectual property, customer lists, corporate or other business records, inventions, designs, patents, patent applications, service marks, registrations, trade names, trademarks, copyrights, licenses, goodwill, computer software, rights to indemnification and tax refunds.
“Government Account Receivable” means an Account that arises out of a Government Contract.
“Government Contract” means an agreement, contract or license to which any Credit Party and the United States or any of its departments, agencies or instrumentalities are parties.
“Government Prior Approval Contract” means a firm fixed price Government Contract, or any other type of Government Contract, that requires prior approval of a contracting officer (or the authorized representative of such contracting officer) before payments are made in connection with such Government Contract.
“Government Subcontract” means an agreement, a contract or license, other than a Government Contract, to which any Credit Party is a party for which the United States or any of its departments, agencies or instrumentalities is the end customer.
“Government Subcontract Account Receivable” means an Account that arises out of a Government Subcontract.
“Governmental Authority” means any nation or government, any state, province or territory or other political subdivision thereof, any governmental agency, department, authority, instrumentality, regulatory body, court, central bank or other governmental entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization exercising such functions.
“Guarantor” means a Person that shall have pledged its credit or property in any manner for the payment or other performance of the indebtedness, contract or other obligation of another and includes (without limitation) any guarantor (whether of payment or of collection), surety, co-maker, endorser or Person that shall have agreed conditionally or otherwise to make any purchase, loan or investment in order thereby to enable another to prevent or correct a default of any kind.
“Guarantor of Payment” means each of the Companies designated a “Guarantor of Payment” on Schedule 2 hereto, each of which is executing and delivering a Guaranty of Payment on the Closing Date, and any other Domestic Subsidiary that shall deliver a Guaranty of Payment to the Administrative Agent, or become a party by joinder to the previously executed Guaranty of Payment, subsequent to the Closing Date.
“Guaranty of Payment” means each Guaranty of Payment executed and delivered prior to the Closing Date by a Guarantor of Payment in connection with this Agreement, as the same are being amended and restated on the Closing Date, and any Guaranty of Payment executed and delivered by one or more Guarantors of Payment on or after the Closing Date, in each case as the same may from time to time be amended, restated or otherwise modified.
“Guaranty of Payment Joinder” means each Guaranty of Payment Joinder, executed and delivered by a Guarantor of Payment for the purpose of adding such Guarantor of Payment as a party to a previously executed Guaranty of Payment.
“HBE” means Henry Bros. Electronics, Inc., a Delaware corporation.
“HBE Acquisition” means that Acquisition by the Borrower of HBE, consummated on or about December 15, 2010.
“Hedge Agreement” means any (a) hedge agreement, interest rate swap, cap, collar or floor agreement, or other interest rate management device entered into by a Company with any Person in connection with any Indebtedness of such Company, (b) currency swap agreement, forward currency purchase agreement or similar arrangement or agreement designed to protect against fluctuations in currency exchange rates entered into by a Company, or (c) any forward commodity purchase agreement or similar agreement or arrangement designed to protect against fluctuations in raw material or other commodity prices.
“Herley” means Herley Industries, Inc., a Delaware corporation.
“Herley Acquisition” means the Acquisition by the Borrower of Herley, consummated on or about March 30, 2011.
“Hermes Contract” means Contract No. 1269 between Hellenic Aerospace Industry S.A. and Gichner (UK) LTD for the procurement of mobile shelters type S-280 C/G dated February 26, 2004 and as amended on March 2, 2010.
“Indebtedness” means, for any Company, without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker’s acceptance, (e) all net obligations under any Hedge Agreement, (f) all synthetic leases, (g) all Capitalized Lease Obligations, (h) all obligations of such Company with respect to asset securitization financing programs, (i) all obligations to advance funds to, or to purchase assets, property or services from, any other Person in order to maintain the financial condition of such Person, (j) all indebtedness of the types referred to in subparts (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Company is a general partner or joint venturer, unless such indebtedness is expressly made non-recourse to such Company, (k) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by such Company to finance its operations or capital requirements, and (l) any guaranty of any obligation described in subparts (a) through (k) hereof.
“Indenture Agent” means Wilmington Trust FSB and any successor collateral agent pursuant to the Senior Notes Documents.
“Indenture Priority Collateral” means the “Indenture Priority Collateral”, as that term is defined in the Intercreditor Agreement.
“Insolvent Lender” means a Lender, as reasonably determined by the Administrative Agent, that (a) has become or is not Solvent or is the subsidiary of a Person that has become or is not Solvent; or (b) has become the subject of a proceeding under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment, or is a subsidiary of a Person that has become subject of a proceeding under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be an Insolvent Lender solely by virtue of the ownership or acquisition of an equity interest in such Lender or a parent company thereof by a governmental authority or an instrumentality thereof. Any Insolvent Lender shall cease to be an Insolvent Lender when the Administrative Agent determines, in its reasonable discretion, that such Insolvent Lender is no longer an Insolvent Lender based upon the characteristics set forth in this definition.
“Instrument of Assignment” means an Instrument of Assignment, in the form of the attached Exhibit G.
“Integral” means Integral Systems, Inc., a Maryland corporation.
“Integral Acquisition” means the acquisition of by the Borrower of Integral, to be consummated on or about the Closing Date.
“Intellectual Property Security Agreement” means each Intellectual Property Security Agreement executed and delivered prior to, on or after the Closing Date by the Borrower or a Guarantor of Payment, wherein the Borrower or such Guarantor of Payment, as the case may be, has granted to the Administrative Agent, for the benefit of the Lenders, a security interest in all intellectual property owned by the Borrower or such Guarantor of Payment, as the same may from time to time be amended, restated or otherwise modified.
“Intellectual Property Security Amendment” means each Amendment and Confirmation of Intellectual Property Security Agreement (or similar document) executed and delivered on or after the Original Closing Date by a Credit Party, relating to an Intellectual Property Security Agreement previously delivered by such Credit Party.
“Intercreditor Agreement” means the Intercreditor Agreement dated as of the Original Closing Date among the Administrative Agent, for the benefit of and on behalf of the Lenders, and the Indenture Agent, for the benefit of and on behalf of the Senior Noteholders, as amended and as the same may from time to time be further amended, restated or otherwise modified.
“Interest Adjustment Date” means the last day of each Interest Period.
“Interest Period” means, with respect to a Eurodollar Loan, the period commencing on the date such Eurodollar Loan is made and ending on the last day of such period, as selected by the Borrower pursuant to the provisions hereof, and, thereafter (unless such Eurodollar Loan is converted to a Base Rate Loan), each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of such period, as selected by the Borrower pursuant to the provisions hereof. The duration of each Interest Period for a Eurodollar Loan shall be one month, two months, three months or six months, in each case as the Borrower may select upon notice, as set forth in Section 2.5 hereof; provided that, if the Borrower shall fail to so select the duration of any Interest Period for a Eurodollar Loan at least three Business Days prior to the Interest Adjustment Date applicable to such Eurodollar Loan, the Borrower shall be deemed to have converted such Eurodollar Loan to a Base Rate Loan at the end of the then current Interest Period.
“Inventory” means inventory, as that term is defined in the U.C.C.
“Investment Grade Account Debtor” means an Account Debtor with a long term issuer rating of no less than Baa1 from Moody’s or BBB+ from Standard & Poor’s.
“Investment Property” means investment property, as that term is defined in the U.C.C., unless the Uniform Commercial Code as in effect in another jurisdiction would govern the perfection and priority of a security interest in investment property, and, in such case, “investment property” shall be defined in accordance with the law of that jurisdiction as in effect from time to time.
“KeyBank” means KeyBank National Association, and its successors and assigns.
“Landlord’s Waiver” means a landlord’s waiver or mortgagee’s waiver, each in form and substance satisfactory to the Administrative Agent, delivered by a Credit Party in connection with this Agreement, as such waiver may from time to time be amended, restated or otherwise modified.
“Lender” means that term as defined in the first paragraph hereof and, as the context requires, shall include the Fronting Lender and the Swing Line Lender.
“Letter of Credit” means a commercial documentary letter of credit or standby letter of credit that shall be issued by the Fronting Lender for the account of the Borrower or a Guarantor of Payment, including amendments thereto, if any, and shall have an expiration date no later than the earlier of (a) three hundred sixty-four (364) days after its date of issuance (provided that such Letter of Credit may provide for the renewal thereof for additional one year periods), or (b) ten days prior to the last day of the Commitment Period.
“Letter of Credit Commitment” means the commitment of the Fronting Lender, on behalf of the Lenders, to issue Letters of Credit in an aggregate face amount of up to Thirty Million Dollars ($30,000,000).
“Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all issued and outstanding Letters of Credit, and (b) the aggregate of the draws made on Letters of Credit that have not been reimbursed by the Borrower or converted to a Revolving Loan pursuant to Section 2.2(b)(v) hereof.
“Lien” means any mortgage, deed of trust, security interest, lien (statutory or other), charge, assignment, hypothecation, encumbrance on, pledge or deposit of, or conditional sale, lease (other than Operating Leases), sale with a right of redemption or other title retention agreement and any capitalized lease with respect to any property (real or personal) or asset.
“Loan” means a Revolving Loan or a Swing Loan made to the Borrower by the Lenders in accordance with Section 2.2(a) or 2.2(c) hereof.
“Loan Documents” means, collectively, this Agreement, each Note, each Guaranty of Payment, each Guaranty of Payment Joinder, all documentation relating to each Letter of Credit, the Intercreditor Agreement, each Security Document and the Administrative Agent Fee Letter, as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced, and any other document delivered pursuant thereto.
“Lockbox” means the post office box rented by and in the name of one or more Credit Parties in accordance with Section 7.2(a) hereof.
“Management Fees” means management, consulting or other similar fees paid by any Company to an equity holder (other than a Company) of a Company or of an Affiliate.
“Master Agreement” means that Master Agreement entered into by and among the Credit Parties and the Administrative Agent in connection with the cash management services undertaken by the Administrative Agent on behalf of the Companies.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of any Credit Party, (b) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Companies taken as a whole, (c) the rights and remedies of the Administrative Agent or the Lenders under any Loan Document, (d) the ability of any Credit Party to perform its obligations under any Loan Document to which it is a party or the Senior Notes Documents, or (e) the legality, validity, binding effect or enforceability against any Credit Party of any Loan Document to which it is a party.
“Material Contract” means (a)any contract or agreement requiring annual payments to be made by a Credit Party or providing for annual payments to be received by a Credit Party, in each case in excess of Seven Million Five Hundred Thousand Dollars ($7,500,000), (b) any other contract or other arrangement to which any Credit Party is a party for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect, or (c) any Material Indebtedness Agreement.
“Material Indebtedness Agreement” means any debt instrument, lease (capital, operating or otherwise), guaranty, contract, commitment, agreement or other arrangement evidencing or entered into in connection with any Indebtedness of any Company or the Companies equal to or in excess of the amount of Two Million Five Hundred Thousand Dollars ($2,500,000).
“Maximum Amount” means, for each Lender, the amount set forth opposite such Lender’s name under the column headed “Maximum Amount” as set forth on Schedule 1 hereto, subject to decreases determined pursuant to Section 2.9(a) hereof, increases pursuant to Section 2.9(b) hereof, and assignments of interests pursuant to Section 11.10 hereof; provided that the Maximum Amount for the Swing Line Lender shall exclude the Swing Line Commitment (other than its pro rata share), and the Maximum Amount of the Fronting Lender shall exclude the Letter of Credit Commitment (other than its pro rata share).
“Maximum Rate” means that term as defined in Section 2.3(d) hereof.
“Maximum Revolving Amount” means One Hundred Million Dollars ($100,000,000), as such amount may be reduced pursuant to Section 2.9(a) hereof.
“Monthly Reporting Period” means a four or, in certain cases, (approximately) five week period established by the Borrower as its monthly reporting period, as set forth on Schedule 5.3 hereto, as such Schedule 5.3 shall from time to time be replaced pursuant to Section 5.3(l) hereof.
“Moody’s” means Moody’s Investors Service, Inc., and any successor to such company.
“Mortgage” means each Open-End Mortgage, Assignment of Leases and Rents and Security Agreement (or deed of trust or comparable document), dated prior to, on or after the Closing Date, relating to the Real Property, executed and delivered by a Credit Party, to further secure the Secured Obligations, as the same may from time to time be amended, restated or otherwise modified.
“Mortgage Amendment” means each Open-End Mortgage Modification Agreement (or similar agreement), relating to each Mortgage delivered prior to the Closing Date, executed and delivered by a Company as of the Closing Date.
“Multiemployer Plan” means a Pension Plan that is subject to the requirements of Subtitle E of Title IV of ERISA.
“Net Income” means, for any period, the net income (loss) for such period, determined in accordance with GAAP.
“Non-Consenting Lender” means that term as defined in Section 11.3(c) hereof.
“Non-Transfer Effective Date” means a date on which either (a) a Default or an Event of Default occurs, or (b) the Revolving Credit Availability is less than the greater of (i) Nine Million Dollars ($9,000,000), or (ii) Fifteen Percent (15%) of the Revolving Amount; and each such subsequent date that occurs after a Transfer Effective Date.
“Non-Transfer Period” means each period commencing on a Non-Transfer Effective Date and ending on the first Transfer Effective Date occurring thereafter; provided that, should more than two separate Non-Transfer Periods exist during any twelve-month period, the then-existing Non-Transfer Period shall continue indefinitely at the discretion of the Administrative Agent.
“Non-U.S. Lender” means that term as defined in Section 3.2(c) hereof.
“Note” means a Revolving Credit Note or the Swing Line Note, or any other promissory note delivered pursuant to this Agreement.
“Notice of Assignment of Claims” means a Notice of Assignment of Claims, in the form of the attached Exhibit H.
“Notice of Loan” means a Notice of Loan in the form of the attached Exhibit D.
“Obligations” means, collectively, (a) all Indebtedness and other obligations now owing or hereafter incurred by the Borrower to the Administrative Agent, the Swing Line Lender, the Fronting Lender, or any Lender pursuant to this Agreement and the other Loan Documents, and includes the principal of and interest on all Loans and all obligations of the Borrower or any other Credit Party pursuant to Letters of Credit; (b) each extension, renewal, consolidation or refinancing of any of the foregoing, in whole or in part; (c) the commitment and other fees, and any prepayment fees payable pursuant to this Agreement or any other Loan Document; (d) all fees and charges in connection with the Letters of Credit; (e) every other liability, now or hereafter owing to the Administrative Agent or any Lender by any Company pursuant to this Agreement or any other Loan Document; and (f) all Related Expenses.
“Operating Account” means a commercial Deposit Account designated “operating account” and maintained by one or more Credit Parties with the Administrative Agent, without liability by the Administrative Agent to pay interest thereon, from which account the Borrower shall have the right to withdraw funds until the Administrative Agent, on behalf of the Lenders, terminates such right after the occurrence of a Default or an Event of Default.
“Operating Leases” means all real or personal property leases under which any Company is bound or obligated as a lessee or sublessee and which, under GAAP, are not required to be capitalized on a balance sheet of such Company; provided that Operating Leases shall not include any such lease under which any Company is also bound as the lessor or sublessor.
“Original Closing Date” means May 19, 2010.
“Organizational Documents” means, with respect to any Person (other than an individual), such Person’s Articles (Certificate) of Incorporation, operating agreement or equivalent formation documents, and Regulations (Bylaws), or equivalent governing documents, and any amendments to any of the foregoing.
“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise, ad valorem or property taxes, goods and services taxes, harmonized sales taxes and other sales taxes, use taxes, value added taxes, charges or similar taxes or levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“Participant” means that term as defined in Section 11.11 hereof.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001, as amended from time to time.
“PBGC” means the Pension Benefit Guaranty Corporation, and its successor.
“Pension Plan” means an ERISA Plan that is a “pension plan” (within the meaning of ERISA Section 3(2)).
“Permitted Foreign Subsidiary Loans, Guaranties and Investments” means:
(a) the investments by the Borrower or a Domestic Subsidiary in a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto;
(b) the loans by the Borrower or a Domestic Subsidiary to a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto (and any extension, renewal or refinancing thereof but, only to the extent that the principal amount thereof does not increase after the Closing Date);
(c) loans by the Borrower or a Domestic Subsidiary to a Foreign Subsidiary consisting of intercompany accounts receivable arising from the transfer of goods or services in the ordinary course of business and consistent with past business practices of the Companies;
(d) loans and investments by the Borrower or a Domestic Subsidiary to or in a Foreign Subsidiary in connection with the Hermes Contract, so long as the aggregate amount of all such loans and investments of all Credit Parties does not exceed, at any time, Three Million Five Hundred Thousand Dollars ($3,500,000);
(e) loans and investments from Herley or a Domestic Subsidiary of Herley to a Foreign Subsidiary of Herley, in an aggregate amount for all such loans and investments of all Credit Parties, permitted pursuant to this subpart (e), not to exceed, at any time, Thirty-Three Million Dollars ($33,000,000); and
(f) additional loans and investments by the Borrower or a Domestic Subsidiary to o