Exhibit
  10.1

  

  
	
   

  	
   

  
	
   

  	
  KeyBanc Capital Markets

  
	
   

  	
  One Embarcadero Center, Ste. 1100

  
	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  
	
   

  	
  Tel:       415.733.2476

  
	
   

  	
  Fax:       415.733.2480

  
	
   

  	
  E-mail:              kmcbride@keybanccm.com

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  October 24, 2007

  



 


 


 


Kratos Defense & Security Solutions, Inc.


Bridge Pointe Corporate Centre


4810 Eastgate Mall


San Diego, CA 92121


Attention: Eric DeMarco, Executive President
and Chief Executive Officer


 


                                Re:
$75,000,000 Senior Secured Credit Facilities — Facilities Letter


 


Ladies and Gentlemen:


 


You
have advised KeyBanc Capital Markets (“KeyBanc”) that Kratos Defense &
Security Solutions, Inc. (“you” or the “Company”) intends to acquire (the “Acquisition”)
all the issued and outstanding capital stock (the “Shares”) of Haverstick
Consulting, Inc. (the “Target”) followed by a merger (the “Merger”) of the
Target with and into the Company.  We
understand that the cash consideration to be paid for the Shares acquired in
connection with the Acquisition will be up to $69,000,000.  You have further advised us that in connection
with the foregoing, the Company will obtain senior credit facilities (the “Facilities”
and, together with the Acquisition, the “Transactions”) in an aggregate
principal amount of up to US$75,000,000, as more fully described in the Summary
of Terms and Conditions attached hereto as Exhibit A (the “Term Sheet”).


 


You
have requested that KeyBanc (i) agree to structure, arrange and syndicate the
Facilities, (ii) to serve as exclusive advisor, sole lead arranger, sole
bookrunner, sole syndication agent and administrative agent and (iii) through
its affiliate KeyBank National Association (“KeyBank”) commit to provide the
aggregate principal amount of the Facilities.  KeyBanc is pleased to advise you of (i) its
willingness to act as exclusive advisor, sole lead arranger, sole bookrunner,
sole syndication agent and administrative agent for the Facilities and (ii) KeyBank’s
commitment to provide the entire amount of the Facilities (the “Commitment”)
upon the terms and subject to the conditions set forth or referred to in this Facilities
Letter, the Term Sheet, the Conditions Annex attached hereto as Exhibit B (the “Conditions
Annex” and, together with this Facilities Letter and the Term Sheet, the “Commitment
Letter”) and in the letter of even date herewith addressed to you providing,
among other things, for certain fees relating to the Facilities (the “Fee
Letter”).


 


KeyBanc
reserves the right and intends, prior to or after the execution of the
definitive documentation with respect to the Facilities (the “Facilities
Documents”), to syndicate all or a portion of its commitment to one or more
financial institutions or other persons (such entities, together with KeyBank,
the “Lenders”) identified by KeyBanc in consultation with, and reasonably
acceptable to, you, which Lenders will become parties to the Facilities
Documents. It is agreed that KeyBanc will act as the sole administrative agent
and exclusive advisor for, and 

















sole
lead arranger, sole bookrunner and sole syndication agent of, the Facilities
and that no additional agents or co-agents or co-arrangers will be appointed
without the prior written consent of KeyBanc.


 


KeyBanc
shall be entitled, after consultation with the Company, to change the pricing,
terms, allocation or structure of the Facilities, provided that the total
amount of the Facilities remains unchanged, either before or after the closing
of the Facilities should KeyBanc, as the Lead Arranger, determine in its
reasonable discretion that such changes are advisable in order to ensure a
successful syndication or an optimal capital structure.  The commitments of KeyBanc under any
Commitment Letter shall be subject to the agreements of this paragraph.  The Term Sheet shall be deemed to be amended
to reflect such changes and the syndication process shall continue.  The agreements in this paragraph shall
survive the closing of the Facilities.


 


KeyBanc
will manage, in consultation with you, all aspects of the syndication,
including decisions as to the selection of institutions to be approached and
when they will be approached, when their commitments will be accepted and which
institutions will participate in the allocations of the commitments among the
Lenders. You agree to assist KeyBanc in forming any such syndicate and to
provide the potential Lenders, promptly upon request, with all information
reasonably requested by them to complete successfully the syndication,
including but not limited to (i) your assistance in the preparation of an
information package, including a Confidential Information Memorandum for the Facilities
and other materials for delivery to potential Lenders and participants, and (ii)
such other information and projections prepared by you or your advisors
relating to the Transactions as may be reasonably requested by KeyBanc or the potential
Lenders. You also agree to participate in, and to make appropriate senior
officers and representatives of the Company available to participate in,
informational meetings for potential Lenders and participants at such times and
places as KeyBanc may reasonably request and to use commercially reasonable
efforts to ensure that KeyBanc’s syndication efforts materially benefit from
the Company’s existing banking relationships.


 


At
KeyBanc’s request, you agree to prepare versions of the information memoranda
and other marketing materials to be used in connection with the syndication
that do not contain material non-public information concerning the Company, its
affiliates or their securities.  In
addition, you agree that unless specifically labeled “Private—Contains
Non-Public Information,” no information, documentation or other data
disseminated to prospective lenders in connection with the syndication of the Facilities,
whether through an Internet website (including, without limitation, an
IntraLinks work-space), electronically, in presentations at meetings or
otherwise, will contain any material non-public information concerning the
Company, its affiliates or their securities.


 


To
ensure an orderly and effective syndication of the Facilities, you agree that,
from the date hereof until the termination of the syndication (as reasonably
determined by KeyBanc), you will not and will not permit any of your affiliates
to, and after consummation of the Merger you will not permit the Target and its
affiliates to, syndicate or issue, attempt to syndicate or issue, announce or
authorize the announcement of the syndication or issuance of, or engage in
discussions concerning the syndication or issuance of, any debt security or
commercial bank or other debt facility (including any renewals thereof),
without the prior written consent of KeyBanc; provided, however, that the
foregoing shall not apply to the transactions contemplated in this Commitment
Letter.

















You
represent and warrant and covenant that:


 


(a)
all information (other than financial projections) taken with your filings with
the SEC which have been or are hereafter furnished to KeyBanc by you or any of
your representatives in connection with the Transactions is complete and
correct as of the date thereof in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances under which such statements were or are made; and


 


(b)
all financial projections taken with your filings with the SEC that have been
or are hereafter prepared by you or on your behalf and made available to
KeyBanc have been or will be prepared in good faith based upon what you believe
to be reasonable assumptions (it being understood that such projections are
subject to significant uncertainties and contingencies, many of which are
beyond your, or the Target’s, control and that no assurance can be given that
the projections will be realized).


 


You
agree to supplement the information and projections referred to in clauses (a)
and (b) above from time to time until completion of the syndication so that the
representations and warranties in the preceding sentence remain correct without
regard to when such information and projections were furnished. In issuing this
Commitment Letter and arranging and syndicating the Facilities, KeyBanc will be
entitled to use and rely on such information and projections without
independent verification thereof.


 


The
commitment of KeyBanc hereunder is subject to your compliance with the terms
and conditions of this Commitment Letter and the Fee Letter; please note,
however, that the terms and conditions of KeyBanc’s commitment hereunder are
not limited to those set forth herein and that those matters that are not
covered or made clear herein are subject to mutual agreement of the parties
hereto.


 


In
addition to the fees described in the Term Sheet hereto, the Company will pay
the fees set forth in the Fee Letter. The terms of the Fee Letter are an
integral part of KeyBanc’s commitment and undertaking hereunder and constitute
part of this Commitment Letter for all purposes hereof. Each of the fees
described in the Fee Letter and the Term Sheet hereto shall be nonrefundable
when paid unless otherwise specified. You agree that neither you nor any of
your affiliates will pay to any Lender any compensation or award any titles of
any kind for its participation in the Facilities except as expressly provided
for in this Commitment Letter, Term Sheet or in the Fee Letter, or as you and
we otherwise agree.


 


You
agree to reimburse KeyBanc and its affiliates for their reasonable
out-of-pocket fees and expenses incurred in connection with the preparation,
execution and delivery of this letter, the Fee Letter and the Facilities
Documents and the activities thereunder or contemplated thereby, including
without limitation syndication expenses and the reasonable fees and expenses of
a single outside counsel to KeyBanc and its affiliates (whether incurred before
or after the execution of this letter), whether or not any of the transactions
contemplated hereby are consummated. You further agree to pay all reasonable
out-of-pocket costs and expenses of KeyBanc (including without limitation, reasonable
fees and disbursements of counsel) incurred in connection with the enforcement
of any of its rights and remedies hereunder.


 


You
agree to indemnify and hold harmless each of KeyBanc and each other Lender,
their respective affiliates and each of their respective directors, officers,
employees, agents and 

















advisors
(each, an “Indemnified Party”), from and against any and all claims, damages,
liabilities (including securities law liabilities), losses and expenses,
including reasonable fees, expenses and disbursements of counsel, which may be
incurred by or asserted against an Indemnified Party in connection with KeyBanc’s
or any Lender’s commitment or participation in the transactions contemplated by
this letter, the Facilities or any related matter or any investigation,
litigation or proceeding in connection therewith and whether or not the
Acquisition is consummated or the Facilities are drawn upon and whether or not
such investigation, litigation or proceeding is brought by the Company, any of
its shareholders or creditors, an Indemnified Party or any other person, or an
Indemnified Party is otherwise a party thereto, except to the extent such
claim, damage, loss, liability or expense resulted from such Indemnified Party’s
own gross negligence or willful misconduct, as determined by a final,
non-appealable judgment of a court of competent jurisdiction.


 


No
Indemnified Party shall be responsible or liable to any other party hereto or
any other person for consequential, special or punitive damages that may be
alleged as a result of this letter or the breach of any party’s obligations
hereunder or have any liability (whether direct or indirect, in contract, tort
or otherwise) to the Company or any of its shareholders or creditors for or in
connection with the transactions contemplated hereby except to the extent such
liability resulted from such Indemnified Party’s gross negligence or willful
misconduct, as determined by a final, non-appealable judgment of court of
competent jurisdiction.


 


This
letter is delivered to you on the understanding that neither this letter nor
any other agreement between us related to this letter or the Transactions,
including the Term Sheet, and the Fee Letter, nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person
except (a) to your officers, agents and advisors who are directly involved in
the consideration of this matter (and then only on a confidential and “need to
know” basis) or (b) as may be compelled in a judicial or administrative
proceeding or as otherwise required by law (in which case you agree to inform
us promptly thereof); provided, however, that you may, after your acceptance of
this Commitment Letter and the Fee Letter, and only in connection with the
Acquisition, disclose this letter and the Term Sheet (including Annex I
attached thereto) and their terms and substance (but not the Fee Letter or its
terms and substance) (i) to the Target in connection with or related to the
Acquisition (and then only on a confidential and “need to know” basis), and
(ii) to other persons to the extent the information being disclosed has been
previously made publicly available other than through a breach of the terms of
this Commitment Letter. Notwithstanding any of the foregoing to the contrary,
you, KeyBanc and each Lender may disclose to any and all persons any
information with respect to the U.S. federal income tax treatment and U.S.
federal income tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to KeyBanc or such Lender relating to the tax treatment and tax
structure.


 


Our
offer to provide the Facilities will terminate at 5:00 PM, Pacific Time, (i) on
October 26, 2007, unless on or before that time you accept this letter by
signing and returning an enclosed counterpart of this letter and the Fee Letter
and (ii) if accepted by you on or prior to such time, on the earlier of
December 28th, 2007 and the date of execution of the Facilities
Documents. In any event your obligations with respect to indemnification, fees,
costs, expenses, confidentiality, governing law, jurisdiction and waiver of
jury trial shall remain in full force and effect, regardless of any termination
of the commitment of KeyBanc made hereunder; provided, that upon execution of
the Facilities Documents, your obligations with respect to indemnification set
forth herein shall terminate automatically and be superseded by the
indemnification provisions of the Facilities Documents.

















This
letter is intended to be solely for the benefit of the parties hereto and is
not intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. You acknowledge that KeyBanc may provide
debt financing, equity capital or other services (including financial advisory
services) to parties whose interests may conflict with your or the Target’s
respective interests. KeyBanc will not furnish confidential information
obtained from you, the Target or any of your or its respective affiliates to
any of KeyBanc’s other customers. Furthermore, KeyBanc shall have no obligation
to use in connection with the transactions contemplated hereby, or to furnish
to you or the Target, confidential information obtained by KeyBanc or any of
its affiliates from any other person.


 


In
connection with all aspects of each transaction contemplated by this Commitment
Letter, you acknowledge and agree that: (i) the Facilities and any related
arranging or other services described in this Commitment Letter are an arm’s-length
commercial transaction between you and your affiliates, on the one hand, and
KeyBanc, on the other hand, and you are capable of evaluating and understanding
and understand and accept the terms, risks and conditions of the transactions
contemplated by this Commitment Letter; (ii) in connection with the process
leading to such transaction, KeyBanc is and has been acting solely as principal
and is not a fiduciary for you or any of your subsidiaries or affiliates,
stockholders, creditors or employees or any other party; (iii) KeyBanc has not
assumed nor will it assume a fiduciary responsibility in your or your
subsidiaries’ or affiliates’ favor with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether
KeyBanc has advised or is currently advising you or your subsidiaries or
affiliates on other matters) and KeyBanc has no obligation to you or your
subsidiaries or affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth in this Commitment Letter and the
definitive loan documentation; (iv) KeyBanc and its respective affiliates may
be engaged in a broad range of transactions that involve interests that differ
from yours and your subsidiaries and affiliates and KeyBanc has no obligation
to disclose any of such interests by virtue of any advisory, agency or
fiduciary relationship; and (v) KeyBanc has not provided any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated
hereby and you have consulted your own legal, accounting, regulatory and tax
advisors to the extent you have deemed appropriate.  You hereby waive and release, to the fullest
extent permitted by law, any claims that you may have against KeyBanc with
respect to any breach or alleged breach of fiduciary duty.


 


We
hereby notify you that, pursuant to the requirements of the USA Patriot Act,
Title III of Pub. L. 107-56 (signed into law October 25, 2001), as amended (the
“Patriot Act”), we may be required to obtain, verify and record information
that identifies the Company, which information includes its name, address and
tax identification number and other information regarding it that will allow us
to identify it in accordance with the Patriot Act.  You agree to provide us with all
documentation and other information required by bank regulatory authorities
under the Patriot Act and any other “know your customer” and anti-money
laundering rules and regulations.


 


This
letter and KeyBanc’s commitment hereunder may not be assigned by you without
the prior written consent of KeyBanc, and any attempted assignment without such
consent shall be void. KeyBanc’s commitment hereunder may be assigned thereby
to any of its affiliates or, in consultation with you, to any Lender. Any such
assignment to an affiliate shall not relieve KeyBanc from any of its
obligations hereunder unless and until the Facilities Documents with respect to
such assigned commitment shall have been executed and delivered by the parties
thereto, but any assignment to a Lender shall be by novation and shall release
KeyBanc from its commitment hereunder pro tanto. This letter may not be amended
or modified or any provision 

















hereof
waived except in writing signed by you and KeyBanc. This Commitment Letter
together with the Term Sheet and the Fee Letter sets forth the entire agreement
between the parties with respect to the matters addressed herein and supersedes
all prior communications, written or oral, with respect hereto. This letter
shall be governed by and construed in accordance with the internal laws of the
State of New York. Each of the parties hereto irrevocably consents to the
exclusive jurisdiction and venue of the federal and/or state courts located
within the City of New York. The parties hereto hereby waive, to the fullest
extent permitted by applicable law, any objection that they may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to the provisions of this Commitment Letter or the Fee
Letter 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.
Each party hereto irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Commitment Letter or the transactions
contemplated hereby or the actions of the parties hereto in the negotiation,
performance or enforcement hereof. This letter may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page of this
letter by facsimile transmission shall be effective as delivery of a manually
signed counterpart hereof.


 


We
appreciate the opportunity to assist you in this very important transaction.


 


Please evidence your
acceptance of this letter by signing and returning to the undersigned the
enclosed copy of this letter.


 


Sincerely,


 


	
  KEYBANC
  CAPITAL MARKETS

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Kevin McBride

  
	
   

  	
  Kevin McBride

  
	
   

  	
  Managing Director

  



In consideration of the foregoing, the undersigned hereby acknowledge
and agree to the terms of the foregoing letter this 26th day of October, 2007.


KRATOS DEFENSE & SECURITY SOLUTIONS, INC.


 


 


	
  By: 

  	
  /s/ Eric DeMarco

  
	
   

  	
   

  
	
  Its:

  	
  President and CEO