Exhibit 10.1
SETTLEMENT AGREEMENT AND GENERAL RELEASE OF CLAIMS
This Settlement Agreement and General Release of Claims ("Agreement") is made
and entered into this 16th day of October, 2009, by and between Kratos Defense &
Security Solutions, Inc. ("KRATOS"), KeyBank National Association ("KEYBANK"),
Field Point III, Ltd. ("FIELD POINT"), and SPF CDO I, Ltd. ("SPF").
The parties
to this Agreement are collectively referred to below as "Parties."
RECITALS
A.
ON DECEMBER 31, 2007, KRATOS AND KEYBANK ENTERED INTO A FIRST LIEN
CREDIT AGREEMENT AND A SECOND LIEN CREDIT AGREEMENT (COLLECTIVELY, THE "CREDIT
FACILITIES").
B.
ON JANUARY 2, 2008, KEYBANK SYNDICATED A PORTION OF THE FIRST LIEN
CREDIT AGREEMENT TO FIELD POINT AND SPF.
C.
ON JUNE 4, 2009, KRATOS FILED A LAWSUIT AGAINST KEYBANK, FIELD
POINT AND SPF CAPTIONED KRATOS DEFENSE & SECURITY SOLUTIONS, INC. V. FIELD POINT
III, LTD., ET AL., CASE NO. 09-CV-1284 IN THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF OHIO (THE "OHIO ACTION").
THE COMPLAINT FILED IN THE
OHIO ACTION ALLEGED, INTER ALIA, THE EXISTENCE OF AN ERROR IN SCHEDULE
7.12(C) TO THE CREDIT FACILITIES, AND SOUGHT, INTER ALIA, REFORMATION OF THE
CREDIT FACILITIES.
D.
ON AUGUST 5, 2009, FIELD POINT AND SPF FILED A LAWSUIT AGAINST
KRATOS AND KEYBANK CAPTIONED FIELD POINT III, LTD., ET AL. V. KRATOS DEFENSE &
SECURITY SOLUTIONS, INC., ET AL., CASE NO. 09-CV-6921 IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE "NEW YORK ACTION").
THE COMPLAINT FILED IN THE NEW YORK ACTION ALLEGED, INTER ALIA, THAT KRATOS
IMPROPERLY CHARACTERIZED CERTAIN INSURANCE PROCEEDS AS EBITDA, AND SOUGHT, INTER
ALIA, DECLARATORY RELIEF THAT THE FINANCIAL COVENANTS REFERRED TO IN SCHEDULE
7.12(C) TO THE CREDIT FACILITIES WERE ENFORCEABLE AS WRITTEN.
E.
EACH OF THE PARTIES TO THIS AGREEMENT DENIES ANY WRONGDOING BY
THEM, AND THEY MAKE NO ADMISSIONS OF LIABILITY OF ANY KIND WHATSOEVER.
FIELD
POINT AND SPF DENY THAT THEY ARE SUBJECT TO PERSONAL JURISDICTION IN THE
NORTHERN DISTRICT OF OHIO, AND ALL PARTIES ACKNOWLEDGE AND AGREE THAT THIS
SETTLEMENT IS WITHOUT WAIVER OF OR PREJUDICE TO FIELD POINT'S AND SPF'S
POSITION, AND THAT NOTHING RELATED IN ANY WAY TO THIS AGREEMENT OR THE
SETTLEMENT SHALL BE ADMISSIBLE IN ANY PROCEEDING OR OTHERWISE USED TO ARGUE THAT
SUCH PERSONAL JURISDICTION EXISTS.
F.
THE PARTIES RECOGNIZE THE UNCERTAINTIES AND COSTS OF LITIGATION
AND NOW DESIRE AMICABLY TO RESOLVE, COMPROMISE AND SETTLE ANY AND ALL CLAIMS AND
CONTROVERSIES BETWEEN THEM OF WHATEVER TYPE (COLLECTIVELY "THE CLAIMS"),
INCLUDING BUT NOT LIMITED TO THOSE CLAIMS ASSERTED IN THE OHIO ACTION AND THE
NEW YORK ACTION, AND TO PROVIDE FOR CERTAIN AGREEMENTS UPON CERTAIN TERMS AND
CONDITIONS.
1
G.
THE PARTIES ARE EXECUTING CONTEMPORANEOUSLY WITH THIS AGREEMENT
THE THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT, ATTACHED HERETO AS
EXHIBIT A, AND THE THIRD AMENDMENT TO SECOND LIEN CREDIT AGREEMENT, ATTACHED
HERETO AS EXHIBIT B.
NOW, THEREFORE, in order to settle the Claims and in consideration of the mutual
covenants and promises contained herein, and for other good