Execution Version
FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT, LIMITED CONSENT, AND WAIVER
This FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT, LIMITED CONSENT, AND
WAIVER (this "Agreement") is made as of July 22, 2016, and effective upon the
Effective Date (as defined below), by and among KRATOS DEFENSE & SECURITY
SOLUTIONS, INC., a Delaware corporation (the "Borrower"), each of the other
Credit Parties identified as such on the signature pages hereof, each of the
lenders signatory hereto constituting the Required Lenders (as defined in the
Credit Agreement described below) and SUNTRUST BANK, a Georgia banking
corporation, as administrative agent (together with its successors and assigns
in such capacity, "Agent").
RECITALS
A.The Borrower, Agent and certain lenders (collectively, the "Lenders") are
parties to that certain Credit and Security Agreement, dated as of May 14, 2014
(as amended to date and as it may be further amended, restated, supplemented
and/or otherwise modified from time to time prior to the date hereof, the
"Credit Agreement"). Except as otherwise defined herein, capitalized terms used
herein have the respective meanings assigned to them in the Credit Agreement.
B.In connection with the Credit Agreement, each Credit Party (other than the
Borrower) guaranteed the Obligations of the Borrower pursuant to that certain
Guaranty of Payment, dated as of May 14, 2014, and each Credit Party granted to
Agent, for the benefit of the Lenders, a first priority security interest
(subject only to Permitted Liens) in substantially all of such Credit Party's
assets pursuant to that certain Security Agreement, dated as of May 14, 2014,
executed by the Credit Parties in favor of Agent.
C.Gichner Systems Group, Inc., a Delaware corporation ("Gichner") and
wholly-owned Subsidiary of the Borrower, has entered into, and desires to
modify, a contracting relationship with Raytheon Company a Delaware corporation
("Raytheon"), pursuant to the purchase orders listed on Annex I hereto (as such
Annex I may be amended by Agent and Raytheon from time to time, collectively,
the "Raytheon Purchase Orders"), and in connection therewith has granted to
Raytheon, and will grant to Raytheon, a first priority Lien in all goods
purchased by Gichner with progress, advance, milestone and/or performance based
payments (collectively, "Raytheon Progress Payments") made by Raytheon to
Gichner pursuant to the Raytheon Purchase Orders (the "Raytheon Collateral")
pursuant to that certain Security Agreement, dated as of June 24, 2014 among
Raytheon Integrated Defense Company, a Delaware corporation ("Raytheon IDC"),
and a division or wholly-owned subsidiary of Raytheon, as amended by (i) that
certain First Amendment to Security Agreement, dated November 10, 2014, between
Raytheon IDC and Gichner, and (ii) as further amended by that certain Second
Amendment to Security Agreement, dated as of the date hereof, between Raytheon
and Gichner, a fully-executed copy of which is attached hereto as Exhibit A (as
so amended, and as the same may be further amended, restated, supplemented
and/or otherwise modified from time to time, together with all other security
agreements between Gichner and Raytheon as Gichner may attach to Exhibit A with
the written