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  Exhibit 10.2    
    

KRATOS DEFENSE & SECURITY SOLUTIONS, INC.,

as
Issuer, 

THE GUARANTORS HEREAFTER PARTIES HERETO,

as
Guarantors 

and 

WILMINGTON TRUST FSB,

as
Trustee and Collateral Agent 

  

FIRST SUPPLEMENTAL INDENTURE

Dated
as of February 7, 2011 

Supplementing
the Indenture, Dated as of May 19, 2010 

  

Providing
for the 

Amendment
to the Terms of 10% Senior Secured Notes due 2017 

  
        THIS FIRST SUPPLEMENTAL INDENTURE, dated as of February 7, 2011 (the "First 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 FSB, as trustee (the "Trustee") and collateral agent (the "Collateral Agent"), for the
Company's 10% Senior Secured Notes due 2017 (the "2017 Notes"). 

        Capitalized
terms used herein and not otherwise defined herein shall have the meanings ascribed to thereto in the Original Indenture (as defined below). 

RECITALS 

        WHEREAS,
the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of May 19, 2010, providing for the issuance of the 2017 Notes (the
"Original Indenture" and as amended, supplemented, waived or otherwise modified, the "Indenture"); 

        WHEREAS,
the Company intends to enter into an agreement and plan of merger with, among other parties, Herley Industries, Inc., a Delaware corporation
("Herley"), pursuant to which Herley will become a wholly owned subsidiary of the Company following the acquisition of all of Herley's issued and
outstanding capital stock through a tender offer followed by a subsequent merger transaction (the "Herley Acquisition"); 

        WHEREAS,
the Company has formed a Wholly-Owned Unrestricted Subsidiary ("Acquisition Holdco"), which the Company intends to cause to issue
up to $325.0 million in aggregate principal amount of Acquisition Holdco's new senior secured notes (the "Acquisition Notes") to finance a
portion of the purchase price of the Herley Acquisition and related transaction fees and expenses and for general corporate purposes; 

        WHEREAS,
following the consummation of the Herley Acquisition, it is contemplated that Acquisition Holdco will be redesignated as a Restricted Subsidiary of the Company and will be
merged into the Company, the Acquisition Notes will be exchanged (the "Exchange Debt Offering") by the Company for Additional Notes to be issued by the
Company under the Indenture, which will be guaranteed by all of the Guarantors, and secured by the same collateral as the 2017 Notes on a pari passu basis; 

        WHEREAS,
the Company's Consolidated Fixed Charge Coverage Ratio determined on a pro forma basis, after giving effect to the Herley Acquisition and the incurrence of such additional
Indebtedness and the application of proceeds thereof, might not at the time of the Exchange Debt Offering be greater than 2.00 to 1.00 for purposes of the incurrence test contained in the proviso to
Section 4.08(a) of the Original Indenture; 

        WHEREAS,
as of the date of this First Supplemental Indenture, $225.0 million aggregate principal amount of 2017 Notes remain outstanding; 

        WHEREAS,
Section 9.02 of the Original Indenture provides that the Company and the Guarantors, when authorized by a Board Resolution, and the Trustee or Collateral Agent, as
applicable, together, with the written consent of Holders representing at least a majority in aggregate principal amount of the outstanding 2017 Notes affected by such supplemental indenture
may enter into an indenture supplemental to the Original Indenture for the purpose of amending or supplementing the Original Indenture; 

        WHEREAS,
the Company has requested the Trustee to join with it in entering into this First Supplemental 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 Herley Acquisition, as permitted by Section 9.02 of the Original Indenture; 

        WHEREAS,
the Company has been soliciting consents to this First Supplemental Indenture upon the terms and subject to the conditions set forth in its Consent Letter, dated
January 31, 2011, and the 

related
consent (which together, including any amendments, modifications or supplements thereto, constitute the "Consent Solicitation"); and 

        WHEREAS,
(1) the Company and the Guarantors have been authorized by a Board Resolution to enter into an indenture supplemental to the Original Indenture, (2) the Company
has received the written consent of the Holders of more than a majority in principal amount of the outstanding 2017 Notes, all as certified by an Officers' Certificate delivered to the Trustee
simultaneously with the execution and delivery of this First Supplemental Indenture, (3) the Company has delivered to the Trustee
simultaneously with the execution and delivery of this First Supplemental Indenture an Opinion of Counsel relating to this First Supplemental Indenture as contemplated by Section 11.04 of the
Original Indenture and (4) the Company has satisfied all other conditions required under Article Nine of the Original Indenture to enable the Company and the Trustee to enter into this First
Supplemental Indenture. 

        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
2017 Notes, as follows: 

 AGREEMENTS  

 ARTICLE I  

 AMENDMENTS TO INDENTURE; EFFECTIVENESS OF AMENDMENTS  

        Section 1.1    Amendments to the Indenture.    

        (a)   Section 1.01
of the Indenture is hereby amended by adding the following definitions: 

        "Herley" means Herley Industries, Inc., a Delaware corporation. 

        "Herley Acquisition" means the acquisition by the Company through one or more of its Subsidiaries of all of the issued and outstanding
capital stock of Herley. 

        (b)   Section 4.08(a)
of the Indenture is hereby amended by adding a new sentence at the end thereof as follows: 

        "Notwithstanding
the foregoing proviso, the Company may incur Indebtedness and any of its Restricted Subsidiaries that is a Guarantor may incur Indebtedness in the form of Additional
Notes in an aggregate principal amount of up to $325.0 million to the extent issued in exchange for Indebtedness incurred by an Unrestricted Subsidiary and to the extent incurred by such
Unrestricted Subsidiary of the Company to fund a portion of the purchase price of the Herley Acquisition and related transaction fees and expenses and for general corporate purposes without regard to
the Consolidated Fixed Charge Coverage Ratio of the Company at the time of such incurrence or after giving effect to the incurrence thereof." 

        Section 1.2    Effectiveness of this First Supplemental
Indenture.    This First Supplemental Indenture is entered into pursuant to and consistent with Section 9.02 of the Indenture, and nothing
herein shall constitute a waiver, amendment, modification or deletion of the Indenture requiring the approval of each Holder affected thereby pursuant to clauses (1) through (9) of the
first paragraph of Section 9.02 of the Indenture. Upon the execution of this First 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 First Supplemental Indenture shall form a part of the Indenture for all purposes and each Holder shall be bound thereby;
provided, however, that the provisions of the Indenture referred to in Section 1.1 above (such provisions being referred to as the
"Section 1.1 Provisions") will remain in effect in the form they existed prior to the execution of this First Supplemental Indenture, and the waivers, amendments
and modifications to the Section 1.1 Provisions will not become operative, and the terms of the Indenture will not be waived, amended or modified, in each case, unless (x) at least one
Business Day prior to the consummation of the Exchange Debt Offering, the Company has not delivered to the Trustee an Officers' Certificate pursuant to which the Company notifies the Trustee that it
does not desire this First Supplemental Indenture to become 

effective
(in which case this First Supplemental Indenture shall thereafter be deemed to be ineffective for all purposes under the Indenture), (y) the Company has made a cash payment to the
Trustee immediately prior to the consummation of the Exchange Debt Offering in an amount equal to $5 per $1,000 principal amount of all 2017 Notes for the account of each Holder in whose name a
2017 Note was registered at 5:00 p.m., New York City time, on January 28, 2011, regardless of whether such Holder consented to the proposed amendments to the Indenture contained herein
and (z) Herley becomes a Wholly-Owned Restricted Subsidiary of the Company and a Guarantor substantially contemporaneously with the consummation of the Exchange Debt Offering. 

 ARTICLE II  

 MISCELLANEOUS PROVISIONS  

        Section 2.1    Confirmation of the Original
Indenture.    The Original Indenture, as heretofore supplemented and amended by this First Supplemental Indenture, as well as the 2017 Notes,
are in all respects ratified and confirmed and all the terms shall remain in full force and effect. This First Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of 2017 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 First Supplemental Indenture shall control. 

        Section 2.2    Governing Law.    This First 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 2.3    Successors.    All agreements of the
Company in this First Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this First Supplemental Indenture shall bind its successors. 

        Section 2.4    Duplicate Originals.    All parties may
sign any number of copies of this First 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 First
Supplemental Indenture and of signature pages by facsimile or pdf shall constitute effective execution and delivery of this First Supplemental Indenture. Signatures of the parties hereto transmitted
by facsimile or pdf shall be deemed to be their original signatures for all purposes. 

        Section 2.5    Severability.    In case any one or more of
the provisions in this First Supplemental Indenture or in the 2017 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 2.6    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 First Supplemental Indenture. 

        Section 2.7    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 First Supplemental Indenture to be duly executed as of the day and year written above. 

 

 

							
	 	 	 KRATOS DEFENSE SYSTEMS & SOLUTIONS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  AI METRIX, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  DEFENSE SYSTEMS, INCORPORATED
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  DIGITAL FUSION SOLUTIONS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  DIGITAL FUSION, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  DTI ASSOCIATES, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  HAVERSTICK CONSULTING, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer

 

 

 

 

							
	

 	
 	
  HAVERSTICK GOVERNMENT SOLUTIONS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  HGS HOLDINGS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  JMA ASSOCIATES, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  KRATOS COMMERCIAL SOLUTIONS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  KRATOS GOVERNMENT SOLUTIONS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  KRATOS MID-ATLANTIC, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  KRATOS SOUTHEAST, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer

 

 

 

 

							
	

 	
 	
  KRATOS SOUTHWEST, L.P.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  KRATOS TEXAS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  MADISON RESEARCH CORPORATION
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  POLEXIS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  REALITY BASED IT SERVICES, LTD.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  ROCKET SUPPORT SERVICES, LLC
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  SHADOW I, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer

 

 

 

 

							
	

 	
 	
  SHADOW II, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  SHADOW III, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  SUMMIT RESEARCH CORPORATION
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  SYS
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  WFI NMC CORP.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  CHARLESTON MARINE CONTAINERS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  DALLASTOWN REALTY I, LLC
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer

 

 

 

 

							
	

 	
 	
  DALLASTOWN REALTY II, LLC
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  GICHNER HOLDINGS, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  GICHNER SYSTEMS GROUP, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  GICHNER SYSTEMS INTERNATIONAL, INC.
	

 	
 	
 By:	
 	
/s/ Deanna H. Lund

 
	 	 	 	 	Name:	 	Deanna H. Lund
	 	 	 	 	Title:	 	Executive Vice President & Chief Financial Officer
	

 	
 	
  WILMINGTON TRUST FSB, as Trustee and Collateral Agent
	

 	
 	
 By:	
 	
/s/ Jane Schweiger

 
	 	 	 	 	Name:	 	Jane Schweiger
	 	 	 	 	Title:	 	Vice President

 

 

  EXHIBIT A  

Guarantors 

AI
METRIX, INC. 

DEFENSE
SYSTEMS, INCORPORATED 

DIGITAL
FUSION SOLUTIONS, INC. 

DIGITAL
FUSION, INC. 

DTI
ASSOCIATES, INC. 

HAVERSTICK
CONSULTING, INC. 

HAVERSTICK
GOVERNMENT SOLUTIONS, INC. 

HGS
HOLDINGS, INC. 

JMA
ASSOCIATES, INC. 

KRATOS
COMMERCIAL SOLUTIONS, INC. 

KRATOS
GOVERNMENT SOLUTIONS, INC. 

KRATOS
MID-ATLANTIC, INC. 

KRATOS
SOUTHEAST, INC. 

KRATOS
SOUTHWEST, L.P. 

KRATOS
TEXAS, INC. 

MADISON
RESEARCH CORPORATION 

POLEXIS, INC. 

REALITY
BASED IT SERVICES, LTD. 

ROCKET
SUPPORT SERVICES, LLC 

SHADOW
I, INC. 

SHADOW
II, INC. 

SHADOW
III, INC. 

SUMMIT
RESEARCH CORPORATION 

SYS

WFI
NMC CORP. 

CHARLESTON
MARINE CONTAINERS, INC. 

DALLASTOWN
REALTY I, LLC 

DALLASTOWN
REALTY II, LLC 

GICHNER
HOLDINGS, INC. 

GICHNER
SYSTEMS GROUP, INC. 

GICHNER
SYSTEMS INTERNATIONAL, INC. 

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  Exhibit 10.3    
    

 
    SECOND AMENDMENT AGREEMENT    
    

        This SECOND AMENDMENT AGREEMENT (this "Amendment") is made as of the 7th day of February, 2011 among: 

        (a)   KRATOS
DEFENSE & SECURITY SOLUTIONS, INC., a Delaware corporation ("Borrower"); 

        (b)   the
Lenders, as defined in the Credit Agreement, as hereinafter defined; and 

        (c)   KEYBANK
NATIONAL ASSOCIATION, as the lead arranger, sole book runner and administrative agent for the Lenders under the Credit Agreement ("Agent"). 

        WHEREAS,
Borrower, Agent and the Lenders are parties to that certain Credit and Security Agreement, dated as of May 19, 2010, that provides, among other things, for loans and
letters of credit aggregating Thirty-Five Million Dollars ($35,000,000), all upon certain terms and conditions (as amended and as the same may from time to time be further amended,
restated or otherwise modified, the "Credit Agreement"); 

        WHEREAS,
Borrower, Agent and the Lenders desire to amend the Credit Agreement to modify certain provisions thereof and add certain provisions thereto; 

        WHEREAS,
each capitalized term used herein and defined in the Credit Agreement, but not otherwise defined herein, shall have the meaning given such term in the Credit Agreement; and 

        WHEREAS,
unless otherwise specifically provided herein, the provisions of the Credit Agreement revised herein are amended effective as of the date of this Amendment; 

        NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
Borrower, Agent and the Lenders agree as follows: 

        1.    Amendments to Definitions in the Credit Agreement.    Section 1.1 of the
Credit Agreement is hereby amended to delete the definitions of "Consolidated EBITDA" and "Consolidated Fixed Charges" therefrom and to insert in place thereof, respectively, the following: 

        "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. (so long as Kratos Southeast, Inc. is held as a
discontinued operation and is sold or otherwise divested on or prior to the last day of the 2010 fiscal year of Borrower) for (A) the 2009 fiscal year of Borrower, and (B) the Quarterly
Reporting Periods in 2010 in an aggregate amount not to exceed Two Million Dollars ($2,000,000), (vi) losses with respect to discontinued operations, in an aggregate amount not to exceed Two
Million Dollars ($2,000,000); (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 Seven Hundred Thousand Dollars ($1,700,000); and (viii) non-recurring transaction costs incurred in connection with the Herley Transactions, in an aggregate amount not to
exceed Eleven Million Dollars ($11,000,000); 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 one or more Acquisitions and
payments on Capitalized Lease Obligations); provided that, for the 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 Four Hundred Thousand
Dollars ($3,400,000), and (iii) payments of the Indebtedness of Herley made at the time of the Herley Transactions, in an aggregate amount not to exceed Fifteen Million Dollars ($15,000,000). 

        2.    Amendment to the Definition of Permitted Foreign Subsidiary Loans, Guaranties and
Investments.    The definition of "Permitted Foreign Subsidiary Loans, Guaranties and Investments" in the Credit Agreement is hereby amended to delete subpart (d)
therefrom and to insert in place thereof the following new subpart (d), and to add the following new subpart (e) at the end thereof: 

        (d)   intercompany
loans and investments from Herley or a Domestic Subsidiary of Herley to a Foreign Subsidiary of Herley, in an aggregate principal amount for all such loans
and investments of all Credit Parties, permitted pursuant to this subpart (d), not to exceed, at any time, Thirty-Three Million Dollars ($33,000,000); and 

        (e)   additional
loans and investments by Borrower or a Domestic Subsidiary to or in a Foreign Subsidiary, or guaranties by Borrower or a Domestic Subsidiary of the
Indebtedness or contract performance of a Foreign Subsidiary, made on or after the Closing Date in the ordinary course of business, so long as the aggregate amount of all such loans and investments of
all Credit Parties does not exceed, at any time, an aggregate amount of Four Million Dollars ($4,000,000). 

        3.    Additions to Definitions in the Credit Agreement.    Section 1.1 of the
Credit Agreement is hereby amended to add the following new definitions thereto: 

        "Exchange
Debt Offering" means that term as defined in Section 9(a) of the Second Amendment Agreement. 

        "HBE"
means Henry Bros. Electronics, Inc., a Delaware corporation. 

        "HBE
Acquisition" means that Acquisition by Borrower of HBE. 

        "Herley"
means Herley Industries, Inc., a Delaware corporation. 

        "Herley
Acquisition Notes" means that term as defined in Section 9(a) of the Second Amendment Agreement. 

        "Herley
Tender Offer" means that term as defined in Section 9(a)(ii) of the Second Amendment Agreement. 

        "Herley
Transactions" means that term as defined in Section 9(a) of the Second Amendment Agreement. 

        "SCT
Acquisition" means that Acquisition by Borrower of SCT Acquisition, LLC, a Delaware corporation. 

        "Second
Amendment Agreement" means that certain Second Amendment Agreement, dated as of the Second Amendment Effective Date, among Borrower, Agent and the Lenders. 

        "Second
Amendment Effective Date" means February 7, 2011. 

        4.    Amendment to Borrowing Covenant Provisions.    Section 5.8 of the Credit
Agreement is hereby amended to delete subsection (j) therefrom and to insert in place thereof the following revised subsection (j), and to add the following new subsections (l)
and (m) at the end thereof: 

        (j)    Indebtedness
incurred in connection with (i) prior to the date of the Exchange Debt Offering, the Herley Acquisition Notes, resulting in aggregate gross proceeds
not to exceed Three Hundred Twenty-Five Million Dollars ($325,000,000), and (ii) on and after the date of the Exchange Debt Offering, the additional Senior Notes issued by Borrower
in (A) the Exchange 

2

 

Debt
Offering, in an original principal amount not to exceed the aggregate principal amount of the Herley Acquisition Notes or (B) an exchange offer made by Borrower for any and all of the
additional Senior Notes issued in the Exchange Debt Offering (the "Exchange Debt Offering Notes") such that the additional Senior Notes received in connection with such exchange offer will
(1) have substantially identical terms to the Exchange Debt Offering Notes, (2) be for the same aggregate principal amount as the Exchange Debt Offering Notes, and (3) be
registered under the Securities Act; 

        (l)    the
Indebtedness existing on the date of the completion of the Herley Tender Offer, in addition to the other Indebtedness permitted to be incurred pursuant to this
Section 5.8, as set forth in Schedule 5.8A hereto (and any extension, renewal or refinancing thereof but only to the extent that the principal amount thereof
does not increase after the date of the completion of the Herley Tender Offer); 

        (m)  other
Indebtedness, in addition to the Indebtedness listed above, in an aggregate principal amount for all Companies not to exceed Twenty-Five Million
Dollars ($25,000,000), with respect to (i) Indebtedness incurred in connection with the Senior Notes, (ii) unsecured Subordinated Indebtedness created pursuant to documentation in form
and substance reasonably satisfactory to Agent and the Required Lenders, and on terms reasonably satisfactory to Agent and the Required Lenders, and (iii) other unsecured Indebtedness; so long
as, in each case, as of the date such additional Indebtedness is incurred, (A) Borrower is in pro forma compliance with Section 5.7 hereof, both before and after giving effect to the
incurrence of such Indebtedness, and (B) no Default or Event of Default shall then exist or immediately thereafter shall begin to exist. 

        5.    Amendment to Permitted Liens Covenant.    Section 5.9 of the Credit
Agreement is hereby amended to delete subsection (h) therefrom and to insert in place thereof the following revised subsection (h), and to add the following new subsection (l) at
the end thereof: 

        (h)   the
Liens securing the Indebtedness under the Senior Notes permitted pursuant to Sections 5.8(h), (j) and (m) hereof, so long as (i) such
Liens are subject to the Intercreditor Agreement, and (ii) as of the issuance date of any additional Senior Notes issued after the date of the Exchange Debt Offering, (A) Borrower is in
pro forma compliance with Section 5.7 hereof, both before and after giving effect to the issuance of such additional Senior Notes, and (B) no Default or Event of Default shall then exist
or immediately thereafter shall begin to exist; 

        (l)    the
Liens existing on the date of the completion of the Herley Tender Offer, in addition to the other Liens permitted pursuant to this Section 5.9, as set forth
in Schedule 5.9A hereto and replacements, extensions, renewals, refundings or refinancings thereof, but only to the extent that the amount of debt secured thereby,
and the property encumbered thereby, shall not be increased. 

        6.    Amendment to Investments, Loans and Guaranties Provisions.    Section 5.11
of the Credit Agreement is hereby amended to delete subsection (v) therefrom and to insert in place thereof the following: 

        (v)   the
holding of each of the Subsidiaries listed on Schedule 6.1 hereto, and the creation, acquisition and holding of and any
investment in any new Subsidiary after the Closing Date so long as such new Subsidiary shall have been created, acquired or held, and investments made, in accordance with the terms and conditions of
this Agreement or the consent set forth in Section 9 of the Second Amendment Agreement; 

        7.    Amendment to Permitted Acquisition Provisions.    Section 5.13 of the Credit
Agreement is hereby amended to delete subsection (j) therefrom and to insert in place thereof the following: 

        (j)    the
aggregate amount of cash Consideration (exclusive of the issuance of equity) paid for all such Acquisitions (including Distressed Acquisitions, but excluding the
Herley Transactions) 

3

 

after
the Second Amendment Effective Date would not exceed Twenty-Five Million Dollars ($25,000,000); provided that, to the extent any cash Consideration for any such Acquisition is funded
with the net cash proceeds of an equity offering by Borrower, the aggregate amount of such net cash proceeds of an equity offering shall be excluded from the calculation of the maximum Dollar amounts
set forth in this subsection (j); and 

        8.    Addition of Schedules to the Credit Agreement.    The Credit Agreement is hereby
amended to add a new Schedule 5.8A and Schedule 5.9A thereto in the forms of the attached
Schedule 5.8A and Schedule 5.9A, respectively, hereto. 

        9.    Consent to the Herley Transactions.    

        (a)    Herley Transactions.    Borrower is seeking to acquire all of the capital stock of
Herley through a series of transactions described below (collectively, the "Herley Transactions"), with the result that Herley will become a wholly-owned Subsidiary of Borrower. Specifically: 

          (i)  Borrower
will create a wholly-owned direct Subsidiary corporation ("Acquisition Holdco"), and will cause Acquisition Holdco to create a wholly-owned direct Subsidiary
corporation ("Acquisition Co."); 

         (ii)  Acquisition
Holdco will, or will cause Acquisition Co. to, make a tender offer for all of the outstanding equity interest of Herley (the "Herley Tender Offer"); 

        (iii)  the
completion of the Herley Tender Offer will be followed by a back-end squeeze-out merger, pursuant to which Herley will be merged with and
into Acquisition Co, with Herley being the surviving entity and a wholly-owned direct Subsidiary of Acquisition Holdco (the "Squeeze-Out Merger"); and 

        (iv)  promptly
following the Squeeze-Out Merger, Acquisition Holdco will be merged with and into Borrower, with Borrower being the surviving entity (the
"Roll-up Merger" and, together with the Squeeze-Out Merger, collectively, the "Mergers"), so that Herley will become a direct wholly-owned Subsidiary of Borrower. 

        To
finance the Herley Transactions, pay fees and expenses of the Herley Transactions and provide working capital for general corporate purposes, Borrower (A) may issue common
equity, from which it would expect to receive net proceeds of up to Forty Million Dollars ($40,000,000) (the "Equity Offering"), (B) will cause Acquisition Holdco to issue new senior secured
notes (the "Herley Acquisition Notes"), from which it expects to receive aggregate gross proceeds of up to Three Hundred Twenty-Five Million Dollars ($325,000,000) less the net proceeds of
the Equity Offering, (C) expects to draw up to Five Million Dollars ($5,000,000) of Revolving Loans (the "Revolver Draw"), and (D) may use up to Four Million Eight Hundred Thousand
Dollars ($4,800,000) of unrestricted cash on hand of Borrower. Borrower will invest the net proceeds of the Equity Offering, the proceeds of the Revolver Draw and any necessary unrestricted cash on
hand of Borrower in Acquisition Holdco, and Acquisition Holdco will use such funds, together with the net proceeds of the Herley Acquisition Notes, to consummate the Herley Tender Offer and the
Squeeze-Out Merger. 

        The
Herley Acquisition Notes will be guaranteed solely by Acquisition Co, and will be secured solely by the assets of Acquisition Holdco and Acquisition Co (other than the equity
interests of Herley until Herley becomes a wholly-owned subsidiary of Acquisition Holdco). Prior to the Roll-up Merger, neither the Credit Agreement nor the Senior Notes will be guaranteed
by, or secured by any of the assets of, Acquisition Holdco, Acquisition Co or Herley (or any of its Subsidiaries). Following the Roll-up Merger, all of the Herley Acquisition Notes will be
exchanged for additional Senior Notes to be issued by Borrower under the Senior Notes Indenture (the "Exchange Debt Offering"), which additional Senior Notes will be guaranteed by each Guarantor of
Payment and secured by the same collateral as the currently outstanding Senior Notes on a pari passu basis. Any guaranties of, and 

4

 

security
interests granted by, Acquisition Holdco and Acquisition Co relating to the Herley Acquisition Notes will terminate and be released upon exchange of the Herley Acquisition Notes for the
additional Senior Notes to be issued by Borrower in the Exchange Debt Offering, and after the Roll-up Merger Herley and its Subsidiaries will give guaranties of the Obligations and the
Senior Notes and grant security interests in their respective assets as required by the Credit Agreement and the Senior Notes Indenture. 

        If,
in connection with the issuance of the Herley Acquisition Notes and the additional Senior Notes to be issued in the Exchange Debt Offering, Borrower is required to obtain a waiver
from the Senior Noteholders (the "Senior Note Waiver"), Borrower may pay a fifty (50.00) basis points fee to each of the Senior Noteholders. 

        (b)    Request for Consent.    Certain of the Herley Transactions are prohibited by one
or more provisions of the Credit Agreement, including but not limited to Sections 5.8 (Borrowing), 5.9 (Liens), 5.10 (Regulations T, U and X), 5.11 (Investments, Loans and Guaranties),
5.12 (Merger and Sale of Assets), 5.13 (Acquisitions), 5.15 (Restricted Payments), 5.17 (Affiliate Transactions), 5.20 (Subsidiary Guaranties, Security Documents and Pledge of Stock or Other Ownership
Interest), 5.28 (Other Covenants and Provisions), 5.30 (Guaranty Under Material Indebtedness Agreement) and 5.31 (Senior Note Documents). Borrower hereby specifically requests that Agent and the
Lenders consent to the Herley Transactions. 

        (c)    Consent of Agent and the Lenders.    Notwithstanding any provisions of the Credit
Agreement that may restrict or prohibit the Herley Transactions, Agent and the Lenders hereby consent to the Herley Transactions and Borrower's consummation of the Herley Transactions, subject to the
following conditions: 

          (i)  after
giving effect to the terms of this Amendment (including but not limited to the consent of Agent and the Lenders) and, if applicable, the Senior Note Waiver,
Borrower shall be in pro forma compliance with the Credit Agreement both before and after consummating the Herley Transactions; 

         (ii)  after
giving effect to the terms of this Amendment (including but not limited to the consent of Agent and the Lenders) and, if applicable, the Senior Note Waiver, no
Default or Event of Default shall exist under the Credit Agreement or any other Loan Document; 

        (iii)  the
Available Liquidity shall be no less than Twenty Million Dollars ($20,000,000) both before and after giving pro forma effect to the Herley Transactions; 

        (iv)  the
Herley Transactions are structured and occur substantially as set forth in Section 9(a) hereof; 

         (v)  the
Roll-up Merger and the Exchange Debt Offering occur within four Business Days of the completion of the Squeeze-Out Merger; 

        (vi)  the
Herley Transactions are not prohibited by the terms of the Senior Notes Documents (as such terms may be modified by any consent given by the Senior Noteholders); 

       (vii)  the
additional Senior Notes issued by Borrower in the Exchange Debt Offering are issued pursuant to the Senior Notes Indenture and subject to the Intercreditor
Agreement; 

      (viii)  neither
the Indenture Agent nor any Senior Noteholder files any U.C.C. Financing Statement on the assets of Herley or any of its subsidiaries prior to the date upon
which Agent has filed such U.C.C. Financing Statements; 

        (ix)  the
Herley Transactions are completed on or before June 30, 2011; and 

         (x)  Borrower
complies with the requirements of Section 10 hereof. 

5

 

This
Amendment shall serve as evidence of such consent. The consent contained in this Section 9 shall not be deemed to waive or amend any provision of the Credit Agreement or the Loan Documents
except with respect to the Herley Transactions, and shall not serve as consent to, or amendment of, any other matter inconsistent with the terms and conditions of the Credit Agreement or other Loan
Documents. Except as specifically set forth in this Section 9, all of the terms of the Credit Agreement and the other Loan Documents remain in full force and effect, and constitute the legal,
valid, binding and enforceable obligations of Borrower to Agent and the Lenders. 

        10.    Closing Deliveries.    Concurrently with the execution of this Amendment, Borrower
shall: 

        (a)   cause
each Guarantor of Payment to execute the attached Guarantor Acknowledgment and Agreement; and 

        (b)   pay
all legal fees and expenses of Agent in connection with this Amendment and any other Loan Documents to the extent then invoiced. 

        11.    Post-Closing Deliveries.    On or before each of the dates specified
in this Section 11 (unless a longer period is agreed to in writing by Agent), Borrower hereby covenants and agrees to satisfy each of the items specified in the subparts below: 

        (a)   prior
to or contemporaneously with the consummation of the Roll-up Merger, as defined in Section 9(a)(iv) hereof, Borrower shall enter into a further
amendment to the Credit Agreement, to be prepared by and in form and substance satisfactory to Agent, that provides for, among other things, amendments to the schedules to the Credit Agreement to
incorporate information relating to the assets acquired pursuant to the Herley Transactions and such other matters as shall be mutually agreed among Borrower, Agent and the Lenders; 

        (b)   prior
to or contemporaneously with the consummation of the Roll-up Merger, Borrower shall consent to an amendment to the Intercreditor Agreement, to be
prepared by and in form and substance satisfactory to Agent, that, in the reasonable judgment of Agent, adequately and appropriately accounts for the additional Senior Notes to be issued by Borrower
in the Exchange Debt Offering, which amendment shall also be signed by the Indenture Agent; 

        (c)   within
twenty (20) days after the Roll-up Merger (and, in any event, prior to or contemporaneously with (i) the grant of any security interest
in the assets of Herley to the Senior Noteholders, or (ii) the guaranty by Herley or any of its subsidiaries of the additional Senior Notes issued by Borrower in the Exchange Debt Offering),
Borrower shall cause Herley and, as appropriate, each Domestic Subsidiary of Herley, to execute and deliver all of the documentation required pursuant to Section 5.20 of the Credit Agreement;
and 

        (d)   within
forty-five (45) days after the Roll-up Merger, Agent shall have received the results of a collateral field audit of Herley and its
subsidiaries and, if required by Agent, an appraisal of the Inventory of Herley and its subsidiaries, each to be in form and substance satisfactory to Agent. 

        12.    Representations and Warranties.    Borrower hereby represents and warrants to
Agent and the Lenders that (a) Borrower has the legal power and authority to execute and deliver this Amendment; (b) the officers executing this Amendment have been duly authorized to
execute and deliver the same and bind Borrower with respect to the provisions hereof; (c) the execution and delivery hereof by Borrower and the performance and observance by Borrower of the
provisions hereof do not violate or conflict with the Organizational Documents of Borrower or any law applicable to Borrower, or, after giving effect to this Amendment (including but not limited to
the consent of Agent and the Lenders in Section 9 hereof) and the Senior Note Waiver, result in a breach of any provision of, or constitute a default under, any other agreement, instrument or
document binding upon or enforceable against Borrower; (d) after giving effect to this Amendment (including but not limited to the consent of Agent 

6

 

and
the Lenders in Section 9 hereof) and the Senior Note Waiver, no Default or Event of Default exists, nor will any occur immediately after the execution and delivery of this Amendment or by
the performance or observance of any provision hereof; (e) after giving effect to this Amendment (including but not limited to the consent of Agent and the Lenders in Section 9 hereof)
and the Senior Note Waiver, each of the representations and warranties contained in the Loan Documents is true and correct in all material respects as of the Second Amendment Effective Date as if made
on the Second Amendment Effective Date, except to the extent that any such representation or warranty expressly states that it relates to an earlier date (in which case such representation or warranty
is true and correct in all material respects as of such earlier date); (f) Borrower is not aware of any claim or offset against, or defense or counterclaim to, Borrower's obligations or
liabilities under the Credit Agreement or any Related Writing; and (g) this Amendment constitutes a valid and binding obligation of Borrower, enforceable in accordance with its terms. 

        13.    No Course of Dealing.    Borrower acknowledges and agrees that this Amendment is
not intended to, nor shall it, establish any course of dealing with respect to the various provisions amended herein, or otherwise, among Borrower, Agent and the Lenders that is inconsistent with the
express terms of the Loan Documents. 

        14.    Waiver and Release.    Borrower, by signing below, hereby waives and releases
Agent, and each of the Lenders, and their respective directors, officers, employees, attorneys, affiliates and subsidiaries, from any and all claims, offsets, defenses and counterclaims of any kind or
nature, absolute and contingent, of which Borrower is aware or should be aware on the date of this Amendment, such waiver and release being with full knowledge and understanding of the circumstances
and effect thereof and after having consulted legal counsel with respect thereto. 

        15.    References to Credit Agreement and Ratification.    Each reference that is made in
the Credit Agreement or any other Related Writing to the Credit Agreement shall hereafter be construed as a reference to the Credit Agreement as amended hereby. Except as herein otherwise specifically
provided, all terms and provisions of the Credit Agreement are confirmed and ratified and shall remain in full force and effect and be unaffected hereby. This Amendment is a Loan Document. 

        16.    Counterparts.    This Amendment may be executed in any number of counterparts, by
different parties hereto in separate counterparts and by facsimile signature, each of which, when so executed and delivered, shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. 

        17.    Headings.    The headings, captions and arrangements used in this Amendment are
for convenience only and shall not affect the interpretation of this Amendment. 

        18.    Severability.    Any term or provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the term or provision so held to be
invalid or unenforceable. 

        19.    Governing Law.    The rights and obligations of all parties hereto shall be
governed by the laws of the State of New York, without regard to principles of conflicts of laws. 

[Remainder
of page intentionally left blank.] 

7

 

        JURY TRIAL WAIVER.    BORROWER, AGENT AND THE LENDERS, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO. 

        IN
WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first set forth above. 

 

 

					
	 	 	 KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
	

 	
 	
By:	
 	
/s/ Deanna H. Lund

 
	 	 	Name:	 	Deanna H. Lund

 
	 	 	Title:	 	Executive Vice President & Chief Financial Officer

 
	

 	
 	
KEYBANK NATIONAL ASSOCIATION,

as Agent and as a Lender
	

 	
 	
By:	
 	
/s/ John P. Dunn

 
	 	 	Name:	 	John P. Dunn

 
	 	 	Title:	 	Vice President

 

 

 Signature
Page to

Second Amendment Agreement 

 
 

  GUARANTOR ACKNOWLEDGMENT AND AGREEMENT    
    

        The undersigned consent and agree to and acknowledge the terms of the foregoing Second Amendment Agreement dated as of
February 7, 2011. The undersigned further agree that the obligations of the undersigned pursuant to the Guaranty of Payment executed by the undersigned are hereby ratified and shall remain in
full force and effect and be unaffected hereby. 

        The
undersigned hereby waive and release Agent and the Lenders and their respective directors, officers, employees, attorneys, affiliates and subsidiaries from any and all claims,
offsets, defenses and counterclaims of any kind or nature, absolute and contingent, of which the undersigned are aware or should be aware on the date of the foregoing Second Amendment Agreement, such
waiver and release being with full knowledge and understanding of the circumstances and effect thereof and after having consulted legal counsel with respect thereto. 

        JURY TRIAL WAIVER.    THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO. 

 

 

							
	 KRATOS PUBLIC SAFETY & SECURITY SOLUTIONS, INC. (F/K/A KRATOS COMMERCIAL SOLUTIONS, INC.)

KRATOS MID-ATLANTIC, INC.

KRATOS SOUTHEAST, INC.

KRATOS TEXAS, INC.

WFI NMC CORP.

SYS

AI METRIX, INC.

POLEXIS, INC.

REALITY BASED IT SERVICES, LTD.

SHADOW I, INC.

SHADOW II, INC.

SHADOW III, INC.

DIGITAL FUSION, INC.

DIGITAL FUSION SOLUTIONS, INC.

SUMMIT RESEARCH CORPORATION

KRATOS GOVERNMENT SOLUTIONS, INC.	 	DEFENSE SYSTEMS, INCORPORATED

HAVERSTICK CONSULTING, INC.

HGS HOLDINGS, INC.

DTI ASSOCIATES, INC.

HAVERSTICK GOVERNMENT SOLUTIONS, INC.

ROCKET SUPPORT SERVICES, LLC

JMA ASSOCIATES, INC.

MADISON RESEARCH CORPORATION

GICHNER SYSTEMS GROUP, INC.

GICHNER HOLDINGS, INC.

GICHNER SYSTEMS INTERNATIONAL, INC.

CHARLESTON MARINE CONTAINERS INC.

DALLASTOWN REALTY I, LLC

DALLASTOWN REALTY II, LLC

DEI SERVICES CORPORATION

SCT ACQUISITION, LLC

SCT REAL ESTATE, LLC
	
 By:	
 	
/s/ Deanna H. Lund

  Deanna H. Lund

Executive Vice President & Chief Financial Officer	
 	
By:	
 	
/s/ Deanna H. Lund

  Deanna H. Lund

Executive Vice President & Chief Financial Officer

 

 Signature
Page 1 of 2 to

Guarantor Acknowledgement and Agreement 

 

 

							
	 KRATOS SOUTHWEST L.P.,

by Kratos Texas, Inc., its general partner	 	HENRY BROS. ELECTRONICS, INC.,

a Delaware corporation
	

By:	 	

/s/ Deanna H. Lund

  Deanna H. Lund

Executive Vice President & Chief Financial Officer	 	HENRY BROS. ELECTRONICS, INC.,

a Colorado corporation

HENRY BROS. ELECTRONICS, INC.,

a Virginia corporation

HENRY BROS. ELECTRONICS, INC.,

a New Jersey corporation

HENRY BROS. ELECTRONICS, INC.,

a California corporation

DIVERSIFIED SECURITY SOLUTIONS, INC.

HENRY BROS. ELECTRONICS, LLC

NATIONAL SAFE OF CALIFORNIA, INC.

AIRORLITE COMMUNICATIONS, INC.
	

 	
 	

 	
 	
By:	
 	
/s/ Deanna H. Lund

  Deanna H. Lund

Executive Vice President & Chief Financial Officer

 

 Signature
Page 2 of 2 to

Guarantor Acknowledgement and Agreement 

 

 

 
 

  SCHEDULE 5.8A    
    
    ADDITIONAL SCHEDULE TO SECTION 5.8    
    

        1.     Indebtedness
of Herley GMI Eyal Ltd owing to The First International Bank of Israel Ltd. pursuant to documentation entered into on or about August, 2008
(the "Herley GMI Eyal Credit Facility"), in an aggregate principal amount not to exceed Ten Million Dollars ($10,000,000). 

        2.     The
guaranty by General Microwave Israel (1987) Ltd of the Indebtedness under the Herley Eyal Credit Facility. 

        3.     Indebtedness
of Herley to (i) East Hempfield Township Industrial Development Authority in respect of the loan of the proceeds of, and (ii) Allfirst Bank in
respect of its letter of credit supporting the payment of, those certain East Hempfield Township Industrial Development Authority $3,000,000 Variable Rate Demand/Fixed Rate Revenue Bonds (Herley
Industries. Inc. Project) Series of 2001, in an aggregate principal amount not to exceed Two Million Dollars ($2,000,000). 

S-1

 
 
 

  SCHEDULE 5.9A    
    
    ADDITIONAL SCHEDULE TO SECTION 5.9    
    

        1.     Liens
on the assets of Herley GMI Eyal Ltd and General Microwave Israel (1987) Ltd securing the Indebtedness described in item 1 of
Schedule 5.8A. 

        2.     Open-End
Mortgage and Security Agreement dated October 17, 2001, executed by Herley, as mortgagor, to Allfirst Bank, as mortgagee, encumbering property
located in Lancaster, Pennsylvania, securing the Indebtedness described in item 3 of Schedule 5.8A, and related UCC-1 financing statements. 

S-2

QuickLinks

Exhibit 10.3

SECOND AMENDMENT AGREEMENT

GUARANTOR ACKNOWLEDGMENT AND AGREEMENT

SCHEDULE 5.8A ADDITIONAL SCHEDULE TO SECTION 5.8

SCHEDULE 5.9A ADDITIONAL SCHEDULE TO SECTION 5.9

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