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  Exhibit 10.2    
    

 
    THIRD AMENDMENT AGREEMENT    
    

        This THIRD AMENDMENT AGREEMENT (this "Amendment") is made as of the 8th day of May, 2012 among: 

        (a)   KRATOS
DEFENSE & SECURITY SOLUTIONS, INC., a Delaware corporation (the "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 (the "Administrative Agent"). 

        WHEREAS,
the Borrower, the Administrative Agent and the Lenders are parties to that certain Credit and Security Agreement, dated as of May 19, 2010, as amended and restated as of
July 27, 2011, that provides, among other things, for loans and letters of credit aggregating One Hundred Ten Million Dollars ($110,000,000), 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,
the Borrower, the Administrative 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, the
Borrower, the Administrative Agent and the Lenders agree as follows: 

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

        "Pegasus"
means the target entity disclosed to the Lenders at the bank group meeting held immediately prior to the Second Amendment Effective Date. 

        "Pegasus
Acquisition" means the Acquisition by the Borrower of Pegasus, to be consummated no later than April 15, 2013. 

        2.    Amendment to Acquisitions Covenant Provisions.    Section 5.13 of the Credit Agreement is hereby amended
to delete the introductory clause therefrom and to insert in place thereof the following: 

        No
Company shall effect an Acquisition; provided that (i) a Company may effect the Integral Acquisition; (ii) a Company may effect the Pegasus Acquisition so long as
(A) on or prior to the consummation of the Pegasus Acquisition, the Borrower shall have received gross proceeds of at least One Hundred Million Dollars ($100,000,000) pursuant to the issuance
of additional common equity of the Borrower, and (B) the Companies shall be in full compliance with the Loan Documents both prior to and after giving pro forma effect to such Acquisition; and
(iii) a Company may effect any such other Acquisition so long as such Acquisition meets all of the following requirements: 

        3.    Closing Deliveries.    Concurrently with the execution of this Amendment, the 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 the Administrative Agent in connection with this Amendment and any other Loan Documents. 

        4.    Post-Closing Delivery.    Prior to or concurrently with the consummation of the Pegasus Acquisition,
the Borrower shall deliver to the Administrative Agent an officer's certificate certifying that the Borrower has received gross proceeds of at least One Hundred Million Dollars ($100,000,000) pursuant
to the issuance of additional common equity of the Borrower. 

        5.    Representations and Warranties.    The Borrower hereby represents and warrants to the Administrative Agent and
the Lenders that (a) the 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 the Borrower with respect to the provisions hereof; (c) the execution and delivery hereof by the Borrower and the performance and observance by the Borrower of the
provisions hereof do not violate or conflict with the Organizational Documents of the Borrower or any law applicable to the Borrower or result in a breach of any provision of or constitute a default
under any other agreement, instrument or document binding upon or enforceable against the Borrower; (d) 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) each of the representations and warranties contained in the Loan Documents is true and correct in
all material respects as of the date hereof as if made on the date hereof, 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) the Borrower is not aware of any claim or offset against, or defense or
counterclaim to, the Borrower's obligations or liabilities under the Credit Agreement or any other Related Writing; and (g) this Amendment constitutes a valid and binding obligation of the
Borrower in every respect, enforceable in accordance with its terms. 

        6.    Waiver and Release.    The Borrower, by signing below, hereby waives and releases the Administrative 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 which the Borrower is
aware, 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. 

        7.    References to Credit Agreement and Ratification.    Each reference to the Credit Agreement that is made in the
Credit Agreement or any other Related Writing shall hereafter be construed as a reference to the Credit Agreement as amended hereby. Except as otherwise specifically provided herein, 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. 

        8.    Counterparts.    This Amendment may be executed in any number of counterparts, by different parties hereto in
separate counterparts and by facsimile or other electronic 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. 

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

        10.    Severability.    Any provision of this Amendment that shall be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction. 

2

 

        11.    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.] 

3

 

        JURY TRIAL WAIVER.    THE BORROWER, THE ADMINISTRATIVE 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 THE BORROWER, THE ADMINISTRATIVE 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 the Administrative Agent and as a Lender

	 
	 	 By:
	 	 /s/ Richard H Johanson

 
	 
	 	 Name:
	 	Richard H Johanson
	 
	 	 Title:
	 	Senior Vice President

 

 Signature
Page 1 of 5 to

Third Amendment Agreement 

 

					
	 
	 	  PNC BANK, NATIONAL ASSOCIATION

	 
	 	 By:
	 	 /s/ Emily Webster

 
	 
	 	 Name:
	 	Emily Webster
	 
	 	 Title:
	 	Vice President

 

 Signature
Page 2 of 5 to

Third Amendment Agreement 

 

					
	 
	 	  EAST WEST BANK

	 
	 	 By:
	 	 /s/ Tom Chang

 
	 
	 	 Name:
	 	Tom Chang
	 
	 	 Title:
	 	SVP-Director of Pac NW Region

 

 Signature
Page 3 of 5 to

Third Amendment Agreement 

 

					
	 
	 	  CATHAY BANK

	 
	 	 By:
	 	 /s/ Sandra Kenyon

 
	 
	 	 Name:
	 	Sandra Kenyon
	 
	 	 Title:
	 	First Vice President

 

 Signature
Page 4 of 5 to

Third Amendment Agreement 

 

					
	 
	 	  BANK OF THE WEST

	 
	 	 By:
	 	 /s/ Emily J. Kitchell

 
	 
	 	 Name:
	 	Emily J. Kitchell
	 
	 	 Title:
	 	Assistant Vice President

 

 Signature
Page 5 of 5 to

Third Amendment Agreement 

 

 
 

  GUARANTOR ACKNOWLEDGMENT AND AGREEMENT    
    

        The undersigned consent and agree to and acknowledge the terms of the foregoing Third Amendment Agreement dated as of May 8,
2012. 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 the Administrative 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, 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 THE BORROWER, THE ADMINISTRATIVE 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.

KRATOS MID-ATLANTIC, INC.

KRATOS SOUTHEAST, INC.

KRATOS TEXAS, INC.

WFI NMC CORP.

KRATOS TECHNOLOGY & TRAINING

    SOLUTIONS, INC.

AI METRIX, INC.

POLEXIS, INC.

REALITY BASED IT SERVICES, LTD.

SHADOW I, INC.

SHADOW II, INC.

KRATOS INTEGRAL SYSTEMS INTERNATIONAL, INC.

    (F/K/A SHADOW III, INC.)

DIGITAL FUSION, INC.

DIGITAL FUSION SOLUTIONS, INC.

SUMMIT RESEARCH CORPORATION	 	HAVERSTICK CONSULTING, INC.

HGS HOLDINGS, INC.

DTI ASSOCIATES, INC.

HAVERSTICK GOVERNMENT SOLUTIONS, INC.

ROCKET SUPPORT SERVICES, LLC

JMA ASSOCIATES, INC. (D/B/A TLA ASSOCIATES)

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 DEFENSE ENGINEERING SOLUTIONS, INC.

KRATOS SOUTHWEST L.P.,

    by Kratos Texas, Inc., its general partner

GENERAL MICROWAVE CORPORATION

    (D/B/A HERLEY NEW YORK)

GENERAL MICROWAVE ISRAEL CORPORATION

HERLEY INDUSTRIES, INC.

HERLEY-CTI, INC.

HERLEY-RSS, INC.

MICRO SYSTEMS, INC.

MSI ACQUISITION CORP.

STAPOR RESEARCH, INC.

KRATOS INTEGRAL HOLDINGS, LLC

    (F/K/A IRIS ACQUISITION SUB LLC)

AVTEC SYSTEMS, INC.

CVG, INCORPORATED

LVDM, INC.

LUMISTAR, INC.

NEWPOINT TECHNOLOGIES, INC.

REAL TIME LOGIC, INC.

SAT CORPORATION

SECUREINFO CORPORATION	 	HENRY BROS. ELECTRONICS, INC.,

    a Delaware corporation

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	
 	
By:	
 	
/s/ Deanna H. Lund

  Deanna H. Lund

Executive Vice President & Chief Financial Officer

 

 Signature
Page 2 of 2 to

Guarantor Acknowledgement and Agreement 

QuickLinks

Exhibit 10.2

THIRD AMENDMENT AGREEMENT

GUARANTOR ACKNOWLEDGMENT AND AGREEMENTCVG 3.31.2012 EX 10.2

Exhibit 10.2 to 2012 10-Q

Convergys Corporation
Annual Executive Incentive Plan
As Amended and Restated, effective February 2, 2012
Eligibility
The Annual Executive Incentive Plan (the “Plan”), as amended and restated effective February 2, 2012, subject to approval by the shareholders of Convergys Corporation (the “Company”) shall apply to the Chief Executive Officer and other executive officers of the Company selected by the Compensation and Benefits Committee (the “Compensation Committee”) commencing on and after January 1, 2012. 
Purpose
The Board of Directors of the Company (the “Board”) intends that the Plan will advance the interests of the Company and shareholders by enabling the Company to attract and retain key senior executives and to encourage those executives to contribute to the continued success of the Company.  Payments under the Plan are intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). 
Performance Criteria
Performance criteria upon which payments under the Plan will be based shall be measured in terms of one or more of the following objectives, described as they relate to Company-wide objectives or objectives related to a subsidiary, division, department or function of the Company for the calendar year: earnings per share, operating income, stock price, shareholder return, return on investment, return on capital, return on equity, earnings before interest, taxes, depreciation and amortization, gross or net profits, gross or net revenues, cash flow, operating margin, profit margin, contribution margin, market share, sales, costs, debt to capital ratio, economic value added, and/or strategic business criteria consisting of one or more objectives based on meeting specified product development, strategic partnering, research and development, market penetration, geographic business expansion goals, cost targets, customer satisfaction, customer retention, gross or net additional customers, average customer life, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint ventures.  The performance criteria may be made relative to the performance of a group comparable companies, or published or special index that the Compensation Committee, in its sole discretion, deems appropriate, or the Company may select performance criteria as compared to various stock market indices.  Performance criteria may be stated as a combination of the listed factors.  Maintaining the status quo or limiting economic losses can be appropriate performance criteria, provided such performance criteria are not substantially certain to occur as of the date the Compensation Committee establishes the performance criteria. 
Each year the Compensation Committee shall specify in writing, no later than 90 days after the beginning of each calendar year, the performance criteria to be achieved, a minimum acceptable level of achievement below which no payment will occur, and a formula for determining the amount of any payment to occur if performance is at or above the minimum acceptable level but falls short of full achievement of the specified performance criteria. 
If the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other 

events or circumstances render the performance criteria to be unsuitable, the Compensation Committee may modify such performance criteria or the related minimum acceptable level of achievement, in whole or in part, as the Compensation Committee deems appropriate and equitable; provided, however, that no such modification will be made to the extent that it would cause a payment under the Plan to fail to qualify as performance-based compensation within the meaning of Section 162(m) of the Code. 
Amount of Payment
The Compensation Committee, based upon information to be supplied by management of the Company, will establish for each year, a target incentive amount and performance criteria for each eligible executive within the first 90 days of the year for which such bonus may be paid. Awards will be earned by eligible executives based upon the level of attainment of the applicable performance criteria during the applicable year. Notwithstanding any other provision of the Plan to the contrary, the maximum amount of any single bonus payment under the Plan to any participant for any year shall be $3,000,000 (or, in the case of an award paid in the form of Company common shares, a number of Company common shares having an aggregate fair market value on the date of payment not in excess of $3,000,000). As soon as practicable after the end of the applicable year, the Compensation Committee shall determine and certify in writing the level of attainment of the performance criteria for each eligible executive and the bonus to be paid to each eligible executive. Notwithstanding any other provision of the Plan to the contrary, the Compensation Committee may, in its sole and absolute discretion, reduce the target incentive amount of any eligible executive or the bonus to be paid to any eligible executive.
Form and Timing of Payment
Awards shall be paid in cash as soon as practicable following the end of the year, but no later than March 15th of the year following the year in which the services were performed to which the payment relates; provided however that if permitted by the Compensation Committee in its sole discretion, payment may be deferred at the election of the eligible executive pursuant to a deferred compensation arrangement maintained by the Company.  The Compensation Committee may, in its sole discretion, determine that all or part of an award shall be paid in the form of an equivalent amount of Company common shares; provided that the shares will be issued under the Company's equity compensation plans in existence at the time of grant.  In the event a participant terminates employment with the Company and its subsidiaries for any reason prior to the last day of the year, the participant shall not be entitled to payment of an award with respect to that year.  
Administration
The Plan is administered by the Compensation Committee, which shall consist of not less than two directors each of whom shall be an “outside director” as defined in the regulations under Section 162(m) of the Code. 
It is the intention of the Company that the Plan qualify for the performance-based compensation exception of Section 162(m) of the Code and the short-term deferral exception of Section 409A of the Code.  The Plan shall be administered in a manner consistent with this intent, and any provision of the Plan or action of the Compensation Committee that would cause the Plan to fail to satisfy either such exception shall have no force and effect until amended or corrected to satisfy such exception (which action may be taken by the Company or the Compensation Committee, as the case may be, without the consent of any eligible executive).
Amendment

The Board may amend or terminate the Plan at any time. However, no amendment shall increase the maximum award to an eligible executive without the consent of shareholders. 
Miscellaneous Provisions
Nothing contained in the Plan shall give any eligible executive the right to be retained in the employment of the Company or affect the right of the Company to dismiss any eligible executive or employee.  The Plan shall not constitute a contract between the Company and the eligible executive.  Except as may be required by law, no amount payable under the Plan shall be subject to assignment in any manner by anticipation, pledge, bankruptcy, attachment, charge or encumbrance of any kind, nor in any manner be subject to the debts or liabilities of any eligible executive.  The Company shall have the right to deduct from all payments made to any executive under the Plan any federal, state, local, foreign or other taxes which, in the opinion of the Company, are required to be withheld with respect to any payment provided under the Plan. Notwithstanding any other provision of the Plan, any payment made to an eligible executive pursuant to the Plan may be subject to repayment to the Company pursuant to any compensation recovery policy that may be maintained by the Company (including a compensation recovery policy adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act) or applicable law.
Governing Law
The provisions of the Plan shall be governed and construed in accordance with the laws of the State of Ohio.

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