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TABLE OF CONTENTS
As filed with the Securities and Exchange Commission on June 7, 2011August 20, 2014
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KRATOS DEFENSEKratos Defense & SECURITY SOLUTIONS, INC.SEE TABLE OF ADDITIONAL REGISTRANTS ON FOLLOWING PAGESecurity Solutions, Inc.
(Exact name of registrantRegistrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) | 4899 (Primary Standard Industrial Classification Code Number) | 13-3818604 (I.R.S. |
Kratos Defense & Security Solutions, Inc.
4820 Eastgate Mall, Suite 200
San Diego, CA 92121
(858) 812-7300
(Address, including zip code,Including Zip Code, and telephone number, including area code,Telephone Number, Including Area Code, of registrant's principal executive offices)Registrant's Principal Executive Offices)
Eric DeMarcoDeanna H. Lund
Executive Vice President and Chief ExecutiveFinancial Officer
Kratos Defense & Security Solutions, Inc.
4820 Eastgate Mall, Suite 200
San Diego, CA 92121
(858) 812-7300
(Name, address, including zip code,Address, Including Zip Code, and telephone number, includingarea code,Telephone Number, Including Area Code, of agent for service)Agent For Service)
Copies to:
Jeffrey C. Thacker, Esq.
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, California 92121
(858) 677-1400
Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after the effective date of this registration statement.Registration Statement becomes effective.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o
If this formForm is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this formForm is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filero | Accelerated filerý | Non-accelerated filero (Do not check if a smaller reporting company) | Smaller reporting companyo |
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o
Exchange Act Rule 14d-1(d)14d-1d) (Cross-Border Third-Party Tender Offer) o
CALCULATION OF REGISTRATION FEE
Title of each class of securities to be registered | Amount to be registered(1) | Proposed maximum offering price per unit | Proposed maximum aggregate offering price(1) | Amount of registration fee(1) | ||||
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10% Senior Secured Exchange Notes due 2017 | $285,000,000 | 100% | $285,000,000 | $33,088.50 | ||||
Guarantees of 10% Senior Secured Exchange Notes due 2017(2) | $285,000,000 | (3) | (3) | (3) | ||||
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Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Offering Price per Unit(1) | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||
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7.000% Senior Secured Notes due 2019 | $625,000,000 | 100% | $625,000,000 | $80,500 | ||||
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The registrantRegistrants hereby amendsamend this registration statementRegistration Statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrants shall file a further amendment which specifically states that this registration statementRegistration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, of 1933 or until the registration statementRegistration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
TABLE OF ADDITIONAL REGISTRANTS
Exact name of Registrant as specified in its | State or other Jurisdiction of Incorporation or Organization | I.R.S. Employee Identification Number | ||
---|---|---|---|---|
AI Metrix, Inc. | Delaware | 94-3406239 | ||
Airorlite Communications, Inc. | New Jersey | �� | 27-0109331 | |
Avtec Systems, Inc. | Virginia | 02-0354151 | ||
BSC Partners LLC | New York | 61-1579937 | ||
Charleston Marine Containers, Inc. | Delaware | 13-3895313 | ||
Composite Engineering, Inc. | California | 68-0233339 | ||
Dallastown Realty I, LLC | Delaware | 13-3891517 | ||
Dallastown Realty II, LLC | Delaware | 11-3531172 | ||
Defense Systems, Incorporated. | Virginia | 54-1869791 | ||
DEI Services Corporation | Florida | 59-3348607 | ||
Digital Fusion, Inc. | Delaware | 13-3817344 | ||
Digital Fusion Solutions, Inc. | Florida | 59-3443845 | ||
Diversified Security Solutions, Inc. | New York | 20-3603298 | ||
DTI Associates, Inc. | Virginia | 54-1462882 | ||
General Microwave Corporation | New York | 11-1956350 | ||
General Microwave Israel Corporation | Delaware | 11-2696835 | ||
Gichner | ||||
| Delaware | 26-0537748 | ||
Gichner Systems International, Inc. | Delaware | 13-3506543 | ||
Haverstick Consulting, Inc. | Indiana | 35-1938389 | ||
Haverstick Government Solutions, Inc. | Ohio | 61-1340684 | ||
Henry Bros. Electronics, Inc. | California | 95-3613209 | ||
Henry Bros. Electronics, Inc. | Colorado | 84-0600621 | ||
Henry Bros. Electronics, Inc. | Delaware | 22-3690168 | ||
Henry Bros. Electronics, Inc. | New Jersey | 22-3000080 | ||
Henry Bros. Electronics, | ||||
| Arizona | 86-0950878 | ||
Herley Industries, Inc. | Delaware | 23-2413500 | ||
Herley-CTI, Inc. | Delaware | 11-3544929 | ||
Herley-RSS, Inc. | Delaware | 20-1529679 | ||
HGS Holdings, Inc. | Indiana | 35-2198582 | ||
JMA Associates, Inc. | Delaware | 52-2228456 | ||
KPSS Government Solutions, Inc. | Delaware | 51-0261462 | ||
Kratos Defense | Delaware | 33-0431023 | ||
Kratos | Maryland | 45-3455455 | ||
Kratos Integral Systems International, Inc. | California | 20-5651555 | ||
Kratos Networks, Inc. | Delaware | |||
Kratos Public Safety & Security Solutions, Inc. | Delaware | 33-0896808 | ||
Kratos Southeast, Inc. | Georgia | 58-1885960 | ||
Kratos Southwest L.P. | Texas | 74-2144182 | ||
Kratos Systems and Solutions, Inc. | Virginia | 04-3743834 | ||
Kratos Technology & Training Solutions, Inc. | California | 95-2467354 | ||
Kratos Texas, Inc. | Texas | 75-2982611 | ||
Kratos Unmanned Systems Solutions, Inc. | Delaware | 26-0537776 | ||
Carlsbad ISI, Inc. | Maryland | 20-3520317 | ||
LVDM, Inc. | Nevada | 20-2258462 | ||
Madison Research Corporation | Alabama | 63-0934056 | ||
Micro Systems, Inc. | Florida | 59-1654615 | ||
MSI Acquisition Corp. | Delaware | 20-2204612 | ||
National Safe of California, Inc. | California | 95-2865458 | ||
Polexis, Inc. | California | 33-0717132 |
Exact name of Registrant as specified in its Charter | State or other Jurisdiction of Incorporation or Organization | I.R.S. Employee Identification Number | ||
---|---|---|---|---|
Real Time Logic, Inc. | Colorado | 74-3063615 | ||
Reality Based IT Services, Ltd. | Maryland | 52-2191091 | ||
Rocket Support Services, LLC | Indiana | 20-5113660 | ||
SAT Corporation | California | 77-0279975 | ||
SCT Acquisition, LLC | Delaware | |||
SCT Real Estate, LLC | Delaware | N/A | ||
Secureinfo Corporation | Delaware | 74-2804679 | ||
Shadow I, Inc. | California | 51-0569123 | ||
Shadow II, Inc. | California | 20-3744832 | ||
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Stapor Research, Inc. | Virginia | 20-1666707 | ||
Summit Research Corporation | Alabama | 63-1285794 | ||
WFI NMC Corp. | Delaware | 33-0936782 |
The information in this prospectus is not complete and may be changed. We may not complete the exchange offer and issuesell these securities until the registration statement filed with the Securities and Exchange Commission of which this prospectus is a part, is declared effective. This prospectus is not an offer to sell these securities and it iswe are not soliciting an offer to buy these securities in any jurisdictionstate where the offer solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any representation to the contrary is a criminal offense.permitted.
SUBJECT TO COMPLETION, DATED JUNE 7, 2011AUGUST 20, 2014
PROSPECTUS
Kratos Defense & Security Solutions, Inc.
Offer to Exchange all Outstanding and Unregistered10%7.000% Senior Secured Notes due 20172019($285,000,000 in principal amount outstanding)for
7.000% Senior Secured Notes due 2019
We are offering to exchange, uponWhich Have been Registered Under the terms and subject to the conditions set forth in thisSecurities Act
This prospectus and the accompanying letter of transmittal relate to our new registered 10% Senior Secured Notesproposed offer (the "Exchange Offer") to exchange up to $625,000,000 aggregate principal amount of 7.000% senior secured notes due 20172019 (the "Exchange Notes"), which are registered under the Securities Act of 1933, as amended (the "Securities Act"), for any and all of our outstanding unregistered 10% Senior Secured7.000% senior secured notes due 2019 (the "Unregistered Notes", and together with the Exchange Notes, due 2017,the "Notes") that were issued on April 15, 2011May 14, 2014 (the "Original Notes""Issue Date"). The Unregistered Notes have certain transfer restrictions. The Exchange Notes will be freely transferable.
The principal features of the Exchange Offer are as follows:
Material Terms of the Exchange Offer
Terms of Exchange Notes.Offer. The terms of the Exchange Notes will be substantially identical to the Original Notes, except that the Exchange Notes will not be subject to transfer restrictions or registration rights relating to the Original Notes. See the section entitled "Description of the Exchange Notes" beginning on page 37 for more information about the Exchange Notes and related exchange guarantees to be issued in this exchange offer.
Expiration Date. The exchange offer expires at 5:00 p.m., New York City time, on , 2011, unless extended.
Notes Exchanged. All Original Notes tendered in accordance with the procedures in this prospectus and not withdrawn will be exchanged for an equal amount of Exchange Notes.
Conditions. The exchange offer is not conditioned upon a minimum aggregate principal amount of Original Notes being tendered. The exchange offer is subject only to the conditions that it not violate applicable laws or any applicable interpretation of the staff of the Securities and Exchange Commission ("SEC").
Guarantees. We are also offering to exchange the guarantees associated with the Original Notes (the "Original Guarantees"), for the guarantees associated with the Exchange Notes (the "Exchange Guarantees"). The terms of the Exchange Guarantees will be substantially identical to the Original Guarantees, except that the Exchange Guarantees will not be subject to the transfer restrictions or registration rights relating to the Original Guarantees.
Market for Exchange Notes.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2014, UNLESS WE EXTEND THE OFFER.
You should read the section titled "The Exchange Offer" beginning on page 19 for themfurther information on how to be quoted on any quotation system.
�� If you do not exchange your OriginalUnregistered Notes and related Original Guarantees for Exchange Notes and related Exchange Guarantees in the exchange offer, you will continue to be subject to the restrictions on transfer provided in the Original Notes and related Original Guarantees and the indenture governing those notes. In general, you may not offer or sell your Original Notes and related Original Guarantees unless such offer or sale is registered under the federal securities laws or are sold in a transaction exempt from or not subject to the registration requirements of the federal securities laws and applicable state securities laws.Notes.
SeePlease see "Risk Factors" beginning on page 149 for a discussion of certain risks thatfactors you should consider before participating in connection with the exchange offer.Exchange Offer.
Neither the Securities and Exchange Commission nor any state securities commissionother regulatory body has approved or disapproved of these securities or passed onupon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2011
2014.
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Each holder of an Unregistered Note wishing to accept the Exchange Offer must deliver the Unregistered Note to be exchanged, together with the letter of transmittal that accompanies this prospectus and any other required documentation, to the exchange agent identified in this prospectus. Alternatively, you may effect a tender of Unregistered Notes by book-entry transfer into the exchange agent's account at The Depository Trust Company ("DTC"). All deliveries are at the risk of the holder. You can find detailed instructions concerning delivery in the section called "The Exchange Offer" in this prospectus and in the accompanying letter of transmittal.
If you are a broker-dealer that receives Exchange Notes for itsyour own account, pursuant to this exchange offeryou must acknowledge that ityou will deliver a prospectus in connection with any resale of suchthe Exchange Notes. The letter of transmittal accompanying this prospectus states that, by so acknowledging and by delivering a prospectus, a broker-dealeryou will not be deemed to admit that it isyou are an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). ThisAct. You may use this prospectus, as we may amend or supplement it may be amended or supplemented from time to time, may be used by a broker-dealer duringin the 180-day period following the closing of the exchange offer in connection withfuture, for your resales of Exchange Notes receivedNotes. We will use commercially reasonable efforts to have the registration statement, of which this prospectus forms a part, remain effective for a period ending on the earlier of (i) 180 days from the date on which this registration statement is declared effective and (ii) the date on which a broker-dealer is no longer required to deliver a prospectus in exchange for Original Notes where such Original Notes were acquired by such broker-dealer as a result ofconnection with market-making or other trading activities. We have agreed thatwill also amend or supplement this prospectus during thethis 180-day period, followingif requested by one or more participating broker-dealers, in order to expedite or facilitate such resales.
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ABOUT THIS PROSPECTUS | ii | |||
INCORPORATION BY REFERENCE | iii | |||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | iv | |||
SUMMARY | 1 | |||
RISK FACTORS | 9 | |||
RATIO OF EARNINGS TO FIXED CHARGES | 22 | |||
USE OF PROCEEDS | 22 | |||
CAPITALIZATION | 23 | |||
SELECTED HISTORICAL FINANCIAL DATA | 24 | |||
SELECTED HISTORICAL QUARTERLY FINANCIAL DATA | 24 | |||
THE EXCHANGE OFFER | 26 | |||
DESCRIPTION OF THE EXCHANGE NOTES | 36 | |||
DESCRIPTION OF CERTAIN INDEBTENDESS | 102 | |||
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS | 103 | |||
PLAN OF DISTRIBUTION | 103 | |||
LEGAL MATTERS | 104 | |||
EXPERTS | 104 | |||
WHERE YOU CAN FIND MORE INFORMATION | 104 |
This prospectus incorporates important business and financial information about the closingCompany that is not included in or delivered with the document. See "Where You Can Find Additional Information." Copies of the exchange offer wethese documents, except for certain exhibits and schedules, will make this prospectusbe made available to any broker-dealer for use in connection with anyyou without charge upon written or oral request to:
Kratos Defense & Security Solutions, Inc.
4820 Eastgate Mall, Suite 200
Attention: Corporate Secretary
San Diego, CA 92121
(858) 812-7300
In order to obtain timely delivery of such resale. See "Planmaterials, you must request information from us no later than five business days prior to , 2014, the date you must make your investment decision.
i
Table of Distribution."Contents
This prospectus is part of a registration statement we filed with the Securities and Exchange Commission, referred to in this prospectus as the SEC. You should read this prospectus together with the registration statement, the exhibits thereto and the additional information described under the heading "Where You Can Find More Information." In making your decision regarding participationto participate in the exchange offer,Exchange Offer, you should rely only on the information contained in this prospectus and in the accompanying letter of transmittal. The information contained in this prospectus is not complete and may be changed. We have not authorized anyone else to provide you with different information. We are not making an offer of any securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any document incorporated by reference is accurate as of any date other than the date of the document in which such information is contained or such other date referred to in such document, regardless of the time of any sale, exchange or issuance of a security.
This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by reference to the actual documents. Copies of some of the documents referred to herein have been filed or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below in this prospectus.the section entitled "Where You Can Find More Information."
This prospectus incorporates by reference important business and financial information about us that is not included in or delivered with this prospectus. We have not authorized anyonedocument. This information is available to provide you with any other information. We are not making an offer of these securities in places where offerswithout charge upon written or oral request to: Kratos Defense & Security Solutions, Inc., Attention: Investor Relations, 4820 Eastgate Mall, San Diego, California, 92121, (858) 812-7300. The Exchange Offer is expected to expire on , 2014, and sales are not permitted. Theyou must make your exchange decision by the expiration date. To obtain timely delivery, you must request the information contained in this prospectus and any applicable prospectus supplement is accurate only onno later than , 2014, or the date such informationthat is presented. Ourfive business financial condition, resultsdays before the expiration date of operationsthe exchange offers.
Trademarks, Trade Names and prospectus may have changed since that date. You should read this prospectus together with the additional information described under the heading "Where You Can Find More Information."Service Marks
This prospectus may be supplementedinclude trade names and trademarks of other companies. Our use or display of other parties' trade names, trademarks or products is not intended to, and does not, imply a relationship with, or endorsement or sponsorship of us by, the trade names or trademark owners. All trademarks appearing in this Prospectus not owned by us are the property of their holders.
In this prospectus, references to "we," "our," "us," "the Company" or "Kratos" mean Kratos Defense & Security Solutions, Inc. and its subsidiaries on a consolidated basis.
ii
We are "incorporating by reference" information filed with the SEC into this prospectus, which means that we are disclosing important business and financial and other information to you by referring you to those documents. Information that is incorporated by reference is an important part of this prospectus. We incorporate by reference into this prospectus the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, and such documents form an integral part of this prospectus:
Unless specifically stated to the contrary, none of the information that we disclose under Items 2.02 or 7.01 of any current report on Form 8-K that we may from time to time furnish to add, updatethe SEC or changeany other document or information deemed to have been furnished and not filed with the SEC will be incorporated by reference into, or otherwise included in, this prospectus.
Any statement contained in this prospectus willor in a document (or part thereof) incorporated or considered to be deemedincorporated by reference in this prospectus shall be considered to be modified or superseded for purposes of this prospectus to the extent that a statement contained in suchthis prospectus supplementor in any other subsequently filed document (or part thereof) that is or is considered to be incorporated by reference in this prospectus modifies or supersedes suchthat statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. Any statement so modified willor superseded shall not be deemed to constitute a part of this prospectus onlyconsidered, except as so modified and any statement soor superseded, will be deemed not to constitute aany part of this prospectus.
Our internet address iswww.kratosdefense.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a), 13(c), 14 or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. The registration statement containinginformation on our website and any other website that is referred to in this prospectus including the exhibits to the registration statement, provides additional information about usis not part of and the securities offered underis not incorporated by reference in this prospectus. The registration statement, including the exhibits, can be read on the website of the SEC or at the offices of the SEC as further described in "Where You Can Find More Information."
You may obtain at no cost copies of each of our documents incorporated by reference into this prospectus (other than an exhibit to a copy offiling unless that exhibit is specifically incorporated by reference into that filing) by writing or telephoning at the registration statement and its exhibits, free of charge, by oral or written request directed to:following address: Kratos Defense & Security Solutions, Inc., Attention: Investor Relations, 4820 Eastgate Mall, San Diego, CACalifornia, 92121, Attention: Corporate Secretary, phone number (858) 812-7300.The exchange offer is expected In order to expire on , 2011 andreceive timely delivery of these materials, you must make your exchange decision by this expiration date. To obtain timely delivery of the requested information, you must request this information by , 2011, which isrequests no later than five business days before the expiration date of the exchange offer.you make your investment decision.
iiii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein contain forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to our future financial performance, the growth of the market for our products and services, expansion plans and opportunities and statements regarding our plans, strategies and objectives for future operations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology.
Forward-looking statements reflect our current views about future events, are based on assumptions, and are subject to known and unknown risks, uncertainties and other important factors. Many important factors could cause actual results, performance or achievements to differ materially from the expected future results, performance or achievements expressed in or implied by our forward-looking statements, including the following:
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These forward-looking statements reflect our views and assumptions only as of the date such forward-looking statements are made. Many of the factors that will determine future results, performance or achievements are beyond our ability to control or predict, and accordingly, you should not place undue reliance on forward-looking statements. Except as required by law, we assume no responsibility for updating any forward-looking statements nor do we intend to do so. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. The risks included in this section are not exhaustive. Additional factors that could cause actual results to differ materially from those described in the forward-looking statements are set forth under the heading "Risk Factors" beginning on page 149 of this prospectus, and in our most recent Annual Report on Form 10-K and in our subsequent reports on Forms 10-Q and 8-K and other filings with the SEC. You should carefully read this prospectus together with the information incorporated herein by reference as described under the heading "Where You Can Find More Information," completely and with the understanding that our actual future results may be materially different from what we expect.
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This summary highlights selected information about us, the Exchange Offer and the Exchange Notes from this prospectus butand the documents incorporated herein by reference and does not contain all material features of the exchange offer.information that you need to consider in making a decision to participate in the Exchange Offer. To understand all of the terms of the exchange offerExchange Offer fully and for a more complete understandingdescription of our business,the legal terms of the Exchange Notes, you should carefully read thethis entire prospectus, the accompanying letter of transmittal and the documents incorporated herein by reference, especially the risks of investing in the Exchange Notes discussed under "Risk Factors" beginning on page 9 of this prospectus.
In this prospectus, references to "we," "our," "us," "the Company" or "Kratos" mean Kratos Defense & Security Solutions, Inc. and its subsidiaries on a consolidated basis. In this prospectus, we sometimes collectively refer to our acquisition of Herley Industries Inc. ("Herley"), our equity offering consummated on February 11, 2011, in which we received approximately $61.1 million in net proceeds, and the debt offering consummated on March 25, 2011, in which we issued $285.0 million in indebtedness and received $305.0 million in gross proceeds, and certain transactions related thereto as the "Transactions". Additionally, we use the term "Original Notes" to refer to the 10% Senior Secured Notes due 2017 that were issued by theOur Company on April 15, 2011, pursuant to that certain Indenture, dated as of May 19, 2010, by and among the Company, the guarantors party thereto and Wilmington Trust, FSB as trustee and collateral agent (as amended or supplemented, the "Indenture"); the term "Exchange Notes" to refer to the 10% Senior Secured Notes due 2017 that have been registered under the Securities Act and are being offered in exchange for the Original Notes as described in this prospectus; the term "Existing Kratos Notes" to refer to the 10% Senior Secured Notes due 2017 that were issued by the Company on May 19, 2010, pursuant to the Indenture and subsequently exchanged for registered notes on August 11, 2010; the term "Kratos Notes" to collectively refer to the Exchange Notes and the Existing Kratos Notes; the term "Existing Kratos Guarantees" to refer to the guarantees related to the Existing Kratos Notes; the term "Exchange Guarantees" to refer to the guarantees related to the Exchange Notes; and the term "Kratos Guarantees" to collectively refer to the Existing Kratos Guarantees and the Exchange Guarantees.
Company Overview
We are a specialized security technology business providing mission critical products, solutions and services for domestic and international customers, with our principal customers being national security business providing mission-critical products, services and solutions forrelated agencies of the U.S. national security priorities.Government. Our core capabilities are sophisticated engineering, manufacturing, and system integration, and test and evaluation offerings for national security platforms and programs. Our principal products and services are related to, but are not limited to Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance, ("C5ISR"); related cybersecurity; cyberwarfare; information assurance and situational awareness solutions; weapons systems lifecycle support and sustainment; military weapon range operations and technical services; missile, rocket and weapons system testing and evaluation; missile and rocket mission launch services, primarily for ballistic missile defense; public safety, critical infrastructure security and surveillance systems; modeling and simulation; unmanned aerial vehicle ("UAV") systems; and advanced network engineering and information technology services.or C5ISR. We offer our customers products, solutions, services and expertise to support their mission-critical needs by leveraging our skills across our core offering areas.areas in C5ISR.
We design, engineer and manufacture specialized electronic components, subsystems and systems for electronic attack, electronic warfare, radar, and missile system platforms; integrated product, software and technology solutions for satellite communications; products and solutions for unmanned systems; products and services related to cybersecurity and cyberwarfare; products and solutions for ballistic missile defense; weapons systems trainers; advanced network engineering and information technology services; weapons systems lifecycle support and sustainment; military weapon range operations and technical services; and public safety, critical infrastructure security and surveillance systems. Our primary end customers are U.S. Federal Government agencies, including the Department of Defense ("DoD"),DoD, classified agencies, intelligence agencies, other national security agencies and homeland security related agencies. We also conduct business with local, state and foreign governments and domestic and international commercial customers. In fiscal 2011, 2012 and 2013, we generated 74%, 65% and 64%, respectively, of our total revenues from contracts with the U.S. Government (including all branches of the U.S. military), either as a prime contractor or a subcontractor. We believe our stable clientcustomer base, strong clientcustomer relationships, intellectual property, broad array of contract vehicles, considerable"designed in" positions on strategic National Security platforms, large employee base possessing national security clearances,specialized skills, specialized manufacturing facilities and equipment, extensive list of past performance qualifications, and significant management and operational capabilities position us for continued growth.
Corporate Information
We serve 14were incorporated in the state of New York on December 19, 1994 and began operations in March 1995. We reincorporated in the top 15 DoD programsstate of Delaware in terms1997. Our principal corporate offices are located at 4820 Eastgate Mall, San Diego, California 92121, and our telephone number is (858) 812-7300. We maintain an Internet website atwww.kratosdefense.com. The information found on our Internet site is not part of total procurement and research, development, testing and evaluation spending. We provide products, solutions and services for a wide range of established, deployed and operating national security platforms, including, but not limited to, Aegis Ballistic Missile Defense systems, M1 Abrams tanks, Bradley fighting vehicles, F-5 Tiger,
HiMARS, Chaparral and HAWK missile systems, Kiowa AH-60 helicopters, DDG-1000 Zumwalt destroyers, attack and missile submarines, certain intelligence surveillance and reconnaissance systems and various unmanned systems.
Current Reporting Segmentsthis prospectus.
We operate in two principal business segments: Kratos Government Solutions and Public Safety and Security. We organize our business segments based on the nature of the services offered. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts and these intercompany transactions are eliminated in consolidation. Our financial statements, incorporated by reference in this prospectus are presented in a manner consistent with our operating structure. For additional information regarding our operating segments, see Note 14 of our Notes to the Consolidated Financial Statements, included in our Annual Report on Form 10-K filed with the SEC on March 2, 2011. From a customer and solutions perspective, we view our business as an integrated whole, leveraging skills and assets wherever possible.
Kratos Government Solutions ("KGS") Segment
The KGS segment provides products, solutions and services primarily for mission-critical national security priorities. KGS customers primarily include national security related agencies, the DoD, intelligence agencies and classified agencies. Our work includes weapon systems sustainment, lifecycle support and extension; C5ISR services, including related cybersecurity, cyberwarfare, information assurance and situational awareness solutions; military range operations and technical services; missile, rocket, and weapons systems test and evaluation; mission launch services; modeling and simulation; UAV products and technology; advanced network engineering and information technology services; and public safety, security and surveillance systems integration. We produce products, solutions and services related to certain C5ISR platforms, unmanned system platforms, weapons systems, national security related assets and warfighter systems.
Public Safety and Security ("PSS") Segment
Our PSS segment provides independent integrated solutions for advanced homeland security, public safety, critical information, and security and surveillance systems for government and commercial applications. Our solutions include designing, installing and servicing building technologies that protect people, critical infrastructure, assets, information and property and make facilities more secure and efficient. We provide solutions in such areas as the design, engineering and operation of command and control centers; the design, engineering, deployment and integration of access control; building automation and control; communications; digital and closed circuit television security and surveillance; fire and life safety; maintenance and service; and project support services.
We provide solutions for customers in the critical infrastructure, power generation, power transport, nuclear energy, financial, information technology, healthcare, education, transportation and petrochemical industries, as well as certain government and military customers. For example, we provide biometrics and other access control technologies to customers such as pipelines, electrical grids, municipal port authorities, power plants, communication centers, large data centers, government installations and other commercial enterprises.
Recent Developments
On May 15, 2011, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Integral Systems, Inc., a Maryland corporation ("Integral Systems"), IRIS Merger Sub Inc., a Maryland corporation and our wholly owned subsidiary ("Merger Sub"), and IRIS Acquisition
Sub LLC, a Maryland limited liability company and our wholly owned subsidiary ("Merger LLC"). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Integral Systems, and Integral Systems will continue as the surviving corporation and as a wholly owned subsidiary of the Company (the "Merger"). The boards of directors of the Company and Integral Systems have unanimously approved the Merger Agreement and the transactions contemplated thereby.
At the effective time of the Merger (the "Effective Time"), holders of Integral Systems common stock will be entitled to receive (i) $5.00 in cash, without interest, and (ii) 0.588 shares of the Company's common stock for each share of Integral Systems common stock they own (the "Merger Consideration").
In addition, at the Effective Time, each Integral Systems stock option that has an exercise price less than $13.00 per share shall, if the holder thereof elects in writing, be cancelled in exchange for an amount in cash, without interest, equal to the product of the total number of shares of Integral Systems common stock subject to such in-the-money option, multiplied by the aggregate value of the excess, if any, of $13.00 over the exercise price per share subject to such option, less the amount of any tax withholding. Each Integral Systems stock option that has an exercise price equal to or greater than $13.00 per share and each Integral Systems in-the-money option the holder of which does not make the election described in the preceding sentence shall be converted into an option to purchase Kratos common stock, with (i) the number of shares subject to such option adjusted to equal the number of shares of Integral Systems common stock subject to such out-of-the-money option multiplied by 0.9559, rounded up to the nearest whole share, and (ii) the per share exercise price under each such option adjusted by dividing the per share exercise price under such option by 0.9559, rounded up to the nearest whole cent. Each share of restricted stock granted under an Integral Systems equity plan or otherwise, whether vested or unvested, that is outstanding immediately prior to the completion of the Merger shall be cancelled and the holder thereof shall be entitled to receive an amount in cash, without interest, equal to the product of the total number of restricted shares of Integral Systems common stock held by such holder, multiplied by $13.00, less the amount of any tax withholding. No fractional shares of Company common stock will be issued in the Merger. The Merger is intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Completion of the Merger is subject to various customary conditions, including, among other things: (i) the approval of the stockholders of each of the Company and Integral Systems; (ii) subject to certain materiality exceptions, the accuracy of the representations and warranties made by each of the Company and Integral Systems and the compliance by each of the Company and Integral Systems with their respective obligations under the Merger Agreement; (iii) obtaining clearance under the Hart-Scott-Rodino Antitrust Improvements Act, as amended; and (iv) the declaration of the effectiveness by the SEC of the Registration Statement on Form S-4 filed by the Company on June 7, 2011.
The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating the Company and Integral Systems to continue to conduct their respective businesses in the ordinary course and to cooperate on seeking regulatory approvals and providing access to each other's information. The Merger Agreement also contains a representation by the Company regarding the availability of funds to complete the transactions contemplated by the Merger Agreement, including certain financing commitments, and a customary "no solicitation" provision pursuant to which, prior to the completion of the Merger, neither the Company nor Integral Systems is permitted to solicit or engage in discussions with any third party regarding another acquisition proposal unless it has received an unsolicited proposal or offer that the recipient's board of directors determines is or could reasonably be expected to result in a "Superior Proposal".
The Merger Agreement contains certain termination rights in favor of each
Summary of the CompanyExchange Offer
The summary below describes the principal terms and Integral Systems, including each party's rightconditions of the Exchange Offer and the Exchange Notes. It does not contain all the information that may be important to terminateyou. Some of the Merger Agreementterms and conditions described below are subject to important limitations and exceptions. Please refer to the sections of this prospectus entitled "The Exchange Offer" and "Description of the Exchange Notes" for more detailed descriptions of the terms and conditions of the Exchange Offer and the terms of the Exchange Notes.
On May 14, 2014, we issued $625 million aggregate principal amount of 7.000% senior secured notes due 2019. On the same day, we and the initial purchasers of the Unregistered Notes entered into a registration rights agreement in which we agreed that you, as a holder of Unregistered Notes, would be entitled to exchange your Unregistered Notes for Exchange Notes registered under certain circumstancesthe Securities Act of 1933, as amended (the "Securities Act"). This Exchange Offer is intended to satisfy these rights. After the Exchange Offer is completed, you will no longer be entitled to any registration rights with respect to your Unregistered Notes. The Exchange Notes will be our obligations and will be entitled to the benefits of the indenture relating to the Unregistered Notes. The form and terms of the Exchange Notes are identical in connection withall material respects to the acceptanceform and terms of a "Superior Proposal".the Unregistered Notes, except that:
In addition, the Merger Agreement provides that in connection with certain terminations ofExchange Notes will bear a different CUSIP and ISIN number than the Merger Agreement, depending on the circumstances surrounding the termination, one party may be required to pay the other a termination fee of $9.3 million.
Background
Department of Defense Drives Strategic PrioritiesUnregistered Notes. The CUSIP number for the CompanyExchange Notes is .
The Exchange Offer | We are offering to exchange any and all of our 7.000% senior secured notes due 2019, which have been registered under the Securities Act, for any and all of our outstanding unregistered 7.000% senior secured notes due 2019 that were issued on May 14, 2014. As of the date of this prospectus, $[625] million in aggregate principal amount of our Unregistered Notes are outstanding. | |
Expiration of the Exchange Offer | The Exchange Offer will expire at 5:00 p.m., New York City time, on , , unless we decide to extend the Exchange Offer. | |
Conditions of the Exchange Offer | We will not be required to accept for exchange any Unregistered Notes, and may amend or terminate the Exchange Offer if any of the following conditions or events occurs: | |
• the Exchange Offer or the making of any exchange by a holder of Unregistered Notes violates applicable law or any applicable interpretation of the staff of the SEC; | ||
• any action or proceeding shall have been instituted or threatened with respect to the Exchange Offer which, in our reasonable judgment, would impair our ability to proceed with the Exchange Offer; and |
The delivery and execution of our mission-critical engineering and support services are driven by the priorities of the U.S. Federal Government and primarily the DoD. The strategic priorities of the DoD are based in large part on the Quadrennial Defense Review, a legislatively mandated review of DoD strategy and priorities. These priorities are currently focused on mission-critical capabilities of the U.S. armed forces and providing the support infrastructure necessary to sustain these forces in a time of heightened warfare readiness and deployment.
The DoD's budget for the 2012 fiscal year is $671.0 billion, a decrease of 5% from fiscal year 2011. The top 28 programs account for approximately $64.0 billion in funding and require aggregate funding that is nearly 14% higher than what was set aside for them in the fiscal year 2010 budget, which closed on September 30, 2010. The increase in the top 28 programs represents a significant opportunity to key federal government contractors in support of the DoD's war fighter, information technology, and other operational priorities. We believe there will be significant market opportunities for providers of system sustainment, information technology ("IT") and engineering services and solutions to federal government agencies over the next several years, particularly those in the defense and homeland security communities.
The entire federal government is currently operating under the authority of a continuing resolution (the "Continuing Resolution") for the fiscal year ending September 30, 2011. The Continuing Resolution funds programs and services, including DoD budgets, at approximately the same levels as fiscal year 2010. The Continuing Resolution runs through September 30, 2011, after which Congress will either pass a new appropriations bill, extend the Continuing Resolution, or shut down the government for all nonessential federal government services.
Focus on Federal Government Transformation
The federal government, and the DoD in particular, is in the midst of a significant transformation that is driven by the federal government's need to address the changing nature of global threats. A significant aspect of this transformation is the use of C5ISR and information technology to increase the federal government's effectiveness and efficiency. The result is increased federal government spending on information technology to upgrade networks and transform the federal government from separate, isolated organizations into larger, enterprise level, network-centric organizations capable of sharing information broadly and quickly. While the transformation initiative is driven by the need to prepare for new world threats, adopting these IT transformation initiatives will also improve efficiency and reduce infrastructure costs across all federal government agencies.
An additional aspect of the military transformation includes significantly enhancing military readiness in areas such as missile defense, weapons system sustainment and extension, and the overall strengthening of intelligence and security. For example, the objective of the DoD as it relates to missile defense is to continue to develop, test, and field missile defense systems to protect America, its allies and deployed forces.
While the real rate of growth in the top line defense budget may be slowing for the first time since September 11, 2001, the U.S. Government's budgetary process continues to give us good visibility with respect to future spending and the threat areas that the government is addressing. We believe that our business is aligned with mission-critical national security priorities, particularly in the area of missile defense, C5ISR, cyber security and information assurance, and that our current contracts and strong backlog provide us with good insight regarding our future cash flows.
• any laws, rules or regulations or applicable interpretations of the staff of the SEC are issued or promulgated which, in our good faith determination, do not permit us to effect the Exchange Offer. We will give oral or written notice of any non-acceptance, amendment or termination to the registered holders of the Unregistered Notes as promptly as practicable. We reserve the right to waive any conditions of the Exchange Offer. Resale of the Exchange Notes Based on interpretative letters of the SEC staff to third parties unrelated to us, we believe that you can resell and transfer the Exchange Notes you receive pursuant to this Exchange Offer without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: • any Exchange Notes to be received by you will be acquired in the ordinary course of your business; • you are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to engage in, the distribution of the Unregistered Notes or Exchange Notes; • you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of ours, or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; • if you are a broker-dealer, you have not entered into any arrangement or understanding with us or any of our "affiliates" to distribute the Exchange Notes; and • you are not acting on behalf of any person or entity that could not truthfully make these representations. If you wish to participate in the Exchange Offer, you must represent to us that these conditions have been met. If you are a broker-dealer and you will receive Exchange Notes for your own account in exchange for Unregistered Notes that were acquired as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of the Exchange Notes. See "Plan of Distribution" for a description of the prospectus delivery obligations of broker-dealers. Any holder of Unregistered Notes who: • is our affiliate; • does not acquire Exchange Notes in the ordinary course of its business; or • tenders its Unregistered Notes in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of Exchange Notes cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in Shearman & Sterling (available July 2, 1993), or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the new notes. Accrued Interest on the Exchange Notes and Unregistered Notes The Unregistered Notes accrue interest from and including May 14, 2014. The first interest payment on the Exchange Notes will be made on November 15, 2014. We will pay interest on the Exchange Notes semi-annually on May 15 and November 15 of each year. Procedures for Tendering Unregistered Notes If you wish to participate in the Exchange Offer, you must follow the procedures established by DTC for tendering Unregistered Notes held in book-entry form. These procedures require that (i) the exchange agent receive, prior to the expiration date of the Exchange Offer, a computer generated message known as an "agent's message" that is transmitted through DTC's automated tender offer program, and (ii) DTC confirms that: • DTC has received your instructions to exchange your Unregistered Notes; and • you agree to be bound by the terms of the letter of transmittal. For more information on tendering your Unregistered Notes, please refer to the section in this prospectus entitled "The Exchange Offer—Procedures for Tendering." Special Procedures for Beneficial Owners If you are a beneficial owner of Unregistered Notes that are held through a broker-dealer, commercial bank, trust company or other nominee and you wish to tender such Unregistered Notes, you should contact the registered holder promptly and instruct them to tender your Unregistered Notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Unregistered Notes, either make appropriate arrangements to register ownership of the Unregistered Notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. Guaranteed Delivery Procedures If you wish to tender your Unregistered Notes and your Unregistered Notes are not immediately available, or you cannot deliver your Unregistered Notes, the letter of transmittal or any other required documents, or you cannot comply with the procedures under DTC's Automated Tender Offer Program for transfer of book-entry interests prior to the expiration date, you must tender your Unregistered Notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offer—Guaranteed Delivery Procedures." Acceptance of Unregistered Notes and Delivery of Exchange Notes Subject to customary conditions, we will accept outstanding Unregistered Notes that are properly tendered in the Exchange Offer and not withdrawn prior to the expiration date. The Exchange Notes will be delivered as promptly as practicable following the expiration date. Withdrawal Rights You may withdraw the tender of your Unregistered Notes at any time prior to 5:00 p.m., New York City time, on , , the expiration date. Consequences of Failure to Exchange If you are eligible to participate in this Exchange Offer and you do not tender your Unregistered Notes as described in this prospectus, your Unregistered Notes may continue to be subject to transfer restrictions. As a result of the transfer restrictions and the availability of Exchange Notes, the market for the Unregistered Notes is likely to be much less liquid than before this Exchange Offer. The Unregistered Notes will, after this Exchange Offer, bear interest at the same rate as the Exchange Notes. The Unregistered Notes will not retain any rights under the registration rights agreement. Certain United States Federal Income Tax Considerations The exchange of the Unregistered Notes for Exchange Notes pursuant to the Exchange Offer will not be a taxable event for U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax Considerations." Exchange Agent Wilmington Trust, National Association, the trustee under the indenture, is serving as exchange agent in connection with the Exchange Offer. Use of Proceeds We will not receive any proceeds from the issuance of Exchange Notes in the Exchange Offer. Issuer Exchange Notes $625.0 million aggregate principal amount of 7.000% Senior Secured Notes due 2019 (the "Exchange Notes"). Interest Rate 7.000% per annum. Maturity Date May 15, 2019. Interest Payment Dates May 15 and November 15 of each year, beginning on November 15, 2014. Guarantees The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. See "Description of the Exchange Notes—Guarantees." Security The Exchange Notes and the related Guarantees will be secured by a lien on substantially all of our and the guarantors' assets, subject to certain exceptions and permitted liens. The security interest in such assets (other than the Notes Priority Collateral) that secure the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure our ABL Credit Facility. The security interest in assets securing the ABL Credit Facility that consist of Notes Priority Collateral will be junior to the liens thereon that secure the Exchange Notes and the related Guarantees. Ranking The Exchange Notes will be our senior obligations and will rank pari passu in right of payment with all of our existing and future senior indebtedness and senior in right of payment with all of our existing and future subordinated indebtedness. The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. Each Guarantee will rank equally in right of payment with the applicable guarantor's existing and future senior debt and rank senior in right of payment to such guarantor's existing and future subordinated debt. The Exchange Notes and Guarantees will be effectively junior to all of our and the guarantors' indebtedness and obligations secured on a first priority basis, including borrowings under our ABL Credit Facility, to the extent of the value of the assets subject to such first priority liens and effectively senior to our and the guarantors' existing and future unsecured obligations to the extent of the value of the collateral securing the Exchange Notes (after taking into account the obligations secured by such assets on a first priority basis). The Exchange Notes and Guarantees will be structurally subordinated to all liabilities of our current and future non-guarantor subsidiaries. See "Description of the Exchange Notes—Guarantees." Intercreditor Agreement Pursuant to an intercreditor agreement, the liens securing the Exchange Notes on the ABL Priority Collateral will be second priority liens that will be expressly junior in priority to the liens on the ABL Priority Collateral that secure obligations under our ABL Credit Facility and the liens securing the Exchange Notes on the Notes Priority Collateral will be first priority liens that will be expressly senior in priority to liens on the Notes Priority Collateral that secure obligations under our ABL Credit Facility. Pursuant to the intercreditor agreement, the liens on the ABL Priority Collateral securing the Exchange Notes may not be enforced for a 180 day "standstill" period, which 180 day "standstill" period will not expire if the agent under the ABL Credit Facility is pursuing remedies. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement." Certain Covenants The Indenture will limit, among other things, our ability and the ability of our restricted subsidiaries to: • incur or guarantee additional indebtedness or issue certain preferred stock; • pay dividends or make other distributions on, or redeem or purchase, any equity interests or make other restricted payments; • make certain acquisitions or investments; • create or incur certain liens; • transfer or sell assets; • incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries; • enter into transactions with affiliates; and • consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications. See "Description of the Exchange Notes—Certain Covenants." Form and Denomination The Exchange Notes will be issued only in fully registered form in minimum denominations of $2,000 and larger integral multiples of $1,000. No Public Market The Exchange Notes are a new issue of securities and will not be listed on any securities exchange or included in any automated quotation system. Based on interpretative letters of the SEC staff to third parties unrelated to us, we believe that you can resell and transfer the Exchange Notes you receive pursuant to this Exchange Offer without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: any Exchange Notes to be received by you will be acquired in the ordinary course of your business; • you are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to engage in, the distribution of the Unregistered Notes or Exchange Notes; • you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of ours, or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; • if you are a broker-dealer, you have not entered into any arrangement or understanding with us or any of our "affiliates" to distribute the Exchange Notes; and • you are not acting on behalf of any person or entity that could not truthfully make these representations. If you wish to participate in the Exchange Offer, you must represent to us that these conditions have been met. If you are a broker-dealer and you will receive Exchange Notes Ratio of Earnings to Fixed Charges Deficiency of Earnings Available to Cover Fixed Charges Any holder of Unregistered Notes who: • is our affiliate; • does not acquire Exchange Notes in the ordinary course of its • tenders its Unregistered Notes cannot rely on the Accrued Interest on the Exchange Notes The Unregistered Notes accrue interest from and including May 14, 2014. The first interest payment on the Exchange Notes will be made on November 15, 2014. We will pay interest on the Exchange Notes semi-annually on May 15 and November 15 of each year. Procedures for Tendering Unregistered Notes If you wish to participate in the Exchange Offer, you must follow the procedures established by DTC for tendering Unregistered Notes held in book-entry form. These procedures require that (i) the exchange agent receive, prior to the expiration date of the Exchange Offer, a • DTC has received your instructions to exchange your • you agree to be bound by the terms of the letter of transmittal. For more information on tendering your Unregistered Notes, please refer to the section in this prospectus entitled "The Exchange Offer—Procedures for Tendering." Special Procedures for Beneficial Owners If you are a beneficial owner of Unregistered Notes that are held through a broker-dealer, commercial bank, trust company or other nominee and you wish to tender such Unregistered Notes, you should contact the registered holder promptly and instruct them to tender your Unregistered Notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Unregistered Notes, either make appropriate arrangements to register ownership of the Unregistered Notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. The following is a brief summary of some of the terms of the Exchange Notes. For a more complete description of the terms of the Exchange Notes, see "Description of the Exchange Notes" in this prospectus. Issuer Exchange Notes $625.0 million aggregate principal amount of 7.000% Senior Secured Notes due 2019 (the "Exchange Notes"). Interest Rate 7.000% per annum. Maturity Date May 15, 2019. Interest Payment Dates May 15 and November 15 of each year, beginning on November 15, 2014. Guarantees The Exchange Notes future domestic restricted subsidiaries. See "Description of the Exchange The Exchange Notes will be our Intercreditor Agreement Pursuant to • • pay dividends or make other distributions on, or redeem or purchase, any equity interests or make other restricted payments; • make certain acquisitions or investments; • create or incur certain liens; • transfer or sell assets; • incur restrictions on the • enter into transactions with affiliates; and • These covenants The Exchange Notes The Exchange Notes are a new issue of securities Consolidated Statements of Operations Financial Data: Revenue Gross profit Operating income (loss) from continuing operations Provision (benefit) for income taxes Income (loss) from continuing operations Income (loss) from discontinued operations Net income (loss) Income (loss) from continuing operations per common share Basic Diluted Income (loss) from discontinued operations per common share Basic Diluted Net income (loss) per common share Basic Diluted Weighted average shares Basic Diluted Consolidated Balance Sheet Data: Cash and cash equivalents Working capital Total assets Short-term debt Long-term debt Total stockholders' equity Resale of the Exchange Notes Based • any Exchange Notes to be received by you will be acquired in the ordinary course of your business; • you are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to engage in, the distribution of the Unregistered Notes or Exchange Notes; • you are not an "affiliate" (as defined in Rule 405 under the Securities Act) of ours, or, if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; • if you are a broker-dealer, you have not entered into any arrangement or understanding with us or any of our "affiliates" to distribute the Exchange Notes; and • you are not acting on behalf of any person or entity that could not truthfully make these representations. If you wish to participate in the Exchange Offer, you must represent to us that these conditions have been met. If you are a broker-dealer and you will receive Exchange Notes for your own account in exchange Any holder of Unregistered Notes who: • is our affiliate; • does not acquire Exchange Notes in the ordinary course of • tenders its Unregistered Notes cannot rely on the position of the staff of the SEC The Unregistered Notes accrue interest from and including May 14, 2014. The first interest payment on the Exchange Notes will be made on November 15, 2014. We will pay interest on the Exchange Notes semi-annually on May 15 and November 15 of each year. Procedures for If you wish to participate in the Exchange Offer, you must follow the procedures established by DTC for tendering Unregistered Notes held in book-entry form. These procedures require that (i) the exchange • DTC has received your instructions to exchange your Unregistered Notes; and • you agree to be bound by the terms of the letter of For more information on tendering your Unregistered Notes, Special Procedures for Beneficial Owners If you are a beneficial owner of Unregistered Notes that are held through a broker-dealer, commercial bank, trust company or other nominee and If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Unregistered Notes, either make appropriate arrangements to register ownership of the Unregistered Notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. Guaranteed Delivery Procedures If you wish to tender your Unregistered Notes and your Unregistered Notes are not immediately available, or you cannot deliver your Unregistered Notes, the letter of transmittal or any other required documents, or you cannot comply with the procedures under DTC's Automated Tender Offer Program for transfer of book-entry interests prior to the expiration date, you must tender your Unregistered Notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offer—Guaranteed Delivery Procedures." Acceptance of Unregistered Notes and Delivery of Exchange Notes Subject to customary conditions, we will accept The Exchange Notes will Withdrawal Rights You may withdraw the tender of Consequences of Failure to Exchange If you are eligible to participate in Certain United States Federal Income Tax Considerations The exchange of the Unregistered Notes for Exchange Notes pursuant to the Exchange Offer will not be a taxable event for U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax Considerations." Exchange Agent Wilmington Trust, National Association, the trustee under the indenture, is serving as exchange The following is a brief summary of some of the terms of the Exchange Notes. For a more complete description of the terms of the Exchange Notes, see "Description of the Exchange Notes" in this prospectus. Issuer Exchange Notes $625.0 million aggregate principal amount of 7.000% Senior Secured Notes due 2019 (the "Exchange Notes"). Interest Rate 7.000% per annum. Maturity Date May 15, 2019. Interest Payment Dates May 15 and November 15 of each year, beginning on November 15, 2014. Guarantees The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. See "Description of the Security The Exchange Notes and the related Guarantees will be secured by a lien on substantially all of our and the guarantors' assets, subject to certain exceptions and permitted liens. The security interest in The Exchange Notes will be our senior obligations and will rank pari passu in right of payment with all of our existing and future senior indebtedness and senior in right of payment with all of our existing and future subordinated indebtedness. The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. Each Guarantee will rank equally in right of payment with the applicable guarantor's existing and future senior debt and rank senior in right of payment to such guarantor's existing and future subordinated debt. The Exchange Notes and Guarantees will be effectively junior to all of our and the guarantors' indebtedness and obligations secured on a first priority basis, including borrowings under our ABL Credit Facility, to the extent Intercreditor Agreement Pursuant to an intercreditor agreement, the liens securing the Exchange Notes on the ABL Priority Collateral will be second priority liens that will be expressly junior in priority to the liens on the ABL Priority Collateral that secure obligations under our ABL Credit Facility and the liens securing the Exchange Notes on the Notes Priority Collateral will be first priority liens that will be expressly senior in priority to liens on the Notes Priority Collateral that secure obligations under our ABL Credit Facility. Pursuant to the intercreditor agreement, the liens on the ABL Priority Collateral securing the Exchange Notes may not be enforced for a 180 day "standstill" period, which 180 day "standstill" period will not expire if the agent under the ABL Credit Facility is pursuing remedies. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement." Certain Covenants The Indenture will limit, among other things, our ability and the ability of our restricted subsidiaries to: • incur or guarantee additional indebtedness or issue certain preferred stock; • pay dividends or make other distributions on, or redeem or purchase, any equity interests or make other restricted payments; • make certain acquisitions or investments; • create or incur certain liens; • transfer or sell assets; • incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries; • enter into transactions with affiliates; and • consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications. See "Description of the Exchange Notes—Certain Covenants." Form and Denomination The Exchange Notes will be issued only in fully registered form in minimum denominations of $2,000 and larger integral multiples of $1,000. No Public Market The Exchange Notes are a new issue of securities and will not be listed on any securities exchange Risk Factors See "Risk Factors" and On or after May 15, 2016, we may Prior to In addition, we may, at our option, redeem some or all of the Exchange Notes at any time prior to May 15, 2016, by paying a "make whole" premium, plus accrued and unpaid interest, if any, to the date of redemption. See "Description of the Exchange Notes—Redemption." In addition, at one time prior to May 15, 2016, we may redeem up to 10% of the original aggregate principal amount of the Exchange Notes issued under the Indenture at a redemption price of 103% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption. Change of Control Offer If we experience change of control events, the holders of the Asset Sale Proceeds Upon certain asset sales, we may be required to offer to use the net proceeds thereof to purchase some of the Exchange Notes at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. See "Description of the Exchange Notes—Certain Covenants—Limitation on Asset Sales." Use of Proceeds We will not You should carefully consider the risks described below in addition to the other information contained in this prospectus or incorporated herein by reference before making a decision to participate in the Exchange Offer. Any of the following risks, as well as other risks and uncertainties, could harm our business and financial results and cause the value of the Exchange Notes to decline, which in turn could cause you to lose all or part of your investment. The risks and uncertainties described in this prospectus and the documents incorporated herein by reference are not the only ones facing us. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, financial condition, results of operations and prospects. Risks Related to our Indebtedness and the Exchange Notes We have substantial indebtedness, which could have a negative impact on our financing options and liquidity position and have adverse effects on our business. As of June 29, 2014, we have approximately $664.2 million of total long-term debt outstanding, which includes $41.0 million under our asset-based credit facility (the "ABL Credit Facility"). The degree to which we are leveraged could have adverse effects on our business, including the following: Our ability to meet our debt service obligations will depend upon our future performance, which may be subject to financial, business and other factors affecting our operations, many of which are beyond our control. Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage. We may be able to incur substantial additional indebtedness in the future. Although the Indenture will limit our ability and the ability of our subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial and, in certain circumstances, could be secured on a first-priority or pari passu basis. In addition, the Indenture will not prevent us from incurring obligations that do not constitute indebtedness. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial leverage described above, including our possible inability to service our debt, would increase. Our debt service obligations may adversely affect our cash flow. A higher level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flow to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we are unable to generate sufficient cash flow to pay the interest on our debt, we may have to delay or curtail our operations. Our ability to generate cash flows from operations and to make scheduled payments on our indebtedness will depend on our future financial performance. Our future financial performance will be affected by a range of economic, competitive and business factors that we cannot control, such as those described under "—Other Risks Related to Kratos." A significant reduction in operating cash flows resulting from changes in economic conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. These alternative strategies may not be effected on satisfactory terms, if at all, and they may not yield sufficient funds to make required payments on the Exchange Notes and our other indebtedness. If for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which would allow our creditors at that time to declare certain outstanding indebtedness to be due and payable, which would in turn trigger cross-acceleration or cross-default rights between the relevant agreements. In addition, our lenders under an existing ABL Credit Facility could compel us to apply all of our available cash to repay our borrowings or they could prevent us from making payments on the Exchange Notes. If the amounts outstanding under the Notes, our existing ABL Credit Facility, and any other indebtedness were to be accelerated, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders, including you as noteholders. A portion of our business is conducted through foreign subsidiaries, and the failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness, including the Exchange Notes. As of June 29, 2014, approximately 8% of our consolidated assets, based on book value, and 8% of our total revenues were held by foreign subsidiaries, which will not guarantee the Exchange Notes. Our ability to meet our debt service obligations (including those relating to the Exchange Notes) with cash from foreign subsidiaries will depend upon the results of operations of these subsidiaries and may be subject to legal, contractual or other restrictions and other business considerations. In addition, dividend and interest payments to us from the foreign subsidiaries may be subject to foreign withholding taxes, which would reduce the amount of funds we receive from such foreign subsidiaries. Dividends and other distributions from our foreign subsidiaries may also be subject to fluctuations in currency exchange rates and legal and other restrictions on repatriation, which could further reduce the amount of funds we receive from such foreign subsidiaries. In general, when an entity in a foreign jurisdiction repatriates cash to the U.S., the amount of such cash is treated as a dividend taxable at current U.S. tax rates. Accordingly, upon the distribution of cash to us from our foreign subsidiaries, we will be subject to U.S. income taxes. Although foreign tax credits may be available to reduce the amount of the additional tax liability, these credits may be limited and only offset the tax paid in the foreign jurisdiction, not the excess of the U.S. tax rate over the foreign tax rate. Therefore, to the extent that we must use cash generated in foreign jurisdictions to make principal or interest payments on the Exchange Notes, there may be a cost associated with repatriating the cash to the U.S. The Indenture and our ABL Credit Facility impose significant operating and financial restrictions on us and our subsidiaries that may prevent us and our subsidiaries from pursuing certain business opportunities and restrict our ability to operate our business. The Indenture and our ABL Credit Facility contain covenants that restrict our ability and our subsidiaries' ability to, among other things: Our ABL Credit Facility also requires us to comply with specified financial ratios, including a borrowing base availability and minimum fixed charge coverage ratio. Our ability to comply with these covenants will likely be affected by many factors, including events beyond our control, and we may not satisfy those requirements. Our failure to comply with our debt-related obligations could result in an event of default under our other indebtedness and the acceleration of our other indebtedness, in whole or in part, could result in an event of default under the Indenture. The restrictions contained in the Indenture and in our ABL Credit Facility will also limit the ability of the Company and its subsidiaries to plan for or react to market conditions, meet capital needs or otherwise restrict their activities or business plans and adversely affect the ability to finance their operations, enter into acquisitions or to engage in other business activities that would be in their interest. If you do not exchange your Unregistered Notes, you may have difficulty transferring them at a later time. We will issue Exchange Notes in exchange for the Unregistered Notes after the exchange agent receives your Unregistered Notes, the letter of transmittal and all related documents. You should allow adequate time for delivery if you choose to tender your Unregistered Notes for exchange. Unregistered Notes that are not exchanged will remain subject to restrictions on transfer and will not have rights to registration. If you do not participate in the Exchange Offer for the purpose of participating in the distribution of the Exchange Notes, you must comply with the registration and prospectus delivery requirements of the Securities Act for any resale transaction. If any Unregistered Notes are not tendered in the exchange or are tendered but not accepted, the trading market for such notes could be negatively affected due to the limited amount of Unregistered Notes expected to remain outstanding following the completion of the Exchange Offer. The consummation of the Exchange Offer may not occur. We are not obligated to complete the Exchange Offer under certain circumstances. See "The Exchange Offer—Conditions." Even if the Exchange Offer is not completed, it may not be completed on the schedule described in this prospectus. Accordingly, holders participating in the Exchange Offer may have to wait longer than expected to receive their Exchange Notes. You may be required to deliver prospectuses and comply with other requirements in connection with any resale of the new notes. Holders of the Unregistered Notes who do not tender their Unregistered Notes will have no further rights under the registration rights agreement, including registration rights and the right to receive additional interest. Holders who do not tender their Unregistered Notes will not have any further registration rights or any right to receive additional interest under the registration rights agreement or otherwise. Our ability to repurchase the Exchange Notes upon a change of control may be limited. Upon the occurrence of specific change of control events, the Company will be required to offer to repurchase all such Exchange Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. The lenders under our ABL Credit Facility have the right to accelerate the indebtedness thereunder upon a change of control. Any future debt agreements of the Company may contain a similar provision. However, the Company may not have sufficient funds at the time of the change of control to make the required repurchase of the Exchange Notes or repayment of such other indebtedness. Any such future debt agreements may contain similar restrictions. If the Company fails to repurchase the Exchange Notes submitted in a change of control offer, it would constitute an event of default under the Indenture which would, in turn, constitute an event of default under our ABL Credit Facility and could constitute an event of default under other indebtedness, even if the change of control itself would not cause a default. Important corporate events, such as takeovers, recapitalizations or similar transactions, may not constitute a change of control under the Indenture and thus not permit the holders of the Exchange Notes to require us to repurchase or redeem the Exchange Notes. See "Description of the Exchange Notes—Repurchase Upon Change of Control." We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the Exchange Notes. Legal uncertainty regarding what constitutes a change of control and the provisions of the Indenture may allow us to enter into transactions, such as acquisitions, refinancings or recapitalizations, that would not constitute a change of control but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the Exchange Notes. The definition of change of control includes a phrase relating to the transfer of "all or substantially all" of our assets and subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require the issuer to repurchase Notes as a result of a transfer of less than all of our assets to another person may be uncertain. There is no active market for the Exchange Notes and if an active trading market does not develop for these Exchange Notes you may not be able to resell them. The Exchange Notes are a new issue of securities for which there is currently no trading market. We do not intend to list the Exchange Notes on any national securities exchange or quotation system. The initial purchasers have advised us that following the completion of this offering, they currently intend to make a market in the Exchange Notes, however, the initial purchasers are not obligated to do so and any market-making activities with respect to the Exchange Notes may be discontinued at any time without notice. In addition, market-making activity will be subject to the limits imposed by law. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. Any such disruptions could adversely affect the prices at which the Exchange Notes may be sold. Although under the registration rights agreement we and the guarantors are required to register the resale of the Exchange Notes, such parties cannot ensure that they will be able to register the Exchange Notes successfully. Unless and until such registration of the Exchange Notes, they may not be offered or sold except in transactions that are exempt from, or not subject to, the registration requirements of the Securities Act. In addition, under the registration rights agreement such parties are permitted to suspend the use of an effective registration statement for specific periods of time for certain reasons. Further, even if a market were to exist, the Exchange Notes could trade at prices that may be lower than the initial offering price of the Exchange Notes depending on many factors, including prevailing interest rates, the markets for similar securities, general economic conditions and our financial condition, current stock price, performance and prospects. The liquidity of and the trading market for the Exchange Notes may be adversely affected by general declines or disruptions in the market for non-investment grade debt. If you do not properly tender your Unregistered Notes, your ability to transfer such Unregistered Notes will be adversely affected. We will only issue Exchange Notes in exchange for Unregistered Notes that are timely received by the exchange agent, together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the Unregistered Notes and you should carefully follow the instructions on how to tender your Unregistered Notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the Unregistered Notes. If you do not tender your Unregistered Notes or if your tender of Unregistered Notes is not accepted because you did not tender your Unregistered Notes properly, then, after consummation of the Exchange Offer, you will continue to hold Unregistered Notes that are subject to the existing transfer restrictions. After the Exchange Offer is consummated, if you continue to hold any Unregistered Notes, you may have difficulty selling them because there will be fewer Unregistered Notes remaining and the market for such Unregistered Notes, if any, will be much more limited than it is currently. In particular, the trading market for unexchanged Unregistered Notes could become more limited than the existing trading market for the Unregistered Notes and could cease to exist altogether due to the reduction in the amount of the Unregistered Notes remaining upon consummation of the Exchange Offer. A more limited trading market might adversely affect the liquidity, market price and price volatility of such untendered Unregistered Notes. If you are a broker-dealer or participating in a distribution of the Exchange Notes, you may be required to deliver prospectuses and comply with other requirements. If you tender your Unregistered Notes for the purpose of participating in a distribution of the Exchange Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes. If you are a broker-dealer that receives Exchange Notes for your own account in exchange for Unregistered Notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such Exchange Notes. Risks Related to the Collateral and Guarantees The lien-ranking provisions set forth in the intercreditor agreement will substantially limit the rights of the holders of the Exchange Notes with respect to liens on the assets (other than the Notes Priority Collateral) securing the Exchange Notes and the related Guarantees. The liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure the ABL Credit Facility. The holders of obligations under the ABL Credit Facility will be entitled to receive proceeds from any realization of such collateral to repay their obligations in full before the holders of the Exchange Notes and other obligations secured by liens subordinated to the ABL Credit Facility will be entitled to any recovery from such collateral. In the event of a foreclosure, the proceeds from the sale of all of such collateral may not be sufficient to satisfy the amounts outstanding under the Notes after payment in full of all obligations secured by the ABL Credit Facility. The rights of the holders of the Notes with respect to the liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will therefore be substantially limited pursuant to the terms of the lien-ranking provisions set forth in the intercreditor agreement. Under those lien-ranking provisions, at any time that the ABL Credit Facility is outstanding, any actions that may be taken in respect of such assets, including the ability to cause the commencement of enforcement proceedings against such assets and to control the conduct of such proceedings, and the approval of releases of such assets from the lien of the collateral documents, will be at the direction of the lenders under the ABL Credit Facility unless a 180-day "standstill" period has expired after notice of an Event of Default under the Indenture from the Collateral Agent to the agent under the ABL Credit Facility (the "ABL Agent") and the ABL Agent is not pursuing remedies with respect to the ABL Priority Collateral. The collateral agent, on behalf of the holders of the Notes, will not during such "standstill" period have the ability to control or direct such actions, even if the rights of the holders of the Exchange Notes are adversely affected. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement." Holders of the Exchange Notes will not control decisions regarding certain collateral. The lenders under our ABL Credit Facility will control substantially all matters related to the ABL Priority Collateral pursuant to the terms of the intercreditor agreement. The lenders of our ABL Credit Facility may cause the ABL Agent to dispose of, release, or foreclose on, or take other actions with respect to, the ABL Priority Collateral (including amendments of and waivers under the security documents) with which holders of the Exchange Notes may disagree or that may be contrary to the interests of holders of the Exchange Notes, even after a default under the Exchange Notes. To the extent any ABL Priority Collateral is released from securing the first priority lien obligations, the intercreditor agreement will provide that in certain circumstances, the second priority liens securing the Exchange Notes will also be released from such collateral. The intercreditor agreement will prohibit second priority lienholders from foreclosing on the ABL Priority Collateral for a 180-day "standstill" period (subject to extension for any period during which the ABL Agent is exercising remedies) until payment in full of the obligations under the ABL Credit Facility. We cannot assure you that in the event of a foreclosure under the ABL Credit Facility the proceeds from the sale of any ABL Priority Collateral securing such obligations would be sufficient to satisfy all or any of the amounts outstanding under the Exchange Notes after payment in full of the obligations under the ABL Credit Facility. The imposition of certain permitted liens will cause the assets on which such liens are imposed to be excluded from the collateral securing the Exchange Notes and the related Guarantees. There are also certain other categories of property that are also excluded from the collateral. The Indenture permits liens in favor of third parties to secure certain other indebtedness, such as purchase money indebtedness and capital lease obligations, and assets subject to such liens will in certain circumstances be excluded from the collateral securing the Notes and the related Guarantees. Our ability to incur purchase money indebtedness and capital lease obligations on a secured basis is subject to limitations as described in "Description of the Exchange Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "—Limitation on Liens." Certain of these third party liens will rank senior to the liens securing the Exchange Notes. In addition, certain categories of assets are excluded from the collateral securing the Exchange Notes and the related Guarantees and the liens on certain categories of assets are not required to be perfected. Excluded assets include certain contracts, certain equipment, and the assets of any non-guarantor subsidiary and certain capital stock of certain subsidiaries. See "Description of the Exchange Notes—Collateral—Generally." If an event of default occurs and the Exchange Notes are accelerated, the Exchange Notes and the related Guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded property and will be effectively subordinated to holders of obligations secured by a lien perfected on such excluded property. The value of the collateral securing the Exchange Notes may not be sufficient to satisfy all the obligations evidenced by or relating to the Exchange Notes secured by such collateral. As a result, holders of the Exchange Notes may not receive full payment on the Exchange Notes following an event of default. No appraisal has been made of the collateral securing the Exchange Notes. The value of the collateral in the event of liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, security interests and other rights granted to other parties (including the lenders under our ABL Credit Facility) encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of that collateral and the ability of the collateral agent under the Indenture or the holders thereof to realize or foreclose on that collateral. Consequently, we cannot assure investors in the Exchange Notes that liquidating the collateral securing the Exchange Notes would produce proceeds in an amount sufficient to pay in full any amounts due under the Exchange Notes (and other pari passu indebtedness) after also satisfying the obligations to pay any creditors with prior claims on the collateral, including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against our and the guarantors' remaining assets. In addition, under the intercreditor agreement between the collateral agent for the holders of the Exchange Notes and the ABL Agent, the right of the lenders under the ABL Credit Facility to exercise certain remedies with respect to the ABL Priority Collateral could delay liquidation of the collateral. Bankruptcy laws and other laws relating to foreclosure and sale also could substantially delay or prevent the ability of the collateral agent or any holder of the Notes to obtain the benefit of any collateral securing the Exchange Notes. Such delays could have a material adverse effect on the value of the collateral. Consequently, liquidating the collateral securing the Exchange Notes and the related Guarantees may not result in proceeds in an amount sufficient to pay any amounts due under the Notes and holders of pari passu claims after also satisfying the obligations to pay any creditors with prior liens (including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral). If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against the remaining assets of the Company and the guarantors. The collateral will in most cases be under the control of the pledgor thereof, and the sale of particular assets by the pledgor thereof could reduce the pool of assets securing the Notes and the related Guarantees secured thereby. The collateral documents allow the pledgors thereof to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from the collateral securing the Exchange Notes and the related Guarantees secured thereby. There are circumstances other than repayment or discharge of the Exchange Notes under which the collateral securing the Exchange Notes and the related Guarantees will be released automatically, without your consent or the consent of the collateral agent, including: In addition, the Indenture also permits us to designate any existing or future restricted subsidiary that is a guarantor of the Notes or any future subsidiary as an unrestricted subsidiary. If we designate such a future subsidiary guarantor as an unrestricted subsidiary for purposes of the Indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the Exchange Notes by such subsidiary or any of its subsidiaries will be released under the Indenture but not necessarily under our ABL Credit Facility. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral securing the Exchange Notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released. Our government contracts accounts receivable constitute a significant portion of the value of the collateral. In an event of default, it may be difficult to realize the value of our government contracts pledged to secure the Notes. We are primarily a U.S. government contractor, and, as such, our U.S. government contracts accounts receivable represent a significant portion of the value of our assets upon which we will grant a security interest to our lenders under our ABL Credit Facility and to the collateral agent to secure the Exchange Notes. The collateral agent's ability to foreclose on the government contracts accounts receivable on behalf of the holders of the Exchange Notes may be subject to perfection, contractual restrictions set out in the intercreditor agreement, and the consent of third parties including, without limitation, the consent of applicable agencies, bureaus and departments of the United States government. The collateral agent will not be able to exercise direct enforcement rights against the applicable U.S. government agencies with respect to the government contracts accounts receivable without following the requirements of the Assignment of Claims Act. The Assignment of Claims Act requires prior notification and approval of applicable U.S. government agencies, bureaus and departments before secured creditors may realize on their debtors' accounts receivables from the U.S. government and before the secured creditors may enforce those U.S. government contracts accounts receivables against the contracting agency, bureau or department of the U.S. government. Pursuant to the security documents we are not required to follow such procedures, notify the applicable agencies, bureaus and departments of the U.S. government and obtain the requisite consent to the assignment of our U.S. government contracts receivables. Accordingly, you cannot be assured that foreclosure on our assets will generate sufficient value to repay the Exchange Notes in full. State law may limit the ability of the collateral agent, trustee under the Indenture or the holders of the Exchange Notes to foreclose on the real property and improvements included in the collateral. The Exchange Notes will be secured by, among other things, liens on certain owned real property and improvements which we and/or the guarantors own. The laws of the states in which such real property is located may limit the ability of collateral agent, the trustee under the Indenture or the holders of the Notes to foreclose on the improved real-property collateral located in those states. Laws of those states govern the perfection, enforceability and foreclosure of mortgage liens against real property interests which secure debt obligations such as the Exchange Notes. These laws may impose procedural requirements for foreclosure different from and necessitating a longer time period for completion than the requirements for foreclosure of security interests in personal property. Debtors may have the right to reinstate defaulted debt (even it is has been accelerated) before the foreclosure date by paying the past due amounts and a right of redemption after foreclosure. Governing laws may also impose security first and one form of action rules which can affect the ability to foreclose or the timing of foreclosure on real and personal property collateral regardless of the location of the collateral and may limit the right to recover a deficiency following a foreclosure. The rights of holders of the Exchange Notes to the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in the collateral and other issues generally associated with the realization of security interests in collateral. Your rights in the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in certain collateral in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate, and certain proceeds, can be perfected only at the time at which such property and rights are acquired and identified. The trustee and the collateral agent for the holders of the Exchange Notes may not monitor, and we are not required to inform the trustee and the collateral agent of, the future acquisition of property and rights that constitute collateral, and necessary action may not be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the holders of the Exchange Notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest in favor of the Exchange Notes against third parties. A failure to monitor such acquisition and take necessary action may result in the loss of the effectiveness of the grant of the security interest therein or the priority of the security interest in favor of the holders of the Exchange Notes against third parties. In addition, the security interest of the collateral agent for the holders of the Exchange Notes will be subject to practical challenges generally associated with the realization of security interests in collateral. For example, the collateral agent may need to obtain the consent of third parties and make additional filings. If we are unable to obtain these consents or make these filings, the security interests may be invalid and the holders of the Exchange Notes will not be entitled to the collateral or any recovery with respect to the collateral. The collateral agent may not be able to obtain any such consent. Further, the consents of any third parties may not be given when required to facilitate a foreclosure on such collateral. Accordingly, the collateral agent may not have the ability to foreclose upon those assets, and the value of the collateral may significantly decrease. We are also not required to obtain third party consents in certain categories of collateral. The pledge of the capital stock of subsidiaries of the Company that will secure the Exchange Notes will automatically be released from the lien on them and no longer constitute collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary. The Exchange Notes and the related Guarantees will be secured by a pledge of the stock of some of the subsidiaries of the Company. Under the SEC regulations in effect as of the date of this Prospectus, if the par value, book value as carried by the Company or market value (whichever is greatest) of the capital stock, other securities or similar items of a subsidiary pledged as part of the collateral to secure the Notes is greater than or equal to 20% of the aggregate principal amount of the Notes then outstanding, such a subsidiary would be required to provide separate financial statements to the SEC. Therefore, the Indenture and the related collateral documents provide that any capital stock and other securities of such subsidiaries will be excluded from the collateral to the extent that the pledge of such capital stock would cause such companies to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time). As a result, holders of the Exchange Notes could lose a portion or all of their security interest in the capital stock or other securities of those subsidiaries. It may be more difficult, costly and time-consuming for holders of the Exchange Notes to foreclose on the assets of a subsidiary that Guarantees the Exchange Notes than to foreclose on its capital stock so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of such subsidiary. See "Description of the Exchange Notes—Collateral—Generally." The collateral is subject to casualty risks. We intend to maintain insurance or otherwise insure against hazards in a manner appropriate and customary for our business. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the collateral, the insurance proceeds may not be sufficient to satisfy all of the secured obligations, including the Exchange Notes and the Guarantees secured thereby. It may be difficult to realize the value of the collateral pledged to secure the Notes and the Guarantees. The security interest of the collateral agent may be subject to practical problems generally associated with the realization of security interests in the collateral. For example, the collateral agent may need to obtain the consent of a third-party or governmental agency to obtain or enforce a security interest in a license or contract or to otherwise operate our business. We cannot assure you that the collateral agent will be able to obtain any such consent. If the trustee exercises its rights to foreclose on certain assets, transferring required government approvals to, or obtaining new approvals by, a purchaser of assets may require governmental proceedings with consequent delays. In addition, any foreclosure on the assets of a subsidiary, rather than upon its capital stock as a result of the stock of such subsidiary being an "excluded asset," may result in delays and additional expense, as well as less proceeds than would otherwise have been the case. In addition, the collateral agent for the Exchange Notes may need to evaluate the impact of potential liabilities before determining to foreclose on the collateral because entities that hold a security interest in real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at the secured property. In this regard, the collateral agent may decline to foreclose on the collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the holders. Finally, the collateral agent's ability to foreclose on the collateral on behalf of the holders of the Exchange Notes may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's lien on the collateral. The Exchange Notes will be structurally subordinated to all liabilities of our future subsidiaries that are not guarantors of the Exchange Notes. Not all of our future subsidiaries will guarantee the Exchange Notes. The Exchange Notes are structurally subordinated to the indebtedness and other liabilities of our future subsidiaries that do not guarantee the Exchange Notes. These future non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Exchange Notes or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any of the non-guarantor subsidiaries upon the liquidation or reorganization of those subsidiaries, and the consequent rights of holders of the Exchange Notes to realize proceeds from the sale of any of those subsidiaries' assets, will be effectively subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of preferred equity interests of those subsidiaries. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of our future non-guarantor subsidiaries, absent a decision of the court, such as in the case of substantive consolidation, these future non-guarantor subsidiaries will pay all of their creditors and holders of preferred equity interests before they will be able to distribute any of their assets to us. The amount that can be collected under the Guarantees will be limited. Each of the Guarantees will be limited to the maximum amount that can be guaranteed by a particular guarantor without rendering the Guarantee, as it relates to that guarantor, avoidable. See "—Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws." In general, the maximum amount that can be guaranteed by a particular guarantor may be significantly less than the principal amount of the Exchange Notes. This provision may not be effective to protect the Guarantees from being voided under fraudulent transfer law, or may eliminate the guarantor's obligations or reduce the guarantor's obligations to an amount that effectively makes the guarantee worthless. In a Florida bankruptcy case, this kind of provision was found to be ineffective to protect the Guarantees. Rights of holders of Exchange Notes in the collateral secured thereby may be adversely affected by bankruptcy proceedings. The right of the collateral agent for the holders of the Exchange Notes to repossess and dispose of the collateral securing the Notes upon acceleration is likely to be significantly impaired by U.S. federal bankruptcy law if bankruptcy proceedings are commenced by or against the pledgor thereof prior to or possibly even after the collateral agent has repossessed and disposed of such collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the holders of the Exchange Notes, is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes could be delayed following commencement of a bankruptcy case, whether or when such collateral agent would repossess or dispose of such collateral, or whether or to what extent holders of the Exchange Notes would be compensated for any delay in payment of loss of value of such collateral through the requirements of "adequate protection." Furthermore, in the event the bankruptcy court determines that the value of such collateral is not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes would have "under-secured claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "under-secured claims" during the debtor's bankruptcy case. Additionally, the collateral agent's ability to foreclose on the collateral on behalf of the holder of the Notes may be subject to the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's security interest in such collateral. Moreover, the debtor or trustee in a bankruptcy case may seek to void an alleged security interest in collateral for the benefit of the bankruptcy estate. It may successfully do so if the security interest is not properly perfected or was perfected within a specified period of time (generally 90 days) prior to the initiation of such proceeding. Under such circumstances, a creditor may hold no security interest and be treated as holding a general unsecured claim in the bankruptcy case. It is impossible to predict what recovery (if any) would be available for such an unsecured claim if we became a debtor in a bankruptcy case. While U.S. bankruptcy law generally invalidates provisions restricting a debtor's ability to assume and/or assign a contract, there are exceptions to this rule which could be applicable in the event that the pledgor of such collateral becomes subject to a U.S. bankruptcy proceeding. Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws. The issuance of the Exchange Notes and the related Guarantees may be subject to review under U.S. federal or state fraudulent transfer laws. If we become a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, a court could avoid (that is, cancel) our obligations under the Exchange Notes. The court might do so if it finds that when we issued the Notes, (i) we received less than reasonably equivalent value or fair consideration and (ii) we either (a) were or were rendered insolvent, (b) were left with inadequate capital to conduct our business or (c) believed or reasonably should have believed that we would incur debts beyond our ability to pay. The court could also avoid the Exchange Notes, without regard to the factors described in clauses (i) and (ii) above, if it finds that we issued the Notes with actual intent to hinder, delay or defraud our creditors. Similarly, if one of the guarantors of the Exchange Notes becomes a debtor in a case under the U.S. Bankruptcy Code or encounters other financial difficulty, a court might cancel its Guarantee if it finds that when such guarantor issued its Guarantee (or in some jurisdictions, when payments become due under the Guarantee of such Exchange Notes), factors (i) and (ii) above applied to such guarantor, such guarantor was a defendant in an action for money damages or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied), or if it found that such guarantor issued its Guarantee with actual intent to hinder, delay or defraud its creditors. A court could avoid any payment by us or any such guarantor pursuant to the Exchange Notes or the Guarantee thereof or any realization on the pledge of assets securing the Exchange Notes or the Guarantees of such Exchange Notes and require the return of any payment or the return of any realized value to us or such guarantor, as the case may be, or to a fund for the benefit of our or such guarantor's creditors. In addition, under the circumstances described above, a court could subordinate rather than avoid obligations under the Exchange Notes, the Guarantees or the pledges. If the court were to avoid any Guarantee, funds may not be available to pay the Exchange Notes from another guarantor thereof or from any other source. The test for determining solvency for purposes of the foregoing will vary depending on the law of the jurisdiction being applied. In general, a court would consider an entity insolvent either if the sum of its existing debts exceeds the fair value of all of its property or its assets' present fair saleable value is less than the amount required to pay the probable liability on its existing debts as they become due. For this analysis, "debts" include contingent and unliquidated debts. If a court avoided our obligations under the Exchange Notes and the obligations of such guarantor under its Guarantee thereof, holders of the Exchange Notes would cease to be our creditors or creditors of such guarantor and likely have no source from which to recover amounts due under the Exchange Notes. Even if the Guarantee of such guarantor is not avoided as a fraudulent transfer, a court may subordinate such Guarantee to such guarantor's other debt. In that event, such Guarantee would be structurally subordinated to all of such guarantor's other debt. The Indenture will limit the liability of each guarantor on its Guarantee of the Exchange Notes issued thereunder to the maximum amount that such guarantor can incur without risk that its Guarantee will be subject to avoidance as a fraudulent transfer. This limitation may not protect such Guarantees from fraudulent transfer challenges or, if it does, the remaining amount due and collectible under the Guarantees may not suffice, if necessary, to pay the Exchange Notes in full when due. Any future pledge of collateral may be avoidable in bankruptcy. Any future pledge of collateral in favor of the trustee or collateral agent under the Indenture, including pursuant to security documents delivered in connection therewith after the date the Exchange Notes are issued, may be avoidable by the pledgor (a debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if (i) the pledgor is insolvent at the time of the pledge, (ii) the pledge permits the holders of the Notes to receive a greater recovery than if the pledge had not been given and (iii) a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge or the perfection thereof, or, in certain circumstances, a longer period. In addition to the foregoing risks, we are, and will continue to be, subject to the risks described in our Annual Report on Form 10-K for the year ended December 29, 2013 and in our subsequent reports on Forms 10-Q and 8-K and other filings with the SEC. All such reports are or will be filed with the SEC and are incorporated by reference into this prospectus. See the section entitled "Where You Can Find More Information" beginning on page 97. The following summary is qualified by the more detailed information appearing in the computation table found in Exhibit 12.1 to the registration statement of which this prospectus is a part and the historical financial statements, including the notes to those financial statements, incorporated by reference in this prospectus. The following table sets forth our earnings to fixed charges and the dollar amount of the coverage deficiency for the six month period ended June 29, 2014 and the fiscal years ending December 27, 2009, December 26, 2010, December 25, 2011, December 30, 2012 and December 29, 2013. Ratio of Earnings to Fixed Charges Deficiency of Earnings Available to Cover Fixed Charges The Exchange Offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the Exchange Notes pursuant to the Exchange Offer. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive a like principal amount of the Unregistered Notes, the terms of which are identical in all material respects to the Exchange Notes, except as otherwise noted in this prospectus. We will retire and cancel all of the Unregistered Notes tendered in the Exchange Offer. Accordingly, the issuance of the Exchange Notes will not result in any change in our indebtedness or capitalization. The following table sets forth our consolidated cash and cash equivalents and our consolidated capitalization as of June 29, 2014. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the accompanying notes thereto, appearing elsewhere in our annual report on Form 10-K incorporated by reference in this prospectus, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014. Cash and cash equivalents Debt, including current and long-term: 7.000% Senior Secured Notes due 2019, capital leases and Israel bank note ABL Credit Facility Other obligations Total liabilities Stockholders' equity: Preferred stock, $0.001 par value, 5,000,000 authorized—None Common stock, $0.001 par value, 195,000,000 shares authorized; 56,613,024 and 57,056,892 shares issued and outstanding at December 30, 2012 and December 29, 2013, respectively Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Total capitalization SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following table sets forth our selected financial data as of the dates and for the periods indicated. The selected financial data for each of the years ended December 29, 2013, December 30, 2012 and December 25, 2011 and as of December 29, 2013 and December 30, 2012 have been derived from our audited consolidated financial statements incorporated herein by reference. The selected financial data for each of the years ended December 27, 2009 and December 26, 2010 and as of December 27, 2009, December 26, 2010 and December 25, 2011 have been derived from our audited consolidated financial statements not incorporated herein by reference. The selected financial data for the six months ended June 30, 2013 and June, 29, 2014 and as of June 29, 2014 have been derived from our unaudited consolidated financial statements incorporated herein by reference. The selected financial data as of June 30, 2013 have been derived from our unaudited consolidated financial statements not incorporated herein by reference. Our historical results are not necessarily indicative of our future results and historical results for any interim period are not necessarily indicative of our results for the entire year. The selected consolidated financial information presented below should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Item 8. Financial Statements and Supplementary Data" and the consolidated financial statements and the notes thereto contained in our annual report on Form 10-K, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014. Amounts in millions except per share amounts Consolidated Statements of Operations Data: Revenues Gross profit Operating income (loss) Provision (benefit) for income taxes Income (loss) from continuing operations Loss from discontinued operations Net income (loss) Income (loss) from continuing operations per common share Basic Diluted Loss from discontinued operations per common share Basic Diluted Net income (loss) per common share Basic Diluted Weighted average shares: Basic Diluted Consolidated Balance Sheet Data: Cash and cash equivalents Working capital(1) Total assets Short-term debt(2) Long-term debt(3) Long-term debt premium Total stockholders' equity Purpose and Effect of Exchange Offer; Registration Rights We sold the Unregistered Notes to SunTrust Robinson Humphrey, Inc., PNC Capital Markets LLC, B. Riley & Co., LLC, KeyBanc Capital Markets Inc., Noble Financial Capital Markets and Sidoti & Company, LLC, as the initial purchasers, pursuant to a purchase agreement dated May 9, 2014. The initial purchasers resold the Unregistered Notes in reliance on Rule 144A and Regulation S under the Securities Act. In connection with the sale of the Unregistered Notes, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed to: If you participate in the Exchange Offer, you will, with limited exceptions, receive Exchange Notes that are freely tradable and not subject to restrictions on transfer. You should read the information in this prospectus under the heading "The Exchange Offer—Resale of Exchange Notes" for more information relating to your ability to transfer Exchange Notes. The Exchange Offer is not being made to, nor will we accept tenders for exchange from, holders of Unregistered Notes in any jurisdiction in which the Exchange Offer or the acceptance of the Exchange Offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction. If you are eligible to participate in this Exchange Offer and you do not tender your Unregistered Notes as described in this prospectus, you will not have any further registration rights. In that case, your Unregistered Notes may continue to be subject to restrictions on transfer under the Securities Act. Shelf Registration In the registration rights agreement, we agreed to file a shelf registration statement in certain circumstances, including if, with respect to any holder: If a shelf registration statement is required, we will use our commercially reasonable efforts to: The shelf registration statement will permit only certain holders to resell their Unregistered Notes from time to time. In particular, we may require, as a condition to including a holder's Unregistered Notes in the shelf registration statement, such holder to furnish to us information regarding itself and the proposed disposition by it of its notes as we may from time to time reasonably request in writing. We will, in the event that a shelf registration statement is filed, provide to each holder of the Unregistered Notes copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the Unregistered Notes. A holder of Unregistered Notes that sells its notes pursuant to the shelf registration statement generally (1) will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, (2) will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and (3) will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations thereunder). Additional Interest If (A) we have not exchanged Exchange Notes for all Unregistered Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to 365th day following the issue date, (B) if applicable, the shelf registration statement has not been declared effective on or prior to 365th day following the issue date or (C) if applicable, such shelf registration statement ceases to be effective at any time prior to the second anniversary of the Issue Date (other than after such time as all the Unregistered Notes have been disposed of thereunder), then additional interest ("Additional Interest") shall accrue on the principal amount of the Unregistered Notes at a rate of 0.25% per annum for the first 90 days commencing on (x) the 366th day following the issue date, in the case of (A) or (B) above, or (y) the day such shelf registration statement ceases to be effective, in the case of (C) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period;provided, however, that the amount of Additional Interest accruing will not exceed 1.0% per annum;provided further, however, that upon the exchange of Exchange Notes for all Unregistered Notes tendered (in the case of clause (A) above), or upon the effectiveness of the shelf registration statement (in the case of clause (B) or (C) above), Additional Interest on the Unregistered Notes as a result of such clause, as the case may be, shall cease to accrue. Any amounts of Additional Interest that have accrued pursuant to this paragraph will be payable in cash on the same original interest payment dates as the Unregistered Notes. Any amounts of Additional Interest that have accrued pursuant to the clause above will be payable in cash on the same original interest payment dates as the Unregistered Notes. We, and not the Trustee, will be responsible for making all calculations with respect to Additional Interest. The Exchange Notes will be accepted for clearance through DTC. This summary of certain provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the complete provisions of the registration rights agreement. A copy of the registration rights agreement is an exhibit to the registration statement that includes this prospectus. Terms of the Exchange Offer Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we are offering to exchange $1,000 principal amount of Exchange Notes for each $1,000 principal amount of Unregistered Notes. You may tender some or all of your Unregistered Notes only in minimum denominations of $2,000 and larger integral multiples of $1,000. As of the date of this prospectus, $625 million aggregate principal amount of the Unregistered Notes is outstanding. The terms of the Exchange Notes to be issued are substantially similar to the Unregistered Notes, except that the offering of the Exchange Notes will have been registered under the Securities Act and, therefore, the certificates for the Exchange Notes will not bear legends restricting their transfer. In addition, the Exchange Notes will not have registration rights and will not have rights to additional interest. The Exchange Notes will be issued under and be entitled to the benefits of the indenture pursuant to which the Unregistered Notes were issued. In connection with the issuance of the Unregistered Notes, we arranged for the Unregistered Notes to be issued and transferable in book-entry form through the facilities of DTC. The Exchange Notes will also be issuable and transferable in book-entry form through DTC. There will be no fixed record date for determining the eligible holders of the Unregistered Notes that are entitled to participate in the Exchange Offer. We will be deemed to have accepted for exchange validly tendered Unregistered Notes when and if we have given oral (promptly confirmed in writing) or written notice of acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of Unregistered Notes for the purpose of receiving Exchange Notes from us and delivering them to such holders. If any tendered Unregistered Notes are not accepted for exchange because of an invalid tender or the occurrence of certain other events described herein, certificates for any such unaccepted Unregistered Notes will be returned, without expenses, to the tendering holder thereof as promptly as practicable after the expiration of the Exchange Offer. Holders of Unregistered Notes who tender in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of Unregistered Notes for Exchange Notes pursuant to the Exchange Offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. It is important that you read the section "Fees and Expenses" below for more details regarding fees and expenses incurred in the Exchange Offer. Any Unregistered Notes which holders do not tender or which we do not accept in the Exchange Offer will remain outstanding and continue to accrue interest and may be subject to restrictions on transfer under the Securities Act. We will not have any obligation to register the offer or sale of such Unregistered Notes under the Securities Act. Holders wishing to transfer Unregistered Notes would have to rely on exemptions from the registration requirements of the Securities Act. Conditions of the Exchange Offer You must tender your Unregistered Notes in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the Exchange Offer. Notwithstanding any other provision of the Exchange Offer, or any extension of the Exchange Offer, we will not be required to accept for exchange any Unregistered Notes, and may amend or terminate the Exchange Offer if: Expiration Date; Extensions; Amendment; Termination The Exchange Offer will expire 5:00 p.m., New York City time, on , , unless we, in our sole discretion, extend it. In the case of any extension, we will notify the exchange agent orally (promptly confirmed in writing) or in writing of any extension. We will also notify the registered holders of Unregistered Notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration of the Exchange Offer. To the extent we are legally permitted to do so, we expressly reserve the right, in our sole discretion, to: We will give oral or written notice of any non-acceptance or amendment to the registered holders of the Unregistered Notes as promptly as practicable. If we consider an amendment to the Exchange Offer to be material, we will promptly inform the registered holders of Unregistered Notes of such amendment in a reasonable manner. If we determine, in our sole discretion, that any of the events or conditions described in "—Conditions of the Exchange Offer" has occurred, we may terminate the Exchange Offer. We may: If any such waiver constitutes a material change in the Exchange Offer, we will disclose the change by means of a supplement to this prospectus that will be distributed to each registered holder of Unregistered Notes, and we will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Unregistered Notes, if the Exchange Offer would otherwise expire during that period. Any determination by us concerning the events described above will be final and binding upon the parties. Without limiting the manner by which we may choose to make public announcements of any extension, delay in acceptance, amendment or termination of the Exchange Offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service. If you wish to tender your Unregistered Notes Subject to customary conditions, we will Withdrawal Rights You may Consequences of Failure to Exchange If you are eligible to participate in Certain United States Federal Income Tax Considerations The exchange of the Unregistered Notes for Exchange Notes pursuant to the Exchange Offer will not be a taxable event for U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax Considerations." Exchange Agent Wilmington Trust, National Association, the trustee under the indenture, is serving as exchange agent in connection with the Exchange Offer. Use of Proceeds We will not receive any proceeds from the issuance of Exchange Notes in the Competitive StrengthsWe believe we have robust capabilities and past performance qualifications in our respective business areas, including a work force that is experienced with the various programs we service and the customers we serve. Additionally, a majority of our employees have national security clearances specifically related to the customers they work for and the contracts which they work on. We believe the following key strengths distinguish us competitively:Significant and Highly Specialized Experience Through existing customer engagements and the government focused acquisitions we have completed over the past several years, we have amassed significant and highly specialized experience in areas directly related to C5ISR weapon system lifecycle extension and sustainment; missile, rocket and weapons system testing and evaluation; military range operations and technical services; and other highly differentiated services and solutions. This collective experience, or past performance qualifications, is a requirement for the majority of our contract vehicles and customer engagements. Further enhancing our specialized expertise, a majority of our approximately 2,900 employees have national security clearances, including top secret and higher. We believe these characteristics represent a significant competitive strength and position us to win renewal or follow-on business.Specialized National Security Focus Aligned with Mission-Critical National Security Priorities Continued concerns related to the threat posed by certain foreign nations and terrorists have caused the U.S. Government to identify national security as an area of functional and spending priority. Budget pressures, particularly related to DoD spending, have placed a premium on developing and fielding relatively low-cost, high-technology solutions to assist in national security missions. Our primary capabilities and areas of focus, listed below, are strongly aligned with the objectives of the U.S. Government:•Intelligence, surveillance and reconnaissance•Command and control•Unmanned systems•Ballistic missile defense•Cyber security and information assuranceStrategic Geographic Locations and Base Realignment and Closure The U.S. Base Realignment and Closure Act of 2005 ("BRAC") is the congressionally authorized process the DoD has implemented to reorganize its base structure to fewer, larger bases in order to support U.S. armed forces more efficiently and effectively, increase operational readiness and facilitate new ways of doing business. As a result of the DoD's BRAC transformation, we have concentrated part of our business strategy on building a significant presence in key BRAC receiving locations where the U.S. Federal Government is relocating its personnel and related technical and professional services. Webelieve our focus on increasing our strategic presence in key BRAC receiving locations will provide us with a significant competitive advantageDiverse Base of Key Contracts with Low Concentration As a result of our business development focus on securing key contracts, we are a preferred contractor on numerous multiyear, government-wide acquisition contracts ("GWACs") and multiple award contracts. Our preferred contractor status provides us with the opportunity to bid on hundreds of millions of dollars of business each year against a discrete number of other prequalified companies. We have a highly diverse base of contracts with no contract representing more than 5% of 2010 revenue. Our fixed price contracts, almost all of which are production contracts, represent approximately 57% of our 2010 revenue. Our cost-plus-fee contracts and time and materials contracts represent approximately 22% and 21%, respectively, of our 2010 revenue. We believe our diverse base of key contracts and low reliance on any one contract provides us with a stable, balanced revenue stream.In-Depth Understanding of Client Missions We have a reputation for providing mission-critical services and solutions to our clients. Our relationships with our U.S. Army, U.S. Navy and U.S. Air Force customers generally exceed 10 years, enabling us to develop an in-depth understanding of their missions and technical needs. In addition, we have employees located at customer sites, providing us with valuable strategic insights into our clients' ongoing and future program requirements. Our in-depth understanding of our clients' missions, in conjunction with the strategic location of our employees, enables us to offer technical solutions tailored to our clients' specific requirements and evolving mission objectives. In addition, once we are on-site with a customer, we have historically been successful in winning recompete business in the vast majority of cases.Significant Cash Flow Visibility Driven by Stable Backlog As of March 27, 2011, our total backlog, on a pro forma basis with Herley and Integral Systems, was approximately $1.2 billion, of which approximately $676.0 million was funded backlog. The majority of our sales are from orders issued under long-term contracts, typically three to five years in duration. Our contract backlog provides visibility into stable future revenue and cash flow over a diverse set of contracts.Highly Skilled Employees and an Experienced Management Team We deliver our services through a skilled workforce of approximately 2,900 employees. Our senior managers have significant experience with U.S. Federal Government agencies, the U.S. military and federal government contractors. Members of our management team have experience growing businesses both organically and through acquisitions. We believe that the cumulative experience and differentiated expertise of our personnel in our core focus areas, coupled with our sizable employee base, the majority of which hold national security clearances, allows us to qualify for and bid on larger projects in a prime contracting role.Our Strategy Our strategy is to grow our business as a leading provider of highly differentiated products, solutions and services in our core areas of focus as noted above by delivering comprehensive, high-end engineering services, technical solutions, product manufacturing, and information technology solutions to federal government agencies, while improving our margin rates and overall profitability.Capitalize on Current Contract BaseWe are pursuing new program and contract opportunities and awards, as we build the business, with our expanding customer base, contract portfolio, and product, solution and service offerings. We are aggressively pursuing task orders under existing contract vehicles to maximize our revenue and strengthen our client relationships, though there is no assurance that the federal government will make awards up to the ceiling amounts or that we will be awarded any task orders under these vehicles. We have developed several internal tools that facilitate our ability to track, prioritize and win task orders under these vehicles. Combining these tools with our technical expertise, our strong past performance record and our knowledge of our clients' needs should position us to win additional task orders.Expand Product, Solution and Service Offerings Provided to Existing Clients We are focused on expanding the products, solutions and services we provide to our current clients by leveraging our strong relationships, technical capabilities and past performance record, and by offering a wider range of comprehensive solutions as we continue to acquire companies with new areas of specialization. In regard to new areas of specialization, two of our recent acquisitions have expanded our service offerings to include manufacturing of tactical combat vehicle shelters for C5ISR systems, unmanned systems, weapon systems and warfighters. We believe our understanding of client missions, processes and needs, in conjunction with our full lifecycle IT offerings, including cybersecurity, cyberwarfare and situational awareness, positions us to capture new work from existing clients as the federal government continues to increase the volume of IT services contracted to professional services providers. Moreover, we believe our strong past performance record positions us to expand the level of services we provide to our clients.Expand Client and Contract Base We are also focused on expanding our client base into areas with significant growth opportunities by leveraging our capabilities, industry reputation, long-term client relationships and diverse contract base. We anticipate that this expansion will enable us to both pursue additional higher value work and to further diversify our revenue base across the federal government. Our long-term relationships with federal government agencies, together with our GWAC vehicles, give us opportunities to win contracts with new clients within these agencies.Improve Operating Margins We believe that we have opportunities to increase our operating margins and improve profitability by capitalizing on our corporate infrastructure investments and internally developed tools, improving efficiencies and reducing costs, and concentrating our efforts on increasing the percentage of revenues generated from high value added contracts.Capitalize on Corporate Infrastructure Investments In recent periods, we have made significant investments in our senior management and corporate infrastructure in anticipation of future revenue growth. These investments included hiring senior executives with significant experience in the national security industry, strengthening our internal controls over financial reporting and accounting staff in support of public company reporting requirements, expanding our Sensitive Compartmented Information Facilities and other corporate facilities, and expanding our backlog and bid and proposal pipeline. We will be allocating additional resources in our pursuit of new and larger contract opportunities, leveraging our increased scale and robust past performance qualifications. We believe our management experience and corporate infrastructure are more typical of a company with a much larger revenue base than ours. We thereforeanticipate that, to
Summary Description of the extent our revenue grows, we will be able to leverage this infrastructure base and increase our operating margins.Concentrate on High Value Added ContractsExchange NotesWe expect to improve our operating margins as we strive to increase the percentageThe following is a brief summary of revenue we derive from our work as a contractor and from engagements where contracts are awarded on a best value, rather than on a low cost, basis. The federal government's move toward performance-based contract awards to realize greater return on its investment has resulted in a shift to greater utilization of best value awards. We believe this shift will enable us to expand our operating margins as we are awarded more contracts of this nature.Pursue Strategic Acquisitions We intend to supplement our organic growth by identifying, acquiring and integrating businesses that meet our primary objective of providing us with enhanced capabilities to pursue a broader cross sectionsome of the DoD, Departmentterms of Homeland Security and other government markets, complement and broaden our existing client base and expand our primary service offerings. Our senior management team has significant acquisition experience.the Exchange Notes. For a more complete description of the terms of the Exchange Notes, see "Description of the Exchange Notes" in this prospectus.Kratos Defense & Security Solutions, Inc. Risk FactorsResale of the Exchange NotesAn investment•involves substantial risks. See "Risk Factors" beginning on page 14for your own account in exchange for Unregistered Notes that were acquired as a result of thismarket-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus and in our most recent Annual Report on Form 10-K andconnection with any subsequent reports on Forms 10-Q and 8-K and other filings with the SEC that are incorporated herein by reference.Ratio of Earnings to Fixed Charges The following summary is qualified by the more detailed information appearing in the computation table found in Exhibit 12.1 to the registration statement of which this prospectus is a part and the historical financial statements, including the notes thereto, incorporated by reference in this prospectus. The following table sets forth our earnings to fixed charges and the dollar amount of the coverage deficiency for the three month period ended March 27, 2011 and the years ending December 31, 2006, December 31, 2007, December 28, 2008, December 27, 2009 and December 26, 2010. We have not included a ratio of earnings to combined fixed charges and preferred stock dividends because no preferred dividends are accrued, accruing or payable on our outstanding preference shares. (In millions, except ratio) Fiscal Year Ended Three Month
Period Ended December 31,
2006 December 31,
2007 December 28,
2008 December 27,
2009 December 26,
2010 March 27,
2011 — — — — 1.1 — $ (26.7 ) $ (25.9 ) $ (104.7 ) $ (37.3 ) — $ (5.0 ) Corporate Information We were incorporated in the state of New York on December 19, 1994 and began operations in March 1995. We reincorporated in the state of Delaware in 1997. Our executive offices are located at 4820 Eastgate Mall, San Diego, California 92121, and our telephone number is (858) 812-7300. We maintain a website at www.kratosdefense.com. Information contained in or accessible through our website does not constitute part of this prospectus. Our common stock has been publicly traded since 1999 and is listed on the NASDAQ Global Select Market under the symbol "KTOS".Summary of the Termsresale of the Exchange Offer On March 25, 2011, Acquisition Co. Lanza Parent,Notes. See "Plan of Distribution" for a Delaware corporation and an indirect wholly owned subsidiarydescription of the Company (the "Stage I Issuer"), issued $285.0 million aggregate principal amountprospectus delivery obligations of broker-dealers.10% Senior Securedbusiness; ordue 2017 (the "Stage I Notes") pursuantin the Exchange Offer with the intention to an indenture, dated asparticipate, or for the purpose of March 25, 2011, amongparticipating, in a distribution of Exchange NotesStage I Issuer,position of the guarantor party theretostaff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Wilmington Trust FSB ("Wilmington Trust")Exxon Capital Holdings Corporation (available May 13, 1988), as trusteeinterpreted in Shearman & Sterling (available July 2, 1993), or similar no-action letters and, collateral agent (the "Stage I Indenture"). On April 4, 2011,in the Stage I Issuer mergedabsence of an exemption therefrom, must comply with the registration and into the Company, and the Company assumed all the assets and liabilitiesprospectus delivery requirements of the Stage I Issuer including, pursuant to a supplemental indenture to the Stage I Indenture, all the obligations of the Stage I Issuer under the Stage I Indenture, the Stage I Notes and the Collateral Agreements (as defined in the Stage I Indenture) and (ii) the Company became the issuer of the Stage I Notes under the Stage I Indenture and pledgor under such Collateral Agreements. In addition, on April 15, 2011, the Company redeemed all of the outstanding Stage I Notes by issuing to each holder of Stage I Notes (each, a "Holder" and collectively, the "Holders") in exchange therefor the Original Notes issued by the Company pursuant to the Indenture in a like principal amount. On March 25, 2011,Securities Act in connection with the issuanceany resale of the Stage Inew notes.we entered intoand Unregistered Notesregistration rights agreement in which we agreedcomputer generated message known as an "agent's message" that you, as a holder of unregistered Original Notes, would be entitledis transmitted through DTC's automated tender offer program, and (ii) DTC confirms that:unregistered OriginalUnregistered Notes; and
Summary Description of the Exchange NotesKratos Defense & Security Solutions, Inc. issued in the exchange offer will evidence the same debt as the Original Notes,be guaranteed on a senior basis by each of our existing and both the Original Notes and the Exchange Notes are governed by the same indenture.IssuerKratos Defense & Security Solutions, Inc.Title$285,000,000 aggregate principal amount of 10% Senior Secured Notes due 2017.Maturity DateJune 1, 2017.Interest RateWe will pay interest on the Exchange Notes at an annual interest rate of 10%.Interest Payment DatesWe will make interest payments on the Exchange Notes semi-annually in arrears on each December 1 and June 1, beginning December 1, 2011. Interest will accrue from and including June 1, 2011.GuaranteesThe Exchange Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by our existing and future domestic restricted subsidiaries (other than discontinued subsidiaries).RankingThe Exchange Notes and the guarantees will rank senior in right of payment to all of our and the guarantors' existing and future subordinated indebtedness and equal in right of payment with all of our and the guarantors' existing and future senior indebtedness, including indebtedness under our revolving credit facility (the "Revolver").Security InterestThe Exchange Notes and the related guarantees will be secured by a lien on substantially all of our and the guarantors' assets, subject to certain exceptions and permitted liens. However, the security interest in such assets (other than real property, plant, equipment, certain intellectual property and the capital stock of our subsidiaries (collectively, the "Notes Priority Collateral")) that secure the Exchange Notes and the Exchange Guarantees will be contractually subordinated to liens thereon that secure the Revolver. The security interest in assets securing the Revolver that consist of Notes Priority Collateral will be contractually subordinated to liens thereon that secure the Exchange Notes.Optional RedemptionOn or after June 1, 2014, we may redeem some or all of the Exchange Notes at the redemption prices set forth under "Description of the Exchange Notes—Redemption—Optional Redemption on or after June 1, 2014," plus accrued and unpaid interest to the date of redemption. Prior to June 1, 2013, we may redeem up to 35% of the aggregate principal amount of the Exchange Notes at the premium set forth under "Description of the Exchange Notes—Redemption—Optional Redemption Upon Equity Offerings," plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings. In addition, we may, at our option, redeem some or all of the Exchange Notes at any time prior to June 1, 2014, by paying a "make whole" premium, plus accrued and unpaid interest, if any, to the date of redemption.Change of Control OfferIf we experience certain change-of-control events, the holders of the Exchange Notes will have the right to require us to purchase all or a portion of their Exchange Notes at a price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase.Asset Sale OfferUpon certain asset sales, we may be required to offer to use the net proceeds thereof to purchase some of the Exchange Notes at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase.Use of ProceedsWe will not receive any cash proceeds from the issuance of the Exchange Notes. See "Use of Proceeds."Notes" for more detailed information about the terms of Exchange Notes.Notes—Guarantees."An investment in theThe Exchange Notes involves significant risks. You should consider carefullyand the following risk factors andrelated Guarantees will be secured by a lien on substantially all of our and the information containedguarantors' assets, subject to certain exceptions and permitted liens. The security interest in this prospectus before deciding whether to participate insuch assets (other than the exchange offer. The risks and uncertainties described below are not the only risks and uncertaintiesNotes Priority Collateral) that we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of those risks actually occurs, our business, financial condition and results of operations would suffer. The risks discussed below also include forward-looking statements. See "Forward-Looking Statements" in this prospectus.Risks Related tosecure the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure our ABL Credit Facility. The security interest in assets securing the ABL Credit Facility that consist of Notes Priority Collateral will be junior to the liens thereon that secure the Exchange OfferNotes and the related Guarantees.We significantly increasedRankingleveragesenior obligations and will rank pari passu in connectionright of payment with all of our existing and future senior indebtedness and senior in right of payment with all of our existing and future subordinated indebtedness. The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. Each Guarantee will rank equally in right of payment with the financingapplicable guarantor's existing and future senior debt and rank senior in right of recent acquisitionspayment to such guarantor's existing and future subordinated debt. The Exchange Notes and Guarantees will be effectively junior to all of our and the Transactions and currently have substantial indebtedness, which could have a negative impact on our financing options and liquidity position and have adverse effects on our business. In connection with the Transactions, we incurred an additional $285.0 million ofguarantors' indebtedness and asobligations secured on a first priority basis, including borrowings under our ABL Credit Facility, to the extent of March 27, 2011, have approximately $521.1 millionthe value of total indebtedness. Asthe assets subject to such first priority liens and effectively senior to our and the guarantors' existing and future unsecured obligations to the extent of the value of the collateral securing the Exchange Notes (after taking into account the obligations secured by such assets on a resultfirst priority basis). The Exchange Notes and Guarantees will be structurally subordinated to all liabilities of this increased indebtedness, our interest payment obligations have increased significantly. The degreecurrent and future non-guarantor subsidiaries. See "Description of the Exchange Notes—Guarantees."which we are leveraged could have adverse effectsan intercreditor agreement, the liens securing the Exchange Notes on our business, including the following:•it may make it difficult for usABL Priority Collateral will be second priority liens that will be expressly junior in priority to satisfy ourthe liens on the ABL Priority Collateral that secure obligations under the Kratos Notes and our other indebtedness and contractual and commercial commitments;•it may limit our flexibility in planning for, or reacting to, changes in our businessABL Credit Facility and the industriesliens securing the Exchange Notes on the Notes Priority Collateral will be first priority liens that will be expressly senior in priority to liens on the Notes Priority Collateral that secure obligations under our ABL Credit Facility. Pursuant to the intercreditor agreement, the liens on the ABL Priority Collateral securing the Exchange Notes may not be enforced for a 180 day "standstill" period, which we operate;•it may require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing180 day "standstill" period will not expire if the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;•it may restrict us from making strategic acquisitions or exploiting business opportunities;•it may place us at a competitive disadvantage compared to our competitors that have less debt;•it may limit our ability to borrow additional funds;•it may prevent us from raising the funds necessary to repurchase the Kratos Notes or other outstanding notes tendered to us if there is a change of control, which would constitute a defaultagent under the Indenture and underABL Credit Facility is pursuing remedies. See "Description of the Revolver; andExchange Notes—Collateral—Intercreditor Agreement."•it may decrease our ability to compete effectively or operate successfully under adverse economic and industry conditions. Our ability to meet our debt service obligations will depend upon our future performance, which may be subject to financial, business and other factors affecting our operations, many of which are beyond our control.Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage.Certain Covenants We may be able to incur substantial additional indebtedness in the future. Although theThe Indenture and the credit agreement governing the Revolver will limit, among other things, our ability and the ability of our restricted subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. For example, indebtedness in excess of $25.0 million may be incurred under the Revolver in reliance on the $15.0 million general debt basket as well as the fixed charge debtincurrence test, which additional indebtedness may be secured subject to certain conditions. See clause (22) of the definition of the term "Permitted Liens" under "Description of the Exchange Notes—Certain Definitions." In addition, the Indenture and the credit agreement governing the Revolver will not prevent us from incurring obligations that do not constitute indebtedness. See the sections entitled "Description of the Exchange Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "Description of Certain Indebtedness." To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial leverage described above, including our possible inability to service our debt, would increase.Our debt service obligations may adversely affect our cash flow. A higher level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flow to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we are unable to generate sufficient cash flow to pay the interest on our debt, we may have to delay or curtail our operations. Our ability to generate cash flows from operations and to make scheduled payments on our indebtedness will depend on our future financial performance. Our future financial performance will be affected by a range of economic, competitive and business factors that we cannot control. A significant reduction in operating cash flows resulting from changes in economic conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. These alternative strategies may not be effected on satisfactory terms, if at all, and they may not yield sufficient funds to make required payments on the Kratos Notes and our other indebtedness. If for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which would allow our creditors at that time to declare certain outstanding indebtedness to be due and payable, which would in turn trigger cross-acceleration or cross-default rights between the relevant agreements. In addition, our lenders could compel us to apply all of our available cash to repay our borrowings or they could prevent us from making payments on the Kratos Notes. If the amounts outstanding under the Kratos Notes, the Revolver, and any other indebtedness, were to be accelerated, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders, including you as noteholders.A portion of our business is conducted through foreign subsidiaries and the failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness, including the Exchange Notes. As of March 27, 2011, approximately 4% of our consolidated assets, based on book value, were held by foreign subsidiaries. Our ability to meet our debt service obligations (including those relating to the Exchange Notes) with cash from foreign subsidiaries will depend upon the results of operations of these subsidiaries and may be subject to legal, contractual or other restrictions and other business considerations. In addition, dividend and interest payments to us from the foreign subsidiaries may be subject to foreign withholding taxes, which would reduce the amount of funds we receive from such foreign subsidiaries. Dividends and other distributions from our foreign subsidiaries may also be subjectto fluctuations in currency exchange rates and legal and other restrictions on repatriation, which could further reduce the amount of funds we receive from such foreign subsidiaries. In general, when an entity in a foreign jurisdiction repatriates cash to the U.S., the amount of such cash is treated as a dividend taxable at current U.S. tax rates. Accordingly, upon the distribution of cash to us from our foreign subsidiaries, we will be subject to U.S. income taxes. Although foreign tax credits may be available to reduce the amount of the additional tax liability, these credits may be limited and only offset the tax paid in the foreign jurisdiction, not the excess of the U.S. tax rate over the foreign tax rate. Therefore, to the extent that we must use cash generated in foreign jurisdictions to make principal or interest payments on the Kratos Notes, there may be a cost associated with repatriating the cash to the U.S.The lien-ranking provisions set forth in the intercreditor agreement will substantially limit the rights of the holders of the Kratos Notes with respect to liens on the assets (other than Notes Priority Collateral) securing the Kratos Notes and the Kratos Guarantees. The liens on our assets (other than Notes Priority Collateral, defined under "Description of the Exchange Notes—Collateral") securing the Kratos Notes and the Kratos Guarantees will be contractually subordinated to the liens thereon that secure the Revolver and will bepari passu with the liens that secure the Kratos Notes. The holders of obligations under the Revolver will be entitled to receive proceeds from any realization of such collateral to repay their obligations in full before the holders of the Kratos Notes and other obligations secured by liens subordinated to the Revolver will be entitled to any recovery from such collateral. In the event of a foreclosure, the proceeds from the sale of all of such collateral may not be sufficient to satisfy the amounts outstanding under the Kratos Notes after payment in full of all obligations secured by the Revolver. The rights of the holders of the Kratos Notes with respect to the liens on our assets (other than Notes Priority Collateral) securing the Kratos Notes and the Kratos Guarantees will therefore be substantially limited pursuant to the terms of the lien-ranking provisions set forth in the intercreditor agreement. Under those lien-ranking provisions, at any time that the Revolver is outstanding, any actions that may be taken in respect of such assets, including the ability to cause the commencement of enforcement proceedings against such assets and to control the conduct of such proceedings, and the approval of releases of such assets from the lien of the collateral documents, will be at the direction of the lenders under the Revolver. The trustee, on behalf of the holders of the Kratos Notes, will not, for significant periods of time, have the ability to control or direct such actions, even if the rights of the holders of the Kratos Notes are adversely affected. See "Description of the Exchange Notes—Intercreditor Agreement."The imposition of certain permitted liens will cause the assets on which such liens are imposed to be excluded from the collateral securing the Kratos Notes and the Kratos Guarantees. There are also certain other categories of property that are also excluded from the collateral. The Indenture permits liens in favor of third parties to secure certain indebtedness, such as indebtedness incurred under the Revolver (which could exceed $35.0 million in the aggregate), purchase money indebtedness and capital lease obligations, and assets subject to such liens will in certain circumstances be excluded from the collateral securing the Kratos Notes and the Kratos Guarantees. Our ability to incur purchase money indebtedness and capital lease obligations on a secured basis is subject to limitations as described in "Description of the Exchange Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "—Limitation on Liens." Certain of these third party liens rank senior to the liens securing the Kratos Notes. In addition, certain categories of assets are excluded from the collateral securing the Kratos Notes and the Kratos Guarantees and the liens on certain categories of assets are not required to be perfected. Excluded assets include certain contracts, certain equipment, and the assets of anynon-guarantor subsidiary and certain capital stock of certain subsidiaries. See "Description of the Exchange Notes—Collateral." If an event of default occurs and the Kratos Notes are accelerated, the Kratos Notes and the Kratos Guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded property and will be effectively subordinated to holders of obligations secured by a lien perfected on such excluded property.The value of the collateral securing the Kratos Notes may not be sufficient to satisfy all the obligations evidenced by or relating to such Kratos Notes secured by such collateral. As a result, holders of such Kratos Notes may not receive full payment on such Kratos Notes following an event of default. No appraisal has been made of the collateral securing the Kratos Notes. The value of the collateral in the event of liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, security interests and other rights granted to other parties (including with respect to collateral that secures such Kratos Notes, the lenders under the Revolver) encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of that collateral and the ability of the trustee under the Indenture governing the Kratos Notes or the holders thereof to realize or foreclose on that collateral. Consequently, we cannot assure investors in the Kratos Notes that liquidating the collateral securing the Kratos Notes would produce proceeds in an amount sufficient to pay in full any amounts due under such Kratos Notes after also satisfying the obligations to pay any creditors with prior claims on the collateral, including, with respect to collateral that secures such Kratos Notes, the lenders under the Revolver. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Kratos Notes, the holders of the Kratos Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Kratos Notes) would have only an unsecured, unsubordinated claim against our and the guarantors' remaining assets. In addition, under the intercreditor agreement between the collateral agent for the Kratos Notes and the agent under the Revolver, the right of the lenders to exercise certain remedies with respect to the collateral could delay liquidation of the collateral. Bankruptcy laws and other laws relating to foreclosure and sale could also substantially delay or prevent the ability of the collateral agent or any holder of the Kratos Notes to obtain the benefit of any collateral securing the Kratos Notes. Such delays could have a material adverse effect on the value of the collateral. Consequently, liquidating the collateral securing the Kratos Notes and the Kratos Guarantees may not result in proceeds in an amount sufficient to pay any amounts due under the Kratos Notes and holders ofpari passu claims after also satisfying the obligations to pay any creditors with prior liens (including the lenders under the Revolver). If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Kratos Notes, the holders of such Kratos Notes (to the extent not repaid from the proceeds of the sale of the collateral securing such Kratos Notes) would have only an unsecured, unsubordinated claim against our remaining assets and the remaining assets of the guarantors of such Kratos Notes.The Indenture and the credit agreement governing our Revolver impose significant operating and financial restrictions on us and our subsidiaries that may prevent us and our subsidiaries from pursuing certain business opportunities and restrict our ability to operate our business. The Indenture and the credit agreement governing our Revolver contain covenants that restrict our and our subsidiaries' ability to:•paymentspayment of dividends or other distributions from our restricted subsidiaries;• Our Revolver also requires us to comply with specified financial ratios, including a borrowing base availability and minimum fixed charge coverage ratio. Our ability to comply with thesewill likely be affected by many factors, including events beyond our control, and we may not be able to satisfy those requirements. Our failure to comply with our debt-related obligations could result in an event of default under our other indebtedness and the acceleration of our other indebtedness, in whole or in part, could result in an event of default under the Indenture. The restrictions contained in the Indenture and in the credit agreement governing the Revolver will also limit our ability and the ability of our subsidiaries to plan for or react to market conditions, meet capital needs or otherwise restrict our respective activities or business plans and adversely affect the ability to finance our respective operations, enter into acquisitions or to engage in other business activities that would be in our respective interests.The collateral will in most cases be under our control and the sale of particular assets by us could reduce the pool of assets securing the Kratos Notes and the Kratos Guarantees secured thereby. The collateral documents allow us to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from, the collateral securing the Kratos Notes and the related guarantees secured thereby. There are circumstances other than repayment or discharge of the Kratos Notes under which the collateral securing the Kratos Notes and the Kratos Guarantees will be released automatically, without your consent or the consent of the trustee, including:•a sale, transfer or other disposal of such collateral in a transaction not prohibited under the Indenture governing the Kratos Notes;•with respect to collateral held by a guarantor, upon the release of such guarantor from its guarantee of the Kratos Notes;•with respect to collateral that is capital stock, upon the dissolution of the issuer of such capital stock in accordance with the Indenture governing the Kratos Notes; and•with respect to our assets (other than Notes Priority Collateral) that secure the Revolver, upon any release in connection with a foreclosure or exercise of remedies with respect to such collateral in accordance with the terms of the Revolver. Pursuant to the terms of the intercreditor agreement, the holders of the Kratos Notes may not be able to control actions with respect to the collateral, whether or not the holders of the Kratos Notes agree or disagree with those actions. In addition, the Indenture also permits us to designate any existing or future restricted subsidiary that is a guarantor of the Kratos Notes or any future subsidiary as an unrestricted subsidiary. If we designate such a future subsidiary guarantor as an unrestricted subsidiary for purposes of the Indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the Kratos Notes by such subsidiary or any of its subsidiaries will be released under the Indenture but not necessarily under the Revolver. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral securing the Kratos Notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released.The rights of holders of Kratos Notes to the collateral securing such Kratos Notes may be adversely affected by the failure to perfect security interests in the collateral and other issues generally associated with the realization of security interests in collateral. Your rights in the collateral securing the Kratos Notes may be adversely affected by the failure to perfect security interests in certain collateral in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificatenumber of important exceptions and certain proceeds, can be perfected only at the time at which such property and rights are acquired and identified. The trustee and the collateral agent for the Kratos Notes may not monitor, and we are not required to inform the trustee and the collateral agent of, the future acquisition of property and rights that constitute collateral, and necessary action may not be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the Kratos Notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest in favor of the Kratos Notes against third parties. A failure to monitor such acquisition and take necessary action may result in the loss of the effectiveness of the grant of the security interest therein or the priority of the security interest in favor of the holders of such Kratos Notes against third parties. In addition, the security interest of the collateral agent for the Kratos Notes will be subject to practical challenges generally associated with the realization of security interests in collateral. For example, the collateral agent may need to obtain the consent of third parties and make additional filings. If we are unable to obtain these consents or make these filings, the security interests may be invalid and the holders of the Kratos Notes will not be entitled to the collateral or any recovery with respect to the collateral. The collateral agent may not be able to obtain any such consent. Further, the consents of any third parties may not be given when required to facilitate a foreclosure on such collateral. Accordingly, the collateral agent may not have the ability to foreclose upon those assets, and the value of the collateral may significantly decrease. We are also not required to obtain third party consents in certain categories of collateral.The pledge of the capital stock of our subsidiaries that secure the Kratos Notes will automatically be released from the lien on them and no longer constitute collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary. The Kratos Notes and the Kratos Guarantees will be secured by a pledge of the stock of some of our subsidiaries. Under the SEC regulations in effect as of the date of this prospectus, if the par value, book value as carried by us or market value (whichever is greatest) of the capital stock, other securities or similar items of a subsidiary pledged as part of the collateral to secure such Kratos Notes is greater than or equal to 20% of the aggregate principal amount of the Kratos Notes then outstanding, such a subsidiary would be required to provide separate financial statements to the SEC. Therefore, the Indenture and the related collateral documents provide that any capital stock and other securities of our subsidiaries will be excluded from the collateral to the extent that the pledge of such capital stock would cause such companies to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time). As a result, holders of the Kratos Notes could lose a portion or all of their security interest in the capital stock or other securities of those subsidiaries. It may be more difficult, costly and time-consuming for holders of the Kratos Notes to foreclose on the assets of a subsidiary that guarantees such Kratos Notes than to foreclose on its capital stock so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of such subsidiary.qualifications. See "Description of the Exchange Notes—Collateral.Certain Covenants."Rights of holders ofForm and Denominationin the collateral secured thereby may be adversely affected by bankruptcy proceedings. The right of the collateral agent for the Exchange Notes to repossess and dispose of the collateral securing the Exchange Notes upon acceleration is likely to be significantly impaired by U.S. federal bankruptcy law if bankruptcy proceedings are commenced by or against us prior to or possibly even after the collateral agent has repossessed and disposed of the collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the Exchange Notes, is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments;provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes could be delayed following commencement of a bankruptcy case, whether or when the collateral agent would repossess or dispose of the collateral, or whether or to what extent holders of the Exchange Notes would be compensated for any delay in payment of loss of value of the collateral through the requirements of "adequate protection." Furthermore, in the event the bankruptcy court determines that the value of the collateral is not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes would have "under-secured claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "under-secured claims" during the debtor's bankruptcy case. Additionally, the collateral agent's ability to foreclose on the collateral on your behalf may be subject to the consent of third parties, prior liens and practical problems associated with the realization of the trustee's security interest in the collateral. Moreover, the debtor or trustee in abankruptcy case may seek to void an alleged security interest in collateral for the benefit of the bankruptcy estate. It may successfully do so if the security interest is not properly perfected or was perfected within a specified period of time (generally 90 days) prior to the initiation of such proceeding. Under such circumstances, a creditor may hold no security interest and be treated as holding a general unsecured claim in the bankruptcy case. It is impossible to predict what recovery (if any) would be available for such an unsecured claim if we became a debtor in a bankruptcy case. While U.S. bankruptcy law generally invalidates provisions restricting a debtor's ability to assume and/or assign a contract, there are exceptions to this rule which could be applicable in the event that we become subject to a U.S. bankruptcy proceeding.Under certain circumstances, a court could cancel the Exchange Notes or the Exchange Guarantees and the security interests that secure the Exchange Notes and such Exchange Guarantees under fraudulent conveyance laws. The issuance of the Exchange Notes and the related Exchange Guarantees may be subject to review under U.S. federal or state fraudulent transfer laws. If we become a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, a court could avoid (that is, cancel) our obligations under the Exchange Notes. The court might do so if it finds that when we issued the Exchange Notes, (i) we received less than reasonably equivalent value or fair consideration and (ii) we either (a) were or were rendered insolvent, (b) were left with inadequate capital to conduct our business or (c) believed or reasonably should have believed that we would incur debts beyond our ability to pay. The court could also avoid the Exchange Notes, without regard to the factors described in clauses (i) and (ii) above, if it finds that we issued the Exchange Notes with actual intent to hinder, delay or defraud our creditors. Similarly, if one of the guarantors of the Exchange Notes becomes a debtor in a case under the U.S. Bankruptcy Code or encounters other financial difficulty, a court might cancel its Exchange Guarantee if it finds that when such guarantor issued its Exchange Guarantee (or in some jurisdictions, when payments become due under the Exchange Guarantee of such Exchange Notes), factors (i) and (ii) above applied to such guarantor, such guarantor was a defendant in an action for money damages or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied), or if it found that such guarantor issued its Exchange Guarantee with actual intent to hinder, delay or defraud its creditors. A court could avoid any payment by us or any such guarantor pursuant to the Exchange Notes or the Exchange Guarantee thereof or any realization on the pledge of assets securing the Exchange Notes or the Exchange Guarantees of such Exchange Notes, and require the return of any payment or the return of any realized value to us or such guarantor, as the case may be, or to a fund for the benefit of our or such guarantor's creditors. In addition, under the circumstances described above, a court could subordinate rather than avoid obligations under the Exchange Notes, the Exchange Guarantees or the pledges. If the court were to avoid any Exchange Guarantee, funds may not be available to pay the Exchange Notes from another guarantor thereof or from any other source. The test for determining solvency for purposes of the foregoing will vary depending on the law of the jurisdiction being applied. In general, a court would consider an entity insolvent either if the sum of its existing debts exceeds the fair value of all of its property, or its assets' present fair saleable value is less than the amount required to pay the probable liability on its existing debts as they become due. For this analysis, "debts" include contingent and unliquidated debts. If a court avoided our obligations under the Exchange Notes and the obligations of such guarantor under its Exchange Guarantee thereof, holders of the Exchange Notes would cease to be our creditors or creditors of such guarantor and likely have no source from which to recover amounts due under the Exchange Notes. Even if the Exchange Guarantee of such guarantor is not avoided as a fraudulent transfer, a court may subordinatesuch Exchange Guarantee to such guarantor's other debt. In that event, such Exchange Guarantee would be structurally subordinated to all of such guarantor's other debt. The Indenture will limit the liability of each guarantor on its Exchange Guarantee of the Exchange Notes issued thereunder to the maximum amount that such guarantor can incur without risk that its Exchange Guarantee will be subject to avoidance as a fraudulent transfer. This limitation may not protect such Exchange Guarantees from fraudulent transfer challenges or, if it does, the remaining amount dueissued only in fully registered form in minimum denominations of $2,000 and collectible under the Exchange Guarantees may not suffice, if necessary, to pay the Exchange Notes in full when due.larger integral multiples of $1,000.Any future pledge of collateral may be avoidable in bankruptcy.No Public Market Any future pledge of collateral in favor of the trustee or collateral agent under the Indenture may be avoidable by the pledgor (a debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if (i) the pledgor is insolvent at the time of the pledge, (ii) the pledge permits the holders of the Kratos Notes to receive a greater recovery than if the pledge had not been given and (iii) a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge or the perfection thereof, or, in certain circumstances, a longer period.The collateral is subject to casualty risks. We intend to maintain insurance or otherwise insure against hazards in a manner appropriate and customary for our business. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the collateral, the insurance proceeds may not be sufficient to satisfy all of the secured obligations, including the Kratos Notes and the Kratos Guarantees secured thereby.Our ability to repurchase the Kratos Notes upon a change of control may be limited. Upon the occurrence of specific change of control events, we will be required to offer to repurchase all outstanding Kratos Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. The lenders under the Revolver will have the right to accelerate the indebtedness thereunder upon a change of control. Any of our future debt agreements may contain a similar provision. However, we may not have sufficient funds at the time of the change of control to make the required repurchase of Kratos Notes or repayment of our other indebtedness. Any of our future debt agreements may contain similar restrictions. If we fail to repurchase any Kratos Notes submitted in a change of control offer, it would constitute an event of default under the Indenture governing the Kratos Notes which would, in turn, constitute an event of default under the Revolver and could constitute an event of default under our other indebtedness, even if the change of control itself would not cause a default. Important corporate events, such as takeovers, recapitalizations or similar transactions, may not constitute a change of control under the Indenture governing the Kratos Notes and thus not permit the holders of the Kratos Notes to require us to repurchase or redeem the Kratos Notes. See "Description of the Exchange Notes—Repurchase Upon Change of Control."The Kratos Notes may receive a reduced rating in the future, which could cause a decline in the liquidity or market price of the Exchange Notes. If in the future one or more rating agencies assigns the Kratos Notes a reduced rating lower than the current rating, the market price of the Kratos Notes may be adversely affected.If you do not exchange your Original Notes pursuant to this exchange offer, you may never be able to sell your Original Notes. It may be difficult for you to sell your Original Notes that are not exchanged in the exchange offer. The Original Notes may not be offered or sold unless they are registered or there are exemptions from the registration requirements under the Securities Act and applicable state securities laws. If you do not tender your Original Notes or if we do not accept some of your Original Notes, those notes will continue to be subject to the transfer and exchange restrictions in:•the Indenture;•the legend on the Original Notes; and•the offering circular relating to the Original Notes. The restrictions on transfer of your Original Notes arise because we issued the Original Notes pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. In general, you may only offer or sell the Original Notes if they are registered under the Securities Act and applicable state securities laws, or offered and sold pursuant to an exemption from such requirements. Holders who do not tender their Original Notes will not have any further registration rights under the registration rights agreement or otherwise, and we do not intend to register the Original Notes under the Securities Act. To the extent Original Notes are tendered and accepted in the exchange offer, the trading market, if any, for the Original Notes would be adversely affected. See "The Exchange Offer—Procedures for Tendering."There is no active market for the Exchange Notes and if an active trading market does not develop for the Exchange Notes you may not be able to resell them.for which there is currently no trading market. We doand will not intend to list the Exchange Notesbe listed on any national securities exchange or include the Exchange Notes for quotation onincluded in any automated dealer quotation system. The initial purchasers of the Stage I Notes indicated that they intend to make a market in the notes; however, they are not obligated to do so and any market-making activities may be discontinued at any time without notice. In addition, market-making activity will be subject to the limits imposed by law. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. Any such disruptions could adversely affect the prices at which the Exchange Notes may be sold. Further, even if a market were to exist, the Exchange Notes could trade at prices that may be lower than the initial offering price depending on many factors, including prevailing interest rates, the markets for similar securities, general economic conditions and our financial condition, current stock price, performance and prospects. The liquidity of, and the trading market for, the Exchange Notes may be adversely affected by general declines or disruptions in the market for non-investment grade debt.Some holders that exchange their Original Notes may be required to comply with registration and prospectus delivery requirements in connection with the sale or transfer of their Exchange Notes. Holders that exchange Original Notes in the exchange offer for the purpose of participating in a distribution of the Exchange Notes may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes which were acquired by such broker-dealer as a result of market-making or other trading activities may be deemed to be a statutory underwriter under theSecurities Act and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Holders that are required to comply with the registration and prospectus delivery requirements may face additional burdens on the transfer of their Exchange Notes and could incur liability for failure to comply with applicable requirements.Your Original Notes will not be accepted for exchange if you fail to follow the applicable exchange offer procedures and, as a result, your Original Notes will continue to be subject to existing transfer restrictions and you may not be able to sell them. We will not accept your Original Notes for exchange if you do not follow the applicable exchange offer procedures. We will issue Exchange Notes as part of the applicable exchange offer only after timely receipt of your Original Notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, if you want to tender your Original Notes, please allow sufficient time to ensure timely delivery. If we do not receive your Original Notes, a properly completed and duly executed letter of transmittal and other required documents by the expiration date of the applicable exchange offer, we will not accept your Original Notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of Original Notes for exchange. If there are defects or irregularities with respect to your tender of Original Notes, we will not accept your Original Notes for exchange.Other Risks Related to Kratos The entire Federal Government is currently operating under the authority of a Continuing Resolution for the fiscal year ending September 30, 2011, and has suspended certain federal retirement fund payments to finance the nation's general obligations. The failure of the Federal Government to pass a new appropriations bill, extend the Continuing Resolution or increase the nation's debt ceiling could result in a shut down of the government for all nonessential Federal Government services. A shut down of the government for all nonessential Federal Government services could cause the government, government agencies or prime contractors that use Kratos as a subcontractor, to reduce their purchases under existing contracts, to exercise their rights to terminate contracts at-will, to abstain from exercising options to renew contracts, to delay or refrain from making new contract awards, or to delay the payment of Kratos' invoices, any of which could have an adverse effect on Kratos' business, financial condition and results of operations. In addition to the foregoing risks, we are, and will continue to be, subject to the risks described in our Annual Report on Form 10-K for the year ended December 26, 2010 and in our subsequent reports on Forms 10-Q and 8-K and other filings with the SEC. All such reports are or will be filed with the SEC and are incorporated by reference into this prospectus. See the section entitled "Where You Can Find More Information" beginning on page 102.SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following table sets forth our selected historical consolidated financial data as of the dates and for each of the periods indicated. The selected historical consolidated financial data for the fiscal years ended December 26, 2010, December 27, 2009 and December 28, 2008 and as of December 26, 2010 and December 27, 2009 is derived from our audited consolidated financial statements, which are incorporated by reference into this prospectus. The selected historical consolidated financial data for the fiscal years ended December 31, 2007 and December 31, 2006 and as of December 28, 2008, December 31, 2007 and December 31, 2006 is derived from our audited historical consolidated financial statements, which are not included or incorporated by reference into this prospectus. The selected historical consolidated financial data for the three months ended and as of March 27, 2011 and March 28, 2010 is derived from our unaudited condensed consolidated financial statements incorporated by reference into this prospectus. In our opinion, such unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our financial position and results of operations for such periods. Interim results for the three months ended and as of March 27, 2011 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 25, 2011. You should read the selected historical consolidated financial data below together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and with the consolidated financial statements and notes to the consolidated financial statements for the year ended December 26, 2010, included in our Annual Report on Form 10-K, and for the three months ended March 27, 2011, included in our Quarterly Report on Form 10-Q, each of which has been filedwith the SEC and all of which are incorporated by reference into this prospectus. See the section entitled "Where You Can Find More Information." Fiscal Year Ended Three Months
Ended
(unaudited) December 31,
2006 December 31,
2007 December 28,
2008 December 27,
2009 December 26,
2010 March 28,
2010 March 27,
2011 (All amounts except per share data in millions) $ 138.2 $ 180.7 $ 286.2 $ 334.5 $ 408.5 $ 68.7 $ 122.8 26.2 29.7 58.2 69.3 90.0 15.3 27.4 (25.9 ) (23.6 ) (93.2 ) (27.0 ) 23.1 3.6 1.4 14.5 1.3 (0.7 ) 1.0 (12.7 ) 0.3 (1.2 ) (41.2 ) (27.2 ) (104.0 ) (38.3 ) 14.6 (0.4 ) (3.8 ) (16.7 ) (13.6 ) (7.1 ) (3.2 ) (0.1 ) 0.6 0.3 $ (57.9 ) $ (40.8 ) $ (111.1 ) $ (41.5 ) $ 14.5 $ 0.2 $ (3.5 ) $ (5.56 ) $ (3.67 ) $ (11.18 ) $ (2.76 ) $ 0.88 $ (0.02 ) $ (0.18 ) $ (5.56 ) $ (3.67 ) $ (11.18 ) $ (2.76 ) $ 0.87 $ (0.02 ) $ (0.18 ) $ (2.26 ) $ (1.84 ) $ (0.77 ) $ (0.23 ) $ (0.01 ) $ 0.04 $ 0.01 $ (2.26 ) $ (1.84 ) $ (0.77 ) $ (0.23 ) $ (0.01 ) $ 0.04 $ 0.01 $ (7.82 ) $ (5.51 ) $ (11.95 ) $ (2.99 ) $ 0.87 $ 0.02 $ (0.17 ) $ (7.82 ) $ (5.51 ) $ (11.95 ) $ (2.99 ) $ 0.86 $ 0.02 $ (0.17 ) 7.4 7.4 9.3 13.9 16.6 15.9 21.3 7.4 7.4 9.3 13.9 16.9 15.9 21.3 As of As of
(unaudited) December 31,
2006 December 31,
2007 December 28,
2008 December 29,
2009 December 26,
2010 March 28,
2010 March 27,
2011 (all amounts in millions) $ 5.6 $ 8.9 $ 3.7 $ 9.9 $ 10.8 $ 6.3 $ 45.5 (3.8 ) 23.4 35.0 37.1 65.8 35.5 242.6 337.7 335.3 312.4 241.6 536.1 225.9 983.4 51.4 2.7 6.1 4.7 0.6 6.2 3.6 — 74.0 76.9 51.6 226.1 48.3 517.5 $ 187.1 $ 167.2 $ 146.9 $ 124.9 $ 169.9 $ 126.2 $ 247.9 We will not receive any cash proceeds from the issuance of the Exchange Notes. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive in exchange Original Notes in like principal amount. The Original Notes surrendered in exchange for Exchange Notes will be retired and canceled and cannot be reissued. Issuance of the Exchange Notes will not result in a change in our amount of outstanding debt.Purpose and Effect of the Exchange Offer On March 25, 2011, the Stage I Issuer issued $285.0 million aggregate principal amount of the Stage I Notes pursuant to the Stage I Indenture. In connection with the purchase and sale of the Stage I Notes, we entered into a registration rights agreement with the initial purchasers of the Stage I Notes. On April 4, 2011, (i) the Stage I Issuer merged with and into the Company, and the Company assumed all the assets and liabilities of the Stage I Issuer including, pursuant to a supplemental indenture to the Stage I Indenture, all the obligations of the Stage I Issuer under the Stage I Indenture, the Stage I Notes and the related Collateral Agreements and (ii) the Company became the issuer of the Stage I Notes under the Stage I Indenture and pledgor under such Collateral Agreements. In addition, on April 15, 2011, the Company redeemed all of the outstanding Stage I Notes by issuing to each Holder in exchange therefor the Original Notes issued by the Company pursuant to the Indenture in a like principal amount.upon an interpretation by the staffon interpretative letters of the SEC contained in no-action letters issuedstaff to third parties unrelated to us, we believe that you maycan resell and transfer the Exchange Notes you receive pursuant to this Exchange Offer without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:Originalfor Unregistered Notes that were acquired as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of the Exchange Notes. See "Plan of Distribution" for a description of the prospectus delivery obligations of broker-dealers.business. For further information on the SEC's position, see Exxon Capital Holdings Corporation, available May 13, 1988, Morgan Stanley & Co. Incorporated, available June 5, 1991 and Shearman & Sterling, available July 2, 1993, and other interpretive letters to similar effect. You will be allowed to resell Exchangeits business; orto the public without further registration under the Securities Act and without delivering to purchasers ofin the Exchange Notes a prospectus that satisfiesOffer with the requirements of Section 10 of the Securities Act so long as you do not participate, do not intendintention to participate, and have no arrangement with any person to participate,or for the purpose of participating, in a distribution of the Exchange Notes. However, the foregoing does not apply to you if you are: a broker-dealer who purchased the Exchange Notes directly from us to resell pursuant to Rule 144A or any other available exemption under the Securities Act; or you are an "affiliate" of ours within the meaning of Rule 405 under the Securities Act. In addition, if you are a broker-dealer, or you acquire Exchange Notes in the exchange offer for the purpose of distributing or participating in the distribution of the Exchange Notes, you containedenunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in Shearman & Sterling (available July 2, 1993), or similar no-action letters and, in the no-action letters mentioned above andabsence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, unless an exemption from registration is otherwise available.of the new notes. Each broker-dealer that receivesAccrued Interest on the Exchange Notes and Unregistered Notesits own accountTendering Unregistered Notesfor Original Notes, whichagent receive, prior to the broker-dealer acquired as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resaleexpiration date of the Exchange Notes. TheOffer, a computer generated message known as an "agent's message" that is transmitted through DTC's automated tender offer program, and (ii) DTC confirms that:transmittal for use in connection with any such resale will state that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of Exchangetransmittal.received in exchange for Original Notes which the broker-dealer acquired as a result of market-making or other trading activities.Terms of the Exchange Offer Upon the terms and subject please refer to the conditions statedsection in this prospectus entitled "The Exchange Offer—Procedures for Tendering."inyou wish to tender such Unregistered Notes, you should contact the registered holder promptly and instruct them to tender your Unregistered Notes on your behalf.all Originaloutstanding Unregistered Notes that are properly tendered in the Exchange Offer and not withdrawn prior to 5:00 p.m. New York City time, on the expiration date. After authentication of the Exchange Notes by the trustee or an authenticating agent, we will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of Original Notes accepted in the exchange offer. Holders may tender some or all of their Original Notes in denominations of $2,000 or any integral multiple of $1,000. If you wish to exchange your Original Notes for Exchange Notes in the exchange offer, you will be required to represent that:•any Exchange Notes to be received by you will be acquired in the ordinary course of your business;•that, at the time of the commencement and consummation of the exchange offer, you have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the Securities Act;•that you are not our "affiliate" (as defined in Rule 405 promulgated under the Securities Act) or, if you are an affiliate, you will comply with any applicable registration and prospectus delivery requirements;•if you are not a broker-dealer, that you are not engaged in, and do not intend to engage in, the distribution of Exchange Notes; and•if you are a broker-dealer that will receive Exchange Notes for your own account in exchange for Original Notes that were acquired as a result of market-making or other trading activities, that you will deliver a prospectus in connection with any resale of such Exchange Notes. You will make these representations to us by signing or agreeing to be bound by the letter of transmittal. Broker-dealers that are receiving Exchange Notes for their own account must have acquired the Original Notes as a result of market-making or other trading activities in order to participate in the exchange offer. Each broker-dealer that receives Exchange Notes for its own account pursuant to this exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the Exchange Notes during the 180-day period following the completion of the exchange offer, exclusive of any period during which a stop order suspending the effectiveness of the registration statement of which this prospectus is a part is in effect or we have suspended the use of this prospectus. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer during the 180-day period following the closing of the exchange offer in connection with resales of Exchange Notes received in exchange for Original Notes where such Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities. We have agreed that, during the 180-day period following the closing of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."evidence the same debtbe delivered as the Original Notes and will be issued under and entitled to the benefits of the same indenture. The form and terms of the Exchange Notes are identical in all material respects to the form and terms of the Original Notes except that:•the Exchange Notes will be issued in a transaction registered under the Securities Act;•the Exchange Notes will bear different CUSIP and ISIN numbers from the Original Notes;•the Exchange Notes will not be subject to transfer restrictions and, except in limited circumstances, holders of Exchange Notes will have no registration rights; and•provisions providing for an increase in the stated interest rate on the Original Notes if the Original Notes are not exchanged for registered Exchange Notes will be eliminated. Holders of Original Notes that are not entitled to participate in the exchange offer and holders who do not receive freely tradable Exchange Notes will have, for a period of 180 dayspromptly as practicable following the consummationexpiration date.the exchange offer, the rightyour Unregistered Notes at any time prior to require us to file a registration statement covering resales of their notes. If we do not timely file or cause this resale registration statement to become effective, these holders will be entitled to additional interest. As of the date of this prospectus, $285.0 million aggregate principal amount of the Original Notes was outstanding. In connection with the issuance of the Original Notes, we arranged for the Original Notes to be issued and transferable in book-entry form through the facilities of DTC, acting as depositary. The Exchange Notes will also be issuable and transferable in book-entry form through DTC. This prospectus, together with the accompanying letter of transmittal, is initially being sent to all registered holders as of the close of business on , 2011. We intend to conduct the exchange offer as required by the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations of the SEC under the Exchange Act, including Rule 14e-1, to the extent applicable. The exchange offer is not conditioned upon any minimum aggregate principal amount of Original Notes being tendered, and holders of the Original Notes do not have any appraisal or dissenters' rights under the General Corporation Law of the State of Delaware or under the Indenture in connection with the exchange offer. No governmental approvals or consents must be received to consummate the exchange offer. We shall be considered to have accepted Original Notes tendered according to the procedures in this prospectus when, as and if we have given oral or written notice of acceptance to the exchange agent. See "—Exchange Agent." The exchange agent will act as agent for the tendering holders for the purpose of receiving Exchange Notes from us and delivering Exchange Notes to those holders. If any tendered Original Notes are not accepted for exchange because of an invalid tender or the occurrence of other events described in this prospectus, the unaccepted Original Notes will be credited to the holder's account at DTC according to the procedures described below or, in the case of Original Notes tendered by delivery of certificates, certificates for these unaccepted Original Notes will be returned, at our cost, to the tendering holder of the Original Notes, promptly after the expiration date. Holders who tender Original Notes in the exchange offer will not be required to pay brokerage commissions or fees or, except as described in the following sentence, transfer taxes related to the exchange of Original Notes in the exchange offer. If you instruct us to register Exchange Notes in the name of, or request that Original Notes not tendered or not accepted in the exchange offer be returned to, a person other than you, you will be responsible for the payment of any applicable transfertax. We will pay all charges and expenses, other than applicable taxes, in connection with the exchange offer. See "—Solicitation of Tenders; Fees and Expenses." Neither we nor our board of directors makes any recommendation to holders of Original Notes as to whether to tender or refrain from tendering all or any portion of their Original Notes pursuant to the exchange offer. Moreover, no one has been authorized to make any recommendation. Holders of Original Notes must make their own decision whether to tender in the exchange offer and, if so, the amount of Original Notes to tender after reading this prospectus and the letter of transmittal and consulting with their advisors, if any, based on their own financial position and requirements.Expiration Date; Extensions; Amendments The term "expiration date" shall mean 5:00 p.m., New York City time, on , 2011 unless we,, the expiration date.our sole discretion, extend the exchange offer,this Exchange Offer and you do not tender your Unregistered Notes as described in which case the term "expiration date" shall mean the latest datethis prospectus, your Unregistered Notes may continue to which the exchange offer is extended. We expressly reserve the right, in our sole discretion:•delay acceptance of any Original Notes or to terminate the exchange offer and to refuse to accept Original Notes not previously accepted, if anytransfer restrictions. As a result of the conditions describedtransfer restrictions and the availability of Exchange Notes, the market for the Unregistered Notes is likely to be much less liquid than before this Exchange Offer. The Unregistered Notes will, after this Exchange Offer, bear interest at the same rate as the Exchange Notes. The Unregistered Notes will not retain any rights under "—Conditions" shall have occurred and shall not have been waived by us;•to extend the expiration dateregistration rights agreement.offer;agent in connection with the Exchange Offer.
Use of Proceeds•to amendWe will not receive any proceeds from the issuance of Exchange Notes in the Exchange Offer.
Summary Description of the Exchange NotesKratos Defense & Security Solutions, Inc. exchange offerExchange Notes—Guarantees."any manner;•to purchase or make offers for any Originalsuch assets (other than the Notes Priority Collateral) that remain outstanding subsequentsecure the Exchange Notes and the related Guarantees will be junior to the expiration date;liens thereon that secure our ABL Credit Facility. The security interest in assets securing the ABL Credit Facility that consist of Notes Priority Collateral will be junior to the liens thereon that secure the Exchange Notes and the related Guarantees.
Ranking•permitted by applicable law, to purchase Original Notes in the open market, in privately negotiated transactions or otherwise. The terms of the purchases or offers described in the fourth and fifth clauses above may differ from the termsvalue of the exchange offer. Any delay in acceptance, termination, extension, or amendmentassets subject to such first priority liens and effectively senior to our and the guarantors' existing and future unsecured obligations to the extent of the value of the collateral securing the Exchange Notes (after taking into account the obligations secured by such assets on a first priority basis). The Exchange Notes and Guarantees will be followed as promptly as practicable by oral or written noticestructurally subordinated to all liabilities of our current and future non-guarantor subsidiaries. See "Description of the Exchange Notes—Guarantees."agentor included in any automated quotation system.by makingthe other information in this prospectus for a public announcement. If the exchange offer is amended in a manner determined by usdiscussion of risk factors related to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holders.our business. Without limiting the manner in whichOptional Redemptionchoose to make public announcements of any delay in acceptance, termination, extension,redeem some or amendmentall of the exchange offer, we shall have no obligationExchange Notes at the redemption prices set forth under "Description of the Exchange Notes—Redemption," plus accrued and unpaid interest to publish, advise, or otherwise communicate any public announcement, other than by making a timely press releasethe date of redemption.an appropriate news agency. You are advised thatMay 15, 2016, we may extendredeem up to 35% of the exchange offer becauseaggregate principal amount of the Exchange Notes at the premium set forth under "Description of the Exchange Notes—Redemption," plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings.OriginalExchange Notes dowill have the right to require us to purchase all or a portion of their Exchange Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. See "Description of the Exchange Notes—Repurchase Upon Change of Control."tender on a timely basis.receive any proceeds from the issuance of Exchange Notes pursuant to the Exchange Offer.
RATIO OF EARNINGS TO FIXED CHARGES (In millions, except ratio) Fiscal Year Ended Six
Month
Period
Ended December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 29,
2014 — * 1.1 0.6 — * 0.5 — * $ (37.3 ) $ — $ (21.6 ) $ (114.5 ) $ (31.9 ) $ $(64.7 ) June 29, 2014 (in millions) $ 26.9 623.2 41.0 270.8 935.0 — 862.3 (0.9 ) (624.3 ) 237.1 $ 1,172.1 December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 30,
2013 June 29,
2014 $ 334.5 $ 408.5 $ 713.9 $ 969.2 $ 950.6 $ 488.5 $ 429.4 63.6 84.3 191.2 257.2 240.0 126.2 109.0 (27.0 ) 23.1 29.5 (49.7 ) 31.8 20.3 8.0 1.0 (12.7 ) 1.9 (1.6 ) — 2.7 3.9 (38.3 ) 14.6 (23.5 ) (112.9 ) (31.9 ) (15.5 ) (64.7 ) (3.2 ) (0.1 ) (0.7 ) (1.5 ) (5.3 ) (4.4 ) (0.2 ) $ (41.5 ) $ 14.5 $ (24.2 ) $ (114.4 ) $ (37.2 ) $ (19.9 ) $ (64.9 ) $ (2.76 ) $ 0.88 $ (0.86 ) $ (2.41 ) $ (0.56 ) $ (0.27 ) $ (1.13 ) $ (2.76 ) $ 0.87 $ (0.86 ) $ (2.41 ) $ (0.56 ) $ (0.27 ) $ (1.13 ) $ (0.23 ) $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.08 ) $ 0.00 $ (0.23 ) $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.08 ) $ 0.00 $ (2.99 ) $ 0.87 $ (0.88 ) $ (2.44 ) $ (0.65 ) $ (0.35 ) $ (1.13 ) $ (2.99 ) $ 0.86 $ (0.88 ) $ (2.44 ) $ (0.65 ) $ (0.35 ) $ (1.13 ) 13.9 16.6 27.4 46.9 56.8 56.6 57.4 13.9 16.9 27.4 46.9 56.8 56.6 57.4 December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 30,
2013 June 29,
2014 $ 9.9 $ 10.8 $ 69.6 $ 49.0 $ 55.7 49.7 26.9 37.1 65.8 207.2 176.6 179.3 179.2 151.6 241.6 535.7 1,216.0 1,284.0 1,216.6 1,222.3 1,172.1 4.7 0.6 1.6 1.5 1.3 1.4 1.2 51.6 226.1 631.5 630.1 628.9 629.5 663.0 — — 22.8 18.7 14.5 16.6 — $ 124.9 $ 169.9 $ 312.6 $ 324.1 $ 295.8 308.1 237.1 Interest on the ExchangeGuaranteed Delivery Procedures The Exchange Notes will bear interest from and including June 1, 2011, or, if later, the most recent date on which interest was paid or provided for on the Original Notes surrendered for the Exchange Notes, at a rate of 10% per year. Accordingly, holders of Original Notes that are accepted for exchange will not receive interest that is accrued but unpaid on the Original Notes at the time oftender. We will pay interest on the Exchange Notes twice a year, on December 1st and June 1st, beginning December 1, 2011.Procedures for Tendering Only a holder may tender his, her or its Original Notes in the exchange offer. Any beneficial owner whose Originalyour Unregistered Notes are registered in the name of such owner's broker, dealer, commercial bank, trust companynot immediately available, or other nominee or are held in book-entry form and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on such owner's behalf. If the beneficial owner wishes to tender on his, her or its own behalf, the beneficial owner must, prior to completing and executingyou cannot deliver your Unregistered Notes, the letter of transmittal and deliveringor any other required documents, or you cannot comply with the owner's Original Notes, either make appropriate arrangements to register ownership of the Original Notes in the owner's name or obtain a properly completed bond power from the registered holder. Theprocedures under DTC's Automated Tender Offer Program for transfer of record ownership may take considerable time and may not be completedbook-entry interests prior to the expiration date. Thedate, you must tender by a holder will constitute an agreement between the holder, us and the exchange agentyour Unregistered Notes according to the terms and subject to the conditions described in this prospectus and in the letter of transmittal. A holder who desires to tender Original Notes and who cannot comply with theguaranteed delivery procedures set forth in this prospectus for tender on a timely basis or whose Original Notes are not immediately available must comply with the procedures for guaranteed delivery set forth below.under "The Exchange Offer—Guaranteed Delivery Procedures." The methodAcceptance of delivery of OriginalUnregistered Notes and the letter of transmittal and all other required documents to the exchange agent is at the election and risk of the holders. Delivery of such documentsExchange Notesbe deemed made only when actually received byaccept outstanding Unregistered Notes that are properly tendered in the exchange agent or deemed received under the ATOP procedures described below. In all cases, sufficient time should be allowed to assure delivery to the exchange agentExchange Offer and not withdrawn prior to the expiration date. No letter of transmittal or OriginalThe Exchange Notes shouldwill be sent to us. Holdersdelivered as promptly as practicable following the expiration date.also request that their respective brokers, dealers, commercial banks, trust companies or nominees effectwithdraw the tender for holdersof your Unregistered Notes at any time prior to 5:00 p.m., New York City time, on , , the expiration date.each casethis Exchange Offer and you do not tender your Unregistered Notes as described in this prospectus, your Unregistered Notes may continue to be subject to transfer restrictions. As a result of the transfer restrictions and the availability of Exchange Notes, the market for the Unregistered Notes is likely to be much less liquid than before this Exchange Offer. The Unregistered Notes will, after this Exchange Offer, bear interest at the same rate as the Exchange Notes. The Unregistered Notes will not retain any rights under the registration rights agreement.letterExchange Offer.
Summary Description of the Exchange Notes
The following is a brief summary of some of the terms of the Exchange Notes. For a more complete description of the terms of the Exchange Notes, see "Description of the Exchange Notes" in this prospectus.
Issuer | Kratos Defense & Security Solutions, Inc. | |
Exchange Notes | $625.0 million aggregate principal amount of | |
Interest Rate | 7.000% per annum. | |
Maturity Date | May 15, 2019. | |
Interest Payment Dates | May 15 and November 15 of each year, beginning on November 15, 2014. | |
Guarantees | The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. See "Description of the Exchange Notes—Guarantees." | |
Security | The Exchange Notes and the related Guarantees will be secured by a lien on substantially all of our and the guarantors' assets, subject to certain exceptions and permitted liens. The security interest in such assets (other than the Notes Priority Collateral) that secure the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure our ABL Credit Facility. The security interest in assets securing the ABL Credit Facility that consist of Notes Priority Collateral will be junior to the liens thereon that secure the Exchange Notes and the related Guarantees. | |
Ranking | The Exchange Notes will be our senior obligations and will rank pari passu in right of payment with all of our existing and future senior indebtedness and senior in right of payment with all of our existing and future subordinated indebtedness. The Exchange Notes will be guaranteed on a senior basis by each of our existing and future domestic restricted subsidiaries. Each Guarantee will rank equally in right of payment with the applicable guarantor's existing and future senior debt and rank senior in right of payment to such guarantor's existing and future subordinated debt. The Exchange Notes and Guarantees will be effectively junior to all of our and the guarantors' indebtedness and obligations secured on a first priority basis, including borrowings under our ABL Credit Facility, to the extent of the value of the assets subject to such first priority liens and effectively senior to our and the guarantors' existing and future unsecured obligations to the extent of the value of the collateral securing the Exchange Notes (after taking into account the obligations secured by such assets on a first priority basis). The Exchange Notes and Guarantees will be structurally subordinated to all liabilities of our current and future non-guarantor subsidiaries. See "Description of the Exchange Notes—Guarantees." |
Intercreditor Agreement | Pursuant to an intercreditor agreement, the liens securing the Exchange Notes on the ABL Priority Collateral will be second priority liens that will be expressly junior in priority to the liens on the ABL Priority Collateral that secure obligations under our ABL Credit Facility and the liens securing the Exchange Notes on the Notes Priority Collateral will be first priority liens that will be expressly senior in priority to liens on the Notes Priority Collateral that secure obligations under our ABL Credit Facility. Pursuant to the intercreditor agreement, the liens on the ABL Priority Collateral securing the Exchange Notes may not be enforced for a 180 day "standstill" period, which 180 day "standstill" period will not expire if the agent under the ABL Credit Facility is pursuing remedies. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement." | |
Certain Covenants | The Indenture will limit, among other things, our ability and the ability of our restricted subsidiaries to: | |
•
| ||
• pay dividends or make other distributions on, or redeem or purchase, any equity interests or make other restricted payments; | ||
• make certain acquisitions or investments; | ||
• create or incur certain liens; | ||
• transfer or sell assets; | ||
• incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries; | ||
• enter into transactions with affiliates; and | ||
• consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all of our assets. | ||
These covenants are subject to a number of important exceptions and qualifications. See "Description of the Exchange Notes—Certain Covenants." | ||
Form and Denomination | The Exchange Notes | |
| The Exchange Notes are a new issue of securities and will not be listed on any securities exchange or included in any automated quotation system. | |
Risk Factors | See "Risk Factors" and the | |
Optional Redemption | On or after May 15, 2016, we may redeem some or all of the Exchange Notes at the redemption prices set forth under "Description of the Exchange Notes—Redemption," plus accrued and unpaid interest to the date of |
Prior to
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In addition, we may, at our option, redeem some or all of the | ||
In addition, at one time prior to May 15, 2016, we may redeem up to 10% of the original aggregate principal amount of the Exchange Notes issued under the Indenture at a | ||
| If we experience change of control events, the | |
Asset Sale Proceeds | Upon certain asset sales, we may
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Use of Proceeds | We will not receive any proceeds from the issuance of Exchange Notes
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You should carefully consider the risks described below in addition to the other information contained in this prospectus or incorporated herein by reference before making a decision to participate in the Exchange Offer. Any of the following risks, as well as other risks and uncertainties, could harm our business and financial results and cause the value of the Exchange Notes to decline, which in turn could cause you to lose all or part of your investment. The risks and uncertainties described in this prospectus and the documents incorporated herein by reference are not the only ones facing us. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, financial condition, results of operations and prospects.
Risks Related to our Indebtedness and the Exchange Notes
We have substantial indebtedness, which could have a negative impact on our financing options and liquidity position and have adverse effects on our business.
As of June 29, 2014, we have approximately $664.2 million of total long-term debt outstanding, which includes $41.0 million under our asset-based credit facility (the "ABL Credit Facility"). The degree to which we are leveraged could have adverse effects on our business, including the following:
Our ability to meet our debt service obligations will depend upon our future performance, which may be subject to financial, business and other factors affecting our operations, many of which are beyond our control.
Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage.
We may be able to incur substantial additional indebtedness in the future. Although the Indenture will limit our ability and the ability of our subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial and, in certain circumstances, could be secured on a first-priority or pari passu basis. In addition, the Indenture will not prevent us from incurring obligations that do not constitute indebtedness. To the extent that we incur additional
indebtedness or such other obligations, the risks associated with our substantial leverage described above, including our possible inability to service our debt, would increase.
Our debt service obligations may adversely affect our cash flow.
A higher level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flow to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we are unable to generate sufficient cash flow to pay the interest on our debt, we may have to delay or curtail our operations.
Our ability to generate cash flows from operations and to make scheduled payments on our indebtedness will depend on our future financial performance. Our future financial performance will be affected by a range of economic, competitive and business factors that we cannot control, such as those described under "—Other Risks Related to Kratos." A significant reduction in operating cash flows resulting from changes in economic conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. These alternative strategies may not be effected on satisfactory terms, if at all, and they may not yield sufficient funds to make required payments on the Exchange Notes and our other indebtedness.
If for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which would allow our creditors at that time to declare certain outstanding indebtedness to be due and payable, which would in turn trigger cross-acceleration or cross-default rights between the relevant agreements. In addition, our lenders under an existing ABL Credit Facility could compel us to apply all of our available cash to repay our borrowings or they could prevent us from making payments on the Exchange Notes. If the amounts outstanding under the Notes, our existing ABL Credit Facility, and any other indebtedness were to be accelerated, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders, including you as noteholders.
A portion of our business is conducted through foreign subsidiaries, and the failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness, including the Exchange Notes.
As of June 29, 2014, approximately 8% of our consolidated assets, based on book value, and 8% of our total revenues were held by foreign subsidiaries, which will not guarantee the Exchange Notes. Our ability to meet our debt service obligations (including those relating to the Exchange Notes) with cash from foreign subsidiaries will depend upon the results of operations of these subsidiaries and may be subject to legal, contractual or other restrictions and other business considerations. In addition, dividend and interest payments to us from the foreign subsidiaries may be subject to foreign withholding taxes, which would reduce the amount of funds we receive from such foreign subsidiaries. Dividends and other distributions from our foreign subsidiaries may also be subject to fluctuations in currency exchange rates and legal and other restrictions on repatriation, which could further reduce the amount of funds we receive from such foreign subsidiaries.
In general, when an entity in a foreign jurisdiction repatriates cash to the U.S., the amount of such cash is treated as a dividend taxable at current U.S. tax rates. Accordingly, upon the distribution of cash to us from our foreign subsidiaries, we will be subject to U.S. income taxes. Although foreign tax
credits may be available to reduce the amount of the additional tax liability, these credits may be limited and only offset the tax paid in the foreign jurisdiction, not the excess of the U.S. tax rate over the foreign tax rate. Therefore, to the extent that we must use cash generated in foreign jurisdictions to make principal or interest payments on the Exchange Notes, there may be a cost associated with repatriating the cash to the U.S.
The Indenture and our ABL Credit Facility impose significant operating and financial restrictions on us and our subsidiaries that may prevent us and our subsidiaries from pursuing certain business opportunities and restrict our ability to operate our business.
The Indenture and our ABL Credit Facility contain covenants that restrict our ability and our subsidiaries' ability to, among other things:
Our ABL Credit Facility also requires us to comply with specified financial ratios, including a borrowing base availability and minimum fixed charge coverage ratio. Our ability to comply with these covenants will likely be affected by many factors, including events beyond our control, and we may not satisfy those requirements. Our failure to comply with our debt-related obligations could result in an event of default under our other indebtedness and the acceleration of our other indebtedness, in whole or in part, could result in an event of default under the Indenture.
The restrictions contained in the Indenture and in our ABL Credit Facility will also limit the ability of the Company and its subsidiaries to plan for or react to market conditions, meet capital needs or otherwise restrict their activities or business plans and adversely affect the ability to finance their operations, enter into acquisitions or to engage in other business activities that would be in their interest.
If you do not exchange your Unregistered Notes, you may have difficulty transferring them at a later time.
We will issue Exchange Notes in exchange for the Unregistered Notes after the exchange agent receives your Unregistered Notes, the letter of transmittal and all related documents. You should allow adequate time for delivery if you choose to tender your Unregistered Notes for exchange. Unregistered Notes that are not exchanged will remain subject to restrictions on transfer and will not have rights to registration.
If you do not participate in the Exchange Offer for the purpose of participating in the distribution of the Exchange Notes, you must comply with the registration and prospectus delivery requirements of
the Securities Act for any resale transaction. If any Unregistered Notes are not tendered in the exchange or are tendered but not accepted, the trading market for such notes could be negatively affected due to the limited amount of Unregistered Notes expected to remain outstanding following the completion of the Exchange Offer.
The consummation of the Exchange Offer may not occur.
We are not obligated to complete the Exchange Offer under certain circumstances. See "The Exchange Offer—Conditions." Even if the Exchange Offer is not completed, it may not be completed on the schedule described in this prospectus. Accordingly, holders participating in the Exchange Offer may have to wait longer than expected to receive their Exchange Notes. You may be required to deliver prospectuses and comply with other requirements in connection with any resale of the new notes.
Holders of the Unregistered Notes who do not tender their Unregistered Notes will have no further rights under the registration rights agreement, including registration rights and the right to receive additional interest.
Holders who do not tender their Unregistered Notes will not have any further registration rights or any right to receive additional interest under the registration rights agreement or otherwise.
Our ability to repurchase the Exchange Notes upon a change of control may be limited.
Upon the occurrence of specific change of control events, the Company will be required to offer to repurchase all such Exchange Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. The lenders under our ABL Credit Facility have the right to accelerate the indebtedness thereunder upon a change of control. Any future debt agreements of the Company may contain a similar provision. However, the Company may not have sufficient funds at the time of the change of control to make the required repurchase of the Exchange Notes or repayment of such other indebtedness. Any such future debt agreements may contain similar restrictions. If the Company fails to repurchase the Exchange Notes submitted in a change of control offer, it would constitute an event of default under the Indenture which would, in turn, constitute an event of default under our ABL Credit Facility and could constitute an event of default under other indebtedness, even if the change of control itself would not cause a default. Important corporate events, such as takeovers, recapitalizations or similar transactions, may not constitute a change of control under the Indenture and thus not permit the holders of the Exchange Notes to require us to repurchase or redeem the Exchange Notes. See "Description of the Exchange Notes—Repurchase Upon Change of Control."
We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the Exchange Notes.
Legal uncertainty regarding what constitutes a change of control and the provisions of the Indenture may allow us to enter into transactions, such as acquisitions, refinancings or recapitalizations, that would not constitute a change of control but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the Exchange Notes. The definition of change of control includes a phrase relating to the transfer of "all or substantially all" of our assets and subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require the issuer to repurchase Notes as a result of a transfer of less than all of our assets to another person may be uncertain.
There is no active market for the Exchange Notes and if an active trading market does not develop for these Exchange Notes you may not be able to resell them.
The Exchange Notes are a new issue of securities for which there is currently no trading market. We do not intend to list the Exchange Notes on any national securities exchange or quotation system. The initial purchasers have advised us that following the completion of this offering, they currently intend to make a market in the Exchange Notes, however, the initial purchasers are not obligated to do so and any market-making activities with respect to the Exchange Notes may be discontinued at any time without notice. In addition, market-making activity will be subject to the limits imposed by law. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. Any such disruptions could adversely affect the prices at which the Exchange Notes may be sold.
Although under the registration rights agreement we and the guarantors are required to register the resale of the Exchange Notes, such parties cannot ensure that they will be able to register the Exchange Notes successfully. Unless and until such registration of the Exchange Notes, they may not be offered or sold except in transactions that are exempt from, or not subject to, the registration requirements of the Securities Act. In addition, under the registration rights agreement such parties are permitted to suspend the use of an effective registration statement for specific periods of time for certain reasons.
Further, even if a market were to exist, the Exchange Notes could trade at prices that may be lower than the initial offering price of the Exchange Notes depending on many factors, including prevailing interest rates, the markets for similar securities, general economic conditions and our financial condition, current stock price, performance and prospects. The liquidity of and the trading market for the Exchange Notes may be adversely affected by general declines or disruptions in the market for non-investment grade debt.
If you do not properly tender your Unregistered Notes, your ability to transfer such Unregistered Notes will be adversely affected.
We will only issue Exchange Notes in exchange for Unregistered Notes that are timely received by the exchange agent, together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the Unregistered Notes and you should carefully follow the instructions on how to tender your Unregistered Notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the Unregistered Notes. If you do not tender your Unregistered Notes or if your tender of Unregistered Notes is not accepted because you did not tender your Unregistered Notes properly, then, after consummation of the Exchange Offer, you will continue to hold Unregistered Notes that are subject to the existing transfer restrictions. After the Exchange Offer is consummated, if you continue to hold any Unregistered Notes, you may have difficulty selling them because there will be fewer Unregistered Notes remaining and the market for such Unregistered Notes, if any, will be much more limited than it is currently. In particular, the trading market for unexchanged Unregistered Notes could become more limited than the existing trading market for the Unregistered Notes and could cease to exist altogether due to the reduction in the amount of the Unregistered Notes remaining upon consummation of the Exchange Offer. A more limited trading market might adversely affect the liquidity, market price and price volatility of such untendered Unregistered Notes.
If you are a broker-dealer or participating in a distribution of the Exchange Notes, you may be required to deliver prospectuses and comply with other requirements.
If you tender your Unregistered Notes for the purpose of participating in a distribution of the Exchange Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes. If you are a broker-dealer that receives Exchange Notes for your own account in exchange for Unregistered Notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such Exchange Notes.
Risks Related to the Collateral and Guarantees
The lien-ranking provisions set forth in the intercreditor agreement will substantially limit the rights of the holders of the Exchange Notes with respect to liens on the assets (other than the Notes Priority Collateral) securing the Exchange Notes and the related Guarantees.
The liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure the ABL Credit Facility. The holders of obligations under the ABL Credit Facility will be entitled to receive proceeds from any realization of such collateral to repay their obligations in full before the holders of the Exchange Notes and other obligations secured by liens subordinated to the ABL Credit Facility will be entitled to any recovery from such collateral. In the event of a foreclosure, the proceeds from the sale of all of such collateral may not be sufficient to satisfy the amounts outstanding under the Notes after payment in full of all obligations secured by the ABL Credit Facility. The rights of the holders of the Notes with respect to the liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will therefore be substantially limited pursuant to the terms of the lien-ranking provisions set forth in the intercreditor agreement. Under those lien-ranking provisions, at any time that the ABL Credit Facility is outstanding, any actions that may be taken in respect of such assets, including the ability to cause the commencement of enforcement proceedings against such assets and to control the conduct of such proceedings, and the approval of releases of such assets from the lien of the collateral documents, will be at the direction of the lenders under the ABL Credit Facility unless a 180-day "standstill" period has expired after notice of an Event of Default under the Indenture from the Collateral Agent to the agent under the ABL Credit Facility (the "ABL Agent") and the ABL Agent is not pursuing remedies with respect to the ABL Priority Collateral. The collateral agent, on behalf of the holders of the Notes, will not during such "standstill" period have the ability to control or direct such actions, even if the rights of the holders of the Exchange Notes are adversely affected. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement."
Holders of the Exchange Notes will not control decisions regarding certain collateral.
The lenders under our ABL Credit Facility will control substantially all matters related to the ABL Priority Collateral pursuant to the terms of the intercreditor agreement. The lenders of our ABL Credit Facility may cause the ABL Agent to dispose of, release, or foreclose on, or take other actions with respect to, the ABL Priority Collateral (including amendments of and waivers under the security documents) with which holders of the Exchange Notes may disagree or that may be contrary to the interests of holders of the Exchange Notes, even after a default under the Exchange Notes. To the extent any ABL Priority Collateral is released from securing the first priority lien obligations, the intercreditor agreement will provide that in certain circumstances, the second priority liens securing the Exchange Notes will also be released from such collateral. The intercreditor agreement will prohibit second priority lienholders from foreclosing on the ABL Priority Collateral for a 180-day "standstill" period (subject to extension for any period during which the ABL Agent is exercising remedies) until payment in full of the obligations under the ABL Credit Facility. We cannot assure you that in the
event of a foreclosure under the ABL Credit Facility the proceeds from the sale of any ABL Priority Collateral securing such obligations would be sufficient to satisfy all or any of the amounts outstanding under the Exchange Notes after payment in full of the obligations under the ABL Credit Facility.
The imposition of certain permitted liens will cause the assets on which such liens are imposed to be excluded from the collateral securing the Exchange Notes and the related Guarantees. There are also certain other categories of property that are also excluded from the collateral.
The Indenture permits liens in favor of third parties to secure certain other indebtedness, such as purchase money indebtedness and capital lease obligations, and assets subject to such liens will in certain circumstances be excluded from the collateral securing the Notes and the related Guarantees. Our ability to incur purchase money indebtedness and capital lease obligations on a secured basis is subject to limitations as described in "Description of the Exchange Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "—Limitation on Liens." Certain of these third party liens will rank senior to the liens securing the Exchange Notes. In addition, certain categories of assets are excluded from the collateral securing the Exchange Notes and the related Guarantees and the liens on certain categories of assets are not required to be perfected. Excluded assets include certain contracts, certain equipment, and the assets of any non-guarantor subsidiary and certain capital stock of certain subsidiaries. See "Description of the Exchange Notes—Collateral—Generally." If an event of default occurs and the Exchange Notes are accelerated, the Exchange Notes and the related Guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded property and will be effectively subordinated to holders of obligations secured by a lien perfected on such excluded property.
The value of the collateral securing the Exchange Notes may not be sufficient to satisfy all the obligations evidenced by or relating to the Exchange Notes secured by such collateral. As a result, holders of the Exchange Notes may not receive full payment on the Exchange Notes following an event of default.
No appraisal has been made of the collateral securing the Exchange Notes. The value of the collateral in the event of liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, security interests and other rights granted to other parties (including the lenders under our ABL Credit Facility) encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of that collateral and the ability of the collateral agent under the Indenture or the holders thereof to realize or foreclose on that collateral. Consequently, we cannot assure investors in the Exchange Notes that liquidating the collateral securing the Exchange Notes would produce proceeds in an amount sufficient to pay in full any amounts due under the Exchange Notes (and other pari passu indebtedness) after also satisfying the obligations to pay any creditors with prior claims on the collateral, including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against our and the guarantors' remaining assets. In addition, under the intercreditor agreement between the collateral agent for the holders of the Exchange Notes and the ABL Agent, the right of the lenders under the ABL Credit Facility to exercise certain remedies with respect to the ABL Priority Collateral could delay liquidation of the collateral. Bankruptcy laws and
other laws relating to foreclosure and sale also could substantially delay or prevent the ability of the collateral agent or any holder of the Notes to obtain the benefit of any collateral securing the Exchange Notes. Such delays could have a material adverse effect on the value of the collateral.
Consequently, liquidating the collateral securing the Exchange Notes and the related Guarantees may not result in proceeds in an amount sufficient to pay any amounts due under the Notes and holders of pari passu claims after also satisfying the obligations to pay any creditors with prior liens (including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral). If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against the remaining assets of the Company and the guarantors.
The collateral will in most cases be under the control of the pledgor thereof, and the sale of particular assets by the pledgor thereof could reduce the pool of assets securing the Notes and the related Guarantees secured thereby.
The collateral documents allow the pledgors thereof to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from the collateral securing the Exchange Notes and the related Guarantees secured thereby. There are circumstances other than repayment or discharge of the Exchange Notes under which the collateral securing the Exchange Notes and the related Guarantees will be released automatically, without your consent or the consent of the collateral agent, including:
In addition, the Indenture also permits us to designate any existing or future restricted subsidiary that is a guarantor of the Notes or any future subsidiary as an unrestricted subsidiary. If we designate such a future subsidiary guarantor as an unrestricted subsidiary for purposes of the Indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the Exchange Notes by such subsidiary or any of its subsidiaries will be released under the Indenture but not necessarily under our ABL Credit Facility. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral securing the Exchange Notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released.
Our government contracts accounts receivable constitute a significant portion of the value of the collateral. In an event of default, it may be difficult to realize the value of our government contracts pledged to secure the Notes.
We are primarily a U.S. government contractor, and, as such, our U.S. government contracts accounts receivable represent a significant portion of the value of our assets upon which we will grant a security interest to our lenders under our ABL Credit Facility and to the collateral agent to secure the Exchange Notes. The collateral agent's ability to foreclose on the government contracts accounts receivable on behalf of the holders of the Exchange Notes may be subject to perfection, contractual
restrictions set out in the intercreditor agreement, and the consent of third parties including, without limitation, the consent of applicable agencies, bureaus and departments of the United States government. The collateral agent will not be able to exercise direct enforcement rights against the applicable U.S. government agencies with respect to the government contracts accounts receivable without following the requirements of the Assignment of Claims Act. The Assignment of Claims Act requires prior notification and approval of applicable U.S. government agencies, bureaus and departments before secured creditors may realize on their debtors' accounts receivables from the U.S. government and before the secured creditors may enforce those U.S. government contracts accounts receivables against the contracting agency, bureau or department of the U.S. government. Pursuant to the security documents we are not required to follow such procedures, notify the applicable agencies, bureaus and departments of the U.S. government and obtain the requisite consent to the assignment of our U.S. government contracts receivables. Accordingly, you cannot be assured that foreclosure on our assets will generate sufficient value to repay the Exchange Notes in full.
State law may limit the ability of the collateral agent, trustee under the Indenture or the holders of the Exchange Notes to foreclose on the real property and improvements included in the collateral.
The Exchange Notes will be secured by, among other things, liens on certain owned real property and improvements which we and/or the guarantors own. The laws of the states in which such real property is located may limit the ability of collateral agent, the trustee under the Indenture or the holders of the Notes to foreclose on the improved real-property collateral located in those states. Laws of those states govern the perfection, enforceability and foreclosure of mortgage liens against real property interests which secure debt obligations such as the Exchange Notes. These laws may impose procedural requirements for foreclosure different from and necessitating a longer time period for completion than the requirements for foreclosure of security interests in personal property. Debtors may have the right to reinstate defaulted debt (even it is has been accelerated) before the foreclosure date by paying the past due amounts and a right of redemption after foreclosure. Governing laws may also impose security first and one form of action rules which can affect the ability to foreclose or the timing of foreclosure on real and personal property collateral regardless of the location of the collateral and may limit the right to recover a deficiency following a foreclosure.
The rights of holders of the Exchange Notes to the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in the collateral and other issues generally associated with the realization of security interests in collateral.
Your rights in the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in certain collateral in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate, and certain proceeds, can be perfected only at the time at which such property and rights are acquired and identified. The trustee and the collateral agent for the holders of the Exchange Notes may not monitor, and we are not required to inform the trustee and the collateral agent of, the future acquisition of property and rights that constitute collateral, and necessary action may not be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the holders of the Exchange Notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest in favor of the Exchange Notes against third parties. A failure to monitor such acquisition and take necessary action may result in the loss of the effectiveness of the grant of the security interest therein or the priority of the security interest in favor of the holders of the Exchange Notes against third parties.
In addition, the security interest of the collateral agent for the holders of the Exchange Notes will be subject to practical challenges generally associated with the realization of security interests in collateral. For example, the collateral agent may need to obtain the consent of third parties and make
additional filings. If we are unable to obtain these consents or make these filings, the security interests may be invalid and the holders of the Exchange Notes will not be entitled to the collateral or any recovery with respect to the collateral. The collateral agent may not be able to obtain any such consent. Further, the consents of any third parties may not be given when required to facilitate a foreclosure on such collateral. Accordingly, the collateral agent may not have the ability to foreclose upon those assets, and the value of the collateral may significantly decrease. We are also not required to obtain third party consents in certain categories of collateral.
The pledge of the capital stock of subsidiaries of the Company that will secure the Exchange Notes will automatically be released from the lien on them and no longer constitute collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary.
The Exchange Notes and the related Guarantees will be secured by a pledge of the stock of some of the subsidiaries of the Company. Under the SEC regulations in effect as of the date of this Prospectus, if the par value, book value as carried by the Company or market value (whichever is greatest) of the capital stock, other securities or similar items of a subsidiary pledged as part of the collateral to secure the Notes is greater than or equal to 20% of the aggregate principal amount of the Notes then outstanding, such a subsidiary would be required to provide separate financial statements to the SEC. Therefore, the Indenture and the related collateral documents provide that any capital stock and other securities of such subsidiaries will be excluded from the collateral to the extent that the pledge of such capital stock would cause such companies to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time).
As a result, holders of the Exchange Notes could lose a portion or all of their security interest in the capital stock or other securities of those subsidiaries. It may be more difficult, costly and time-consuming for holders of the Exchange Notes to foreclose on the assets of a subsidiary that Guarantees the Exchange Notes than to foreclose on its capital stock so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of such subsidiary. See "Description of the Exchange Notes—Collateral—Generally."
The collateral is subject to casualty risks.
We intend to maintain insurance or otherwise insure against hazards in a manner appropriate and customary for our business. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the collateral, the insurance proceeds may not be sufficient to satisfy all of the secured obligations, including the Exchange Notes and the Guarantees secured thereby.
It may be difficult to realize the value of the collateral pledged to secure the Notes and the Guarantees.
The security interest of the collateral agent may be subject to practical problems generally associated with the realization of security interests in the collateral. For example, the collateral agent may need to obtain the consent of a third-party or governmental agency to obtain or enforce a security interest in a license or contract or to otherwise operate our business. We cannot assure you that the collateral agent will be able to obtain any such consent. If the trustee exercises its rights to foreclose on certain assets, transferring required government approvals to, or obtaining new approvals by, a purchaser of assets may require governmental proceedings with consequent delays. In addition, any foreclosure on the assets of a subsidiary, rather than upon its capital stock as a result of the stock of such subsidiary being an "excluded asset," may result in delays and additional expense, as well as less proceeds than would otherwise have been the case.
In addition, the collateral agent for the Exchange Notes may need to evaluate the impact of potential liabilities before determining to foreclose on the collateral because entities that hold a security interest in real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at the secured property. In this regard, the collateral agent may decline to foreclose on the collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the holders. Finally, the collateral agent's ability to foreclose on the collateral on behalf of the holders of the Exchange Notes may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's lien on the collateral.
The Exchange Notes will be structurally subordinated to all liabilities of our future subsidiaries that are not guarantors of the Exchange Notes.
Not all of our future subsidiaries will guarantee the Exchange Notes. The Exchange Notes are structurally subordinated to the indebtedness and other liabilities of our future subsidiaries that do not guarantee the Exchange Notes. These future non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Exchange Notes or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any of the non-guarantor subsidiaries upon the liquidation or reorganization of those subsidiaries, and the consequent rights of holders of the Exchange Notes to realize proceeds from the sale of any of those subsidiaries' assets, will be effectively subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of preferred equity interests of those subsidiaries. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of our future non-guarantor subsidiaries, absent a decision of the court, such as in the case of substantive consolidation, these future non-guarantor subsidiaries will pay all of their creditors and holders of preferred equity interests before they will be able to distribute any of their assets to us.
The amount that can be collected under the Guarantees will be limited.
Each of the Guarantees will be limited to the maximum amount that can be guaranteed by a particular guarantor without rendering the Guarantee, as it relates to that guarantor, avoidable. See "—Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws." In general, the maximum amount that can be guaranteed by a particular guarantor may be significantly less than the principal amount of the Exchange Notes. This provision may not be effective to protect the Guarantees from being voided under fraudulent transfer law, or may eliminate the guarantor's obligations or reduce the guarantor's obligations to an amount that effectively makes the guarantee worthless. In a Florida bankruptcy case, this kind of provision was found to be ineffective to protect the Guarantees.
Rights of holders of Exchange Notes in the collateral secured thereby may be adversely affected by bankruptcy proceedings.
The right of the collateral agent for the holders of the Exchange Notes to repossess and dispose of the collateral securing the Notes upon acceleration is likely to be significantly impaired by U.S. federal bankruptcy law if bankruptcy proceedings are commenced by or against the pledgor thereof prior to or possibly even after the collateral agent has repossessed and disposed of such collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the holders of the Exchange Notes, is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds,
products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes could be delayed following commencement of a bankruptcy case, whether or when such collateral agent would repossess or dispose of such collateral, or whether or to what extent holders of the Exchange Notes would be compensated for any delay in payment of loss of value of such collateral through the requirements of "adequate protection." Furthermore, in the event the bankruptcy court determines that the value of such collateral is not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes would have "under-secured claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "under-secured claims" during the debtor's bankruptcy case. Additionally, the collateral agent's ability to foreclose on the collateral on behalf of the holder of the Notes may be subject to the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's security interest in such collateral. Moreover, the debtor or trustee in a bankruptcy case may seek to void an alleged security interest in collateral for the benefit of the bankruptcy estate. It may successfully do so if the security interest is not properly perfected or was perfected within a specified period of time (generally 90 days) prior to the initiation of such proceeding. Under such circumstances, a creditor may hold no security interest and be treated as holding a general unsecured claim in the bankruptcy case. It is impossible to predict what recovery (if any) would be available for such an unsecured claim if we became a debtor in a bankruptcy case. While U.S. bankruptcy law generally invalidates provisions restricting a debtor's ability to assume and/or assign a contract, there are exceptions to this rule which could be applicable in the event that the pledgor of such collateral becomes subject to a U.S. bankruptcy proceeding.
Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws.
The issuance of the Exchange Notes and the related Guarantees may be subject to review under U.S. federal or state fraudulent transfer laws. If we become a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, a court could avoid (that is, cancel) our obligations under the Exchange Notes. The court might do so if it finds that when we issued the Notes, (i) we received less than reasonably equivalent value or fair consideration and (ii) we either (a) were or were rendered insolvent, (b) were left with inadequate capital to conduct our business or (c) believed or reasonably should have believed that we would incur debts beyond our ability to pay. The court could also avoid the Exchange Notes, without regard to the factors described in clauses (i) and (ii) above, if it finds that we issued the Notes with actual intent to hinder, delay or defraud our creditors.
Similarly, if one of the guarantors of the Exchange Notes becomes a debtor in a case under the U.S. Bankruptcy Code or encounters other financial difficulty, a court might cancel its Guarantee if it finds that when such guarantor issued its Guarantee (or in some jurisdictions, when payments become due under the Guarantee of such Exchange Notes), factors (i) and (ii) above applied to such guarantor, such guarantor was a defendant in an action for money damages or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied), or if it found that such guarantor issued its Guarantee with actual intent to hinder, delay or defraud its creditors.
A court could avoid any payment by us or any such guarantor pursuant to the Exchange Notes or the Guarantee thereof or any realization on the pledge of assets securing the Exchange Notes or the Guarantees of such Exchange Notes and require the return of any payment or the return of any realized value to us or such guarantor, as the case may be, or to a fund for the benefit of our or such guarantor's creditors. In addition, under the circumstances described above, a court could subordinate rather than avoid obligations under the Exchange Notes, the Guarantees or the pledges. If the court were to avoid any Guarantee, funds may not be available to pay the Exchange Notes from another guarantor thereof or from any other source.
The test for determining solvency for purposes of the foregoing will vary depending on the law of the jurisdiction being applied. In general, a court would consider an entity insolvent either if the sum of its existing debts exceeds the fair value of all of its property or its assets' present fair saleable value is less than the amount required to pay the probable liability on its existing debts as they become due. For this analysis, "debts" include contingent and unliquidated debts. If a court avoided our obligations under the Exchange Notes and the obligations of such guarantor under its Guarantee thereof, holders of the Exchange Notes would cease to be our creditors or creditors of such guarantor and likely have no source from which to recover amounts due under the Exchange Notes. Even if the Guarantee of such guarantor is not avoided as a fraudulent transfer, a court may subordinate such Guarantee to such guarantor's other debt. In that event, such Guarantee would be structurally subordinated to all of such guarantor's other debt.
The Indenture will limit the liability of each guarantor on its Guarantee of the Exchange Notes issued thereunder to the maximum amount that such guarantor can incur without risk that its Guarantee will be subject to avoidance as a fraudulent transfer. This limitation may not protect such Guarantees from fraudulent transfer challenges or, if it does, the remaining amount due and collectible under the Guarantees may not suffice, if necessary, to pay the Exchange Notes in full when due.
Any future pledge of collateral may be avoidable in bankruptcy.
Any future pledge of collateral in favor of the trustee or collateral agent under the Indenture, including pursuant to security documents delivered in connection therewith after the date the Exchange Notes are issued, may be avoidable by the pledgor (a debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if (i) the pledgor is insolvent at the time of the pledge, (ii) the pledge permits the holders of the Notes to receive a greater recovery than if the pledge had not been given and (iii) a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge or the perfection thereof, or, in certain circumstances, a longer period.
In addition to the foregoing risks, we are, and will continue to be, subject to the risks described in our Annual Report on Form 10-K for the year ended December 29, 2013 and in our subsequent reports on Forms 10-Q and 8-K and other filings with the SEC. All such reports are or will be filed with the SEC and are incorporated by reference into this prospectus. See the section entitled "Where You Can Find More Information" beginning on page 97.
RATIO OF EARNINGS TO FIXED CHARGES
The following summary is qualified by the more detailed information appearing in the computation table found in Exhibit 12.1 to the registration statement of which this prospectus is a part and the historical financial statements, including the notes to those financial statements, incorporated by reference in this prospectus.
The following table sets forth our earnings to fixed charges and the dollar amount of the coverage deficiency for the six month period ended June 29, 2014 and the fiscal years ending December 27, 2009, December 26, 2010, December 25, 2011, December 30, 2012 and December 29, 2013.
| (In millions, except ratio) | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fiscal Year Ended | Six Month Period Ended | |||||||||||||||||
| December 27, 2009 | December 26, 2010 | December 25, 2011 | December 30, 2012 | December 29, 2013 | June 29, 2014 | |||||||||||||
Ratio of Earnings to Fixed Charges | — | * | 1.1 | 0.6 | — | * | 0.5 | — | * | ||||||||||
Deficiency of Earnings Available to Cover Fixed Charges | $ | (37.3 | ) | $ | — | $ | (21.6 | ) | $ | (114.5 | ) | $ | (31.9 | ) | $ | $(64.7 | ) |
The Exchange Offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the Exchange Notes pursuant to the Exchange Offer. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive a like principal amount of the Unregistered Notes, the terms of which are identical in all material respects to the Exchange Notes, except as otherwise noted in this prospectus. We will retire and cancel all of the Unregistered Notes tendered in the Exchange Offer. Accordingly, the issuance of the Exchange Notes will not result in any change in our indebtedness or capitalization.
The following table sets forth our consolidated cash and cash equivalents and our consolidated capitalization as of June 29, 2014. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the accompanying notes thereto, appearing elsewhere in our annual report on Form 10-K incorporated by reference in this prospectus, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014.
| June 29, 2014 | |||
---|---|---|---|---|
| (in millions) | |||
Cash and cash equivalents | $ | 26.9 | ||
| | | | |
| | | | |
Debt, including current and long-term: | ||||
7.000% Senior Secured Notes due 2019, capital leases and Israel bank note | 623.2 | |||
ABL Credit Facility | 41.0 | |||
Other obligations | 270.8 | |||
| | | | |
Total liabilities | 935.0 | |||
| | | | |
Stockholders' equity: | ||||
Preferred stock, $0.001 par value, 5,000,000 authorized—None | — | |||
Common stock, $0.001 par value, 195,000,000 shares authorized; 56,613,024 and 57,056,892 shares issued and outstanding at December 30, 2012 and December 29, 2013, respectively | ||||
Additional paid-in capital | 862.3 | |||
Accumulated other comprehensive loss | (0.9 | ) | ||
Accumulated deficit | (624.3 | ) | ||
| | | | |
Total stockholders' equity | 237.1 | |||
| | | | |
Total capitalization | $ | 1,172.1 | ||
| | | | |
| | | | |
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth our selected financial data as of the dates and for the periods indicated. The selected financial data for each of the years ended December 29, 2013, December 30, 2012 and December 25, 2011 and as of December 29, 2013 and December 30, 2012 have been derived from our audited consolidated financial statements incorporated herein by reference. The selected financial data for each of the years ended December 27, 2009 and December 26, 2010 and as of December 27, 2009, December 26, 2010 and December 25, 2011 have been derived from our audited consolidated financial statements not incorporated herein by reference. The selected financial data for the six months ended June 30, 2013 and June, 29, 2014 and as of June 29, 2014 have been derived from our unaudited consolidated financial statements incorporated herein by reference. The selected financial data as of June 30, 2013 have been derived from our unaudited consolidated financial statements not incorporated herein by reference. Our historical results are not necessarily indicative of our future results and historical results for any interim period are not necessarily indicative of our results for the entire year.
The selected consolidated financial information presented below should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Item 8. Financial Statements and Supplementary Data" and the consolidated financial statements and the notes thereto contained in our annual report on Form 10-K, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014.
Amounts in millions except per share amounts
| December 27, 2009 | December 26, 2010 | December 25, 2011 | December 30, 2012 | December 29, 2013 | June 30, 2013 | June 29, 2014 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated Statements of Operations Data: | ||||||||||||||||||||||
Revenues | $ | 334.5 | $ | 408.5 | $ | 713.9 | $ | 969.2 | $ | 950.6 | $ | 488.5 | $ | 429.4 | ||||||||
Gross profit | 63.6 | 84.3 | 191.2 | 257.2 | 240.0 | 126.2 | 109.0 | |||||||||||||||
Operating income (loss) | (27.0 | ) | 23.1 | 29.5 | (49.7 | ) | 31.8 | 20.3 | 8.0 | |||||||||||||
Provision (benefit) for income taxes | 1.0 | (12.7 | ) | 1.9 | (1.6 | ) | — | 2.7 | 3.9 | |||||||||||||
Income (loss) from continuing operations | (38.3 | ) | 14.6 | (23.5 | ) | (112.9 | ) | (31.9 | ) | (15.5 | ) | (64.7 | ) | |||||||||
Loss from discontinued operations | (3.2 | ) | (0.1 | ) | (0.7 | ) | (1.5 | ) | (5.3 | ) | (4.4 | ) | (0.2 | ) | ||||||||
Net income (loss) | $ | (41.5 | ) | $ | 14.5 | $ | (24.2 | ) | $ | (114.4 | ) | $ | (37.2 | ) | $ | (19.9 | ) | $ | (64.9 | ) | ||
Income (loss) from continuing operations per common share | ||||||||||||||||||||||
Basic | $ | (2.76 | ) | $ | 0.88 | $ | (0.86 | ) | $ | (2.41 | ) | $ | (0.56 | ) | $ | (0.27 | ) | $ | (1.13 | ) | ||
Diluted | $ | (2.76 | ) | $ | 0.87 | $ | (0.86 | ) | $ | (2.41 | ) | $ | (0.56 | ) | $ | (0.27 | ) | $ | (1.13 | ) | ||
Loss from discontinued operations per common share | ||||||||||||||||||||||
Basic | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.08 | ) | $ | 0.00 | ||
Diluted | $ | (0.23 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.08 | ) | $ | 0.00 | ||
Net income (loss) per common share | ||||||||||||||||||||||
Basic | $ | (2.99 | ) | $ | 0.87 | $ | (0.88 | ) | $ | (2.44 | ) | $ | (0.65 | ) | $ | (0.35 | ) | $ | (1.13 | ) | ||
Diluted | $ | (2.99 | ) | $ | 0.86 | $ | (0.88 | ) | $ | (2.44 | ) | $ | (0.65 | ) | $ | (0.35 | ) | $ | (1.13 | ) | ||
Weighted average shares: | ||||||||||||||||||||||
Basic | 13.9 | 16.6 | 27.4 | 46.9 | 56.8 | 56.6 | 57.4 | |||||||||||||||
Diluted | 13.9 | 16.9 | 27.4 | 46.9 | 56.8 | 56.6 | 57.4 |
| December 27, 2009 | December 26, 2010 | December 25, 2011 | December 30, 2012 | December 29, 2013 | June 30, 2013 | June 29, 2014 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated Balance Sheet Data: | ||||||||||||||||||||||
Cash and cash equivalents | $ | 9.9 | $ | 10.8 | $ | 69.6 | $ | 49.0 | $ | 55.7 | 49.7 | 26.9 | ||||||||||
Working capital(1) | 37.1 | 65.8 | 207.2 | 176.6 | 179.3 | 179.2 | 151.6 | |||||||||||||||
Total assets | 241.6 | 535.7 | 1,216.0 | 1,284.0 | 1,216.6 | 1,222.3 | 1,172.1 | |||||||||||||||
Short-term debt(2) | 4.7 | 0.6 | 1.6 | 1.5 | 1.3 | 1.4 | 1.2 | |||||||||||||||
Long-term debt(3) | 51.6 | 226.1 | 631.5 | 630.1 | 628.9 | 629.5 | 663.0 | |||||||||||||||
Long-term debt premium | — | — | 22.8 | 18.7 | 14.5 | 16.6 | — | |||||||||||||||
Total stockholders' equity | $ | 124.9 | $ | 169.9 | $ | 312.6 | $ | 324.1 | $ | 295.8 | 308.1 | 237.1 |
Purpose and Effect of Exchange Offer; Registration Rights
We sold the Unregistered Notes to SunTrust Robinson Humphrey, Inc., PNC Capital Markets LLC, B. Riley & Co., LLC, KeyBanc Capital Markets Inc., Noble Financial Capital Markets and Sidoti & Company, LLC, as the initial purchasers, pursuant to a purchase agreement dated May 9, 2014. The initial purchasers resold the Unregistered Notes in reliance on Rule 144A and Regulation S under the Securities Act. In connection with the sale of the Unregistered Notes, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed to:
If you participate in the Exchange Offer, you will, with limited exceptions, receive Exchange Notes that are freely tradable and not subject to restrictions on transfer. You should read the information in this prospectus under the heading "The Exchange Offer—Resale of Exchange Notes" for more information relating to your ability to transfer Exchange Notes.
The Exchange Offer is not being made to, nor will we accept tenders for exchange from, holders of Unregistered Notes in any jurisdiction in which the Exchange Offer or the acceptance of the Exchange Offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction.
If you are eligible to participate in this Exchange Offer and you do not tender your Unregistered Notes as described in this prospectus, you will not have any further registration rights. In that case, your Unregistered Notes may continue to be subject to restrictions on transfer under the Securities Act.
Shelf Registration
In the registration rights agreement, we agreed to file a shelf registration statement in certain circumstances, including if, with respect to any holder:
If a shelf registration statement is required, we will use our commercially reasonable efforts to:
The shelf registration statement will permit only certain holders to resell their Unregistered Notes from time to time. In particular, we may require, as a condition to including a holder's Unregistered Notes in the shelf registration statement, such holder to furnish to us information regarding itself and the proposed disposition by it of its notes as we may from time to time reasonably request in writing.
We will, in the event that a shelf registration statement is filed, provide to each holder of the Unregistered Notes copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the Unregistered Notes. A holder of Unregistered Notes that sells its notes pursuant to the shelf registration statement generally (1) will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, (2) will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and (3) will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations thereunder).
Additional Interest
If (A) we have not exchanged Exchange Notes for all Unregistered Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to 365th day following the issue date, (B) if applicable, the shelf registration statement has not been declared effective on or prior to 365th day following the issue date or (C) if applicable, such shelf registration statement ceases to be effective at any time prior to the second anniversary of the Issue Date (other than after such time as all the Unregistered Notes have been disposed of thereunder), then additional interest ("Additional Interest") shall accrue on the principal amount of the Unregistered Notes at a rate of 0.25% per annum for the first 90 days commencing on (x) the 366th day following the issue date, in the case of (A) or (B) above, or (y) the day such shelf registration statement ceases to be effective, in the case of (C) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period;provided, however, that the amount of Additional Interest accruing will not exceed 1.0% per annum;provided further, however, that upon the exchange of Exchange Notes for all Unregistered Notes tendered (in the case of clause (A) above), or upon the effectiveness of the shelf registration statement (in the case of clause (B) or (C) above), Additional Interest on the Unregistered Notes as a result of such clause, as the case may be, shall cease to accrue. Any amounts of Additional Interest that have accrued pursuant to this paragraph will be payable in cash on the same original interest payment dates as the Unregistered Notes. Any amounts of Additional Interest that have accrued pursuant to the clause above will be payable in cash on the same original interest payment dates as the Unregistered Notes. We, and not the Trustee, will be responsible for making all calculations with respect to Additional Interest.
The Exchange Notes will be accepted for clearance through DTC. This summary of certain provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the complete provisions of the registration rights agreement. A copy of the registration rights agreement is an exhibit to the registration statement that includes this prospectus.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we are offering to exchange $1,000 principal amount of Exchange Notes for each $1,000 principal amount of Unregistered Notes. You may tender some or all of your Unregistered Notes only in minimum denominations of $2,000 and larger integral multiples of $1,000. As of the date of this prospectus, $625 million aggregate principal amount of the Unregistered Notes is outstanding.
The terms of the Exchange Notes to be issued are substantially similar to the Unregistered Notes, except that the offering of the Exchange Notes will have been registered under the Securities Act and, therefore, the certificates for the Exchange Notes will not bear legends restricting their transfer. In addition, the Exchange Notes will not have registration rights and will not have rights to additional interest. The Exchange Notes will be issued under and be entitled to the benefits of the indenture pursuant to which the Unregistered Notes were issued.
In connection with the issuance of the Unregistered Notes, we arranged for the Unregistered Notes to be issued and transferable in book-entry form through the facilities of DTC. The Exchange Notes will also be issuable and transferable in book-entry form through DTC.
There will be no fixed record date for determining the eligible holders of the Unregistered Notes that are entitled to participate in the Exchange Offer. We will be deemed to have accepted for exchange validly tendered Unregistered Notes when and if we have given oral (promptly confirmed in writing) or written notice of acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of Unregistered Notes for the purpose of receiving Exchange Notes from us and delivering them to such holders.
If any tendered Unregistered Notes are not accepted for exchange because of an invalid tender or the occurrence of certain other events described herein, certificates for any such unaccepted Unregistered Notes will be returned, without expenses, to the tendering holder thereof as promptly as practicable after the expiration of the Exchange Offer.
Holders of Unregistered Notes who tender in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of Unregistered Notes for Exchange Notes pursuant to the Exchange Offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. It is important that you read the section "Fees and Expenses" below for more details regarding fees and expenses incurred in the Exchange Offer.
Any Unregistered Notes which holders do not tender or which we do not accept in the Exchange Offer will remain outstanding and continue to accrue interest and may be subject to restrictions on transfer under the Securities Act. We will not have any obligation to register the offer or sale of such Unregistered Notes under the Securities Act. Holders wishing to transfer Unregistered Notes would have to rely on exemptions from the registration requirements of the Securities Act.
Conditions of the Exchange Offer
You must tender your Unregistered Notes in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the Exchange Offer. Notwithstanding any other
provision of the Exchange Offer, or any extension of the Exchange Offer, we will not be required to accept for exchange any Unregistered Notes, and may amend or terminate the Exchange Offer if:
Expiration Date; Extensions; Amendment; Termination
The Exchange Offer will expire 5:00 p.m., New York City time, on , , unless we, in our sole discretion, extend it. In the case of any extension, we will notify the exchange agent orally (promptly confirmed in writing) or in writing of any extension. We will also notify the registered holders of Unregistered Notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration of the Exchange Offer.
To the extent we are legally permitted to do so, we expressly reserve the right, in our sole discretion, to:
We will give oral or written notice of any non-acceptance or amendment to the registered holders of the Unregistered Notes as promptly as practicable. If we consider an amendment to the Exchange Offer to be material, we will promptly inform the registered holders of Unregistered Notes of such amendment in a reasonable manner.
If we determine, in our sole discretion, that any of the events or conditions described in "—Conditions of the Exchange Offer" has occurred, we may terminate the Exchange Offer. We may:
If any such waiver constitutes a material change in the Exchange Offer, we will disclose the change by means of a supplement to this prospectus that will be distributed to each registered holder of Unregistered Notes, and we will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Unregistered Notes, if the Exchange Offer would otherwise expire during that period.
Any determination by us concerning the events described above will be final and binding upon the parties. Without limiting the manner by which we may choose to make public announcements of any extension, delay in acceptance, amendment or termination of the Exchange Offer, we will have no
obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.
If you tender your Original Notes through ATOP, signatures and signature guarantees are not required.
Determinations of Validity. All questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of the tendered Original Notes will be determined by us in our sole discretion. This determination will be final and binding. We reserve the absolute right to reject any and all Original Notes not properly tendered or any Original Notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any irregularities or conditions of tender as to particular Original Notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Original Notes must
be cured within the time we shall determine. Although we intend to notify holders of defects or irregularities related to tenders of Original Notes, neither we, the exchange agent nor any other person shall be under any duty to give notification of defects or irregularities related to tenders of Original Notes, nor shall any of us incur liability for failure to give notification. Tenders of Original Notes will not be considered to have been made until the irregularities have been cured or waived. Any Original Notes received by the exchange agent that we determine are not properly tendered or the tender of which is otherwise rejected by us and as to which the defects or irregularities have not been cured or waived by us will be returned by the exchange agent to the tendering holder unless otherwise provided in the letter of transmittal, promptly following the expiration date.
Guaranteed Delivery Procedures
Holders whoIf you wish to tender their Originalyour Unregistered Notes and:
may effect a tender if they tender through an institution eligible to guarantee signatures described under "—Procedures for Tendering—Signatures," or if they tender using ATOP's guaranteed delivery procedures.
A tender of Original Notes made by or through an eligible institution will be accepted if:
A tender made through DTC's ATOP procedures will be accepted if:
Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their Originalyour Unregistered Notes according to the guaranteed delivery procedures described above.
Withdrawal of Tenders
Except as otherwise providedset forth in this prospectus tendersunder "The Exchange Offer—Guaranteed Delivery Procedures."
Acceptance of OriginalUnregistered Notes and Delivery of Exchange Notes
Subject to customary conditions, we will accept outstanding Unregistered Notes that are properly tendered in the Exchange Offer and not withdrawn prior to the expiration date. The Exchange Notes will be delivered as promptly as practicable following the expiration date.
Withdrawal Rights
You may be withdrawnwithdraw the tender of your Unregistered Notes at any time prior to 5:00 p.m., New York City time, on , , the expiration date. To withdraw a
Consequences of Failure to Exchange
If you are eligible to participate in this Exchange Offer and you do not tender of Originalyour Unregistered Notes in the exchange offer:
Any notice of withdrawal must:
All questions as to the validity, form and eligibility, including time of receipt, of the withdrawal notices will be determined by us, and our determination shall be final and binding on all parties. Any Original Notes so withdrawn will be judged not to have been tendered according to the proceduresdescribed in this prospectus, for purposes of the exchange offer, and no Exchange Notes will be issued in exchange for those Original Notes unless the Original Notes so withdrawn are validly retendered. Any Original Notes that have been tendered but are not accepted for exchange will be returned to the holder of the Original Notes without cost to the holder or, in the case of Original Notes tendered by book-entry transfer into the holder's account at DTC, according to the procedures described above. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn Originalyour Unregistered Notes may be retendered by following one of the procedures described above under "—Procedures for Tendering" at any time prior to the expiration date.
Conditions
The exchange offer is subject only to the following conditions:
commencement and consummation of the exchange offer, it has no arrangement or understanding with any personsubject to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the Securities Act; (iii) that it is not our "affiliate" (as defined in Rule 405 promulgated under the Securities Act) or, if it is an affiliate, it will comply with any applicable registration and prospectus delivery requirements; (iv) if such holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of Exchange Notes; and (v) if such holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes that were acquired astransfer restrictions. As a result of market-making or other trading activities, that itthe transfer restrictions and the availability of Exchange Notes, the market for the Unregistered Notes is likely to be much less liquid than before this Exchange Offer. The Unregistered Notes will, deliver a prospectus in connection withafter this Exchange Offer, bear interest at the same rate as the Exchange Notes. The Unregistered Notes will not retain any resalerights under the registration rights agreement.
Certain United States Federal Income Tax Considerations
The exchange of suchthe Unregistered Notes for Exchange Notes.
If any of these conditions are not met, weNotes pursuant to the Exchange Offer will not be required to accepta taxable event for exchange, or to issue Exchange Notes in exchange for, any Original Notes and may terminate or amend the exchange offer. These conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our discretion. All such conditions must be satisfied or waived by us at or before the expiration date.U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax Considerations."
Exchange Agent
Wilmington Trust, has been appointedNational Association, the trustee under the indenture, is serving as exchange agent for the exchange offer. In this capacity, the exchange agent has no fiduciary duties and will be acting solely on the basis of our directions. Requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal, and requests for the notice of guaranteed delivery should be directed to the exchange agent. You should send certificates for Original Notes, letters of transmittal and any other required documents to the exchange agent addressed to:
By Regular Mail, Overnight Mail or Courier:Wilmington Trust FSBc/o Wilmington Trust CompanyRodney Square North1100 North Market StreetWilmington, DE 19890-1626
Delivery of the letter of transmittal to an address other than as listed above or transmission of instructions via facsimile other than as described above does not constitute a valid delivery of the letter of transmittal.
Solicitation of Tenders; Fees and Expenses
We will bear the expenses of requesting that holders of Original Notes tender those notes for Exchange Notes. The principal solicitation under the exchange offer is being made by mail. Additional solicitations may be made by our officers and regular employees and our affiliates in person, by telegraph, telephone or telecopier.
We have not retained any dealer-manager in connection with the exchange offer andExchange Offer.
Use of Proceeds
We will not makereceive any payments to brokers, dealers or other persons soliciting acceptancesproceeds from the issuance of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket costs and expenses in connection with the exchange offer and will indemnify the exchange agent for all losses and claims incurred by it as a result of the exchange offer. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the Original Notes and in handling or forwarding tenders for exchange.
We will pay the expenses to be incurred in connection with the exchange offer, including fees and expenses of the exchange agent and trustee, SEC registration fees, and accounting and legal fees, printing costs, transfer taxes and related fees and expenses.
You will not be obligated to pay any transfer tax in connection with the exchange, except if you instruct us to register Exchange Notes in the name of, or request that Original Notes not tendered or not accepted in the exchange offer be returned to, a person other than you, you will be responsible for the payment of any applicable transfer tax.Exchange Offer.
Summary Description of the Exchange Notes
The following is a brief summary of some of the terms of the Exchange Notes. For a more complete description of the terms of the Exchange Notes, see "Description of the Exchange Notes" in this prospectus.
| Kratos Defense & Security Solutions, Inc. | |
Exchange Notes | $625.0 million aggregate principal amount of 7.000% Senior Secured Notes due 2019 (the "Exchange Notes"). | |
Interest Rate | 7.000% per annum. | |
Maturity Date | May 15, 2019. | |
Interest Payment Dates | May 15 and
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Guarantees | The Exchange Notes will be | |
Security | The Exchange Notes and the related Guarantees will be secured by a lien on substantially all of our and the guarantors' assets, subject to certain exceptions and permitted liens. The security interest in such assets (other than the Notes Priority Collateral) that secure the Exchange Notes and | |
Ranking | The Exchange Notes
right of payment with all of our existing and future subordinated indebtedness. The
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Moreover, the Collateral Agent may need to evaluate the impact of the potential liabilities before determining to foreclose on Collateral consisting of real property because a secured creditor that holds a lien on real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at such real property. Consequently, the Collateral Agent may decline to foreclose on such Collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the Holders.
The Collateral Agent's ability to foreclose on the Collateral may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the Collateral Agent's Lien on the Collateral.
Intercreditor Agreement |
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Certain Covenants | The Indenture will limit, among other things, our ability and the | |
• incur or guarantee additional indebtedness or issue certain preferred stock; | ||
• pay dividends or make other distributions on, or redeem or purchase, any | ||
• make certain acquisitions or | ||
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• enter into transactions with affiliates; and | ||
• consummate a merger or
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These covenants are | ||
Form and Denomination | The Exchange Notes will be issued only in fully registered form in minimum denominations of $2,000 and larger integral multiples of $1,000. | |
No Public Market | The Exchange Notes are a new issue of securities and will not be listed on any securities exchange or | |
Risk Factors | See "Risk Factors" and the other information in | |
Optional Redemption | On or after May 15, 2016, we may redeem some or all of the |
Prior to
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In addition, we may, at our option, redeem some or all of the Exchange Notes at any time prior to May 15, 2016, by paying a "make whole" premium, plus accrued and | |||||||||||||||||||||||||||
In addition, at one time prior to May 15, 2016, we may redeem up to 10% of the original aggregate principal amount of the Exchange Notes
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| If we experience change of control events, the holders of the Exchange Notes will have the right to require
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Asset Sale Proceeds | Upon certain asset sales, we may be required
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You should carefully consider the risks described below in addition to the other information contained in this prospectus or incorporated herein by reference before making a decision to participate in the Exchange Offer. Any of the following risks, as well as other risks and uncertainties, could harm our business and financial results and cause the value of the Exchange Notes to decline, which in turn could cause you to lose all or part of your investment. The risks and uncertainties described in this prospectus and the documents incorporated herein by reference are not the only ones facing us. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, financial condition, results of operations and prospects. Risks Related to our Indebtedness and the Exchange Notes We have substantial indebtedness, which could have a negative impact on our financing options and liquidity position and have adverse effects on our business. As of June 29, 2014, we have approximately $664.2 million of total long-term debt outstanding, which includes $41.0 million under our asset-based credit facility (the "ABL Credit Facility"). The degree to which we are leveraged could have adverse effects on our business, including the following: Our ability to meet our debt service obligations will depend upon our future performance, which may be subject to financial, business and other factors affecting our operations, many of which are beyond our control. Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage. We may be able to incur substantial additional indebtedness in the future. Although the Indenture will limit our ability and the ability of our subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial and, in certain circumstances, could be secured on a first-priority or pari passu basis. In addition, the Indenture will not prevent us from incurring obligations that do not constitute indebtedness. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial leverage described above, including our possible inability to service our debt, would increase. Our debt service obligations may adversely affect our cash flow. A higher level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flow to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we are unable to generate sufficient cash flow to pay the interest on our debt, we may have to delay or curtail our operations. Our ability to generate cash flows from operations and to make scheduled payments on our indebtedness will depend on our future financial performance. Our future financial performance will be affected by a range of economic, competitive and business factors that we cannot control, such as those described under "—Other Risks Related to Kratos." A significant reduction in operating cash flows resulting from changes in economic conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducing capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. These alternative strategies may not be effected on satisfactory terms, if at all, and they may not yield sufficient funds to make required payments on the Exchange Notes and our other indebtedness. If for any reason we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which would allow our creditors at that time to declare certain outstanding indebtedness to be due and payable, which would in turn trigger cross-acceleration or cross-default rights between the relevant agreements. In addition, our lenders under an existing ABL Credit Facility could compel us to apply all of our available cash to repay our borrowings or they could prevent us from making payments on the Exchange Notes. If the amounts outstanding under the Notes, our existing ABL Credit Facility, and any other indebtedness were to be accelerated, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders, including you as noteholders. A portion of our business is conducted through foreign subsidiaries, and the failure to generate sufficient cash flow from these subsidiaries, or otherwise repatriate or receive cash from these subsidiaries, could result in our inability to repay our indebtedness, including the Exchange Notes. As of June 29, 2014, approximately 8% of our consolidated assets, based on book value, and 8% of our total revenues were held by foreign subsidiaries, which will not guarantee the Exchange Notes. Our ability to meet our debt service obligations (including those relating to the Exchange Notes) with cash from foreign subsidiaries will depend upon the results of operations of these subsidiaries and may be subject to legal, contractual or other restrictions and other business considerations. In addition, dividend and interest payments to us from the foreign subsidiaries may be subject to foreign withholding taxes, which would reduce the amount of funds we receive from such foreign subsidiaries. Dividends and other distributions from our foreign subsidiaries may also be subject to fluctuations in currency exchange rates and legal and other restrictions on repatriation, which could further reduce the amount of funds we receive from such foreign subsidiaries. In general, when an entity in a foreign jurisdiction repatriates cash to the U.S., the amount of such cash is treated as a dividend taxable at current U.S. tax rates. Accordingly, upon the distribution of cash to us from our foreign subsidiaries, we will be subject to U.S. income taxes. Although foreign tax credits may be available to reduce the amount of the additional tax liability, these credits may be limited and only offset the tax paid in the foreign jurisdiction, not the excess of the U.S. tax rate over the foreign tax rate. Therefore, to the extent that we must use cash generated in foreign jurisdictions to make principal or interest payments on the Exchange Notes, there may be a cost associated with repatriating the cash to the U.S. The Indenture and our ABL Credit Facility impose significant operating and financial restrictions on us and our subsidiaries that may prevent us and our subsidiaries from pursuing certain business opportunities and restrict our ability to operate our business. The Indenture and our ABL Credit Facility contain covenants that restrict our ability and our subsidiaries' ability to, among other things: Our ABL Credit Facility also requires us to comply with specified financial ratios, including a borrowing base availability and minimum fixed charge coverage ratio. Our ability to comply with these covenants will likely be affected by many factors, including events beyond our control, and we may not satisfy those requirements. Our failure to comply with our debt-related obligations could result in an event of default under our other indebtedness and the acceleration of our other indebtedness, in whole or in part, could result in an event of default under the Indenture. The restrictions contained in the Indenture and in our ABL Credit Facility will also limit the ability of the Company and its subsidiaries to plan for or react to market conditions, meet capital needs or otherwise restrict their activities or business plans and adversely affect the ability to finance their operations, enter into acquisitions or to engage in other business activities that would be in their interest. If you do not exchange your Unregistered Notes, you may have difficulty transferring them at a later time. We will issue Exchange Notes in exchange for the Unregistered Notes after the exchange agent receives your Unregistered Notes, the letter of transmittal and all related documents. You should allow adequate time for delivery if you choose to tender your Unregistered Notes for exchange. Unregistered Notes that are not exchanged will remain subject to restrictions on transfer and will not have rights to registration. If you do not participate in the Exchange Offer for the purpose of participating in the distribution of the Exchange Notes, you must comply with the registration and prospectus delivery requirements of the Securities Act for any resale transaction. If any Unregistered Notes are not tendered in the exchange or are tendered but not accepted, the trading market for such notes could be negatively affected due to the limited amount of Unregistered Notes expected to remain outstanding following the completion of the Exchange Offer. The consummation of the Exchange Offer may not occur. We are not obligated to complete the Exchange Offer under certain circumstances. See "The Exchange Offer—Conditions." Even if the Exchange Offer is not completed, it may not be completed on the schedule described in this prospectus. Accordingly, holders participating in the Exchange Offer may have to wait longer than expected to receive their Exchange Notes. You may be required to deliver prospectuses and comply with other requirements in connection with any resale of the new notes. Holders of the Unregistered Notes who do not tender their Unregistered Notes will have no further rights under the registration rights agreement, including registration rights and the right to receive additional interest. Holders who do not tender their Unregistered Notes will not have any further registration rights or any right to receive additional interest under the registration rights agreement or otherwise. Our ability to repurchase the Exchange Notes upon a change of control may be limited. Upon the occurrence of specific change of control events, the Company will be required to offer to repurchase all such Exchange Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. The lenders under our ABL Credit Facility have the right to accelerate the indebtedness thereunder upon a change of control. Any future debt agreements of the Company may contain a similar provision. However, the Company may not have sufficient funds at the time of the change of control to make the required repurchase of the Exchange Notes or repayment of such other indebtedness. Any such future debt agreements may contain similar restrictions. If the Company fails to repurchase the Exchange Notes submitted in a change of control offer, it would constitute an event of default under the Indenture which would, in turn, constitute an event of default under our ABL Credit Facility and could constitute an event of default under other indebtedness, even if the change of control itself would not cause a default. Important corporate events, such as takeovers, recapitalizations or similar transactions, may not constitute a change of control under the Indenture and thus not permit the holders of the Exchange Notes to require us to repurchase or redeem the Exchange Notes. See "Description of the Exchange Notes—Repurchase Upon Change of Control." We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the Exchange Notes. Legal uncertainty regarding what constitutes a change of control and the provisions of the Indenture may allow us to enter into transactions, such as acquisitions, refinancings or recapitalizations, that would not constitute a change of control but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the Exchange Notes. The definition of change of control includes a phrase relating to the transfer of "all or substantially all" of our assets and subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require the issuer to repurchase Notes as a result of a transfer of less than all of our assets to another person may be uncertain. There is no active market for the Exchange Notes and if an active trading market does not develop for these Exchange Notes you may not be able to resell them. The Exchange Notes are a new issue of securities for which there is currently no trading market. We do not intend to list the Exchange Notes on any national securities exchange or quotation system. The initial purchasers have advised us that following the completion of this offering, they currently intend to make a market in the Exchange Notes, however, the initial purchasers are not obligated to do so and any market-making activities with respect to the Exchange Notes may be discontinued at any time without notice. In addition, market-making activity will be subject to the limits imposed by law. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. Any such disruptions could adversely affect the prices at which the Exchange Notes may be sold. Although under the registration rights agreement we and the guarantors are required to register the resale of the Exchange Notes, such parties cannot ensure that they will be able to register the Exchange Notes successfully. Unless and until such registration of the Exchange Notes, they may not be offered or sold except in transactions that are exempt from, or not subject to, the registration requirements of the Securities Act. In addition, under the registration rights agreement such parties are permitted to suspend the use of an effective registration statement for specific periods of time for certain reasons. Further, even if a market were to exist, the Exchange Notes could trade at prices that may be lower than the initial offering price of the Exchange Notes depending on many factors, including prevailing interest rates, the markets for similar securities, general economic conditions and our financial condition, current stock price, performance and prospects. The liquidity of and the trading market for the Exchange Notes may be adversely affected by general declines or disruptions in the market for non-investment grade debt. If you do not properly tender your Unregistered Notes, your ability to transfer such Unregistered Notes will be adversely affected. We will only issue Exchange Notes in exchange for Unregistered Notes that are timely received by the exchange agent, together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the Unregistered Notes and you should carefully follow the instructions on how to tender your Unregistered Notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the Unregistered Notes. If you do not tender your Unregistered Notes or if your tender of Unregistered Notes is not accepted because you did not tender your Unregistered Notes properly, then, after consummation of the Exchange Offer, you will continue to hold Unregistered Notes that are subject to the existing transfer restrictions. After the Exchange Offer is consummated, if you continue to hold any Unregistered Notes, you may have difficulty selling them because there will be fewer Unregistered Notes remaining and the market for such Unregistered Notes, if any, will be much more limited than it is currently. In particular, the trading market for unexchanged Unregistered Notes could become more limited than the existing trading market for the Unregistered Notes and could cease to exist altogether due to the reduction in the amount of the Unregistered Notes remaining upon consummation of the Exchange Offer. A more limited trading market might adversely affect the liquidity, market price and price volatility of such untendered Unregistered Notes. If you are a broker-dealer or participating in a distribution of the Exchange Notes, you may be required to deliver prospectuses and comply with other requirements. If you tender your Unregistered Notes for the purpose of participating in a distribution of the Exchange Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes. If you are a broker-dealer that receives Exchange Notes for your own account in exchange for Unregistered Notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such Exchange Notes. Risks Related to the Collateral and Guarantees The lien-ranking provisions set forth in the intercreditor agreement will substantially limit the rights of the holders of the Exchange Notes with respect to liens on the assets (other than the Notes Priority Collateral) securing the Exchange Notes and the related Guarantees. The liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will be junior to the liens thereon that secure the ABL Credit Facility. The holders of obligations under the ABL Credit Facility will be entitled to receive proceeds from any realization of such collateral to repay their obligations in full before the holders of the Exchange Notes and other obligations secured by liens subordinated to the ABL Credit Facility will be entitled to any recovery from such collateral. In the event of a foreclosure, the proceeds from the sale of all of such collateral may not be sufficient to satisfy the amounts outstanding under the Notes after payment in full of all obligations secured by the ABL Credit Facility. The rights of the holders of the Notes with respect to the liens on our assets (other than Notes Priority Collateral) securing the Exchange Notes and the related Guarantees will therefore be substantially limited pursuant to the terms of the lien-ranking provisions set forth in the intercreditor agreement. Under those lien-ranking provisions, at any time that the ABL Credit Facility is outstanding, any actions that may be taken in respect of such assets, including the ability to cause the commencement of enforcement proceedings against such assets and to control the conduct of such proceedings, and the approval of releases of such assets from the lien of the collateral documents, will be at the direction of the lenders under the ABL Credit Facility unless a 180-day "standstill" period has expired after notice of an Event of Default under the Indenture from the Collateral Agent to the agent under the ABL Credit Facility (the "ABL Agent") and the ABL Agent is not pursuing remedies with respect to the ABL Priority Collateral. The collateral agent, on behalf of the holders of the Notes, will not during such "standstill" period have the ability to control or direct such actions, even if the rights of the holders of the Exchange Notes are adversely affected. See "Description of the Exchange Notes—Collateral—Intercreditor Agreement." Holders of the Exchange Notes will not control decisions regarding certain collateral. The lenders under our ABL Credit Facility will control substantially all matters related to the ABL Priority Collateral pursuant to the terms of the intercreditor agreement. The lenders of our ABL Credit Facility may cause the ABL Agent to dispose of, release, or foreclose on, or take other actions with respect to, the ABL Priority Collateral (including amendments of and waivers under the security documents) with which holders of the Exchange Notes may disagree or that may be contrary to the interests of holders of the Exchange Notes, even after a default under the Exchange Notes. To the extent any ABL Priority Collateral is released from securing the first priority lien obligations, the intercreditor agreement will provide that in certain circumstances, the second priority liens securing the Exchange Notes will also be released from such collateral. The intercreditor agreement will prohibit second priority lienholders from foreclosing on the ABL Priority Collateral for a 180-day "standstill" period (subject to extension for any period during which the ABL Agent is exercising remedies) until payment in full of the obligations under the ABL Credit Facility. We cannot assure you that in the event of a foreclosure under the ABL Credit Facility the proceeds from the sale of any ABL Priority Collateral securing such obligations would be sufficient to satisfy all or any of the amounts outstanding under the Exchange Notes after payment in full of the obligations under the ABL Credit Facility. The imposition of certain permitted liens will cause the assets on which such liens are imposed to be excluded from the collateral securing the Exchange Notes and the related Guarantees. There are also certain other categories of property that are also excluded from the collateral. The Indenture permits liens in favor of third parties to secure certain other indebtedness, such as purchase money indebtedness and capital lease obligations, and assets subject to such liens will in certain circumstances be excluded from the collateral securing the Notes and the related Guarantees. Our ability to incur purchase money indebtedness and capital lease obligations on a secured basis is subject to limitations as described in "Description of the Exchange Notes—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "—Limitation on Liens." Certain of these third party liens will rank senior to the liens securing the Exchange Notes. In addition, certain categories of assets are excluded from the collateral securing the Exchange Notes and the related Guarantees and the liens on certain categories of assets are not required to be perfected. Excluded assets include certain contracts, certain equipment, and the assets of any non-guarantor subsidiary and certain capital stock of certain subsidiaries. See "Description of the Exchange Notes—Collateral—Generally." If an event of default occurs and the Exchange Notes are accelerated, the Exchange Notes and the related Guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded property and will be effectively subordinated to holders of obligations secured by a lien perfected on such excluded property. The value of the collateral securing the Exchange Notes may not be sufficient to satisfy all the obligations evidenced by or relating to the Exchange Notes secured by such collateral. As a result, holders of the Exchange Notes may not receive full payment on the Exchange Notes following an event of default. No appraisal has been made of the collateral securing the Exchange Notes. The value of the collateral in the event of liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, security interests and other rights granted to other parties (including the lenders under our ABL Credit Facility) encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of that collateral and the ability of the collateral agent under the Indenture or the holders thereof to realize or foreclose on that collateral. Consequently, we cannot assure investors in the Exchange Notes that liquidating the collateral securing the Exchange Notes would produce proceeds in an amount sufficient to pay in full any amounts due under the Exchange Notes (and other pari passu indebtedness) after also satisfying the obligations to pay any creditors with prior claims on the collateral, including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral. If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against our and the guarantors' remaining assets. In addition, under the intercreditor agreement between the collateral agent for the holders of the Exchange Notes and the ABL Agent, the right of the lenders under the ABL Credit Facility to exercise certain remedies with respect to the ABL Priority Collateral could delay liquidation of the collateral. Bankruptcy laws and other laws relating to foreclosure and sale also could substantially delay or prevent the ability of the collateral agent or any holder of the Notes to obtain the benefit of any collateral securing the Exchange Notes. Such delays could have a material adverse effect on the value of the collateral. Consequently, liquidating the collateral securing the Exchange Notes and the related Guarantees may not result in proceeds in an amount sufficient to pay any amounts due under the Notes and holders of pari passu claims after also satisfying the obligations to pay any creditors with prior liens (including the lenders under our ABL Credit Facility with respect to the ABL Priority Collateral). If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes (to the extent not repaid from the proceeds of the sale of the collateral securing the Exchange Notes) would have only an unsecured, unsubordinated claim against the remaining assets of the Company and the guarantors. The collateral will in most cases be under the control of the pledgor thereof, and the sale of particular assets by the pledgor thereof could reduce the pool of assets securing the Notes and the related Guarantees secured thereby. The collateral documents allow the pledgors thereof to remain in possession of, retain exclusive control over, freely operate, and collect, invest and dispose of any income from the collateral securing the Exchange Notes and the related Guarantees secured thereby. There are circumstances other than repayment or discharge of the Exchange Notes under which the collateral securing the Exchange Notes and the related Guarantees will be released automatically, without your consent or the consent of the collateral agent, including: In addition, the Indenture also permits us to designate any existing or future restricted subsidiary that is a guarantor of the Notes or any future subsidiary as an unrestricted subsidiary. If we designate such a future subsidiary guarantor as an unrestricted subsidiary for purposes of the Indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the Exchange Notes by such subsidiary or any of its subsidiaries will be released under the Indenture but not necessarily under our ABL Credit Facility. Designation of an unrestricted subsidiary will reduce the aggregate value of the collateral securing the Exchange Notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released. Our government contracts accounts receivable constitute a significant portion of the value of the collateral. In an event of default, it may be difficult to realize the value of our government contracts pledged to secure the Notes. We are primarily a U.S. government contractor, and, as such, our U.S. government contracts accounts receivable represent a significant portion of the value of our assets upon which we will grant a security interest to our lenders under our ABL Credit Facility and to the collateral agent to secure the Exchange Notes. The collateral agent's ability to foreclose on the government contracts accounts receivable on behalf of the holders of the Exchange Notes may be subject to perfection, contractual restrictions set out in the intercreditor agreement, and the consent of third parties including, without limitation, the consent of applicable agencies, bureaus and departments of the United States government. The collateral agent will not be able to exercise direct enforcement rights against the applicable U.S. government agencies with respect to the government contracts accounts receivable without following the requirements of the Assignment of Claims Act. The Assignment of Claims Act requires prior notification and approval of applicable U.S. government agencies, bureaus and departments before secured creditors may realize on their debtors' accounts receivables from the U.S. government and before the secured creditors may enforce those U.S. government contracts accounts receivables against the contracting agency, bureau or department of the U.S. government. Pursuant to the security documents we are not required to follow such procedures, notify the applicable agencies, bureaus and departments of the U.S. government and obtain the requisite consent to the assignment of our U.S. government contracts receivables. Accordingly, you cannot be assured that foreclosure on our assets will generate sufficient value to repay the Exchange Notes in full. State law may limit the ability of the collateral agent, trustee under the Indenture or the holders of the Exchange Notes to foreclose on the real property and improvements included in the collateral. The Exchange Notes will be secured by, among other things, liens on certain owned real property and improvements which we and/or the guarantors own. The laws of the states in which such real property is located may limit the ability of collateral agent, the trustee under the Indenture or the holders of the Notes to foreclose on the improved real-property collateral located in those states. Laws of those states govern the perfection, enforceability and foreclosure of mortgage liens against real property interests which secure debt obligations such as the Exchange Notes. These laws may impose procedural requirements for foreclosure different from and necessitating a longer time period for completion than the requirements for foreclosure of security interests in personal property. Debtors may have the right to reinstate defaulted debt (even it is has been accelerated) before the foreclosure date by paying the past due amounts and a right of redemption after foreclosure. Governing laws may also impose security first and one form of action rules which can affect the ability to foreclose or the timing of foreclosure on real and personal property collateral regardless of the location of the collateral and may limit the right to recover a deficiency following a foreclosure. The rights of holders of the Exchange Notes to the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in the collateral and other issues generally associated with the realization of security interests in collateral. Your rights in the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in certain collateral in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate, and certain proceeds, can be perfected only at the time at which such property and rights are acquired and identified. The trustee and the collateral agent for the holders of the Exchange Notes may not monitor, and we are not required to inform the trustee and the collateral agent of, the future acquisition of property and rights that constitute collateral, and necessary action may not be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the holders of the Exchange Notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest in favor of the Exchange Notes against third parties. A failure to monitor such acquisition and take necessary action may result in the loss of the effectiveness of the grant of the security interest therein or the priority of the security interest in favor of the holders of the Exchange Notes against third parties. In addition, the security interest of the collateral agent for the holders of the Exchange Notes will be subject to practical challenges generally associated with the realization of security interests in collateral. For example, the collateral agent may need to obtain the consent of third parties and make additional filings. If we are unable to obtain these consents or make these filings, the security interests may be invalid and the holders of the Exchange Notes will not be entitled to the collateral or any recovery with respect to the collateral. The collateral agent may not be able to obtain any such consent. Further, the consents of any third parties may not be given when required to facilitate a foreclosure on such collateral. Accordingly, the collateral agent may not have the ability to foreclose upon those assets, and the value of the collateral may significantly decrease. We are also not required to obtain third party consents in certain categories of collateral. The pledge of the capital stock of subsidiaries of the Company that will secure the Exchange Notes will automatically be released from the lien on them and no longer constitute collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary. The Exchange Notes and the related Guarantees will be secured by a pledge of the stock of some of the subsidiaries of the Company. Under the SEC regulations in effect as of the date of this Prospectus, if the par value, book value as carried by the Company or market value (whichever is greatest) of the capital stock, other securities or similar items of a subsidiary pledged as part of the collateral to secure the Notes is greater than or equal to 20% of the aggregate principal amount of the Notes then outstanding, such a subsidiary would be required to provide separate financial statements to the SEC. Therefore, the Indenture and the related collateral documents provide that any capital stock and other securities of such subsidiaries will be excluded from the collateral to the extent that the pledge of such capital stock would cause such companies to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time). As a result, holders of the Exchange Notes could lose a portion or all of their security interest in the capital stock or other securities of those subsidiaries. It may be more difficult, costly and time-consuming for holders of the Exchange Notes to foreclose on the assets of a subsidiary that Guarantees the Exchange Notes than to foreclose on its capital stock so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of such subsidiary. See "Description of the Exchange Notes—Collateral—Generally." The collateral is subject to casualty risks. We intend to maintain insurance or otherwise insure against hazards in a manner appropriate and customary for our business. There are, however, certain losses that may be either uninsurable or not economically insurable, in whole or in part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the collateral, the insurance proceeds may not be sufficient to satisfy all of the secured obligations, including the Exchange Notes and the Guarantees secured thereby. It may be difficult to realize the value of the collateral pledged to secure the Notes and the Guarantees. The security interest of the collateral agent may be subject to practical problems generally associated with the realization of security interests in the collateral. For example, the collateral agent may need to obtain the consent of a third-party or governmental agency to obtain or enforce a security interest in a license or contract or to otherwise operate our business. We cannot assure you that the collateral agent will be able to obtain any such consent. If the trustee exercises its rights to foreclose on certain assets, transferring required government approvals to, or obtaining new approvals by, a purchaser of assets may require governmental proceedings with consequent delays. In addition, any foreclosure on the assets of a subsidiary, rather than upon its capital stock as a result of the stock of such subsidiary being an "excluded asset," may result in delays and additional expense, as well as less proceeds than would otherwise have been the case. In addition, the collateral agent for the Exchange Notes may need to evaluate the impact of potential liabilities before determining to foreclose on the collateral because entities that hold a security interest in real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at the secured property. In this regard, the collateral agent may decline to foreclose on the collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the holders. Finally, the collateral agent's ability to foreclose on the collateral on behalf of the holders of the Exchange Notes may be subject to lack of perfection, the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's lien on the collateral. The Exchange Notes will be structurally subordinated to all liabilities of our future subsidiaries that are not guarantors of the Exchange Notes. Not all of our future subsidiaries will guarantee the Exchange Notes. The Exchange Notes are structurally subordinated to the indebtedness and other liabilities of our future subsidiaries that do not guarantee the Exchange Notes. These future non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Exchange Notes or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any of the non-guarantor subsidiaries upon the liquidation or reorganization of those subsidiaries, and the consequent rights of holders of the Exchange Notes to realize proceeds from the sale of any of those subsidiaries' assets, will be effectively subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of preferred equity interests of those subsidiaries. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of our future non-guarantor subsidiaries, absent a decision of the court, such as in the case of substantive consolidation, these future non-guarantor subsidiaries will pay all of their creditors and holders of preferred equity interests before they will be able to distribute any of their assets to us. The amount that can be collected under the Guarantees will be limited. Each of the Guarantees will be limited to the maximum amount that can be guaranteed by a particular guarantor without rendering the Guarantee, as it relates to that guarantor, avoidable. See "—Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws." In general, the maximum amount that can be guaranteed by a particular guarantor may be significantly less than the principal amount of the Exchange Notes. This provision may not be effective to protect the Guarantees from being voided under fraudulent transfer law, or may eliminate the guarantor's obligations or reduce the guarantor's obligations to an amount that effectively makes the guarantee worthless. In a Florida bankruptcy case, this kind of provision was found to be ineffective to protect the Guarantees. Rights of holders of Exchange Notes in the collateral secured thereby may be adversely affected by bankruptcy proceedings. The right of the collateral agent for the holders of the Exchange Notes to repossess and dispose of the collateral securing the Notes upon acceleration is likely to be significantly impaired by U.S. federal bankruptcy law if bankruptcy proceedings are commenced by or against the pledgor thereof prior to or possibly even after the collateral agent has repossessed and disposed of such collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent for the holders of the Exchange Notes, is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral and may include cash payments or the granting of additional security, if and at such time as the court in its discretion determines, for any diminution in the value of the collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes could be delayed following commencement of a bankruptcy case, whether or when such collateral agent would repossess or dispose of such collateral, or whether or to what extent holders of the Exchange Notes would be compensated for any delay in payment of loss of value of such collateral through the requirements of "adequate protection." Furthermore, in the event the bankruptcy court determines that the value of such collateral is not sufficient to repay all amounts due on the Exchange Notes, the holders of the Exchange Notes would have "under-secured claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "under-secured claims" during the debtor's bankruptcy case. Additionally, the collateral agent's ability to foreclose on the collateral on behalf of the holder of the Notes may be subject to the consent of third parties, prior liens and practical problems associated with the realization of the collateral agent's security interest in such collateral. Moreover, the debtor or trustee in a bankruptcy case may seek to void an alleged security interest in collateral for the benefit of the bankruptcy estate. It may successfully do so if the security interest is not properly perfected or was perfected within a specified period of time (generally 90 days) prior to the initiation of such proceeding. Under such circumstances, a creditor may hold no security interest and be treated as holding a general unsecured claim in the bankruptcy case. It is impossible to predict what recovery (if any) would be available for such an unsecured claim if we became a debtor in a bankruptcy case. While U.S. bankruptcy law generally invalidates provisions restricting a debtor's ability to assume and/or assign a contract, there are exceptions to this rule which could be applicable in the event that the pledgor of such collateral becomes subject to a U.S. bankruptcy proceeding. Under certain circumstances, a court could cancel the Exchange Notes or the related Guarantees and the security interests that secure the Exchange Notes and such Guarantees under fraudulent conveyance laws. The issuance of the Exchange Notes and the related Guarantees may be subject to review under U.S. federal or state fraudulent transfer laws. If we become a debtor in a case under the U.S. Bankruptcy Code or encounter other financial difficulty, a court could avoid (that is, cancel) our obligations under the Exchange Notes. The court might do so if it finds that when we issued the Notes, (i) we received less than reasonably equivalent value or fair consideration and (ii) we either (a) were or were rendered insolvent, (b) were left with inadequate capital to conduct our business or (c) believed or reasonably should have believed that we would incur debts beyond our ability to pay. The court could also avoid the Exchange Notes, without regard to the factors described in clauses (i) and (ii) above, if it finds that we issued the Notes with actual intent to hinder, delay or defraud our creditors. Similarly, if one of the guarantors of the Exchange Notes becomes a debtor in a case under the U.S. Bankruptcy Code or encounters other financial difficulty, a court might cancel its Guarantee if it finds that when such guarantor issued its Guarantee (or in some jurisdictions, when payments become due under the Guarantee of such Exchange Notes), factors (i) and (ii) above applied to such guarantor, such guarantor was a defendant in an action for money damages or had a judgment for money damages docketed against it (if, in either case, after final judgment the judgment is unsatisfied), or if it found that such guarantor issued its Guarantee with actual intent to hinder, delay or defraud its creditors. A court could avoid any payment by us or any such guarantor pursuant to the Exchange Notes or the Guarantee thereof or any realization on the pledge of assets securing the Exchange Notes or the Guarantees of such Exchange Notes and require the return of any payment or the return of any realized value to us or such guarantor, as the case may be, or to a fund for the benefit of our or such guarantor's creditors. In addition, under the circumstances described above, a court could subordinate rather than avoid obligations under the Exchange Notes, the Guarantees or the pledges. If the court were to avoid any Guarantee, funds may not be available to pay the Exchange Notes from another guarantor thereof or from any other source. The test for determining solvency for purposes of the foregoing will vary depending on the law of the jurisdiction being applied. In general, a court would consider an entity insolvent either if the sum of its existing debts exceeds the fair value of all of its property or its assets' present fair saleable value is less than the amount required to pay the probable liability on its existing debts as they become due. For this analysis, "debts" include contingent and unliquidated debts. If a court avoided our obligations under the Exchange Notes and the obligations of such guarantor under its Guarantee thereof, holders of the Exchange Notes would cease to be our creditors or creditors of such guarantor and likely have no source from which to recover amounts due under the Exchange Notes. Even if the Guarantee of such guarantor is not avoided as a fraudulent transfer, a court may subordinate such Guarantee to such guarantor's other debt. In that event, such Guarantee would be structurally subordinated to all of such guarantor's other debt. The Indenture will limit the liability of each guarantor on its Guarantee of the Exchange Notes issued thereunder to the maximum amount that such guarantor can incur without risk that its Guarantee will be subject to avoidance as a fraudulent transfer. This limitation may not protect such Guarantees from fraudulent transfer challenges or, if it does, the remaining amount due and collectible under the Guarantees may not suffice, if necessary, to pay the Exchange Notes in full when due. Any future pledge of collateral may be avoidable in bankruptcy. Any future pledge of collateral in favor of the trustee or collateral agent under the Indenture, including pursuant to security documents delivered in connection therewith after the date the Exchange Notes are issued, may be avoidable by the pledgor (a debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if (i) the pledgor is insolvent at the time of the pledge, (ii) the pledge permits the holders of the Notes to receive a greater recovery than if the pledge had not been given and (iii) a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge or the perfection thereof, or, in certain circumstances, a longer period. In addition to the foregoing risks, we are, and will continue to be, subject to the risks described in our Annual Report on Form 10-K for the year ended December 29, 2013 and in our subsequent reports on Forms 10-Q and 8-K and other filings with the SEC. All such reports are or will be filed with the SEC and are incorporated by reference into this prospectus. See the section entitled "Where You Can Find More Information" beginning on page 97. The following summary is qualified by the more detailed information appearing in the computation table found in Exhibit 12.1 to the registration statement of which this prospectus is a part and the historical financial statements, including the notes to those financial statements, incorporated by reference in this prospectus. The following table sets forth our earnings to fixed charges and the dollar amount of the coverage deficiency for the six month period ended June 29, 2014 and the fiscal years ending December 27, 2009, December 26, 2010, December 25, 2011, December 30, 2012 and December 29, 2013. Ratio of Earnings to Fixed Charges Deficiency of Earnings Available to Cover Fixed Charges The Exchange Offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the Exchange Notes pursuant to the Exchange Offer. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive a like principal amount of the Unregistered Notes, the terms of which are identical in all material respects to the Exchange Notes, except as otherwise noted in this prospectus. We will retire and cancel all of the Unregistered Notes tendered in the Exchange Offer. Accordingly, the issuance of the Exchange Notes will not result in any change in our indebtedness or capitalization. The following table sets forth our consolidated cash and cash equivalents and our consolidated capitalization as of June 29, 2014. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, including the accompanying notes thereto, appearing elsewhere in our annual report on Form 10-K incorporated by reference in this prospectus, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014. Cash and cash equivalents Debt, including current and long-term: 7.000% Senior Secured Notes due 2019, capital leases and Israel bank note ABL Credit Facility Other obligations Total liabilities Stockholders' equity: Preferred stock, $0.001 par value, 5,000,000 authorized—None Common stock, $0.001 par value, 195,000,000 shares authorized; 56,613,024 and 57,056,892 shares issued and outstanding at December 30, 2012 and December 29, 2013, respectively Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Total capitalization SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following table sets forth our selected financial data as of the dates and for the periods indicated. The selected financial data for each of the years ended December 29, 2013, December 30, 2012 and December 25, 2011 and as of December 29, 2013 and December 30, 2012 have been derived from our audited consolidated financial statements incorporated herein by reference. The selected financial data for each of the years ended December 27, 2009 and December 26, 2010 and as of December 27, 2009, December 26, 2010 and December 25, 2011 have been derived from our audited consolidated financial statements not incorporated herein by reference. The selected financial data for the six months ended June 30, 2013 and June, 29, 2014 and as of June 29, 2014 have been derived from our unaudited consolidated financial statements incorporated herein by reference. The selected financial data as of June 30, 2013 have been derived from our unaudited consolidated financial statements not incorporated herein by reference. Our historical results are not necessarily indicative of our future results and historical results for any interim period are not necessarily indicative of our results for the entire year. The selected consolidated financial information presented below should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Item 8. Financial Statements and Supplementary Data" and the consolidated financial statements and the notes thereto contained in our annual report on Form 10-K, and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and unaudited consolidated financial statements and the notes thereto contained in our quarterly report on Form 10-Q for the three months ended June 29, 2014. Amounts in millions except per share amounts Consolidated Statements of Operations Data: Revenues Gross profit Operating income (loss) Provision (benefit) for income taxes Income (loss) from continuing operations Loss from discontinued operations Net income (loss) Income (loss) from continuing operations per common share Basic Diluted Loss from discontinued operations per common share Basic Diluted Net income (loss) per common share Basic Diluted Weighted average shares: Basic Diluted Consolidated Balance Sheet Data: Cash and cash equivalents Working capital(1) Total assets Short-term debt(2) Long-term debt(3) Long-term debt premium Total stockholders' equity Purpose and Effect of Exchange Offer; Registration Rights We sold the Unregistered Notes to SunTrust Robinson Humphrey, Inc., PNC Capital Markets LLC, B. Riley & Co., LLC, KeyBanc Capital Markets Inc., Noble Financial Capital Markets and Sidoti & Company, LLC, as the initial purchasers, pursuant to a purchase agreement dated May 9, 2014. The initial purchasers resold the Unregistered Notes in reliance on Rule 144A and Regulation S under the Securities Act. In connection with the sale of the Unregistered Notes, we entered into a registration rights agreement with the initial purchasers. Under the registration rights agreement, we agreed to: If you participate in the Exchange Offer, you will, with limited exceptions, receive Exchange Notes that are freely tradable and not subject to restrictions on transfer. You should read the information in this prospectus under the heading "The Exchange Offer—Resale of Exchange Notes" for more information relating to your ability to transfer Exchange Notes. The Exchange Offer is not being made to, nor will we accept tenders for exchange from, holders of Unregistered Notes in any jurisdiction in which the Exchange Offer or the acceptance of the Exchange Offer would not be in compliance with the securities laws or blue sky laws of such jurisdiction. If you are eligible to participate in this Exchange Offer and you do not tender your Unregistered Notes as described in this prospectus, you will not have any further registration rights. In that case, your Unregistered Notes may continue to be subject to restrictions on transfer under the Securities Act. Shelf Registration In the registration rights agreement, we agreed to file a shelf registration statement in certain circumstances, including if, with respect to any holder: If a shelf registration statement is required, we will use our commercially reasonable efforts to: The shelf registration statement will permit only certain holders to resell their Unregistered Notes from time to time. In particular, we may require, as a condition to including a holder's Unregistered Notes in the shelf registration statement, such holder to furnish to us information regarding itself and the proposed disposition by it of its notes as we may from time to time reasonably request in writing. We will, in the event that a shelf registration statement is filed, provide to each holder of the Unregistered Notes copies of the prospectus which is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the Unregistered Notes. A holder of Unregistered Notes that sells its notes pursuant to the shelf registration statement generally (1) will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, (2) will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and (3) will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including certain indemnification rights and obligations thereunder). Additional Interest If (A) we have not exchanged Exchange Notes for all Unregistered Notes validly tendered in accordance with the terms of the Exchange Offer on or prior to 365th day following the issue date, (B) if applicable, the shelf registration statement has not been declared effective on or prior to 365th day following the issue date or (C) if applicable, such shelf registration statement ceases to be effective at any time prior to the second anniversary of the Issue Date (other than after such time as all the Unregistered Notes have been disposed of thereunder), then additional interest ("Additional Interest") shall accrue on the principal amount of the Unregistered Notes at a rate of 0.25% per annum for the first 90 days commencing on (x) the 366th day following the issue date, in the case of (A) or (B) above, or (y) the day such shelf registration statement ceases to be effective, in the case of (C) above, such Additional Interest rate increasing by an additional 0.25% per annum at the beginning of each subsequent 90-day period;provided, however, that the amount of Additional Interest accruing will not exceed 1.0% per annum;provided further, however, that upon the exchange of Exchange Notes for all Unregistered Notes tendered (in the case of clause (A) above), or upon the effectiveness of the shelf registration statement (in the case of clause (B) or (C) above), Additional Interest on the Unregistered Notes as a result of such clause, as the case may be, shall cease to accrue. Any amounts of Additional Interest that have accrued pursuant to this paragraph will be payable in cash on the same original interest payment dates as the Unregistered Notes. Any amounts of Additional Interest that have accrued pursuant to the clause above will be payable in cash on the same original interest payment dates as the Unregistered Notes. We, and not the Trustee, will be responsible for making all calculations with respect to Additional Interest. The Exchange Notes will be accepted for clearance through DTC. This summary of certain provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the complete provisions of the registration rights agreement. A copy of the registration rights agreement is an exhibit to the registration statement that includes this prospectus. Terms of the Exchange Offer Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we are offering to exchange $1,000 principal amount of Exchange Notes for each $1,000 principal amount of Unregistered Notes. You may tender some or all of your Unregistered Notes only in minimum denominations of $2,000 and larger integral multiples of $1,000. As of the date of this prospectus, $625 million aggregate principal amount of the Unregistered Notes is outstanding. The terms of the Exchange Notes to be issued are substantially similar to the Unregistered Notes, except that the offering of the Exchange Notes will have been registered under the Securities Act and, therefore, the certificates for the Exchange Notes will not bear legends restricting their transfer. In addition, the Exchange Notes will not have registration rights and will not have rights to additional interest. The Exchange Notes will be issued under and be entitled to the benefits of the indenture pursuant to which the Unregistered Notes were issued. In connection with the issuance of the Unregistered Notes, we arranged for the Unregistered Notes to be issued and transferable in book-entry form through the facilities of DTC. The Exchange Notes will also be issuable and transferable in book-entry form through DTC. There will be no fixed record date for determining the eligible holders of the Unregistered Notes that are entitled to participate in the Exchange Offer. We will be deemed to have accepted for exchange validly tendered Unregistered Notes when and if we have given oral (promptly confirmed in writing) or written notice of acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of Unregistered Notes for the purpose of receiving Exchange Notes from us and delivering them to such holders. If any tendered Unregistered Notes are not accepted for exchange because of an invalid tender or the occurrence of certain other events described herein, certificates for any such unaccepted Unregistered Notes will be returned, without expenses, to the tendering holder thereof as promptly as practicable after the expiration of the Exchange Offer. Holders of Unregistered Notes who tender in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of Unregistered Notes for Exchange Notes pursuant to the Exchange Offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the Exchange Offer. It is important that you read the section "Fees and Expenses" below for more details regarding fees and expenses incurred in the Exchange Offer. Any Unregistered Notes which holders do not tender or which we do not accept in the Exchange Offer will remain outstanding and continue to accrue interest and may be subject to restrictions on transfer under the Securities Act. We will not have any obligation to register the offer or sale of such Unregistered Notes under the Securities Act. Holders wishing to transfer Unregistered Notes would have to rely on exemptions from the registration requirements of the Securities Act. Conditions of the Exchange Offer You must tender your Unregistered Notes in accordance with the requirements of this prospectus and the letter of transmittal in order to participate in the Exchange Offer. Notwithstanding any other provision of the Exchange Offer, or any extension of the Exchange Offer, we will not be required to accept for exchange any Unregistered Notes, and may amend or terminate the Exchange Offer if: Expiration Date; Extensions; Amendment; Termination The Exchange Offer will expire 5:00 p.m., New York City time, on , , unless we, in our sole discretion, extend it. In the case of any extension, we will notify the exchange agent orally (promptly confirmed in writing) or in writing of any extension. We will also notify the registered holders of Unregistered Notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration of the Exchange Offer. To the extent we are legally permitted to do so, we expressly reserve the right, in our sole discretion, to: We will give oral or written notice of any non-acceptance or amendment to the registered holders of the Unregistered Notes as promptly as practicable. If we consider an amendment to the Exchange Offer to be material, we will promptly inform the registered holders of Unregistered Notes of such amendment in a reasonable manner. If we determine, in our sole discretion, that any of the events or conditions described in "—Conditions of the Exchange Offer" has occurred, we may terminate the Exchange Offer. We may: If any such waiver constitutes a material change in the Exchange Offer, we will disclose the change by means of a supplement to this prospectus that will be distributed to each registered holder of Unregistered Notes, and we will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Unregistered Notes, if the Exchange Offer would otherwise expire during that period. Any determination by us concerning the events described above will be final and binding upon the parties. Without limiting the manner by which we may choose to make public announcements of any extension, delay in acceptance, amendment or termination of the Exchange Offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service. Interest on the Exchange Notes The Unregistered Notes accrue interest from and including May 14, 2014. The first interest payment on the Exchange Notes will be made on November 15, 2014. We will pay interest on the Exchange Notes semi-annually on May 15 and November 15 of each year. Holders of Unregistered Notes that are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest accrued from the date of the last interest payment date that was made in respect of the Unregistered Notes until the date of the issuance of the Exchange Notes. Consequently, holders of Exchange Notes will receive the same interest payments that they would have received had they not accepted the Exchange Offer. Resale of Exchange Notes Based upon existing interpretations of the staff of the SEC set forth in several no-action letters issued to third parties unrelated to us, we believe that the Exchange Notes issued pursuant to the Exchange Offer for the Unregistered Notes may be offered for resale, resold and otherwise transferred by you without complying with the registration and prospectus delivery provisions of the Securities Act, provided that: If you wish to participate in the Exchange Offer, you will be required to make these representations to us in the letter of transmittal. If our belief is inaccurate and you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration under the Securities Act, you may incur liability under the Securities Act. We do not assume or indemnify you against such liability. In addition, if you are a broker-dealer and you will receive Exchange Notes for your own account in exchange for Unregistered Notes that were acquired as a result of market-making activities or other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of the Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, you will not be deemed to admit that you are an "underwriter" within the meaning of the Securities Act. The prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealers in connection with resales of Exchange Notes received in exchange for Unregistered Notes. We have agreed to use commercially reasonable efforts to have the registration statement, of which this prospectus forms a part, remain effective for a period ending on the earlier of (i) 180 days from the date on which this registration statement is declared effective and (ii) the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities. Upon consummation of the Exchange Offer, the Exchange Notes will have different CUSIP and ISIN numbers from the Unregistered Notes. Procedures for Tendering To tender your Unregistered Notes in the exchange offer, you must comply with either of the following: In addition, either: Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between us and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal. The method of delivery of Unregistered Notes, letters of transmittal and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing Unregistered Notes to us. You may request that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you. If you are a beneficial owner whose Unregistered Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your Unregistered Notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the Unregistered Notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your Unregistered Notes, either: The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulating Authority, a commercial bank or trust company having an office or correspondent in the United States or another "eligible guarantor institution" within the meaning of Rule 17A(d)-15 under the Exchange Act unless the Unregistered Notes surrendered for exchange are tendered: If the letter of transmittal is signed by a person other than the registered holder of any Unregistered Notes listed on the Unregistered Notes, such Unregistered Notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the Unregistered Notes, and an eligible guarantor institution must guarantee the signature on the bond power. If the letter of transmittal, any certificates representing Unregistered Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should also indicate when signing and, unless waived by us, they should also submit evidence satisfactory to us of their authority to so act. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use DTC's Automated Tender Offer Program to tender Unregistered Notes. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the Unregistered Notes to the exchange agent in accordance with DTC's Automated Tender Offer Program procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that: DTC is referred to herein as a "book-entry transfer facility." Guaranteed Delivery Procedures If you wish to tender your Unregistered Notes but your Unregistered Notes are not immediately available or you cannot deliver your Unregistered Notes, the letter of transmittal or any other required documents to the exchange agent or comply with the procedures under DTC's Automatic Tender Offer Program in the case of Unregistered Notes, prior to the expiration date, you may still tender if: Upon request, the exchange agent will send to you a notice of guaranteed delivery if you wish to tender your Unregistered Notes according to the guaranteed delivery procedures. Determinations Under the Exchange Offer We will determine, in our sole discretion, all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered Unregistered Notes and withdrawal of tendered Unregistered Notes. Our determination will be final and binding. We reserve the absolute right to reject any Unregistered Notes not properly tendered or any Unregistered Notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect, irregularities or conditions of tender as to particular Unregistered Notes. Our interpretation of the terms and conditions of the Exchange Offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of Unregistered Notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of Unregistered Notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of Unregistered Notes will not be deemed made until such defects or irregularities have been cured or waived. Any Unregistered Notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, promptly following the expiration or termination of the Exchange Offer. When We Will Issue Exchange Notes We will issue the Exchange Notes when or promptly after the Exchange Offer expires. In all cases, we will issue Exchange Notes for Unregistered Notes that we have accepted for exchange under the Exchange Offer only after the exchange agent timely receives: Return of Unregistered Notes Not Accepted or Exchanged If we do not accept any tendered Unregistered Notes for exchange or if Unregistered Notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged Unregistered Notes will be returned without expense to their tendering holder. Such non-exchanged Unregistered Notes will be credited to an account maintained with DTC. These actions will occur promptly after the expiration or termination of the Exchange Offer. Your Representations to Us By agreeing to be bound by the letter of transmittal, you will represent to us that, among other things: If you are a beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the old notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either: The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date. Book-Entry Transfer We understand that the exchange agent will make a request promptly after the date of this document to establish an account with respect to the Unregistered Notes at DTC for the purpose of facilitating the Exchange Offer. Any financial institution that is a participant in DTC's system may make book-entry delivery of Unregistered Notes by causing DTC to transfer such Unregistered Notes into the exchange agent's DTC account in accordance with DTC's Automated Tender Offer Program procedures for such transfer. The exchange for tendered Unregistered Notes will only be made after a timely confirmation of a book-entry transfer of the Unregistered Notes into the exchange agent's account at DTC, and timely receipt by the exchange agent of an agent's message. The term "agent's message" means a message, transmitted by DTC and received by the exchange agent and forming part of the confirmation of a book-entry transfer, which states that DTC has received an express acknowledgment from a participant tendering Unregistered Notes and that such participant has received an appropriate letter of transmittal and agrees to be bound by the terms of the letter of transmittal, and we may enforce such agreement against the participant. Delivery of an agent's message will also constitute an acknowledgment from the tendering DTC participant that the representations contained in the appropriate letter of transmittal and described above are true and correct. Withdrawal of Tenders Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective, you must comply with the appropriate procedures of DTC's ATOP system. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn Unregistered Notes and otherwise comply with the procedures of DTC. We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal. Our determination shall be final and binding on all parties. We will deem any Unregistered Notes so withdrawn not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Unregistered Notes that have been tendered for exchange but are not exchanged for any reason will be credited to an account maintained with DTC for the Unregistered Notes. This crediting will take place promptly after the expiration or termination of the Exchange Offer. Consequences of Failure to Exchange If you do not tender your Unregistered Notes to be exchanged in this Exchange Offer, they will remain "restricted securities" within the meaning of Rule 144(a)(3) of the Securities Act. Accordingly, they: As a result of the restrictions on transfer of the Unregistered Notes, as well as the availability of the Exchange Notes, the Unregistered Notes are likely to be much less liquid than before the Exchange Offer. Exchange Agent Wilmington Trust, National Association has been appointed as the exchange agent for the exchange of the Unregistered Notes. Questions and requests for assistance relating to the exchange of the Unregistered Notes should be directed to the exchange agent addressed as follows: By Regular Mail, Overnight Mail or Courier: Wilmington Trust, National Association By Facsimile (for Eligible Institutions Only): Facsimile No: (302) 636-4139 For Information or Confirmation: DTC Desk (DTC2@WilmingtonTrust.com) Fees and Expenses We will bear the expenses of soliciting tenders pursuant to the Exchange Offer. The principal solicitation for tenders pursuant to the Exchange Offer is being made by mail. Additional solicitations may be made by our officers and regular employees and our affiliates in person or by telephone. We will not make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offer. We, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its related reasonable out-of-pocket expenses and accounting and legal fees. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the Unregistered Notes and in handling or forwarding tenders for exchange. We will pay all transfer taxes, if any, applicable to the exchange of Unregistered Notes pursuant to the Exchange Offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if: If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. Accounting Treatment We will record the Exchange Notes in our accounting records at the same carrying value as the Unregistered Notes, which is the aggregate principal amount as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the Exchange Offer. The Exchange Offer costs will be amortized as part of deferred financing costs over the life of the Exchange Notes. You can find the definitions of certain terms used in this description under the subheading "—Definitions." In this description, "Kratos" and "the Company" refers only to Kratos Defense & Security Solutions, Inc. and not to any of its subsidiaries. Kratos will issue the Exchange Notes under the indenture, dated as of May 14, 2014, among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee (in such capacity, the "Trustee") and collateral agent (in such capacity, the "Collateral Agent") (as amended or supplemented to the date hereof, the "indenture" or "Indenture") pursuant to which the Company previously issued the Unregistered Notes on May 14, 2014. The Exchange Notes will be subject to and governed by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The terms of the Exchange Notes will include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act. Unless the context requires otherwise, all references to the "Notes" include the Unregistered Notes and the Exchange Notes. The Unregistered Notes, the Exchange Notes and any Additional Notes (as defined below) will be treated as a single class for all purposes of the indenture. The failure to consummate the exchange offer or to register the Unregistered Notes for resale may result in the Company paying Additional Interest (as defined below). The Trustee acts as paying agent and registrar for the Exchange Notes. You may present Unregistered Notes for registration of transfer and exchange at the offices of the registrar, which is the Trustee's corporate office. No service charge will be made for any registration of transfer or exchange or redemption of the Unregistered Notes, but we may require payment in certain circumstances of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. The Company may change any paying agent and registrar without notice to Holders. The Company will pay principal (and premium, if any) on the Exchange Notes at the Trustee's corporate office. At the Company's option, it may pay interest and Additional Interest, if any, through the paying agent at the Trustee's corporate trust office or by check mailed to the registered address of each Holder The summary herein of certain provisions of the indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the indenture, including definitions therein of certain terms. Certain terms used in this summary are defined under the subheading "—Definitions." Brief Description of the Exchange Notes and the Guarantees The Exchange Notes will: The Exchange Notes will initially be guaranteed by all of our existing and future direct and indirect Domestic Restricted Subsidiaries (other than Discontinued Subsidiaries). Each Guarantee (as defined under "—Guarantees" below) of a Guarantor (as defined under "—Definitions") below will be: Principal, Maturity and Interest The Company will issue the Exchange Notes in fully registered form in minimum denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. The Exchange Notes are unlimited in aggregate principal amount, of which $625.0 million in aggregate principal amount will be issued in the offering contemplated hereby. The Company may issue additional 7.000% Senior Secured Notes due 2019 (referred to in this section as "Additional Notes") from time to time, subject to the limitations set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and "—Limitation on Liens." The Exchange Notes and any Additional Notes will be substantially identical other than the issuance dates and the dates from which interest will accrue. Unless the context otherwise requires, for all purposes of the Indenture and this "Description of the Exchange Notes," references to the Exchange Notes include any Additional Notes actually issued. Any Unregistered Notes that remain outstanding after the completion of the Exchange Offer, together with the Exchange Notes issued in connection with the Exchange Offer, will be treated as a single class of securities under the Indenture. Any Additional Notes issued after the offering contemplated hereby will be secured, equally and ratably with the Notes. As a result, the issuance of Additional Notes will have the effect of diluting the security interest of the Collateral for the then Unregistered Notes. Any Additional Notes may not be fungible with the Notes for federal income tax purposes, they may have a different CUSIP number or numbers and be represented by a different global Note or Notes. The Notes and any Additional Notes would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Exchange Notes will mature on May 15, 2019. Interest on the Exchange Notes will accrue at the rate of 7.000% per annum and will be due and payable semiannually in cash on each of May 15 and November 15, commencing on November 15, 2014, to the Persons who are registered Holders at the close of business on each of May 1 and November 1 immediately preceding the applicable interest payment date. Interest on the Exchange Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including May 14, 2014. The Company will pay interest on overdue principal of and premium, if any, on the Exchange Notes at 1% per annum in excess of the above rate and will pay interest on overdue installments of interest at such increased rate to the extent lawful. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Collateral Generally The Exchange Notes and the Guarantees will be secured by (i) a Lien on the Notes Priority Collateral that is contractually senior to a Lien on the Notes Priority Collateral that secures the Credit Agreement and (ii) a Lien on the Credit Facility Priority Collateral that is contractually subordinated to a Lien on the Credit Facility Priority Collateral that secures the Credit Agreement, in each case subject to Permitted Liens. "Notes Priority Collateral" means all existing and future property and assets owned by the Company and the Guarantors (other than Excluded Assets (as defined below) and the Credit Facility Priority Collateral). The Notes Priority Collateral includes, but is not be limited to, the Company's and the Guarantors' real property, equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings and fixtures, parts and accessories of the equipment, and all replacements and substitutions therefor or accessions thereto, trademarks, licenses, trade names, patents, trade secrets, domain names and copyrights, and general intangibles necessary for the operation of the equipment, machinery and motor vehicles, including warranties and operational manuals and similar items, Capital Stock of each Subsidiary (other than any Discontinued Subsidiary) owned by the Company or any such Guarantor, supporting obligations securing or guaranteeing licenses of intellectual property granted to the Company and its Subsidiaries, and all identifiable proceeds of each of the foregoing (including insurance proceeds, eminent domain proceeds and condemnation proceeds for loss of the foregoing). "Excluded Assets" include: (1) vehicles and other items covered by certificates of title or ownership to the extent that a security interest cannot be perfected solely by filing a UCC-1 financing statement (or similar instrument); (2) leasehold interests in real property with respect to which the Company or any Guarantor is a tenant or subtenant; (3) (A) any asset or property right of any nature if the grant of a security interest therein to the Collateral Agent shall constitute or result in the abandonment, invalidation or unenforceability of such asset or property right or the loss of use of such asset or property right and (B) any lease, license, contract or agreement if the grant of security interest therein to the Collateral Agent shall constitute or result in a breach, termination or default under any lease, license, contract or agreement, other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity, to which the Company or Guarantor is party; (4) any asset or property right of any nature to the extent that any applicable law or regulation prohibits the creation of a security interest thereon (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity); (5) any applications for trademarks or service marks filed in the United States Patent and Trademark Office (the "PTO") pursuant to 15 U.S.C. § 1051 Section 1(b) unless and until evidence of use of the mark in interstate commerce is submitted to the PTO pursuant to 15 U.S.C. § 1051 Section 1(c) or Section 1(d); (6) the voting Capital Stock of any Foreign Subsidiary in excess of 65% of all of the outstanding voting Capital Stock of such Foreign Subsidiary; (7) property and assets owned by the Company or any Guarantor that are the subject of Permitted Liens described in clause (6) or (7) of the definition thereof for so long as such Permitted Liens are in effect and the Indebtedness secured thereby otherwise prohibits any other Liens thereon; (8) any Capital Stock or other securities of the Company's Subsidiaries to the extent that the pledge of such securities results in the Company being required to file separate financial statements of such Subsidiary with the SEC, but only to the extent necessary for the Company not to be subject to such requirement and only for so long as such requirement is in existence;provided that neither the Company nor any of its Subsidiaries shall take any action in the form of a reorganization, merger or other restructuring a principal purpose of which is to provide for the release of the Lien on any securities pursuant to this clause; (9) any Capital Stock of any Discontinued Subsidiary; (10) (i) deposit and securities accounts the balance of which consists exclusively of (a) withheld income taxes and federal, state or local employment taxes in such amounts as are required to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of the Company or any of the Guarantors, and (b) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of the Company or any Guarantor, and (ii) all segregated deposit accounts constituting (and the balance of which consists solely of funds set aside in connection with) tax accounts and trust accounts; and (11) real property owned in fee by the Company and Guarantors with a fair market value (as reasonably determined by the Company) of less than $3.0 million; provided that notwithstanding anything to the contrary above, no asset described in clause (1) through (11) above (other than clause (8)) shall constitute an "Excluded Asset" if such asset is subject to a Permitted Lien described in clause (18) or (22) of the definition thereof. The "Credit Facility Priority Collateral" consists of all of the Company's and each Guarantors' existing and future (i) accounts, (ii) receivables, (iii) inventory, (iv) deposit accounts and all cash, cash equivalents, checks and other instruments on deposit therein or credited thereto, (v) securities accounts and all investment property, cash and cash equivalents, (vi) lock boxes and all cash, checks and other instruments on deposit therein or credited thereto, (vii) general intangibles, (viii) contract rights, instruments, documents, chattel paper (whether tangible or electronic), drafts and acceptances, and all other forms of obligations owing to the Company or such Guarantor, (ix) business interruption insurance policies and payments thereunder, and (x) all supporting obligations (other than with respect to supporting obligations securing or guaranteeing licenses of intellectual property granted to the Company and its Subsidiaries); together with all of the Company's or such Guarantor's ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by the Company or any Guarantor or in which it has an interest), computer programs, tapes, disks and documents and all proceeds and products of the foregoing in whatever form, including: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, and tort claim proceeds. Notwithstanding anything to the contrary in the immediately preceding sentence, (i) trademarks, licenses, trade names, patents, trade secrets, domain names, and copyrights of the Company or any Guarantor, and general intangibles necessary for the operation of the equipment, machinery and motor vehicles, including warranties and operational manuals and similar items, (ii) any Capital Stock of any Subsidiary of the Company or any Guarantor (other than a Discontinued Subsidiary), (iii) any real property, equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings and fixtures, parts and accessories of the equipment, and all replacements and substitutions therefor or accessions thereto owned by the Company or any Guarantor (provided that, for the avoidance of doubt, this clause (iii) does not extend to the foregoing items that constitute inventory of the Company or any Guarantor), (iv) supporting obligations securing or guaranteeing licenses of intellectual property granted to the Company and its Subsidiaries, and (v) the identifiable proceeds of each of the foregoing (including insurance proceeds, eminent domain proceeds and condemnation proceeds for loss of the foregoing) shall not constitute Credit Facility Priority Collateral. No appraisals of any Collateral have been prepared in connection with the offering contemplated hereby. The value of the Collateral at any time will depend on market and other economic conditions, including the availability of suitable buyers for the Collateral. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, no assurance can be given that the proceeds from any sale or liquidation of the Collateral will be sufficient to pay any of the Company's Obligations under the Exchange Notes or any of the Guarantees thereof, in full or at all. The right of the Collateral Agent to repossess and dispose or otherwise exercise remedies in respect of the Collateral upon the occurrence of an Event of Default is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or against the Company or any Guarantor prior to the Collateral Agent having repossessed and disposed of the Collateral or otherwise completed the exercise of its remedies with respect to the Collateral. Under the Bankruptcy Code, a secured creditor such as the Collateral Agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without prior bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments;provided that, under the Bankruptcy Code, the secured creditor is given "adequate protection" of its interest in the collateral. The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral securing the Obligations owed to it and may include cash payments or the granting of additional or replacement security, if and at such times as the bankruptcy court in its discretion determines, for any diminution in the value of such collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case. In view of the lack of a precise definition of the term "adequate protection" and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Exchange Notes or the Guarantees could be delayed following commencement of a bankruptcy case, whether or when the Collateral Agent could repossess or dispose of the Collateral or whether or to what extent Holders would be compensated for any delay in payment or loss of value of the Collateral following the commencement of the bankruptcy case through the requirement of "adequate protection." Moreover, the Collateral Agent may need to evaluate the impact of the potential liabilities before determining to foreclose on Collateral consisting of real property because a secured creditor that holds a lien on real property may be held liable under environmental laws for the costs of remediating or preventing release or threatened releases of hazardous substances at such real property. Consequently, the Collateral Agent may decline to foreclose on such Collateral or exercise remedies available if it does not receive indemnification to its satisfaction from the Holders. The Collateral Agent's ability to foreclose on the Collateral may be subject to lack of perfection, the consent of third parties, prior liens, Permitted Liens and practical problems associated with the realization of the Collateral Agent's Lien on the Collateral. Certain liens and security interests in the Collateral may not be in place on the Issue Date or may not be perfected on the Issue Date. For example, some of the instruments and other documents, such as Mortgages and account control agreements relating to certain assets of the Company and the Guarantors, required to perfect a security interest may not be delivered and/or, if applicable, recorded on or prior to such date. To the extent any such lien or security interest cannot be perfected by such date, the Company and the applicable Guarantors will use their commercially reasonable efforts to perform all acts and things that may be required, including obtaining any required consents from third parties, to have all liens and security interests in the Collateral duly created and enforceable and perfected, to the extent required by the Collateral Agreements, within 90 days following the Issue Date or such later time as consented to by the administrative agent for the ABL Credit Facility. See "Risk Factors"—The rights of holders of Exchange Notes to the collateral securing the Exchange Notes may be adversely affected by the failure to perfect security interests in the collateral and other issues generally associated with the realization of security interests in collateral." Intercreditor Agreement The Collateral Agent, on behalf of itself, the Trustee, the Holders and the holders of any future Permitted Additional Pari Passu Obligations, and the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, have entered into the Intercreditor Agreement. By their acceptance of the Exchange Notes, the Holders will be deemed to have authorized the Collateral Agent to enter into the Intercreditor Agreement, which, among other things, provides for the following: Lien Priorities. Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens granted to the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations on the Credit Facility Priority Collateral or of any Liens granted to the Administrative Agent or the Credit Facility Claim Holders on the Credit Facility Priority Collateral and notwithstanding any provision of the Uniform Commercial Code or any other applicable law or the Permitted Additional Pari Passu Documents or the Credit Facility Documents or any other circumstance whatsoever, so long as the Discharge of the Credit Facility Claims has not occurred: (a) any Lien on the Credit Facility Priority Collateral now or hereafter held by or on behalf of the Administrative Agent or any Credit Facility Claim Holders or any agent or trustee therefor securing any Credit Facility Claims, will be senior in all respects and prior to any Lien thereon that secures any of the Pari Passu Obligations; and (b) any Lien on such Credit Facility Priority Collateral now or hereafter held by or on behalf of the Collateral Agent, the Trustee, any Holders or holders of any Permitted Additional Pari Passu Obligations or any agent or trustee therefor securing any Pari Passu Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, will be junior and subordinate in all respects to all Liens thereon that secures any Credit Facility Claims. Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens granted to the Administrative Agent or the Credit Facility Claim Holders on the Notes Priority Collateral or of any Liens granted to the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations on the Notes Priority Collateral and notwithstanding any provision of the Uniform Commercial Code or any other applicable law or the Credit Facility Documents or the Indenture Documents or any other circumstance whatsoever, so long as the Discharge of Pari Passu Obligations has not occurred: (a) any Lien on the Notes Priority Collateral now or hereafter held by or on behalf of the Collateral Agent, the Trustee, any Holders or holders of any Permitted Additional Pari Passu Obligations or any agent or trustee therefor securing any Pari Passu Obligations, will be senior in all respects and prior to any Lien thereon that secures any of the Credit Facility Claims (except as provided in the definition of Pari Passu Obligations); and (b) any Lien on such Notes Priority Collateral now or hereafter held by or on behalf of the Administrative Agent or any Credit Facility Claim Holders or any agent or trustee therefor securing any Credit Facility Claims, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, will be junior and subordinate in all respects to all Liens thereon that secure any Pari Passu Obligations. Prohibition on Contesting Liens. The Collateral Agent, on behalf of itself, the Trustee and each Holder and any holder of any future Permitted Additional Pari Passu Obligations, and the Administrative Agent, on behalf of itself and each Credit Facility Claim Holder, agrees that it will not and will waive any right to contest or support any other Person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the priority, validity, perfection or enforceability of a Lien held by or on behalf of any of the Credit Facility Claim Holders in the Common Collateral or by or on behalf of any of the Holders or holders of future Permitted Additional Pari Passu Obligations in the Common Collateral, as the case may be;provided that nothing in the Intercreditor Agreement shall be construed to prevent or impair the rights of: (a) the Administrative Agent or any Credit Facility Claim Holder to enforce the Intercreditor Agreement, including the priority of the Liens securing the Credit Facility Claims; or (b) the Collateral Agent, the Trustee, any Holder and holder of any future Permitted Additional Pari Passu Obligations to enforce the Intercreditor Agreement, including the priority of the Liens securing the Pari Passu Obligations. New Liens. The Administrative Agent, on behalf of itself and each Credit Facility Claim Holder, agrees that, so long as the Discharge of Pari Passu Obligations has not occurred, it shall not obtain a Lien on any asset or property of the Company or any Guarantor unless the Company or the Administrative Agent shall have provided the Collateral Agent with prior written notice thereof. The Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, agrees that, so long as the Discharge of Credit Facility Claims has not occurred, it shall not obtain a Lien on any asset or property of the Company or any Guarantor unless the Company or the Collateral Agent shall have provided the Administrative Agent with prior written notice thereof. To the extent the foregoing is not complied with for any reason, without limiting any other right or remedy available to the Administrative Agent or the Collateral Agent, as applicable, the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, and the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, agrees that any amounts received by or distributed to any of the Credit Facility Claim Holders, the Holders or holders of any Permitted Additional Pari Passu Obligations pursuant to or as a result of any Lien granted in contravention of the foregoing shall be subject to "—Application of Proceeds." Exercise of Remedies in Respect of Credit Facility Priority Collateral. So long as the Discharge of Credit Facility Claims has not occurred, whether or not any insolvency or liquidation proceeding has been commenced by or against the Company or any Guarantor, (a) the Collateral Agent, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations will not exercise or seek to exercise any rights or remedies (including set-off) with respect to any Credit Facility Priority Collateral that secures any Pari Passu Obligations, institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), contest, protest or object to any foreclosure proceeding or action brought by the Administrative Agent or any Credit Facility Claim Holder, the exercise of any right under any Indenture Document or any lockbox agreement, control agreement, blocked account agreement, landlord waiver or bailee's letter or similar agreement or arrangement to which the Collateral Agent, the Trustee or any Holder is a party relating to any Credit Facility Priority Collateral, or any other exercise by any such Person, of any rights and remedies relating to the Credit Facility Priority Collateral under the Credit Facility Documents or otherwise, or object to the forbearance by the Credit Facility Claim Holders from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Credit Facility Priority Collateral, and (b) the Administrative Agent and the Credit Facility Claim Holders will have the exclusive right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and make determinations regarding the release, disposition, or restrictions with respect to the Credit Facility Priority Collateral without any consultation with or the consent of the Collateral Agent, the Trustee or any Holder;provided,however, that (i) in any insolvency or liquidation proceeding commenced by or against the Company or any Guarantor, the Collateral Agent may file a proof of claim or statement of interest with respect to the Pari Passu Obligations, subject to the limitations contained in the Intercreditor Agreement, (ii) the Collateral Agent may take any action (not adverse to the prior Liens on the Credit Facility Priority Collateral that secures the Pari Passu Obligations, or the rights of the Administrative Agent or the Credit Facility Claim Holders to exercise remedies in respect thereof) in order to preserve or protect its Lien on such Credit Facility Priority Collateral so long as such action is consistent with the terms and limitations on the Collateral Agent, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations imposed by the Intercreditor Agreement, (iii) the Collateral Agent may file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Company or any Guarantor arising under any insolvency or liquidations proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of the Intercreditor Agreement or applicable law, (iv) the Collateral Agent may file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding, or other pleadings made by any person objecting to or otherwise seeking the disallowance or subordination of its claims or the claims of the Holders, or the avoidance of its Liens, (v) the Collateral Agent may vote on any plan of reorganization or similar dispositive restructuring plan in accordance with the terms of the Intercreditor Agreement and (vi) the Collateral Agent may take any action to foreclose upon any such Credit Facility Priority Collateral so long as (1) 180 days have elapsed from the date that the Collateral Agent has given written notice to the Administrative Agent of the occurrence of an Event of Default under and as defined in the Indenture Documents or any Permitted Additional Pari Passu Documents, (2) the Administrative Agent is not diligently pursuing in good faith the exercise of its enforcement rights or remedies against such Credit Facility Priority Collateral at the end of such 180-day period, and (3) the proceeds received by the Collateral Agent, the Trustee or any Holder in connection with such foreclosure action by the Collateral Agent is applied pursuant to "—Application of Proceeds";provided further that, to the extent the Administrative Agent or the Credit Facility Claim Holders are stayed or otherwise prohibited by law from exercising such rights or remedies in respect of the relevant Credit Facility Priority Collateral during such 180-day period, then the foregoing 180-day period will be automatically extended by the number of days of such stay or prohibition. The Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, agrees that it will not knowingly take or receive, directly or indirectly, in cash or other property or by setoff, counterclaim or in any other manner (whether pursuant to any enforcement, collection, execution, levy or foreclosure proceeding or otherwise), any Credit Facility Priority Collateral that secure any Pari Passu Obligations or any proceeds of such Credit Facility Priority Collateral, in each case (i) in connection with the exercise of any right or remedy (including set-off) with respect to any such Credit Facility Priority Collateral (or in respect of any such Credit Facility Priority Collateral in the event of the occurrence of an insolvency or liquidation proceeding with respect to a Guarantor), or (ii) in the event that the Company or any other Guarantor is liquidating Credit Facility Priority Collateral, at the request of the Administrative Agent, not in the ordinary course of business and the Collateral Agent or the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations receive the proceeds thereof (other than proceeds received from the Company as payment of regularly scheduled interest on the Exchange Notes); unless and until the Discharge of Credit Facility Claims has occurred. Without limiting the generality of the foregoing, unless and until the Discharge of Credit Facility Claims has occurred, except as expressly provided in the proviso to the first sentence of the preceding paragraph, the sole right of the Collateral Agent, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations with respect to such Credit Facility Priority Collateral is to hold a Lien on such Credit Facility Priority Collateral pursuant to the Indenture Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Credit Facility Claims has occurred. Exercise of Remedies in Respect of Notes Priority Collateral. So long as the Discharge of Pari Passu Obligations has not occurred, whether or not any insolvency or liquidation proceeding has been commenced by or against the Company or any Guarantor, (a) the Administrative Agent and the Credit Facility Claim Holders will not exercise or seek to exercise any rights or remedies (including set-off) with respect to any Notes Priority Collateral that secures any Credit Facility Claims, institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), contest, protest or object to any foreclosure proceeding or action brought by the Collateral Agent, the Trustee or any Holder, the exercise of any right under any Credit Facility Document or any lockbox agreement, control agreement, blocked account agreement, landlord waiver or bailee's letter or similar agreement or arrangement to which the Administrative Agent or any Credit Facility Claim Holder is a party relating to any Notes Priority Collateral, or any other exercise by any such Person, of any rights and remedies relating to the Notes Priority Collateral under the Indenture Documents or otherwise, or object to the forbearance by the Holders or holders of any Permitted Additional Pari Passu Obligations from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Notes Priority Collateral, and (b) subject to certain limitations contained in the Intercreditor Agreement, the Collateral Agent, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations will have the exclusive right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and make determinations regarding the release, disposition, or restrictions with respect to the Notes Priority Collateral without any consultation with or the consent of the Administrative Agent or any Credit Facility Claim Holder;provided,however, that (i) in any insolvency or liquidation proceeding commenced by or against the Company or any Guarantor, the Administrative Agent may file a proof of claim or statement of interest with respect to the Credit Facility Claims, subject to certain limitations contained in the Intercreditor Agreement, (ii) the Administrative Agent may take any action (not adverse to the prior Liens on the Notes Priority Collateral that secures the Credit Facility Claims, or the rights of the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations to exercise remedies in respect thereof) in order to preserve or protect its Lien on such Notes Priority Collateral so long as such action is consistent with the terms and limitations on the Administrative Agent and the Credit Facility Claim Holders imposed by the Intercreditor Agreement, (iii) the Collateral Agent may file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Company or any Guarantor arising under any insolvency or liquidations proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of the Intercreditor Agreement or applicable law, (iv) the Collateral Agent may file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding, or other pleadings made by any person objecting to or otherwise seeking the disallowance or subordination of its claims or the claims of the Holders, or the avoidance of its Liens, (v) the Collateral Agent may vote on any plan of reorganization or similar dispositive restructuring plan in accordance with the terms of the Intercreditor Agreement and (vi) the Administrative Agent may take any action to foreclose upon any such Notes Priority Collateral so long as (1) 270 days have elapsed from the date that the Administrative Agent has given written notice to the Collateral Agent of the occurrence of an Event of Default under and as defined in the Credit Facility Documents (and so long as at the time such notice is given an Event of Default under and as defined in the Indenture Documents has occurred and be continuing), (2) the Collateral Agent is not diligently pursuing in good faith the exercise of its enforcement rights or remedies against such Notes Priority Collateral at the end of such 270-day period, and (3) the proceeds received by the Administrative Agent or any Credit Facility Claim Holder in connection with such foreclosure action by the Administrative Agent is applied pursuant to "—Application of Proceeds";provided further that, to the extent the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations are stayed or otherwise prohibited by law from exercising such rights or remedies in respect of the relevant Notes Priority Collateral during such 270-day period, then the foregoing 270-day period will be automatically extended by the number of days of such stay or prohibition. Notwithstanding anything herein to the contrary, in the event that proceeds of Common Collateral are received from (or are otherwise attributable to the value of) a sale or other disposition of Common Collateral that involves a combination of Credit Facility Priority Collateral and Notes Priority Collateral, the portion of such proceeds that shall be allocated as proceeds of Credit Facility Priority Collateral for purposes of the Intercreditor Agreement shall be an amount equal to the book value of such Credit Facility Priority Collateral, without regard to any adjustments or write-offs (except in the case of accounts which amount shall be equal to the face amount of such accounts). In addition, notwithstanding anything herein to the contrary, to the extent proceeds of Collateral are proceeds received from (or are otherwise attributable to the value of) the sale or disposition of all or substantially all of the Capital Stock of any Subsidiary owned by the Company or another Guarantor or all or substantially all of the assets of any such Subsidiary, such proceeds shall constitute (a) first, in an amount equal to the face amount of the accounts and the book value of all other Credit Facility Priority Collateral, without regard to any adjustments or write-offs, owned by such Subsidiary at the time of such sale or disposition, Credit Facility Priority Collateral and (b) second, to the extent in excess of the amounts described in the preceding clause (a), Notes Priority Collateral. Collateral Access and Other Rights in favor of the Administrative Agent. The Administrative Agent and its officers, employees and agents shall have, at no cost, reasonable and non-exclusive access to and use of any real property, equipment and fixtures of the Company or any Guarantor, for a period not exceeding 180 days;provided that, to the extent the Administrative Agent is stayed or otherwise prohibited by law from exercising such rights or remedies in respect of the relevant Credit Facility Priority Collateral during such 180-day period, then the foregoing 180-day period shall be automatically extended by the number of days of such stay or prohibition (the "Processing and Sale Period"), as necessary or reasonably appropriate to remove or sell, in any lawful manner, any Credit Facility Priority Collateral, subject to the following conditions and limitations: (i) The Processing and Sale Period will commence on the date that the Collateral Agent shall have given the Administrative Agent notice of the occurrence of an Event of Default and the Collateral Agent's intention to commence its exercise of remedies subject to the terms of the Intercreditor Agreement and will terminate on the earlier to occur of (A) the day which is 180 days (as such period may be extended) thereafter, and (B) the Discharge of Credit Facility Claims. (ii) Each of the Collateral Agent and its successors and assigns, including any foreclosure purchaser will be entitled, as a condition of permitting such access and use, to receive written confirmation from the Administrative Agent that (A) the access or use requested by the Administrative Agent is not prohibited by law; and (B) the Collateral Agent, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations are adequately insured at no cost to them for damage to property and liability to persons, including property and liability insurance, that may occur incidental to such access or use. The Collateral Agent and any such successors and assigns, including any such foreclosure purchaser will: (i) provide reasonable cooperation to the Administrative Agent and its officers, employees and agents, in connection with the use, removal and sale of any Credit Facility Priority Collateral by the Administrative Agent and its officers, employees and agents, as provided above; and (ii) be entitled to receive, from the Administrative Agent, fair compensation and reimbursement for their reasonable out-of-pocket costs and expenses incurred in connection with such cooperation. The Collateral Agent and any such successors and assigns, including any such foreclosure purchaser (or its transferee or successor) will not otherwise be contractually required to remove, insure, protect, store, safeguard, sell or deliver any Credit Facility Priority Collateral or to provide any support, assistance or cooperation to the Administrative Agent in respect thereof. Notwithstanding any priority of a lien granted to the Collateral Agent, the Company and each Guarantor grants to the Administrative Agent a non-exclusive royalty-free license to use any patent, trademark, copyrights, any licenses relating thereto or proprietary information or books and records of the Company or such Guarantor, in connection with the enforcement of any consensual Lien held by the Administrative Agent upon any inventory of the Company or such Guarantor or the collection of accounts or performance of contracts of the Company or such Guarantor, as the case may be, and to the extent the use of such patent, trademark, copyrights, any licenses relating thereto or proprietary information or books and records is necessary or appropriate, in the commercially reasonable opinion of the Administrative Agent, to manufacture, produce, complete, remove or sell any such inventory in any lawful manner, or to collect accounts or perform contracts of the Company or such Guarantor. The Collateral Agent's Lien described above shall be subject to such licenses and this provision shall be binding on its successors and assigns, including a purchaser of the patent, trademark, copyrights, any licenses relating thereto or proprietary information or books and records subject to such license at a foreclosure sale conducted in foreclosure of any Lien held by the Collateral Agent. Application of Proceeds. So long as the Discharge of Credit Facility Claims has not occurred, the Credit Facility Priority Collateral or proceeds thereof (or amounts in respect thereof) received in connection with the sale or other disposition of, or collection on, such Credit Facility Priority Collateral upon the exercise of remedies (or in respect of any Credit Facility Priority Collateral in the event of the occurrence of an insolvency or liquidation proceeding with respect to the Company or any Guarantor), shall be applied in the following order:first, to the payment of (a) the costs and expenses incurred by the Administrative Agent in connection with the Credit Agreement or the costs and expenses otherwise payable under the Credit Agreement, and (b) the costs and expenses specifically incurred by the Collateral Agent in connection with such sale or other disposition or collection relating to such Credit Facility Priority Collateral by the Collateral Agent on the Credit Facility Priority Collateral that is permitted pursuant to "Exercise of Remedies in Respect of Credit Facility Priority Collateral," until all such costs and expenses as set forth in clauses (a) and (b) hereof shall have been paid in full in cash;provided that, notwithstanding anything in this clause (b) to the contrary, in no event shall proceeds of Credit Facility Priority Collateral collected prior to the commencement of such sale, disposition or collection by the Collateral Agent, be used to pay (i) costs and expenses of the Collateral Agent pursuant to this clause, or (ii) costs and expenses incurred prior to such date of commencement;second, by the Administrative Agent to the Credit Facility Claims in such order as specified in the relevant Credit Facility Documents (or, if an order is not specified in the Credit Facility Documents, in such order determined by the Administrative Agent in its sole discretion) until the Discharge of Credit Facility Claims has occurred;third, by the Collateral Agent to the Pari Passu Obligations in such order as specified in the Indenture until the Discharge of Pari Passu Obligations has occurred;fourth, by the Administrative Agent and the Collateral Agent to the Excess Credit Facility Claims and the Excess Pari Passu Obligations, respectively, on apro rata basis until all such Obligations have been paid in full in cash; andfifth, to the Company or applicable Guarantor, or its successors or assigns, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. So long as the Discharge of Pari Passu Obligations has not occurred, the Notes Priority Collateral or proceeds thereof (or amounts in respect thereof) received in connection with the sale or other disposition of, or collection on, such Notes Priority Collateral upon the exercise of remedies (or in respect of any Notes Priority Collateral in the event of the occurrence of an insolvency or liquidation proceeding with respect to the Company or any Guarantor), shall be applied:first, to the payment of (a) the costs and expenses incurred by the Collateral Agent and the Trustee in connection with the Indenture Documents or the costs and expenses otherwise payable under the Indenture Documents, and (b) the costs and expenses specifically incurred by the Administrative Agent in connection with such sale or other disposition or collection relating to such Notes Priority Collateral by the Administrative Agent on the Notes Priority Collateral that is permitted pursuant to "Exercise of Remedies in Respect of Notes Priority Collateral," until all such costs and expenses as set forth in clauses (a) and (b) hereof shall have been paid in full in cash;provided that, notwithstanding anything in this clause (b) to the contrary, in no event shall proceeds of Notes Priority Collateral collected prior to the commencement of such sale, disposition or collection by the Administrative Agent, be used to pay (i) costs and expenses of the Administrative Agent pursuant to this clause, or (ii) costs and expenses incurred prior to such date of commencement; second, by the Collateral Agent to the Pari Passu Obligations in such order as specified in the Indenture until the Discharge of Pari Passu Obligations has occurred;third, by the Administrative Agent to the Credit Facility Claims in such order as specified in the Credit Facility Documents (or, if an order is not specified in the Credit Facility Documents, in such order determined by the Administrative Agent in its sole discretion) until the Discharge of Credit Facility Claims has occurred;fourth, by the Administrative Agent and the Collateral Agent to the Excess Credit Facility Claims and the Excess Pari Passu Obligations, respectively, on apro rata basis until all such Obligations have been paid in full in cash; andfifth, to the Company or applicable Guarantor, or its successors or assigns, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds. Turnover. So long as the Discharge of Credit Facility Claims has not occurred, any Credit Facility Priority Collateral or proceeds thereof (or amounts in respect thereof) received by the Collateral Agent, the Trustee or any Holder in connection with the exercise of any right or remedy (including set-off) relating to the Credit Facility Priority Collateral in contravention of the Intercreditor Agreement shall be segregated and held in trust and forthwith paid over to the Administrative Agent for the benefit of itself and the Credit Facility Claim Holders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. So long as the Discharge of Pari Passu Obligations has not occurred, any Notes Priority Collateral or proceeds thereof (or amounts in respect thereof) received by the Administrative Agent or any Credit Facility Claim Holder in connection with the exercise of any right or remedy (including set-off) relating to the Notes Priority Collateral in contravention of the Intercreditor Agreement shall be segregated and held in trust and forthwith paid over to the Collateral Agent for the benefit of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. Release of Liens. If in connection with (a) the exercise of the Administrative Agent's remedies in respect of the Credit Facility Priority Collateral or (b) any sale, lease, exchange, transfer or other disposition of any Credit Facility Priority Collateral that, with respect to this clause (b), is both permitted or not prohibited under (i) the terms of the Credit Facility Documents (whether or not an "event of default" thereunder, and as defined therein, has occurred and is continuing) and (ii) the terms of the Indenture, the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, releases (or indicates that it will release) any of its Liens on any part of the Credit Facility Priority Collateral, the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, will agree to promptly execute and deliver to the Administrative Agent or the Company (at the Company's expense) such termination statements, releases and other documents as the Administrative Agent or the Company may reasonably request to effect such release. If in connection with (a) the exercise of the Collateral Agent's remedies in respect of the Notes Priority Collateral or (b) any sale, lease, exchange, transfer or other disposition of any Notes Priority Collateral that, with respect to this clause (b), is both permitted or not prohibited under (i) the terms of the Indenture Documents (whether or not an Event of Default has occurred and is continuing) and (ii) under the terms of the Credit Agreement, the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, releases (or indicates that it will release) any of its Liens on any part of the Notes Priority Collateral, the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, will agree to promptly execute and deliver to the Collateral Agent or the Company such termination statements, releases and other documents as the Collateral Agent or the Company may reasonably request to effect such release. Bankruptcy Financing and Other Matters. If the Company or any Guarantor shall be subject to any insolvency or liquidation proceeding and the Administrative Agent shall desire to permit the use of cash collateral or to permit the Company or any Guarantor to obtain financing under Section 363 or Section 364 of Title 11 of the United States Code or any similar bankruptcy law ("DIP Financing") in an aggregate principal amount, which when taken together with the aggregate principal amount of all pre-petition Credit Facility Claims (excluding any Credit Facility Cash Management Obligations and Credit Facility Hedging Obligations but including any Protective Advance Obligations), does not exceed the then permitted Maximum Credit Facility Principal Amount on such date, and, in any event, that is not to be secured by any of the Notes Priority Collateral, then the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, will agree that it will raise no objection to such use of cash collateral or DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted in the third immediately succeeding paragraph or relating to the Notes Priority Collateral), and, to the extent the Liens securing the Credit Facility Claims are subordinated orpari passu with such DIP Financing, will subordinate its Liens in the Common Collateral (other than the Notes Priority Collateral) to such DIP Financing (and all Obligations relating thereto) on the same basis as the Liens on the Credit Facility Priority Collateral that secures the Pari Passu Obligations are subordinated to the Liens thereon that secures the Credit Facility Claims under the Intercreditor Agreement, and agrees that notice received two (2) calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice. If the Company or any Guarantor shall be subject to any insolvency or liquidation proceeding and the Collateral Agent shall desire to permit the use of cash collateral or to permit the Company or any Guarantor to obtain DIP Financing in an aggregate principal amount, which when taken together with the aggregate principal amount of all pre-petition Pari Passu Obligations, does not exceed the then permitted Maximum Pari Passu Principal Amount on such date, and, in any event, that is not to be secured by any of the Credit Facility Priority Collateral, then the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, will agree that it will raise no objection to such use of cash collateral or DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted in the third immediately succeeding paragraph or relating to the Credit Facility Priority Collateral), and, to the extent the Liens securing the Pari Passu Obligations are subordinated or pari passu with such DIP Financing, will subordinate its Liens in the Common Collateral (other than the Credit Facility Priority Collateral) to such DIP Financing (and all Obligations relating thereto) on the same basis as the Liens on the Notes Priority Collateral that secure the Credit Facility Claims are subordinated to the Liens thereon that secure the Pari Passu Obligations under the Intercreditor Agreement, and agrees that notice received two (2) calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice. Until the Discharge of Credit Facility Claims, the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, will agree that none of them shall seek relief from the automatic stay or any other stay in any insolvency or liquidation proceeding in respect of the Credit Facility Priority Collateral, without the prior written consent of the Administrative Agent. Until the Pari Passu Obligations have been paid in full, the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, agrees that none of them shall seek relief from the automatic stay or any other stay in any insolvency or liquidation proceeding in respect of the Notes Priority Collateral, without the prior written consent of the Collateral Agent. The Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, will agree that none of them shall contest (or support any other Person contesting): (a) any request by the Administrative Agent or the Credit Facility Claim Holders for adequate protection; or (b) any objection by the Administrative Agent or the Credit Facility Claim Holders to any motion, relief, action or proceeding based on the Administrative Agent or the Credit Facility Claim Holders claiming a lack of adequate protection, in each case, in respect of the Credit Facility Priority Collateral. Notwithstanding the foregoing, in any insolvency or liquidation proceeding, (i) if the Credit Facility Claim Holders (or any subset thereof) are granted adequate protection in the form of additional or replacement collateral in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of Title 11 of the United States Code or any similar bankruptcy law, then the Collateral Agent, on behalf of itself, the Trustee or any of the Holders, may seek or request adequate protection in the form of a Lien on such additional or replacement collateral, which Lien, if any, on any assets not constituting Notes Priority Collateral or not of the type constituting Notes Priority Collateral shall be subordinated to the Liens securing and granted as adequate protection for the Credit Facility Claims on the same basis as the other Liens on the Credit Facility Priority Collateral that secure the Pari Passu Obligations are so subordinated to the Liens thereon that secure the Credit Facility Claims under the Intercreditor Agreement, and (ii) in the event the Collateral Agent, on behalf of itself, the Trustee, the Holders and holders of any Permitted Additional Pari Passu Obligations, seeks or requests adequate protection and such adequate protection is granted in the form of additional or replacement collateral that constitutes Credit Facility Priority Collateral or is of the type constituting Credit Facility Priority Collateral, then the Collateral Agent, on behalf of itself, the Trustee, any of the Holders or holders of any Permitted Additional Pari Passu Obligations, agrees that the Administrative Agent shall also be granted a senior Lien on such additional or replacement collateral as security and adequate protection for the Credit Facility Claims and that any Lien on such additional or replacement collateral securing or granted as adequate protection the Pari Passu Obligations shall be subordinated to the Liens on such collateral securing the Credit Facility Claims and any other Liens granted to the Credit Facility Claim Holders as adequate protection on the same basis as the other Liens on the Credit Facility Priority Collateral that secure the Pari Passu Obligations are so subordinated to the Liens thereon that secure such Credit Facility Claims under the Intercreditor Agreement. The Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, will agree that none of them shall contest (or support any other Person contesting): (a) any request by the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations for adequate protection; or (b) any objection by the Collateral Agent, the Trustee, the Holders or holders of any Permitted Additional Pari Passu Obligations to any motion, relief, action or proceeding based on the Collateral Agent, the Trustee or the Holders claiming a lack of adequate protection, in each case, in respect of the Notes Priority Collateral. Notwithstanding the foregoing, in any insolvency or liquidation proceeding, (i) if the Holders (or any subset thereof) or holders of any Permitted Additional Pari Passu Obligations are granted adequate protection in the form of additional or replacement collateral in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of Title 11 of the United States Code or any similar bankruptcy law, then the Administrative Agent, on behalf of itself or any of the Credit Facility Claim Holders, may seek or request adequate protection in the form of a Lien on such additional or replacement collateral, which Lien, if any, on any assets not constituting Credit Facility Priority Collateral or not of the type constituting Credit Facility Priority Collateral shall be subordinated to the Liens securing and granted as adequate protection for the Pari Passu Obligations on the same basis as the other Liens on the Notes Priority Collateral that secure the Credit Facility Claims are so subordinated to the Liens thereon that secure the Pari Passu Obligations under the Intercreditor Agreement, and (ii) in the event the Administrative Agent, on behalf of itself and the Credit Facility Claim Holders, seeks or requests adequate protection and such adequate protection is granted in the form of additional or replacement collateral that constitutes Note Priority Collateral or is of the type constituting Notes Priority Collateral, then the Administrative Agent, on behalf of itself or any of the Credit Facility Claim Holders, agrees that the Collateral Agent shall also be granted a senior Lien on such additional or replacement collateral as security and adequate protection for the Pari Passu Obligations and that any Lien on such additional or replacement collateral securing or granted as adequate protection for the Credit Facility Claims shall be subordinated to the Liens on such collateral securing the Pari Passu Obligations and any other Liens granted to the Holders or holders of any Permitted Additional Pari Passu Obligations as adequate protection on the same basis as the other Liens on the Notes Priority Collateral that secure the Credit Facility Claims are so subordinated to the Liens thereon that secure such Pari Passu Obligations under the Intercreditor Agreement. Asset Dispositions in an Insolvency or Liquidation Proceeding. None of the Collateral Agent, the Trustee or any Holder shall, in an insolvency or liquidation proceeding or otherwise, oppose any sale or disposition of any assets of the Company or any Guarantor made in accordance with certain limitations set forth in the Intercreditor Agreement solely consisting of any Credit Facility Priority Collateral that is supported by the Credit Facility Credit Facility Claim Holders, and the Collateral Agent, the Trustee and each Holder will be deemed to have consented under Section 363 of Title 11 of the United States Code (and otherwise) to any sale of such assets supported by the Credit Facility Claim Holders and to have released their Liens in such assets (provided that the parties respective Liens shall attach to the proceeds of such sale or other disposition with the same priority as existed on such assets prior thereto). Neither the Administrative Agent nor any Credit Facility Claim Holder shall, in an insolvency or liquidation proceeding or otherwise, oppose any sale or disposition of any assets of the Company or any Guarantor solely consisting of any Notes Priority Collateral that is supported by the requisite Holders (as determined in accordance with the Indenture) and the Administrative Agent and each Credit Facility Claim Holder will be deemed to have consented under Section 363 of Title 11 of the United States Code (and otherwise) to any sale of such assets supported by the Holders or holders of any Permitted Additional Pari Passu Obligations and to have released their Liens in such assets (provided that the parties' respective Liens shall attach to the proceeds of such sale or other disposition with the same priority as existing on such assets prior thereto). Purchase Option. Upon the occurrence and during the continuance of (a) the acceleration prior to maturity of all or any portion of the Indebtedness then outstanding under the Credit Agreement, (b) the exercise of any remedy with respect to Liens on the Common Collateral by the Administrative Agent, (c) a default in any scheduled payment of principal, premium, if any, interest or fees under the Indenture or the Credit Agreement that remains uncured or unwaived for a period of 30 days in the aggregate, or (d) the commencement of an insolvency or liquidation proceeding, the Holders and holders of any Permitted Additional Pari Passu Obligations may (but shall not be obligated to), at their sole expense and effort, upon notice from the Collateral Agent at the direction of such Holders to the Company and the Administrative Agent, irrevocably require the Credit Facility Claim Holders to transfer and assign to the Holders and holders of any Permitted Additional Pari Passu Obligations, without warranty or representation or recourse (other than the representation or warranty that such Credit Facility Claims are being transferred without any Lien created by the Credit Facility Claim Holders), all (but not less than all) of the Credit Facility Claims and all rights of the Credit Facility Claim Holders under the Credit Facility Documents with respect to the Credit Facility Claims;provided that (x) the Administrative Agent and the Credit Facility Claim Holders shall retain all rights to be indemnified or to be held harmless by the Company and the Guarantors in accordance with the terms of the Credit Facility Documents, (y) such assignment shall not conflict with any law, rule or regulation or order of any court or other governmental authority having jurisdiction, and (z) the Holders and holders of any Permitted Additional Pari Passu Obligations shall have paid to the Administrative Agent, for the account of the Credit Facility Claim Holders, in immediately available funds, an amount equal to 100% of the principal of such Indebtedness (including Credit Facility Hedging Obligations, Protective Advance Obligations and Credit Facility Cash Management Obligations)plus all accrued and unpaid interest thereonplus all accrued and unpaid fees (including, without limitation, reasonable attorney's fees and costs) including any breakage costs and expenses (other than any other fees that become due as a result of the prepayment of the loans and other advances under, or early termination of, the Credit Agreement (such fees are referred to hereinafter as "Termination Fees"))plus all the other Credit Facility Claims then outstanding (which shall include, with respect to the aggregate face amount of the letters of credit outstanding under the Credit Agreement, an amount in cash equal to 105% thereof). In order to effectuate the foregoing, the Administrative Agent shall provide an estimated calculation, upon the written request of the Holders and holders of any Permitted Additional Pari Passu Obligations submitted through the Collateral Agent from time to time (but in no event more than twice in any calendar month), of the amount in cash that would be necessary to so purchase the Credit Facility Claims. If the purchase option is exercised: (a) the parties shall endeavor to close promptly thereafter but in any event within ten (10) business days of the notice thereof, (b) such purchase of the Credit Facility Claims shall be exercised pursuant to documentation mutually acceptable to each of the Administrative Agent and the Holders and holders of any Permitted Additional Pari Passu Obligations purchasing such claims, and (c) such Credit Facility Claims shall be purchased pro rata among the Holders and holders of any Permitted Additional Pari Passu Obligations giving notice to the Collateral Agent of their intent to exercise the purchase option hereunder according to such Holders' portion of the Pari Passu Obligations outstanding on the date of purchase. Notwithstanding anything to the contrary herein, if, at any time following the consummation of such transfer and assignment and the occurrence of the Discharge of Credit Facility Claims and the Discharge of Pari Passu Obligations (other than the payment of any fees that become due as a result of the prepayment or termination of the Pari Passu Obligations), the Holders and holders of any Permitted Additional Pari Passu Obligations recover any Termination Fees prior to the first anniversary of the date of such transfer and assignment is consummated, they shall turn over such fees to Credit Facility Claim Holders in the form and to the extent received. Exercise of Remedies under the Collateral Agreements Subject to the terms of the Intercreditor Agreement, after the incurrence of any Permitted Additional Pari Passu Obligations (other than the issuance of Additional Exchange Notes), the holders of a majority in principal amount of the Pari Passu Obligations (acting through the agent for the Permitted Additional Pari Passu Obligations) will have the right to direct the Collateral Agent, following the occurrence of an Event of Default under the Indenture or an event of default under any agreement or instrument representing such Permitted Additional Pari Passu Obligations, to foreclose on, or exercise its other rights with respect to, the Collateral (or exercise other remedies with respect to the Collateral). Any action taken or not taken following approval by holders of a majority in principal amount of the Pari Passu Obligations but without the vote of any particular holder of Pari Passu Obligations will nevertheless be binding on such non-voting holder. If the Collateral Agent has asked the holders of Pari Passu Obligations for instruction and the applicable holders have not yet responded to such request, the Collateral Agent will be authorized to take, but will not be required to take, and will in no event have any liability for taking, any delay in taking or the failure to take, such actions with regard to a default or event of default which the Collateral Agent, in good faith, believes to be reasonably required to promote and protect the interests of the holders of the Pari Passu Obligations and to preserve the value of the Collateral;provided that once instructions from the applicable holders of the Pari Passu Obligations have been received by the Collateral Agent and an indemnity deemed adequate by the Collateral Agent has been provided, the actions of the Collateral Agent will be governed thereby and the Collateral Agent will not take any further action which would be contrary thereto unless such action is contrary to the terms of the Indenture, the Collateral Agreements or applicable law or exposes the Collateral Agent to liability. In the event of any determination by a court of competent jurisdiction with respect to any series of Permitted Additional Pari Passu Obligations (other than any Additional Exchange Notes) that (i) such series of Permitted Additional Pari Passu Obligations is unenforceable under applicable law or are subordinated to any other obligations (other than the Exchange Notes or another series of Permitted Additional Pari Passu Obligations), (ii) such series of Permitted Additional Pari Passu Obligations does not have an enforceable security interest in any of the Collateral and/or (iii) any intervening security interest exists securing any other obligations (other than the Exchange Notes or other series of Permitted Additional Pari Passu Obligations) on a basis ranking prior to the security interest of such series of Permitted Additional Pari Passu Obligations but junior to the security interest of the Exchange Notes or other series of Permitted Additional Pari Passu Obligations (any such condition referred to in the foregoing clauses (i), (ii) or (iii) with respect to any series of Permitted Additional Pari Passu Obligations, an "Impairment" of such series of Permitted Additional Pari Passu Obligations), the results of such Impairment shall be borne solely by the holders of such series of Permitted Additional Pari Passu Obligations, and the rights of the holders of such series of Permitted Additional Pari Passu Obligations (including, without limitation, the right to receive distributions in respect of such series of Permitted Additional Pari Passu Obligations) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of such series of Permitted Additional Pari Passu Obligations subject to such Impairment. Notwithstanding the foregoing, with respect to any Collateral for which a third party (other than a holder of the Exchange Notes or series of Permitted Additional Pari Passu Obligations) has a lien or security interest that is junior in priority to the security interest of the Holders or any series of Permitted Additional Pari Passu Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of the holder of any other series of Permitted Additional Pari Passu Obligations (other than any Additional Exchange Notes) (such third party, an "Intervening Creditor"), the value of any Collateral or proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Collateral or proceeds to be distributed in respect of the series of Permitted Additional Pari Passu Obligations with respect to which such Impairment exists. Release of Liens The Company and the Guarantors will be entitled to releases of assets included in the Collateral from the Liens securing Indenture Obligations under any one or more of the following circumstances, and such Liens on such assets shall immediately and automatically, without the need for any further action by any Person, be released, terminated and discharged: (1) in connection with asset dispositions to a Person that is not the Company or a Guarantor permitted or not prohibited under the covenant described below under "—Certain Covenants—Limitation on Asset Sales"; (2) if any Guarantor is released from its Guarantee in accordance with the terms of the Indenture (including by virtue of such Guarantor ceasing to be a Restricted Subsidiary), that Guarantor's assets will also be released from the Liens securing its Guarantee and the other Indenture Obligations; or (3) if required in accordance with the terms of the Intercreditor Agreement or any Collateral Agreement. The Liens on the Collateral that secure the Indenture Obligations also will automatically, without the need for any further action by any Person, be released, terminated and discharged: (1) upon legal defeasance or covenant defeasance or satisfaction and discharge of the Indenture as described below under the captions "—Legal Defeasance and Covenant Defeasance" and "—Satisfaction and Discharge"; or (2) with the consent of the Holders of the requisite percentage of Exchange Notes in accordance with the provisions described below under the caption "—Modification of the Indenture." The Collateral Agreements provide that the Collateral Agent will execute, upon request and at the Company's expense, any documents, instruments, agreements or filings reasonably requested by the Company to evidence the release of the Collateral. Guarantees The full and prompt payment of the Company's payment obligations under the Exchange Notes and the other Indenture Documents will be guaranteed, jointly and severally, by all existing and future, direct and indirect, Domestic Restricted Subsidiaries (other than Discontinued Subsidiaries). Each Guarantor will fully and unconditionally guarantee on a senior secured basis (each a "Guarantee" and, collectively, the "Guarantees"), jointly and severally, to each Holder and the Trustee, the full and prompt performance of the Company's Obligations under the Exchange Notes and the other Indenture Documents, including the payment of principal of, interest on, premium, if any, on and Additional Interest, if any, on the Exchange Notes. The Guarantee of each Guarantor will rank senior in right of payment to all existing and future subordinated Indebtedness of such Guarantor and equally in right of payment with all other existing and future senior Indebtedness of such Guarantor. The obligations of each Guarantor will be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of such Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law (although certain courts have held that this provision is not enforceable). The net worth of any Guarantor for such purpose shall include any claim of such Guarantor against the Company for reimbursement and any claim against any other Guarantor for contribution. Each Guarantor may consolidate with or merge into or sell its assets to the Company or another Guarantor without limitation. See "—Certain Covenants—Merger, Consolidation and Sale of Assets" and "—Limitation on Asset Sales." Notwithstanding the foregoing, a Guarantor will be released from its Guarantee without any action required on the part of the Trustee or any Holder: (1) if (a) all of the Capital Stock issued by such Guarantor or all or substantially all of the assets of such Guarantor are sold or otherwise disposed of (including by way of merger or consolidation) to a Person other than the Company or any other Guarantor or (b) such Guarantor ceases to be a Restricted Subsidiary, and the Company otherwise complies, to the extent applicable, with the covenant described below under the caption "—Certain Covenants—Limitation on Asset Sales"; (2) if the Company designates such Guarantor as an Unrestricted Subsidiary in accordance with the covenant described below under the caption "—Certain Covenants—Limitation on Restricted Payments"; (3) if the Company exercises its legal defeasance option or its covenant defeasance option as described below under the caption "—Legal Defeasance and Covenant Defeasance"; or (4) upon satisfaction and discharge of the Indenture or payment in full in cash of the principal of, premium, if any, accrued and unpaid interest and Additional Interest, if any, on the Exchange Notes (including Additional Notes, if any) and all other Obligations that are then due and payable. At the Company's request and expense, the Trustee will execute and deliver an instrument evidencing such release. A Guarantor may also be released from its obligations under its Guarantee in connection with a permitted amendment of the Indenture. See "—Modification of the Indenture." As of the Issue Date, all of the Company's Subsidiaries were Restricted Subsidiaries. However, under certain circumstances described below under "—Certain Covenants—Limitation on Restricted Payments," the Company will be permitted to designate certain of its Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to the restrictive covenants of the Indenture and will not guarantee the Exchange Notes. In the event of a bankruptcy, liquidation or reorganization of any of these Unrestricted Subsidiaries or any of the Company's existing and future Foreign Restricted Subsidiaries, such Unrestricted Subsidiary or such Foreign Restricted Subsidiary, as the case may be, will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Company. Redemption Optional Redemption Prior to May 15, 2016. At any time on or prior to May 15, 2016, the Exchange Notes may be redeemed or purchased by the Company in whole or in part, at the Company's option, at a price equal to 100% of the principal amount thereofplus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the date of redemption or purchase (the "Redemption Date") (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date occurring prior to or on the Redemption Date). Such redemption or purchase may be made upon notice mailed by first-class mail to each Holder's registered address, not less than 30 nor more than 60 days prior to the Redemption Date. In addition, at one time prior to May 15, 2016, the Company may redeem up to 10% of the original aggregate principal amount of the Exchange Notes issued under the Indenture at a redemption price of 103% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, on the Notes to the date of redemption. For the avoidance of doubt, the Company may redeem Exchange Notes up to the maximum amount allowed pursuant to the immediately preceding paragraph prior to the redemption of any Notes upon payment of the Applicable Premium pursuant to the first paragraph of this section. Optional Redemption on or After May 15, 2016. Except as described above and below, the Exchange Notes are not redeemable before May 15, 2016. Thereafter, the Company may redeem the Exchange Notes, at its option, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on May 15, of the year set forth below: 2016 2017 2018 and thereafter In addition, the Company must pay accrued and unpaid interest and Additional Interest, if any, on the Exchange Notes redeemed. Optional Redemption Upon Equity Offerings. At any time, or from time to time, prior to May 15, 2016, the Company may, at its option, use an amount not to exceed the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the aggregate principal amount of the Notes (including Additional Notes, if any) originally issued under the Indenture at a redemption price of 107.000% of the aggregate principal amount thereof,plus accrued and unpaid interest and Additional Interest, thereon, if any, to the date of redemption;provided that: (1) at least 65% of the aggregate principal amount of Notes (including Additional Notes, if any) originally issued under the Indenture remains outstanding immediately after any such redemption; and (2) the Company makes such redemption not more than 120 days after the consummation of any such Equity Offering. Selection and Notice of Redemption In the event that the Company chooses to redeem less than all of the Notes, selection of the Notes for redemption will be made by the Trustee either: (1) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or (2) if the Notes are not then listed on a national securities exchange, on apro rata basis, by lot or by such method as the Trustee may reasonably determine is fair and appropriate. If a partial redemption is made with the proceeds of an Equity Offering, the Trustee will select the Notes (including Additional Notes, if any) only on apro rata basis or on as nearly apro rata basis as is practicable (subject to DTC procedures), unless such method is otherwise prohibited. No Exchange Notes of a principal amount of $2,000 or less shall be redeemed in part and Exchange Notes of a principal amount in excess of $2,000 may be redeemed in part in multiples of $1,000 only. Notice of redemption will be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to the Trustee and each Holder to be redeemed at its registered address. If Notes are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed. A new Exchange Note in a principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Exchange Note (or appropriate adjustments to the amount and beneficial interests in the Global Note will be made). The Company will pay the redemption price for any Exchange Note together with accrued and unpaid interest and Additional Interest thereon through the date of redemption. On and after the redemption date, interest will cease to accrue on Exchange Notes or portions thereof called for redemption as long as the Company has deposited with the paying agent funds in satisfaction of the applicable redemption price pursuant to the Indenture. Mandatory Redemption; Offers to Purchase; Open Market Purchases The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Exchange Notes. However, under certain circumstances, the Company may be required to offer to purchase the Exchange Notes as described under the captions "—Repurchase Upon Change of Control" and "—Certain Covenants—Limitation on Asset Sales." The Company may at any time and from time to time purchase Exchange Notes in the open market or otherwise. Repurchase Upon Change of Control Upon the occurrence of a Change of Control, each Holder will have the right to require that the Company purchase all or a portion (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder's Exchange Notes using immediately available funds pursuant to the offer described below (the "Change of Control Offer"), at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase,plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase. Within 30 days following the date upon which the Change of Control occurred, the Company must send, by first-class mail, an offer to each Holder, with a copy to the Trustee, which offer shall govern the terms of the Change of Control Offer. Such offer shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "Change of Control Payment Date"). Holders electing to have an Exchange Note purchased pursuant to a Change of Control Offer will be required to surrender the Exchange Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Exchange Note completed, to the paying agent at the address specified in the notice prior to the close of business on the third business day prior to the Change of Control Payment Date. If only a portion of an Exchange Note is purchased pursuant to a Change of Control Offer, a new Exchange Note in a principal amount equal to the portion thereof not purchased will be issued in the name of the Holder thereof upon cancellation of the original Exchange Note (or appropriate adjustments to the amount and beneficial interests in a Global Note will be made). Exchange Notes (or portions thereof) purchased pursuant to a Change of Control Offer will be cancelled and cannot be reissued. If Holders of not less than 90% in aggregate principal amount of the then outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Company, or any other Person making a Change of Control Offer in lieu of the Company as described below, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Company will have the right, upon not less than 15 nor more than 30 days' prior notice, given not more than 15 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a redemption price in cash equal to 101% of the principal amount thereof on the date of redemption, plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption. The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Exchange Notes validly tendered and not withdrawn under such Change of Control Offer. If a Change of Control Offer is made, there can be no assurance that the Company will have available funds sufficient to pay the Change of Control purchase price for all the Exchange Notes that might be delivered by Holders seeking to accept the Change of Control Offer. In the event the Company is required to purchase outstanding Exchange Notes pursuant to a Change of Control Offer, the Company expects that it would seek third party financing to the extent it does not have available funds to meet its purchase obligations. However, there can be no assurance that the Company would be able to obtain such financing and the terms of the Credit Agreement and/or the Indenture may restrict the ability of the Company to obtain such financing. Restrictions in the Indenture described herein on the ability of the Company and its Restricted Subsidiaries to incur additional Indebtedness, to grant Liens on its property, to make Restricted Payments and to make Asset Sales may also make more difficult or discourage a takeover of the Company, whether favored or opposed by the management or the board of directors of the Company. Consummation of any such Asset Sales in certain circumstances may require redemption or repurchase of the Exchange Notes pursuant to the terms of the Indenture, and there can be no assurance that the Company or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of the Company or any of its Subsidiaries by the management of the Company. While such restrictions cover a wide variety of arrangements that have traditionally been used to effect highly leveraged transactions, the Indenture may not afford the Holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger, recapitalization or similar transaction. One of the events that constitutes a Change of Control under the Indenture is the disposition of "all or substantially all" of the Company's assets under certain circumstances. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder to require the Company to repurchase its Exchange Notes as a result of a sale, transfer, conveyance or other disposition of less than all of the assets of the Company to another Person or group may be uncertain. As a consequence, in the event Holders elect to require the Company to purchase the Exchange Notes and the Company elects to contest such election, there can be no assurance as to how a court interpreting New York law would interpret the phrase under such circumstances. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Exchange Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Change of Control" provisions of the Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Change of Control" provisions of the Indenture by virtue thereof. Certain Covenants The Indenture contains, among others, the following covenants: Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company and dividends and distributions payable to the Company or another Restricted Subsidiary of the Company) on or in respect of shares of Capital Stock of the Company or its Restricted Subsidiaries to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or its Restricted Subsidiaries (other than any such Capital Stock held by the Company or any Restricted Subsidiary); (3) make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or any Guarantor that is subordinate or junior in right of payment to the Exchange Notes or a Guarantee; or (4) make any Investment (other than Permitted Investments) (each of the foregoing actions set forth in clauses (1), (2), (3) and (4) being referred to as a "Restricted Payment"), if at the time of such Restricted Payment or immediately after giving effect thereto: (i) a Default or an Event of Default shall have occurred and be continuing; (ii) the Company is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with the covenant described under "—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock"; or (iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall exceed the sum of: (A) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income is a loss, minus 100% of such loss) of the Company earned from the beginning of the fiscal quarter commencing after Issue Date to the end of the last day of the Company's most recent fiscal quarter ending prior to the date the Restricted Payment occurs for which financial statements are available (the "Reference Date") (treating such period as a single accounting period);plus (B) 100% of the aggregate net cash proceeds and the Fair Market Value of property and marketable securities received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (excluding any net proceeds from an Equity Offering to the extent used to redeem Exchange Notes pursuant to the provisions described under "—Redemption—Optional Redemption Upon Equity Offerings");plus (C) 100% of the aggregate net cash proceeds received from the issuance of Indebtedness or shares of Disqualified Capital Stock of the Company that have been converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Issue Date and on or prior to the Reference Date;plus (D) the amount for the period subsequent to the Issue Date and on or prior to the Reference Date equal to the sum of (i) the net reduction in the Investments (other than Permitted Investments) made by the Company or any of its Restricted Subsidiaries in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any of its Restricted Subsidiaries, and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary;provided,however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any of its Restricted Subsidiaries in such Person or Unrestricted Subsidiary;plus (E) 100% of the aggregate net cash proceeds received from the exercise by any holder of a convertible note of the Company that has been converted into Qualified Capital Stock of the Company subsequent to the Issue Date and on or prior to the Reference Date. In the case of clause (iii)(B) above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or indirectly using funds borrowed from the Company or any Subsidiary of the Company, shall be excluded until and to the extent such borrowing is repaid. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1) the payment of any dividend or other distribution or redemption within 60 days after the date of declaration of such dividend or notice for redemption if such payment would have been permitted on the date of declaration or notice for redemption (assuming, in the case of a redemption payment, the giving of the notice would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time); (2) the acquisition of any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale; (3) the acquisition of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Exchange Notes and Guarantees either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) within 60 days after such sale of (a) shares of Qualified Capital Stock of the Company or (b) if no Default or Event of Default would exist after giving effect thereto, Refinancing Indebtedness; (4) an Investment either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale; (5) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, the repurchase or other acquisition of shares of Capital Stock of the Company from employees, former employees, directors or former directors of the Company (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock;provided,however, that the aggregate amount of such repurchases and other acquisitions in any calendar year shall not exceed $5.0 million;provided further,however, that such amount in any calendar year may be increased by an amount not to exceed the net cash proceeds of key man life insurance policies received by the Company after the Issue Date; (6) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other similar rights if such Capital Stock represents a portion of the exercise price of such options, warrants or other similar rights; (7) payments or distributions to dissenting stockholders of Capital Stock of the Company pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company or any of its Restricted Subsidiaries; (8) distribution of rights pursuant to a shareholder rights plan of the Company or redemptions of such rights;provided that such redemptions are in accordance with the terms of such shareholder rights plan; (9) any purchase, redemption or acquisition for value of Qualified Capital Stock of the Company in connection with the Company's 401(k) plan or Employee Stock Purchase Plan (as such plans are amended or modified from time to time); (10) Restricted Payments to allow the payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the conversion or exchange of Capital Stock of any Person (including in a merger, consolidation, amalgamation or similar transaction); (11) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Subsidiary of the Company to the holders of its Capital Stock on a pro rata basis; and (12) if no Default shall have occurred and be continuing or would exist after giving effect thereto, other Restricted Payments not to exceed $35.0 million outstanding at any one time in the aggregate. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the first paragraph of this "Limitation on Restricted Payments" covenant amounts expended pursuant to clauses (1), (2)(ii), (3)(ii)(a), (4)(ii) and (12) shall be included in such calculation. For purposes of determining compliance with this covenant if a Restricted Payment meets the criteria of more than one of the exceptions described in clauses (1) through (12) above or is entitled to be made according to the first paragraph of this covenant the Company may, in its sole discretion, classify the Restricted Payment in any manner that complies with this covenant. Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "incur," which term shall be deemed to include the entry into a committed revolving credit facility or agreement to increase in the amount of the revolving commitments thereunder, in each case, in an aggregate principal amount equal to the aggregate amount of all revolving commitments thereunder at the time of such entry or increase, as the case may be, and for the avoidance of doubt not the extension or issuance of individual loans or letters of credit thereunder) any Indebtedness (other than Permitted Indebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock;provided,however, that if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company may incur Indebtedness or issue Disqualified Stock and any of its Restricted Subsidiaries that is or, upon such incurrence, becomes a Guarantor may incur Indebtedness or Disqualified Stock, in each case, if on the date of the incurrence of such Indebtedness or the issuance of such Disqualified Stock, as the case may be, the Consolidated Fixed Charge Coverage Ratio of the Company will be, after giving effect to the incurrence thereof, greater than 2.00 to 1.00. (b) The Company will not, and will not permit any of its Domestic Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or such Domestic Restricted Subsidiary unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Obligations of the Company or such Domestic Restricted Subsidiary under (a) in the case of the Company, the Exchange Notes and the other Indenture Documents or (b) in the case of such Domestic Restricted Subsidiary, its Guarantee and the other Indenture Documents, in each case, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or such Domestic Restricted Subsidiary. Limitation on Asset Sales. The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) the Company or the applicable Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed; (2) at least 75% of the consideration received by the Company or the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash or Cash Equivalents and is received at the time of such disposition;provided that (a) the amount of any liabilities (as shown on the most recent applicable balance sheet) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets shall be deemed to be cash for purposes of this provision so long as the documents governing such liabilities or the assumption thereof provide that there is no further recourse to the Company or any of its Subsidiaries with respect to such liabilities and (b) the Fair Market Value of any marketable securities received by the Company or any such Restricted Subsidiary in exchange for any such assets that are converted into cash or Cash Equivalents within 60 days after the consummation of such Asset Sale shall be deemed to be cash for purposes of this provision; and (3) the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either: (a) to the extent the property that is subject to such Asset Sale constitutes Credit Facility Priority Collateral, (i) to repay or prepay Indebtedness and other Obligations under the Credit Agreement and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto or (ii) to acquire inventory, documents, contracts, or accounts, chattel paper, instruments or contract rights in respect of any service or sales contracts; or (b) to make (or enter into a definitive and binding agreement committing to do so within 180 days after the date that is 360 days following the date of receipt of such Net Cash Proceeds) an investment in property, plant, equipment or other non-current assets that replace the properties and assets that were the subject of such Asset Sale or that will be used or useful in a Permitted Business or the acquisition of all of the Capital Stock of a Person engaged in a Permitted Business; or (c) a combination of repayment and investment permitted by the foregoing clauses (3)(a) and (3)(b); provided that if such Asset Sale is of all or substantially all of the Capital Stock of one or more of the Subsidiaries of the Company and if the Net Cash Proceeds of such Capital Stock are not reinvested in the acquisition of all of the Capital Stock of a Person engaged in a Permitted Business as described in clause (3)(b) above, then the portion of the Net Cash Proceeds attributable to Credit Facility Priority Collateral of such Subsidiaries immediately prior to such sale shall be applied as required by clause (3)(a) above, and the portion of the Net Cash Proceeds attributable to Notes Priority Collateral of such Subsidiaries immediately prior to such sale shall be applied as required by clause (3)(b) above, notwithstanding the fact that such Capital Stock constitutes Notes Priority Collateral. Pending the final application of Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or invest such Net Cash Proceeds in Cash Equivalents. On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) or (3)(c) of the preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (each a "Net Proceeds Offer Amount") shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, to all Holders, and, if required by the terms of any Permitted Additional Pari Passu Obligations, to the holders of such Permitted Additional Pari Passu Obligations, to purchase the maximum principal amount of Notes and such Permitted Additional Pari Passu Obligations (ratably) that may be purchased with the Net Proceeds Offer Amount at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest thereon, if any, to the date of purchase;provided,however, that if (x) at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder on the date of such conversion or disposition, as the case may be, and the Net Cash Proceeds thereof shall be applied in accordance with clause (3) of the immediately preceding paragraph and this paragraph and (y) any Net Cash Proceeds are not applied by the date provided in any definitive and binding agreement described under clause (3)(b) of the immediately preceding paragraph (as such date may be extended in accordance with the terms of such definitive agreement, but in any event, to a date no later than 180 days following such 361st date), such date (as extended, if applicable) shall immediately be deemed to be a "Net Proceeds Trigger Date" and the aggregate amount of such Net Cash Proceeds not applied in accordance with clause (3)(a), (3)(b) or (3)(c), as applicable, by such date shall immediately be deemed to be the "Net Proceeds Offer Amount," and such aggregate amount shall be subject to a Net Proceeds Offer and such Net Cash Proceeds shall be applied in accordance with this paragraph. The Company may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to the immediately preceding paragraph). Upon the completion of each Net Proceeds Offer, the Net Proceeds Offer Amount will be reset at zero, and for the avoidance of doubt, if the aggregate principal amount of Notes and Permitted Additional Pari Passu Obligations properly tendered in connection with such Net Proceeds Offer was less than the Net Proceeds Offer Amount, any Net Cash Proceeds relating to, and remaining following the completion of, such Net Proceeds Offer shall no longer constitute Net Cash Proceeds for purposes of this covenant. If the aggregate principal amount of Notes or the Permitted Additional Pari Passu Obligations surrendered by such holders thereof exceeds the amount of Net Proceeds Offer Amount, the Company shall select the Notes and such Permitted Additional Pari Passu Obligations to be purchased on a pro rata basis based on the accreted value or principal amount of the Exchange Notes or such Permitted Additional Pari Passu Obligations tendered. In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under "—Merger, Consolidation and Sale of Assets," which transaction does not constitute a Change of Control, the successor entity shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it constituted an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Each notice of a Net Proceeds Offer shall be mailed first class, postage prepaid, to the record Holders as shown on the register of Holders within 20 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Exchange Notes in whole or in part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered) subject to adjustments so that no Notes in an unauthorized denomination are purchased in part or remain outstanding in part (subject to DTC procedures). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Exchange Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Asset Sale" provisions of the Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Asset Sale" provisions of the Indenture by virtue of such compliance. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to: (1) pay dividends or make any other distributions on or in respect of its Capital Stock; (2) make loans or advances or to pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary of the Company; or (3) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, except for such encumbrances or restrictions existing under or by reason of: (a) applicable law, rule or regulation; (b) the Notes, the Indenture, the Guarantees or the Collateral Agreements; (c) customary non-assignment provisions of any lease of any Restricted Subsidiary of the Company to the extent such provisions restrict the transfer of the lease or the property leased thereunder; (d) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (e) the Credit Agreement (and all replacements or substitutions thereof on terms with respect to such encumbrances or restrictions no more materially adverse to the Holders taken as a whole); (f) agreements existing on the Issue Date to the extent and in the manner such agreements were in effect on such date; (g) restrictions on the transfer of assets subject to any Lien permitted under the Indenture; (h) restrictions imposed by any agreement to sell assets or Capital Stock permitted under the Indenture to any Person pending the closing of such sale; (i) provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) entered into in the ordinary course of business; (j) restrictions contained in the terms of the Purchase Money Indebtedness or Capitalized Lease Obligations not incurred in violation of the Indenture;provided that such restrictions relate only to the assets financed with such Indebtedness; (k) restrictions in other Indebtedness incurred in compliance with the covenant described under "—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock";provided that such restrictions, taken as a whole, are, in the good faith judgment of the Company's Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those contained in the existing agreements referenced in clause (b), (e) or (f) above; (l) restrictions on cash or other deposits imposed by customers under contracts or other arrangements entered into or agreed to in the ordinary course of business; (m) restrictions on the ability of any Foreign Restricted Subsidiary to make dividends or other distributions resulting from the operation of covenants contained in documentation governing Indebtedness of such Subsidiary permitted under the Indenture; or (n) an agreement governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement referred to in clause (b), (d), (e), (f), (j) or (k) above;provided,however, that the provisions relating to such encumbrance or restriction contained in any such Indebtedness are no less favorable to the Company, taken as a whole, as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (b), (d), (e), (f), (j) or (k). Limitation on Issuances and Sales of Capital Stock of Subsidiaries. The Company will not permit or cause any of its Restricted Subsidiaries to issue or sell any Capital Stock (other than to the Company or to a Wholly Owned Subsidiary of the Company or permit any Person (other than the Company or a Wholly Owned Subsidiary of the Company) to own or hold any Capital Stock of any Restricted Subsidiary of the Company or any Lien or security interest therein (other than as required by applicable law);provided,however, that this provision shall not prohibit (1) any issuance or sale if, immediately after giving effect thereto, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under the "—Limitation on Restricted Payments" covenant if made on the date of such issuance or sale or (2) the sale of all of the Capital Stock of a Restricted Subsidiary in compliance with the provisions of the "—Limitation on Asset Sales" covenant. Limitation on Liens. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens (other than Permitted Liens) of any kind against or upon any property or assets of the Company or any of its Restricted Subsidiaries whether owned on the Issue Date or acquired thereafter, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom. Limitation on Sale and Leaseback Transactions. The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction;provided that the Company and any Restricted Subsidiary may enter into a sale and leaseback transaction if: (1) the Company or such Restricted Subsidiary could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the covenant described above under the caption "—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption "—Limitation on Liens"; and (2) the transfer of assets in such sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption "—Limitation on Asset Sales." Merger, Consolidation and Sale of Assets. The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Company's Restricted Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (1) either: (a) the Company shall be the surviving or continuing corporation; or (b) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company's Restricted Subsidiaries substantially as an entirety (the "Surviving Entity"): (x) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia; and (y) shall expressly assume, (i) by supplemental indenture, executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, interest and Additional Interest, if any, on all of the Exchange Notes and the performance of every covenant of the Exchange Notes and the Indenture on the part of the Company to be performed or observed thereunder and (ii) by amendment, supplement or other instrument, executed and delivered to the Trustee, all obligations of the Company under the Collateral Agreements, and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Agreements on the Collateral owned by or transferred to the surviving entity; (2) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall (a) be able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with the "—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant or (b) have a Consolidated Fixed Charge Coverage Ratio that is no worse than the Company's Consolidated Fixed Charge Coverage Ratio immediately prior to such transaction and any related financing transaction; (3) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and (4) the Company or the Surviving Entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to such transaction have been satisfied. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. The Indenture provides that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing, in which the Company is not surviving or the continuing corporation, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Exchange Notes with the same effect as if such surviving entity had been named as such. Upon such substitution, the Company and any Guarantors that remain Subsidiaries of the Company shall be released from their obligations under the Indenture and the Guarantees. Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with the terms of the Guarantee and the Indenture in connection with any transaction complying with the provisions of this covenant and the "—Limitation on Asset Sales" covenant) will not, and the Company will not cause or permit any Guarantor to, consolidate with or merge with or into any Person, other than the Company or any other Guarantor unless: (1) the entity formed by or surviving any such consolidation or merger (if other than the Guarantor) or to which such sale, lease, conveyance or other disposition shall have been made is a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia; (2) such entity assumes (a) by supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Guarantor under the Guarantee and the performance of every covenant of the Guarantee and the Indenture and (b) by amendment, supplement or other instrument executed and delivered to the Trustee and the Collateral Agent, all obligations of the Guarantor under the Collateral Agreements and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Agreements on the Collateral owned by or transferred to the surviving entity; and (3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing. Any merger or consolidation of (i) a Guarantor with and into the Company (with the Company being the surviving entity) or another Guarantor or (ii) a Guarantor or the Company with an Affiliate organized solely for the purpose of reincorporating such Guarantor or the Company in another jurisdiction in the United States or any state thereof or the District of Columbia need only comply with: (A) clause (4) of the first paragraph of this covenant; and (B) (x) in the case of a merger or consolidation involving the Company as described in clause (ii), clause 1(b)(y) of the first paragraph of this covenant and (y) in the case of a merger or consolidation involving the Guarantor as described in clause (ii), clause (2) of the immediately preceding paragraph. Limitations on Transactions with Affiliates. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted under paragraph (b) below, and (y) Affiliate Transactions on terms that are no less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Company or such Restricted Subsidiary. All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a Fair Market Value in excess of $5.0 million shall be approved by a majority of the members of the Board of Directors of the Company (including a majority of the disinterested members thereof), as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions and the Company shall deliver an Officers' Certificate to the Trustee certifying that such transactions are in compliance with clause (a)(y) of the preceding paragraph. If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) that involves an aggregate Fair Market Value of more than $10.0 million, the Company shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of the financial terms of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from an Independent Financial Advisor and deliver the same to the Trustee. (b) The restrictions set forth in paragraph (a) of this covenant shall not apply to: (1) reasonable fees and compensation paid to and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary of the Company as determined in good faith by the Company's Board of Directors or senior management; (2) transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries;provided that such transactions are not otherwise prohibited by the Indenture; (3) any agreement as in effect as of the Issue Date or any transaction contemplated thereby and any amendment thereto or any replacement agreement thereto so long as any such amendment or replacement agreement is not materially more disadvantageous to the Holders, taken as a whole, in any material respect than the original agreement as in effect on such date; (4) Restricted Payments permitted by the Indenture and Permitted Investments described in clause (10) of the definition thereof; (5) any merger or other transaction with an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction or creating a holding company of the Company; and (6) any employment, stock option, stock repurchase, employee benefit compensation, business expense reimbursement, severance, termination or other employment-related agreements, arrangements or plans entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business. Additional Subsidiary Guarantees. If (a) the Company or any of its Restricted Subsidiaries acquires or creates another Domestic Restricted Subsidiary after the Issue Date (other than a Discontinued Subsidiary) or (b) if any Domestic Restricted Subsidiary that was a Discontinued Subsidiary is no longer a Discontinued Subsidiary, then the Company shall cause such Domestic Restricted Subsidiary to: (1) execute and deliver to the Trustee a supplemental indenture pursuant to which such Domestic Restricted Subsidiary shall unconditionally guarantee on a senior secured basis all of the Company's obligations under the Exchange Notes and the Indenture on the terms set forth in the Indenture; (2) take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Holders a perfected security interest in the assets of such new Domestic Restricted Subsidiary of the type that would constitute Collateral (which for the avoidance of doubt shall not include any Excluded Assets), subject to the Permitted Liens, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Security Agreement or by law; (3) take such further action and execute and deliver such other documents specified in the Indenture or otherwise reasonably requested by the Trustee or the Collateral Agent to effectuate the foregoing; and (4) deliver to the Trustee an Opinion of Counsel that such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Domestic Restricted Subsidiary and constitutes a legal, valid, binding and enforceable obligations of such Domestic Restricted Subsidiary and such other opinions regarding the perfection of such Liens in the assets of such Domestic Restricted Subsidiary as provided for in the Indenture. Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture. Real Estate Mortgages and Filings. With respect to any fee interest in any real property (individually and collectively, the "Premises") (a) owned by the Company or any of the Guarantors on the Issue Date with a fair market value in excess of $3.0 million or (b) acquired by the Company or the Guarantors thereafter with a purchase price of greater than $3.0 million (the "Mortgaged Property"), the Company shall use commercially reasonable efforts to deliver to the Collateral Agent each of the following items, (x) in the case of clause (a) above, within 90 days of the Issue Date and (y) in the case of clause (b) above, within 90 days of the acquisition thereof: (1) fully executed counterparts of Mortgages, each dated within 90 days after the Issue Date or the date of acquisition of such property, as the case may be, duly executed by the Company or the applicable Guarantor, together with evidence of the completion (or satisfactory arrangements for the completion), of all recordings and filings of such Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens, against the properties purported to be covered thereby; (2) mortgagee's title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of the Collateral Agent, the Trustee, the Holders and the holders of any Permitted Additional Pari Passu Obligations in an amount equal to 100% of the Fair Market Value of the Premises purported to be covered by the related Mortgage, insuring that title to such property is marketable and that the interests created by the Mortgage constitute valid Liens thereon free and clear of all Liens, defects and encumbrances other than Permitted Liens, and shall be accompanied by evidence of the payment in full of all premiums thereon; (3) the most recent survey of such Premises, together with either (i) an updated survey certification from the applicable title insurance company in favor of the Trustee and the Collateral Agent from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit from the Company and the Guarantors stating that there has been no change, other than, in each case, changes that do not materially adversely affect the use by the Company or Guarantor, as applicable, of such Premises for the Company or such Guarantor's business as so conducted, or intended to be conducted, at such Premises; and (4) such further information, opinions, certificates and documents evidencing or relating to the Mortgaged Property or required to effect the foregoing including, without limitation, any information, certificates, opinions and documents substantially similar in form and substance to those delivered to the Administrative Agent under the Credit Agreement in connection with such Mortgaged Property. Conduct of Business. The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any businesses other than Permitted Businesses. Reports to Holders. The Indenture provides that, whether or not required by the rules and regulations of the SEC, so long as any Exchange Notes are outstanding, the Company will furnish to the Trustee and to the Holders: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in Management's Discussion and Analysis of Financial Condition and Results of Operations, the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company, if any) and, with respect to the annual information only, a report thereon by the Company's certified independent accountants; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports, in each case, within the time periods required for filing such forms and reports as specified in the SEC's rules and regulations (and, during any period in which the Company is not required to file reports with the SEC, within the time periods specified in the SEC's rules and regulations applicable to a "non-accelerated filer"). To the extent the Company is not required to file reports with the SEC, it will make the information publicly available (including via a non-password protected website). Whether the Company files such reports with the SEC or posts its reports on its website, the public posting of such reports shall satisfy any requirement hereunder to deliver such reports to Holders. Notwithstanding the foregoing, the Company may satisfy such requirements, whether or not required by the rules and regulations of the SEC, All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a Fair Market Value in excess of $5.0 million shall be approved by a majority of the members of the Board of Directors of the Company (including a majority of the disinterested members thereof), as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions and the Company shall deliver an Officers' Certificate to the Trustee certifying that such transactions are in compliance with clause (a)(y) of the preceding paragraph. If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) that involves an aggregate Fair Market Value of more than $10.0 million, the Company shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of the financial terms of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from an Independent Financial Advisor and file the same with the Trustee. (b) The restrictions set forth in paragraph (a) of this covenant shall not apply to:(1)reasonable fees and compensation paid to and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary of the Company as determined in good faith by the Company's Board of Directors or senior management;(2)transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries;provided that such transactions are not otherwise prohibited by the Indenture;(3)any agreement as in effect as of May 19, 2010 or any transaction contemplated thereby and any amendment thereto or any replacement agreement thereto so long as any such amendment or replacement agreement is not materially more disadvantageous to the Holders in any material respect than the original agreement as in effect on such date;(4)Restricted Payments permitted by the Indenture and Permitted Investments described in clause (10) of the definition thereof;(5)any merger or other transaction with an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction or creating a holding company of the Company; and(6)any employment, stock option, stock repurchase, employee benefit compensation, business expense reimbursement, severance, termination or other employment-related agreements, arrangements or plans entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business. Additional Subsidiary Guarantees. If (a) the Company or any of its Restricted Subsidiaries acquires or creates another Domestic Restricted Subsidiary after May 19, 2010 (other than a Discontinued Subsidiary) or (b) if any Domestic Restricted Subsidiary that was a Discontinued Subsidiary is no longer a Discontinued Subsidiary, then the Company shall cause such Domestic Restricted Subsidiary to:(1)execute and deliver to the Trustee a supplemental indenture pursuant to which such Domestic Restricted Subsidiary shall unconditionally guarantee on a senior secured basis all of the Company's obligations under the Notes and the Indenture on the terms set forth in the Indenture;(2)take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Holders a perfected security interest in the assets of such new Domestic Restricted Subsidiary of the type that would constitute Collateral (which for the avoidance of doubt shall not include any Excluded Assets), subject to the Permitted Liens, including the filing of UniformCommercial Code financing statements in such jurisdictions as may be required by the Security Agreement or by law;(3)take such further action and execute and deliver such other documents specified in the Indenture or otherwise reasonably requested by the Trustee or the Collateral Agent to effectuate the foregoing; and(4)deliver to the Trustee an Opinion of Counsel that such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Domestic Restricted Subsidiary and constitutes a legal, valid, binding and enforceable obligations of such Domestic Restricted Subsidiary and such other opinions regarding the perfection of such Liens in the assets of such Domestic Restricted Subsidiary as provided for in the Indenture. Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture. Real Estate Mortgages and Filings. With respect to any fee interest in any real property (individually and collectively, the "Premises") (a) owned by the Company or any of its Domestic Restricted Subsidiaries on May 19, 2010 or (b) acquired by the Company or any such Domestic Restricted Subsidiary after May 19, 2010 with a purchase price of greater than $1.0 million, on May 19, 2010 in the case of clause (a) and within 90 days of the acquisition thereof in the case of clause (b):(1)the Company shall deliver to the Collateral Agent, as mortgagee, fully executed counterparts of Mortgages, each dated as of May 19, 2010 or the date of acquisition of such property, as the case may be, duly executed by the Company or the applicable Domestic Restricted Subsidiary, together with evidence of the completion (or satisfactory arrangements for the completion), of all recordings and filings of such Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens, against the properties purported to be covered thereby;(2)the Company shall deliver to the Collateral Agent mortgagee's title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of the Collateral Agent, the Trustee and the Holders in an amount equal to 100% of the Fair Market Value of the Premises purported to be covered by the related Mortgage, insuring that title to such property is marketable and that the interests created by the Mortgage constitute valid Liens thereon free and clear of all Liens, defects and encumbrances other than Permitted Liens, and shall be accompanied by evidence of the payment in full of all premiums thereon; and(3)the Company shall deliver to the Collateral Agent, with respect to each of the covered Premises, the most recent survey of such Premises, together with either (i) an updated survey certification in favor of the Trustee and the Collateral Agent from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit from the Company and the Guarantors stating that there has been no change, other than, in each case, changes that do not materially adversely affect the use by the Company or Guarantor, as applicable, of such Premises for the Company or such Guarantor's business as so conducted, or intended to be conducted, at such Premises. Conduct of Business. The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any businesses other than Permitted Businesses.
RATIO OF EARNINGS TO FIXED CHARGES (In millions, except ratio) Fiscal Year Ended Six
Month
Period
Ended December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 29,
2014 — * 1.1 0.6 — * 0.5 — * $ (37.3 ) $ — $ (21.6 ) $ (114.5 ) $ (31.9 ) $ $(64.7 ) June 29, 2014 (in millions) $ 26.9 623.2 41.0 270.8 935.0 — 862.3 (0.9 ) (624.3 ) 237.1 $ 1,172.1 December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 30,
2013 June 29,
2014 $ 334.5 $ 408.5 $ 713.9 $ 969.2 $ 950.6 $ 488.5 $ 429.4 63.6 84.3 191.2 257.2 240.0 126.2 109.0 (27.0 ) 23.1 29.5 (49.7 ) 31.8 20.3 8.0 1.0 (12.7 ) 1.9 (1.6 ) — 2.7 3.9 (38.3 ) 14.6 (23.5 ) (112.9 ) (31.9 ) (15.5 ) (64.7 ) (3.2 ) (0.1 ) (0.7 ) (1.5 ) (5.3 ) (4.4 ) (0.2 ) $ (41.5 ) $ 14.5 $ (24.2 ) $ (114.4 ) $ (37.2 ) $ (19.9 ) $ (64.9 ) $ (2.76 ) $ 0.88 $ (0.86 ) $ (2.41 ) $ (0.56 ) $ (0.27 ) $ (1.13 ) $ (2.76 ) $ 0.87 $ (0.86 ) $ (2.41 ) $ (0.56 ) $ (0.27 ) $ (1.13 ) $ (0.23 ) $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.08 ) $ 0.00 $ (0.23 ) $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.08 ) $ 0.00 $ (2.99 ) $ 0.87 $ (0.88 ) $ (2.44 ) $ (0.65 ) $ (0.35 ) $ (1.13 ) $ (2.99 ) $ 0.86 $ (0.88 ) $ (2.44 ) $ (0.65 ) $ (0.35 ) $ (1.13 ) 13.9 16.6 27.4 46.9 56.8 56.6 57.4 13.9 16.9 27.4 46.9 56.8 56.6 57.4 December 27,
2009 December 26,
2010 December 25,
2011 December 30,
2012 December 29,
2013 June 30,
2013 June 29,
2014 $ 9.9 $ 10.8 $ 69.6 $ 49.0 $ 55.7 49.7 26.9 37.1 65.8 207.2 176.6 179.3 179.2 151.6 241.6 535.7 1,216.0 1,284.0 1,216.6 1,222.3 1,172.1 4.7 0.6 1.6 1.5 1.3 1.4 1.2 51.6 226.1 631.5 630.1 628.9 629.5 663.0 — — 22.8 18.7 14.5 16.6 — $ 124.9 $ 169.9 $ 312.6 $ 324.1 $ 295.8 308.1 237.1
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1615
Attention: Workflow Management, 5th Floor
DESCRIPTION OF THE EXCHANGE NOTES Percentage 105.250 % 102.625 % 100.000 % so long as any Notes are outstanding, the Company will furnish to the Trustee and to the Holders:
in each case, within the time periods required for filing such forms and reports as specified in the SEC's rules and regulations.
Notwithstanding the foregoing, the Company may satisfy such requirements prior to the effectiveness of the registration statement contemplated by the Registration Rights Agreement by filing with the SEC such registration statement within the time period required for such filing as specified in the Registration Rights Agreement, to the extent that any such registration statement contains substantially the same information as would be required to be filed by the Company if it were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and by providing the Trustee and Holders with such Registration Statement (and any amendments thereto) promptly following the filing thereof.
In addition, following the consummation of the Exchange Offer, whether or not required by the SEC's rules and regulations, the Company will file a copy of all such information and reports with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing). During any period in which the Company is not required to file reports with the SEC, the Company shall make such information publicly available within the time periods specified in the SEC's rules and regulations applicable to a "non-accelerated filer." In addition, the Company has agreed that, prior to the consummation of the Exchange Offer, for so long as any Exchange Notes remain outstanding, it will furnish to the Holders upon their request, the information required to be delivered pursuant to Rule 144(A)(d)(4) under the Securities Act.
Payments for Consent. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture, the Notes or any of the Collateral Agreements unless such consideration is offered to be paid or is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Company or of any Subsidiary of the Company, as such, shall have any liability for any obligations of the Company or the Guarantors under the Exchange Notes, the Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Exchange Note waives and releases all such liability. The waiver may not be effective to waive liabilities under the federal securities laws.
Events of Default
The following events are defined in the Indenture as "Events"Events of Default"Default":
(1)
(2)
offer to purchase (including a default in payment resulting from the failure to make a required offer to purchase), upon acceleration or otherwise;
(3)
(4)
(5)
(6)
(7)
liquidation of its affairs; and such judgment, decree or order shall remain unstayed and in effect for a period of sixty (60) days;
(8)
(9)
invalid or any Guarantor denies its liability under its Guarantee (other than by reason of release of a Guarantor in accordance with the terms of the Indenture); or
(10)
If an Event of Default (other than an Event of Default specified in clause (6) or (7) above with respect to the Company) shall occur and be continuing and has not been waived, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes (which includes the Initial Notes and(including Additional Notes, if any) may declare the principal of and premium, if any, accrued interest and Additional Interest, if any, on all the Exchange Notes to be due and payable by notice in writing to the Company and the Trustee specifying the Event of Default and that it is a "notice of acceleration" (the "Acceleration Notice""Acceleration Notice"), and the same shall become immediately due and payable.
If an Event of Default specified in clause (6) or (7) above with respect to the Company occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest and Additional Interest, if any, on all of the outstanding Exchange Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
The Indenture provides that, at any time after a declaration of acceleration with respect to the Exchange Notes as described in the preceding paragraphs, the Holders of a majority in principal amount of the Notes (which includes the Initial Notes and(including Additional Notes, if any) may rescind and cancel such declaration and its consequences:
(1)
(2)
(3)
become due otherwise than by such declaration of acceleration, has been paid or deposited with the Trustee for payment therefor without any restriction on or condition to the application by the Trustee towards such payment;
(4)
(5)
No such rescission shall affect any subsequent Default or impair any right consequent thereto.
The Holders of a majority in principal amount of the Notes (which includes the Initial Notes and(including Additional Notes, if any) may waive any existing Default or Event of Default under the Indenture, and
its consequences, except a default in the payment of the principal of or premium, if any, interest or Additional Interest, if any, on any Notes.
Holders may not enforce the Indenture or the Exchange Notes except as provided in the Indenture and under the Trust Indenture Act.TIA. The Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee an indemnity or security satisfactory to the Trustee. Subject to the provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Exchange Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.
No past, present or future director, officer, employee, incorporator, or stockholder of the Company or a Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Exchange Notes, the Guarantees or the Indenture or for any claim based on, or in respect of, such obligations or their creation. Each Holder by accepting aan Exchange Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Exchange Notes.
Under the Indenture, the Company is required to provide an Officers' Certificate to the Trustee promptly upon any Officer obtaining knowledge of any Default or Event of Default (provided that such Officers' Certificate shall be provided at least annually whether or not such Officers know of any Default or Event of Default) that has occurred and, if applicable, describe such Default or Event of Default and the status thereof.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors discharged with respect to the outstanding Exchange Notes ("Legal Defeasance"). Such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Exchange Notes, except for:
(1)
(2)
(3)
(4)
In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Exchange Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under "Events"Events of Default"Default" will no longer constitute an Event of Default with respect to the Exchange Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1)
Additional Interest, if any, on the Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be;
(2)
(a)
(b)
in either case to the effectstating that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3)
(4)
(5)
(6)
(7)
(8)
Satisfaction and Discharge
The Indenture (and all Liens on Collateral in connection with the issuance of the Notes) will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, as expressly provided for in the Indenture) as to all outstanding Exchange Notes when:
(1)
(a)
(b)
(2)
(3)
Modification of the Indenture
From time to time, the Company, the Guarantors, the Trustee and, if such amendment, modification or supplement relates to any Collateral Agreement, the Collateral Agent, without the consent of the Holders, may amend, modify or supplement the Indenture, the Exchange Notes, the Guarantees and the Collateral Agreements:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(9) to conform the text of the Indenture, the Exchange Notes, or the Guarantees to any provision of this Description of the Exchange Notes to the extent that such provision in this Description of the Exchange Notes was intended to be a verbatim recitation of a provision of the Indenture, the Exchange Notes, or the Guarantees, which intent may be evidenced by an Officer's Certificate to that effect;
(10) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the date of the Indenture; or
(11) to enter into or amend the Intercreditor Agreement and/or Collateral Agreements
so long as such amendment, modification or supplement does not, adversely affect the rights of any of the Holders in any material respect. Other amendments of, modifications to and supplements to the Indenture, the Exchange Notes, the Guarantees the Registration Rights Agreement and the Collateral Agreements may be made with the consent of the Holders of a majority in principal amount of the then outstanding Notes issued under the Indenture (which includes Additional Notes, if any), except that,
(a)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(b)(includingissued under the Initial Notes andIndenture (including Additional Notes, if any) issued under the Indenture,, release all or substantially all of the Collateral otherwise than in accordance with the terms of the Indenture and the Collateral Agreements.
Notwithstanding the foregoing, the Trustee and the Collateral Agent will not be required to enter into any amendment that affects the Trustee's or Collateral Agent's rights and obligations under the Indenture and Collateral Agreements.
Governing Law
The Indenture provides that it, the Exchange Notes and the Guarantees arewill be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the law, of another jurisdiction would be required thereby.
The Trustee
The Indenture provides that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
�� The Indenture and the provisions of the Trust Indenture ActTIA contain certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the Trust Indenture Act,TIA, the Trustee will be permitted to engage in other transactions;provided that if the Trustee acquires any conflicting interest as described in the Trust Indenture Act,TIA, it must eliminate such conflict or resign.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided.
"Acquired Indebtedness" "Acquired Indebtedness" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with or into the Company or any of its Restricted Subsidiaries or in the case of any Indebtedness assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation and which Indebtedness is without recourse to the Company or any of its Subsidiaries or to any of their respective properties or assets other than the Person or the assets to which such Indebtedness related prior to the time such Person became a Restricted Subsidiary of the Company or the time of such acquisition, merger or consolidation.
"Additional Notes" means all 10% Senior Secured Notes due 2017 that are not Exchange Notes issued after May 19, 2010 (other than pursuant to Sections 2.06. 2.07, 2.10 and 3.06 of the Indenture) from time to time in accordance with the Indenture, including, without limitation, the provisions of Section 2.02 of the Indenture.
"Additional Interest" "Additional Interest" has the meaning set forth in the Registration Rights Agreement.
"Administrative Agent" "Administrative Agent" has the meaning set forth in the definition of the term "Credit Agreement."
"Affiliate" "Affiliate" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term "control""control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The terms "controlling" and "controlled" have meanings correlative toof the foregoing.
"Applicable Premium""Applicable Premium" means, with respect to a Note at any Redemption Date, the greater of (i) 1.00% of the principal amount of such Note and (ii) the excess of (A) the present value at such Redemption Date of
(1) the redemption price of such Note on June 1, 2014May 15, 2016 (such redemption price being that described in the first paragraph of "—Redemption—Optional Redemption on or after June 1, 2014"After May 15, 2016")plus
(2) all required remaining scheduled interest payments due on such Exchange Notes through June 1, 2014,May 15, 2016, with such present value being computed for purposes of both clauses (1) and (2) using a discount rate equal to the Treasury Rateplus 50 basis points over
(B) the principal amount of such Note on such Redemption Date. Calculation of the Applicable Premium will be made by the Company or on behalf of the Company by such Person as the Company shall designate.
"Asset Acquisition" "Asset Acquisition" means:
(1)
(2)
"Asset Sale" "Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer (other than a Lien permitted in accordance with the Indenture) for value by (x) the Company or any of its Restricted Subsidiaries to any Person other than the Company or a Guarantor or (y) a Foreign Restricted Subsidiary to any Person other than the Company or a Wholly Owned Subsidiary of the Company of:
(1)
(2)
provided,however, that Asset Sales shall not include:
(a)
(b)
(c)
(d)
(e)
(f) a disposition by a Subsidiary to the Company or by the Company or a Subsidiary of the Company to a Wholly Owned Restricted Subsidiary;
(g) the non-exclusive license or sublicense of intellectual property or other intangibles;
(h) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and
(i) the unwinding of any Commodity Agreement or Credit Facility Hedging Obligations (including sales under forward contracts);
(j) any dispositions to the extent required by, or made pursuant to customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding agreements;
(k) the lease or sublease of office space; and
(l) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, as amended (or comparable or successor provision), any exchange of like property for use in any Permitted Business.
"Attributable Debt""Attributable Debt" in respect of a sale and leaseback transaction occurring on or after the date of the Indenture means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended);provided,however, if such sale and leaseback transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capitalized Lease Obligation.
"Bankruptcy Code""Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended, and codified as 11 U.S.C. §§101et seq.
"Beneficial Owner" "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" have meanings correlative to the foregoing.
"Board "Board of Directors"Directors" means, as to any Person, the board of directors or similar governing body of such Person or any duly authorized committee thereof.
"Board Resolution" "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Capital Stock" "Capital Stock" means:
(1)
(2)
(3)
"Capitalized "Capitalized Lease Obligation"Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
"Cash Equivalents" "Cash Equivalents" means:
(1)
(2)
(3)
(4)
(6)
"Cash "Cash Management Obligations"Obligations" means, with respect to any Person, all obligations (including fees, expenses and overdrafts and related liabilities) of such Person to any other Person that arise from credit cards, stored value cards, credit card processing services, debit cards, purchase cards (including so called "procurement cards" or "P-cards"), treasury, depositary or cash management services, including in connection with any automated clearing house transfers of funds, or any similar transactions.
"Change "Change of Control"Control" means the occurrence of one or more of the following events:
(1)
(2)
(3)
(4)
"Collateral" "Collateral" means all of the assets of the Company or any Guarantor, whether now owned or hereafter existing and whether real, personal or mixed, which secures the Indenture Obligations.
"Collateral Agent" means the collateral agentObligations and any successor under the Indenture.Permitted Additional Pari Passu Obligations.
"Collateral Agreements" "Collateral Agreements" means, collectively, the Intercreditor Agreement, the Security Agreement and each Mortgage, in each case, as the same may be in force from time to time.
"Commodity Agreement" "Commodity Agreement" means any hedging agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in commodity prices.
"Common Collateral" "Common Collateral" means all of the assets of the Company or any Guarantor, whether now owned or hereafter existing and whether real, personal or mixed, with respect to which a Lien is granted or held as security for both the Credit Facility Claims and the IndenturePari Passu Obligations.
"Common Stock" "Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person's common stock, whether outstanding on May 19, 2010the Issue Date or issued thereafter, and includes, without limitation, all series and classes of such common stock.
"Consolidated EBITDA" "Consolidated EBITDA" means, with respect to any Person, for any period, the excess of:
(x)
(1)
(2)
(a)
(b)
(c)
(d)
(y)
all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated "Consolidated Fixed Charge Coverage Ratio"Ratio" means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four consecutive full fiscal quarters (the "Four"Four Quarter Period"Period") most recently ending on or prior to the date of the transaction or event giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio for which financial statements are available (the "Transaction Date""Transaction Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
(1)
(2)
liability for any such Indebtedness or Acquired Indebtedness and also including any Consolidated EBITDA associated with such Asset Acquisition) occurred on the first day of the Four Quarter Period;provided that the Consolidated EBITDA of any Person acquired shall be included only to the extent includible pursuant to the definition of "Consolidated Net Income." If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio":
"Consolidated Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of:
"Consolidated Interest Expense" means, with respect to any Person for any period, the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, as determined in accordance with GAAP, and including, without duplication, (a) all amortization or accretion of original issue discount; (b) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period; and (c) net cash costs under all Interest Swap Obligations (including amortization of fees).
"Consolidated Net Income" means, with respect to any Person, for any period, the aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP;provided,however, that there shall be excluded therefrom:
"Consolidated Non-cash Charges" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash items and expenses of such Person and its Restricted Subsidiaries to the extent they reduce Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).
"Credit Agreement" means the Credit and Security Agreement, dated as of May 19, 2010, by and among the Company, the lenders party thereto (together with their successors and assigns, the "Lenders") and KeyBank National Association, as administrative agent (in such capacity, together with its successors and assigns, the "Administrative Agent"), setting forth the terms and conditions of the senior credit facility, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended, restated, supplemented or otherwise modified from time to time, including pursuant to one or more agreements evidencing revolving credit facilities, commercial paper facilities, term loan facilities, receivables financings and/or notes or bond financings, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time that extend the maturity of, refinance, replace or otherwise restructure (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted to be incurred pursuant to (a) clause (2) of the definition of the term "Permitted Indebtedness" and/or (b) (i) the Consolidated Fixed Charge Coverage Ratio test under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and/or (ii) clause (15) of the definition of the term "Permitted Indebtedness" that, in the case of each of such clauses (i) and (ii), is secured by a Permitted Lien described in clause (22) of the
definition thereof that is subject to the Intercreditor Agreement) or adding Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.
"Credit Facility Cash Management Obligations" means any Cash Management Obligations secured by any collateral under the Credit Facility Collateral Documents pursuant to a Permitted Lien described in clause (23) of the definition thereof.
"Credit Facility Claims" means (a) Indebtedness under the Credit Agreement (including Protective Advance Obligations); (b) the Credit Facility Cash Management Obligations and the Credit Facility Hedging Obligations, and (c) all other Obligations of the Company and the Guarantors under the documents relating to Indebtedness described in clauses (a) and (b) above;provided, that notwithstanding the foregoing, the aggregate principal amount of all such Indebtedness (excluding Credit Facility Hedging Obligations and Credit Facility Cash Management Obligations but including the principal amount of all Protective Advance Obligations) that exceeds the Maximum Credit Facility Principal Amount on the date such Indebtedness is incurred or, with respect to any such Indebtedness incurred under a revolving facility, on the date the commitment under such revolving facility is initially put in place (and any interest thereon) shall not constitute Credit Facility Claims (all such excess principal and interest thereon are referred to herein as "Excess Credit Facility Claims").
"Credit Facility Claim Holder" means each holder of a Credit Facility Claim under the Credit Facility Documents.
"Credit Facility Collateral Documents" has the meaning ascribed thereto in the Intercreditor Agreement.
"Credit Facility Documents" means the Credit Agreement, any other agreement, document or instrument pursuant to which a Lien is granted securing any Credit Facility Claims or under which rights or remedies with respect to such Liens are governed, and each of the other agreements, documents and instruments (including each agreement, document or instrument providing for or evidencing a Credit Facility Hedging Obligation or Credit Facility Cash Management Obligation) providing for or evidencing any Obligation under the Credit Agreement or any other Credit Facility Claim, and any other related document or instrument executed or delivered pursuant to any Credit Facility Document at any time or otherwise evidencing any Credit Facility Claims.
"Credit Facility Hedging Obligations" means, collectively, any Interest Swap Obligations that are permitted to be incurred under clause (4) of the definition of the term "Permitted Indebtedness," Indebtedness under Currency Agreements that are permitted to be incurred under clause (5) of the definition of the term "Permitted Indebtedness" and Indebtedness under Commodity Agreements that are permitted to be incurred under clause (14) of the definition of the term "Permitted Indebtedness," in each case, that are secured by any Credit Facility Priority Collateral under the Credit Facility Collateral Documents pursuant to Liens subject to the Intercreditor Agreement.
"Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.
"Discharge of Credit Facility Claims" means the payment in full in cash of (a) the principal of and interest (including interest accruing on or after the commencement of an insolvency or liquidation proceeding, whether or not such interest would be allowed in such proceeding) and premium, if any, on all Indebtedness (including, without limitation, Credit Facility Hedging Obligations and Credit Facility
Cash Management Obligations) outstanding under the Credit Agreement and related documents or, with respect to letters of credit outstanding thereunder, delivery of cash collateral (in an amount of no less than 105% of the undrawn, or drawn and unreimbursed, amount thereof) or backstop letters of credit in respect thereof in compliance with the Credit Facility and related documents, in each case after or concurrently with termination of all commitments to extend credit thereunder, and (b) any other Credit Facility Claims that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid.
"Discharge of Indenture Obligations" means the earliest to occur of: (A) the payment in full in cash of (a) the principal of and interest (including interest accruing on or after the commencement of an insolvency or liquidation proceeding, whether or not such interest would be allowed in such proceeding) and premium, if any, on all Indebtedness outstanding under the Indenture Documents, and (b) any other Indenture Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid; (B) the Company's exercise of its legal defeasance option or covenant defeasance option as described in and in accordance with Section 8.01 ("Legal Defeasance and Covenant Defeasance") of the Indenture; and (C) the satisfaction and discharge of the Indenture in accordance with Section 8.02 ("Satisfaction and Discharge") thereto.
"Discontinued Subsidiaries" means Restricted Subsidiaries of the Company that have been classified as "discontinued operations" in Note 6 to the Company's unaudited condensed consolidated statements of cash flows for the quarter ended March 28, 2010.
"Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event that would constitute a Change of Control), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except in each case, upon the occurrence of a Change of Control) on or prior to the first anniversary of the final maturity date of the Notes for cash or is convertible into or exchangeable for debt securities of the Company or its Subsidiaries at any time prior to such anniversary.
"Domestic Restricted Subsidiary" means, with respect to any Person, a Domestic Subsidiary of such Person that is a Restricted Subsidiary of such Person.
"Domestic Subsidiary" means, with respect to any Person, a Subsidiary of such Person that is not a Foreign Subsidiary of such Person.
"Equity Offering" means an underwritten public offering of Common Stock of the Company or any holding company of the Company pursuant to a registration statement filed with the SEC (other than on Form S-8) or any private placement of Common Stock of the Company or any holding company of the Company to any Person other than issuances upon exercise of options by employees of any holding company, the Company or any of the Restricted Subsidiaries.
"Excess Indenture Obligations" means any principal amounts outstanding on the Notes (which includes the Initial Notes and Additional Notes, if any) in excess of the Maximum Note Principal Amount and interest thereon.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
"Exchange Offer" means an exchange offer that may be made by the Company, pursuant to the Registration Rights Agreement, to exchange for any and all the Initial Notes, or Additional Notes, as applicable, a like aggregate principal amount of Notes having substantially identical terms to the Initial Notes, or any Additional Notes, registered under the Securities Act.
"Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of the Company acting in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee;provided, that with respect to any price less than $5.0 million only the good faith determination by the Company's senior management shall be required.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is organized under the laws of any jurisdiction other than the United States of America, any state thereof or the District of Columbia.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary of such Person that is organized under the laws of any jurisdiction other than the United States of America, any state thereof or the District of Columbia.
"GAAP" means accounting principles generally accepted in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of May 19, 2010.
"Guarantor" means (1) each of the Company's Domestic Restricted Subsidiaries existing on May 19, 2010, and (2) each of the Company's Domestic Restricted Subsidiaries that in the future executes a supplemental indenture in which such Domestic Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Guarantor;provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of this Indenture.
"Herley" means Herley Industries, Inc.
"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.
"Holder" means the Person in whose name a Note is registered on the registrar's books.
"Indebtedness" means with respect to any Person, without duplication:
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market Value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock.
"Indenture Documents" means the Notes, the Indenture, the Guarantees and the Collateral Agreements.
"Indenture Obligations" means all Obligations in respect of the Notes or arising under the Indenture Documents. Indenture Obligations shall include all interest accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.
"Independent Financial Advisor" means a nationally-recognized accounting, appraisal or investment banking firm: (1) that does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company; and (2) that, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged.
"Initial Guarantee" means a guarantee made under the indenture in respect of the Initial Notes.
"Initial Notes" means the 10% Senior Secured Notes due 2017 that were previously issued by the Company under the Indenture on May 19, 2010, in the aggregate principal amount of $225.0 million.
"Intercreditor Agreement" means the Intercreditor Agreement among the Administrative Agent, the Collateral Agent, the Company and the Guarantors, dated as of May 19, 2010, as the same may be amended, supplemented or modified from time to time.
"Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.
"Investment" in any Person means any direct or indirect advance, loan (other than advances or extensions of trade credit to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of
guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for value of Capital Stock, Indebtedness or other similar instruments issued by such Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be its fair market value at the time the Investment is made and without giving effect to subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary", the definition of "Restricted Payment" and the covenant described under "—Certain Covenants—Limitation on Restricted Payments:"
"Lenders" has the meaning set forth in the definition of the term "Credit Agreement."
"Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).
"Maximum Credit Facility Principal Amount" means the sum of (i) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and its Subsidiaries pursuant to clause (2) of the definition of the term "Permitted Indebtedness"; plus (ii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and its Subsidiaries pursuant to clause (15) of the definition of the term "Permitted Indebtedness"; plus (iii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and its Subsidiaries pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock;" provided that, in the case of each of clauses (ii) and (iii), such Indebtedness is permitted to be secured by a Lien permitted pursuant to clause (22) of the definition of the term "Permitted Lien".
"Maximum Note Principal Amount" means the sum of (i) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the Guarantors pursuant to clause (1) of the definition of the term "Permitted Indebtedness"; plus (ii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the Guarantors pursuant to clause (15) of the definition of the term "Permitted Indebtedness"; plus (iii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the
Guarantors pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock;" provided that, in the case of each of clauses (ii) and (iii), such Indebtedness is permitted to be secured by a Lien permitted pursuant to clause (22) of the definition of the term "Permitted Lien".
"Mortgages" means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents securing Liens on the Premises as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of:
provided,however, that if, after the payment of all taxes with respect to such Asset Sale, the amount of estimated taxes, if any, pursuant to clause (2) above exceeded the tax amount actually paid in cash in respect of such Asset Sale, the aggregate amount of such excess shall, at such time, constitute Net Cash Proceeds.
"Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
"Officer" means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers of the Company, at least one of whom shall be the principal financial officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel who shall be reasonably acceptable to the Trustee.
"Permitted Business" means any business that is the same as or similar, reasonably related, complementary or incidental to the business in which the Company and its Restricted Subsidiaries are engaged on May 19, 2010.
"Permitted Indebtedness" means, without duplication, each of the following:
For purposes of determining compliance with the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant, (a) the outstanding principal amount of any item of Indebtedness shall be counted only once and (b) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (15) above or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such covenant, the Company will be permitted, in its sole discretion, to classify (or later reclassify) such item of Indebtedness in any manner that complies with such covenant;provided, that Permitted Indebtedness under the Credit Agreement outstanding on May 19, 2010 will initially be deemed to have been incurred on such date under clause (2) above. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant.
"Permitted Investments" means:
"Permitted Liens" means the following types of Liens:
return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company;
"Person" means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.
"Pro Forma Consolidated EBITDA" means, with respect to any Person, the Consolidated EBITDA of such Person during the four consecutive full fiscal quarters (the "Four Quarter Period") most recently ending on or prior to the date of the transaction or event giving rise to the need to calculate Pro Forma Consolidated EBITDA for which financial statements are available (the "Transaction Date") of such Person for the Four Quarter Period;provided, however, that such Consolidated EBITDA shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date (including Indebtedness actually incurred on the Transaction Date) and which will continue to be so determined thereafter shall be deemed to have accrued at the average rate per annum on such Indebtedness during the period of four fiscal quarters (or if less, such period of time that it was outstanding and) ending on or most recently ended prior to the Transaction
Date;provided that interest on any Indebtedness actually incurred on the Transaction Date or not outstanding on the last date of such Four Quarter Period, shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of:
(1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs);plus
(2) the product of (x) the amount of all dividend payments on any Disqualified Capital Stock of such Person and any series of Preferred Stock of such Person (other than dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be paid or accrued during such periodtimes (y) a fraction, the numerator of which is one and the denominator of which is oneminus the then current effective consolidated federal, state and local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any period, the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, as determined in accordance with GAAP, and including, without duplication, (a) all amortization or accretion of original issue discount; (b) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period; and (c) net cash costs under all Interest Swap Obligations (including amortization of fees).
"Consolidated Net Income" means, with respect to any Person, for any period, the aggregate net income (or net loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP;provided,however, that there shall be excluded therefrom:
(1) after-tax gains and losses from Asset Sales or abandonments or reserves relating thereto;
(2) after-tax items classified as extraordinary gains or losses;
(3) the net income (but not loss) of any Restricted Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted by a contract, operation of law or otherwise;
(4) the net income of any Person, other than the referent Person or a Restricted Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Wholly Owned Subsidiary of the referent Person by such Person;
(5) any restoration to income of any material contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date;
(6) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);
(7) all gains and losses realized on or because of the purchase or other acquisition by such Person or any of its Restricted Subsidiaries of any securities of such Person or any of its Restricted Subsidiaries;
(8) the cumulative effect of a change in accounting principles;
(9) interest expense attributable to dividends on Qualified Capital Stock pursuant to Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity";
(10) non-cash charges resulting from the impairment of intangible assets;
(11) non-cash charges resulting from the amortization of intangible assets;
(12) non-cash charges resulting from the amortization of deferred financing costs and expenses;
(13) any non-cash compensation or other non-cash expenses or charges arising from the grant of or issuance or repricing of stock, stock options or other equity-based awards or any amendment, modification, substitution or change of any such stock, stock options or other equity-based awards;
(14) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets;
(15) any fees, expenses and other costs incurred or paid in connection with the offering of the Exchange Notes, the Credit Agreement, the redemption of the Existing Notes, and the transactions contemplated hereby and thereby; and
(16) any expenses or charges related to any Equity Offering, Asset Sale, merger, amalgamation, consolidation, arrangement, acquisition, disposition, recapitalization or the incurrence of Indebtedness permitted to be incurred by the Indenture (including a refinancing thereof) (whether or not successful).
"Consolidated Non-cash Charges" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash items and expenses of such Person and its Restricted Subsidiaries to the extent they reduce Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve for cash charges for any future period).
"Consolidated Secured Leverage Ratio" means, with respect to any Person, the ratio of (1) the aggregate amount of Secured Debt of such Person and its Restricted Subsidiaries as of the Transaction Date (determined on a consolidated basis in accordance with GAAP) less unrestricted cash and Cash Equivalents of the Company and its Restricted Subsidiaries to (2) Consolidated EBITDA for the Four-Quarter Period. The Consolidated Secured Leverage Ratio shall be calculated in a manner consistent with the pro forma provisions (to the extent applicable) of the definition of "Consolidated Fixed Charge Coverage Ratio."
"Credit Agreement" means the Credit and Security Agreement dated as of the Issue Date, by and among the Company, the lenders party thereto (together with their successors and assigns, the "Lenders") and SunTrust Bank, as administrative agent and collateral agent (in such capacity, together with its successors and assigns, the "Administrative Agent"), setting forth the terms and conditions of the senior credit facility, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended, restated, supplemented or otherwise modified from time to time, including pursuant to one or more agreements evidencing revolving credit facilities, commercial paper facilities, term loan facilities,
receivables financings and/or notes or bond financings, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time that extend the maturity of, refinance, replace or otherwise restructure (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted to be incurred pursuant to (a) clause (2) of the definition of the term "Permitted Indebtedness" and/or (b) (i) the Consolidated Fixed Charge Coverage Ratio test under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" and/or (ii) clause (15) of the definition of the term "Permitted Indebtedness" that, in the case of each of such clauses (i) and (ii), is secured by a Permitted Lien described in clause (18) or (22) of the definition thereof and that is subject to the Intercreditor Agreement) or adding Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.
"Credit Facility Cash Management Obligations" means any Cash Management Obligations secured by any collateral under the Credit Facility Collateral Documents pursuant to a Permitted Lien described in clause (23) of the definition thereof.
"Credit Facility Claims" means (a) Indebtedness under the Credit Agreement (including Protective Advance Obligations), (b) the Credit Facility Cash Management Obligations and the Credit Facility Hedging Obligations, and (c) all other Obligations of the Company and the Guarantors under the documents relating to Indebtedness described in clauses (a) and (b) above;provided that, notwithstanding the foregoing, the aggregate principal amount of all such Indebtedness (excluding Credit Facility Hedging Obligations and Credit Facility Cash Management Obligations but including the principal amount of all Protective Advance Obligations) that exceeds the Maximum Credit Facility Principal Amount on the date such Indebtedness is incurred or, with respect to any such Indebtedness incurred under a revolving facility, on the date the commitment under such revolving facility is initially put in place (and any interest thereon) shall not constitute Credit Facility Claims (all such excess principal and interest thereon are referred to herein as "Excess Credit Facility Claims").
"Credit Facility Claim Holder" means each holder of a Credit Facility Claim under the Credit Facility Documents.
"Credit Facility Collateral Documents" has the meaning ascribed thereto in the Intercreditor Agreement.
"Credit Facility Documents" means the Credit Agreement, any other agreement, document or instrument pursuant to which a Lien is granted securing any Credit Facility Claims or under which rights or remedies with respect to such Liens are governed, and each of the other agreements, documents and instruments (including each agreement, document or instrument providing for or evidencing a Credit Facility Hedging Obligation or Credit Facility Cash Management Obligation) providing for or evidencing any Obligation under the Credit Agreement or any other Credit Facility Claim, and any other related document or instrument executed or delivered pursuant to any Credit Facility Document at any time or otherwise evidencing any Credit Facility Claims.
"Credit Facility Hedging Obligations" means, collectively, any Interest Swap Obligations that are permitted to be incurred under clause (4) of the definition of the term "Permitted Indebtedness," Indebtedness under Currency Agreements that are permitted to be incurred under clause (5) of the definition of the term "Permitted Indebtedness" and Indebtedness under Commodity Agreements that are permitted to be incurred under clause (14) of the definition of the term "Permitted Indebtedness," in each case, that are secured by any Credit Facility Priority Collateral under the Credit Facility Collateral Documents pursuant to Liens subject to the Intercreditor Agreement.
"Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.
"Discharge of Credit Facility Claims" means the payment in full in cash of (a) the principal of and interest (including interest accruing on or after the commencement of an insolvency or liquidation proceeding, whether or not such interest would be allowed in such proceeding) and premium, if any, on all Indebtedness (including, without limitation, Credit Facility Hedging Obligations and Credit Facility Cash Management Obligations) outstanding under the Credit Agreement and related documents or, with respect to letters of credit outstanding thereunder, delivery of cash collateral (in an amount of no less than 105% of the undrawn, or drawn and unreimbursed, amount thereof) or backstop letters of credit in respect thereof in compliance with the Credit Facility and related documents, in each case after or concurrently with termination of all commitments to extend credit thereunder, and (b) any other Credit Facility Claims that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid.
"Discharge of Pari Passu Obligations" means the earliest to occur of: (A) the payment in full in cash of (a) the principal of and interest (including interest accruing on or after the commencement of an insolvency or liquidation proceeding, whether or not such interest would be allowed in such proceeding) and premium, if any, on all Indebtedness outstanding under the Permitted Additional Pari Passu Documents, and (b) any other Pari Passu Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid; (B) with respect to Obligations under the Exchange Notes, the Company's exercise of its legal defeasance option or covenant defeasance option as described in and in accordance with Section 8.01 (Legal Defeasance and Discharge) of the Indenture, and, with respect to any Permitted Additional Pari Passu Obligations, pursuant to any comparable provision in any Permitted Additional Pari Passu Obligations Document; and (C) with respect to Obligations under the Exchange Notes, the satisfaction and discharge of the Indenture in accordance with Section 8.02 (Satisfaction and Discharge) thereto, and, with respect to any Permitted Additional Pari Passu Obligations pursuant to any comparable provision in any Permitted Additional Pari Passu Obligations Document.
"Discontinued Subsidiaries" means Restricted Subsidiaries of the Company that have been classified as "discontinued operations" in Note 9 to the Company's audited consolidated financial statements for the fiscal year ended December 29, 2013.
"Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event that would constitute a Change of Control), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except in each case, upon the occurrence of a Change of Control) on or prior to the first anniversary of the final maturity date of the Exchange Notes for cash or is convertible into or exchangeable for debt securities of the Company or its Subsidiaries at any time prior to such anniversary.
"Domestic Restricted Subsidiary" means, with respect to any Person, a Domestic Subsidiary of such Person that is a Restricted Subsidiary of such Person.
"Domestic Subsidiary" means, with respect to any Person, a Subsidiary of such Person that is not a Foreign Subsidiary of such Person.
"Equity Offering" means an underwritten public offering of Common Stock of the Company or any holding company of the Company pursuant to a registration statement filed with the SEC (other than
on Form S-8) or any private placement of Common Stock of the Company or any holding company of the Company to any Person other than issuances upon exercise of options by employees of any holding company, the Company or any of the Restricted Subsidiaries.
"Excess Pari Passu Obligations" means any principal amounts outstanding on the Exchange Notes (including Additional Notes, if any) and Permitted Additional Pari Passu Obligations in excess of the Maximum Pari Passu Principal Amount and interest thereon.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
"Exchange Offer" means an exchange offer that may be made by the Company, pursuant to the Registration Rights Agreement, to exchange for any and all the Unregistered Notes a like aggregate principal amount of Exchange Notes having substantially identical terms to the Exchange Notes registered under the Securities Act.
"Existing Notes" means the Company's 10% Senior Secured Notes due 2017.
"Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of the Company acting in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee;provided that with respect to any price less than $5.0 million only the good faith determination by the Company's senior management shall be required.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is organized under the laws of any jurisdiction other than the United States of America, any state thereof or the District of Columbia.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary of such Person that is organized under the laws of any jurisdiction other than the United States of America, any state thereof or the District of Columbia.
"GAAP" means accounting principles generally accepted in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date.
"Guarantor" means (1) each of the Company's Domestic Restricted Subsidiaries existing on the Issue Date, and (2) each of the Company's Domestic Restricted Subsidiaries that in the future executes a supplemental indenture in which such Domestic Restricted Subsidiary agrees to be bound by the terms of the Indenture as a Guarantor;provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of the Indenture.
"Holder" means the Person in whose name a Note is registered on the registrar's books.
"Indebtedness" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the deferred purchase price of property, including holdbacks, earn-outs, or similar obligations, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and any deferred purchase price represented by earn outs consistent with the Company's past practice);
(5) all Obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, whether or not then due;
(6) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below;
(7) all Obligations of any other Person of the type referred to in clauses (1) through (6) which are secured by any Lien on any property or asset of such Person, the amount of any such Obligation being deemed to be the lesser of the Fair Market Value of the property or asset securing such Obligation or the amount of such Obligation;
(8) all Interest Swap Obligations and all Obligations under Currency Agreements of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market Value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock.
"Indenture Documents" means the Exchange Notes, the Indenture, the Guarantees and the Collateral Agreements.
"Indenture Obligations" means all Obligations of the Company and the Guarantors under the Indenture Documents. Indenture Obligations shall include all interest, fees and other amounts accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest, fees and other amounts is allowed as a claim in such insolvency or liquidation proceeding.
"Independent Financial Advisor" means a nationally-recognized accounting, appraisal or investment banking firm: (1) that does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company; and (2) that, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged.
"Intercreditor Agreement" means the Intercreditor Agreement among the Administrative Agent, the Collateral Agent, the Company and the Guarantors, dated as of the Issue Date, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.
"Investment" in any Person means any direct or indirect advance, loan (other than advances or extensions of trade credit to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for value of Capital Stock, Indebtedness or other similar instruments issued by such Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be its fair market value at the time the Investment is made and without giving effect to subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary," the definition of "Restricted Payment" and the covenant described under "—Certain Covenants—Limitation on Restricted Payments":
(1) "Investment" shall include the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary;provided,however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the Company's "Investment" in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company.
"Issue Date" means the date of original issuance of the Unregistered Notes offered pursuant to the Indenture.
"Lenders" has the meaning set forth in the definition of the term "Credit Agreement."
"Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).
"Maximum Credit Facility Principal Amount" means the sum of (i) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and its Subsidiaries pursuant to clause (2) of the definition of the term "Permitted Indebtedness"; plus (ii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and its Subsidiaries pursuant to clause (15) of the definition of the term "Permitted Indebtedness"; plus (iii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the
Company and its Subsidiaries pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock"; provided that, in the case of each of clauses (ii) and (iii), such Indebtedness is permitted to be secured by a Lien permitted pursuant to clause (22) of the definition of the term "Permitted Lien."
"Maximum Pari Passu Principal Amount" means the sum of (i) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the Guarantors pursuant to clause (1) of the definition of the term "Permitted Indebtedness"; plus (ii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the Guarantors pursuant to clause (15) of the definition of the term "Permitted Indebtedness"; plus (iii) the maximum aggregate principal amount of Indebtedness that is permitted to be incurred by the Company and the Guarantors pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock";provided that, in the case of each of clauses (i), (ii) and (iii), such Indebtedness is permitted to be secured by a Lien permitted pursuant to clause (25) of the definition of the term "Permitted Lien."
"Mortgages" means the mortgages, deeds of trust, deeds to secure indebtedness or other similar documents creating Liens securing the Indenture Obligations and any Permitted Additional Pari Passu Obligations on the Premises as well as on the other Collateral encumbered by and described in the mortgages, deeds of trust, deeds to secure indebtedness or other similar documents.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of:
(1) reasonable out-of-pocket costs, commissions, expenses and fees incurred by the Company or such Restricted Subsidiary, as the case may be, in connection with such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions);
(2) all taxes and other costs and expenses actually paid or estimated in good faith by the Company or such Restricted Subsidiary, as the case may be, to be payable in cash in connection with such Asset Sale;
(3) repayment of Indebtedness that is secured by the property or assets that are the subject of such Asset Sale and is required to be repaid in connection with such Asset Sale; and
(4) appropriate amounts to be provided by the Company or such Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale;
provided,however, that if, after the payment of all taxes with respect to such Asset Sale, the amount of estimated taxes, if any, pursuant to clause (2) above exceeded the tax amount actually paid in cash in respect of such Asset Sale, the aggregate amount of such excess shall, at such time, constitute Net Cash Proceeds.
"Obligations" means all obligations for principal, premium, interest, Additional Interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
"Officer" means the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers of the Company, at least one of whom shall be the principal financial officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel who may be an employee of or counsel to the Company or any of its Subsidiaries, or other counsel who is reasonably acceptable to the Trustee.
"Pari Passu Obligations" means the Indenture Obligations and any Permitted Additional Pari Passu Obligations.
"Permitted Additional Pari Passu Document" means any document or instrument executed and delivered with respect to any Permitted Additional Pari Passu Obligations.
"Permitted Additional Pari Passu Obligations" means obligations under any Additional Notes or other Indebtedness secured by lienspari passu with the Exchange Notes on the Collateral in compliance with clause (25) under the definition of "Permitted Liens";provided that (i) the representative of such Permitted Additional Pari Passu Obligations executes a joinder agreement to the Security Agreement in the form attached thereto agreeing to be bound thereby and by the Intercreditor Agreement and (ii) the Company has designated such Debt as "Permitted Additional Pari Passu Obligations" under the Security Agreement.
"Permitted Business" means any business that is the same as or similar, reasonably related, complementary or incidental to the business in which the Company and its Restricted Subsidiaries are engaged on the Issue Date.
"Permitted Indebtedness" means, without duplication, each of the following:
(1) Indebtedness under the Exchange Notes issued in this Exchange Offer and related Guarantees (other than Additional Notes);
(2) Indebtedness incurred pursuant to any Credit Agreement in an aggregate principal amount at any time outstanding not to the exceed the greater of (a) $135.0 million and (b) the sum of 85% of the net book value of accounts receivable of the Company and 50% of net book value of the inventory of the Company and its Restricted Subsidiaries, in each case, calculated substantially consistent with such calculation under the Credit Agreement on the Issue Dateless, in each case, the aggregate amount of all Net Cash Proceeds of Asset Sales applied to permanently repay the principal amount of any such Indebtedness and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto pursuant to clause (3)(a) of "—Certain Covenants—Limitation on Asset Sales";
(3) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date;
(4) Interest Swap Obligations of the Company or any Restricted Subsidiary of the Company covering Indebtedness of the Company or such Restricted Subsidiary;provided,however, that such Interest Swap Obligations are entered into for the purpose of fixing or hedging interest rates with respect to any fixed or variable rate Indebtedness that is permitted by the Indenture to be outstanding to the extent that the notional amount of any such Interest Swap Obligation does not exceed the principal amount of Indebtedness to which such Interest Swap Obligation relates;
(5) Indebtedness under Currency Agreements;provided that in the case of Currency Agreements which relate to Indebtedness of the Company or any Restricted Subsidiary of the Company, such Currency Agreements do not increase the Indebtedness of the Company or such Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(6) intercompany Indebtedness of the Company or any Restricted Subsidiary for so long as such Indebtedness is held by the Company or any Restricted Subsidiary;provided that (a) if owing
by the Company or any Guarantor, such Indebtedness shall be unsecured and contractually subordinated in all respects (other than with respect to the maturity thereof) to the Obligations of the Company under the Exchange Notes and the other Indenture Documents or such Guarantor under its Guarantee and the other Indenture Documents, as the case may be, and (b) if as of any date any Person other than the Company or a Restricted Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Permitted Liens of the type described in clause (17), (18) or (20) of the definition thereof), such date shall be deemed the incurrence of Indebtedness not permitted under this clause (6) by the issuer of such Indebtedness;
(7) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;provided,however, that such Indebtedness is extinguished within five business days of such incurrence;
(8) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of or represented by letters of credit issued for the account of the Company or such Restricted Subsidiary, as the case may be, that are issued in support of, or to provide security for, (a) trade obligations or (b) any other liabilities (including workers' compensation claims and payment obligations in connection with self-insurance or similar requirements but excluding any liabilities in respect of borrowed money or any other Indebtedness), in each case, in the ordinary course of business;
(9) obligations of the Company or any of its Restricted Subsidiaries in respect of performance, bid and surety bonds and completion guarantees provided by the Company or any such Restricted Subsidiary in the ordinary course of business;
(10) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness (including Capitalized Lease Obligations or Purchase Money Indebtedness arising in connection with a sale and leaseback transaction) of the Company and its Restricted Subsidiaries incurred in the ordinary course of business (including Refinancings thereof that do not result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness andplus the amount of reasonable expenses incurred by the Company in connection with such Refinancing)) not to exceed $25.0 million at any time outstanding;
(11) Refinancing Indebtedness;
(12) Indebtedness represented by guarantees by the Company or a Restricted Subsidiary of Indebtedness incurred by the Company or a Restricted Subsidiary so long as the incurrence of such Indebtedness by the Company or any such Restricted Subsidiary is otherwise permitted by the terms of the Indenture;
(13) Indebtedness arising from agreements of the Company or a Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Subsidiary in connection with such disposition;
(14) Indebtedness under Commodity Agreements;provided that such Commodity Agreements are entered into in the ordinary course of the Company's or its Restricted Subsidiaries' businesses, not for speculative purposes and otherwise in compliance with the Indenture; and
(15) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed $25.0 million at any time outstanding.
For purposes of determining compliance with the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant, (a) the outstanding principal amount of any item of Indebtedness shall be counted only once and (b) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (15) above or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such covenant, the Company will be permitted, in its sole discretion, to classify (or later reclassify) such item of Indebtedness in any manner that complies with such covenant;provided that Permitted Indebtedness under the Credit Agreement outstanding on the Issue Date will initially be deemed to have been incurred on such date under clause (2) above. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or will become immediately after such Investment a Restricted Subsidiary or that will merge or consolidate with or into the Company or a Restricted Subsidiary, or that transfers or conveys all or substantially all of its assets to the Company or a Restricted Subsidiary;
(2) Investments in the Company by any Restricted Subsidiary of the Company;
(3) Investments in any Foreign Restricted Subsidiary by any other Foreign Restricted Subsidiary;
(4) Investments in cash and Cash Equivalents;
(5) Commodity Agreements, Currency Agreements and Interest Swap Obligations entered into in the ordinary course of the Company's or its Restricted Subsidiaries' businesses, not for speculative purposes and otherwise in compliance with the Indenture;
(6) Investments in the Exchange Notes (including Additional Notes, if any);
(7) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers in exchange for claims against such trade creditors or customers;
(8) Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the "—Certain Covenants—Limitation on Asset Sales" covenant;
(9) Investments in existence on the Issue Date;
(10) loans and advances, including advances for travel and moving expenses, to employees, officers and directors of the Company and its Restricted Subsidiaries in the ordinary course of business for bona fide business purposes not in excess of $5.0 million at any one time outstanding;
(11) advances and extensions of trade credit to suppliers and customers in the ordinary course of business that are recorded as accounts receivable; and
(12) additional Investments in an aggregate amount not to exceed $15.0 million at any time outstanding.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(2) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law or pursuant to customary reservations or retentions of title incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(4) any judgment Lien not giving rise to an Event of Default;
(5) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;
(6) any interest or title of a lessor under any Capitalized Lease Obligation permitted pursuant to clause (10) of the definition of "Permitted Indebtedness";provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation;
(7) Liens securing Purchase Money Indebtedness permitted pursuant to clause (10) of the definition of "Permitted Indebtedness";provided,however, that (a) the Indebtedness shall not exceed the cost of the property or assets acquired, together, in the case of real property, with the cost of the construction thereof and improvements thereto, and shall not be secured by a Lien on any property or assets of the Company or any Restricted Subsidiary of the Company other than such property or assets so acquired or constructed and improvements thereto and (b) the Lien securing such Indebtedness shall be created within 180 days of such acquisition or construction or, in the case of a refinancing of any Purchase Money Indebtedness, within 180 days of such refinancing;
(8) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(9) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;
(10) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off;
(11) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under the Indenture;
(12) Liens securing Indebtedness under Currency Agreements and Commodity Agreements that are permitted under the Indenture;
(13) Liens securing Acquired Indebtedness incurred in accordance with the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant;provided that:
(a) such Liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company; and
(b) such Liens do not extend to or cover any property or assets of the Company or of any of its Restricted Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company and are no more favorable to the lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company;
"Protective(14) Liens arising from precautionary Uniform Commercial Code filings regarding operating leases or consigned products or consigned merchandise to the extent such Liens only relate to the assets, property, products or merchandise that are the subject of such lease or consignment, as the case may be;
(15) any interest or title of a lessor or sublessor under any operating lease;
(16) Liens existing as of the Issue Date and securing Permitted Indebtedness described in clause (3) of the definition thereof to the extent and in the manner such Liens are in effect on such date;
(17) Liens securing the Exchange Notes (other than any Additional Notes) and all other monetary obligations under the Indenture, the Guarantees and the other Indenture Documents;
(18) Liens to secure Permitted Indebtedness described in clause (2) of the definition thereof;provided that such Liens are subject to the Intercreditor Agreement;
(19) Liens securing Refinancing Indebtedness which is incurred to Refinance any Indebtedness which has been secured by a Permitted Lien and which has been incurred in accordance with the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" provisions of the Indenture;provided,however, that such Liens: (i) are no less favorable to the Holders and are not more favorable to the lienholders with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to or cover any property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced;
(20) Liens securing Indebtedness of Foreign Restricted Subsidiaries to the extent such Indebtedness is permitted under the covenant described above under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock";provided that no asset of the Company or any Guarantor shall be subject to any such Lien;
(21) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to Obligations in an aggregate principal amount that does not exceed $10.0 million at any one time outstanding and that (A) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (B) do not in the aggregate materially detract from the value of
the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary;
(22) Liens securing Indebtedness incurred pursuant to (a) the Consolidated Fixed Charge Coverage Ratio test under "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" or (b) clause (15) of the definition of the term "Permitted Indebtedness";provided that the aggregate principal amount of all such secured Indebtedness outstanding at the time of the most recent incurrence of any such Indebtedness shall not exceed $25.0 million;provided that the Liens under this clause (22) are subject to the provisions of the Intercreditor Agreement;
(23) Liens securing Credit Facility Cash Management Obligations;provided that such Liens are subject to the Intercreditor Agreement;
(24) Liens in favor of the Company or any of its Restricted Subsidiaries;
(25) Liens securing any Permitted Additional Pari Passu Obligations (including any Additional Notes) in an amount such that at the time of incurrence and after giving pro forma effect thereto, the Consolidated Secured Leverage Ratio would be no greater than 5.50 to 1.00;provided that Liens under this clause (25) are subject to the provisions of the Intercreditor Agreement; and
(26) Liens pursuant to the terms and conditions of any contracts between the Company or any Restricted Subsidiary and the U.S. government.
"Person" means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.
"Pro Forma Consolidated EBITDA" means, with respect to any Person, the Consolidated EBITDA of such Person during the four consecutive full fiscal quarters (the "Four Quarter Period") most recently ending on or prior to the date of the transaction or event giving rise to the need to calculate Pro Forma Consolidated EBITDA for which financial statements are available (the "Transaction Date") of such Person for the Four Quarter Period;provided,however, that such Consolidated EBITDA shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
(1) the incurrence or repayment of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and
(2) any Asset Sale or other disposition or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of any such Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date), as if such Asset Sale or other disposition or Asset Acquisition (including the incurrence, assumption or liability for any such Indebtedness or Acquired Indebtedness and also including any Consolidated EBITDA associated with such Asset Acquisition) occurred on the first day of the Four Quarter Period;provided that the Consolidated EBITDA of any Person acquired shall be included only to the extent includible pursuant to the
definition of "Consolidated Net Income." If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.
"Protective Advance Obligations"Obligations" means all obligations of the Company and Guarantors with respect to the repayment of protective advances and expenses incurred by the Administrative Agent and the Lenders to maintain, protect or preserve the Common Collateral or the rights of the Administrative Agent and the Lenders under the Credit Agreement and related documents and to enhance the likelihood of, or to maximize the amount of, repayment of the Credit Facility Claims or Indenture Obligations.
"Purchase"Purchase Money Indebtedness"Indebtedness" means Indebtedness of the Company and its Restricted Subsidiaries incurred (including pursuant to a sale and leaseback transaction) for the purpose of financing all or any part of the purchase price, or the cost of installation, construction or improvement, of property or equipment,provided that the aggregate principal amount of such Indebtedness does not exceed the lesser of the Fair Market Value of such property or such purchase price or cost.
"QualifiedQualified Capital Stock"Stock" means any Capital Stock that is not Disqualified Capital Stock.
"Refinance" "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced""Refinanced" and "Refinancing""Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" "Refinancing Indebtedness" means any Refinancing by the Company or any Restricted Subsidiary of the Company of Indebtedness incurred in accordance with the "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant (other than pursuant to Permitted Indebtedness) or clauses (1), (3) or (11) of the definition of Permitted"Permitted Indebtedness," in each case that does not:
(1)
(2)
(3)
(4)
(5)
"RegistrationTable of Contents
"Registration Rights Agreement"Agreement" means with respect to the Initial Notes bearing CUSIP Nos. 5007BAA6, U50103AA5, and 50077BAB4, the Registration Rights Agreement, dated as of May 19, 2010,the Issue Date, between the Company, the Guarantors and the Initial Purchasers,initial purchasers, as the same may be amended or modified from time to time in accordance with the terms thereof, with respect to the Additional Notes bearing CUSIP Nos. 50077BAD0, U50103AB3, and 50077BAE8, the Registration Rights Agreement, dated as of March 25, 2011, among the Company, the guarantors party thereto, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and Oppenheimer & Co. Inc.thereof.
"Restricted Subsidiary" "Restricted Subsidiary" of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary.
"SEC" "SEC" means the Securities and Exchange Commission or any successor agency thereto.
"Securities Act" "Secured Debt" means any Indebtedness of the Company or any of its Restricted Subsidiaries secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"Security Agreement" "Security Agreement" means the Security Agreement, dated as of May 19, 2010,the Issue Date, made by the Company and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
"Significant Subsidiary" "Significant Subsidiary" with respect to any Person, means any Restricted Subsidiary of such Person that satisfies the criteria for a "significant subsidiary" set forth in Rule 1-02(w) of Regulation S-X under the Exchange Act.
"Subsidiary" "Subsidiary" with respect to any Person, means:
(1)
(2)
"Treasury Rate""Treasury Rate" means, with respect to a Redemption Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519)H.15 (519) (or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity) that has become publicly available at least two business days prior to such Redemption Date (or, if such Statistical Release (or any successor release) is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such Redemption Date to June 1, 2014;May 15, 2016;provided,however, that if the period from such Redemption Date to June 1, 2014May 15, 2016 is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from such Redemption Date to June 1, 2014May 15, 2016 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the trustee and any successor under the Indenture.
"Unrestricted Subsidiary" "Unrestricted Subsidiary" of any Person means:
(1)
(2)
The Board of Directors may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated,
provided that:
(1)
(2)
The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:
(1)
"— "—Certain Covenants—Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred Stock" covenant; and
(2)
Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.
"Voting Stock" "Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors (or equivalent governing body) of such Person.
"Weighted "Weighted Average Life to Maturity"Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (1) the then outstanding aggregate principal amount of such Indebtedness into (2) the sum of the total of the products obtained by multiplying:
(a)
(b)
"Wholly "Wholly Owned Subsidiary"Subsidiary" of any Person means any Restricted Subsidiary of such Person of which all the outstanding Capital Stock (other than in the case of a Foreign Restricted Subsidiary, directors' qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person.
Book-Entry DeliverySettlement and FormClearance
The Global Notes
The Exchange Notes will be deliveredissued in the form of one or more fully registered global notes (the "Global Notes." TheNotes"). Upon issuance, each of the Global Notes will be deposited with or on behalf of,the trustee as custodian for DTC and registered in the name of DTC or its nominee, who will be the Global Notes holder. ExceptCede & Co., as set forth below, the Global Notes may be transferred, in whole and not in part, only to DTC or another nominee of DTC. Investors may hold their
Ownership of beneficial interests in theeach Global Notes directlyNote will be limited to persons who have accounts with DTC ("DTC participants") or persons who hold interests through DTC if they are participating organizations or "participants" in such system or indirectly through organizations that are participants in such system. Except in the limited circumstances described below, owners of beneficialparticipants. Beneficial interests in the Global Notes will not be entitled to receive physical deliveryheld in minimum denominations of certificated notes.
Depository Procedures
The following description$2,000 and integral multiples of the operations and procedures$1,000 in excess of DTC are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them from time to time. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.
DTC has advised us that DTC is a limited purpose trust company that was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.$2,000.
We expect that pursuant tounder procedures established by DTC (i) DTC:
Beneficial interests in the Global Notes tomay not be exchanged for notes in physical, certificated form ("Certificated Notes") except in the respective accounts of persons who have accounts with such depositary and (ii) ownershiplimited circumstances described below. Transfers of beneficial interests in the Global Notes will be shown on,subject to the applicable rules and procedures of DTC and its direct and indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.
Book-entry procedures for the transfer of such ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). Such accounts initially will be designated by or on behalf of the initial purchasers and ownership of beneficialGlobal Notes
All interests in the Global Notes will be subject to the operations and procedures of DTC, Euroclear and Clearstream. We provide the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of each settlement system are controlled by that settlement system and may be changed at any time. Neither we nor the initial purchasers are responsible for those operations or procedures.
DTC has advised us that it is:
DTC was created to personshold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTC's participants include securities brokers and dealers; banks and trust companies; clearing corporations and other organizations. Indirect access to DTC's system is also available to others such as banks, brokers, dealers and trust companies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who have accounts withare not DTC ("participants")participants may beneficially own securities held by or persons who hold interests through participants. Holders may hold their interests in the Global Notes directlyon behalf of DTC only through DTC if they areparticipants or indirect participants in such system, or indirectly through organizations that are participants in such system.DTC.
So long as DTC, or itsDTC's nominee is the registered owner or holder, DTC or suchof a Global Note, that nominee as the case may be, will be considered the sole owner or holder of the notes represented by suchthat Global NotesNote for all purposes under the Indentureindenture. Except as provided below, owners of beneficial interests in a Global Note:
As a result, each investor who owns a beneficial owner of an interest in a Global Note must rely on the Global Notes will be ableprocedures of DTC to transfer that interest except in accordance with DTC's procedures, in addition to those provided forexercise any rights of a holder of notes under the Indenture underindenture (and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which such Global Notes are issued.the investor owns its interest).
Payments of the principal, of, premium, (if any),if any, and interest (including Additional Interest) on,with respect to the notes represented by a Global NotesNote will be made by the trustee to DTC or itsDTC's nominee as the case may be, asregistered holder of the registered owner thereof. None of us,Global Note. Neither we nor the Trustee, or any paying agenttrustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a Global Note, for any aspect of the records relating to or payments made on account of beneficial ownershipthose interests in the Global Notesby DTC, or for maintaining, supervising or reviewing any records of DTC relating to such beneficial ownershipthose interests.
We expect that DTC or its nominee, upon receipt of any payment of principal, premium, if any, or interest (including Additional Interest) on the Global Notes, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC or its nominee. We also expect that paymentsPayments by participants and indirect participants in DTC to the owners of beneficial interests in thea Global Notes held through such participantsNote will be governed by standing instructions and customary industry practice as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such paymentsand will be the responsibility of such participants.those participants or indirect participants and DTC.
Transfers between participants in DTC will be effected in the ordinary way through DTC's same-day funds system in accordance with DTC rulesDTC's procedures and will be settled in same daysame-day funds. If a holder requires physical delivery of certificated notesTransfers between participants in Euroclear or Clearstream will be effected in accordance with their respective rules and operating procedures.
Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected within DTC through the DTC participants that are acting as depositaries for any reason, including to sell Notes to persons in states which require physical delivery of such Notes,Euroclear and Clearstream. To deliver or to pledge such securities, such holder must transfer itsreceive an interest in a Global Note held in a Euroclear or Clearstream account, an investor must send transfer instructions to Euroclear or Clearstream, as the case may be, in accordance with the normalrules and procedures of that system and within the established deadlines of that system. If the transaction meets its settlement requirements, Euroclear or Clearstream, as the case may be, will send instructions to its DTC and with the procedures set forth in the Indenture under which such Global Notes are issued.
DTC has advised us that it willdepositary to take any action permitted to be takeneffect final settlement by a holder only at the direction of onedelivering or more participants to whose account the DTCreceiving interests in the relevant Global Notes in DTC, and making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. Euroclear and Clearstream participants may not deliver instructions directly to the DTC depositaries that are credited and only in respect of such portion of the aggregate principal amount of Notes as to which such participantacting for Euroclear or participants has or have given such direction. However, if there is an event of default under the Indenture under which such Notes are issued, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its participants.Clearstream.
Although DTC, hasEuroclear and Clearstream have agreed to the foregoingabove procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligationin those settlement systems. However, the settlement systems are not obligated to perform suchthese procedures and suchmay discontinue or change these procedures may be discontinued at any time. Neither we nor the Trusteetrustee will have any responsibility for the performance by DTC, Euroclear or itsClearstream or their participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for a Certificated Note only if:
Certificated Securities
Subject to certain conditions, any person having a beneficial interest in a Global Note may, upon request to the Trustee, exchange such beneficial interest for notes in the form of certificated securities. Upon any such issuance, the Trustee is required to register such certificated securities in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). All such certificated notes would be subject to legend requirements. In addition, if:
then, upon surrender by the Global Notes holder of its Global Notes, notes in such form will be issued to each person that the Global Notes holder and DTC identify as being the beneficial owner of the related notes.
Neither we nor the Trustee will be liable for any delay by the Global Notes holder or DTC in identifying the beneficial owners of notes and we and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Notes holder or DTC for all purposes.
Same-Day Settlement and Payment
The Indenture requires that payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, interest and Additional Interest, if any) be made by wire transfer of immediately available funds to the accounts specified by the Global Notes holder. With respect to certificated securities, we will make all payments of principal, premium, if any, and interest by wire transfer of immediately available funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address.
Methods of Receiving Payments on the Notes
If a holder has given wire transfer instructions to us, we will make all principal, premium and interest payments on those Notes in accordance with those instructions. All other payments on these Notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless we elect to make interest payments by check mailed to the holders at their address set forth in the register of holders.
Paying Agent and Registrar for the Notes
The Trustee will initially act as paying agent and registrar for the Notes. We may change the paying agent or registrar without prior notice to the holders of the Notes, and we or any of our subsidiaries may act as paying agent or registrar.
Transfer and Exchange
A holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and we may require a holder to pay any taxes and fees required by law or permitted by the Indenture. We are not required to transfer or exchange any Note selected for redemption. Also, we are not required to transfer or exchange any Note for a period of 15 days before a selection of Notes is to be redeemed.
The registered holder of a Note will be treated as the owner of it for all purposes.
DESCRIPTION OF CERTAIN INDEBTEDNESS
May 2010 $225.0 Million 10% Senior Secured Note OfferingABL Credit Facility
On May 19, 2010,14, 2014, we issued $225.0 millionentered into a credit and security agreement with SunTrust Bank ("SunTrust"), as administrative agent and as sole lead arranger and book runner, and the lenders party thereto (the "2014 Credit Agreement"). The 2014 Credit Agreement is a five-year senior secured revolving credit facility in aggregatethe maximum principal amount of 10% Senior Secured Notes due 2017 in an unregistered offering pursuant$110.0 million (the "Revolver"), which maximum principal amount may be increased to Rule 144A$135.0 million, subject to SunTrust's and Regulation S under the Securities Act (the "2010 Notes"). On August 11, 2010, we completed an exchange offerapplicable lenders' approval. The Revolver includes $50.0 million of availability for the 2010 Notes pursuant to a registration rights agreement entered into in connection with the issuanceletters of the 2010 Notes. In the exchange offer, we offered to exchange the 2010 Notescredit and $10.0 million of availability for a like aggregate amount of 10% Senior Secured Notes due June 1, 2017 registered under the Securities Act (referred to elsewhere in this prospectus as the "Existing Kratos Notes").swing line loans. The Existing Kratos Notes have substantially similar terms as the 2010 Notes, except that the Existing Kratos Notes do not have transfer restrictions or registration rights. The Existing Kratos Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by us and each of our subsidiaries, as the guarantors thereof. We pay interest on the Existing Kratos Notes semi-annually, in arrears, on June 1 and December 1 of each year, which began on December 1, 2010.
The Existing Kratos Notes are2014 Credit Agreement is secured by a first priority lien on substantially all of our assetsthe ABL Priority Collateral and a second priority lien on the assets of the guarantors thereunder,Notes Priority Collateral, subject to certain exceptions and permitted liens. The holders of the Existing Kratos Notes have a first priority lien on substantially all of our assets and the guarantors, except accounts receivable, inventories, deposit accounts, securities accounts, cash, securities and general intangibles (other than intellectual property) where the holders of the Existing Kratos Notes have a second priority lien to the $35.0 million credit facility described below.
The Existing Kratos Notes include customary covenants and events of default as well as a consolidated fixed charge ratio of 2.00 to 1.00 for the incurrence of additional indebtedness. Negative covenants include, among other things, limitations on additional debt, liens, negative pledges, investments, dividends, stock repurchases, asset sales and affiliate transactions. Events of default include, among other events, non-performance of covenants, breach of representations, cross-default to other material debt, bankruptcy, insolvency, material judgments and changes in control. As of December 26, 2010, we were in compliance with the covenants contained in the Existing Kratos Notes.
On or after June 1, 2014, we may redeem some or all of the Existing Kratos Notes at 105% of the aggregate principal amount of such notes through June 1, 2015, 102.5%borrowings and letters of credit that may be outstanding under the aggregate principal amount of such notes through June 1, 2016 and 100% of the aggregate principal amount of such notes thereafter, plus accrued and unpaid interest to the date of redemption. Prior to June 1, 2013, we may redeem up to 35% of the aggregate principal amount of the Existing Kratos Notes at 110% of the aggregate principal amount of the Existing Kratos Notes, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings. In addition, we may, at our option, redeem some or all of the Existing Kratos NotesRevolver at any time prior to June 1, 2014,is limited by paying a "make whole" premium, plus accrued and unpaid interest, if any, to the date of redemption.
$35.0 Million Credit Facility
Concurrent with the completion of the offering of the 2010 Notes, on May 19, 2010, we entered into a Credit and Security Agreement (the "Credit Agreement") with certain lenders and with KeyBank, as administrative agent, lead arranger and sole book runner, for a four year senior secured revolving credit facility in the amount of $25.0 million. The Revolver is secured by a lien on substantially all of our assets and the assets of the guarantors thereunder, subject to certain exceptions and permitted liens. The Revolver has a first priority lien on accounts receivable, inventories, deposit accounts, securities accounts, cash, securities and general intangibles (other than intellectual property). On all other assets, the Revolver has a second priority lien to the Existing Kratos Notes.
The Revolver will expire on May 18, 2014 and may be increased to $45.0 million. Any increase in the Revolver is subject to the consent of KeyBank and compliance with covenants in the Existing Kratos Notes. The amounts of borrowings that may be made under the Revolver are based on a borrowing base which is comprisedthat consists of specified percentages of eligible receivables, eligible unbilled receivables, eligible raw materials inventory and eligible work-in-process inventory. If the amount of borrowings and letters of credit outstanding under the Revolver exceeds the borrowing base then in effect, we are required to repay such borrowings in an amount sufficient to eliminate such excess. The Revolver includes $10.0 million of availability for letters of credit and $5.0 million of availability for swingline loans.
We may borrow funds underIn addition, the Revolver at a base rate based either on LIBOR or a base rate established by KeyBank. Base rate borrowings bear interest at an applicable margin of 1.25% to 2.0% over the base rate (which will be the greater of the prime rate or 0.5% over the federal funds rate, with a floor of 1.0% over one month LIBOR). LIBOR rate borrowings will bear interest at an applicable margin of 3.25% to 4.0% over the LIBOR rate. The applicable margin for base rate borrowings and LIBOR borrowings will depend on the average monthly revolving credit availability. The Revolver also has a commitment fee of 0.75% to 1.0%, depending on the average monthly revolving credit availability.
Borrowings under the Revolver are subject to mandatory prepayment uponvia exercise of cash dominion by SunTrust when excess availability under the occurrenceborrowing base is less than the greater of certain events, including$16.5 million and 15% of the issuance of certain securities,aggregate commitments for the incurrence of certain debt and the sale or other disposition of certain assets.Revolver.
The Revolver includes customary affirmative and negative covenants and events of default, as well as a financial covenant relating toestablishing a minimum fixed charge coverage ratio of 1.25.1.15x. Negative covenants include, among other limitations,things, limitations on additional debt, liens, negative pledges,mergers, consolidations and acquisitions, asset sales, investments, dividends, stock repurchases, asset salesredemptions and other payments on junior capital, certain affiliate transactions.transactions, dividends, sale/leaseback transactions, speculative hedging, amendments to material agreements, and changes in fiscal year or accounting practices. Events of default include, among other events, non-performance of covenants, breach of representations, cross-default to other material debt, bankruptcy and insolvency, material judgments, material adverse change and changes in control.
On December 13, 2010, weWe are able to borrow funds under the Revolver at a rate of interest equal to one, two or three-month LIBOR plus an applicable margin of between 2.50% and 3.00%, depending on the average quarterly excess availability under the borrowing base. The Revolver will also have an unused fee of 0.375% to 0.500%, depending on the average daily unused portion of the revolving commitments.
Debt Acquired in Acquisition of Herley
We assumed a $10.0 million ten-year term loan with a bank in Israel that Herley entered into on September 16, 2008 in connection with the acquisition of one of its wholly owned subsidiaries. The balance as of June 29, 2014 was $4.2 million, and the loan is payable in quarterly installments of $0.3 million plus interest at LIBOR plus a First Amendment Agreement (the "Amendment Agreement"), with certain lenders and with KeyBank, as administrative agent, lead arranger and sole book runner, which amended the Credit Agreement. Among other things, the Amendment Agreement: (i) increased the amountmargin of the senior secured revolving line of credit from $25.0 million to $35.0 million; (ii) modified the definitions of certain terms contained in the Credit Agreement; (iii) amended certain borrowing1.5%. The loan agreement contains various covenants under the Credit Agreement to (a) increase the acceptable amount of additional Indebtedness (as defined in the Credit Agreement) attributable to Senior Notes, unsecured Subordinated Indebtedness (bothincluding a minimum net equity covenant as defined in the Credit Agreement) and other unsecured Indebtedness from $25.0 million to $100.0 million and (b) exempt certain performance based contingent obligations related to prior acquisitions from the borrowing restrictions; and (iv) updated certain schedules to the Credit Agreement. As of December 26, 2010, there were no outstanding borrowings on the Revolver and $2.4 million was outstanding on letters of credit resulting in net availability of $32.6 million. As of December 26, 2010, weloan agreement. We were in compliance with the financial covenants contained inof the Revolver.loan agreement as of June 29, 2014.
CERTAINMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
To ensure compliance with Treasury Department Circular 230, you are hereby notified that: (a) any discussion of U.S. federal tax issues contained or referred to herein is not intended or written to be used, and cannot be used, by holders for the purpose of avoiding penalties that may be imposed on them under the Internal Revenue Code of 1986, as amended (the "Code"); (b) such discussion is written in connection with the promotion or marketing of the transactions or matters addressed herein; and (c) holders should seek advice based on their particular circumstances from an independent tax advisor.Exchange Offer
The following is a summary of certain material U.S. federal income tax considerations relating to the exchange of OriginalUnregistered Notes for Exchange Notes in the exchange offer. This summary is based on the Code, existing and proposed Treasury Regulations, revenue rulings, administrative interpretations and judicial decisions now in effect, all of which are subjectExchange Offer will not constitute a taxable event to change possibly with retroactive effect. This summary does not purport to address allholders for U.S. federal income tax considerations that may be relevant to holders in lightpurposes. Consequently, you will not recognize gain or loss upon receipt of their particular circumstances or to holders subject to special tax rules, such as banks, insurance companies or other financial institutions, dealers in securities or foreign currencies, tax-exempt investors, holders subject toan exchange note. The holding period of the U.S. federal alternative minimum tax, or personsexchange note will include the holding period of the notes as part of a hedging transaction, straddle, conversion transaction, or other integrated transaction.
We have not sought and we do not expect to seek any ruling from the Internal Revenue Service (the "IRS") or an opinion of counsel with respect to the statements madeunregistered note exchanged therefor and the conclusions reached inbasis of the following summary. As such, there canexchange note will be no assurance that the IRS will agree with such statements and conclusions. Thus, all persons thatsame as the basis of the unregistered note immediately before the exchange.
Persons considering the exchange Originalof Unregistered Notes for Exchange Notes in the exchange offer are urged toshould consult their own tax advisors with regard to the application ofconcerning the U.S. federal income tax laws toconsequences in light of their particular situations as well as any tax consequences arising under the laws of any state, local or foreignother taxing jurisdiction.
The exchange of the Original Notes for the Exchange Notes in the exchange offer will not constitute a taxable event or exchange for U.S. federal income tax purposes, and thus will have no U.S. federal income tax consequences to holders of Original Notes. The Exchange Notes received pursuant to the exchange offer will be treated as a continuation of the Original Notes. Consequently, there will be no change in a holder's adjusted tax basis in the Exchange Notes, and the holder's holding period in the Exchange Notes will be the same as that applicable to the Original Notes. In addition, the U.S. federal income tax consequences of holding and disposing of the Exchange Notes will be the same as those applicable to the Original Notes.
The preceding discussion of certain U.S. federal income tax considerations is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state, local and foreign tax consequences of exchanging Original Notes for, holding and disposing of Exchange Notes, including the consequences of any proposed change in applicable laws.
Each broker-dealer that receives Exchange Notes for its own account inpursuant to the exchange offerExchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of thesuch Exchange Notes. We have agreed that, during the period broker-dealers are required to deliver this prospectus, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for OriginalUnregistered Notes where such OriginalUnregistered Notes were acquired as a result of market-making activities or other trading activities. We have agreed to use commercially reasonable best efforts to keep the registration statement, of which this prospectus forms a part, continuously effective, supplemented and amended to the extent necessary to ensure that it is available for resales of the Exchange Notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms in all material respects with the requirements of the registration rights agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which this registration statement is declared effective and (ii) the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.
We will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange notesNotes received by broker-dealers for their own account inpursuant to the exchange offerExchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions through the writing of options on the Exchange Notes or a combination of thesesuch methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers whothat may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own account inpursuant to the exchange offerExchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commissionscommission or concessions received by any such persons may be considereddeemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
During the 180-day period following the completion of this exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the Original Notes), other than dealers' and brokers' discounts, commissions and counsel fees and will indemnify the holders of the Original Notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.
Certain legal matters in connection with the issuanceThe validity of the Exchange Notes and the related guarantees will be passed onupon for us by Paul, Hastings, Janofsky & WalkerDLA Piper LLP (US), San Diego, CaliforniaCalifornia; Burr & Forman LLP, Birmingham, Alabama; Faerge Bakers Daniels LLP, Denver, Colorado; Frost Brown Todd LLC, Indianapolis, Indiana; and Sheppard Mullin Richter & Hampton LLP, New York, New York.
The audited consolidated financial statements of Kratos as of December 27, 2009 and December 26, 201030, 2012, and for each of the threetwo years in the period ended December 26, 2010,30, 2012, incorporated by reference in this prospectus and elsewhere in the registration statement of Kratos of which this prospectus forms a part, have been so incorporated by reference in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving such reports.auditing.
The consolidated financial statements, of Herley Industries, Inc. and its subsidiariesincorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K as of December 29, 2013, and for the fifty-two weeksyear ended August 1, 2010, included in our Current Report on Form 8-K/A filed withDecember 29, 2013, and the SEC on April 11, 2011, incorporated by reference in this prospectuseffectiveness of Kratos Defense and elsewhere in the registration statement,Security Solutions, Inc.'s internal control over financial reporting have been audited by Grant ThorntonDeloitte & Touche LLP, an independent registered public accounting firm, as set forthstated in their report, therein, which as to the year ended August 1, 2010 are based in part on the report of Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu, independent registered public accounting firm.is incorporated herein by reference. Such consolidated financial statements have been so incorporated by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Herley and its subsidiaries as of and for the fifty-two weeks ended August 2, 2009 and the fifty-three weeks ended August 3, 2008, included in our Current Report on Form 8-K/A filed with the SEC on April 11, 2011, incorporated by reference in this prospectus and elsewhere in the registration statement, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report therein, which as to the fifty-two weeks ended August 2, 2009 are based in part on the report of Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu, independent registered public accounting firm. Such consolidated financial statements have been incorporated by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Henry Bros. Electronics, Inc. and its subsidiaries as of December 31, 2009 and 2008 and for each of the three years in the period ended December 31, 2009, included in our Current Report on Form 8-K filed by us on February 4, 2011, which is incorporated by reference in this prospectus and elsewhere in the registration statement, have been audited by Amper, Politziner and Mattia, LLP, independent registered public accounting firm, as set forth in their report therein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Gichner Holdings, Inc. and its subsidiaries as of and for the years ended December 31, 2009, 2008 and 2007, included in the Current Report on Form 8-K filed by us on May 25, 2010, which is incorporated by reference in this prospectus and elsewhere in the registration statement, have been audited by Plante & Moran PLLC, independent registered public accounting firm, as set forth in their report therein. Such consolidated financial statements are incorporated by reference in reliance upon such report given on the authority of such firm as an expert in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Available Information We have filed a registration statement on Form S-4 with the SEC under the Securities Act that registers the securities offered by this prospectus. The registration statement, including the documents that have been filed or will be filed or incorporated by reference as exhibits, contains additional relevant information about us. The rules and regulations of the SEC allow us to omit some information included in the registration statement from this prospectus.
We file annual, quarterly and specialcurrent reports, proxy statements and other information with the SEC. You maycan read and copy any documentmaterials we file with the SEC at the SEC'sits Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please callYou can obtain information about the operations of the SEC Public Reference Room by calling the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room.1-800-SEC-0330. The SEC also maintains an interneta website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers thatwe file electronically with the SEC, which you can access over the Internet atwww.sec.gov. General information about us, including Kratos Defense & Security Solutions, Inc. You may also access our reports and proxy statements free of charge at our website, http://www.kratosdefense.com.
This prospectus is part of a registration statement that we have filed with the SEC relating to the securities to be offered. This prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules in accordance with the rules and regulations of the SEC, and we refer you to the omitted information. The statements this prospectus makes pertaining to the content of any contract, agreement or other document that is an exhibit to the registration statement necessarily are summaries of their material provisions and do not describe all exceptions and qualifications contained in those contracts, agreements or documents. You should read those contracts, agreements or documents for information that may be important to you. The registration statement, exhibits and schedules are available at the SEC's Public Reference Room or through its internet website.
Incorporation by Reference
The rules of the SEC allow us to incorporate by reference in this prospectus the information in other documents that we file with it, which means that we can disclose important information to you by referring you to those documents that we have filed separately with the SEC. You should read the information incorporated by reference because it is an important part of this prospectus. We hereby incorporate by reference the following information or documents into this prospectus:
Holdings, Inc. as of and for the periods of August 22, 2007 through December 31, 2007 and January 1, 2007 through August 22, 2007, and the unaudited financial statements of Gichner Holdings, Inc. as of and for the three months ended March 31, 2010 and 2009, filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on May 25, 2010.
Any information in any of the foregoing documents will automatically be deemed to be modified or supersededfurnish them to, the extent that information inSEC. Information on, or accessible through, our website is not incorporated into this prospectus or inour other securities filings and is not a later filed document that is incorporated or deemedpart of these filings.
If for any reason we are not required to be incorporated herein by reference modifies or replaces such information.
We also incorporate by reference any future filings (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) madecomply with the SEC pursuantreporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we are still required under the indenture to furnish the holders of the Exchange Notes with the information, documents and other reports specified in Sections 13(a), 13(c), 14 or13 and 15(d) of the Exchange Act, untilAct. In addition, we file a post-effective amendment which indicateshave agreed that, allfor so long as any notes remain outstanding, we will furnish to the holders of the notes and to securities offered hereby have been sold or which deregisters all securities then remaining unsold. Information in such future filings updatesanalysts and supplementsprospective investors, upon their request, the information provided in this prospectus. Any statements in any such future filings will automatically be deemed to modify and supersede any information in any document we previously filed with the SEC that is incorporated or deemedrequired to be incorporated hereindelivered by reference toRule 144A(d)(4) under the extent that statements in the later filed document modify or replaceSecurities Act. Any such earlier statements.
Upon written or oral request, we will provide to you, without charge, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits which are specifically incorporated by reference into such documents. Requestsrequests should be directed to:to us at: Kratos Defense & Security Solutions, Inc., Attention: Investor Relations, 4820 Eastgate Mall, San Diego, California, 92121, telephone (858) 812-7300.92121.
$285,000,000Kratos Defense & Security Solutions, Inc.
Offer to exchangeExchange all outstandingOutstanding and Unregistered$285,000,000 principal amount of10%7.000% Senior Secured Notes due 20172019
for$285,000,000 principal amount of10%7.000% Senior Secured Notes due 20172019registered underWhich Have been Registered Under the Securities Act of 1933
PROSPECTUSProspectus
, 20112014
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of DirectorsOfficers and Officers.Directors
The following summary is qualified in its entirety by reference to the complete text of the statutes referred to below and the certificates and articles of incorporation and the certificates of formation, all as amended, the bylaws, operating agreements and agreements of limited partnership, all as amended, and any other contractual agreements referred to below in reference to Kratos Defense & Security Solutions, Inc. and all additional registrants.
Kratos Defense & Security Solutions, Inc.
Under Section 145145(a) of the Delaware General Corporation Law of the State of Delaware (the "DGCL"), provides, in general, that a corporation hasshall have the power to indemnify its directors and officers under certain prescribed circumstances and, subjectany person who was or is a party or is threatened to certain limitations,be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, because the person is or was a director or officer of the corporation. Such indemnity may be against certain costs and expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and if, with respect to any criminal action or proceeding, the person did not have reasonable cause to believe the person's conduct was unlawful.
Section 145(b) of the DGCL provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or proceeding, whether criminal, civil, administrativein the right of the corporation to procure a judgment in its favor because the person is or investigative, to which any of them is a party by reason of his beingwas a director or officer of the corporation, against any expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if it is determined that hethe person acted in accordance withgood faith and in a manner the applicable standardperson reasonably believed to be in or not opposed to the best interests of conduct set forththe corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such statutory provision.person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to be indemnified for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145(g) of the DGCL provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against the person in any such capacity, or arising out of the person's status as such, whether or not the corporation would have the power to indemnify the person against such liability under the provisions of the law.
Our amended and restated certificate of incorporation provides that, pursuant to the DGCL, our directors shall not be liable for monetary damages to the fullest extent authorized under applicable law, including for breach of the directors' fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, pursuant to Section 102(b)(7) of the DGCL, each director will continue to be subject to liability for breach of the director's duty of loyalty, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of the law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or
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redemptions that are unlawful under Delaware law. This provision in the certificate of incorporation also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.
Our second amended and restated bylaws provide that we will indemnify, to the fullest extent authorized by the DGCL, each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of our company, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer against all expenses, liability and loss reasonably incurred or suffered by such person in connection therewith.
We have entered into indemnification agreements with certain of our directors and officers. Pursuant to these indemnification agreements, we are obligated to indemnify each director and officer who is a party to the indemnification agreement to the fullest extent permitted by the DGCL against any and all expenses, liability and loss, as each is defined in the indemnification agreement, reasonably incurred or suffered by such person in connection with any threatened, pending or completed action, suit, investigation or proceeding that arises out of any event or occurrence related to the fact that such person is or was a director or officer or is or was serving at our request as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including any of our subsidiaries. We also have directors' and officers' liability insurance to protect our directors and officers from liability.
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Table The foregoing statements are subject to the detailed provisions of ContentsSection 145 of the DGCL and Article VI of our amended and restated certificate of incorporation.
We maintain a director and officer liability insurance policy for the benefit of our directors and certain officers and the directors and certain officers of its subsidiaries covering certain liabilities that may be incurred in the performance of these duties, which may include liability or related losses under the Securities Act or the Securities Exchange Act of 1934, as amended.
Additional Registrants
Alabama Registrants: Madison Research Corporation and Summit Research Corporation are incorporated under the laws of Alabama.
Sections 10-2B-8.51 and 10-2B-8.5610A-2-8.50 through 10A-2-8.58 of the Alabama Business Corporation Act provide thatLaw (the "ABCL") gives a corporation maypower to indemnify an individualany person who was or is a party or is threatened to be made a party to aany threatened, pending or completed action, suit or proceeding, becausewhether civil, criminal, administrative or investigative and whether formal or informal by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against liabilityexpenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement reasonably incurred by him in theconnection with such action, suit or proceeding if the individual conducted himself or herselfsuch person acted in good faith and the individualin a manner he reasonably believed: (i)believed to be in the casebest interests of conductthe corporation, when acting in his or her official capacity with the corporation, that the conduct was in the corporation's best interests; and (ii)or, in all other cases, that the conduct was at least not opposed to the corporation's best interests;interests of the corporation, and, (iii) in the case ofwith respect to any criminal action or proceeding, the individual had no reasonable cause to believe that his or her conduct was unlawful. A corporation mayNo indemnification shall be made, however, in respect of any claim, issue or matter as to which such person shall have not indemnify a director or officer: (i) in connection with a proceeding by or inmet the rightapplicable standard of the corporation in which the director or officer wasconduct, shall have been adjudged to be liable to the corporation;corporation or, (ii) in connection with any other action, suit or proceeding charging improper personal benefit to the director or officer, whether or not involving action in his or her official capacity, in which the director or officersuch person, if such person was adjudged liable on the basis that personal benefit was improperly received by himhim. Also, the ABCL states that, to the extent that a director or her. Sections 10-2B-8.52 and 10-2B-8.56 provide that indemnification is mandatory for an officer or director who wasof a corporation has been successful on the merits or
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otherwise in the defense of any such action, suit or proceeding, or in defense of any claim, issue or matter in such proceeding,therein, he shall be indemnified against reasonable expenses (including attorneys' fees) reasonably incurred by him in connection therewith. The indemnification provisions of the Alabama Business Corporation Act aretherewith, notwithstanding that he has not exclusive and are deemed to bebeen successful on any other claim, issue or matter in addition to any provisions which may be contained in a corporation's articles of incorporation, bylaws, a resolution of its shareholderssuch action, suit or board of directors, or in a contract or otherwise.
Section 10-2B-202(b)(3) of the Alabama Business Corporation Act permits a corporation to include in its articles of incorporation a provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for: (A) the amount of a financial benefit received by a director to which he or she is not entitled; (B) an intentional infliction of harm on the corporation or the shareholders; (C) unlawful distributions; (D) an intentional violation of criminal law; or (E) a breach of the director's duty of loyalty to the corporation or its shareholders.proceeding.
The articles of incorporation of Summit Research Corporation, as amended, and the bylaws of Madison Research Corporation provide that each of the registrants shall indemnify directors and officers to the full extent authorized by Alabama law. The organizational documents of the registrants also make clear that the indemnification provided therein shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. The bylaws of Madison Research Corporation further establish that (i) expenses incurred in defending any proceeding may be paid by the registrant in advance of the final disposition of such proceeding, as authorized by the board of directors, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation, and (ii) the board of directors may authorize the registrant to purchase and maintain insurance on behalf of any person who is or was a director or officer of the registrant against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability.
Neither the articles of incorporation of Madison Research Corporation, as amended, nor those of Summit Research Corporation, as amended, eliminate or limit the liability of the directors of each of the registrants for money damages.
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Arizona Registrant: Henry Bros. Electronics, L.L.C. is a limited liability company organized under the laws of Arizona.
Section 29-610Sections 10-850 through 10-858 of the Arizona Limited Liability Company ActRevised Statutes (the "A.R.S.") permit indemnification of present and former directors, officers, employees or agents of an Arizona corporation, whether or not authority for such indemnification is contained in the indemnifying corporation's articles of incorporation or bylaws.
Sections 10-852 and 10-856 of the A.R.S. require an Arizona corporation, unless limited by its articles of incorporation, to indemnify an officer or director who has prevailed, on the merits or otherwise, in defending any proceeding brought against the officer or director because such person is or was an officer or director of the corporation. The corporation must indemnify the officer or director for reasonable expenses, including attorneys' fees and all other costs and expenses reasonably related to a proceeding. A "proceeding" includes any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal.
Section 10-851 of the A.R.S. permits an Arizona corporation to indemnify an officer or director made a party to a proceeding because such person is or was an officer or director of the corporation. The corporation may indemnify the officer or director against liability incurred in the proceeding if all of the following conditions exist: (i) the officer or director's conduct was in good faith; (ii) the officer or director reasonably believed that his or her conduct was at least not opposed to the best interests of the corporation, or, where the conduct was in an official corporate capacity, that the conduct was in the best interest of the corporation; and (iii) in the case of criminal proceedings, the officer or director had no reasonable cause to believe that the conduct was unlawful.
Before discretionary indemnification under Section 10-851 may be awarded to a director, the corporation must determine that it is permissible under the circumstances. This determination may be made either: (i) by majority vote of the directors not parties to the proceedings; (ii) by special legal counsel selected by majority vote of the disinterested directors, or by majority vote of the board if there
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are no disinterested directors; or (iii) by the shareholders (but shares owned by or voted under the control of directors who are parties to the proceeding are not voted).
Section 10-854 of the A.R.S. permits a domestic limited liability companydirector of an Arizona corporation who is a party to indemnify a member, manager, employee, officer or agent or any other person.
Section 29-651proceeding, unless the articles of the Arizona Limited Liability Company Act provides that a member, manager, employee, officer or agent of a limited liability company is not liable, solely by reason of being a member, manager, employee, officer or agent, for the debts, obligations and liabilities of the limited liability company whether arising in contract or tort, under a judgment, decree or order ofincorporation provide otherwise, to apply to a court of competent jurisdiction for indemnification or otherwise.for an advance of expenses. The court may order indemnification or an advance if it determines that indemnification is fair and reasonable, even if the director did not meet the prescribed standard of conduct described in Section 10-851.
The limited liability company agreement of Henry Bros. Electronics, L.L.C. provides that any member shall not be liable for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such member. The limited liability company agreement further provides that no officer shall be liable for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such officer other than fraudulent acts or omissions or those resulting from willful misconduct by such officer. Additionally, the limited liability company agreement provides that, to the fullest extent permitted by applicable law, any member or officer shall be entitled to indemnification for any loss, damage or claim incurred by the member or officer by reason of any act or omission performed or omitted by the member or officer, except that no officer shall be entitled to be indemnified with respect to his/her fraudulent acts or omissions or those resulting from willful misconduct;provided that, any indemnity shall be provided out of and to the extent of the assets of Henry Bros. Electronics, L.L.C. only and no member shall have personal liability on account thereof.
California Registrants: Composite Engineering, Inc., Henry Bros. Electronics, Inc. (CA), Kratos Integral Systems International, Inc., Kratos Technology & Training Solutions, Inc., National Safe of California, Polexis, Inc., Shadow I, Inc., Shadow II, Inc., and Shadow III, Inc.,SAT Corporation are incorporated under the laws of California.
Section 317 of the California Corporations Code authorizesprovides that a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than in an action by reasonor on behalf of the fact that thecorporation to obtain a favorable judgment for itself, because such person is or was a director, officer, employee oran agent of the corporation (as defined in Section 317(a) of the California Corporation Code), against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding, if: (i) inif the case of a criminal proceeding, such person had no reasonable cause to believe the conduct of the person was unlawful, and (ii) in the case of any action other than one brought by or in the right of the corporation to procure a judgment in its favor, such person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation and, (iii) in the case of an actioncriminal proceedings, had no reasonable cause to believe that the conduct was unlawful. In the case of suits by or in the righton behalf of thea corporation to procureobtain a judgment in its favor, a corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to such proceeding because such person is or was the corporation's agent, against expenses actually and reasonably incurred if the person acted in good faith in a manner suchthe person believed to be in the best interests of the corporation and its shareholders. Noshareholders, except that no such indemnification shallmay be made in the case of an action by or in the right of the corporation to procure a judgment in its favor, however, with respect to (i) any claim, issue, or matterfor claims as to which suchthe person hasshall have been adjudged to be liable to the corporation in the performance of suchthat person's duty to the corporation, and its shareholders, unless and only to the extent that the court in which such proceeding is or was pending shall determine on application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for expenses and then only to the extent a court determines otherwise.
The articles of incorporation of Composite Engineering, Inc., as amended, limit the liability of directors of the corporation for monetary damages to the fullest extent possible under California law. The bylaws of Composite Engineering, Inc. provide that the courtregistrant shall determine, (ii) amounts paidindemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in settlingthe right of the registrant) by reason of the fact that such person is or otherwise disposingwas a director, officer, employee or agent, or, while such person is or was serving at the request of a pending action without court approval, or (iii) expenses incurred in defending a pending action that is settled or otherwise disposed of without court approval. The California Corporations Code further provides that a corporation must indemnifythe registrant as a director, officer, employee or agent of theanother corporation, if hepartnership, joint venture, trust or she has been successful on the meritsother enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in defense of any proceeding, or in defense of any claim, issue or matter therein, against expensessettlement actually and reasonably incurred by him in connection therewith. The indemnification authorized by the California Corporations Code shall not be deemed exclusive of any additional rights to indemnification
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for breach of dutysuch person in connection with such action, suit or proceeding, but in each case only if and to the corporationextent permitted under applicable state or federal law. The indemnification provisions of the bylaws of Composite Engineering, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and its shareholders while acting in the capacity ofshall continue as to a person who has ceased to be a director, officer, employee or officeragent and shall inure to the benefit of the corporation.
Section 204(a)(10) of the California Corporations Code permits a corporation to provide in its articles of incorporation that a director of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for breachheirs and personal representatives of such director's duties, except that such a provision may not eliminate or limit the liability of directors (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit or has a material financial interest, (iv) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, or (vii) for authorizing unlawful distributions.person.
The articles of incorporation of Henry Bros. Electronics, Inc. (CA), as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers. The bylaws of Henry Bros. Electronics, Inc. (CA), as amended, provide that the registrant shall indemnify and hold harmless directors and officers from and against any and all claims and liabilities to which such person shall become subject by reason of his being or having been a director or officer, or by reason of any action alleged to have been taken or omitted as such director or officer. The bylaws further provide that the registrant shall reimburse directors and officers for all legal and other expenses reasonably incurred by such directors and officers;provided, however, that no such person shall be indemnified against, or be reimbursed for any expense incurred in connection with any claim or liability arising out of his own negligence or willful misconduct. The indemnification provisions of the bylaws are not exclusive of any other rights to which those indemnified may be entitled.
The articles of incorporation of each of Polexis, Inc., Shadow I, Inc., Shadow II, Inc., Shadow III,and Kratos Integral Systems International, Inc., as amended, the amended and restated articles of incorporation of Kratos Technology & Training Solutions, Inc., and the second amended and restated articles of incorporation of Polexis, Inc., as amended, provide that each registrant is authorized to provide indemnification of agents (as defined in Section 317 of the California Corporations Code, which includes directors and officers) through bylaw provisions, agreements with agents, vote of shareholders or disinterested directors, or otherwise, to the fullest extent permitted by Section 317 of the California Corporations Code, subject to the applicable limits on indemnifications set forth in Sections 204 and 317 of the California Corporations Code. The articles of incorporation of each registrant also provide that the liability of the directors of each corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.
The bylaws of each of Polexis, Inc., as amended, Shadow I, Inc., Shadow II, Inc., Shadow III,Kratos Integral Systems International, Inc. and Kratos Technology & Training Solutions, Inc. provide that each registrant is authorized to provide insurance for agents as set forth in Section 317 of the California Corporations Code. The bylaws of each of Kratos Integral Systems International, Inc., Shadow I, Inc. and Shadow II, Inc. provide that liability of the directors for monetary damages shall be eliminated to the fullest extent permissible under California law.
The bylaws of each of Polexis, Inc., as amended, and Kratos Technology & Training Solutions, Inc. further provide that expenses incurred in defending any proceeding may be advanced by each registrant before the final disposition of such proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amounts if it shall be determined ultimately that the director or officer is not entitled to be indemnified by the corporation.
The bylaws of Kratos Technology & Training Solutions, Inc. also establish that the indemnification therein provided shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators, and that the registrant shall indemnify any such person seeking indemnity in connection with any proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors. The indemnification provisions of the bylaws are not exclusive of any other rights to which those indemnified may be entitled.
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The articles of incorporation, as amended, and the bylaws of National Safe of California, Inc. are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
Colorado Registrant: Henry Bros. Electronics, Inc. (CO) is incorporated under the laws of Colorado.
Sections 7-109-102 The amended and 7-109-107 of the Colorado Business Corporation Act provide that a corporation may indemnify a person made a party to a proceeding because the person is or was a director or officer against liability incurred in the proceeding if the person's conduct was in good faith and the person reasonably believed: (i) in the case of conduct in an official capacity with the corporation, that the conduct was in the corporation's best interests and (ii) in all other cases, that the conduct was at least not opposed to the corporation's best interests; and (iii) in the case of any criminal proceeding, the person had no reasonable cause to believe the person's conduct was unlawful. A corporation may not indemnify a director or officer: (i) in connection with a proceeding by or in the right of the corporation in which the director or officer was adjudged liable to the corporation; or (ii) in connection with any other proceeding charging improper personal benefit to the director or officer, whether or not involving action in an official capacity, in which the director or officer was adjudged liable on the basis that personal benefit was improperly received by him or her. Sections 7-109-103 and 7-109-107 provide that, unless the registrant's articles of incorporation provide otherwise, indemnification is mandatory for a director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding, against reasonable expenses incurred in connection therewith. The indemnification provisions of the Colorado Business Corporation Act are not exclusive and are deemed to be in addition to any provisions which may be contained in a corporation's articles of incorporation, bylaws, a resolution of its shareholders or board of directors, or in a contract or otherwise.
Therestated articles of incorporation of Henry Bros. Electronics, Inc. (CO)SAT Corporation provide that the registrantliability of directors for monetary damages shall indemnify any director, officer, employee or agent, or any former director, officer, employee or agent, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection with such action, suit or proceeding, if the person (i) acted in good faith and (ii) in a manner reasonably believed to be in, or not opposedeliminated to the best interests of the corporation;fullest extent permissible under California law. The amended and (iii) with respect to any criminal action or proceeding, the person had no reasonable cause to believe the person's conduct was unlawful. Therestated articles of incorporation of Henry Bros. Electronics, Inc. (CO) furtherSAT Corporation provide that theeach registrant shall indemnify any person who was or is a party, or is threatenedauthorized to be made a party, to any threatened, pending or completed action by orprovide indemnification of agents (as defined in the rightSection 317 of the corporation by reasonCalifornia Corporations Code, which includes directors and officers) through bylaw provisions or through written agreements with the agents, or both, in excess of the fact that such person is or was a director, officer, employee or agentindemnification otherwise permitted by Section 317 of the corporation, or is or was serving atCorporations Code, subject to the requestlimits on such excess indemnification set forth in Section 204 of the corporation as a director, officer, employee or agent of another corporation or business entity against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action, if such person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be made in respect of any claim as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of such person's duty to the corporation.Corporations Code.
The bylaws of Henry Bros. Electronics, Inc. (CO)SAT Corporation provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the corporation)registrant) by reason of the fact that such person is or was a director, officer, employee or agent, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of SAT Corporation are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
II-5Colorado Registrants: Henry Bros. Electronics, Inc. (CO) and Real Time Logic, Inc. are incorporated under the laws of Colorado.
Sections 7-109-102 through 7-109-110 of the Colorado Business Corporation Act (the "Act") grant the registrants' broad powers to indemnify any person in connection with legal proceedings brought against him by reason of his present or past status as an officer or director of the registrant, provided with respect to conduct in an official capacity with the registrant, the person acted in good faith and in a manner he reasonably believed to be in the best interests of the registrant, with respect to all other conduct, the person believed the conduct to be at least not opposed to the best interests of the registrant, and with respect to any criminal action or proceeding, the person had no reasonable cause to believe his conduct was unlawful. Indemnification is limited to reasonable expenses incurred in connection with the proceeding. No indemnification may be made (i) in connection with a proceeding by or in the right of the registrant in which the person was adjudged liable to the registrant; or (ii) in connection with any other proceedings charging that the person derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the person was judged liable on the basis that he derived an improper personal benefit, unless and only to the extent the court in which such action was brought or another court of competent jurisdiction determines upon application that, despite such adjudication, but in view of all relevant circumstances, the person is fairly and reasonably entitled to indemnity for reasonable expenses as the court deems proper. In addition, to the extent that any such person is successful in the defense of any such legal proceeding, the registrant is required by the Act to indemnify him against reasonable expenses.
The articles of incorporation of Henry Bros. Electronics, Inc. (CO), as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
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The bylaws of Henry Bros. Electronics, Inc. (CO) provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of Henry Bros. Electronics, Inc. (CO) are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
The articles of incorporation of Real Time Logic, Inc. provide that the board of directors of the registrant shall adopt from time to time bylaw provisions with respect to indemnification of directors, officers, employees, agents and other persons as deemed expedient and in the best interest of the registrant and to the extent permitted by law.
The bylaws of Real Time Logic, Inc. provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of Real Time Logic, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
Delaware Registrants:
(a) AI Metrix, Inc., Charleston Marine Containers, Inc., Digital Fusion, Inc., General Microwave Israel Corporation, Gichner Holdings, Inc., Gichner Systems Group, Inc., Gichner Systems International, Inc., Henry Bros. Electronics, Inc. (DE), Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc., JMA Associates, Inc, KPSS Government Solutions, Inc., Kratos Defense Engineering Solutions,& Rocket Support Services, Inc., Kratos Mid-Atlantic,Networks, Inc., Kratos Public Safety & Security Solutions, Inc., Kratos Unmanned Systems Solutions, Inc., MSI Acquisition Corp.Corp, Secureinfo Corporation and WFI NMC Corp. are incorporated under the laws of Delaware.
Section 145 of the DGCL provides that a Delawaregrants each corporation mayorganized thereunder the power to indemnify its directors, officers, employees and agents (or persons serving at our request asany person who is or was a director, officer, employee or agent of another entity)a corporation or enterprise, against expenses, including attorneys' fees, judgments, fines and settlementsamounts paid in settlement actually and reasonably incurred by themhim in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, suit orother than an action except actions by or in the right of the corporation, by reason of being or having been in any such capacity, if in connection with the matters in issue, theyhe acted in good faith and in a manner they reasonably believed to be in, or not opposed to, the best interests of the corporation, and, in connection with respect to any criminal suitaction or proceeding, if in connection with the matters in issue, they had no reasonable cause to believe theirhis conduct was unlawful. Section 145 further provides that in connection with the defense or settlement
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Table of any action by or in the right of the corporation, a Delaware corporation may indemnify its directors, officers, employees and agents (or persons serving at our request as a director, officer, employee or agent of another entity) against expenses actually and reasonably incurred by them if, in connection with the matters in issue, they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue, or matter as to which such person has been adjudged liable to the corporation unless the Delaware Court of Chancery or other court in which such action or suit is brought approves such indemnification. Section 145 further permits a Delaware corporation to grant its directors and officers additional rights of indemnification through bylaw provisions and otherwise, and/or purchase indemnity insurance on behalf of its directors and officers. Section 145 also provides that indemnification is mandatory for an officer or director who was successful, on the merits or otherwise, in the defense of any proceeding, or of any claim, issue or matter in such proceeding, against reasonable expenses (including attorneys' fees) actually and reasonably incurred in connection therewith. The DGCL additionally provides that these rights to indemnification and reimbursement or advancement of expenses shall continue as to a person who has ceased to be a director or officer (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person. Further, the indemnification and advancement of expenses provided by, or granted pursuant to, the provisions of the DGCL shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office.Contents
Section 102(b)(7) of the DGCL provides thatenables a corporation'scorporation in its certificate of incorporation may contain a provision eliminating or limitingan amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders forof monetary damages for breachviolations of the directors' fiduciary duty as a director;provided that such provision shall not eliminate or limit the liability of a directorcare, except (i) for any breach of the director'sdirectors' duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or whichthat involve intentional misconduct or a knowing
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violation of law, (iii) pursuant to Section 174 of the DGCL (providing for actions leading to improper personal benefit to the director, andliability of directors for unlawful payment of dividends or approval ofunlawful stock repurchasespurchases or redemptions that are unlawful under Delaware law.redemptions) or (iv) for any transaction from which a director derived an improper personal benefit.
The second amended and restated certificate of incorporation of each of AI Metrix, Inc., as amended, and the amended and restated certificate of incorporation of each of Digital Fusion, Inc., Henry Bros. Electronics, Inc. (DE), Gichner Systems International, Inc., as amended, Kratos Defense & Rocket Support Services, Inc., as amended, and JMA Associates, Inc., as amended, and the certificate of incorporation of each of Charleston Marine Containers, Inc., Digital Fusion, Inc., General Microwave Israel Corporation, Gichner Holdings, Inc., Gichner Systems Group, Inc., Gichner Systems International, Inc., Henry Bros. Electronics, Inc. (DE),as amended, Herley-CTI, Inc., as amended, Herley-RSS, Inc., JMA Associates, Inc., Kratos Public Safety & Security Solutions, Inc., as amended, Kratos Defense EngineeringNetworks, Inc., as amended, Kratos Unmanned Systems Solutions, Inc., as amended, MSI Acquisition Corp. and, WFI NMC Corp., and Secureinfo Corporation, and the restated certificate of incorporation of Herley Industries, Inc. exculpates the directors of each of these registrants from liability to the fullest extent permitted by the DGCL. The certificate of incorporation of Kratos Mid-Atlantic, Inc. is silent with respect to exculpation of directors from liability for monetary damages.
The organizational documents of all Delaware-incorporated registrants, except for Digital Fusion, Inc., Herley Industries, and KPSS Government Solutions, Inc. and Kratos Mid-Atlantic, Inc., obligate each of the registrants to indemnify their directors and officers to the fullest extent permitted under the DGCL. The amended and restated bylaws of Digital Fusion, Inc. differ in that they provide that no indemnification shall be made in respect of any claim, issue or matter—whether or not it is by or in the right of the corporation—as to which the indemnitee shall have been adjudged to be liable to the corporation unless, and only to the extent that, a court determines that such person is fairly and reasonably entitled to indemnity for such expenses as the Delaware Court of Chancery or such other court deems proper.
The bylaws and seconded amended and restated certificate of incorporation of Kratos Mid-Atlantic, Inc. is silent with respect to the indemnification by the corporation of its directors and officers.
The bylaws of each of AI Metrix, Inc., as amended, the amended and restated bylaws of Digital Fusion, Inc., Gichner Holdings, Inc., Gichner Systems Group, Inc., and the bylaws of JMA Associates, Inc., and Kratos Defense Engineering Solutions, Inc. obligate each of the registrantsregistrant to pay in advance of the final disposition of any proceeding the expenses, including attorneys' fees, incurred by a director or officer in defending or otherwise being involved in such proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. The bylaws of each of Kratos Public Safety & Security Solutions, Inc. and WFI NMC Corp. provide instead that each of the companiesregistrants may pay in advance of the final disposition of any proceeding the expenses incurred by a director or officer in defending such proceeding, contingent upon the authorization of the board of directors and receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation. The bylaws of Charleston Marine Containers, Inc. provide that, if a person who may be entitled to indemnification requests that such person's expenses actually and reasonably incurred in connection with any proceeding, arbitration or investigation be paid by the registrant in advance of its final disposition, such request shall not be unreasonably refused, and a response to such request shall not be unreasonably delayed.
The certificate of incorporation of Kratos Networks, Inc., as amended, and the sixth amended and restated certificate of incorporation of Secureinfo Corporation, as amended, obligate the registrants to pay in advance of the final disposition of any proceeding the expenses incurred by a director or officer in defending or otherwise being involved in such proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation.
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The certificate of incorporation of Kratos Unmanned Systems Solutions, Inc., as amended, states that the indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person; provided, however, that, except as provided in subsection b, the registrant shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors of the registrant. The right to indemnification is a contract right and includes the right to be paid by the registrant the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to the registrant of an undertaking to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified. The registrant may, by action of its board of directors, provide indemnification to employees and agents of the registrant with the same scope and effect as the foregoing indemnification of directors and officers.
The bylaws of each of AI Metrix, Inc., Gichner Holdings, Inc., Gichner Systems Group, Inc., JMA Associates, Inc., Kratos Public Safety & Security Solutions, Inc., Kratos Defense Engineering Solutions, Inc., and WFI NMC Corp. further provide that each of the registrants may maintain insurance to protect itself and any director or officer of the registrant against any expenses, liabilities or losses, whether or not the corporation would have the power to indemnify such person against such expenses, liabilities or losses under the DGCL. The amended and restated bylaws of Digital Fusion, Inc., on the other hand, mandate that the registrant purchase and maintain insurance on behalf of any person who is or was or has agreed to serve as a director or officer of the registrant against any liability asserted against and incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the registrant would have the power to indemnify him or her against such liability, so long as such insurance is available on acceptable terms as decided by the board of directors. Also, the certificate of incorporation of each of Kratos Networks, Inc., as amended, and Kratos Unmanned Systems Solutions, Inc., as amended, and the sixth amended and restated certificate of incorporation of Secureinfo Corporation, as amended, provide that the registrant may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent or its subsidiary or affiliate, or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the registrant would have the power to indemnify such person against such expense, liability or loss under the DGCL.
The bylaws of each of Gichner Holdings, Inc., Gichner Systems Group, Inc., JMA Associates, Inc., and Kratos Defense Engineering Solutions, Inc. provide that each of the registrants shall indemnify any
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director or officer in connection with any proceeding (or part thereof) initiated by such director or officer only if such proceeding (or part thereof) was authorized by the board of directors of the corporation, or, as for Kratos Defense Engineering Solutions, Inc., only if such proceeding was brought to establish or enforce a right to indemnification under any agreement, statute or law.corporation.
The bylaws of each of General Microwave Israel Corporation, Henry Bros. Electronics, Inc. (DE), Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc. and, Kratos Networks, Inc., MSI Acquisition Corp., and Secureinfo Corporation provide that each of the registrants shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the corporation)registrant) by reason of the fact that such person is or was a director, officer, employee or agent, of the corporation, or, while such person is or was serving at the request of the corporationregistrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of each of AI Metrix, Inc., General Microwave Israel Corporation, Henry Bros. Electronics, Inc.
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(DE), Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc. and, Kratos Networks, Inc., MSI Acquisition Corp., and Secureinfo Corporation and of the certificate of incorporation of Kratos Unmanned Systems Solutions, Inc., as amended, are not exclusive of any other rights to which those indemnified may be entitled and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person. The indemnification provisions in the articles of incorporation of Herley-CTI, Inc. and Herley-RSS, Inc. and the sixth amended and restated certificate of incorporation of Secureinfo Corporation, as amended, are not exclusive of any other rights to which those indemnified may be entitled.
Neither the Articles of Incorporation nor the Bylaws of KPSS Governmental Solutions, Inc. specifies the extent to which the corporation may indemnify its officers or directors.
(b) Dallastown Realty I, LLC, Dallastown Realty II, LLC, SCT Acquisition, LLC, and SCT Real Estate, LLC are limited liability companies organized under the laws of Delaware.
Section 18-108 of the Delaware Limited Liability Company Act permitsempowers a Delaware limited liability company to indemnify and hold harmless any member or manager of the limited liability company from and against any and all claims and demands whatsoever.
Section 18-1101 of the Delaware Limited Liability Company Act permits a limited liability company to provide in its limited liability company agreement that a member, manager or other person shall not be liable for breach of contract and breach of duties to the limited liability company or to another member or manager or to another person that is a party to or is otherwise bound by the limited liability company agreement, except that a limited liability company agreement may not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.
The restated operating agreements of Dallastown Realty I, LLC and Dallastown Realty II, LLC provide that each of the registrants shall indemnify and protect each member and manager against any and all claims, liabilities, costs and expenses (including but not limited to reasonable legal fees and costs) arising directly or indirectly from any suit, action, investigation or other proceeding (whether formal or informal) that is brought or threatened against a member or manager and is based on the acts or omissions of such member or manager on behalf of the registrant, unless such acts or omissions violate the operating agreement, constituted willful misconduct or resulted from a willful violation of criminal law. The registrant shall have no obligation to indemnify a member or manager to the extent, if any, that the member or manager is entitled to be indemnified by another source, such as, without limitation, an insurance company. If a member or manager incurs or pays an indemnified cost, the companyregistrant shall reimburse the member or manager for the full amount of such indemnified cost.
The amended and restated limited liability company operating agreement of SCT Acquistion,Acquisition, LLC provides that the registrant shall indemnify, save harmless, and pay all judgments and claims against any member, officer, employee, advisor or agent relating to any liability or damage incurred by reason of any act performed or omitted to be performed by such member, officer, employee, advisor or agent in connection with the business of the corporation, including attorneys' fees incurred by such member,
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officer, employee, advisor or agent in connection with the defense of any action based on any such act or omission. The operating agreement provides further that the registrant shall indemnify, save harmless, and pay all expenses, costs or liabilities of any member, officer, employee, advisor or agent who for the benefit of the corporation makes any deposit, acquires any option, or makes any other similar payment or assumes any obligation in connection with any property proposed to be acquired by the corporation and who suffers any financial loss as the result of such action.
The amended and restated limited liability company agreement of SCT Real Estate, LLC provides that the registrant shall indemnify any member or officer for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such member or officer, other than fraudulent acts or omissions or those resulting from willful misconduct by such officer;provided that, any indemnity shall be provided out of and to the extent of companyregistrant assets only and no member shall have personal liability on account thereof.
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Florida Registrant: DEI Services Corporation, Digital Fusion Solutions, Inc., and Micro Systems, Inc. are incorporated under the laws of Florida.
Section 607.0831 of the Florida Business Corporation Act provides, among other things, that a director is not personally liable for monetary damages to a corporation or any other person for any statement, vote, decision, or failure to act, by the director, regarding corporate management or policy, unless the director breached or failed to perform his or her duties as a director and such breach or failure constitutes (a) a violation of criminal law, unless the director had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (b) a transaction from which the director derived an improper personal benefit; (c) a circumstance under which the liability provisions of Section 607.0834 of the Florida Business Corporation Act (relating to the liability of the directors for improper distributions) are applicable; (d) willful misconduct or a conscious disregard for the best interest of the corporation in the case of a proceeding by or in the right of the corporation to procure a judgment in its favor or by or in the right of a stockholders; or (e) recklessness or an act or omission in bad faith or with malicious purpose or with wanton and willful disregard of human rights, safety or property, in a proceeding by or in the right of someone other than such corporation or a stockholder.
Section 607.0850 of the Florida Business Corporation Act provides thatauthorizes, among other things, a corporation shall have power to indemnify any person who was or is a party to any proceeding (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or officeragent of the corporation or(or is or was serving at the request of the corporation asin such a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise,position for any entity) against liability incurred in connection with such proceedingproceedings, if he or she acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding,proceedings, had no reasonable cause to believe his or her conduct was unlawful. A corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions against expenses and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless judicially approved. Section 607.0850 of the
The Florida Business Corporation Act also providesrequires that a director, officer or employee be indemnified for actual and reasonable expenses (including attorneys' fees) to the extent that a director, officer, employee,he or agent of a corporationshe has been successful on the merits or otherwise in the defense of any proceeding. Florida law also allows expenses of defending a proceeding claim, issueto be advanced by a corporation before the final disposition of the proceedings, provided that the officer, director or matter referredemployee undertakes to above, he must be indemnified against expenses actually and reasonably incurred.repay such advance if it is ultimately determined that indemnification is not permitted.
Section 607.0831 of theThe Florida Business Corporation Act providesstates that the indemnification and advancement of expenses provided pursuant to Section 607.0850 is not exclusive and that indemnification may be provided by a corporation pursuant to other means, including agreements or bylaw provisions. Florida law prohibits indemnification or advancement of expenses, however, if a judgment or other final adjudication establishes that the actions of a director, shall not be personally liable for monetary damages to the corporationofficer or any other person for any statement, vote, decision or failure to act regarding corporate management or policy by such director, unless the director breached or failed to perform his or her duties as a director and the director's breach of, or failure to perform, those duties constitutes:employee constitute (i) a violation of criminal law, unless the directorhe or she had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (ii) a transaction from which the directorsuch person derived an improper personal benefit, either directlybenefit; (iii) willful misconduct or indirectly; (iii)conscious disregard for the best interests of the corporation in the case of a circumstance under which the director is liable for unlawful distributions; (iv) inderivative action or a proceeding by or in the right of the corporation to procure a judgment in its favorstockholder, or by or(iv) in the rightcase of a shareholder, conscious disregard fordirector, a circumstance under which the best interestliability provisions of Section 607.0834 of the corporation, or willful misconduct; or (v) in a proceeding by or inFlorida Business Corporation Act (relating to the rightliability of someone other than the corporation or a shareholder, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.directors for improper distributions) are applicable.
The articles of incorporation of DEI Services Corporation provide that the registrant shall indemnify any present or former officer or director, or person exercising any duties of an officer or director, and shall advance expenses on behalf of any such officer, director or other person, in each case, to the fullest extent permitted by Florida law.
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The bylaws of DEI Services Corporation are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The articles of incorporation and the bylaws of Digital Fusion Solutions, Inc. provide that any person, his heirs, or personal representative, made, or threatened to be made, a party to any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative, because he is or was a
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director, officer, employee, or agent of the registrant or serves or served any other corporation or other enterprise in any capacity at the request of the registrant, shall indemnify any officer or director, or any former officer or director,be indemnified by the registrant, and the registrant will advance his related expenses to the full extent permitted by Florida law,law. In discharging his duty, any director, officer, employee, or agent, when acting in good faith, may rely upon information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by (1) one or more officers or employees of the advancementregistrant whom the director, officer, employee, or agent reasonably believes to be reliable and competent in the matters presented, (2) counsel, public accountants, or other persons as to matters that the director, officer, employee, or agent believes to be within that person's professional or expert competence, or (3) in the case of related expenses, if sucha director, or officer complies witha committee of the standardboard of conduct required by Floridadirectors upon which he does not serve, duly designated according to law, as is described above. The bylaws provide furtherto matters within its designated authority, if the director reasonably believes that the committee is competent. The foregoing right of indemnification shall not beor reimbursement is exclusive of other rights to which the director or officer,person, his heirs, or personal representatives may be entitled and that theentitled. The registrant may, upon the affirmative vote of a majority of its board of directors, purchase insurance, which may be for the purposebenefit of indemnifyingall directors, and officers.officers, or employees.
The restated articles of incorporation of Micro Systems, Inc., as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The bylaws of Micro Systems, Inc. provide that the registrant shall indemnify any person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation)registrant) by reason of the fact that he is or was a director or officer of the registrant, or is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred in connection with such proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the registrant and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The indemnification provisions provided by the bylaws of Micro Systems, Inc. are not deemed exclusive of any other rights to which a director or officer may be entitled under the articles of incorporation, bylaws, any resolution of stockholders or directors, any agreement or otherwise, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
Georgia Registrant: Kratos Southeast, Inc. is incorporated under the laws of Georgia.
Sections 14-2-851 and 14-2-857Section 14-2-851(a) of the Georgia Business Corporation Code provide(the "GBCC") provides that a corporation may indemnify an individual who is made a party to a proceeding because he or she is or was a director or officer against liability incurred in the proceeding if: (1) the(i) such individual conducted himself or herself in good faith; and (2) the(ii) such individual reasonably believed: (A)believed (a) in the case of conduct in his or her official capacity, with the corporation, that thesuch conduct was in the corporation's best interests; and (B)interests of the corporation, (b) in all other cases, that thesuch conduct was at least not opposed to the corporation's best interests;interests of the corporation, and (C)(c) in the case of any criminal proceeding, that the individual had no reasonable cause to believe that his or hersuch conduct was unlawful. ASection 14-2-851(d) of the GBCC provides that a corporation may not indemnify a director or officer: (1) in connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard described above;of conduct, or (2) in connection with any proceeding with respect to conduct for which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her, whether or not involving action in his or her official capacity. SectionsNotwithstanding the foregoing, pursuant to Section 14-2-854 of the GBCC, a court may order a corporation to indemnify a director if such court determines, in view of all the relevant circumstances, that it is fair and 14-2-857 providereasonable to indemnify or
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advance expenses to the director, even if the director has not met the relevant standard of conduct set forth in subsections (a) and (b) of Section 14-2-851 of the GBCC, failed to comply with Section 14-2-853 of the GBCC, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of Section 14-2-851(d) of the GBCC but if the director was adjudged so liable, the indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.
Section 14-2-852 of the GBCC provides that indemnification is mandatory for an officer ora corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he or she was a party because he or she was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding.
Section 14-2-202(b)(4)14-2-857 of the Georgia Business Corporation Code permitsGBCC provides that a corporation may indemnify and advance expenses to provide in itsan officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director. If the officer is not a director (or if the officer is a director but the sole basis on which he or she is made a party to the proceeding is an act or omission solely as an officer), the corporation may also indemnify and advance expenses to such officer to such further extent as may be provided by the articles of incorporation that a directoror the bylaws of the corporation, shall not be personally liable toby a resolution of the board of directors of the corporation, or its shareholders for monetary damages for any action taken or any failure to take any action as a director,by contract, except for (a) anyliability arising out of conduct that constitutes: (i) the appropriation, in violation of his or hertheir duties, of any business opportunity of the corporation; (b)(ii) acts or omissions which involve intentional misconduct or a knowing
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violation of law; (c)(iii) the types of liability for unlawful distributions;set forth in Section 14-2-832 of the GBCC; or (iv) any transaction from which the director receivedreceipt of an improper personal benefit. An officer of a corporation who is not a director is entitled to mandatory indemnification under Section 14-2-84214-2-852 of the Georgia Business Corporation Code provides that an officer shall not be liableGBCC may apply to a court under Section 14-2-854 of the GBCC for indemnification or advances, in each case to the same extent to which a director may be entitled to indemnification under those provisions. Finally, a corporation may also indemnify an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its shareholders for anyarticles of incorporation or bylaws, by general or specific action taken as an officerby its board of directors or any failure to take any action if such officer performed the duties of the office (i) in a manner he or she believes in good faith to be in the best interests of the corporation and (ii) with the care an ordinarily prudent person in a like position would exercise under similar circumstances.by contract.
The amended and restated articles of incorporation and the amended and restated bylaws of Kratos Southeast, Inc. exculpate the directors from liability for monetary damages to the fullest extent permitted by Georgia law.
The amended and restated articles of incorporation also provide that the registrant shall, to the fullest extent permitted by the provisions of the Georgia Business Corporation Code, indemnify any and all persons whom it shall have power to indemnify from and against any and all of the expenses, liabilities or other matters referred to in, or covered by, Georgia law, and any such indemnification shall not be deemed exclusive of rights to which those indemnified may be entitled under any bylaw, vote of shareholders or disinterested directors, or otherwise, both as to action in their official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
The amended and restated bylaws provide also that expenses incurred in any claim, action, suit or proceeding may only be paid or reimbursed by the registrant in advance of the final disposition of such claim, action, suit or proceeding if authorized by the board of directors or shareholders upon receipt from the director or officer of (i) a written affirmation of his good faith belief either that he has met the relevant standard of conduct set forth in the Georgia Business Corporation CodeGBCC or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation, and (ii) a written undertaking by such person to repay such advances if it ultimately shall be determined that such director or officer is not entitled to be indemnified. Additionally, the registrant may also purchase and maintain insurance, at its expense, on behalf of an individual who is or was a director or officer of the registrant against liability asserted against or incurred by him in any such capacity or arising from his
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status as a director or officer, whether or not the registrant would have the power to indemnify him against the same liability under its bylaws.
Indiana Registrants:
(a) Haverstick Consulting, Inc. and HGS Holdings, Inc. are incorporated under the laws of Indiana.
Sections 23-1-37-8 and 23-1-37-13Chapter 37 of the Indiana Business Corporation Law authorizes("INCL") states that a corporation tomay indemnify an individual made a party to a proceeding because the individual is or was a director or officer against liability and reasonable expense incurred in the proceeding if the individual's conduct was in good faith, and the individual reasonably believed: (A)believed, in the case of conduct in the individual's official capacity with the corporation, that the individual's conduct was in its best interests;interests, and, (B) in all other cases, that the individual's conduct was at least not opposed to its best interests. In the case of any criminal proceeding, a corporation may indemnify a director or officer if he or she either: (A)the individual either had reasonable cause to believe the individual's conduct was lawful;lawful or (B) had no reasonable cause to believe the individual's conduct was unlawful. Unless limited by its articles of incorporation, a corporation must indemnify a director who iswas wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding. A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if the director furnishes the corporation a written affirmation of the director's good faith belief that the director has met the standard of conduct described in the INCL, the director furnishes the corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct and a determination is made that the facts then known to those making the determination would not preclude indemnification under the law. A corporation may not indemnify a director unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth under the law. The determination shall be made by the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding, or by the other methods specified in Chapter 37 of the INCL.
The indemnification explicitlyand advance for expenses provided for or authorized by the Indiana Business Corporation LawINCL does not exclude any other rights to indemnification and advance for expenses that a person may have under a corporation's articles of incorporation, bylaws or bylaws, a resolution of the board of directors or of the shareholders, or anycertain other authorization by a majority vote of all the voting shares of the corporation.
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Section 23-1-35-1(e) of the Indiana Business Corporation Law provides that a director shall not be liable for any action taken as a director or any failure to take any action, regardless of the nature of the alleged breach of duty, unless (i) the director has breached or failed to perform the duties of the director's office (1) in good faith, (2) with the care an ordinarily prudent person in a like position would exercise under similar circumstances and (3) in a manner the director reasonably believes to be in the best interests of the corporation and (ii) the breach or failure to perform constitutes willful misconduct or recklessness.duly authorized agreements.
The fourth amended and restated articles of incorporation of each of Haverstick Consulting, Inc., as amended, and the articles of incorporation of HGS Holdings, Inc. provide that the directors shall be immune from personal liability for any action taken as a director, or any failure to take any action, to the fullest extent permitted by the provisions of and the general principles of the Indiana Business Corporation Law.
The amended and restated bylaws of each of Haverstick Consulting, Inc. and the bylaws of HGS Holdings, Inc. alsoboth authorize the indemnification provisions described above to the fullest extent permitted under Indiana law.
(b) Rocket Support Services, LLC is a limited liability company organized under the laws of Indiana.
Section 23-18-2-2Chapter 2 of the Indiana Business Flexibility Act provides that, unless the limited liabilitysubject to any standards and restrictions set forth in a company's articles of organization provide otherwise, everyoperating agreement, a limited liability company has power tomay indemnify and hold harmless any member, manager, agent or employee from and against any and all claims and demands, except inunless the case of action or failure to act by the member, agent, or employeefor which constitutes willful misconduct or recklessness and subject to any standards and restrictions set forth in a written operating agreement. Section 23-18-4-4 of the Indiana Business Flexibility Act provides that a written operating agreement may provide for indemnification of a member or manager for monetary damages for judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager.
Section 23-18-4-2(a) of the Indiana Business Flexibility Act provides that, unless otherwise provided in a written operating agreement, a member or manager cannot be liable for damages to the limited liability company or to the members of the limited liability company for any action taken or failure to act on behalf of the limited liability company, unless the act or omissionsought constitutes willful misconduct or recklessness.
The amended and restated operating agreement of Rocket Support Services, LLC provides that the registrant is obligated to indemnify the manager and any officer of the companyregistrant against any
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liability or expense incurred with respect to claims asserted against the manager or such officer by reason of being the manager or officer of the registrant or arising out of or in connection with any action taken or failure to act for or on behalf of the registrant to the fullest extent permitted by law.
Maryland Registrant:Registrants:
(a) Carlsbad ISI, Inc. and Reality Based IT Services, Ltd. isare incorporated under the laws of Maryland.
Section 2-418 of theThe Maryland General Corporation Law ("MGCL") permits indemnification ofa corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any officer or director madeproceeding to which they may be a party to any proceeding by reason of their service as an officerin those or directorother capacities unless it is established that: (i)that (a) the act or omission of such personthe director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was thea result of active and deliberate dishonesty; (ii) such persondishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services;services or (iii)(c) in the case of any criminal proceeding, such personthe director or officer had reasonable cause to believe that the act or omission was unlawful. The indemnityHowever, a Maryland corporation may be against judgments, penalties, fines, settlements and reasonable expenses (including attorneys' fees) actually incurred by the director or officernot indemnify for an adverse judgment in connection with the proceeding; but, if the proceeding is onea suit by or in the right ofif the corporation indemnification is not permitted with respect to any proceeding in which the director or officer has been adjudged to be liable to the corporation. If the proceeding is one charging improper personal benefit to the director or officer, whether or not involving action in the director's or officer's official capacity, indemnification of the director or officer is not permitted if the director or officer was adjudged to be liable onto the basis thatcorporation nor may a director be indemnified in circumstances in which the director is found liable for an improper personal benefit was improperly received. Unless limited bybenefit. Additionally, the MGCL permits a corporation to include in its charter under section 2-418
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Tableany provision expanding or limiting the liability of Contents
its directors and officers to the corporation or its stockholders for money damages, so long as such provision does not restrict or limit the liability of its directors or officers to the corporation or its stockholders (1) to the extent that it is proved that the person actually received an improper benefit or profit in money, property, or services for the amount of the Maryland General Corporation Law, a corporation is requiredbenefit or profit in money, property, or services actually received, or (2) to indemnify a director for reasonable expenses incurred if such individual has been successful, on the merits or otherwise, in defense of any proceeding arising out of such individual's official capacity. Indemnification under the provisions of Maryland law is not deemed exclusive of any other rights, by indemnification or otherwise, to which a director or officer may be entitled under the charter, bylaws, any resolution of stockholders or directors, any agreement or otherwise.
Section 2-405.1 of the Maryland General Corporation Law and Section 5-417 of the Maryland Courts and Judicial Proceedings Article provideextent that a director shall have no liability by reason of beingjudgment or having been a director of a corporation if such director performs his or her duties (i) in good faith, (ii)other final adjudication adverse to the person is entered in a manner he or she reasonably believes to beproceeding based on a finding in the best interestsproceeding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the corporation and (iii) withcause of action adjudicated in the care that an ordinarily prudent person in a like position would use under similar circumstances.proceeding.
The certificatearticles of incorporation, as amended, and the amended and restated bylaws of Reality Based IT Services, Ltd. are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The articles of incorporation of Carlsbad ISI, Inc., as amended, provide that the registrant shall indemnify (A) its directors and officers, whether serving the registrant or at its request any other entity, to the full extent required or permitted by Maryland law, including the advance of expenses under the procedures and to the full extent permitted by law and (B) other employees and agents to such extent as shall be authorized by the board of directors or the registrant's bylaws and be permitted by law. The foregoing rights of indemnification are exclusive of any other rights to which those seeking indemnification may be entitled. The board of directors can take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such by-laws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the articles of incorporation would limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.
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The bylaws of Carlsbad ISI, Inc., as amended, obligate the registrant to indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent of the registrant, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification is not deemed exclusive of any other rights to which those indemnified may be entitled and will continue as to a person who has ceased to be a director, officer, employee or agent and will inure to the benefit of the heirs and personal representatives of such a person.
(b) Kratos Integral Holdings, LLC is a limited liability company organized under the laws of Maryland.
Section 4A-203 of the Maryland Limited Liability Company Act permits a Maryland limited liability company to indemnify and hold harmless any member, agent, or employee from and against any and all claims and demands, except in the case of action or failure to act by the member, agent, or employee which constitutes willful misconduct or recklessness, and subject to the standards and restrictions, if any, set forth in the articles of organization or operating agreement.
The amended and restated operating agreement of Kratos Integral Holdings, LLC, provides that the Member, which is Kratos Defense & Security Solutions, Inc., and any officers appointed by the Member, shall not be liable, responsible, or accountable, in damages or otherwise, to the registrant for any act performed by the Member, or by an officer appointed by the Member, except for fraud, gross negligence, or an intentional breach of the Operating Agreement. The registrant shall indemnify and hold harmless and advance expenses, to the fullest extent to which such persons are entitled to be indemnified and held harmless under the Maryland General Corporation Law as of the date of the Operating Agreement, each present and former officer, director or employee of Integral Systems, Inc., a Maryland corporation (the "Predecessor"), and its subsidiaries, against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys' fees and disbursements, incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to (i) the fact that an Indemnified Party is or was an officer, director, employee, fiduciary or agent of the Predecessor or any of its subsidiaries or is or was serving at the request of the Predecessor or any of its subsidiaries as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise or non-profit entity or (ii) matters related to the Predecessor or its subsidiaries existing or occurring at or prior to the effective time (the "Effective Time") of the merger (the "Merger") of Predecessor with MIS Merger Sub Inc., a Maryland corporation, whether asserted or claimed prior to, at or after such Effective Time, to the fullest extent permitted under applicable law. Moreover, all rights to indemnification, expenses and exculpation existing in favor of the former or present directors and officers of the Predecessor for their acts and omissions occurring prior to the Effective Time, as provided in the Charter and Bylaws of the Predecessor as of the date of the execution of the merger agreement related to the Merger shall be observed by the registrant for a period of six years from the Effective Time. Any indemnity shall be provided out of and to the extent of the assets of the registrant only.
Nevada Registrant: LVDM, Inc.
Chapter 78 of the Nevada Revised Statutes ("NRS") allows directors and officers to be indemnified against liabilities they may incur while serving in such capacities. Under the applicable
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statutory provisions, the registrant may indemnify its directors or officers who were or are a party or are threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that they are or were directors or officers of the corporation, or are or were serving at the request of the corporation as directors or officers of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement, actually and reasonably incurred by them in connection with the action, suit, or proceeding, unless it is ultimately determined by a court of competent jurisdiction that they breached their fiduciary duties by intentional misconduct, fraud, or a knowing violation of law or did not act in good faith and in a manner which they reasonably believed to be in or not opposed to the best interests of the registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In addition, the applicable statutory provisions mandate that the registrant indemnify its directors and officers who have been successful on the merits or otherwise in defense of any action, suit, or proceeding against expenses, including attorneys' fees, actually and reasonably incurred by them in connection with the defense. The registrant may include a provision in the Articles of Incorporation or bylaws requiring it to advance expenses incurred by directors or officers in defending any such action, suit, or proceeding upon receipt of written confirmation from such officers or directors that they have met certain standards of conduct and an undertaking by or on behalf of such officers or directors to repay such advances if it is ultimately determined that they are not entitled to indemnification by the registrant.
The articles of incorporation of LVDM, Inc., as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The bylaws of LVDM, Inc. provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of LVDM, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
New Jersey Registrants: Airorlite Communications, Inc. and Henry Bros. Electronics, Inc. (NJ) are incorporated under the laws of New Jersey.
Section 14A:3-53-5(2) of the New Jersey Business Corporation ActAnnotated Statutes authorizes a New Jersey corporation to indemnify a corporate agent, which includes directors and officers, against his expenses and liabilities in connection with any proceeding involving the corporate agent by reason of his being or having been such a corporate agent, other than a proceeding by or in the right of the corporation, if (a) such corporate agent (i) acted in good faith and (ii) in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; and (iii)(b) with respect to any criminal proceeding, such corporate agent had no reasonable cause to believe such corporate agent'shis conduct was unlawful.
Under Section 14A:3-5(3) of the New Jersey Annotated Statutes, a New Jersey corporation has the power to indemnify a corporate agent against his expenses in connection with any proceeding by or in the right of the corporation to procure a judgment in its favor which involves the corporate agent by reason of his being or having been such corporate agent, if he acted in good faith and in a manner he
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reasonably believed to be in or not opposed to the best interests of the corporation. However, in such proceeding no indemnification shall be provided in respect of any claim, issue or matter as to which such corporate agent shall have been adjudged to be liable to the corporation, unless and only to the extent that the New Jersey Superior Court or the court in which such proceeding was brought shall determine upon application that despite the adjudication of liability, but in view of all circumstances of the case, such corporate agent is fairly and reasonably entitled to indemnity for such expenses as the New Jersey Superior Court or such other court shall deem proper.
A New Jersey corporation shall indemnify a corporate agent against expenses to the extent such corporate agent has been successful on the merits or otherwise in any proceeding referred to in Sections 14A:3-5(2) and 14A:3-5(3) or in defense of any claim, issue or matter therein.
The articles of incorporation of Henry Bros. Electronics, Inc. (NJ), as amended, provides that the registrant shall indemnify any and all corporate agents (as defined in Sections 14A:3-5 of the New Jersey Business Corporation Act) to the fullest extent permitted by Section 14A:3-5 of the New Jersey Business Corporation Act and that the indemnification provided for in such articles shall continue as to a person who has ceased to be a corporate agent and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such corporate agent. The bylaws of Henry Bros. Electronics, Inc. (NJ) are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The bylaws of Airorlite Communications, Inc. provide that the registrant shall indemnify to the fullest extent permitted by law, any person in an action (including actions by or in right of the corporation) by reason of the fact that such person is or was a director or officer of the corporation against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of an action or proceeding, civil or criminal, and expenses incurred by such person in defending or settling such action or proceeding. The certificate of incorporation of Airorlite Communications, Inc., as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
New York Registrants:
(a) Diversified Security Solutions, Inc. and General Microwave Corporation are incorporated under the laws of New York.
SectionsSection 721 and 722 of the New York Business Corporation Law provide(the "NYBCL") provides that, in addition to indemnification provided in Article 7 of the NYBCL, a corporation may indemnify any person made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, by reason of the fact that he was a director or officer of the corporation, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred asby a result of such action or proceeding, or any appeal therein, if such director or officer acted in good faith and for a purpose which he reasonably believed to beprovision contained in the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful. The indemnification provisions of the New York Business
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Corporation Law are not exclusive and are deemed to be in addition to any provisions which may be contained in a corporation's certificate of incorporation bylaws,or by-laws or by a duly authorized resolution of its shareholders or board of directors or in anby agreement, providing for such indemnification;provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action, or that such director or officer personally gained, in fact, a financial profit or other advantage to which he was not legally entitled.
Section 722(a) of the NYBCL provides that a corporation may indemnify a director or officer made, or threatened to be made, a party to any action other than a derivative action, whether civil or criminal, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred as a result of such action or proceeding or any appeal therein, if such director or officer acted in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe It his conduct was unlawful.
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Section 722(c) of the NYBCL provides that a corporation may indemnify a director or officer made, or threatened to be made, a party in a derivative action, against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with the defense or settlement of such action or in connection with an appeal therein if such director or officer acted in good faith, for a purpose which he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification will be available under Section 722(c) of the NYBCL in respect of a threatened action, or a pending action which is settled or otherwise disposed of, or any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines, upon application, that, in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper.
Section 723 of the NYBCL specifies the manner in which payment of indemnification under Section 722 of the NYBCL or indemnification permitted under Section 721 of the NYBCL may be authorized by the corporation. Section 723 of the NYBCL also provides that the indemnification provided for in Section 722 of the NYBCL is mandatory in any case in which the director or officer has been successful, whether on the merits or otherwise, in defending an action. In the event that the director or officer has not been successful or the action is settled, indemnification must be authorized by the appropriate corporate action as set forth in Section 723 of the NYBCL. Section 724 of the NYBCL provides that, upon application by a director or officer, indemnification may be awarded by a court to the extent authorized. Sections 722 and 723 of the NYBCL contain certain other provisions affecting the indemnification of directors and officers.
Section 725(a) of the NYBCL provides that expenses advanced by the corporation pursuant to Section 723 of the NYBCL or allowed by a court pursuant to Section 724 of the NYBCL shall be repaid if the recipient is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so adjudicated,advanced by the corporation or allowed by the court exceed the indemnification to which he is entitled.
Section 726 of the NYBCL authorizes the purchase and maintenance of insurance to indemnify (i) a corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the provisions of Article 7 of the NYBCL, (ii) directors and officers in instances in which they may be indemnified by the corporation under the provisions of Article 7 of the NYBCL, and (iii) directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of Article 7 of the NYBCL, provided that the contract of insurance covering such directors and officers provides, in a manner acceptable to the New York State Superintendent of Insurance, for a retention amount and for co-insurance.
Section 402(b) of the NYBCL provides that a corporation's certificate of incorporation may eliminate or limit the personal liability of directors to the corporation or its shareholders for damages for any breach of duty in such capacity, provided that no such provision shall eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled.entitled or that his acts violated or in certain other instances.
The certificate of incorporation andof Diversified Security Solutions, Inc. provides that no director of the registrant shall be personally liable to the registrant or its stockholders for damages for any breach of duty in such capacity except where a judgment or other final adjudication adverse to said director establishes that the director's acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that said director personally gained a financial profit or other advantage
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to which he was not entitled, or the director's acts violated Section 719 of the New York Business Corporation Law.
The bylaws of Diversified Security Solutions, Inc. are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The certificate of incorporation of General Microwave Corporation, as amended, provides that the registrant may indemnify each person who at any time is or shall have been a director or officer of the corporation and is threatened to be or is made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the corporation, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any such threatened, pending or completed action, suit or proceeding to the full extent authorized by New York law. The indemnification provisions of the certificate of incorporation of General Microwave Corporation, as amended, are not exclusive of any other rights to which such director, officer, employee, or agent may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise.
The bylaws of General Microwave Corporation provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the corporation)registrant) by reason of the fact that such person is or was a director, officer, employee or agent, of the corporation, or, while such person is or was serving at the request of the corporationregistrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of General Microwave Corporation are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
(b) BSC Partners, LLC
Under Section 202(k) of the New York Limited Liability Company Law (the "NYLLCL"), unless the articles of organization provide otherwise and subject to any limitations provided in the NYLLCL or any other law of the State of New York, a limited liability company may indemnify a member or manager.
Under Section 420 of the NYLLCL, subject to the standards and restrictions, if any, set forth in its operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless, and advance expenses to, any member, manager or any testator or intestate of such member or manager from and against any and all claims and demands whatsoever; provided, however, that no indemnification may be made to or on behalf of any member or manager if a judgment or other final adjudication adverse to such member or manager establishes (a) that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (b) that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled.
The amended and restated operating agreement of BSC Partners, LLC provides that the registrant, with the consent of the sole member, Kratos Technology & Training Solutions, Inc., is obligated to indemnify any person in connection with any and all claims and demands whatsoever to the fullest extent permitted under the Act.
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Ohio Registrant: Haverstick Government Solutions, Inc. is incorporated under the laws of Ohio.
Section 1701.13(E)(1) of the Ohio Revised CodeGeneral Corporation Law (the "OGCL") provides that a corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, (otherwhether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation)corporation, by reason of the fact that such personhe is or was a director, officer, employee, or officeragent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney's fees, judgments, fines, and liabilityamounts paid in settlement actually and reasonably incurred by the director or officerhim in connection with such action, suit, or proceeding, if the director or officerhe acted in good faith and in a manner such personhe reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe that thishis conduct was unlawful. In connectionThe termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
A corporation may also indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed proceeding,action or suit by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney's fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made (subjectin respect of any of the following: (i) any claim, issue, or matter as to certain exceptions) if: (a)which such person shall have beenis adjudged to be liable for negligence or misconduct in the performance of the person'shis duty to the corporation unless, and only to the extent that, the court of common pleas or the court in which the proceedingsuch action or suit was brought shall determinedetermines, upon application, that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper; (ii) any action or (b)suit in which the only liability asserted against a director in a proceeding is for the director voting for or assentingpursuant to the following: the payment of a
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dividend or distribution, the making of a distribution of assets to shareholders, or the purchase or redemptionsection 1701.95 of the corporation's own shares in violation of Ohio law or the corporation's articles of incorporation; a distribution of assets to shareholders during the winding up of the affairs of the corporation, or on dissolution or otherwise, without the payment of all known obligations of the corporation or without making adequate provision for their payment; or the making of a loan, other than in the usual course of business, to an officer, director or shareholder of the corporation other than in the case of at the time of the making of the loan, a majority of the disinterested directors of the corporation voted for the loan and taking into account the terms and provisions of the loan and other relevant factors, determined that the making of the loan could reasonably be expected to benefit the corporation. The Ohio Revised Code further provides that, to the extent that a director, trustee, officer, employee, member, manager, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding, or in defense of any claim, issue, or matter therein, the corporation must indemnify him against expenses, including attorney's fees, actually and reasonably incurred by him in connection with the action, suit, or proceeding.
Section 1701.59(D) of the Ohio Revised Code provides that, unless otherwise provided in the articles of incorporation or bylaws, a director shall be liable in damages for any action that the director takes or fails to take as a director only if it is proved by clear and convincing evidence in a court of competent jurisdiction that the director's action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interests of the corporation.OGCL.
The bylawsregulations of Haverstick Government Solutions, Inc. provide that the registrant shall indemnify each person who is made or threatened to be made a party to any proceeding, whether brought by or in the right of the registrant, by reason of the fact that such person is or was a director or officer, against all costs and expenses actually and reasonably incurred by such person concerning, or in connection with, the defense of any claim asserted or suit or proceeding brought against such person by reason of that person's conduct, actions or inaction in such capacity, at the time of incurring such costs or expenses, except costs and expenses incurred in relation to matters as to which such person shall have been willfully derelict in the performance of such person's duty, as determined by the final adjudication of such proceeding or, in a matter not falling within above, as determined by a majority of disinterested members of the board of directors or a majority of a committee of disinterested shareholders of the registrant. The registrant may also make advances against costs, expenses and fees, as and upon the terms, determined by the board of directors. The bylaws also provide that, to the extent any of these indemnification provisions prove to be ineffective for any reason in furnishing the
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indemnification provided, each of the persons named above shall be indemnified by the registrant to the full extent authorized by Ohio law.
Registrants in Texas:Texas Registrants:
(a) Kratos Texas, Inc. is incorporated under the laws of Texas.
Article 2.02-1 Section 8.051 of the Texas Business Corporation Act provides that any directorOrganizations Code (the "TBOC") applies to each form of entity in Texas and states that: (a) An enterprise shall indemnify a governing person, former governing person, or officer of a Texas corporation may be indemnifieddelegate against judgments, penalties, fines, settlements and reasonable expenses actually incurred by the person in connection with or in defending any action, suit ora proceeding in which hethe person is a respondent because the person is or was a governing person or delegate if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding. (b) A court that determines, in a suit for indemnification, that a governing person, former governing person, or delegate is entitled to indemnification under this section shall order indemnification and award to the person the expenses incurred in securing the indemnification.
Section 8.052 states that (a) On application of a governing person, former governing person, or delegate and after notice is provided as required by the court, a court may order an enterprise to indemnify the person to the extent the court determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances. (b) This section applies without regard to whether the governing person, former governing person, or delegate applying to the court satisfies the requirements of Section 8.101 or has been found liable: (1) to the enterprise; or (2) because the person improperly received a personal benefit, without regard to whether the benefit resulted from an action taken in the person's official capacity. (c) The indemnification ordered by the court under this section is limited to reasonable expenses if the governing person, former governing person, or delegate is found liable: (1) to the enterprise; or (2) because the person improperly received a personal benefit, without regard to whether the benefit resulted from an action taken in the person's official capacity.
Section 8.101 states that (a) An enterprise may indemnify a governing person, former governing person, or delegate who was, is, or is threatened to be made a named defendantrespondent in a proceeding to the extent permitted by reason of his position as director or officer;providedSection 8.102 if it is determined in accordance with Section 8.103 that: (1) he conducted himselfthe person: (A) acted in good faith; and (2) he(B) reasonably believed that,believed: (i) in the case of conduct in histhe person's official capacity, as a director or officer ofthat the corporation, suchperson's conduct was in the corporation'senterprise's best interests,interests; and (ii) in allany other cases,case, that suchthe person's conduct was at least not opposed to the corporation'senterprise's best interests; and (3)(C) in the case of a criminal proceeding, he had nodid not have a reasonable cause to believe histhe person's conduct was unlawful.unlawful; (2) with respect to expenses, the amount of expenses other than a judgment is reasonable; and (3) indemnification should be paid. (b) Action taken or omitted by a governing person or delegate with respect to an employee benefit plan in the performance of the person's duties for a purpose reasonably believed by the person to be in the interest of the participants and beneficiaries of the plan is for a purpose that is not opposed to the best interests of the enterprise. (c) Action taken or omitted by a delegate to another enterprise for a purpose reasonably believed by the delegate to be in the interest of the other enterprise or its owners or members is for a purpose that is not opposed to the best interests of the enterprise. (d) A corporationperson does not fail to meet the standard under Subsection (a)(1) solely because of the termination of a proceeding by: (1) judgment; (2) order; (3) settlement; (4) conviction; or (5) a plea of nolo contendere or its equivalent.
Section 8.102 states that (a) Subject to Subsection (b), an enterprise may indemnify a directorgoverning person, former governing person, or officerdelegate against: (1) a judgment; and (2) expenses, other than a judgment, that are reasonable and actually incurred by the person in respectconnection with a proceeding. (b) Indemnification under this subchapter of a proceeding in which he is found liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in his official capacity, or in which heperson who is found liable to the corporation, butenterprise or is found liable because the indemnificationperson improperly received a personal benefit: (1) is limited to reasonable expenses actually incurred by the person in connection with the proceeding; (2) does not include a judgment, a penalty, a fine, and an excise or similar tax, including an excise tax assessed against the person with
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is limitedrespect to reasonable expenses actually incurred by him in connection with the proceedingan employee benefit plan; and shall(3) may not be made in respect of anyrelation to a proceeding in which he shall havethe person has been found liable forfor: (A) willful or intentional misconduct in the performance of histhe person's duty to the corporation. If a director or officer is wholly successful, on the merits or otherwise, in connection with such a proceeding, such indemnification is mandatory.
Section 7.001 of the Texas Business Organizations Code provides that the articles of incorporation of a corporation may provide that directors are not liable, or are liable only to the extent provided by the articles of incorporation, to the corporation for monetary damages for an act or omission by the person in the person's capacity as a director, except to the extent the director is found liable for (i) aenterprise; (B) breach of the person's duty of loyalty if any,owed to the corporationenterprise; or the stockholders, (ii)(C) an act or omission not committed in good faith that either constitutes a breach of a duty owed by the person to the enterprise. (c) A governing person, former governing person, or delegate is considered to have been found liable in relation to a claim, issue, or matter only if the liability is established by an order, including a judgment or decree of a court, and all appeals of the director to the corporationorder are exhausted or involves intentional misconduct or a knowing violation of law, (iii) a transaction from which the person received an improper benefit, regardless of whether the benefit resulted from an action taken within the scope of the person's duties, or (iv) an act or omission for which the liability of a director is expressly providedforeclosed by an applicable statute.law.
The articles of incorporation of Kratos Texas, Inc., as amended, exculpate the directors of the registrant from liability for monetary damages to the fullest extent permitted by Texas law.
The articles of incorporation of Kratos Texas, Inc., as amended, also provide that the registrant (a) must indemnify directors to the extent permitted under Texas law, and (b) agrees to advance the reasonable expenses of a director after the registrant receives a written affirmation by the director of his good faith belief that he has met the standard of conduct necessary for indemnification and a written undertaking by or on behalf of the director to repay the amount paid or reimbursed if it is ultimately determined that he has not met that standard or if it is ultimately determined that indemnification of the director against expenses incurred by him in connection with that proceeding is prohibited. These indemnification rights are not exclusive of any other rights to which any director of the registrant may be entitled under any agreement, pursuant to a vote of the board of directors, any committee thereof or the shareholders, as a matter of law or otherwise, either as to action in his official capacity or as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director and shall inure to the benefit of the heirs, executors and administrators of such person.
The bylaws of Kratos Texas, Inc. further provide that the corporation shall indemnify to the maximum extent permitted by Texas law any director or officer who was or is a party or is threatened to be made a party to any proceeding by reason of the fact that he is or was a director or officer of the registrant against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such proceeding if: (i) in the case of a criminal proceeding, such person had no reasonable cause to believe the conduct of the person was unlawful, and (ii) in the case of any action other than one brought by or in the right of the registrant to procure a judgment in its favor, such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and, (iii) in the case of an action by or in the right of the registrant to procure a judgment in its favor, such person acted in good faith, in a manner such person believed to be in or not opposed to the best interests of this corporation and its shareholders. No indemnification shall be made in the case of an action by or in the right of the registrant to procure a judgment in its favor, however, with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
The bylaws of Kratos Texas, Inc. also establish that expenses incurred by an officer as well as a director in defending a proceeding may be paid by the registrant in advance of the final disposition of such proceeding as authorized by the board of directors upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is
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entitled to be indemnified by the corporation as authorized in these bylaws, and that these indemnification rights shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. The registrant is also entitled to purchase and maintain insurance on behalf of any person who is or was a director or officer against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the registrant would have the power to indemnify him against such liability under its bylaws.
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(b) Kratos Southwest, L.P., is a limited partnership organized under the laws of Texas.
Section 11.02The relevant sections of the Texas Revised Limited Partnership Act provides that a limited partnershipBusiness Organizations Code (the "TBOC") referenced above may indemnify a person who was, is or is threatenedapply equally to be made a named defendant or respondent in a proceeding because the person is or was a general partner of a limited partnership, and it is determined that the person (i) acted in good faith, and (ii) reasonably believed, in cases regarding the person's conduct in the official capacity of general partner, that such conduct was in the best interests of the partnership, and in all other cases, that the person's conduct was at least not opposedpartnerships to the partnership's best interests, and (iii)extent they provide as such in the case of a criminal proceeding, the person had no reasonable cause to believe that the conduct was unlawful. Pursuant to Section 11.17 of the Texas Revised Limited Partnership Act, a limited partnership may further indemnify and advance expenses to a limited partner, employee, agent, or person serving at the request of the limited partnership as a representative of another enterprise, if so provided by the partnership agreement. The Texas Revised Limited Partnership Act is silent as to exculpation of partners.their organizational documents.
The agreement of limited partnership of Kratos Southwest, L.P. provides that the general partner shall be indemnified and held harmless by the partnership, to the full extent permitted under the laws of the State of Texas, to the extent that the partnership assets are sufficient therefor, from and against any and all claims, demands, liabilities, costs, damages, and cause of action arising out of the general partners' management of the partnership affairs, except where the claim at issue is based upon gross negligence, bad faith, breach of any material provision of the partnership agreement, or willful misconduct of the general partner. The indemnification rights herein contained shall be cumulative of, and in addition to, any and all rights, remedies, and recourse to which the general partner shall be entitled. This indemnification shall include the payment of reasonable attorney's fees and other expenses incurred in settling or defending any claims, threatened action, or finally adjudicated legal proceedings. The liability of the limited partners shall be limited to the amount which they have contributed and agreed to contribute to the partnership, and the total amount of all capital contributions returned to such limited partner together with interest thereon necessary to discharge partnership liabilities to all creditors who extend credit or whose claims arose before such return.
Virginia Registrants: Defense Systems, Inc., DTI Associates, Inc., Henry Bros. Electronics,Kratos Systems and Solutions, Inc. (VA), and Stapor Research, Inc. and Avtec Systems, Inc. are incorporated under the laws of Virginia.
Under Sections 13.1-697 and 13.1-702 of the Virginia Stock Corporation Act provides that(the "Act"), a Virginia corporation maygenerally is authorized to indemnify an individual made a party to a proceeding because he is or was a director or officer against liability incurredits directors and officers in the proceedingcivil and criminal actions if the director conducted himselfthey acted in good faith and believed: (a)believed their conduct to be in the best interests of the corporation and, in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (b) in all other cases, that his conduct was at least not opposed to its best interests; and (c) in the case of any criminal proceeding, heactions, had no reasonable cause to believe histhat the conduct was unlawful. A corporation may not indemnifyIn addition, the Act caps the liability for monetary damages of a director under this section (i) in connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding, if it is determined that the director has met the standard of conduct described above, or (ii) in connection with any other proceeding charging improper personal benefit to the director, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. Unless limited by its articles of incorporation, a corporation shall indemnify a director who entirely prevails in the defense of any
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proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. Any corporation also has the power to make any further indemnity beyond the provisions contained in the Virginia Stock Corporation Act, including indemnity with respect to a proceeding by or in the right of the corporation, and to make additional provision for advances and reimbursement of expenses, to any director or officer that may be authorized byin a shareholder or derivative proceeding, and allows a corporation to provide complete indemnity for such actions if the indemnity is specified in the articles of incorporation or, any bylaw, except an indemnity against (i) hisif approved by the shareholders, in the bylaws. This elimination of liability will not apply in the event of willful misconduct or (ii) a knowing violation of the criminal law or any federal or state securities law.
Section 13.1-690(C) Sections 13.1-692.1 and 13.1-696 through 704 of the Virginia Stock Corporation Act provides that a director shall not be liable for any action taken as a director or any failure to take any action if such director performed the duties of the office in accordance with his or her good faith business judgment of the best interests of the corporation.are incorporated into this paragraph by reference.
The amended and restated articles of incorporation of Defense Systems, Inc. provide that directors and officers shall only be liable for actions taken as a director or officer to the extent provided by the law of the Commonwealth of Virginia. Further, the registrant shall indemnify, to the fullest extent permitted and required by the Virginia Stock Corporation Act, its directors and officers who are made a party to any proceeding by reason of their office for acts or omissions performed in their official capacity. The bylaws of Defense System, Inc. is silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The articles of incorporation of DTI Associates, Inc., as amended, provide that the registrant shall indemnify an individual against liability who has at any time served or serves as a director or officer of the registrant and is made a party to a proceeding because he is or was a director or officer of the registrant, if he conducted himself in good faith and believed his conduct to be in the best interests of the registrant or at least not opposed to its best interests, or had no reasonable cause to believe his conduct was unlawful. The registrant shall not indemnify an individual against liability in connection with any proceeding in which he is adjudged liable to the corporation or in which it is charged that personal benefit was improperly received by him, whether or not the action was performed in his official capacity.
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The articles of incorporation of each of Henry Bros. Electronics, Inc. (VA) and Stapor Research, Inc. areis silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The bylaws of Henry Bros. Electronics, Inc. (VA) provide that the registrant shall indemnify any and all persons who may serve or have served at any time as directors or officers, and their respective heirs, administrators, successors and assigns, against any and all expenses (including attorneys' fees), and amounts paid in settlement (before or after suit is commenced), actually and necessarily incurred by such persons in connection with the defense or settlement of any claim, action, suit or proceeding in which they are made a party or which may be asserted against them by reason of being or having been directors or officers. The bylaws of Henry Bros. Electronics, Inc. (VA) further provide that the registrant shall have the power to make any other or further indemnity to such officer or director, or former officer or director, that may be authorized by the articles of incorporation or the bylaws of the registrant, or any resolution of its stockholders, except for indemnity against such person's gross negligence or willful misconduct.
The bylaws of Stapor Research, Inc. provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the corporation)registrant) by reason of the fact that such person is or was a director, officer, employee or agent, of the corporation, or, while such person is or was serving at the request of the corporationregistrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of Stapor Research, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
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The amended and restated articles of incorporation of Avtec Systems, Inc. are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
The bylaws of Avtec Systems, Inc. provide that the registrant shall indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action or suit by or in the right of the registrant) by reason of the fact that such person is or was a director, officer, employee or agent, or, while such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, but in each case only if and to the extent permitted under applicable state or federal law. The indemnification provisions of the bylaws of Avtec Systems, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
Table The amended and restated articles of Contentsincorporation of Kratos Systems and Solutions, Inc., as amended, are silent with respect to exculpation of directors from liability for monetary damages and indemnification by the registrant of its directors and officers.
Item 21. Exhibits The bylaws of Kratos Systems and Financial Statement Schedules.
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.1 | Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/30/01 | 4.1 | ||||||
3.2 | Certificate of Ownership and Merger of Kratos Defense & Security Solutions, Inc. into Wireless Facilities, Inc. | 8-K | 09/12/07 | 3.1 | ||||||
3.3 | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/27/09 | 3.1 | ||||||
3.4 | Certificate of Designations, Preferences and Rights of Series A Preferred Stock of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/30/01 | 4.2 | ||||||
3.5 | Certificate of Designations, Preferences and Rights of Series B Preferred Stock of Kratos Defense & Security Solutions, Inc. (included as Exhibit A to the Preferred Stock Purchase Agreement, dated as of May 16, 2002, by and among Kratos Defense & Security Solutions, Inc., Meritech Capital Partners II L.P., Meritech Capital Affiliates II L.P., MCB Entrepreneur Partners II L.P., Oak Investment Partners X, Limited Partnership, Oak X Affiliates Fund, Limited Partnership, Oak Investment Partners IX, L.P., Oak Affiliates Fund, L.P., Oak IX Affiliates Fund-A, L.P., and the KLS Trust dated July 14, 1999). | 8-K/A | 06/05/02 | 4.1 | ||||||
3.6 | Certificate of Designation of Series C Preferred Stock of Kratos Defense & Security Solutions, Inc. | 8-K | 12/17/04 | 3.1 | ||||||
3.7 | Second Amended and Restated Bylaws of Kratos Defense & Security Solutions, Inc. | 8-K | 03/15/11 | 3.1 | ||||||
3.8 | Second Amended and Restated Certificate of Incorporation of AI Metrix, Inc., as amended | S-4 | 06/28/10 | 3.8 | ||||||
3.9 | Bylaws of AI Metrix, Inc. | S-4 | 06/28/10 | 3.9 | ||||||
3.10 | Certificate of Incorporation of Airorlite Communications, Inc., as amended (f/k/a ACI Acquisition Inc.) | * | ||||||||
3.11 | Bylaws of Airorlite Communications, Inc. (f/k/a ACI Acquisition Inc.) | * | ||||||||
3.12 | Certificate of Incorporation of Charleston Marine Containers Inc. | S-4 | 06/28/10 | 3.10 |
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| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.13 | Bylaws of Charleston Marine Containers Inc. | S-4 | 06/28/10 | 3.11 | ||||||
3.14 | Certificate of Formation of Dallastown Realty I, LLC | S-4 | 06/28/10 | 3.12 | ||||||
3.15 | Restated Operating Agreement of Dallastown Realty I, LLC | S-4 | 06/28/10 | 3.13 | ||||||
3.16 | Certificate of Formation of Dallastown Realty II, LLC | S-4 | 06/28/10 | 3.14 | ||||||
3.17 | Restated Operating Agreement of Dallastown Realty II, LLC | S-4 | 06/28/10 | 3.15 | ||||||
3.18 | Amended and Restated Articles of Incorporation of Defense Systems, Incorporated | S-4 | 06/28/10 | 3.16 | ||||||
3.19 | Bylaws of Defense Systems, Incorporated | S-4 | 06/28/10 | 3.17 | ||||||
3.20 | Articles of Incorporation of DEI Services Corporation, as amended | * | ||||||||
3.21 | Bylaws of DEI Services Corporation | * | ||||||||
3.22 | Amended and Restated Certificate of Incorporation of Digital Fusion, Inc. | S-4 | 06/28/10 | 3.18 | ||||||
3.23 | Amended and Restated Bylaws of Digital Fusion, Inc. | S-4 | 06/28/10 | 3.19 | ||||||
3.24 | Amended and Restated Articles of Incorporation of Digital Fusion Solutions, Inc., as amended | S-4 | 06/28/10 | 3.20 | ||||||
3.25 | Bylaws of Digital Fusion Solutions, Inc. | S-4 | 06/28/10 | 3.21 | ||||||
3.26 | Certificate of Incorporation of Diversified Security Solutions, Inc., as amended (f/k/a Henry Bros. Electronics, Inc.) | * | ||||||||
3.27 | Bylaws of Diversified Security Solutions, Inc. (f/k/a Henry Bros. Electronics, Inc.) | * | ||||||||
3.28 | Articles of Incorporation of DTI Associates, Inc., as amended (f/k/a Defense Technology Incorporated) | S-4 | 06/28/10 | 3.22 | ||||||
3.29 | Bylaws of DTI Associates, Inc. (f/k/a Defense Technology Incorporated) | S-4 | 06/28/10 | 3.23 | ||||||
3.30 | Certificate of Incorporation of General Microwave Corporation, as amended | * | ||||||||
3.31 | Certificate of Incorporation of General Microwave Israel Corporation | * | ||||||||
3.32 | Certificate of Incorporation of Gichner Holdings, Inc., as amended | S-4 | 06/28/10 | 3.24 |
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Tablethe registrant) by reason of Contents
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.33 | Bylaws of Gichner Holdings, Inc. | S-4 | 06/28/10 | 3.25 | ||||||
3.34 | Certificate of Incorporation of Gichner Systems Group, Inc., as amended (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | 3.26 | ||||||
3.35 | Bylaws of Gichner Systems Group, Inc. (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | 3.27 | ||||||
3.36 | Amended and Restated Certificate of Incorporation of Gichner Systems International, Inc., as amended (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | 3.28 | ||||||
3.37 | Bylaws of Gichner Systems International, Inc. (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | 3.29 | ||||||
3.38 | Fourth Amended and Restated Articles of Incorporation of Haverstick Consulting, Inc., as amended | S-4 | 06/28/10 | 3.30 | ||||||
3.39 | Amended and Restated Code of By-laws of Haverstick Consulting, Inc. | S-4 | 06/28/10 | 3.31 | ||||||
3.40 | Articles of Incorporation of Haverstick Government Solutions, Inc., as amended (f/k/a AFK Acquisition, Co.) | S-4 | 06/28/10 | 3.32 | ||||||
3.41 | Regulations of Haverstick Government Solutions, Inc. (f/k/a AFK Acquisition, Co.) | S-4 | 06/28/10 | 3.33 | ||||||
3.42 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | * | ||||||||
3.43 | Bylaws of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | * | ||||||||
3.44 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CO) (f/k/a Securus, Inc. and Photo-Scan of Colo., Inc.) | * | ||||||||
3.45 | Certificate of Incorporation of Henry Bros. Electronics, Inc., as amended (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | * | ||||||||
3.46 | Bylaws of Henry Bros. Electronics, Inc. (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | * |
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| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.47 | Certificate of Incorporation of Henry Bros. Electronics, Inc., as amended (NJ) (f/k/a HBE Acquisition Corp.) | * | ||||||||
3.48 | Bylaws of Henry Bros. Electronics, Inc. (NJ) (f/k/a HBE Acquisition Corp.) | * | ||||||||
3.49 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (VA) (f/k/a CIS Security Systems Corporation and Williams Systems) | * | ||||||||
3.50 | Bylaws of Henry Bros. Electronics, Inc. (VA) (f/k/a CIS Security Systems Corporation and Williams Systems) | * | ||||||||
3.51 | Articles of Organization of Henry Bros. Electronics, L.L.C., as amended (f/k/a Corporate Security Integration, LLC) | * | ||||||||
3.52 | Limited Liability Company Agreement of Henry Bros. Electronics, L.L.C. (f/k/a Corporate Security Integration, LLC) | * | ||||||||
3.53 | Amended and Restated Certificate of Incorporation of Herley Industries, Inc. | * | ||||||||
3.54 | Certificate of Incorporation of Herley-CTI, Inc., as amended (f/k/a Syrix Corp.) | * | ||||||||
3.55 | Certificate of Incorporation of Herley-RSS, Inc. | * | ||||||||
3.56 | Articles of Incorporation of HGS Holdings, Inc. | S-4 | 06/28/10 | 3.34 | ||||||
3.57 | Bylaws of HGS Holdings, Inc. | S-4 | 06/28/10 | 3.35 | ||||||
3.58 | First Amended and Restated Certificate of Incorporation of JMA Associates, Inc., as amended | S-4 | 06/28/10 | 3.36 | ||||||
3.59 | Bylaws of JMA Associates, Inc. | S-4 | 06/28/10 | 3.37 | ||||||
3.60 | Amended and Restated Certificate of Incorporation of Kratos Defense Engineering Solutions, Inc., as amended (f/k/a Kratos Government Solutions, Inc., WFI Government Services, Inc. and High Technology Solutions, Inc.) | * | ||||||||
3.61 | Bylaws of Kratos Defense Engineering Solutions, Inc. (f/k/a Kratos Government Solutions, Inc., WFI Government Services, Inc. and High Technology Solutions, Inc.) | S-4 | 06/28/10 | 3.41 | ||||||
3.62 | Certificate of Incorporation of Kratos Mid-Atlantic, Inc., as amended (f/k/a Delmarva Systems Corp. and WFI Delaware, Inc.) | S-4 | 06/28/10 | 3.42 |
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Tablethe registrant as a director, officer, employee or agent of Contents
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.63 | Bylaws of Kratos Mid-Atlantic, Inc. (f/k/a Delmarva Systems Corp. and WFI Delaware, Inc.) | S-4 | 06/28/10 | 3.43 | ||||||
3.64 | Certificate of Incorporation of Kratos Public Safety & Security Solutions, Inc., as amended (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | * | ||||||||
3.65 | Amended and Restated Bylaws of Kratos Public Safety & Security Solutions, Inc. (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | S-4 | 06/28/10 | 3.39 | ||||||
3.66 | Amended and Restated Articles of Incorporation of Kratos Southeast, Inc., as amended | S-4 | 06/28/10 | 3.44 | ||||||
3.67 | Amended and Restated Bylaws of Kratos Southeast, Inc. | S-4 | 06/28/10 | 3.45 | ||||||
3.68 | Certificate of Limited Partnership of Kratos Southwest L.P., as amended (f/k/a Enco Systems Partnership, Ltd., WFI Texas Limited Partnership, Ltd. and WFI Southwest LP) | S-4 | 06/28/10 | 3.46 | ||||||
3.69 | Agreement of Limited Partnership of Kratos Southwest L.P. (f/k/a Enco Systems Partnership, Ltd., WFI Texas Limited Partnership, Ltd. and WFI Southwest LP) | S-4 | 06/28/10 | 3.47 | ||||||
3.70 | Amended and Restated Articles of Incorporation of Kratos Technology & Training Solutions, Inc., as amended (f/k/a SYS) | * | ||||||||
3.71 | Bylaws of Kratos Technology & Training Solutions, Inc. (f/k/a SYS) | S-4 | 06/28/10 | 3.67 | ||||||
3.72 | Articles of Incorporation of Kratos Texas, Inc., as amended (f/k/a ENCO Systems, Inc., WFI Texas, Inc., Wireless Facilities II Texas, Inc. and Kratos Southwest, Inc.) | S-4 | 06/28/10 | 3.48 | ||||||
3.73 | Bylaws of Kratos Texas, Inc. (f/k/a ENCO Systems, Inc., WFI Texas, Inc., Wireless Facilities II Texas, Inc. and Kratos Southwest, Inc.) | S-4 | 06/28/10 | 3.49 | ||||||
3.74 | Articles of Incorporation of Madison Research Corporation, as amended | S-4 | 06/28/10 | 3.50 | ||||||
3.75 | Bylaws of Madison Research Corporation | S-4 | 06/28/10 | 3.51 | ||||||
3.76 | Restated Articles of Incorporation of Micro Systems, Inc., as amended | * |
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| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.77 | Certificate of Incorporation of MSI Acquisition Corp. | * | ||||||||
3.78 | Articles of Incorporation of National Safe of California, as amended (f/k/a Protection Equipment Corporation) | * | ||||||||
3.79 | Bylaws of National Safe of California (f/k/a Protection Equipment Corporation) | * | ||||||||
3.80 | Second Amended and Restated Articles of Incorporation of Polexis, Inc., as amended | S-4 | 06/28/10 | 3.52 | ||||||
3.81 | Bylaws of Polexis, Inc., as amended | S-4 | 06/28/10 | 3.53 | ||||||
3.82 | Articles of Incorporation of Reality Based IT Services, Ltd., as amended | S-4 | 06/28/10 | 3.54 | ||||||
3.83 | Amended and Restated Bylaws of Reality Based IT Services, Ltd. | S-4 | 06/28/10 | 3.55 | ||||||
3.84 | Articles of Organization of Rocket Support Services, LLC | S-4 | 06/28/10 | 3.56 | ||||||
3.85 | Amended and Restated Operating Agreement of Rocket Support Services, LLC | S-4 | 06/28/10 | 3.57 | ||||||
3.86 | Certificate of Formation of SCT Acquisition, LLC | * | ||||||||
3.87 | Amended and Restated Limited Liability Company Operating Agreement of SCT Acquisition, LLC | * | ||||||||
3.88 | Certificate of Formation of SCT Real Estate, LLC | * | ||||||||
3.89 | Amended and Restated Limited Liability Company Agreement of SCT Real Estate, LLC | * | ||||||||
3.90 | Articles of Incorporation of Shadow I, Inc. | S-4 | 06/28/10 | 3.58 | ||||||
3.91 | Bylaws of Shadow I, Inc. | S-4 | 06/28/10 | 3.59 | ||||||
3.92 | Articles of Incorporation of Shadow II, Inc. | S-4 | 06/28/10 | 3.60 | ||||||
3.93 | Bylaws of Shadow II, Inc. | S-4 | 06/28/10 | 3.61 | ||||||
3.94 | Articles of Incorporation of Shadow III, Inc. | S-4 | 06/28/10 | 3.62 | ||||||
3.95 | Bylaws of Shadow III, Inc. | S-4 | 06/28/10 | 3.63 | ||||||
3.96 | Articles of Incorporation of Stapor Research, Inc. | * | ||||||||
3.97 | Articles of Incorporation of Summit Research Corporation, as amended | S-4 | 06/28/10 | 3.64 | ||||||
3.98 | Amended and Restated Bylaws of Summit Research Corporation | S-4 | 06/28/10 | 3.65 | ||||||
3.99 | Certificate of Incorporation of WFI NMC Corp. | S-4 | 06/28/10 | 3.68 |
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Tablethe bylaws of ContentsKratos Systems and Solutions, Inc. are not exclusive of any other rights to which those indemnified may be entitled, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs and personal representatives of such a person.
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
3.100 | Bylaws of WFI NMC Corp. | S-4 | 06/28/10 | 3.69 | ||||||
3.101 | Form of Bylaws of General Microwave Corporation, General Microwave Israel Corporation, Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc., Micro Systems, Inc., MSI Acquisition Corp., Stapor Research, Inc. and Henry Bros. Electronics, Inc. (CO) | * | ||||||||
4.1 | Specimen Stock Certificate | 10-K | 12/26/10 | 4.1 | ||||||
4.2 | Form of 10% Senior Secured Note due 2017 (issuable in connection with the 2011 exchange offer) | * | ||||||||
4.3 | Form of 10% Senior Secured Note due 2017 (issued in connection with the 2010 exchange offer) | S-4 | 06/28/10 | 4.1 | ||||||
4.4 | Rights Agreement, dated as of December 16, 2004, by and between Kratos Defense & Security Solutions, Inc. and Wells Fargo, N.A. | 8-K | 12/17/04 | 4.1 | ||||||
4.5 | Indenture, dated as of May 19, 2010, by and among Kratos Defense & Security Solutions, Inc., the Guarantors set forth therein and Wilmington Trust FSB, as Trustee and Collateral Agent (including the Form of 10% Senior Secured Notes due 2017 filed as an exhibit thereto) | 8-K | 05/25/10 | 4.1 | ||||||
4.6 | First Supplemental Indenture, dated as of February 7, 2011, by and among Kratos Defense & Security Solutions, Inc., the guarantors listed on Exhibit A thereto and Wilmington Trust FSB, as trustee, to the Indenture (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 02/07/11 | 10.2 | ||||||
4.7 | Supplemental Indenture, dated April 1, 2011, among the guaranteeing subsidiaries named therein and Wilmington Trust FSB, as trustee, to the Indenture (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 04/07/11 | 4.1 |
II-25
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
4.8 | Third Supplemental Indenture, dated April 15, 2011, by and among Kratos Defense & Security Solutions, Inc., the guarantors listed on Exhibit A thereto and Wilmington Trust FSB, as trustee and collateral agent, to the Indenture, (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 04/20/11 | 4.1 | ||||||
4.9 | Registration Rights Agreement, dated March 25, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc., and Oppenheimer & Co. Inc. | 8-K | 03/29/11 | 4.2 | ||||||
5.1 | Opinion of Paul, Hastings, Janofsky & Walker LLP | * | ||||||||
5.2 | Opinion of Sheppard, Mullin, Richter & Hampton LLP | * | ||||||||
5.3 | Opinion of Jackson Walker L.L.P. | * | ||||||||
5.4 | Opinion of Greenberg Traurig, P.A. | * | ||||||||
5.5 | Opinion of Dinsmore & Shohl LLP | * | ||||||||
5.6 | Opinion of Bradley Arant Boult Cummings LLP | * | ||||||||
5.7 | Opinion of Ice Miller LLP | * | ||||||||
5.8 | Opinion of Greenberg Traurig, LLP | * | ||||||||
5.9 | Opinion of King & Spalding LLP | * | ||||||||
5.10 | Opinion of Montgomery, McCracken, Walker & Rhoads, LLP | * | ||||||||
5.11 | Opinion of Faegre & Benson | * | ||||||||
10.1 | Purchase Agreement, dated March 25, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc., and Oppenheimer & Co. Inc. | 8-K | 03/29/11 | 10.1 | ||||||
10.2 | Security Agreement, dated March 25, 2011, by and among Acquisition Co. Lanza Parent, Lanza Acquisition Co., and Wilmington Trust FSB, as collateral agent | 8-K | 03/29/11 | 10.2 | ||||||
12.1 | Statement of computation of ratio of earnings to fixed charges | * |
II-26
| | Incorporated by Reference | | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||
21.1 | List of Subsidiaries | S-4 | 06/07/11 | 21.1 | ||||||
23.1 | Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1) | * | ||||||||
23.2 | Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.2) | * | ||||||||
23.3 | Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP | * | ||||||||
23.4 | Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP | * | ||||||||
23.5 | Consent of Registered Public Accounting Firm, Marcum LLP | * | ||||||||
23.6 | Consent of Registered Public Accounting Firm, Brightman Almagor Zohar & Co. | * | ||||||||
23.7 | Consent of Independent Registered Public Accountants, Amper, Politziner & Mattia LLP | * | ||||||||
23.8 | Consent of Independent Registered Public Accounting Firm, Plante & Moran, PLLC | * | ||||||||
24.1 | Powers of attorney (included in signature pages of the Registration Statement) | * | ||||||||
25.1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, of Trustee under the Indenture | * | ||||||||
99.1 | Form of Letter of Transmittal | * | ||||||||
99.2 | Form of Notice of Guaranteed Delivery | * | ||||||||
99.3 | Form of Letter to Registered Holders and Depository Trust Company Participants | * | ||||||||
99.4 | Form of Letter to Clients | * |
Item 21. Exhibits and Financial Data Schedules
(a) Exhibits
See Exhibit Index
(b) Financial Statement Schedules
Item 22. Undertakings.Undertakings
(a) Each of the undersigned co-registrants hereby undertakes:
(1) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing
II-27
provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(3) To file, during any period duringin which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.statement;
(4) (2) That, for purposesthe purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.thereof; and
(5)(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(6) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(7) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
(8)(4) That, for purposesthe purpose of determining liability under the Securities Act of 1933 to any purchaser each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.Provided, however,, that no statement made in a registration statement or prospectus that is part of the registration statement
II-28
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(9)(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: Each of theThe undersigned co-registrantsregistrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
II-26
purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.(b) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
II-29 (c) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
(d) Insofar as indemnification for liabilities arising under Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
II-27
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. | ||||
By: | /s/ Senior Vice President, General Counsel/Registered In-House Counsel, Chief Compliance Officer and |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directorsconstitutes and officersappoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||
/s/ | Vice President and Corporate Controller | |||
II-30II-28
Signature | Title | Date | ||
---|---|---|---|---|
/s/ | Director | |||
/s/ BRANDEL L. CARANO Brandel L. Carano | Director | August 20, 2014 | ||
/s/ WILLIAM A. HOGLUND William A. Hoglund | Director | |||
/s/ SCOT B. JARVIS Scot B. Jarvis | Director | |||
/s/ JANE E. JUDD Jane E. Judd | Director | |||
/s/ SAMUEL N. LIBERATORE Samuel N. Liberatore | Director |
II-31II-29
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
KPSS GOVERNMENT SOLUTIONS, INC. (DE) | ||||
KRATOS SOUTHEAST, INC. (GA) | ||||
KRATOS TEXAS, INC. (TX) | ||||
WFI NMC CORP. (DE) | ||||
HENRY BROS. ELECTRONICS, INC. (DE) | ||||
DIVERSIFIED SECURITY SOLUTIONS, INC. | ||||
HENRY BROS. ELECTRONICS, INC. (NJ) | ||||
HENRY BROS. ELECTRONICS, INC. (CA) | ||||
AIROLITE COMMUNICATIONS, INC. (NJ) | ||||
HENRY BROS. ELECTRONICS, INC. (CO) | ||||
NATIONAL SAFE OF CALIFORNIA, INC. (CA) | ||||
AI METRIX, INC. (DE) | ||||
POLEXIS, INC. (CA) | ||||
REALITY BASED IT SERVICES, LTD. (MD) | ||||
SHADOW I, INC. (CA) | ||||
SHADOW II, INC. (CA) | ||||
KRATOS INTEGRAL SYSTEMS INTERNATIONAL, INC. (CA) | ||||
DEI SERVICES CORPORATION (FL) | ||||
SECUREINFO CORPORATION (DE) | ||||
KRATOS NETWORKS, INC. | ||||
KRATOS SYSTEMS AND SOLUTIONS, INC.(VA) | ||||
AVTEC SYSTEMS, INC. (VA) | ||||
LVDM, INC. (NV) | ||||
SAT CORPORATION (CA) | ||||
REAL TIME LOGIC, INC. (CO) | ||||
CARLSBAD ISI, INC. |
II-32II-30
GIRCHNER SYSTEMS GROUP, INC. (DE) | ||||
GIRCHNER SYSTEMS INTERNATIONAL, INC. (DE) | ||||
CHARLESTON MARINE CONTAINERS INC. (DE) | ||||
HERLEY INDUSTRIES, INC. (DE) | ||||
GENERAL MICROWAVE CORPORATION (NY) | ||||
GENERAL MICROWAVE ISRAEL CORPORATION (DE) | ||||
HERLEY-CTI, INC. (DE) | ||||
HERLEY-RSS, INC. (DE) | ||||
STAPOR RESEARCH, INC. (VA) | ||||
MSI ACQUISITION CORP. (DE) | ||||
MICRO SYSTEMS, INC. (FL) | ||||
COMPOSITE ENGINEERING, INC. (CA) | ||||
DIGITAL FUSION, INC. (DE) | ||||
DIGITAL FUSION SOLUTIONS, INC. (FL) | ||||
SUMMIT RESEARCH CORPORATION (AL) |
MADISON RESEARCH CORPORATION (AL) | ||||
DEFENSE SYSTEMS, INCORPORATED (VA) | ||||
HAVERSTICK CONSULTING, INC. (IN) | ||||
HGS HOLDINGS, INC. (IN) | ||||
HAVERSTICK GOVERNMENT SOLUTIONS, INC.(OH) | ||||
DTI ASSOCIATES, INC. (VA) | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President, |
II-31
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directorsconstitutes and officersappoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer) | |||
/s/ | ||||
/s/ MICHAEL W. FINK Michael W. Fink | Director | August 20, 2014 |
II-33II-32
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
By: Its General Partner | ||||||
a | ||||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officersconstitutes and appoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of |
II-34
/s/ RICHARD DUCKWORTH Richard Duckworth | ||||
August 20, 2014 | ||||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Kratos Texas, Inc. | August 20, 2014 |
II-35II-33
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
By: Its Sole Member | ||||||
a | ||||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officersconstitutes and appoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons in the capacities and on the dates indicated.
II-36
II-37
SIGNATURES
Pursuant to the requirementsbehalf of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.
POWER OF ATTORNEY
Know all men by these presents, that the undersigned officers of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and each of them, the individual's true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution, for the person and in his or her name, place and stead, in any and all capacities, to sign such registration statement and any or all amendments, including post-effective amendments to the registration statement, including a prospectus or an amended prospectus therein and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all other documents in connection therewith to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Henry Bros. Electronics, Inc. | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of Henry Bros. Electronics, Inc. |
II-38
/s/ RICHARD DUCKWORTH Richard Duckworth | ||||
August 20, 2014 | ||||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Henry Bros. Electronics, Inc. | August 20, 2014 |
II-39II-34
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directorsconstitutes and officersappoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer and Director (Principal Financial Officer) | |||
/s/ | ||||
/s/ SCOTT I. ANDERSON Scott I. Anderson | Director | August 20, 2014 |
II-40II-35
Signature | Title | Date | ||
---|---|---|---|---|
/s/ DEBORAH BUTERA Deborah Butera | Director | August 20, 2014 | ||
/s/ BANDEL CARANO Bandel Carano | Director | August 20, 2014 | ||
/s/ SCOT B. JARVIS Scot B. Jarvis | Director | August 20, 2014 | ||
/s/ JANE E. JUDD Jane E. Judd | Director | August 20, 2014 |
II-36
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
BSC PARTNERS, LLC | ||||
By: | Its Sole Member | |||
KRATOS a California corporation | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directorsconstitutes and officersappoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, Chief Executive Officer | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer | |||
II-41II-37
Signature | Title | Date | ||
---|---|---|---|---|
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ SCOTT I. ANDERSON Scott I. Anderson | Director of Kratos Technology & Training Solutions, Inc. | August 20, 2014 | ||
/s/ DEBORAH BUTERA Deborah Butera | Director of Kratos Technology & Training Solutions, Inc. | August 20, 2014 | ||
/s/ BANDEL CARANO Bandel Carano | Director of Kratos Technology & Training Solutions, Inc. | August 20, 2014 | ||
/s/ SCOT B. JARVIS Scot B. Jarvis | Director of Kratos Technology & Training Solutions, Inc. | August 20, 2014 | ||
/s/ JANE E. JUDD Jane E. Judd | Director of Kratos Technology & Training Solutions, Inc. | August 20, 2014 |
II-38
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
KRATOS | ||||
By: | Its Sole Member | |||
KRATOS a | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officersconstitutes and appoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Kratos | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) | August 20, 2014 |
II-39
Signature | Title | Date | ||
---|---|---|---|---|
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ SCOTT I. ANDERSON Scott I. Anderson | Director of Kratos | |||
/s/ | ||||
/s/ WILLIAM A. HOGLUND William A. Hoglund | Director of Kratos Defense & Security Solutions, Inc. | August 20, 2014 | ||
/s/ SCOT B. JARVIS Scot B. Jarvis | Director of Kratos Defense & Security Solutions, Inc. | August 20, 2014 | ||
/s/ JANE E. JUDD Jane E. Judd | Director of Kratos Defense & Security Solutions, Inc. | August 20, 2014 | ||
/s/ SAMUEL N. LIBERATORE Samuel N. Liberatore | Director of Kratos Defense & Security Solutions, Inc. | August 20, 2014 |
II-42II-40
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
By: | Its Sole Member | |||
a | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officersconstitutes and appoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Charleston Marine Containers, Inc. | August 20, 2014 | ||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of Charleston Marine Containers, Inc. | August 20, 2014 | ||
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Charleston Marine Containers, Inc. | August 20, 2014 |
II-41
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on August 20, 2014.
SCT REAL ESTATE, LLC | ||||
By: | Its Sole Member | |||
SCT ACQUISITION, LLC, a Delaware limited liability company | ||||
By: | Its Sole Member | |||
CHARLESTON MARINE CONTAINERS INC., a Delaware corporation | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Eric M. DeMarco and Deborah Butera, or either of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective amendments and registration statements), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Charleston Marine Containers, Inc. | August 20, 2014 | ||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of Charleston Marine Containers, Inc. | August 20, 2014 |
II-42
Signature | Title | Date | ||
---|---|---|---|---|
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Charleston Marine Containers, Inc. | August 20, 2014 |
II-43
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on August 20, 2014.
DALLASTOWN REALTY I, LLC | ||||
By: | Its Sole Member | |||
KRATOS UNMANNED SYSTEMS SOLUTIONS, INC., a Delaware corporation | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Eric M. DeMarco and Deborah Butera, or either of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective amendments and registration statements), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 | ||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 |
II-44
Signature | Title | Date | ||
---|---|---|---|---|
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 |
II-45
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on August 20, 2014.
DALLASTOWN REALTY II, LLC | ||||
By: | Its Sole Member | |||
DALLASTOWN REALTY I, LLC | ||||
By: | Its Sole Member | |||
KRATOS UNMANNED SYSTEMS SOLUTIONS, INC., | ||||
A Delaware corporation | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Eric M. DeMarco and Deborah Butera, or either of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective amendments and registration statements), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
II-46
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 | ||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 | ||
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller of registrant (Principal Accounting Officer) | August 20, 2014 | ||
/s/ MICHAEL W. FINK Michael W. Fink | Director of Kratos Unmanned Systems Solutions, Inc. | August 20, 2014 |
II-47
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on August 20, 2014.
KRATOS DEFENSE & ROCKET SUPPORT SERVICES, INC. | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Eric M. DeMarco and Deborah Butera, or either of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective amendments and registration statements), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, Chief Executive Officer and Director (Principal Executive Officer) | August 20, 2014 | ||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer) | August 20, 2014 | ||
/s/ RICHARD DUCKWORTH Richard Duckworth | Corporate Controller (Principal Accounting Officer) | August 20, 2014 |
II-48
Signature | Title | Date | ||
---|---|---|---|---|
/s/ MICHAEL W. FINK Michael W. Fink | Director | August 20, 2014 | ||
/s/ WILLIAM A. HOGLUND William A. Hoglund | Director | August 20, 2014 |
II-49
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on August 20, 2014.
ROCKET SUPPORT SERVICES, LLC | ||||
By: Its Sole Member | ||||
HGS HOLDINGS, INC., an Indiana corporation | ||||
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Eric M. DeMarco and Deborah Butera, or either of them, each acting alone, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective amendments and registration statements), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President and Chief Executive Officer of registrant (Principal Executive Officer) Director of HGS Holdings, Inc. | |||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President and Chief Financial Officer of registrant (Principal Financial Officer) Director of HGS Holdings, Inc. | |||
/s/ | August 20, 2014 | |||
/s/ MICHAEL W. FINK Michael W. Fink | Director of HGS Holdings, Inc. |
II-43II-50
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.August 20, 2014.
By: | /s/ ERIC M. DEMARCO Eric M. DeMarco President and Chief Executive |
Know all men by these presents,KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officersconstitutes and appoints each of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and eachDeborah Butera, or either of them, the individual'seach acting alone, his true and lawful attorney-in-fact and agents,agent, with full power of substitution and resubstitution, for thesuch person and in his or her name, place and stead, in any and all capacities, to sign such registration statementthis Registration Statement on Form S-4 (including all pre-effective and any or all amendments, including post-effective amendments and registration statements), and to the registration statement, including a prospectus or an amended prospectus therein and any registration statement forfile the same, offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended,with all exhibits thereto, and all other documents in connection therewith, to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of themacting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agentsany such attorney-in-fact and agent, or any of them, or theirhis substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | |||
---|---|---|---|---|---|
/s/ ERIC M. DEMARCO Eric M. DeMarco | President, | ||||
/s/ DEANNA H. LUND Deanna H. Lund | Executive Vice President, | ||||
/s/ |
II-44II-51
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 7th day of June, 2011.
POWER OF ATTORNEY
Know all men by these presents, that the undersigned officers of the registrant, which is filing a registration statement on Form S-4 with the Securities and Exchange Commission, Washington, D.C. 20549 under the provisions of the Securities Act of 1933, as amended, hereby constitute and appoint Eric M. DeMarco and Deanna H. Lund, and each of them, the individual's true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution, for the person and in his or her name, place and stead, in any and all capacities, to sign such registration statement and any or all amendments, including post-effective amendments to the registration statement, including a prospectus or an amended prospectus therein and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all other documents in connection therewith to be filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact as agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement and the Power of Attorney has been signed by the following persons in the capacities and on the dates indicated.
II-45
EXHIBIT INDEX
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
3.1 | Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/30/01 | 4.1 | ||||||||||||
3.2 | Certificate of Ownership and Merger of Kratos Defense & Security Solutions, Inc. into Wireless Facilities, Inc. | 8-K | 09/12/07 | 3.1 | ||||||||||||
3.3 | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/27/09 | 3.1 | ||||||||||||
3.4 | Certificate of Designations, Preferences and Rights of Series A Preferred Stock of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/30/01 | 4.2 | ||||||||||||
3.5 | Certificate of Designations, Preferences and Rights of Series B Preferred Stock of Kratos Defense & Security Solutions, Inc. (included as Exhibit A to the Preferred Stock Purchase Agreement, dated as of May 16, 2002, by and among Kratos Defense & Security Solutions, Inc., Meritech Capital Partners II L.P., Meritech Capital Affiliates II L.P., MCB Entrepreneur Partners II L.P., Oak Investment Partners X, Limited Partnership, Oak X Affiliates Fund, Limited Partnership, Oak Investment Partners IX, L.P., Oak Affiliates Fund, L.P., Oak IX Affiliates Fund—A, L.P., and the KLS Trust dated July 14, 1999). | 8-K/A | 06/05/02 | 4.1 | ||||||||||||
3.6 | Certificate of Designation of Series C Preferred Stock of Kratos Defense & Security Solutions, Inc. | 8-K | 12/17/04 | 3.1 | ||||||||||||
3.7 | Second Amended and Restated Bylaws of Kratos Defense & Security Solutions, Inc. | 8-K | 03/15/11 | 3.1 | ||||||||||||
3.8 | Second Amended and Restated Certificate of Incorporation of AI Metrix, Inc., as amended | S-4 | 06/28/10 | 3.8 | ||||||||||||
3.9 | Bylaws of AI Metrix, Inc. | S-4 | 06/28/10 | 3.9 | ||||||||||||
3.10 | Certificate of Incorporation of Airorlite Communications, Inc., as amended (f/k/a ACI Acquisition Inc.) | * | ||||||||||||||
3.11 | Bylaws of Airorlite Communications, Inc. (f/k/a ACI Acquisition Inc.) | * | ||||||||||||||
3.12 | Certificate of Incorporation of Charleston Marine Containers Inc. | S-4 | 06/28/10 | 3.10 | ||||||||||||
3.13 | Bylaws of Charleston Marine Containers Inc. | S-4 | 06/28/10 | 3.11 | ||||||||||||
3.14 | Certificate of Formation of Dallastown Realty I, LLC | S-4 | 06/28/10 | 3.12 | ||||||||||||
3.15 | Restated Operating Agreement of Dallastown Realty I, LLC | S-4 | 06/28/10 | 3.13 | ||||||||||||
3.16 | Certificate of Formation of Dallastown Realty II, LLC | S-4 | 06/28/10 | 3.14 | ||||||||||||
3.17 | Restated Operating Agreement of Dallastown Realty II, LLC | S-4 | 06/28/10 | 3.15 | ||||||||||||
3.18 | Amended and Restated Articles of Incorporation of Defense Systems, Incorporated | S-4 | 06/28/10 | 3.16 | ||||||||||||
3.19 | Bylaws of Defense Systems, Incorporated | S-4 | 06/28/10 | 3.17 | ||||||||||||
3.20 | Articles of Incorporation of DEI Services Corporation, as amended | * | ||||||||||||||
3.21 | Bylaws of DEI Services Corporation | * | ||||||||||||||
3.22 | Amended and Restated Certificate of Incorporation of Digital Fusion, Inc. | S-4 | 06/28/10 | 3.18 | ||||||||||||
3.23 | Amended and Restated Bylaws of Digital Fusion, Inc. | S-4 | 06/28/10 | 3.19 |
| | Incorporated by Reference | | ||||||
---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
2.1 | + | Agreement and Plan of Merger, dated February 7, 2011, by and among Kratos Defense & Security Solutions, Inc., Lanza Acquisition, Co. and Herley Industries, Inc. (incorporated by reference to Annex A to the Prospectus Supplement dated February 8, 2011, pursuant to the Registration Statement on Form S-3 of Kratos Defense & Security Solutions, Inc.) | 424 | 02/08/2011 | |||||
2.2 | + | Agreement and Plan of Merger, dated May 15, 2011, by and among Kratos Defense & Security Solutions, Inc., Integral Systems, Inc., IRIS Merger Sub Inc., and IRIS Acquisition Sub LLC. | 8-K | 05/18/2011 | |||||
2.3 | + | Stock Purchase Agreement, dated May 8, 2012, by and among Kratos Defense & Security Solutions, Inc., Composite Engineering, Inc., and Amy Fournier, the stockholders representative | 8-K | 5/8/2012 | |||||
3.1 | Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/30/2001 (000-27231) | ||||||
3.2 | Certificate of Ownership and Merger of Kratos Defense & Security Solutions, Inc. into Wireless Facilities, Inc. | 8-K | 09/14/2007 (000-27231) | ||||||
3.3 | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Kratos Defense & Security Solutions, Inc. | 10-Q | 09/27/2009 (001-34460) | ||||||
3.4 | Certificate of Designations, Preferences and Rights of Series A Preferred Stock. | 10-Q | 09/30/2001 (000-27231) | ||||||
3.5 | Certificate of Designations, Preferences and Rights of Series B Preferred Stock (included as Exhibit A to the Preferred Stock Purchase Agreement dated as of May 16, 2002 among the Company, Meritech Capital Partners II L.P., Meritech Capital Affiliates II L.P., MCB Entrepreneur Partners II L.P., Oak Investment Partners X, Limited Partnership, Oak X Affiliates Fund, Limited Partnership, Oak Investment Partners IX, L.P, Oak Affiliates Fund, L.P, Oak IX Affiliates Fund-A, L.P, and the KLS Trust dated July 14, 1999). | 8-K/A | 06/5/2002 (000-27231) | ||||||
II-52
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
3.24 | Amended and Restated Articles of Incorporation of Digital Fusion Solutions, Inc., as amended | S-4 | 06/28/10 | 3.20 | ||||||||||||
3.25 | Bylaws of Digital Fusion Solutions, Inc. | S-4 | 06/28/10 | 3.21 | ||||||||||||
3.26 | Certificate of Incorporation of Diversified Security Solutions, Inc., as amended (f/k/a Henry Bros. Electronics, Inc.) | * | ||||||||||||||
3.27 | Bylaws of Diversified Security Solutions, Inc. (f/k/a Henry Bros. Electronics, Inc.) | * | ||||||||||||||
3.28 | Articles of Incorporation of DTI Associates, Inc., as amended | S-4 | 06/28/10 | 3.22 | ||||||||||||
3.29 | Bylaws of DTI Associates, Inc. (f/k/a Defense Technology Incorporated) | S-4 | 06/28/10 | 3.23 | ||||||||||||
3.30 | Certificate of Incorporation of General Microwave Corporation, as amended | * | ||||||||||||||
3.31 | Certificate of Incorporation of General Microwave Israel Corporation | * | ||||||||||||||
3.32 | Certificate of Incorporation of Gichner Holdings, Inc., as amended | S-4 | 06/28/10 | 3.24 | ||||||||||||
3.33 | Bylaws of Gichner Holdings, Inc. | S-4 | 06/28/10 | 3.25 | ||||||||||||
3.34 | Certificate of Incorporation of Gichner Systems Group, Inc., as amended (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | 3.26 | ||||||||||||
3.35 | Bylaws of Gichner Systems Group, Inc. (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | 3.27 | ||||||||||||
3.36 | Amended and Restated Certificate of Incorporation of Gichner Systems International, Inc., as amended (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | 3.28 | ||||||||||||
3.37 | Bylaws of Gichner Systems International, Inc. (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | 3.29 | ||||||||||||
3.38 | Fourth Amended and Restated Articles of Incorporation of Haverstick Consulting, Inc., as amended | S-4 | 06/28/10 | 3.30 | ||||||||||||
3.39 | Amended and Restated Code of By-laws of Haverstick Consulting, Inc. | S-4 | 06/28/10 | 3.31 | ||||||||||||
3.40 | Articles of Incorporation of Haverstick Government Solutions, Inc., as amended (f/k/a AFK Acquisition, Co.) | S-4 | 06/28/10 | 3.32 | ||||||||||||
3.41 | Regulations of Haverstick Government Solutions, Inc. (f/k/a AFK Acquisition, Co.) | S-4 | 06/28/10 | 3.33 | ||||||||||||
3.42 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | * | ||||||||||||||
3.43 | Bylaws of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | * | ||||||||||||||
3.44 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CO) (f/k/a Securus, Inc. and Photo-Scan of Colo., Inc.) | * | ||||||||||||||
3.45 | Certificate of Incorporation of Henry Bros. Electronics, Inc., as amended (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | * |
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
3.46 | Bylaws of Henry Bros. Electronics, Inc. (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | * | ||||||||||||||
3.47 | Certificate of Incorporation of Henry Bros. Electronics, Inc., as amended (NJ) (f/k/a HBE Acquisition Corp.) | * | ||||||||||||||
3.48 | Bylaws of Henry Bros. Electronics, Inc. (NJ) (f/k/a HBE Acquisition Corp.) | * | ||||||||||||||
3.49 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (VA) (f/k/a CIS Security Systems Corporation and Williams Systems) | * | ||||||||||||||
3.50 | Bylaws of Henry Bros. Electronics, Inc. (VA) (f/k/a CIS Security Systems Corporation and Williams Systems) | * | ||||||||||||||
3.51 | Articles of Organization of Henry Bros. Electronics, L.L.C., as amended (f/k/a Corporate Security Integration, LLC) | * | ||||||||||||||
3.52 | Limited Liability Company Agreement of Henry Bros. Electronics, L.L.C. (f/k/a Corporate Security Integration, LLC) | * | ||||||||||||||
3.53 | Amended and Restated Certificate of Incorporation of Herley Industries, Inc. | * | ||||||||||||||
3.54 | Certificate of Incorporation of Herley-CTI, Inc., as amended | * | ||||||||||||||
3.55 | Certificate of Incorporation of Herley-RSS, Inc. | * | ||||||||||||||
3.56 | Articles of Incorporation of HGS Holdings, Inc. | S-4 | 06/28/10 | 3.34 | ||||||||||||
3.57 | Bylaws of HGS Holdings, Inc. | S-4 | 06/28/10 | 3.35 | ||||||||||||
3.58 | First Amended and Restated Certificate of Incorporation of JMA Associates, Inc., as amended | S-4 | 06/28/10 | 3.36 | ||||||||||||
3.59 | Bylaws of JMA Associates, Inc. | S-4 | 06/28/10 | 3.37 | ||||||||||||
3.60 | Amended and Restated Certificate of Incorporation of Kratos Defense Engineering Solutions, Inc., as amended (f/k/a Kratos Government Solutions, Inc., WFI Government Services, Inc. and High Technology Solutions, Inc.) | * | ||||||||||||||
3.61 | Bylaws of Kratos Defense Engineering Solutions, Inc. (f/k/a Kratos Government Solutions, Inc., WFI Government Services, Inc. and High Technology Solutions, Inc.) | S-4 | 06/28/10 | 3.41 | ||||||||||||
3.62 | Certificate of Incorporation of Kratos Mid-Atlantic, Inc., as amended (f/k/a Delmarva Systems Corp. and WFI Delaware, Inc.) | S-4 | 06/28/10 | 3.42 | ||||||||||||
3.63 | Bylaws of Kratos Mid-Atlantic, Inc. (f/k/a Delmarva Systems Corp. and WFI Delaware, Inc.) | S-4 | 06/28/10 | 3.43 | ||||||||||||
3.64 | Certificate of Incorporation of Kratos Public Safety & Security Solutions, Inc., as amended (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | * | ||||||||||||||
3.65 | Amended and Restated Bylaws of Kratos Public Safety & Security Solutions, Inc. (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | S-4 | 06/28/10 | 3.39 | ||||||||||||
3.66 | Amended and Restated Articles of Incorporation of Kratos Southeast, Inc., as amended | S-4 | 06/28/10 | 3.44 |
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
3.67 | Amended and Restated Bylaws of Kratos Southeast, Inc. | S-4 | 06/28/10 | 3.45 | ||||||||||||
3.68 | Certificate of Limited Partnership of Kratos Southwest L.P., as amended (f/k/a Enco Systems Partnership, Ltd., WFI Texas Limited Partnership, Ltd. and WFI Southwest LP) | S-4 | 06/28/10 | 3.46 | ||||||||||||
3.69 | Agreement of Limited Partnership of Kratos Southwest L.P. | S-4 | 06/28/10 | 3.47 | ||||||||||||
3.70 | Amended and Restated Articles of Incorporation of Kratos Technology & Training Solutions, Inc., as amended (f/k/a SYS) | * | ||||||||||||||
3.71 | Bylaws of Kratos Technology & Training Solutions, Inc. (f/k/a/ SYS) | S-4 | 06/28/10 | 3.67 | ||||||||||||
3.72 | Articles of Incorporation of Kratos Texas, Inc., as amended | S-4 | 06/28/10 | 3.48 | ||||||||||||
3.73 | Bylaws of Kratos Texas, Inc. (f/k/a ENCO Systems, Inc., WFI Texas, Inc., Wireless Facilities II Texas, Inc. and Kratos Southwest, Inc.) | S-4 | 06/28/10 | 3.49 | ||||||||||||
3.74 | Articles of Incorporation of Madison Research Corporation, as amended | S-4 | 06/28/10 | 3.50 | ||||||||||||
3.75 | Bylaws of Madison Research Corporation | S-4 | 06/28/10 | 3.51 | ||||||||||||
3.76 | Restated Articles of Incorporation of Micro Systems, Inc., as amended | * | ||||||||||||||
3.77 | Certificate of Incorporation of MSI Acquisition Corp. | * | ||||||||||||||
3.78 | Articles of Incorporation of National Safe of California, as amended (f/k/a Protection Equipment Corporation) | * | ||||||||||||||
3.79 | Bylaws of National Safe of California (f/k/a Protection Equipment Corporation) | * | ||||||||||||||
3.80 | Second Amended and Restated Articles of Incorporation of Polexis, Inc., as amended | S-4 | 06/28/10 | 3.52 | ||||||||||||
3.81 | Bylaws of Polexis, Inc., as amended | S-4 | 06/28/10 | 3.53 | ||||||||||||
3.82 | Articles of Incorporation of Reality Based IT Services, Ltd., as amended | S-4 | 06/28/10 | 3.54 | ||||||||||||
3.83 | Amended and Restated Bylaws of Reality Based IT Services, Ltd. | S-4 | 06/28/10 | 3.55 | ||||||||||||
3.84 | Articles of Organization of Rocket Support Services, LLC | S-4 | 06/28/10 | 3.56 | ||||||||||||
3.85 | Amended and Restated Operating Agreement of Rocket Support Services, LLC | S-4 | 06/28/10 | 3.57 | ||||||||||||
3.86 | Certificate of Formation of SCT Acquisition, LLC | * | ||||||||||||||
3.87 | Amended and Restated Limited Liability Company Operating Agreement of SCT Acquisition, LLC | * | ||||||||||||||
3.88 | Certificate of Formation of SCT Real Estate, LLC | * | ||||||||||||||
3.89 | Amended and Restated Limited Liability Company Agreement of SCT Real Estate, LLC | * | ||||||||||||||
3.90 | Articles of Incorporation of Shadow I, Inc. | S-4 | 06/28/10 | 3.58 | ||||||||||||
3.91 | Bylaws of Shadow I, Inc. | S-4 | 06/28/10 | 3.59 | ||||||||||||
3.92 | Articles of Incorporation of Shadow II, Inc. | S-4 | 06/28/10 | 3.60 |
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
3.93 | Bylaws of Shadow II, Inc. | S-4 | 06/28/10 | 3.61 | ||||||||||||
3.94 | Articles of Incorporation of Shadow III, Inc. | S-4 | 06/28/10 | 3.62 | ||||||||||||
3.95 | Bylaws of Shadow III, Inc. | S-4 | 06/28/10 | 3.63 | ||||||||||||
3.96 | Articles of Incorporation of Stapor Research, Inc. | * | ||||||||||||||
3.97 | Articles of Incorporation of Summit Research Corporation, as amended | S-4 | 06/28/10 | 3.64 | ||||||||||||
3.98 | Amended and Restated Bylaws of Summit Research Corporation | S-4 | 06/28/10 | 3.65 | ||||||||||||
3.99 | Certificate of Incorporation of WFI NMC Corp. | S-4 | 06/28/10 | 3.68 | ||||||||||||
3.100 | Bylaws of WFI NMC Corp. | S-4 | 06/28/10 | 3.69 | ||||||||||||
3.101 | Form of Bylaws of General Microwave Corporation, General Microwave Israel Corporation, Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc., Micro Systems, Inc., MSI Acquisition Corp., Stapor Research, Inc. and Henry Bros. Electronics, Inc. (CO) | * | ||||||||||||||
4.1 | Specimen Stock Certificate | 10-K | 12/26/10 | 4.1 | ||||||||||||
4.2 | Form of 10% Senior Secured Note due 2017 (issuable in connection with the 2011 exchange offer) | * | ||||||||||||||
4.3 | Form of 10% Senior Secured Note due 2017 (issued in connection with the 2010 exchange offer) | S-4 | 06/28/10 | 4.1 | ||||||||||||
4.4 | Rights Agreement, dated as of December 16, 2004, by and between Kratos Defense & Security Solutions, Inc. and Wells Fargo, N.A. | 8-K | 12/17/04 | 4.1 | ||||||||||||
4.5 | Indenture, dated as of May 19, 2010, by and among Kratos Defense & Security Solutions, Inc., the Guarantors set forth therein and Wilmington Trust FSB, as Trustee and Collateral Agent (including the Form of 10% Senior Secured Notes due 2017 filed as an exhibit thereto) | 8-K | 05/25/10 | 4.1 | ||||||||||||
4.6 | First Supplemental Indenture, dated as of February 7, 2011, by and among Kratos Defense & Security Solutions, Inc., the guarantors listed on Exhibit A thereto and Wilmington Trust FSB, as trustee, to the Indenture (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 02/07/11 | 10.2 | ||||||||||||
4.7 | Supplemental Indenture, dated April 1, 2011, among the guaranteeing subsidiaries named therein and Wilmington Trust FSB, as trustee, to the Indenture (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 04/07/11 | 4.1 |
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed— Furnished Herewith | |||||||||||
4.8 | Third Supplemental Indenture, dated April 15, 2011, by and among Kratos Defense & Security Solutions, Inc., the guarantors listed on Exhibit A thereto and Wilmington Trust FSB, as trustee and collateral agent, to the Indenture, (as amended or supplemented), dated as of May 19, 2010, among Kratos Defense & Security Solutions, Inc., the guarantors party thereto and Wilmington Trust FSB, as trustee and collateral agent | 8-K | 04/20/11 | 4.1 | ||||||||||||
4.9 | Registration Rights Agreement, dated March 25, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc., and Oppenheimer & Co. Inc. | 8-K | 03/29/11 | 4.2 | ||||||||||||
5.1 | Opinion of Paul, Hastings, Janofsky & Walker LLP | * | ||||||||||||||
5.2 | Opinion of Sheppard, Mullin, Richter & Hampton LLP | * | ||||||||||||||
5.3 | Opinion of Jackson Walker L.L.P. | * | ||||||||||||||
5.4 | Opinion of Greenberg Traurig, P.A. | * | ||||||||||||||
5.5 | Opinion of Dinsmore & Shohl LLP | * | ||||||||||||||
5.6 | Opinion of Bradley Arant Boult Cummings LLP | * | ||||||||||||||
5.7 | Opinion of Ice Miller LLP | * | ||||||||||||||
5.8 | Opinion of Greenberg Traurig, LLP | * | ||||||||||||||
5.9 | Opinion of King & Spalding LLP | * | ||||||||||||||
5.10 | Opinion of Montgomery, McCracken, Walker & Rhoads, LLP | * | ||||||||||||||
5.11 | Opinion of Faegre & Benson | * | ||||||||||||||
10.1 | Purchase Agreement, dated March 25, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc., and Oppenheimer & Co. Inc. | 8-K | 03/29/11 | 10.1 | ||||||||||||
10.2 | Security Agreement, dated March 25, 2011, by and among Acquisition Co. Lanza Parent, Lanza Acquisition Co., and Wilmington Trust FSB, as collateral agent | 8-K | 03/29/11 | 10.2 | ||||||||||||
12.1 | Statement of computation of ratio of earnings to fixed charges | * | ||||||||||||||
21.1 | List of Subsidiaries | S-4 | 06/07/11 | 21.1 | ||||||||||||
23.1 | Consent of Paul, Hastings, Janofsky & Walker LLP (included in Exhibit 5.1) | * | ||||||||||||||
23.2 | Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.2) | * | ||||||||||||||
23.3 | Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP | * | ||||||||||||||
23.4 | Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP | * | ||||||||||||||
23.5 | Consent of Registered Public Accounting Firm, Marcum LLP | * | ||||||||||||||
23.6 | Consent of Registered Public Accounting Firm, Brightman Almagor Zohar & Co. | * | ||||||||||||||
23.7 | Consent of Independent Registered Public Accountants, Amper, Politziner & Mattia LLP | * |
| | Incorporated by Reference | | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Herewith | ||||||||||||
|
| 8-K | 12/17/2004 (000-27231) | |||||||||||||
Second Amended and Restated Bylaws of Kratos Defense & Security Solutions, Inc. | 8-K | 03/15/2011 | ||||||||||||||
|
| |||||||||||||||
Second Amended and Restated Certificate of Incorporation of AI Metrix, Inc., as amended | S-4 | 06/28/10 | ||||||||||||||
|
| |||||||||||||||
Bylaws of AI Metrix, Inc. | S-4 | 06/28/10 | ||||||||||||||
|
| |||||||||||||||
Certificate of Incorporation of Airorlite Communications, Inc., as amended (f/k/a ACI Acquisition Inc.) | S-4 | 06/07/11 | ||||||||||||||
|
| |||||||||||||||
Bylaws of Airorlite Communications, Inc. (f/k/a ACI Acquisition Inc.) | S-4 | 06/07/11 | ||||||||||||||
|
| |||||||||||||||
Certificate of Incorporation of Charleston Marine Containers Inc. | S-4 | 06/28/10 | ||||||||||||||
|
| |||||||||||||||
Bylaws of Charleston Marine Containers Inc. | S-4 | 06/28/10 | ||||||||||||||
3.14 | Certificate of Formation of Dallastown Realty I, LLC | S-4 | 06/28/10 | |||||||||||||
3.15 | Restated Operating Agreement of Dallastown Realty I, LLC | S-4 | 06/28/10 | |||||||||||||
3.16 | Certificate of Formation of Dallastown Realty II, LLC | S-4 | 06/28/10 | |||||||||||||
3.17 | Restated Operating Agreement of Dallastown Realty II, LLC | S-4 | 06/28/10 | |||||||||||||
3.18 | Amended and Restated Articles of Incorporation of Defense Systems, Incorporated | S-4 | 06/28/10 | |||||||||||||
3.19 | Bylaws of Defense Systems, Incorporated | S-4 | 06/28/10 | |||||||||||||
3.20 | Articles of Incorporation of DEI Services Corporation, as amended | S-4 | 06/07/11 | |||||||||||||
3.21 | Bylaws of DEI Services Corporation | S-4 | 06/07/11 | |||||||||||||
3.22 | Amended and Restated Certificate of Incorporation of Digital Fusion, Inc. | S-4 | 06/28/10 | |||||||||||||
3.23 | Amended and Restated Bylaws of Digital Fusion, Inc. | S-4 | 06/28/10 | |||||||||||||
3.24 | Amended and Restated Articles of Incorporation of Digital Fusion Solutions, Inc., as amended | S-4 | 06/28/10 | |||||||||||||
3.25 | Bylaws of Digital Fusion Solutions, Inc. | S-4 | 06/28/10 | |||||||||||||
II-53
Incorporated by Reference | |||||||||
---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.26 | Certificate of Incorporation of Diversified Security Solutions, Inc., as amended (f/k/a Henry Bros. Electronics, Inc.) | S-4 | 06/07/11 | ||||||
3.27 | Bylaws of Diversified Security Solutions, Inc. (f/k/a Henry Bros. Electronics, Inc.) | S-4 | 06/07/11 | ||||||
3.28 | Articles of Incorporation of DTI Associates, Inc., as amended (f/k/a Defense Technology Incorporated) | S-4 | 06/28/10 | ||||||
3.29 | Bylaws of DTI Associates, Inc. (f/k/a Defense Technology Incorporated) | S-4 | 06/28/10 | ||||||
3.30 | Certificate of Incorporation of General Microwave Corporation, as amended | S-4 | 06/07/11 | ||||||
3.31 | Certificate of Incorporation of General Microwave Israel Corporation | S-4 | 06/07/11 | ||||||
3.32 | Certificate of Incorporation of Gichner Systems Group, Inc., as amended (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | ||||||
3.33 | Bylaws of Gichner Systems Group, Inc. (f/k/a Gichner Acquisition, Inc.) | S-4 | 06/28/10 | ||||||
3.34 | Amended and Restated Certificate of Incorporation of Gichner Systems International, Inc., as amended (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | ||||||
3.35 | Bylaws of Gichner Systems International, Inc. (f/k/a Gichner Systems Group, Inc.) | S-4 | 06/28/10 | ||||||
3.36 | Fourth Amended and Restated Articles of Incorporation of Haverstick Consulting, Inc., as amended | S-4 | 06/28/10 | ||||||
3.37 | Amended and Restated Code of By-laws of Haverstick Consulting, Inc. | S-4 | 06/28/10 | ||||||
3.38 | Articles of Incorporation of Haverstick Government Solutions, Inc., as amended (f/k/a AFK Acquisition, Co.) | S-4 | 06/28/10 | ||||||
3.39 | Regulations of Haverstick Government Solutions, Inc. (f/k/a AFK Acquisition, Co.) | S-4 | 06/07/11 | ||||||
3.40 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | S-4 | 06/07/11 | ||||||
II-54
Incorporated by Reference | |||||||||
---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.41 | Bylaws of Henry Bros. Electronics, Inc., as amended (CA) (f/k/a Photo Scan Systems, Inc. and Photo-Scan Systems, Inc.) | S-4 | 06/07/11 | ||||||
3.42 | Articles of Incorporation of Henry Bros. Electronics, Inc., as amended (CO) (f/k/a Securus, Inc. and Photo-Scan of Colo., Inc.) | S-4 | 06/07/11 | ||||||
3.43 | Amended and Restated Certificate of Incorporation of Henry Bros. Electronics, Inc. (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | X | |||||||
3.44 | Bylaws of Henry Bros. Electronics, Inc. (DE) (f/k/a Diversified Security Solutions, Inc. and IntegCom Corp.) | S-4 | 06/07/11 | ||||||
3.45 | Certificate of Incorporation of Henry Bros. Electronics, Inc., as amended (NJ) (f/k/a HBE Acquisition Corp.) | S-4 | 06/07/11 | ||||||
3.46 | Bylaws of Henry Bros. Electronics, Inc. (NJ) (f/k/a HBE Acquisition Corp.) | S-4 | 06/07/11 | ||||||
3.47 | Amended and Restated Articles of Organization of Henry Bros. Electronics, L.L.C. (f/k/a Corporate Security Integration, LLC) | S-4 | 06/07/11 | ||||||
3.48 | Limited Liability Company Agreement of Henry Bros. Electronics, L.L.C. (f/k/a Corporate Security Integration, LLC) | S-4 | 06/07/11 | ||||||
3.49 | Restated Certificate of Incorporation of Herley Industries, Inc. | S-4 | 06/07/11 | ||||||
3.50 | Certificate of Incorporation of Herley-CTI, Inc., as amended (f/k/a Syrix Corp.) | S-4 | 06/07/11 | ||||||
3.51 | Certificate of Incorporation of Herley-RSS, Inc. | S-4 | 06/07/11 | ||||||
3.52 | Articles of Incorporation of HGS Holdings, Inc. | S-4 | 06/28/10 | ||||||
3.53 | Bylaws of HGS Holdings, Inc. | S-4 | 06/28/10 | ||||||
3.54 | First Amended and Restated Certificate of Incorporation of JMA Associates, Inc., as amended | S-4 | 06/28/10 | ||||||
3.55 | Bylaws of JMA Associates, Inc. | S-4 | 06/28/10 | ||||||
II-55
Incorporated by Reference | |||||||||
---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.56 | Certificate of Incorporation of Kratos Public Safety & Security Solutions, Inc., as amended (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | S-4 | 06/07/11 | ||||||
3.57 | Amended and Restated Bylaws of Kratos Public Safety & Security Solutions, Inc. (f/k/a Kratos Commercial Solutions, Inc., SecurePlanet, Inc. and WFI Network Management Services Corp.) | S-4 | 06/28/10 | ||||||
3.58 | Amended and Restated Articles of Incorporation of Kratos Southeast, Inc., as amended | S-4 | 06/28/10 | ||||||
3.59 | Amended and Restated Bylaws of Kratos Southeast, Inc. | S-4 | 06/28/10 | ||||||
3.60 | Certificate of Limited Partnership of Kratos Southwest L.P., as amended (f/k/a Enco Systems Partnership, Ltd., WFI Texas Limited Partnership, Ltd. and WFI Southwest LP) | S-4 | 06/28/10 | ||||||
3.61 | Agreement of Limited Partnership of Kratos Southwest L.P. (f/k/a Enco Systems Partnership, Ltd., WFI Texas Limited Partnership, Ltd. and WFI Southwest LP) | S-4 | 06/28/10 | ||||||
3.62 | Amended and Restated Articles of Incorporation of Kratos Technology & Training Solutions, Inc., as amended (f/k/a SYS) | S-4 | 06/07/11 | ||||||
3.63 | Bylaws of Kratos Technology & Training Solutions, Inc. (f/k/a/ SYS) | S-4 | 06/28/10 | ||||||
3.64 | Articles of Incorporation of Kratos Texas, Inc., as amended (f/k/a ENCO Systems, Inc., WFI Texas, Inc., Wireless Facilities II Texas, Inc. and Kratos Southwest, Inc.) | S-4 | 06/28/10 | ||||||
3.65 | Bylaws of Kratos Texas, Inc. (f/k/a ENCO Systems, Inc., WFI Texas, Inc., Wireless Facilities II Texas, Inc. and Kratos Southwest, Inc.) | S-4 | 06/28/10 | ||||||
3.66 | Articles of Incorporation of Madison Research Corporation, as amended | S-4 | 06/28/10 | ||||||
3.67 | Bylaws of Madison Research Corporation | S-4 | 06/28/10 | ||||||
3.68 | Restated Articles of Incorporation of Micro Systems, Inc., as amended | S-4 | 06/07/11 | ||||||
3.69 | Certificate of Incorporation of MSI Acquisition Corp. | S-4 | 06/07/11 |
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.70 | Articles of Incorporation of National Safe of California, as amended (f/k/a Protection Equipment Corporation) | S-4 | 06/07/11 | ||||||
3.71 | Bylaws of National Safe of California (f/k/a Protection Equipment Corporation) | S-4 | 06/07/11 | ||||||
3.72 | Second Amended and Restated Articles of Incorporation of Polexis, Inc., as amended | S-4 | 06/28/10 | ||||||
3.73 | Bylaws of Polexis, Inc., as amended | S-4 | 06/28/10 | ||||||
3.74 | Articles of Incorporation of Reality Based IT Services, Ltd., as amended | S-4 | 06/28/10 | ||||||
3.75 | Amended and Restated Bylaws of Reality Based IT Services, Ltd. | S-4 | 06/28/10 | ||||||
3.76 | Articles of Organization of Rocket Support Services, LLC | S-4 | 06/28/10 | ||||||
3.77 | Amended and Restated Operating Agreement of Rocket Support Services, LLC | S-4 | 06/28/10 | ||||||
3.78 | Certificate of Formation of SCT Acquisition, LLC | S-4 | 06/07/11 | ||||||
3.79 | Amended and Restated Limited Liability Company Operating Agreement of SCT Acquisition, LLC | S-4 | 06/07/11 | ||||||
3.80 | Certificate of Formation of SCT Real Estate, LLC | S-4 | 06/07/11 | ||||||
3.81 | Amended and Restated Limited Liability Company Agreement of SCT Real Estate, LLC | S-4 | 06/07/11 | ||||||
3.82 | Articles of Incorporation of Shadow I, Inc. | S-4 | 06/28/10 | ||||||
3.83 | Bylaws of Shadow I, Inc. | S-4 | 06/28/10 | ||||||
3.84 | Articles of Incorporation of Shadow II, Inc. | S-4 | 06/28/10 | ||||||
3.85 | Bylaws of Shadow II, Inc. | S-4 | 06/28/10 | ||||||
3.86 | Articles of Incorporation of Kratos Integral Systems International, Inc., as amended (f/k/a Shadow III, Inc.) | S-4 | 11/25/11 | ||||||
3.87 | Bylaws of Kratos Integral Systems International, Inc. (f/k/a Shadow III, Inc.) | S-4 | 06/28/10 | ||||||
3.88 | Articles of Incorporation of Stapor Research, Inc. | S-4 | X | ||||||
3.89 | Articles of Incorporation of Summit Research Corporation, as amended | S-4 | 06/28/10 |
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---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.90 | Amended and Restated Bylaws of Summit Research Corporation | S-4 | 06/28/10 | ||||||
3.91 | Certificate of Incorporation of WFI NMC Corp. | S-4 | 06/28/10 | ||||||
3.92 | Bylaws of WFI NMC Corp. | S-4 | 06/28/10 | ||||||
3.93 | Amended and Restated Articles of Incorporation of Kratos Systems and Solutions, Inc., as amended (f/k/a CVG, Incorporated) | X | |||||||
3.94 | Bylaws of Kratos Systems and Solutions, Inc. (f/k/a CVG, Incorporated) | X | |||||||
3.95 | Amended and Restated Articles of Incorporation of Avtec Systems, Inc. | S-4 | 11/25/11 | ||||||
3.96 | Articles of Incorporation of LVDM, Inc., as amended | S-4 | 11/25/11 | ||||||
3.97 | Articles of Incorporation of Real Time Logic, Inc. | S-4 | 11/25/11 | ||||||
3.98 | Amended and Restated Articles of Incorporation of SAT Corporation | S-4 | 11/25/11 | ||||||
3.99 | Form of Bylaws of Avtec Systems, Inc., General Microwave Corporation, General Microwave Israel Corporation, Henry Bros. Electronics, Inc. (CO), Herley Industries, Inc., Herley-CTI, Inc., Herley-RSS, Inc., LVDM, Inc., Micro Systems, Inc., MSI Acquisition Corp., Real Time Logic, Inc., SAT Corporation, and Stapor Research, Inc. | S-4 | 11/25/11 | ||||||
3.100 | Articles of Organization of BSC Partners, LLC | X | |||||||
3.101 | Amended and Restated Operating Agreement of BSC Partners, LLC | X | |||||||
3.102 | Certificate of Incorporation of KPSS Government Solutions, Inc., as amended (f/k/a Delmarva Systems Corp., Delmarva Systems Corporation, WFI Delaware Inc., Kratos Mid-Atlantic, Inc.) | X | |||||||
3.103 | Bylaws of KPSS Government Solutions, Inc. (f/k/a Delmarva Systems Corp., Delmarva Systems Corporation, WFI Delaware Inc., Kratos Mid-Atlantic, Inc.) | X | |||||||
3.104 | Sixth Amended and Restated Certificate of Incorporation of Secureinfo Corporation, as amended | X |
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
3.105 | Bylaws of Secureinfo Corporation | X | |||||||
3.106 | Articles of Incorporation of Composite Engineering, Inc., as amended | X | |||||||
3.107 | Bylaws of Composite Engineering, Inc. | X | |||||||
3.108 | Amended and Restated Certificate of Incorporation of Kratos Defense & Rocket Support Services, Inc., as amended (f/k/a High Technology Solutions, Inc., WFI Government Services, Inc., Kratos Government Solutions, Inc., Kratos Defense Engineering Solutions, Inc.) | X | |||||||
3.109 | Bylaws of Kratos Defense & Rocket Support Services, Inc. (f/k/a High Technology Solutions, Inc., WFI Government Services, Inc., Kratos Government Solutions, Inc., Kratos Defense Engineering Solutions, Inc.) | X | |||||||
3.110 | Certificate of Incorporation of Kratos Networks, Inc., as amended (f/k/a ISI Merger Corp., Newpoint Technologies, Inc.) | X | |||||||
3.111 | Bylaws of Kratos Networks, Inc. (f/k/a ISI Merger Corp., Newpoint Technologies, Inc.) | X | |||||||
3.112 | Certificate of Incorporation of Kratos Unmanned Systems Solutions, Inc., as amended (f/k/a Gichner Holdings, Inc.) | X | |||||||
3.113 | By-laws of Kratos Unmanned Systems Solutions, Inc. (f/k/a Gichner Holdings, Inc.) | X | |||||||
3.114 | Articles of Incorporation of Carlsbad ISI, Inc., as amended (f/k/a Lumistar, Inc.) | X | |||||||
3.115 | Bylaws of Carlsbad ISI, Inc. (f/k/a Lumistar, Inc.) | X | |||||||
3.116 | Articles of Organization of Kratos Integral Holdings, LLC (f/k/a Iris Acquisition Sub LLC) | X | |||||||
3.117 | Amended and Restated Operating Agreement of Kratos Integral Holdings, LLC (f/k/a Iris Acquisition Sub LLC) | X | |||||||
4.1 | Specimen Stock Certificate. | 10-K | 12/26/2010 | ||||||
4.2 | Rights Agreement, dated as of December 16, 2004, between Kratos Defense & Security Solutions, Inc. and Wells Fargo, N.A. | 8-K | 12/17/2004 (000-27231) | ||||||
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---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
4.3 | Amendment No. 1 to Rights Agreement, dated as of May 14, 2012, between Kratos Defense & Security Solutions, Inc. and Wells Fargo, N.A. | 8-K | 05/15/2012 | ||||||
4.4 | Form of 10% Senior Secured Note due 2017 (issuable in connection with the October 2011 exchange offer). | S-4 | 10/25/2011 | ||||||
4.5 | Indenture, dated March 25, 2011, by and among Acquisition Co. Lanza Parent, the Guarantors named therein and a party thereto, and Wilmington Trust FSB, as Trustee and Collateral Agent (including the Form of 10% Senior Secured Notes). | 8-K | 03/29/2011 | ||||||
4.6 | First Supplemental Indenture, date April 4, 2011, by and among Kratos Defense & Security Solutions, Inc., Herley Industries, Inc. and Wilmington Trust FSB, as Trustee and Collateral Agent, to the Indenture, dated as of March 25, 2011, among Kratos Defense & Security Solutions, Inc., the Guarantor party thereto and Wilmington Trust FSB, as Trustee and Collateral Agent. | 8-K | 04/04/2011 | ||||||
4.7 | Registration Rights Agreement, dated March 25, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the Guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and Oppenheimer & Co. Inc. | 8-K | 03/29/2011 | ||||||
4.8 | Registration Rights Agreement, dated July 27, 2011, by and among Kratos Defense & Security Solutions, Inc., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and B. Riley & Co., LLC. | 8-K | 07/29/2011 | ||||||
4.9 | Indenture, dated as of May 14, 2014, among Kratos Defense & Security Solutions, Inc., as Issuer, the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee and Collateral Agent. | 8-K | 05/15/2014 | ||||||
4.10 | Registration Rights Agreement, dated as of May 14, 2014, among Kratos Defense & Security Solutions, Inc., as Issuer, the Guarantors party thereto, and SunTrust Robinson Humphrey, Inc., as Representative of the Initial Purchasers. | 8-K | 05/15/2014 | ||||||
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
5.1 | Opinion of DLA Piper LLP (US). | X | |||||||
5.2 | Opinion of Burr & Forman LLP. | X | |||||||
5.3 | Opinion of Faegre Baker Daniels LLP. | X | |||||||
5.4 | Opinion of Frost Brown Todd LLC. | X | |||||||
5.5 | Opinion of Sheppard Mullin Richter & Hampton LLP. | X | |||||||
10.1 | Commitment Letter, dated February 7, 2011, by and among Kratos Defense & Security Solutions, Inc. and Jefferies Group, Inc., Key Capital Corporation and OPY Credit Corp. | 8-K | 02/07/2011 | ||||||
10.2 | # | Form of Indemnification Agreement by and between Kratos Defense & Security Solutions, Inc. and its directors and executive officers. | 10-Q | 06/26/2011 | |||||
10.3 | # | 2000 Nonstatutory Stock Option Plan. | 10-Q | 9/30/2000 (000-27231) | |||||
10.4 | # | Form of Stock Option Agreement and Grant Notice used in connection with the 2000 Nonstatutory Stock Option Plan. | 10-Q | 09/30/2000 (000-27231) | |||||
10.5 | # | Nonqualified Deferred Compensation Plan. | 10-K | 12/31/2005 (000-27231) | |||||
10.6 | # | 2005 Equity Incentive Plan. | S-8 | 08/01/2005 (333-127060) | |||||
10.7 | # | Form of Stock Option Agreement pursuant to the 2005 Equity Incentive Plan. | S-8 | 08/01/2005 (333-127060) | |||||
10.8 | # | Form of Restricted Stock Unit Agreement and Form of Notice of Grant under the 2005 Equity Incentive Plan. | 8-K | 01/17/2007 (000-27231) | |||||
10.9 | # | Herley Industries, Inc. 1996 Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.10 | # | Herley Industries, Inc. 1997 Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.11 | # | Herley Industries, Inc. 1998 Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.12 | # | Herley Industries, Inc. 2000 Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.13 | # | Herley Industries, Inc. 2003 Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.14 | # | Herley Industries, Inc. Amended and Restated 2006 New Employee Stock Option Plan. | S-8 | 04/08/2011 | |||||
10.15 | # | 2011 Equity Incentive Plan. | DEF 14A | 04/15/2011 | |||||
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---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
10.16 | # | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Award Agreement pursuant to the 2011 Equity Incentive Plan. | 8-K | 11/18/2011 | |||||
10.17 | # | 2014 Equity Incentive Plan. | DEF 14A | 04/11/2014 | |||||
10.18 | # | Employment Agreement, dated as of July 22, 2010, by and between Kratos Government Solutions, Inc. and David Carter. | 10-K | 12/26/2010 | |||||
10.19 | # | First Amendment to Employment Agreement, dated as of August 4, 2011, by and between Kratos Defense Engineering Solutions, Inc. and David Carter. | 10-Q | 09/25/2011 | |||||
10.20 | # | Second Amended and Restated Executive Employment Agreement, dated as of August 4, 2011, by and between Kratos Defense & Security Solutions, Inc. and Eric DeMarco | 10-Q | 06/26/2011 | |||||
10.21 | # | Second Amended and Restated Severance and Change of Control Agreement, dated as of August 4, 2011, by and between Kratos Defense & Security Solutions, Inc. and Deanna Lund. | 10-Q | 06/26/2011 | |||||
10.22 | # | Amended and Restated Severance and Change of Control Agreement, dated as of August 4, 2011, by and between Kratos Defense & Security Solutions, Inc. and Deborah S. Butera. | 10-Q | 6/26/2011 | |||||
10.23 | # | Employment Agreement, dated as of August 4, 2011, by and between Kratos Public Safety & Security Solutions, Inc. and Ben Goodwin. | 10-Q | 09/25/2011 | |||||
10.24 | # | Settlement Agreement and General Release of Claims, dated as of October 16, 2009, among Kratos Defense & Security Solutions, Inc., KeyBank National Association, Field Point III, Ltd. and SPF CDO I, Ltd. | 10-Q | 09/27/2009 (001-34460) | |||||
10.25 | Sublease Agreement, dated as of December 17, 2009, by and between Amylin Pharmaceuticals, Inc. (Sublessor) and Kratos Defense & Security Solutions, Inc. (Sublessee). | 10-K | 12/27/2009 (000-34460) | ||||||
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
10.26 | Purchase Agreement, dated as of May 12, 2010, by and among Kratos Defense & Security Solutions, Inc., the Guarantors set forth therein, Jefferies & Company, Inc., B. Riley & Co., LLC, Imperial Capital, LLC, Keybanc Capital Markets Inc. and Noble International Investments, Inc. | 8-K | 05/25/2010 | ||||||
10.27 | Security Agreement, dated as of May 19, 2010, by and among Kratos Defense & Security Solutions, Inc., the Guarantors set forth therein and Wilmington Trust FSB, as Collateral Agent. | 8-K | 05/25/2010 | ||||||
10.28 | Intercreditor Agreement, dated as of May 19, 2010, by and among Kratos Defense & Security Solutions, Inc., the Guarantors set forth therein, Wilmington Trust FSB, as Indenture Agent, and KeyBank National Association, as Credit Facility Agent. | 8-K | 05/25/2010 | ||||||
10.29 | Credit Agreement, dated as of March 3, 2010, among Kratos Defense & Security Solutions, Inc., KeyBank National Association, as Administrative Agent and Lender, Bank of America, N.A., as Syndication Agent and Lender, and the other financial institutions parties thereto with Keybanc Capital Markets and Banc of America Securities, LLC, as Co-Lead Arrangers and Book Runners. | 8-K | 03/08/2010 (001-34460) | ||||||
10.30 | First Amendment Agreement, dated as of December 13, 2010, by and among Kratos Defense & Security Solutions, Inc., as Borrower, the Lenders named therein and KeyBank National Association, as Lead Arranger, Sole Book Runner and Administrative Agent. | 8-K | 12/16/2010 | ||||||
10.31 | Second Amendment Agreement, dated as of February 7, 2011, among Kratos Defense & Security solutions, the Lenders named therein and KeyBank National Association. | 8-K | 02/07/2011 | ||||||
10.32 | Purchase Agreement, dated March 22, 2011, by and among Kratos Defense & Security Solutions, Inc., Acquisition Co. Lanza Parent, Lanza Acquisition Co., the guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets, Inc. and Oppenheimer & Co. Inc. | 8-K | 03/29/2011 | ||||||
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
10.33 | Security Agreement, dated March 25, 2011, by and among Acquisition Co. Lanza Parent, Lanza Acquisition Co. and Wilmington Trust FSB, as Collateral Agent. | 8-K | 03/29/2011 | ||||||
10.34 | Credit and Security Agreement, dated as of May 19, 2010, as amended and restated as of July 27, 2011, among Kratos Defense & Security Solutions, Inc., as Borrower, the Lenders named therein and KeyBank National Association, as Lead Arranger, Sole Book Runner and Administrative Agent. | 8-K | 07/29/2011 | ||||||
10.35 | First Amendment Agreement, dated as of November 14, 2011, by and among Kratos Defense & Security Solutions, Inc., as Borrower, the Lenders named therein, and Key Bank National Association, as Lead Arranger, Sole Book Runner and Administrative Agent. | 8-K | 11/18/2011 | ||||||
10.36 | Purchase Agreement, dated July 14, 2011, by and among Kratos Defense & Security Solutions, Inc., the Guarantors named therein, Jefferies & Company, Inc., KeyBanc Capital Markets Inc. and B. Riley & Co., LLC, as amended by that certain Joinder Agreement, dated July 27, 2011. | 10-Q | 09/25/2011 | ||||||
10.37 | Stipulation and Agreement of Settlement of Derivative Claims, dated as of January 5, 2010. | 10-K | 12/27/2009 (001-34460) | ||||||
10.38 | Amended and Restated Herley Industries, Inc. 2010 Stock Plan, and the forms of agreement related thereto. | S-8 | 03/08/2012 | ||||||
10.39 | Amended and Restated Integral Systems, Inc. 2008 Stock Incentive Plan, and the forms of agreement related thereto. | S-8 | 03/08/2012 | ||||||
10.40 | Second Amendment to Credit and Security Agreement, dated as of May 4, 2012, among Kratos Defense & Security Solutions, the lenders named therein, and KeyBank National Association. | 8-K | 05/08/2012 | ||||||
10.41 | Third Amendment to Credit and Security Agreement, dated as of May 8, 2012, among Kratos Defense & Security Solutions, the lenders named therein, and KeyBank National Association. | 8-K | 05/08/2012 | ||||||
II-64
Incorporated by Reference | |||||||||
---|---|---|---|---|---|---|---|---|---|
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
10.42 | Standstill Agreement, dated May 14, 2012, between Kratos Defense & Security Solutions, Inc., Bandel Carano, Oak Investment Partners IX, L.P., Oak IX Affiliates Fund, L.P., Oak IX Affiliates Fund-A, L.P., Oak X Affiliates Fund, L.P., Oak Investment Partners X, L.P., and Oak Investment Partners XIII, L.P. | 8-K | 05/15/2012 | ||||||
10.43 | Form of Restricted Stock Unit Agreement entered into between Kratos Defense & Security Solutions, Inc. and certain employees of Composite Engineering, Inc. | S-8 | 07/27/2012 | ||||||
10.44 | # | Fourth Amendment to Credit and Security Agreement, dated as of February 27, 2013, among Kratos Defense & Security Solutions, the lenders named therein, and KeyBank National Association. | 10-Q | 05/09/2013 | |||||
10.45 | Employment Agreement, effective January 17, 2014, by and between Kratos Defense & Security Solutions, Inc. and Phil Carrai. | 8-K | 01/22/2014 | ||||||
10.46 | Registration Rights Agreement, dated as of May 14, 2014, among Kratos Defense & Security Solutions, Inc., as Issuer, the Guarantors party thereto, and SunTrust Robinson Humphrey, Inc., as Representative of the Initial Purchasers. | 8-K | 05/15/2014 | ||||||
10.47 | Credit and Security Agreement, dated as of May 14, 2014, among Kratos Defense & Security Solutions, Inc., as Borrower, the lenders named therein, SunTrust Bank, as Agent, and SunTrust Robinson Humphrey, Inc., as Lead Arranger and Sole Book Runner. | 8-K | 05/15/2014 | ||||||
12.1 | Statement of Computation of Ratio of Earnings to Fixed Charges. | X | |||||||
21.1 | List of Subsidiaries | 10-K | 03/12/2014 | ||||||
23.1 | Consent of Independent Registered Public Accounting Firm, Deloitte & Touche LLP. | X | |||||||
23.2 | Consent of Independent Registered Public Accounting Firm, Grant Thornton LLP. | X | |||||||
23.3 | Consent of DLA Piper LLP (US) (included in Exhibit 5.1) | X | |||||||
24.1 | Power of Attorney (included on the signature page to the registration statement). | X | |||||||
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Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date (File No.) | Filed-Furnished Herewith | |||||
25.1 | Statement of Eligibility on Form T-1. | X | |||||||
99.1 | Form of Letter of Transmittal | X | |||||||
99.2 | Form of Notice of Guaranteed Delivery | X | |||||||
99.3 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | X | |||||||
99.4 | Form of Letter to Clients | X |
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