Exhibit 10.42

 

AMENDMENT NO. 1 TO SECURITY AGREEMENT

 

AMENDMENT NO. 1 (the “Amendment”) dated as of May 2, 2014, to the Security
Agreement dated as of March 22, 2010 (the “Security Agreement”), among ALION
SCIENCE AND TECHNOLOGY CORPORATION, a Delaware corporation (the “Company”), each
subsidiary of the Company party thereto (each such subsidiary individually a
“Subsidiary Grantor” and collectively, the “Subsidiary Grantors”; the Subsidiary
Grantors and the Company are referred to collectively herein as the “Grantor”),
WILMINGTON TRUST COMPANY, as collateral agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined in the Security Agreement) and WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”).

 

A.            Reference is made to (i) the Credit Agreement dated as of
March 22, 2010, as amended and restated as of March 11, 2011 (as amended,
supplemented or otherwise modified from time to time, the “Original Credit
Agreement”), among the Company, the lenders named therein (the “Original
Lenders”), and Credit Suisse AG, Cayman Islands Branch, as administrative agent
(in such capacity, the “Original Administrative Agent”) for the Lenders,
(ii) the Indenture dated as of March 22, 2010 (as amended, supplemented or
otherwise modified from time to time, the “Indenture”), among the Company, the
guarantors party thereto, Wilmington Trust Company, as trustee (in such
capacity, the “Trustee”) and (iii) the Intercreditor Agreement dated as of
March 22, 2010 (as amended, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”), among the Company, the other grantors
party thereto, the Original Administrative Agent, the Trustee and the Collateral
Agent.

 

B.            Effective as of an even date herewith, the Original Administrative
Agent entered into an Assignment and Acceptance (the “Assignment and
Acceptance”) with Wells Fargo, and, pursuant to which, among other things,
(x) Credit Suisse AG, Cayman Islands Branch, in its capacity as an Original
Lender, assigned to Wells Fargo all of its Assigned Interests (as defined in the
Assignment and Acceptance) and (y) the Original Administrative Agent resigned as
Administrative Agent under the Original Credit Agreement and was succeeded in
such capacity by Wells Fargo.

 

C.            In connection with the Assignment and Acceptance, the
Intercreditor Agreement is being modified pursuant to that certain Replacement
Authorized Representative Joinder Agreement No. 1 effective as of even date
herewith by and among the Company, Wells Fargo, the Original Administrative
Agent and the Collateral Agent (the “Joinder Agreement”).  Pursuant to the terms
of the Joinder Agreement, Wells Fargo is replacing the Original Administrative
Agent under the Intercreditor Agreement.

 

D.            The Original Credit Agreement is being amended and restated in its
entirety pursuant to that certain Second Amended and Restated Credit Agreement
dated of even date herewith by and among Wells Fargo, as administrative agent
for the Lenders named therein, (the “Agent”), Sole Lead Arranger, and Sole Book
Runner, and the Company (as amended, amended and restated, replaced,
supplemented or otherwise modified from time to time, the “Replacement Credit
Agreement”).  All obligations of the Loan Parties described in the Original
Credit Agreement are being refinanced in their entirety by the lenders party to
the Replacement Credit Agreement (the “Lenders”).

 

--------------------------------------------------------------------------------

 

E.            The parties are entering into this Agreement to amend the Security
Agreement to reflect the substitution of Wells Fargo for the Original
Administrative Agent and to update and correct certain cross references in the
Security Agreement to correspond with the correct section  references in the
Replacement Credit Agreement.

 

F.             Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Replacement Credit
Agreement, the Indenture, the Intercreditor Agreement or the Security Agreement,
as applicable.

 

Accordingly, Wells Fargo, the Collateral Agent and the Company agree as follows:

 

SECTION 1.         From and after the date of this Agreement, each reference to
the “Credit Agreement” in the Security Agreement shall be deemed to refer to the
Replacement Credit Agreement and each reference to the “Lenders” in the Security
Agreement (defined above as the Original Lenders) shall be deemed to refer to
the Lenders.

 

SECTION 2.         In accordance with Section 5.16(b) of the Security Agreement,
Wells Fargo by its signature below agrees (a) that each reference to the
Administrative Agent in the Security Agreement shall be a reference to Wells
Fargo as the “Administrative Agent” under the Original Credit Agreement and as
the “Agent” under the Replacement Credit Agreement and each reference to the
Trustee in the Security Agreement shall be a reference to the Trustee, (b) to be
bound by all the terms and provisions of the Security Agreement applicable to a
Secured Party, (c) each reference in the Security Agreement of a grant of a
security interest in a Grantor’s Collateral to a Secured Party shall also mean a
grant of a security interest to Wells Fargo as a Secured Party, (d) each
reference to Agents in the Security Agreement shall be a reference to the Agent
and Trustee.

 

SECTION 3.         Exhibit B of the Security Agreement is replaced in its
entirety with Exhibit B attached hereto.  From and after the date of this
Amendment, all references in the Security Agreement to the Perfection
Certificate shall be deemed to refer to Exhibit B attached hereto.

 

SECTION 4.         The reference in Section 3.02(b) to “Schedule 2 to the
Perfection Certificate” is amended and restated in its entirety to refer to
“Schedule 1(a) to the Perfection Certificate”.

 

SECTION 5.         [RESERVED].

 

SECTION 6.         [RESERVED].

 

SECTION 7.         The reference in Section 3.03(i) of the Security Agreement to
Section 6.05 of the Credit Agreement is amended and restated in its entirety to
refer to Sections 6.03 and 6.04 of the Replacement Credit Agreement.

 

SECTION 8.         The reference in Section 3.03(k) of the Security Agreement to
Section 5.02 of the Credit Agreement is amended and restated in its entirety to
refer to Section 5.06 of the Replacement Credit Agreement.

 

2

--------------------------------------------------------------------------------

 

SECTION 9.         The reference in Section 5.01 of the Security Agreement to
Section 9.01 of the Credit Agreement is amended and restated in its entirety to
refer to Section 11 of the Replacement Credit Agreement.

 

SECTION 10.       [RESERVED].

 

SECTION 11.       The references in Sections 5.09(b) and 5.15(f) of the Security
Agreement to Section 9.08 of the Credit Agreement are amended and restated in
their entirety to refer to Section 14.01 of the Replacement Credit Agreement.

 

SECTION 12.       The references in Section 5.16 of the Security Agreement to
Section 5.09 of the Credit Agreement are amended and restated in their entirety
to refer to Section 5.12 of the Replacement Credit Agreement.

 

SECTION 13.       The references in the definition of “Bankruptcy Default” to
paragraphs (g) and (h) of Article VII of the Credit Agreement are amended and
restated in their entirety to refer to Sections 8.04 and 8.05 of the Replacement
Credit Agreement.

 

SECTION 14.       The references to “Hedging Agreements” in the Security
Agreement shall also be deemed to be references to “Hedge Agreements” as such
term is defined in the Replacement Credit Agreement.

 

SECTION 15.       The reference in Section 5.03 of the Security Agreement to
“L/C Exposure” is hereby amended and restated in its entirety to mean “Letter of
Credit Exposure” as defined in the Replacement Credit Agreement.

 

SECTION 16.       The references in Sections 5.09 and 5.14 of the Security
Agreement to “Issuing Banks” shall also be deemed to be references to “Issuing
Lenders” as such term is defined in the Replacement Credit Agreement.

 

SECTION 17.       The reference in Section 5.15 of the Security Agreement to
“Revolving Credit Maturity Date” is hereby amended and restated in its entirety
to mean “Maturity Date” as defined in the Replacement Credit Agreement.

 

SECTION 18.       Schedule II to the Security Agreement is replaced in its
entirety with Schedule II attached hereto.  From and after the date of this
Amendment, all references in the Security Agreement to Schedule II shall be
deemed to refer to Schedule II attached hereto.

 

SECTION 19.       Schedule III to the Security Agreement is replaced in its
entirety with Schedule III attached hereto.  From and after the date of this
Amendment, all references in the Security Agreement to Schedule III shall be
deemed to refer to Schedule III attached hereto.

 

SECTION 20.       The Grantors each hereby reaffirm its grant of a continuing
Security Interest in all presently existing and later acquired Collateral to the
Collateral Agent, its successors and assigns (on behalf of the Secured Parties)
as security for the payment or performance, as the case may be, in full of the
Obligations.

 

3

--------------------------------------------------------------------------------

 

SECTION 21.       The Grantors each hereby certify that the representations and
warranties contained in the Security Agreement (other than those in the first
two sentences of Section 3.02(b) of the Security Agreement) remain true, correct
and complete in all material respects as of the date hereof with the same force
and effect as if made on the date hereof and that it has no offsets,
counterclaims or defenses to any of its Obligations.

 

SECTION 22.       The Grantors jointly and severally represent and warrant to
the Collateral Agent and the Secured Parties that the Perfection Certificate has
been duly prepared, completed and executed and the information set forth therein
(including (x) the exact legal name of each Grantor and (y) the jurisdiction of
organization of each Grantor) is correct and complete as of the date hereof. 
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings, or registrations
containing a description of the Article 9 Collateral have been prepared by the
Collateral Agent based upon the information provided to the Collateral Agent and
the Secured Parties by the Grantors for filing the UCC records in the state of
formation for each Grantor (or such other office specified by notice from the
Company to the Administrative Agent or the Trustee after the date hereof in the
case of filings, recordings or registrations required to be made after the date
hereof under the Finance Documents, which are all the filings, recordings and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in the Article 9 Collateral consisting of United
States Patents, Trademarks and Copyrights) that are necessary as of the date
hereof to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(on behalf of the Secured Parties) in respect of all Article 9 Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.

 

SECTION 23.       This Amendment may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Amendment shall become effective when the Collateral
Agent shall have received counterparts of this Amendment that, when taken
together, bear the signatures of the Company, Wells Fargo and the Collateral
Agent.  Delivery of an executed signature page to this Amendment by facsimile
transmission or other electronic means shall be as effective as delivery of a
manually signed counterpart of this Amendment.

 

SECTION 24.       Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.

 

SECTION 25.       THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 26.       In case any one or more of the provisions contained in this
Amendment should be held invalid, illegal or unenforceable in any respect, the
validity, legality and

 

4

--------------------------------------------------------------------------------

 

enforceability of the remaining provisions contained herein and in the Security
Agreement shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction).  The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

SECTION 27.       All communications and notices hereunder shall be in writing
and given as provided in Section 5.01 of the Security Agreement.

 

SECTION 28.       The Company agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Amendment, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.

 

SECTION 29.       The Recitals and Preliminary Statements in this Amendment are
incorporated by reference as if fully set forth in this Section 29.

 

[signature pages follow]

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company, the Subsidiary Grantors, Wells Fargo and the
Collateral Agent have duly executed this Amendment to the Security Agreement as
of the day and year first above written.

 

 

ALION SCIENCE AND TECHNOLOGY CORPORATION

 

 

 

 

 

By:

/s/ Barry Broadus

 

 

Name: Barry Broadus

 

 

Title: Chief Financial Officer

 

 

 

 

 

ALION-BMH CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

ALION-CATI CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

ALION-IPS CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

ALION-JJMA CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

[Signature Page to Amendment No. 1 to Security Agreement]

 

--------------------------------------------------------------------------------

 

 

ALION-MA&D CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

ALION-METI CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

ALION INTERNATIONAL CORPORATION

 

 

 

 

 

By:

/s/ Stacy Mendler

 

 

Name: Stacy Mendler

 

 

Title: President

 

 

 

 

 

WASHINGTON CONSULTING, INC.

 

 

 

 

 

By:

/s/ Kevin Boyle

 

 

Name: Kevin Boyle

 

 

Title: Secretary

 

 

 

 

 

WASHINGTON CONSULTING GOVERNMENT SERVICES, INC.

 

 

 

 

 

By:

/s/ Christiane Lourenco

 

 

Name: Christiane Lourenco

 

 

Title: Secretary

 

 

 

 

 

WILMINGTON TRUST COMPANY, as Collateral Agent

 

 

 

 

 

By:

/s/ Michael G. Oller, Jr.

 

 

Name: Michael G. Oller, Jr.

 

 

Title: Assistant Vice President

 

[Signature Page to Amendment No. 1 to Security Agreement]

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Marc Grossman

 

 

Name:

Marc Grossman

 

 

Title:

SVP

 

[Signature Page to Amendment No. 1 to Security Agreement]

 

--------------------------------------------------------------------------------

 

Schedule II to

Security Agreement

 

[see attached]

 

--------------------------------------------------------------------------------

 

Schedule III to

Security Agreement

 

[see attached]

 

--------------------------------------------------------------------------------

 

Exhibit B to

Security Agreement

 

[see attached]

 

--------------------------------------------------------------------------------