**Exhibit 10.1**

 

**AMENDMENT NO. 3 TO CREDIT AGREEMENT**

# ** **

This AmendmentNo. 3 to Credit Agreement (this “Amendment”) dated as of May 12,2008, is made among **ATS CORPORATION**,a Delaware corporation (the “Borrower”), **BANK OFAMERICA, N.A.**, a national banking association organized and existingunder the laws of the United States, in its capacity as administrative agentfor the Lenders (as defined in the Credit Agreement (as defined below)) (insuch capacity, the “Administrative Agent”), each of the Lenderssignatory hereto and each of the Guarantors signatory hereto.

 

# **W I T N E S S E T H:**

# ** **

**WHEREAS**,the Borrower, the Administrative Agent and the Lenders have entered into thatcertain Credit Agreement dated as of June 4, 2007 (as amended by AmendmentNo. 1 to Credit Agreement dated as of June 29, 2007, Amendment No. 2to Credit Agreement, Limited Consent and Agreement to Increase Commitmentsdated as of November 9, 2007, as amended by this Amendment and as fromtime to time hereafter further amended, restated, supplemented or otherwisemodified, the “Credit Agreement”; capitalized terms used in thisAmendment not otherwise defined herein shall have the definition given theretoin the Credit Agreement), pursuant to which the Lenders have made available tothe Borrower a revolving credit facility, including a letter of creditsubfacility; and

 

**WHEREAS**,each of the Guarantors has entered into a Guaranty pursuant to which it hasguaranteed the payment and performance of the obligations of the Borrower underthe Credit Agreement and the other Loan Documents; and

 

**WHEREAS,**the Borrower has advised the Administrative Agent and the Lenders that itdesires to amend certain provisions of the Credit Agreement as set forth belowand the Administrative Agent and the Lenders signatory hereto are willing toeffect such amendment on the terms and conditions contained in this Agreement;and

 

**NOW,THEREFORE**, in consideration of the premises andfurther valuable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereto agree as follows:

 

1.                                       **Amendments to CreditAgreement**.  Subject to the terms and conditions set forthherein, and in reliance upon the representations and warranties of the Borrowermade herein, the Credit Agreement is hereby amended as follows:

 

(a)                          Section 1.01 of the Credit Agreement is amended to addthe following defined term thereto:

 

“Net CashProceeds” means with respect to the sale of any Equity Interests by theBorrower or any of its Subsidiaries, or the exercise or conversion of any warrants,options or rights with respect to such Equity Interests, the excess of (i) thesum of the cash and cash equivalents received in connection therewith over (ii) theunderwriting discounts and commissions, and other out-of-pocket expenses,incurred by such Person in connection therewith.

 

----

 

(b)                         Section 1.01 of the Credit Agreement is amended byreplacing the definitions of “Applicable Rate” and “CoverageAdjustment Amount” in their entirety with the following definitions:

 

“Applicable Rate” means,from time to time, the following percentages per annum, based upon theConsolidated Leverage Ratio as set forth in the most recent ComplianceCertificate received by Agent pursuant to Section 6.02(b)(i):

 

**Applicable Rate**

 

| **Pricing  Level** | ** ** | **Consolidated  Leverage Ratio**                             | ** ** | **Unused Fee** | ** ** | **LIBOR Monthly  Floating Rate  and  Letter of Credit  Fee** | ** ** |
|--------------------|------------|-------------------------------------------------------------------|------------|---------------------|------------|----------------------------------------------------------------------------------|------------|
| 1                  |       | Less than or equal to 2.00 to 1.00                                |       | 0.200               | %          | 2.000                                                                            | %          |
| 2                  |       | Less than or equal to 2.50 to 1.00, but greater than 2.00 to 1.00 |       | 0.250               | %          | 2.250                                                                            | %          |
| 3                  |       | Less than or equal to 3.00 to 1.00, but greater than 2.50 to 1.00 |       | 0.250               | %          | 2.750                                                                            | %          |
| 4                  |       | Greater than 3.00 to 1.00                                         |       | 0.375               | %          | 3.500                                                                            | %          |

 

Any increase or decreasein the Applicable Rate resulting from a change in the Consolidated LeverageRatio shall become effective as of the first Business Day of the monthimmediately following the date a Compliance Certificate is delivered pursuantto Section 6.02(b) (each such day, an “Applicable RateChange Date”); provided, however, that if a ComplianceCertificate is not delivered  when due inaccordance with such Section, then Pricing Level 4 shall apply as of the firstBusiness Day of the month following the date such Compliance Certificate wasrequired to have been delivered; providedfurther thatnotwithstanding the Coverage Adjustment Amount then in effect, if at any date aCoverage Adjustment Amount equal to $0 would result in the Borrower’s failureto comply with Section 6.12(a) then Pricing Level 4 shallapply as of such date until such time as the Borrower has demonstrated that aCoverage Adjustment Amount equal to $0 would not result in such non-compliance.

 

“Coverage AdjustmentAmount” means, with respect to any date occurring during each period setforth below, an amount equal to the amount set 

 

2

----

 

forth below opposite such period, but subject toadjustment pursuant to Section 6.10:

 
| **Period**                                             | ** ** | **Coverage Adjustment  Amount** | ** ** |
|--------------------------------------------------------|------------|--------------------------------------|------------|
| December 31,  2007 through May 31, 2008      |       | $                                    | 9,250,000  |   |
| June 1,  2008 through August 31, 2008        |       | $                                    | 7,500,000  |   |
| September 1,  2008 through February 28, 2009 |       | $                                    | 6,500,000  |   |
| March 1,  2009 through May 31, 2009          |       | $                                    | 5,500,000  |   |
| June 1,  2009 through August 31, 2009        |       | $                                    | 3,500,000  |   |
| September 1,  2009 through November 30, 2009 |       | $                                    | 1,500,000  |   |
| December 1,  2009 and thereafter                  |       | $                                    | 0          |   |

 

provided, however, each of the CoverageAdjustment Amounts set forth in the table above shall be reduced by (i) theamount of any mandatory prepayment required to be made by Sections 2.05(d) and(e), and (ii) the Net Cash Proceeds received by the Borrower or anyof its Subsidiaries in connection with the Borrower’s Early Warrant ExerciseProgram effective as of April 8, 2008.

 

(c)                                 Section 1.01of the Credit Agreement is amended by adding the following sentence to the endof the definition of “Consolidated Cash Flow”:

 

“Amounts included in the calculation of Consolidated Cash Flow underclause (b) above for losses from discontinued operations and extraordinaryitems and clause (c) above for other non-cash charges shall be subject tothe approval of such items by the Administrative Agent.”

 

(d)                                Section 1.01of the Credit Agreement is amended by adding the following sentence to the endof the definition of “Consolidated EBITDA”:

 

“Amounts included in the calculation of Consolidated EBITDA underclause (b) above for losses from discontinued operations and extraordinaryitems and clause (e) above for other non-cash charges shall be subject tothe approval of such items by the Administrative Agent.”

 

(e)                                 Section 2.05 of the Credit Agreement is amended by addingnew subsections (d) and (e) thereto as follows:

 

“(d)                     Upon the sale or issuance by the Borrower orany of its Subsidiaries of any of its Equity Interests (including, withoutlimitation, any conversion or exercise by any Person of any warrants, optionsor rights with respect to any such Equity Interests other than in connectionwith the Borrower’s Early Warrant Exercise Program effective as of April 8,2008, but not including any sales or issuances of Equity Interests to theBorrower or any Guarantor), the Borrower shall prepay an aggregate principalamount of Loans equal to (i) at any time the Consolidated Leverage Ratiois less than or equal to 2.50 to 1.00 (before giving effect to any prepaymentrequired by this Section 2.05(d)), 50% of the Net 

 

3

----

 

Cash Proceeds of such saleor issuance and (ii) at any time the Consolidated Leverage Ratio isgreater than 2.50 to 1.00 (before giving effect to any prepayment required bythis Section 2.05(d)), 100% of the Net Cash Proceeds of such saleor issuance.

 

(e)                                  Upon the receipt by the Borrower or any ofits Subsidiaries of any funds held in an escrow or similar arrangement inconnection with, or pursuant to any document related to, any Acquisition (“EscrowedFunds”), the Borrower shall prepay an aggregate principal amount of Loansequal to 100% of the amount of such Escrowed Funds.”

 

(f)                                   Section 6.01(d) of the Credit Agreement is amended byreplacing such Section in its entirety with the following:

 

“(d)                           as soonas available, but in any event within 30 days after the end of each month, anaccounts receivable aging report and accounts payable aging report for theBorrower and each Subsidiary;”

 

(g)                                Section 6.02(a) of the Credit Agreement is amended byreplacing such Section in its entirety with the following:

 

“(a)                            beginningwith such financial statements for the fiscal year of the Borrower ending December 31,2008, concurrently with the delivery of the financial statements referred to inSection 6.01(a) a certificate of the Registered PublicAccounting Firm certifying such financial statements and stating that in makingthe examination necessary therefor no knowledge was obtained of any Defaultunder any financial covenant contained in this Agreement or, if any suchDefault shall exist, stating the nature and status of such event;”

 

(h)                                Section 6.02(b) of the Credit Agreement is amended byreplacing such Section in its entirety with the following:

 

“(b)                           concurrentlywith the delivery of (i) the financial statements referred to in Sections6.01(a) and (b), a duly completed Compliance Certificate in theform attached hereto as Exhibit D-1 and (ii) the reportsreferred to in Section 6.01(d), a duly completed ComplianceCertificate in the form attached hereto as Exhibit D-2, in eachcase signed by the chief executive officer, chief financial officer, treasureror controller of Borrower;”

 

(i)                                    Section 6.12 of the Credit Agreement is amended byreplacing such Section in its entirety with the following:

 

**“6.12****                 FinancialCovenants.**

 

(a)                                  ConsolidatedAsset Coverage Ratio.  Maintain aConsolidated Asset Coverage Ratio of not less than 1.00 to 1.00 at alltimes.  This ratio will be reported atthe end of each month.”

 

4

----

 

(b)                                 ConsolidatedLeverage Ratio.  Maintain aConsolidated Leverage Ratio at any time during any period set forth below notexceeding the ratio set forth opposite such period.  This ratio will be reported at the end ofeach reporting period for which this Agreement requires the Borrower to deliverfinancial statements (pursuant to Sections 6.01(a), 6.01(b) or6.01(f), as applicable), using the results of the twelve-month periodending with that reporting period (except as otherwise provided in Section 1.07(c)).

 
| **Period**                                              | ** ** | **Consolidated Leverage  Ratio** | ** ** |
|---------------------------------------------------------|------------|---------------------------------------|------------|
| March 31,  2008 through June 29, 2008         |       | 4.25 to 1.00                          |       |
| June 30,  2008 through September 29, 2008     |       | 4.00 to 1.00                          |       |
| September 30,  2008 through December 30, 2008 |       | 3.75 to 1.00                          |       |
| December 31,  2008 and thereafter                  |       | 3.50 to 1.00                          |       |

 

(c)                                  ConsolidatedFixed Charge Coverage Ratio. Maintain at all times a Consolidated Fixed Charge Coverage Ratio of notless than 1.30 to 1.00.  This ratio willbe reported at the end of each reporting period for which this Agreementrequires the Borrower to deliver financial statements (pursuant to Sections6.01(a), 6.01(b) or 6.01(f), as applicable), using theresults of the twelve-month period ending with that reporting period (except asotherwise provided in Section 1.07(c)).

 

(d)                                 MinimumConsolidated EBITDA.  Maintain ConsolidatedEBITDA for each fiscal quarter set forth below in an amount not less than theamount set forth below opposite such fiscal quarter:

 
| **Fiscal Quarter**                        | ** ** | **Minimum Consolidated  EBITDA** | ** ** |
|------------------------------------------------|------------|---------------------------------------|------------|
| Fiscal  quarter ending March 31, 2008     |       | $                                     | 3,200,000  |   |
| Fiscal  quarter ending June 30, 2008      |       | $                                     | 2,750,000  |   |
| Fiscal  quarter ending September 30, 2008 |       | $                                     | 3,000,000  |   |
| Fiscal  quarter ending December 31, 2008  |       | $                                     | 2,600,000  |   |

 

(j)                                    Section 7.07 of the Credit Agreement is amended byreplacing such Section in its entirety with the following:

 

**“7.07****                 Acquisitions**.  Enter into any agreement, contract, bindingcommitment or other arrangement providing for any Acquisition, or take anyaction to solicit the tender of securities or proxies in respect thereof inorder to effect any Acquisition, unless (a) the Person to be (or whoseassets are to be) acquired does not oppose such Acquisition and the line orlines of business of the Person to be acquired are (i) the provision of services primarily in the governmentalcontracting field, or (ii) substantially the same as one or moreline or lines of business conducted by Borrower and its Subsidiaries, orsubstantially related or incidental thereto, (b) no Default or Event ofDefault shall have 

 

5

----

 

occurred and be continuing and the representations andwarranties contained in Section 5.06 shall be true and correct, ineach case, immediately prior to and immediately after giving effect to suchAcquisition, (c) the Cost of Acquisition is less than $10,000,000, (d) thePerson acquired shall be a wholly-owned Subsidiary, or be merged into theBorrower, a Guarantor or any wholly-owned Subsidiary, immediately uponconsummation of the Acquisition (or if assets are being acquired, the acquirershall be the Borrower, a Guarantor or any wholly-owned Subsidiary), (e) aftergiving effect to such Acquisition, the aggregate Costs of Acquisition incurredduring the fiscal year in which such Acquisition is made shall not exceed$20,000,000, and (f) immediately after giving effect to any suchAcquisition the difference between the Aggregate Commitments and the TotalOutstandings shall not be less than $5,000,000; provided that, prior toeffecting any such transaction, the Borrower shall have furnished to Agent (i) proforma historical financial statements as of the end of the most recentlycompleted fiscal year of the Borrower and most recent interim fiscal quarter,if applicable, giving effect to such Acquisition and (ii) a ComplianceCertificate prepared on a historical pro forma basis as of the most recent datefor which financial statements have been furnished pursuant to Section 6.01(a) or (b) giving effectto such Acquisition, which certificate shall demonstrate that immediately aftergiving effect to such Acquisition (including, without limitation, any Borrowings related thereto)  (A) the Consolidated Leverage Ratiowould not exceed 2.50 to 1.00, and (B) no Default or Event of Defaultwould then exist.  Each Acquisitioncomplying with the terms of this Section 7.07, or otherwiseconsented to by the Required Lenders in writing is referred to herein as a “PermittedAcquisition.”  The partiesacknowledge that the Borrower may from time to time seek the consent of theRequired Lenders to an Acquisition that does not conform to the requirements ofthis Section 7.07, provided that the Required Lenders shallhave no obligation to give such consent.”

 

(k)                                 Theexisting Exhibit D-1 and Exhibit D-2 to the CreditAgreement are deleted in theirentirety and Exhibit D-1 and Exhibit D-2 attachedhereto, respectively, are inserted in lieu thereof.

 

6

----

 

2.                                       **Consent to 2007 Fiscal Year EndConsolidated EBITDA and Consolidated Cash Flow Calculations**. Solely for the purpose of calculating Consolidated EBITDA andConsolidated Cash Flow for the fiscal year of the Borrower ending December 31,2007, the Administrative Agent hereby consents to and accepts the calculationsby the Borrower thereof as each is set forth in that certain ComplianceCertificate dated as of March 17, 2008 and delivered by the Borrower tothe Administrative Agent in connection with such fiscal year end pursuant to Section 6.02(b) ofthe Credit Agreement other than the adjustments reflected in each suchcalculation for the “Nashville loss” and “PBGC loss” (as each of those items isset forth by the Borrower in such Compliance Certificate).

 

3.                                       **Effectiveness; ConditionsPrecedent**.  The amendments, consents and acceptances setforth in Sections 1(c),  (d) and(g) and Section 2 of this Amendment shall be effectiveas of December 31, 2007, and all other amendments contained in thisAmendment shall be effective as of March 31, 2008, in each case upon thesatisfaction of the following conditions precedent:

 

(a)                                  The Administrative Agent shall have receivedeach of the following documents or instruments in form and substance acceptableto the Administrative Agent:

 

(i)            one or more counterparts of this Amendment,duly executed by the Borrower and each Guarantor; and

 

(ii)           such other documents, instruments, opinions,certifications, undertakings, further assurances and other matters as theAdministrative Agent shall reasonably request.

 

(b)                                 Allupfront, amendment or modification fees due to the Lenders, together with allother fees and expenses payable to the AdministrativeAgent (including the fees and expenses of counsel to the Administrative Agent) estimated todate shall have been paid in full (without prejudice to final settling ofaccounts for such fees and expenses).

 

4.                                       **Consent of the Guarantor.**  Notwithstanding that such consent is notrequired by the Loan Documents, the Guarantor hereby consents, acknowledges andagrees to the amendments set forth herein and hereby confirms and ratifies inall respects the Loan Documents to which such Person is a party (includingwithout limitation the continuation of such Person’s payment and performanceobligations and the effectiveness and priority of any Liens granted thereunder,in each case upon and after the effectiveness of this Amendment and theamendments contemplated hereby) and the enforceability of such Loan Documentsagainst such Person in accordance with its terms.

 

5.                                       **Representations andWarranties****.**  In order to induce the Administrative Agentand the Lenders to enter into this Amendment, the Borrower represents andwarrants to the Administrative Agent and such Lenders as follows:

 

(a)                                  The representations and warranties made by itin Article V of the Credit Agreement, and by each Loan Party ineach of the Loan Documents to which such Loan Party is a party are true andcorrect on and as of the date hereof, except 

 

7

----

 

to the extent that suchrepresentations and warranties expressly relate to an earlier date, in whichcase such representations and warranties are true and correct as of suchearlier date;

 

(b)                                Since the date of the most recent financialreports of the Borrower delivered pursuant to Section 6.01 of theCredit Agreement, no act, event, condition or circumstance has occurred orarisen which, singly or in the aggregate with one or more other acts, events,occurrences or conditions (whenever occurring or arising), has had or couldreasonably be expected to have a Material Adverse Effect;

 

(c)                                 ThePersons appearing as Guarantors on the signature pages to this Agreementconstitute all Persons who are required to be Guarantors pursuant to the termsof the Credit Agreement and the other Loan Documents, including withoutlimitation all Persons who became Subsidiaries or were otherwise required tobecome Guarantors after the Closing Date, and each of such Persons has becomeand remains a party to a Guaranty as a Guarantor;

 

(d)                                This Amendment has been duly authorized,executed and delivered by the Borrower and the Guarantor and constitutes a legal,valid and binding obligation of such Persons, except as may be limited bygeneral principles of equity or by the effect of any applicable bankruptcy,insolvency, reorganization, moratorium or similar law affecting creditors’rights generally; and

 

(e)                                 NoDefault or Event of Default has occurred and is continuing after giving effectto this Amendment.

 

6.                                       **Entire Agreement.**  This Amendment, together with all the LoanDocuments (collectively, the “Relevant Documents”), sets forth theentire understanding and agreement of the parties hereto in relation to thesubject matter hereof and supersedes any prior negotiations and agreementsamong the parties relating to such subject matter.  No promise, condition, representation orwarranty, express or implied, not set forth in the Relevant Documents shallbind any party hereto, and no such party has relied on any such promise,condition, representation or warranty. Each of the parties hereto acknowledges that, except as otherwiseexpressly stated in the Relevant Documents, no representations, warranties orcommitments, express or implied, have been made by any party to the other inrelation to the subject matter hereof or thereof.  None of the terms or conditions of this Amendmentmay be changed, modified, waived or canceled orally or otherwise, except inwriting and in accordance with Section 10.01 of the CreditAgreement.

 

7.                                       **Full Force and Effect ofAgreement****.**  Except as hereby specifically amended,modified or supplemented, the Credit Agreement and all other Loan Documents arehereby confirmed and ratified in all respects and shall be and remain in fullforce and effect according to their respective terms.

 

8

----

 

8.                                       **Counterparts****.**  ThisAmendment may be executed in any number of counterparts, each of which shall bedeemed an original as against any party whose signature appears thereon, andall of which shall together constitute one and the same instrument.  Delivery of an executed counterpart of asignature page of this Amendment by telecopy shall be effective asdelivery of a manually executed counterpart of this Amendment.

 

9.                                       **Governing Law; Jurisdiction,Etc****.**  ThisAmendment shall in all respects be governed by, and construed in accordancewith, the laws of the Commonwealth of Virginia, and shall be further subject tothe provisions of Section 10.13 of the Credit Agreement.

 

10.                                 **Enforceability****.** Should any one or more of the provisions of this Amendment be determinedto be illegal or unenforceable as to one or more of the parties hereto, allother provisions nevertheless shall remain effective and binding on the partieshereto.

 

11.                                 **References****.**  Allreferences in any of the Loan Documents to the “Credit Agreement” shall meanthe Credit Agreement, as amended hereby.

 

12.                                 **Successors and Assigns.**  This Amendment shall be binding upon andinure to the benefit of the Borrower, the Guarantor, the Administrative Agentand each Lender, and their respective successors and assignees to the extentsuch assignees are permitted assignees as provided in Section 10.06of the Credit Agreement.

 

**[Signature pages follow.]**

 

9

----

 

INWITNESS WHEREOF, the parties hereto have caused this Amendment to be made,executed and delivered by their duly authorized officers as of the day and yearfirst above written.

 

 
| ** ** | **BORROWER:**       |
|------------|---------------------|
| ** ** | ** **          |
| ** ** | ** **          |
| ** ** | **ATS CORPORATION** |
| ** ** | ** **          |
| ** ** | ** **          |
|       | By:                 | /s/ Pamela A. Little |
|       | Name:               | Pamela A. Little |
|       | Title:              | Chief Financial Officer |

 

----

 
| ** ** | **ADMINISTRATIVE  AGENT:**  |
|------------|-----------------------------|
| ** ** | ** **                  |
| ** ** | ** **                  |
| ** ** | **BANK OF  AMERICA, N.A.,** |
| ** ** | as Administrative Agent     |
| ** ** | ** **                  |
| ** ** | ** **                  |
|       | By:                         | /s/ Anne M. Zeschke |
|       | Name:                       |  Anne M. Zeschke |
|       | Title:                      |  Assistant  Vice President |

 

----

 
| ** ** | **LENDERS:**                       |
|------------|------------------------------------|
| ** ** | ** **                         |
| ** ** | ** **                         |
| ** ** | **BANK OF  AMERICA, N.A.,**        |
|       | as a Lender                        |
|       |                               |
|       |                               |
|       | By:                                | /s/ Michael D. Brannan |
|       | Name:                              | Michael D. Brannan |
|       | Title:                             | Senior Vice  President |
|       |                               |   |
|       |                               |   |
|       | **CITIZENS  BANK OF PENNSYLVANIA** |
|       | ** **                         |
|       | ** **                         |
|       | By:                                | /s/ Owen B. Burman |
|       | Name:                              | Owen B. Burman |
|       | Title:                             | Vice  President |

 

----

** **
| ** ** | **GUARANTOR:**                        |
|------------|---------------------------------------|
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | **ADVANCED TECHNOLOGY SYSTEMS, INC.** |
| ** ** | ** **                            |
| ** ** | ** **                            |
|       | By:                                   | /s/ Pamela A. Little |
|       | Name:                                 | Pamela A. Little |
|       | Title:                                | Chief Financial Officer |
|            |                                       |  |  |

 

----