EX-10.54







INCREMENTAL TERM LOAN ASSUMPTION AGREEMENT AND AMENDMENT NO. 1
dated as of April 1, 2005 (this “Assumption Agreement and Amendment”),
related to the CREDIT AGREEMENT dated as of August 2, 2004 (the “Credit
Agreement”), among ALION SCIENCE AND TECHNOLOGY CORPORATION (the
“Borrower”), the Subsidiary Guarantors listed on the signature pages
hereto (solely with respect to Sections 6, 8, 10 and 11 hereof), the
lenders from time to time party to the Credit Agreement (the “Lenders”)
and CREDIT SUISSE FIRST BOSTON (“CSFB”), as administrative agent (in such
capacity, the “Administrative Agent”) and as collateral agent for the
Lenders.



A. The Borrower has requested that the persons set forth on Schedule I hereto (the
“Incremental Term Lenders”) make Incremental Term Loans to the Borrower pursuant to the Credit
Agreement.



B. The Incremental Term Lenders are willing to make Incremental Term Loans to the
Borrower on the Amendment Effective Date (as defined below), on the terms and subject to the
conditions set forth herein and in the Credit Agreement.



C. Additionally, the Borrower has requested certain amendments to the Credit
Agreement as set forth herein.



Accordingly, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties
hereto agree as follows:



SECTION 1. Defined Terms; Interpretation; Etc. Capitalized terms used and not
defined herein shall have the meanings assigned to such terms in the Credit Agreement. The rules
of construction set forth in Section 1.02 of the Credit Agreement shall apply equally to this
Assumption Agreement and Amendment. This Assumption Agreement and Amendment shall be a “Loan
Document and, to the extent it relates to the making of Incremental Term Loans, an “Incremental
Term Loan Assumption Agreement” for all purposes of the Credit Agreement and the other Loan
Documents.



SECTION 2. Incremental Term Loans. (a) Each Incremental Term Lender hereby agrees
to make an Incremental Term Loan to the Borrower on the Amendment Effective Date in a principal
amount equal to the Incremental Term Loan amount set forth next to such Incremental Term Lender’s
name on Schedule I attached hereto. All such Incremental Term Loans shall constitute “Term Loans”
for all purposes of the Credit Agreement and the other Loan Documents.




(b) The proceeds of the Incremental Term Loans are to be used by the Borrower
solely (i) to finance one or more Permitted Acquisitions, (ii) to effect the payment and
satisfaction of the Mezzanine Warrant Put Right, if exercised, (iii) to repay outstanding
Revolving Loans, (iv) subject to Section 2.25 of the Credit Agreement (as amended hereby), to
repay outstanding Term Loans and Incremental Term Loans, (v) to pay related fees and expenses
and (vi) for other general corporate purposes of the Borrower and the Subsidiaries.



SECTION 3. Conditions Precedent to Incremental Term Loans. The obligation of the
Incremental Term Lenders to make Incremental Term Loans hereunder shall be subject to the
satisfaction of the following conditions precedent:




(a) On the Amendment Effective Date, each of the conditions set forth in
paragraphs (b) and (c) of Section 4.01 of the Credit Agreement shall be satisfied and the
Administrative Agent shall have received a certificate to that effect dated as of the
Amendment Effective Date and executed by a Financial Officer of the Borrower.




(b) The Administrative Agent shall have received (with sufficient copies for
each Incremental Term Lender) such legal opinions, board resolutions and other closing
certificates and documentation as shall be reasonably required by the Incremental Term
Lenders, in each case consistent with those delivered on the Closing Date under Section 4.02
of the Credit Agreement.




(c) The Administrative Agent shall have received a certificate, dated the
Amendment Effective Date and executed by a Financial Officer of the Borrower, confirming that
the Borrower will be in Pro Forma Compliance after giving effect to the making of the
Incremental Term Loans and the application of the proceeds therefrom.




(d) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by
the Borrower hereunder or under any other Loan Document.



SECTION 4. Amendments to Credit Agreement. Effective as of the Amendment Effective
Date:




(a) The definition of the term “Applicable Percentage” set forth in Section
1.01 of the Credit Agreement is hereby amended as follows:




	 	(i)	 	by deleting “2.75%” at the end of clause (a)
therein and substituting therefor “2.25%”; and	 






	 	(ii)	 	by deleting “1.75%” at the end of clause (b)
therein and substituting therefor “1.25%”.	 






(b) The definition of the term “Incremental Term Loan Amount” set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as
follows:



““Incremental Term Loan Amount” shall mean, at any time
after the Amendment Effective Date, the excess, if any, of (a)
$150,000,000 over (b) the aggregate amount of all Incremental
Term Commitments established after the Amendment Effective Date
but prior to such time pursuant to Section 2.24.”




(c) The definition of the term “Permitted Investments” set forth in Section
1.01 of the Credit Agreement is hereby amended by:




(i) deleting the word “and” at the end of clause (e) thereof;




(ii) redesignating clause (f) thereof as clause (g); and




(iii) adding a new clause (f) thereof as follows:



“(f) investments in so-called “auction rate”
securities rated AAA or higher by S&P or Aaa or higher
by Moody’s and which have a reset date not more than 90
days from the date of acquisition thereof; and”




(d) Section 1.01 of the Credit Agreement is hereby further amended by adding
the following defined term in appropriate alphabetical order:




	 	(i)	 	““Amendment Effective Date” shall have the meaning set forth
in Amendment No. 1.”






	 	(ii)	 	““Amendment No. 1” shall mean the Incremental Term Loan
Assumption Agreement and Amendment No. 1 to this Agreement dated as
of April 1, 2005.”






	 	(iii)	 	““JJMA Stock Purchase Agreement” shall mean that certain
Stock Purchase Agreement dated as of April 1, 2005, among the
Borrower, John J. McMullen Associates, Inc. (“JJMA”), a New York
corporation, M & I Marshall & Ilsley Trust Company, as trustee of the
John J. McMullen Associates, Inc. Employee Stock Ownership Trust, and
certain holders of JJMA stock options and/or stock appreciation
rights, pursuant to which the Borrower acquired all of the issued and
outstanding capital stock of JJMA.”






(e) To give effect to the making of the Incremental Term Loans on the Amendment
Effective Date and the treatment thereof as “Term Loans” for all purposes of the Credit
Agreement, Section 2.11(a) of the Credit Agreement is hereby amended and restated in its
entirety as follows:



“(a) The Borrower shall pay to the Administrative Agent, for the accounts
of the Term Lenders, on the dates set forth below, or if any such date is
not a Business Day, on the immediately preceding Business Day (each such
date being called a “Repayment Date”), a principal amount of the Term
Loans (as adjusted from time to time pursuant to Sections 2.12, 2.13(f)
and 2.24(d)) equal to the amount set forth below for such date, together
in each case with accrued and unpaid interest on the principal amount to
be paid to but excluding the date of such payment:



	 	 	 	 	 
	Repayment Date	 	Amount
	June 30, 2005
	 	$	360,000	 
	 
	 	 	 	 
	September 30, 2005
	 	$	360,000	 
	 
	 	 	 	 
	December 31, 2005
	 	$	360,000	 
	 
	 	 	 	 
	March 31, 2006
	 	$	360,000	 
	 
	 	 	 	 
	June 30, 2006
	 	$	360,000	 
	 
	 	 	 	 
	September 30, 2006
	 	$	360,000	 
	 
	 	 	 	 
	December 31, 2006
	 	$	360,000	 
	 
	 	 	 	 
	March 31, 2007
	 	$	360,000	 
	 
	 	 	 	 
	June 30, 2007
	 	$	360,000	 
	 
	 	 	 	 
	September 30, 2007
	 	$	360,000	 
	 
	 	 	 	 
	December 31, 2007
	 	$	360,000	 
	 
	 	 	 	 
	March 31, 2008
	 	$	360,000	 
	 
	 	 	 	 
	June 30, 2008
	 	$	360,000	 
	 
	 	 	 	 
	September 30, 2008
	 	$	360,000	 
	 
	 	 	 	 
	December 31, 2008
	 	$	34,650,000	 
	 
	 	 	 	 
	March 31, 2009
	 	$	34,650,000	 
	 
	 	 	 	 
	June 30, 2009
	 	$	34,650,000	 
	 
	 	 	 	 
	Term Loan Maturity Date
	 	$	34,650,000	 
	 
	 	 	 	 








(f) Article II is hereby amended by adding a new Section 2.25 at the end
thereof as follows:



“SECTION 2.25. Term Loan Repricing Protection. In the event that,
prior to the first anniversary of the Amendment Effective Date, any Term
Lender receives a Repricing Prepayment (as defined below), then, at the
time thereof, the Borrower shall pay to such Term Lender a prepayment
premium equal to 1.0% of the amount of such Repricing Prepayment. As used
herein, with respect to any Term Lender, a “Repricing Prepayment” is the
amount of principal of the Term Loans of such Term Lender that is either
(a) prepaid by the Borrower pursuant to Section 2.12 substantially
concurrently with the incurrence by the Borrower of new term loans
(whether pursuant to Incremental Term Commitments or otherwise) that have
interest rate margins lower than the Applicable Percentages then in effect
for the Term Loans so prepaid or (b) received by such Term Lender as a
result of the mandatory assignment of such Term Loans under the
circumstances described in Section 2.21(a)(iv) following the failure of
such Term Lender to consent to an amendment of this Agreement (other than
Amendment No. 1) that would have the effect of reducing the Applicable
Percentage with respect to such Term Loans.”




(g) Section 6.01(j) is hereby amended by inserting the following parenthetical
after the phrase “Term Loan Maturity Date” at the end of clause (i) of the proviso therein:



“(other than Indebtedness in the form of deferred purchase price and SAR
termination payments incurred pursuant to the JJMA Stock Purchase
Agreement in effect on the Amendment Effective Date)”




(h) Section 6.01(n) is hereby amended by deleting “$10,000,000” therein and
substituting “$15,000,000” therefor.




(i) Section 6.07 is hereby amended by deleting the word “and” prior to clause
(e) thereof and adding a new clause (f) at the end thereof as follows:



“, and (f) the Borrower may make deferred purchase price and SAR
termination payments to Affiliates pursuant to the terms of the JJMA Stock
Purchase Agreement in effect on the Amendment Effective Date”




(j) Section 6.13 is hereby amended by deleting the table set forth therein and
substituting therefor the following table:



	 	 	 
	Period	 	Ratio
	Closing Date through March 31, 2005	 	3.85 to 1.00
	April 1, 2005 through December 31, 2005

	 	3.75 to 1.00
	 

	 	 
	 
	 	 
	January 1, 2006 through March 31, 2006

	 	3.50 to 1.00
	 

	 	 
	 
	 	 
	April 1, 2006 through March 31, 2007

	 	3.25 to 1.00
	 

	 	 
	 
	 	 
	April 1, 2007 through March 31, 2008

	 	2.75 to 1.00
	 

	 	 
	 
	 	 
	Thereafter

	 	2.25 to 1.00
	 

	 	 







SECTION 5. Representations and Warranties. To induce the other parties hereto to
enter into this Assumption Agreement and Amendment, the Borrower represents and warrants to the
Administrative Agent and each of the Lenders that, as of the Amendment Effective Date:




(a) This Assumption Agreement and Amendment has been duly authorized, executed
and delivered by each Loan Party party hereto, and constitutes a legal, valid and binding
obligation of such Loan Party in accordance with its terms. The Credit Agreement (as amended
hereby) constitutes a legal, valid and binding obligation of the Borrower in accordance with
its terms.




(b) The representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects on and as of the Amendment Effective
Date with the same effect as though made on and as of the Amendment Effective Date, except to
the extent such representations and warranties expressly relate to an earlier date (in which
case such representations and warranties were true and correct in all material respects as of
such earlier date).




(c) No Default or Event of Default has occurred and is continuing.



SECTION 6. Effectiveness. This Assumption Agreement and Amendment shall become
effective as of the date (the “Amendment Effective Date”) that the Administrative Agent shall have
received counterparts of this Assumption Agreement and Amendment that, when taken together, bear
the signatures of (i) the Borrower, (ii) each Subsidiary Guarantor, (iii) the Administrative Agent,
(iv) the Required Lenders, (v) each Term Lender (after giving effect to any prior or concurrent
assignment by Term Lenders, whether pursuant to Section 2.21 of the Credit Agreement or otherwise)
and (vi) each Incremental Term Lender.



SECTION 7. Effect of Amendment. Except as expressly set forth herein, this
Assumption Agreement and Amendment shall not by implication or otherwise limit, impair, constitute
a waiver of, or otherwise affect the rights and remedies of the Lenders, the Administrative Agent,
the Collateral Agent or the Borrower under the Credit Agreement or any other Loan Document, and
shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which
are ratified and affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or any other Loan Document in similar or different circumstances.
This Assumption Agreement and Amendment shall apply and be effective only with respect to the
provisions of the Credit Agreement specifically referred to herein. After the date hereof, any
reference to the Credit Agreement shall mean the Credit Agreement, as modified hereby.



SECTION 8. Consent and Reaffirmation. Each Subsidiary Guarantor hereby consents to
this Assumption Agreement and Amendment and the transactions contemplated hereby, and each Loan
Party hereby (a) agrees that, notwithstanding the effectiveness of this Assumption Agreement and
Amendment, the Guarantee and Collateral Agreement and each of the other Security Documents continue
to be in full force and effect, (b) confirms its guarantee of the Obligations (with respect to each
Subsidiary Guarantor) and its grant of a security interest in its assets as Collateral therefor,
all as provided in the Loan Documents as originally executed and (c) acknowledges that such
guarantee and/or grant continue in full force and effect in respect of, and to secure, the
Obligations under the Credit Agreement (as amended hereby) and the other Loan Documents, including
the Incremental Term Loans.



SECTION 9. Expenses. The Borrower agrees to reimburse the Administrative Agent for
all reasonable out-of-pocket expenses incurred in connection with this Assumption Agreement and
Amendment in accordance with the Credit Agreement, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent.



SECTION 10. Counterparts. This Assumption Agreement and Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same contract. Delivery of an executed counterpart of a signature page
of this Assumption Agreement and Amendment by facsimile or electronic transmission shall be as
effective as delivery of a manually executed counterpart hereof.



SECTION 11. Applicable Law. THIS ASSUMPTION AGREEMENT AND AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



SECTION 12. Headings. The headings of this Assumption Agreement and Amendment are
for purposes of reference only and shall not limit or otherwise affect the meaning hereof.



[Remainder of page intentionally left blank]






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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.



	 	 	 
	ALION SCIENCE AND TECHNOLOGY CORPORATION,

	 
	 	 
	By: /s/ John M. Hughes

Name:

Title:

	 	

John M. Hughes

Chief Financial Officer







	 	 	 
	 	 	HUMAN FACTORS APPLICATIONS, INC.,	 	 	 	 
	 	 	By: /s/ John M. Hughes	 	 	 	 
	 	 	Name:	 	 	John M.	 	 	Hughes
	 	 	Title:	 	 	Chief Financial Officer





	 	 	 
	 	 	MANTECH ENVIRONMENTAL TECHNOLOGY, INC.,	 
	 	 	By: /s/Barry S. Watson	 
	 	 	Name:	 	 	Barry S. Watson
	 	 	Title:	 	 	President





	 	 	 
	 	 	CARMEL APPLIED TECHNOLOGIES, INC.,	 
	 	 	By: /s/Rob Goff	 	 	 
	 	 	Name:	 	 	Rob Goff
	 	 	Title:	 	 	President






	 	 	 	CREDIT SUISSE FIRST BOSTON,






acting through its Cayman Islands branch, individually and as Administrative Agent,




By: /s/ Vanessa Gomez




	 	 	 	Name: Vanessa Gomez

Title: Vice President






By: /s/ Thomas S. Hall


Name: Thomas S. Hall


Title: Vice President



2



Incremental Term Lenders




	 	 	 	 	 
	Incremental Term Lender	 	Incremental Term Loan Amount
	 
	 	 	 	 
	Credit Suisse First Boston, acting
through its Cayman Islands branch
	 	$	72,000,000.00	
	 
	 	 	 	 
	TOTAL COMMITMENT
	 	$	72,000,000.00	
	 
	 	 	 	 








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