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Exhibit 10.37 THE FIRST AMENDMENT TO THE MEZZANINE WARRANT
AGREEMENT THIS FIRST AMENDMENT TO THE MEZZANINE WARRANT AGREEMENT(the Amendment)
is made effective as of December 16, 2004, between Alion Science and
Technology Corporation, a Delaware corporation (the Company), and Illinois
Institute of Technology, an Illinois not-for-profit corporation (IIT). WHEREAS, the Company, IIT Research Institute, an Illinois not-for-profit
corporation affiliated with and controlled by IIT (IITRI), and Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Trust
(the Trust) entered into that certain Mezzanine Warrant Agreement dated as of
the 20th day of December 2002 (the Mezzanine Warrant Agreement), pursuant to
which the Company issued to IITRI warrants to purchase Five Hundred Twenty-Four
Thousand Two Hundred Twenty-Eight and Nine-Tenths (524,228.9) shares of the
Companys $0.01 par value per share common stock (Common Stock), of which
warrants to purchase Five Hundred Four Thousand Nine Hundred One and
Nine-Tenths (504,901.9) shares of Common Stock remain outstanding as of the
date of this Amendment; WHEREAS, as of July 1, 2004, IITRI transferred to IIT all its rights and
interests in the Mezzanine Warrant Agreement; WHEREAS, the Company and IIT desire to amend Sections 3(l)(v) and 16(e) of
the Mezzanine Warrant Agreement; WHEREAS, the Trust is a party to the Mezzanine Warrant Agreement only for
the purposes of Sections 6, 7, 15 and 17 through 25 of the Mezzanine
Warrant Agreement, and pursuant to Section 18 of the Mezzanine Warrant
Agreement, Sections 3(l)(v) and 16(e) may be amended by the mutual written
agreement of the Company and IIT, without the need to obtain the Trusts
consent; and WHEREAS, the Company and IIT desire to amend the Mezzanine Warrant
Agreement as set forth herein. NOW, THEREFORE, in consideration of the premises set forth above and the
respective covenants and agreements contained in this Amendment, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
mutually acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows: 1. Amendments to the Mezzanine Warrant Agreement. First Amendment to the
Mezzanine Warrant Agreement




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(a) Section 3(l)(v) of the Mezzanine Warrant Agreement is hereby amended
by deleting the entire text of Section 3(l)(v) and substituting in lieu
thereof: interests or rights designated as phantom stock issued or granted
by the Company to employees, consultants, officers or directors of
the Company or any of its Subsidiaries in accordance with a
phantom stock plan to be adopted by the Companys board of
directors after the Effective Date, except for such amount of
phantom stock that, at the time of issuance or grant, would cause
the aggregate number of shares of phantom stock then outstanding
(excluding any shares of phantom stock that have (x) expired,
terminated unexercised or become unexercisable, or (y) been
forfeited or otherwise terminated, surrendered or cancelled) to be
in excess of 225,000 shares of phantom stock. (b) Section 16(e) of the Mezzanine Warrant Agreement is hereby amended by
deleting the entire text of Section 16(e) and substituting in lieu thereof: The Company will not issue shares of phantom stock that cause the
number of shares of outstanding phantom stock (excluding any
shares of phantom stock that have expired, terminated unexercised,
or become unexercisable, or that have been forfeited or otherwise
terminated, surrendered or cancelled), at the time of issuance, to
be in excess of 225,000 shares of phantom stock. 2. Waiver. IIT hereby irrevocably waives (i) any and all breaches
by the Company of the Companys covenants set forth in Section 16(e) of the
Mezzanine Warrant Agreement, and (ii) any and all adjustments to the Exercise
Price (as defined in the Mezzanine Warrant Agreement), in each case based upon
or arising out of the issuance by the Company of shares of phantom stock on or
before the effective date of this Amendment, and hereby fully and forever,
effective as of the effective date of this Amendment, releases, discharges and
acquits the Company from any and all claims, demands, causes of action, and/or
damages, which IIT may now or hereafter have or claim to have against the
Company, based in whole or in part upon, or which may arise from the issuance
by the Company of shares of phantom stock on or before the effective date of
this Amendment. 3. Remainder of the Mezzanine Warrant Agreement Not Affected.
Except as set forth in Section 1 hereof, the terms and provisions of the
Mezzanine Warrant Agreement remain in full force and effect without change,
amendment, waiver or modification. 4. Ratification. As modified hereby, the Mezzanine Warrant
Agreement and its terms and provisions are hereby ratified for all purposes and
in all respects. 5. Counterparts. This Amendment may be executed in one or more
counterparts, all of which taken together shall constitute one instrument. 6. References. From and after the date provided above, all
references to the Mezzanine Warrant Agreement shall be deemed to be references
to the Mezzanine Warrant Agreement as modified hereby. 2




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7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflict of laws principles thereof. 8. Conflict. In the event of any conflict between the terms of
this Amendment and the Mezzanine Warrant Agreement, the terms of this Amendment
shall govern. [Signatures follow on next page] 3




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IN WITNESS WHEREOF,the parties hereto have caused this Amendment to be
executed by its officers thereunto duly authorized as of the date hereof. Alion Science and Technology Corporation
    
    Illinois Institute of TechnologyBy:
/s/ Bahman Atefi
    
    By:/s/ Lew CollensName: Bahman Atefi
    
    Name: Lew CollensTitle: Chief Executive Officer
    
    Title: President