exv10w30



 










EXHIBIT 10.30




AMENDMENT NO. 2



to



CREDIT AGREEMENT




               THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (the “Amendment”) is made as of
March 31, 2004 by and among ALION SCIENCE AND TECHNOLOGY CORPORATION (the
“Borrower”), the institutions listed on the signature pages hereof (the
“Lenders”), and LASALLE BANK NATIONAL ASSOCIATION, in its individual capacity
as a Lender and in its capacity as contractual representative (the
“Administrative Agent”) under that certain Credit Agreement dated as of
December 20, 2002 by and among the Borrower, the institutions from time to time
parties thereto as lenders, and the Administrative Agent (as amended by an
Amendment No. 1 dated as of February 6, 2004, and as further amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
Defined terms used herein and not otherwise defined herein shall have the
meaning given to them in the Credit Agreement.



WITNESSETH




               WHEREAS, the Borrower, the Lenders, and the Administrative Agent are
parties to the Credit Agreement; and



               WHEREAS, the Borrower has requested that the Administrative Agent and each
Lender amend the Credit Agreement and waive the “Specified Default” (as defined
below), in each case, on the terms and conditions set forth herein; and



               WHEREAS, the Borrower, each Lender, and the Administrative Agent have
agreed to amend the Credit Agreement and waive the Specified Default, in each
case, on the terms and conditions set forth herein;



               NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto have agreed to the following amendments to the Credit
Agreement:



Amendments to the Credit Agreement. Effective as of March 31, 2004 and subject to the satisfaction of the

conditions precedent set forth in Section 4 below, the Credit Agreement is hereby amended as follows:




Section 1.01 of the Credit Agreement is hereby amended by adding the following term to such Section in

proper alphabetical order:





           “AB Technologies Acquisition” means the purchase by IITRI of
substantially all of the assets of AB Technologies, Inc. pursuant
to the terms and conditions set forth in the Asset Purchase
Agreement, dated as of February 7, 2000 by and between IITRI, AB
Technologies, Inc., Clyde Andrews and William Bewley, as in effect
on the Closing Date and without giving effect to any subsequent
amendment or modification thereto, and in respect of which the
Borrower assumed all of the obligations of IITRI concurrently with
the IITRI Acquisition.



Section 1.01 of the Credit Agreement is hereby amended by deleting the defined term “Borrowing Base (Senior

Debt)” thereof in its entirety and replacing it with the following:





           “Borrowing Base (Senior Debt)” means, (i) for the fiscal year
ending September 30, 2003 and for the fiscal period ending December
31, 2003, an amount, as set forth on the most current Borrowing
Base Certificate delivered to the Administrative Agent, equal to
the sum of (a) ninety percent (90%) of all billed Receivables from
any Account Debtor (other than the Borrower,



 









 






any Guarantor or an Affiliate of the Borrower or any Guarantor)
(“Total Billed Receivables”) which are outstanding less than one
hundred twenty-one (121) days from the date of original invoice as
of such date, plus (b) sixty percent (60%) of Total Billed
Receivables which are outstanding one hundred twenty-one (121) days
or more from the date of original invoice, plus (c) seventy-five
percent (75%) of all unbilled Receivables which may in accordance
with Agreement Accounting Principles be included as current assets
of the Borrower or any of its Subsidiaries notwithstanding that
such amounts have not yet been billed, plus (d) fifty percent (50%)
of net property, plants and equipment of the Borrower and its
consolidated Subsidiaries as of such date determined in accordance
with Agreement Accounting Principles, (ii) for the fiscal periods
ending March 31, 2004, June 30, 2004 and September 30, 2004, an
amount, as set forth on the most current Borrowing Base Certificate
delivered to the Administrative Agent, equal to the sum of (a)
fifty percent (50%) of Total Billed Receivables which are
outstanding one hundred twenty-one (121) days or more from the date
of original invoice, plus (b) fifty percent (50%) of net property,
plants and equipment of the Borrower and its consolidated
Subsidiaries as of such date determined in accordance with
Agreement Accounting Principles, plus (c) ninety percent (90%) of
the Net Amount of Eligible Receivables that are Eligible Billed
Government Accounts Receivable as of such date, plus (d)
eighty-five percent (85%) of the Net Amount of Eligible Receivables
that are Eligible Billed Commercial Accounts Receivable as of such
date, plus (e) sixty-five percent (65%) of the gross amount of
Eligible Unbilled Government Receivables as of such date, and (iii)
for any date of determination after September 30, 2004, the
Borrowing Base (Monthly).



Subclause (e) of Section 7.4(C) of the Credit Agreement is hereby amended by deleting the text thereof in its

and replacing it with the following:





(e) cash payments in respect of purchase price adjustments,
earn-outs or other similar forms of contingent purchase price
during such period (exclusive of (x) cash purchase price
adjustments related to the IITRI Acquisition paid on the Closing
Date and (y) earn-outs related to the AB Techologies Acquisition
paid during the fiscal year ending on September 30, 2004 to Clyde
Andrews or William Bewly or to their designees), of at least (1)
1.20 to 1.00 as of the end of each fiscal quarter for the period
commencing with the fiscal quarter ending on December 20, 2002
through the fiscal quarter ending September 30, 2003; (2) 1.25 to
1.00 as of the end of each fiscal quarter for the period commencing
with the fiscal quarter ending on December 31, 2003 through the
fiscal quarter ending March 31, 2006; and (3) 1.35 to 1.00 as of
the end of each fiscal quarter thereafter.



Section 7.3 of the Credit Agreement is amended by adding the following clause (CC) to such Section:





(CC) The Borrower shall not sale, assign, transfer, convey or
otherwise dispose of those certain Subordianted Notes and Seller
Warrants purchased by the Borrower from Jonathan M. Emery on
November 12, 2003.



The Exhibit J to the Credit Agreement (Form of Borrowing Base Certificate) is amended by deleting subline

5 of Section VI thereof in its entirety and replacing it with the following:




	 	 	 	 	 	 	 
	5.	 	Borrowing Base (Senior Debt) for Fiscal Year Ending
September 30, 2003 and for the Fiscal Quarter
Ending December 31, 2003 (Sum of Line 1
through Line 4
	 	$	_________	 







The Exhibit J to the Credit Agreement (Form of Borrowing Base Certificate) is
amended by deleting Section VII thereof in its entirety and replacing it with
the following:



VII. CALCULATION OF
BORROWING BASE (SENIOR DEBT) FOR FISCAL

PERIODS ENDING MARCH 31, 2004, JUNE 30, 2004 AND

SEPTEMBER 30, 2004




	 	 	 	 	 	 	 
	1.	 	50% of all such Receivables which are outstanding one
hundred twenty-one (121) days or more from
the date of original invoice
	 	$	_________	 







 









 






	 	 	 	 	 	 	 
	2.	 	Plus: 50% of the net property, plants and equipment of
the Borrower and its consolidated Subsidiaries
as of such date determined in accordance with
Agreement Accounting Principles
	 	$	_________	 
	 	 	 	 	 	 	 
	3.	 	Plus: 90% of the Net Amount of Eligible Billed
Government Accounts Receivables (Line I.18)
	 	$	__________	 
	 	 	 	 	 	 	 
	4.	 	Plus: 85% of the Net Amount of Eligible Billed
Commercial Accounts Receivables (Line II.17)
	 	$	___________	 
	 	 	 	 	 	 	 
	5.	 	Plus: 65% of the Gross Amount of Eligible Unbilled
Government Receivables (Line III.13)
	 	$	___________	 
	 	 	 	 	 	 	 
	6.	 	Borrowing Base (Senior Debt) for fiscal periods ending
March 31, 2004, July 31, 2004 and
September 30, 2004
(Sum of Line 1 through Line 5)
	 	$	___________	 







Waiver. Effective as of the date of this Amendment and subject to the satisfaction of the conditions

precedent set forth in Section 4 below, the parties hereby agree that certain Defaults arising by virtue of the

Borrower’s failure to consummate the sale of the “Subject Investment” required under, and as such term is

defined in, that certain Consent Memorandum, dated as of November 13, 2003, executed by the Required

Lenders, (such Default being herein, the “Specified Default”) is hereby waived.




Conditions of Effectiveness. The effectiveness of this Amendment is subject to the conditions precedent that

the Administrative Agent shall have received the following:





	 	(a)	 	duly executed originals of this Amendment from each of the
Borrower, each Lender and the Administrative Agent;
	 
	 	(b)	 	duly executed originals of a Reaffirmation in the form of
Attachment A attached hereto from each of the Borrower’s
Subsidiaries identified thereon;
	 
	 	(c)	 	such other documents, instruments and agreements as the
Administrative Agent may reasonably request; and
	 
	 	(d)	 	an amendment fee for the account of each Lender in an
aggregate amount equal to $150,000, payable to the Administrative
Agent for the ratable benefit of the Lenders based on each Lender’s
Commitment.





Representations and Warranties of the Borrower.





	 	(e)	 	The Borrower hereby represents and warrants that this
Amendment, the attached Reaffirmation and the Credit Agreement, as
previously executed and as amended hereby, constitute legal, valid
and binding obligations of the Borrower and its Subsidiaries parties
thereto and are enforceable against the Borrower and its
Subsidiaries parties thereto in accordance with their terms (except
as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights
generally).
	 
	 	(f)	 	Upon the effectiveness of this Amendment and after giving
effect hereto, (i) the Borrower hereby reaffirms all covenants,
representations and warranties made in the Credit Agreement as
amended hereby, and agrees that all such covenants, representations
and warranties shall be true and correct as of the effective date of
this Amendment (unless such representation and warranty is made as
of a specific date, in which case such representation and warranty
shall be true and correct as of such date) and (ii) no Default or
Unmatured Default has occurred and is continuing.





References to the Credit Agreement.





	 	(g)	 	Upon the effectiveness of Section 1 hereof, on and after the
date hereof, each reference in the Credit Agreement (including any
reference therein to “this Credit Agreement,” “hereunder,”




 









 












	 	 	 	“hereof,” “herein” or words of like import referring thereto) or in
any other Loan Document shall mean and be a reference to the Credit
Agreement as amended hereby.
	 
	 	(h)	 	Except as specifically amended above, the Credit Agreement
and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and
effect, and are hereby ratified and confirmed.
	 
	 	(i)	 	The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of the Administrative Agent or the
Lenders, nor, except as expressly provided herein in respect of the
Specified Default, constitute a waiver of any provision of the
Credit Agreement or any other documents, instruments and agreements
executed and/or delivered in connection therewith.





GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ., BUT

OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF

ILLINOIS.




Headings. Section headings in this Amendment are included herein for convenience of reference only and

shall not constitute a part of this Amendment for any other purpose.




Counterparts. This Amendment may be executed by one or more of the parties to this Amendment on any

number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one

and the same instrument.




[REMAINDER OF PAGE INTENTIONALLY BLANK]




 









 








               IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	ALION SCIENCE AND TECHNOLOGY
	 	 	CORPORATION, as Borrower
	 
	 	 	 	 	 	 	 	 
	 	 	By: /s/ John M. Hughes
	

	 	Name:
	 	 	 	John M. Hughes	 	 
	

	 	Title:
	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION, as
	 	 	Administrative Agent and as a Lender
	 
	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/
	 	Scott O. Parsons	 	 
	

	 	Name:
	 	 	 	Scott O. Parsons	 	 
	

	 	Title:
	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NCB CAPITAL CORPORATION, as a Lender
	 
	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/
	 	Patrick N. Connelly	 	 
	

	 	Name:
	 	 	 	Patrick N. Connelly	 	 
	

	 	Title:
	 	 	 	Managing Director	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BRANCH BANKING & TRUST COMPANY, as a
	 	 	Lender
	 
	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/
	 	Gregory E. Dougherty	 	 
	

	 	Name:
	 	 	 	Gregory E. Dougherty	 	 
	

	 	Title:
	 	 	 	Senior Vice President	 	 







 









 






	 	 	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as a
	 	 	Lender
	 
	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/
	 	Timothy Fossa	 	 
	

	 	Name:
	 	 	 	Timothy Fossa	 	 
	

	 	Title:
	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ORIX FINANCIAL SERVICES, INC., as a Lender
	 
	 	 	 	 	 	 	 	 
	

	 	By:
	 	/s/
	 	Christopher W. Coulomb	 	 
	

	 	Name:
	 	 	 	Christopher W. Coulomb	 	 
	

	 	Title:
	 	 	 	Vice President	 	 







 









 






REAFFIRMATION




               The undersigned hereby acknowledges receipt of a copy of the foregoing
Amendment No. 2 to the Credit Agreement dated as of December 20, 2002 by and
among ALION SCIENCE AND TECHNOLOGY CORPORATION (the “Borrower”), the
institutions from time to time parties thereto (the “Lenders”), and LASALLE
BANK NATIONAL ASSOCIATION, a national banking association, in its individual
capacity as a Lender and in its capacity as contractual representative (the
“Administrative Agent”)(as amended by an Amendment No. 1 dated as of February
6, 2004, and as further amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), which Amendment No. 2 is dated as
of March 31, 2004 (the “Amendment”). Capitalized terms used in this
Reaffirmation and not defined herein shall have the meanings given to them in
the Credit Agreement. Without in any way establishing a course of dealing by
the Administrative Agent or any Lender, the undersigned reaffirms the terms and
conditions of the Guaranty, the Security Agreement and any other Loan Document
executed by it and acknowledges and agrees that such agreement and each and
every such Loan Document executed by the undersigned in connection with the
Credit Agreement remains in full force and effect and is hereby reaffirmed,
ratified and confirmed. All references to the Credit Agreement contained in
the above-referenced documents shall be a reference to the Credit Agreement as
so modified by the Amendment and as the same may from time to time hereafter be
amended, modified or restated.



Dated: March 31, 2004




HUMAN FACTORS APPLICATIONS, INC.




	 	 	 	 	 	 	 
	By:

	 	/s/
	 	John M. Hughes	 	 
	Name:

	 	 	 	John M. Hughes	 	 
	Title:

	 	 	 	Chief Financial Officer