EXHIBIT 10.29
AMENDMENT NO. 1
TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (the "Amendment") is
made as of February 6, 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, 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
Defaults" (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
Defaults, 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:
1. Amendments to the Credit Agreement. Effective as of
December 19, 2003 and subject to the satisfaction of the conditions precedent
set forth in Section 4 below, the Credit Agreement is hereby amended as follows:
1.1. 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) ninety percent
(90%) of the Net Amount of Eligible Receivables that are
Eligible Billed Government Accounts Receivable as of such
date, plus (b) eighty-five percent (85%) of the Net Amount of
Eligible Receivables that are Eligible Billed Commercial
Accounts Receivable as of such date, plus (c) sixty-five
percent (65%) of the gross amount of Eligible Unbilled
Government Receivables as of such date, and (iii) as of any
date of determination thereafter, the Borrowing Base
(Monthly).
1.2. The Exhibit J to the Credit Agreement (Form of Borrowing Base
Certificate) is amended by deleting Line VI thereof in its
entirety and replacing it with the following:
VI. CALCULATION OF BORROWING BASE (SENIOR DEBT) FOR
FISCAL YEAR ENDING SEPTEMBER 30, 2003 AND FOR THE FISCAL
PERIOD ENDING DECEMBER 31, 2003
1.3. The Exhibit J to the Credit Agreement (Form of Borrowing Base
Certificate) is amended by deleting Line 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
1.4. Section 6.7(A) of the Credit Agreement is amended to delete
the reference to "Section 6.20" and to substitute therefor a
reference to "Section 6.21".
2. Waivers. 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 (i) the Borrower's non-compliance with
mandatory prepayment obligations of Section 2.5(B)(ii) of the Credit Agreement
for the period commencing on December 19, 2003 through and including the date
the conditions precedent set forth in Section 4 below shall have been satisfied
and (ii) 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
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Memorandum, dated as of November 13, 2003, executed by the Required Lenders,
(such Defaults under clauses (i) and (ii) being herein, the "Specified
Defaults") are hereby waived; provided, that, in the case of clause (ii) above,
such sale of the "Subject Investment" shall have occurred on or before March 31,
2004.
3. Consent of the Administrative Agent and
Acknowledgement of the Lenders. Effective as of December 19, 2003 and subject to
the satisfaction of the conditions precedent set forth in Section 4 below, the
Administrative Agent hereby consents, under Section 7.3(N) to the Credit
Agreement, to the Borrower and its Subsidiary changing their fiscal year for
accounting and tax purposes from a period consisting of 52/53 calendar weeks
ending September 30 of each year to a period consisting of 12 months ending on
the last day of September of each year; provided that, for purposes of the
Credit Agreement and all other Loan Documents references to fiscal quarters
ending on or about March 12, July 2, September 30, or December 17 shall mean
March 31, June 30, September 30 and December 31, respectively; provided,
further, that, each Lender hereby acknowledges and agrees to the foregoing.
4. 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; and
(c) such other documents, instruments and agreements as the
Administrative Agent may reasonably request.
5. Representations and Warranties of the Borrower.
(a) 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).
(b) 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.
6. References to the Credit Agreement.
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(a) 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.
(b) 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.
(c) 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 constitute a waiver of any provision
of the Credit Agreement or any other documents, instruments
and agreements executed and/or delivered in connection
therewith.
7. 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.
8. 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.
9. 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.
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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/ J. M. Hughes
-------------------------------------------
Name: J. M. Hughes
Title: Senior Vice President and Chief
Financial Officer
LASALLE BANK NATIONAL
ASSOCIATION, as Administrative Agent and
as a Lender
By: /s/ Scott D. Parsons
-------------------------------------------
Name: Scott D. Parsons
Title: Vice President
NCB CAPITAL CORPORATION, as a Lender
By: /s/ Meg Shrum
-------------------------------------------
Name: Meg Shrum
Title: Vice President
BRANCH BANKING & TRUST COMPANY,
as a Lender
By: /s/ Gregg E. Dougherty
-------------------------------------------
Name: Gregg E. Dougherty
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ Timothy A. Fossa
-------------------------------------------
Name: Timothy A. Fossa
Title: Vice President
ORIX FINANCIAL SERVICES, INC., as a
Lender
By: /s/ Christopher W. Coulomb
-------------------------------------------
Name: Christopher W. Coulomb
Title: Vice President
ATTACHMENT A
REAFFIRMATION
The undersigned hereby acknowledges receipt of a copy of the
foregoing Amendment No. 1 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"), which Amendment No. 1 is dated as of February 6, 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: February 6, 2004
HUMAN FACTORS APPLICATIONS, INC.
By: /s/ J. M. Hughes
--------------------------------------
Name: J. M. Hughes
Title: Treasurer