This Assumption Agreement involves
Title: AMENDMENT NO. 5 dated as of September 30, 2008 (this " Amendment "), to the CREDIT AGREEMENT
Governing Law: New York Date: 10/6/2008
AMENDMENT NO. 5 dated as of September 30, 2008 (this “ Amendment ”), to the CREDIT AGREEMENT dated as of August 2, 2004, as amended pursuant to that certain Incremental Term Loan Assumption Agreement and Amendment No. 1 dated as of April 1, 2005, that certain Incremental Term Loan Assumption Agreement and Amendment No. 2 dated as of March 24, 2006, as amended as of April 21, 2006, that certain Incremental Term Loan Assumption Agreement and Amendment No. 3 dated as of June 30, 2006, and that certain Amendment No. 4 dated as of February 6, 2007 (as so amended, 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 4, 6, 7, 8, 10, 11 and 12 hereof), the lenders from time to time party to the Credit Agreement (the “ Lenders ”) and CREDIT SUISSE (formerly known as Credit Suisse First Boston), as administrative agent (in such capacity, the “ Administrative Agent ”) and as collateral agent for the Lenders.
A. Pursuant to the Credit Agreement, the Lenders have extended, and have agreed to extend, credit to the Borrower.
B. The Borrower has requested certain amendments to the Credit Agreement as set forth herein, and the Lenders have agreed to such request on and subject to the terms and conditions of this Amendment.
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 Amendment. This Amendment shall be a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 2. Amendments to Credit Agreement . Effective as of September 30, 2008:
(a) Section 1.01 of the Credit Agreement is hereby amended by inserting the following defined term in the appropriate alphabetical order therein:
“ Original Maximum Senior Secured Leverage Ratio ” shall mean, on any date of determination, the maximum Senior Secured Leverage Ratio permitted at such date under Section 6.13 without giving effect to the changes made to such Section by Amendment No. 5 dated as of September 30, 2008, to this Agreement.
(b) The definition of the term “Adjusted LIBO Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“ Adjusted LIBO Rate ” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to the greater of (a) 3.50% per annum and (b) the product of (i) the LIBO Rate in effect for such Interest Period and (ii) Statutory Reserves.
(c) The definition of the term “Alternate Base Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) 4.50% per annum. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be.
(d) The definition of the term “Applicable Percentage” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
“ Applicable Percentage ” shall mean, except as otherwise provided in the applicable Incremental Term Loan Assumption Agreement with respect to any Other Term Loan, for any day, (a) with respect to any Eurodollar Loan, 6.00%, and (b) with respect to any ABR Loan (including any Swingline Loan), 5.00%. Notwithstanding the foregoing, if the Revolving Credit Maturity Date shall be extended, or if the Revolving Credit Commitments shall otherwise be refinanced or replaced, and in connection with such extension, refinancing or replacement or at any time thereafter the “Applicable Percentage” or similar component of the interest rate applicable to loans to be made under such extended, refinanced or replaced revolving credit commitments would exceed the Applicable Percentage then in effect for Term Loans hereunder by more than 50 basis points (the portion of such excess above 50 basis points being referred to herein as the “ Rate Differential ”), then the Applicable Percentage for Term Loans hereunder shall be automatically increased, effective as of the date of any such increase in respect of the revolving credit commitments, by an amount equal to the Rate Differential.
(e) Section 1.03 ( Pro Forma Calculations ) of the Credit Agreement is hereby amended by inserting the words “the Senior Secured Leverage Ratio,” immediately following the words “as permitted pursuant to the terms hereof,” contained therein.
(f) Section 2.13(d) of the Credit Agreement is hereby amended by deleting the words “50% (or, if the Leverage Ratio at the end of such fiscal year shall have been less than 2.0 to 1.0, 25%)” therefrom and substituting therefor “100%”.
(g) Section 2.13(e) of the Credit Agreement is hereby amended by inserting immediately after the words “Section 6.01” contained therein the words “(other than Section 6.01(s))”.
(h) Section 5.04 ( Financial Statements, Reports, etc. ) of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of the paragraph (i) thereof, (ii) redesignating paragraph (j) thereof as paragraph (k) and (iii) adding the following as a new paragraph (j) thereof:
(j) within 30 days after the end of each of the first two months of each fiscal quarter, its internally prepared summary financial statements, in a form reasonably satisfactory to the Administrative Agent, showing the consolidated financial position of the Borrower and the Subsidiaries as of the close of such month and the results of operations and the operations of the Subsidiaries for such month and the elapsed portion of the fiscal year, and comparative figures for the same periods in the immediately preceding fiscal year.
(i) Section 6.01 ( Indebtedness ) of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of paragraph (q) thereof, (ii) deleting the period at the end of paragraph (r) thereof and substituting “; and” therefor, and (iii) adding the following as a new paragraph (s) thereto:
(s) Indebtedness of the Borrower (which may be Guaranteed by any Loan Party) the Net Cash Proceeds of which are used to prepay Term Loans (including the payment of accrued interest thereon), in whole or in part; provided that (i) such Indebtedness (x) matures no less than 120 days after the Term Loan Maturity Date, (y) requires no scheduled payment of principal prior to its maturity and (z) contains non-economic covenants, events of default, remedies and other provisions, and is in form and substance, reasonably satisfactory to the Administrative Agent, and (ii) the initial issuance of Indebtedness under this Section 6.01(s) shall be in an aggregate principal amount of not less than $50,000,000.
(j) The last paragraph of Section 6.01 ( Indebtedness ) of the Credit Agreement is hereby amended by inserting immediately after the words “other than” contained therein the words “Indebtedness incurred under Section 6.01(s),”.
(k) Section 6.02 ( Liens ) of the Credit Agreement is hereby amended by adding the following as a new paragraph (p) thereto:
(p) Liens on any Collateral to secure Indebtedness incurred pursuant to Section 6.01(s); provided that such Liens are junior and subordinated in priority to the Liens securing the Obligations pursuant to an intercreditor agreement in form and substance satisfactory to the Administrative Agent.
(l) Section 6.04(k) ( Investments ) of the Credit Agreement is hereby amended by inserting the words “at any time outstanding” immediately following the words “does not exceed $15,000,000 in the aggregate” contained therein.
(m) Section 6.06(a)(iii) ( Restricted Payments ) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:
(iii) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Borrower may repurchase its Equity Interests owned by directors, officers and employees of the Borrower or the Subsidiaries or make payments to directors, officers and employees of the Borrower or the Subsidiaries (x) in connection with Warrants, stock options, stock appreciation rights, “phantom” stock plans or similar equity incentives or equity based incentives pursuant to management or other incentive plans or (y) in connection with the death or disability of such directors, officers and employees, in the case of both (x) and (y) in an aggregate amount not to exceed $20,000,000; provided that, except for payments of up to $1,800,000 in the aggregate in respect of phantom stock rights vested as of September 30, 2008, no payments may be mad