ALION SCIENCE AND TECHNOLOGY
CORPORATION
10.25% Senior Notes due
2015
Credit Suisse
Securities (USA) LLC (“ Credit Suisse ”)
,
Eleven Madison Avenue,
New
York, N.Y. 10010-3629
1.
Introductory. Alion Science and Technology Corporation, a
Delaware corporation (the “ Company ”),
proposes, subject to the terms and conditions stated herein, to
issue and sell to Credit Suisse Securities (USA) LLC (the
initial “ Purchaser ”) U.S. $250,000,000
principal amount of its 10.25% Senior Notes due 2015 (“
Offered Securities ”) to be issued under an indenture
dated February 8, 2007 (the “ Indenture ”),
among the Company, the Guarantors (as defined below) and Wilmington
Trust Company, as Trustee. The United States Securities Act of
1933, as amended, is herein referred to as the “
Securities Act .”
The Offered
Securities will be guaranteed, on a senior and unsecured basis,
jointly and severally by those subsidiaries of the Company listed
in the attached Schedule B hereto (the “
Guarantors ”).
The holders of the
Offered Securities will be entitled to the benefits of a
Registration Rights Agreement of even date herewith among the
Company, the Guarantors and the Purchaser (the “
Registration Rights Agreement ”), pursuant to which
the Company agrees to file a registration statement with the
Securities Exchange Commission (the “ Commission
”) registering an exchange offer for, or, in certain
circumstances, the resale of, the Offered Securities under the
Securities Act.
The Company and
the Guarantors, jointly and severally, hereby agree with the
Purchaser as follows:
2.
Representations and Warranties of the Company and the
Guarantors. The Company and the Guarantors jointly and
severally represent and warrant to, and agree with, the Purchaser
that:
(a) A preliminary
offering circular (the “ Preliminary Offering Circular
”) relating to the
Offered Securities to be offered by the Purchaser and a final
offering circular (the “ Final Offering Circular
”) disclosing the
offering price and other final terms of the Offered Securities and
dated the date of this Agreement (even if finalized and issued
subsequent to the date of this Agreement) have been or will be
prepared by the Company. “ General Disclosure Package
” means the Preliminary Offering Circular, together with any
Issuer Free Writing Communication (as hereinafter defined) existing
at the Applicable Time (as hereinafter defined) and the
information
which is intended for general distribution to prospective
investors, as evidenced by its being specified in Schedule A
to this Agreement (including the term sheet listing the final terms
of the Offered Securities and their offering, included in
Schedule D to this Agreement, which is referred to as the
“ Terms Communication ”). “ Applicable
Time ” means 11:55 a.m. (EDT time) on the date of
this Agreement. As of the date of this Agreement, the Final
Offering Circular does not include any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Applicable Time
neither (i) the General Disclosure Package, nor (ii) any
individual Supplemental Marketing Material (as hereinafter
defined), when considered together with the General Disclosure
Package, included any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The preceding two sentences do not
apply to statements in or omissions from the Preliminary or Final
Offering Circular, the General Disclosure Package or any
Supplemental Marketing Material based upon written information
furnished to the Company by the Purchaser specifically for use
therein, it being understood and agreed that the only such
information is that described as such in Section 8(b) hereof.
Except as disclosed in the General Disclosure Package, on the date
of this Agreement, the Company’s Annual Report on Form 10-K
most recently filed with the Securities and Exchange Commission
(the “ Commission ”) and all subsequent reports
(collectively, the “ Exchange Act Reports ”)
which have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the
“ Exchange Act ”) do not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Except as
disclosed on Schedule 2(a), such documents, when they were
filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder.
“ Free
Writing Communication ” means a written communication (as
such term is defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or a solicitation of an offer to buy
the Offered Securities and is made by means other than the
Preliminary Offering Circular or the Final Offering Circular.
“ Issuer Free Writing Communication ” means a
Free Writing Communication prepared by or on behalf of the Company,
used or referred to by the Company or containing a description of
the final terms of the Offered Securities or of their offering, in
the form retained in the Company’s records. “
Supplemental Marketing Material ” means any Issuer
Free Writing Communication other than any Issuer Free Writing
Communication specified in Schedule E to this
Agreement.
(b) The Company
has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct
its business as described in the General Disclosure Package; and
the Company is duly qualified to do business as a foreign
corporation in good standing in all other material jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification.
(c) The entities
listed on Schedule F to this Agreement are the only direct or
indirect subsidiaries and joint ventures of the Company.
Schedule F sets forth the jurisdiction of organization of each
such subsidiary or joint venture. Each subsidiary of the Company
has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation,
with power and authority (corporate and other) to own its
properties and conduct its business as described in the General
Disclosure Package; and each subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing
in all other material jurisdictions in which its ownership or lease
of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital
stock
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of each
subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable; and the capital stock
of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects,
except for liens and encumbrances granted in connection with the
Guaranty and Collateral Agreement entered into by the Company in
connection with the Company’s Term B Senior Credit Facility
(as hereinafter defined). For purposes of this Agreement, “
Term B Senior Credit Facility ” means that certain
credit agreement dated as of August 2, 2004, as amended, among
the Company, certain subsidiaries of the company guaranteeing the
Company’s obligations thereunder, the lenders party thereto
and Credit Suisse (formerly known as Credit Suisse First Boston),
as administrative agent and as collateral agent for such lenders.
For purposes of this Agreement, “ Guaranty and Collateral
Agreement ” means the Guarantee and Collateral Agreement
dated as of August 2, 2004, as amended, among the Company,
certain of its subsidiaries guaranteeing the Company’s
obligations under the Term B Senior Credit Facility and Credit
Suisse (formerly known as Credit Suisse First Boston), as
collateral agent.
(d) The Indenture
has been duly authorized by the Company and each of the Guarantors;
the Offered Securities have been duly authorized by the Company;
and when the Offered Securities are delivered and paid for pursuant
to this Agreement on the Closing Date (as defined below), the
Indenture will have been duly executed and delivered, such Offered
Securities will have been duly executed, authenticated, issued and
delivered, will be consistent with the information in the General
Disclosure Package and will conform to the description thereof
contained in the Final Offering Circular and the Indenture will
constitute a valid and legally binding obligation of the Company
and the Guarantors and such Offered Securities will constitute a
valid and legally binding obligation of the Company, in each case
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors’ rights and to general equity
principles.
(e) Except as
disclosed in the General Disclosure Package, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Purchaser for a brokerage commission, finder’s fee or
other like payment.
(f) No consent,
approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement or
the Registration Rights Agreement in connection with the issuance
and sale of the Offered Securities by the Company except for the
Exchange Offer Registration Statement, the Shelf Registration
Statement, if required, the order of the Commission declaring
effective the Exchange Offer Registration Statement or, if
required, the Shelf Registration Statement (each as defined in the
Registration Rights Agreement) and any necessary state securities
filings.
(g) The execution,
delivery and performance of the Indenture, this Agreement and the
Registration Rights Agreement, and the issuance and sale of the
Offered Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their
properties, or any agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or
by-laws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
3
(h) This Agreement
and the Registration Rights Agreement have been duly authorized,
executed and delivered by the Company and the
Guarantors.
(i) Except as
disclosed in the General Disclosure Package, the Company and its
subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made
or to be made thereof by them; and except as disclosed in the
General Disclosure Package, the Company and its subsidiaries hold
any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the
use made or to be made thereof by them.
(j) The Company
and its subsidiaries possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken
as a whole (“ Material Adverse Effect
”).
(k) No labor
dispute with the employees of the Company or any subsidiary exists
or, to the knowledge of the Company, is imminent that might have a
Material Adverse Effect.
(l) The Company
and its subsidiaries own, possess or can acquire on reasonable
terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, “
intellectual property rights ”) necessary to conduct
the business now operated by them, or presently employed by them,
and have not received any notice of infringement of or conflict
with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(m) Except as
disclosed in the General Disclosure Package, neither the Company
nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “
environmental laws ”), owns or operates any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not
aware of any pending investigation which might lead to such a
claim.
(n) Except as
disclosed in the General Disclosure Package, there are no pending
actions, suits or proceedings against or affecting the Company, any
of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under the Indenture, this
Agreement, the Registration Rights Agreement, or which are
otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are
threatened or, to the Company’s knowledge,
contemplated.
4
(o) The financial
statements included in the General Disclosure Package present
fairly in all material respects the financial position of the
Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown,
and, except as otherwise disclosed in the General Disclosure
Package, such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United
States applied on a consistent basis; and the assumptions used in
preparing the pro forma financial statements included in the
General Disclosure Package provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(p) Except as
disclosed in the General Disclosure Package, since the date of the
latest audited financial statements included in the General
Disclosure Package there has
been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations
of the Company and its subsidiaries taken as a whole, and, except
as disclosed in or contemplated by the General Disclosure Package,
there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital
stock.
(q) The Company is
subject to the reporting requirements of either Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 and files
reports with the Commission on the Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system.
(r) Neither the
Company nor any of the Guarantors is an open-end investment
company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the
United States Investment Company Act of 1940 (the “
Investment Company Act ”) ; and the Company is not
and, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described
in the General Disclosure Package, will not be an “investment
company” as defined in the Investment Company Act.
(s) No securities
of the same class (within the meaning of Rule 144A(d)(3) under
the Securities Act) as the Offered Securities are listed on any
national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system.
(t) The offer and
sale of the Offered Securities in the manner contemplated by this
Agreement will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof and
Regulation S thereunder, and it is not necessary to qualify an
indenture in respect of the Offered Securities under the United
States Trust Indenture Act of 1939, as amended (the “
Trust Indenture Act ”).
(u) Neither the
Company, nor any of its affiliates, nor any person acting on its or
their behalf (i) has, within the six-month period prior to the
date hereof, offered or sold in the United States or to any U.S.
person (as such terms are defined in Regulation S under the
Securities Act) the Offered Securities or any security of the same
class or series as the Offered Securities or (ii) has offered
or will offer or sell the Offered Securities (A) in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities
Act or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S (“
Regulation S ”) under the Securities Act, by means of
any directed selling efforts within the meaning of Rule 902(c) of
Regulation S. The Company, its affiliates and any person
acting on its or their behalf have complied and will comply with
the offering restrictions
5
requirement of
Regulation S. The Company has not entered and will not enter
into any contractual arrangement with respect to the distribution
of the Offered Securities except for this Agreement, the Indenture
and the Registration Rights Agreement.
(v) The sale of
the Offered Securities pursuant to Regulation S is not part of
a plan or scheme to evade the registration provisions of the
Securities Act.
(w) The Alion
Science and Technology Corporation Employee Ownership, Savings and
Investment Trust (the “ ESOT ”) has been duly
organized and is a validly existing trust. Except as disclosed in
the General Disclosure Package, each of the ESOP Plan Documents (as
defined herein) is in full force and effect and no term or
condition thereof has been amended, modified or waived from the
terms and conditions contained in the ESOP Plan Documents delivered
to the Purchaser, except to the extent such amendment, modification
or waiver could not reasonably be anticipated to have a material
adverse effect upon the Purchaser or otherwise have a Material
Adverse Effect. The ESOT has performed and complied with all the
material terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by the ESOT,
and no unmatured default, default or breach of any covenant by any
such party exists thereunder.
(x) The Company
has provided the Purchaser with a complete and true copy of each of
the documents pursuant to which the Alion Science and Technology
Corporation Employee Ownership, Savings and Investment Plan (the
“ ESOP ”) and the ESOT are maintained by the
Company, or which concern the Company’s obligations with
respect to the ESOP and ESOT, which are listed in the attached
Schedule C hereto, and are referred to herein as the “
ESOP Plan Documents .” The Company has not
subsequently amended or in any other way modified or replaced such
ESOP Plan Documents in any material manner without the prior
written consent of the Purchaser, except for any amendment,
modification or replacement required by the Internal Revenue
Service or by applicable law (and the Company shall use its best
efforts to deliver a copy of any such amendment, modification or
replacement to the Purchaser prior to the execution
thereof).
(y) None of the
assets of the Company constitute, for any purpose of the Employee
Retirement Income Security Act of 1974, as amended (“
ERISA ”), or Section 4975 of the Internal Revenue
Code of 1986, as amended (the “ Internal Revenue Code
”), assets of the ESOP or any other “plan” as
defined in Section 3(3) of ERISA or Section 4975 of the
Internal Revenue Code.
(z) No non-exempt
prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code has occurred with respect
to the ESOP, and none of the Offered Securities, the Indenture or
this Agreement hereunder constitutes or shall constitute or give
rise to any such non-exempt prohibited transaction.
(aa) The ESOP is
qualified under Section 401(a) of the Internal Revenue Code, and
the ESOP includes two components, one of which is an employee stock
ownership plan as defined in Section 4975(e)(7) of the
Internal Revenue Code, and the other is a profit sharing plan that
includes a cash or deferred compensation arrangement under Section
401(k) of the Internal Revenue Code.
(bb) To the
Company’s knowledge, neither of the Offered Securities nor
the Indenture is (for any purpose of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code) a direct or
indirect loan or other transaction between the Purchaser, any such
persons to whom the Purchaser may resell the Offered Securities
(“ Repurchasers ”) and the ESOT which, if it is
assumed that the Purchaser or Repurchasers are “parties in
interest” and “disqualified persons”
6
(as defined in
Section 3(14) of ERISA and Section 4975 of the Internal
Revenue Code), is a non-exempt prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Internal
Revenue Code.
(cc) Neither the
Company nor any of its subsidiaries is or shall be subject to the
tax imposed by Section 4978 of the Internal Revenue Code with
respect to any “disposition” by the ESOT of any shares
of equity interests of the Company.
(dd) There is no
investigation or review by any Governmental Authority, or action,
suit, proceeding or arbitration, pending or concluded, concerning
any matter with respect to the ESOP or the ESOT relevant as to
whether any representation set forth herein is inaccurate or
breached (other than in respect of (i) periodic requests to
the IRS to issue a favorable determination letter to the effect
that the ESOP is and continues to be a qualified plan and an
employee stock ownership plan, (ii) Annual Reports (IRS
Form 5500 Series) for the ESOP, (iii) routine claims for
ESOP benefits and (iv) routine audits of contributions to the
ESOP), and neither the ESOP fiduciary nor, to the best of the
Company’s knowledge, the ESOT trustee has made any assertion
with respect to the ESOP or the ESOT contrary to or inconsistent
with the accuracy of any such representation which assertion could
reasonably be expected to have a Material Adverse
Effect.
(ee) Neither the
ESOP fiduciary nor the ESOT trustee has made any assertion with
respect to the ESOP or the ESOT contrary to or inconsistent with
the accuracy of any representation or warranty set forth herein
that could reasonably be expected to result in a Material Adverse
Event.
3.
Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements and subject
to the terms and conditions set forth herein, the Company agrees to
sell to the Purchaser, and the Purchaser agrees to purchase from
the Company, at a purchase price of 97.50% of the principal amount
thereof plus accrued interest from February 8, 2007, to the
Closing Date (as hereinafter defined), $250,000,000 principal
amount of the Offered Securities.
The Company will
deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global securities
in definitive form (the “ Global Securities ”)
deposited with the Trustee as custodian for The Depository Trust
Company (“ DTC ”) and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent
Global Securities will be held only in book-entry form through DTC,
except in the limited circumstances described in the Final Offering
Circular. Payment for the Offered Securities shall be made by the
Purchaser in Federal (same day) funds by official check or checks
or wire transfer to an account at a bank acceptable to the
Purchaser drawn to the order of the Company at the office of Baker
& McKenzie LLP at 10:00 A.M. (New York time), on
February 8, 2007, or at such other time not later than seven
full business days thereafter that the Purchaser and the Company
determine, such time being herein referred to as the “
Closing Date ”, against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the
Securities. The Global Securities will be made available for
checking at the above office at least 24 hours prior to the Closing
Date.
4.
Representations by Purchaser; Resale by Purchaser.
(a) The Purchaser represents and warrants to the Company that
it is an “accredited investor” within the meaning of
Regulation D under the Securities Act.
(b) The Purchaser
acknowledges that t
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