Alion Science and Technology Corporation $50,000,000 Incremental Term Loan Facility Amendment to Existing Term Loan Facility Commitment Letter
EXECUTION COPY
| CREDIT SUISSE SECURITIES (USA) LLC Xxxxxx Xxxxxxx Xxxxxx Xxx Xxxx, XX 00000 |
XXXXXX XXXXXX Xxxxxx Xxxxxxx Xxxxxx Xxx Xxxx, XX 00000 |
CONFIDENTIAL
February 17, 2006
Alion Science and Technology Corporation
0000 Xxxxxx Xxxxxxxxx
XxXxxx, XX 00000
0000 Xxxxxx Xxxxxxxxx
XxXxxx, XX 00000
| Attention: | Xxxx X. Xxxxxx Chief Financial Officer |
Alion Science and Technology Corporation
$50,000,000 Incremental Term Loan Facility
Amendment to Existing Term Loan Facility
Commitment Letter
$50,000,000 Incremental Term Loan Facility
Amendment to Existing Term Loan Facility
Commitment Letter
Ladies and Gentlemen:
Reference is made 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 (the “Credit Agreement”), among Alion Science and Technology Corporation, a Delaware
corporation (the “Borrower” or “you”), the lenders party thereto (the “Lenders”) and Credit Suisse
(formerly known as Credit Suisse First Boston, “CS”), as Administrative Agent and Collateral Agent.
Terms used but not defined in this commitment letter (this “Commitment Letter”) shall have the
meanings assigned thereto in the Credit Agreement.
You have informed CS, in its capacity as the Administrative Agent, and Credit Suisse
Securities (USA) LLC (“CS Securities” and, together with CS and their respective affiliates,
“Credit Suisse”, “we” or “us”) that (a) you intend to consummate one or more Permitted
Acquisitions, (b) pursuant to Section 2.24 of the Credit Agreement, you desire to obtain
Incremental Term Loan Commitments for additional Term Loans (or, to the extent contemplated by the
fourth paragraph of the fee letter dated the date hereof, among the Borrower, CS and CS Securities
(the “Fee Letter”), Other Term Loans) in an aggregate principal amount of $50,000,000 (the
“Incremental Term Facility”) and to use the proceeds thereof to finance such Permitted
Acquisitions, to pay related fees and expenses and for other general corporate purposes and (c) you
desire to amend certain provisions of the Credit Agreement in order (i) to give effect to the
making of loans under the Incremental Term Facility and the treatment of such loans as
Term Loans for all purposes of the Credit Agreement and the other Loan Documents, (ii) to
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modify certain of the financial covenants contained therein and (iii) to make certain other changes
thereto (the “Related Amendment”).
In connection with the foregoing, (a) CS is pleased to advise you of its commitment to provide
the entire principal amount of the Incremental Term Facility and (b) CS Securities is pleased to
advise you of its agreement to use commercially reasonable efforts to arrange the Related
Amendment, in each case upon the terms and subject to the conditions set forth in this Commitment
Letter.
You hereby appoint (a) CS Securities to act, and CS Securities hereby agrees to act, as sole
bookrunner and sole lead arranger in respect of the Incremental Term Facility, and (b) CS to act,
and CS hereby agrees to act, as sole administrative agent and sole collateral agent in respect of
the Incremental Term Facility. Each of CS Securities and CS, in such capacities, will perform the
duties and exercise the authority customarily performed and exercised by it in such roles. You
agree that no other titles will be awarded and no compensation (other than that expressly
contemplated by this Commitment Letter and the Fee Letter) will be paid in connection with the
Incremental Term Facility or the Related Amendment unless you and we shall so agree.
We reserve the right, prior to or after the execution of definitive documentation for the
Incremental Term Facility, to syndicate all or a portion of our commitment in respect of the
Incremental Term Facility to a group of financial institutions identified by us in consultation
with and reasonably acceptable to you (together with CS, the “New Term Lenders”). We intend to
commence syndication efforts promptly upon the execution of this Commitment Letter, and you agree
actively to assist us in completing a satisfactory syndication. Such assistance shall include (a)
your using commercially reasonable efforts to ensure that any syndication efforts benefit from your
existing lending and investment banking relationships, (b) direct contact (at times mutually
agreed) between senior management, representatives and advisors of the Borrower and the proposed
New Term Lenders, (c) assistance by you in the preparation of a Confidential Information Memorandum
for the Incremental Term Facility and other marketing materials to be used in connection with the
syndication, (d) prior to the launch of the syndication, the obtaining of ratings for the
Incremental Term Facility from each of Standard & Poor’s Ratings Service and Xxxxx’x Investors
Service, Inc., and (e) the hosting, with CS Securities, of one or more meetings (at times mutually
agreed) of prospective New Term Lenders. You agree, at the request of CS Securities, to assist in
the preparation of a version of the Confidential Information Memorandum and other marketing
materials and presentations to be used in connection with the syndication of the Incremental Term
Facility, consisting exclusively of information and documentation that is either (i) publicly
available or (ii) not material with respect to the Borrower and its subsidiaries and any of their
respective securities for purposes of United States Federal and state securities laws.
CS Securities will manage, in consultation with you, all aspects of the syndication of the
Incremental Term Facility, including decisions as to the selection of institutions to be approached
and when they will be approached, when their commitments will be accepted, which institutions will
participate and the allocation of the commitments among the New Term Lenders (subject to the
institutions which will participate and the commitment allocations being reasonably acceptable to
you).
To assist CS Securities in its syndication efforts, you agree promptly to prepare and provide
to Credit Suisse all information with respect to the Borrower and its subsidiaries,
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including all
financial information and projections (the “Projections”), as we may reasonably request. You hereby
represent and covenant that (a) all information other than the Projections and information of a
general economic nature (the “Information”), taken as a whole, that has been or will be prepared by
or on behalf of you or any of your representatives and that has been or will be made available to
Credit Suisse by you or any of your representatives in connection with the transactions
contemplated hereby is or will be, when furnished, complete and correct in all material respects
and does not or will not, when furnished, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made and (b) the
Projections that have been or will be prepared by or on behalf of you or any of your
representatives and that have been or will be made available to Credit Suisse by you or any of your
representatives in connection with the transactions contemplated hereby have been or will be
prepared in good faith based upon assumptions that are reasonable at the time made and at the time
the related Projections are made available to Credit Suisse (it being understood that the
Projections are subject to significant uncertainties and contingencies, many of which are beyond
the control of the Borrower, and that no assurance can be given that such Projections will be
realized). You agree that if at any time prior to the closing of the Incremental Term Facility and
the effectiveness of the Related Amendment any of the representations in the preceding sentence
would be incorrect if the Information and Projections were being furnished, and such
representations were being made by you, at such time, then you will promptly supplement the
Information and the Projections so that such representations will be correct under those
circumstances. In arranging and syndicating the Incremental Term Facility and arranging the
Related Amendment, we will be entitled to use and rely primarily on the Information and the
Projections without responsibility for independent verification thereof.
As consideration for CS’s commitment hereunder, and CS Securities’s and CS’s agreements to
perform the services described herein, you agree to pay to CS Securities the fees set forth in the
Fee Letter.
CS’s commitment hereunder, and CS Securities’s and CS’s agreements to perform the services
described herein, are subject to (a) our not having discovered or otherwise become aware of any
information not previously disclosed to us that we believe to be inconsistent in a material and
adverse manner with our understanding, based on the information, taken as a whole, provided to us
prior to the date hereof, of the business, assets, liabilities, operations, financial condition or
Projections of the Borrower and its subsidiaries, taken as a whole, (b) there not having occurred
any event, change or condition since September 30, 2005 (the date of the most recent audited
financial statements of the Borrower delivered to Credit Suisse as of the date hereof) that,
individually or in the aggregate, has caused, or could reasonably be expected to cause, a material
adverse condition in or materially adverse effect on the business, assets, liabilities, operations
or financial condition of the Borrower and its subsidiaries, taken as a whole, (c) the absence of a
material disruption or adverse change in financial, banking or capital markets generally, or in the
market for new issuances of leveraged loans in particular, in each case that, in CS Securities’s
reasonable judgment, could be expected to materially impair the syndication of the Incremental Term
Facility, (d) our satisfaction that, prior to and during the syndication of the Incremental Term
Facility, there shall be no other issues of debt securities or commercial bank or other credit
facilities of the Borrower or its subsidiaries being offered, placed or arranged, (e) the
negotiation, execution and delivery of definitive documentation with respect to the Incremental
Term Facility
reflecting the terms and conditions set forth herein and in the Credit Agreement and otherwise
reasonably satisfactory to Credit Suisse and its counsel, (f) CS Securities’s having been afforded
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a period of at least 20 consecutive days following the launch of the general syndication of the
Incremental Term Facility (“launch” being defined as the date of the general meeting with
prospective New Term Lenders) and immediately prior to the closing date to syndicate the
Incremental Term Facility and (g) your compliance with the terms of the Fee Letter.
You acknowledge that Credit Suisse may be providing debt financing, equity capital or other
services (including financial advisory services) to other companies in respect of which you may
have conflicting interests regarding the transactions described herein and otherwise. Neither we
nor any of our affiliates will use confidential information obtained from you by virtue of the
transactions contemplated by this Commitment Letter or our other relationships with you in
connection with the performance by us of services for other companies, and we will not furnish any
such information to other companies. You also acknowledge that neither we nor any of our
affiliates has any obligation to use in connection with the transactions contemplated by this
Commitment Letter, or to furnish to you, confidential information obtained by us from other
companies.
You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship
between you and Credit Suisse is intended to be or has been created in respect of any of the
transactions contemplated by this Commitment Letter, irrespective of whether Credit Suisse has
advised or is advising you on other matters, (b) Credit Suisse, on the one hand, and you, on the
other hand, have an arms-length business relationship that does not directly or indirectly give
rise to, nor do you rely on, any fiduciary duty on the part of Credit Suisse, (c) you are capable
of evaluating and understanding, and you understand and accept, the terms, risks and conditions of
the transactions contemplated by this Commitment Letter, (d) you have been advised that Credit
Suisse is engaged in a broad range of transactions that may involve interests that differ from your
interests and that Credit Suisse has no obligation to disclose such interests and transactions to
you by virtue of any fiduciary, advisory or agency relationship, and (e) you waive, to the fullest
extent permitted by law, any claims you may have against Credit Suisse for breach of fiduciary duty
or alleged breach of fiduciary duty and agree that Credit Suisse shall have no liability (whether
direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting a
fiduciary duty claim on behalf of or in right of you, including your stockholders, employees or
creditors.
This Commitment Letter shall not be assignable by you without the prior written consent of CS
and CS Securities (and any attempted assignment without such consent shall be null and void), is
intended to be solely for the benefit of the parties hereto (and Indemnitees (as defined below)),
and is not intended to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto (and Indemnitees). CS may assign its commitment hereunder to any of its
affiliates or, with your consent (which shall not be unreasonably withheld or delayed), to any
prospective New Term Lender. Any such assignment to an affiliate will not relieve CS from any of
its obligations hereunder unless and until such affiliate shall have funded the portion of the
commitment so assigned (or the commitment of CS hereunder shall have otherwise terminated in
accordance with the terms of this Commitment Letter). Any such assignment to a prospective New
Term Lender shall release CS from the portion of its commitment hereunder so assigned. Any and all
obligations of, and services to be provided by, CS Securities or CS hereunder may be performed and
any and all rights of CS Securities or CS hereunder may be exercised by or through any of their
respective affiliates or branches. This
Commitment Letter may not be amended or any provision hereof waived or modified except by an
instrument in writing signed by CS Securities, CS and you. This Commitment Letter may be
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executed
in any number of counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement. Delivery of an executed counterpart of a signature page
of this Commitment Letter by facsimile or electronic transmission shall be effective as delivery of
a manually executed counterpart hereof. THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF
THIS COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER.
Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and
its property, to the non-exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Commitment Letter or the transactions
contemplated hereby, or for recognition or enforcement of any judgment, and agrees that all claims
in respect of any such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Commitment Letter or the
transactions contemplated hereby in any New York State or in any such Federal court and (c) waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
This Commitment Letter is delivered to you on the understanding that neither this Commitment
Letter nor the Fee Letter nor any of their terms or substance shall be disclosed, directly or
indirectly, to any other person except (a) to your affiliates, officers, directors, employees,
attorneys, accountants and advisors on a confidential and need-to-know basis or (b) as required by
applicable law or compulsory legal process (in which case you agree to inform us promptly thereof).
Credit Suisse acknowledges and agrees that the Borrower may file this Commitment Letter with the
Securities and Exchange Commission as an exhibit to any of its periodic reports. Credit Suisse
acknowledges and agrees that the provisions of Section 9.16 (Confidentiality) of the Credit
Agreement apply to all Information (as defined therein) provided by the Borrower to Credit Suisse
hereunder or in connection with the Incremental Term Facility.
Notwithstanding anything herein to the contrary, any party to this Commitment Letter (and any
employee, representative or other agent of such party) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions contemplated by
this Commitment Letter and the Fee Letter and all materials of any kind (including opinions or
other tax analyses) that are provided to it relating to such tax treatment and tax structure,
except that (i) tax treatment and tax structure shall not include the identity of any existing or
future party (or any affiliate of such party) to this Commitment Letter or the Fee Letter and (ii)
no party shall disclose any information relating to such tax treatment and tax structure to the
extent nondisclosure is reasonably necessary in order to comply with applicable securities laws.
For this purpose, the tax treatment of the transactions contemplated by this Commitment Letter and
the Fee Letter is the purported or claimed U.S. federal income tax treatment of such
transactions and the tax structure of such transactions is any fact that may be relevant to
understanding the purported or claimed U.S. federal income tax treatment of such transactions.
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The Borrower acknowledges and agrees that the provisions of Section 9.05 (Expenses; Indemnity)
of the Credit Agreement apply to the actions and activities of Credit Suisse and its Related
Parties (collectively referred to as “Indemnitees”) under this Commitment Letter and the Fee Letter
and in connection with the proposed Incremental Term Facility and the Related Amendment.
The compensation, reimbursement, indemnification, confidentiality, jurisdiction and waiver of
jury trial provisions contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation for the Incremental Term Facility or the
Related Amendment shall be executed and delivered and notwithstanding the termination of this
Commitment Letter.
You acknowledge that the Related Amendment will require the consent of the Required Lenders
and each Term Lender. CS supports the Related Amendment and intends to recommend the Related
Amendment to the Lenders for their approval, but no assurance can be given that such approval will
be obtained.
Credit Suisse hereby notifies you that pursuant to the requirements of the USA PATRIOT Act,
Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), Credit Suisse
and each New Term Lender is required to obtain, verify and record information that identifies the
Borrower, which information includes the name, address, tax identification number and other
information regarding the Borrower that will allow Credit Suisse or such New Term Lender to
identify the Borrower in accordance with the PATRIOT Act. This notice is given in accordance with
the requirements of the PATRIOT Act and is effective as to Credit Suisse and each New Term Lender.
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the
terms of this Commitment Letter and of the Fee Letter by returning to us executed counterparts
hereof and the Fee Letter by not later than 5:00 p.m. (New York City time) on February 20, 2006.
CS’s commitment hereunder, and CS Securities’s and CS’s agreements to perform the services
described herein, will expire at such time in the event that Credit Suisse has not received such
executed counterparts in accordance with the immediately preceding sentence. In the event the
initial borrowing in respect of the Incremental Term Facility does not occur on or before March 15,
2006, then this Commitment Letter, CS’s commitment and CS Securities’s and CS’s agreements to
perform the services described herein shall automatically terminate unless Credit Suisse shall, in
its discretion, agree to an extension. Neither the execution and delivery of this Commitment
Letter nor the termination hereof shall affect your obligations under the fee letter dated June 10,
2004, between the Borrower and CS. The Borrower and Credit Suisse agree that this Commitment
Letter and the Fee Letter shall be effective as of February 15, 2006.
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Credit Suisse is pleased to have been given the opportunity to assist you in connection with
this important financing.
| Very truly yours, | ||||||||
| CREDIT SUISSE SECURITIES (USA) LLC | ||||||||
| by | /s/ Xxxxxxxxxxx X. Xxxxxxxxxx | |||||||
| Name: | Xxxxxxxxxxx X. Xxxxxxxxxx | |||||||
| Title: | Managing Director | |||||||
| CREDIT SUISSE, CAYMAN ISLANDS BRANCH | ||||||||
| by | /s/ Xxxxxx Xxxx | |||||||
| Name: | Xxxxxx Xxxx | |||||||
| Title: | Managing Director | |||||||
| by | /s/ Xxxxxxxxx Xxxxxxx | |||||||
| Name: | Xxxxxxxxx Xxxxxxx | |||||||
| Title: | Vice President | |||||||
| Accepted and agreed as of the date first above written: | ||||||
| ALION SCIENCE AND TECHNOLOGY CORPORATION | ||||||
by
|
/s/ Xxxx X. Xxxxxx | |||||
| Name: | Xxxx X. Xxxxxx | |||||
| Title: | Chief Financial Officer | |||||
