MEZZANINE WARRANT REDEMPTION AGREEMENT
Exhibit 10.67
THIS MEZZANINE WARRANT REDEMPTION AGREEMENT (the “Agreement”) is made effective as of March
27, 2006, between Alion Science and Technology Corporation, a Delaware corporation (the “Company”),
and Illinois Institute of Technology, an Illinois not-for-profit corporation (“IIT”).
WHEREAS, the Company, IIT Research Institute, an Illinois not-for-profit corporation
affiliated with and controlled by IIT (“IITRI”), and Alion Science and Technology Corporation
Employee Ownership, Savings and Investment Trust (the “Trust”) entered into that certain Mezzanine
Warrant Agreement dated as of the 20th day of December 2002 (the “Mezzanine Warrant
Agreement”), pursuant to which the Company issued to IITRI warrants to purchase Five Hundred
Twenty-Four Thousand Two Hundred Twenty-Eight and Nine-Tenths (524,228.9) shares of the Company’s
$0.01 par value per share common stock (“Common Stock”), of which warrants to purchase Five Hundred
Four Thousand Nine Hundred One and Nine-Tenths (504,901.9) shares of Common Stock (the “Warrant
Shares”) remain outstanding as of the date of this Agreement (the “Outstanding Warrants”);
WHEREAS, as of July 1, 2004, IITRI transferred to IIT all its rights and interests in the
Mezzanine Warrant Agreement;
WHEREAS, the Company and IIT entered into (a) that certain First Amendment to the Mezzanine
Warrant Agreement effective as of December 16, 2004 (the “First Amendment”), (b) that certain
Second Amendment to the Mezzanine Warrant Agreement effective as of January 24, 2005 (the “Second
Amendment”), and (c) that certain Third Amendment to the Mezzanine Warrant Agreement effective as
of March 8, 2005 (the “Third Amendment”) (the Mezzanine Warrant Agreement, as amended by the First
Amendment, the Second Amendment and the Third Amendment, is hereinafter referred to as the “Amended
Mezzanine Warrant Agreement”); and
WHEREAS, subject to the terms and conditions of this Agreement, IIT desires to sell to the
Company, and the Company desires to redeem from IIT, all of the Outstanding Warrants.
NOW, THEREFORE, in consideration of the premises set forth above and the respective covenants
and agreements contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby mutually acknowledged, and intending to be legally
bound, the parties hereto hereby agree as follows:
1. Redemption of the Mezzanine Warrant Agreement. IIT hereby agrees to sell to the
Company, and the Company hereby agrees to redeem from IIT, all of the Outstanding Warrants
(including any and all component and related rights).
2. Redemption Price. The Company shall pay to IIT for the redemption of the
Outstanding Warrants an amount (the “Redemption Price”) equal to the product of (a) the number of
Warrant Shares (which is 504,901.9) multiplied by (b) the difference between (i) the fair market
value of one share of Common Stock as of September 30, 2005, which such fair market value is set
forth in the appraisal dated as of September 30, 2005 performed by the independent appraisal firm
of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx at the Company’s request
relating to the Alion Science and Technology Corporation Employee Ownership, Savings and Investment
Plan (which is $35.89), minus (ii) Ten Dollars ($10), which is the current per share exercise price
for the Outstanding Warrants.
3. Closing, The closing of the redemption of the Outstanding Warrants by the Company
(the “Closing”) shall take place on or about March 28, 2006, or such other date as the parties
hereto may mutually agree. At the Closing, the Company shall pay the Redemption Price, and IIT
shall deliver to the Company any and all original executed Outstanding Warrants, which shall be
marked “cancelled”.
4. Termination of Amended Mezzanine Warrant Agreement. IIT hereby acknowledges and
agrees that immediately upon the redemption of the Outstanding Warrants by the Company (the
“Redemption”), the Amended Mezzanine Warrant Agreement shall terminate and have no further force or
effect, such that IIT shall no longer have any rights whatsoever under the Amended Mezzanine
Warrant Agreement and the Company shall no longer have any obligations whatsoever under the Amended
Mezzanine Warrant Agreement.
5. Termination of Portion of Rights Agreement. IIT hereby further acknowledges and
agrees that, immediately upon the Redemption, the portion of the rights agreement among the
Company, IIT, as successor to IITRI, and others dated as of December 20, 2002 (the “Rights
Agreement”) relating to rights held by IIT, in its capacity as a holder of Outstanding Warrants,
shall terminate and have no further force or effect, such that IIT shall no longer have any rights
under the Rights Agreement relating to holding the Outstanding Warrants and the Company shall no
longer have any obligations under the Rights Agreement to IIT in its capacity as a holder of the
Outstanding Warrants. Except as so terminated, the remaining rights and obligations under the
Rights Agreement shall survive such termination and shall remain in full force and effect.
6. Representations and Warranties.
(a) Each party hereby represents and warrants to the other that each has the requisite
corporate authority to enter into, deliver and perform this Agreement, that this Agreement does not
conflict with any other agreement of such party and that this Agreement constitutes the valid and
binding legal obligation of such party, enforceable against such party in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in
general and subject to general principles of equity and the discretion of courts in granting
equitable remedies.
(b) IIT represents and warrants to the Company that IIT owns all of the Outstanding
Warrants beneficially and of record, free and clear of any liens or encumbrances, and upon delivery
of payment of the Redemption Price by Company pursuant to this Agreement, IIT shall convey good,
valid and marketable title thereto, free and clear of any liens, encumbrances or restrictions other
than restrictions imposed by applicable securities laws.
7. Full Release and Discharge by IIT. IIT, for itself and on behalf of its
successors and assigns, its insurers and any other Person claiming through IIT, hereby knowingly
and voluntarily, fully and forever, effective as of the date of this Agreement, releases,
discharges, indemnifies, holds harmless and acquits the Company, its officers, directors,
employees, agents,
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representatives, successors and assigns from and against any and all claims, demands, causes of
action, suits, obligations, liabilities, sums of money, debts, covenants, agreements, and/or
damages (each a “Claim”) whatsoever, whether known or unknown, which IIT, directly or indirectly,
may now or hereafter have or claim to have had against the Company,
based upon or which may
arise from or be connected to the Amended Mezzanine Warrant Agreement and/or the Outstanding
Warrants, other than any Claim arising from a breach by Company of any of its representations and
warranties set forth herein, including without limitation, those representations and warranties set
forth in Section 6 above.
8. Full Release and Discharge by Company. Company, for itself and on behalf of
its successors and assigns, its insurers and any other Person claiming through Company, hereby
knowingly and voluntarily, fully and forever, effective as of the date of this Agreement, releases,
discharges, indemnifies, holds harmless and acquits IIT, its officers, trustees, employees, agents,
representatives, successors and assigns from and against any and all Claims whatsoever, whether
known or unknown, which Company, directly or indirectly, may now or hereafter have or claim to
have had against IIT, based upon or which may arise from or be connected to the Amended
Mezzanine Warrant Agreement, the Outstanding Warrants and/or the sale thereof pursuant to this
Agreement, other than any Claim arising from a breach by IIT of any of its representations and
warranties set forth herein, including without limitation, those representations and warranties set
forth in Section 6 above.
9. Entire Agreement. This Agreement constitutes the entire agreement between IIT
and the Company concerning its subject matter and supersedes all prior oral and written
communications between IIT and the Company with respect to the subject matter contained herein.
10. Counterparts. This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one instrument.
11. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of laws principles thereof.
[Signatures follow on next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by its
officers thereunto duly authorized as of the date hereof.
| Alion Science and Technology Corporation | Illinois Institute of Technology | |||||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxx Xxxxxxx | |||||
| Name: Xxxxxx Xxxxx | Name: Xxxxx Xxxxxxx | |||||||
| Title: Chief Executive Officer | Title: President | |||||||
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