-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VWR9h1q4U+DAyj/a8Q365kfLSaW533h6dHe1q7pNpKnqE2xBGwGzlopJQLvZpZCA l8R64Yb4Q8rIire35/jTkg== 0001299933-05-001215.txt : 20050314 0001299933-05-001215.hdr.sgml : 20050314 20050314101704 ACCESSION NUMBER: 0001299933-05-001215 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050308 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050314 DATE AS OF CHANGE: 20050314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALION SCIENCE & TECHNOLOGY CORP CENTRAL INDEX KEY: 0001166568 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 542061691 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-89756 FILM NUMBER: 05677267 BUSINESS ADDRESS: STREET 1: 1750 TYSONS BLVD STREET 2: STE 1300 CITY: MCLEAN STATE: VA ZIP: 22102 BUSINESS PHONE: 7039184480 MAIL ADDRESS: STREET 1: 1750 TYSONS BLVD STREET 2: STE 1300 CITY: MCLEAN STATE: VA ZIP: 22102 FORMER COMPANY: FORMER CONFORMED NAME: BEAGLE HOLDINGS INC DATE OF NAME CHANGE: 20020205 8-K 1 htm_3621.htm LIVE FILING Alion Science and Technology (Form: 8-K)  

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     
Date of Report (Date of Earliest Event Reported):   March 8, 2005

Alion Science and Technology
__________________________________________
(Exact name of registrant as specified in its charter)

     
Delaware 333-89756 54-2061691
_____________________
(State or other jurisdiction 		_____________
(Commission 		______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
1750 Tysons Boulevard, Suite 1300, McLean, Virginia   22102
_________________________________
(Address of principal executive offices) 		  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   703-918-4480

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

As of March 8, 2005, Alion Science and Technology Corporation (the "Company") and the Illinois Institute of Technology ("IIT") entered into the Third Amendment to the Seller Warrant Agreement (the "Seller Amendment") and the Third Amendment to the Mezzanine Warrant Agreement (the "Mezzanine Amendment"). The Illinois Institute of Technology owns warrants to purchase up to approximately 32.0 percent of the Company's common stock on a fully diluted basis (assuming the exercise of all outstanding warrants), calculated as of September 30, 2004.

As of March 8, 2005, the Company and Dr. Bahman Atefi, the chairman and chief executive officer of the Company, entered into the Third Amendment to the Alion Mezzanine Warrant Agreement (the "Atefi Amendment," and collectively with the Seller Amendment and the Mezzanine Amendment, the "Amendments" or "Warrant Agreements"). Dr. Atefi owns warrants to purchase up to approximately 0.4 percent of the Company's common stock, on a fully diluted basis (assuming the exerc ise of all outstanding warrants), calculated as of September 30, 2004.

Pursuant to the Amendments, the Company and IIT have agreed to increase the amount of Stock Appreciation Rights ("SARs") issuable by the Company, subject to certain terms and conditions. A complete description of the terms associated with the issuance of SARs pursuant to the amendments is set forth in each of the Warrant Agreements, attached as Exhibits to this Form 8-K.





Item 9.01. Financial Statements and Exhibits.

(c) Exhibits





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
    Alion Science and Technology
          
March 14, 2005   By:   John M. Hughes
       
        Name: John M. Hughes
        Title: Chief Financial Officer

Exhibit Index


     
Exhibit No.   Description
 
10.50
  Third Amendment to the Seller Warrant Agreement
10.51
  Third Amendment to the Mezzanine Warrant Agreement
10.52
  Third Amendment to the Alion Mezzanine Warrant Agreement
EX-10.50 2 exhibit1.htm EX-10.50 EX-10.50

EXHIBIT 10.50

THIRD AMENDMENT TO THE SELLER WARRANT AGREEMENT

THIS THIRD AMENDMENT TO THE SELLER WARRANT AGREEMENT (the “Amendment”) is made effective as of March 8, 2005, 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 Seller Warrant Agreement dated as of the 20th day of December 2002 (the “Seller Warrant Agreement”), pursuant to which the Company issued to IITRI warrants to purchase One Million Eighty Thousand Four Hundred Thirty-Six and Eight-Tenths (1,080,436.8) shares of the Company’s $0.01 par value per share common stock (“Common Stock”);

WHEREAS, as of July 1, 2004, IITRI transferred to IIT all its rights and interests in the Seller Warrant Agreement;

WHEREAS, the Company and IIT entered into that certain First Amendment to the Seller Warrant Agreement effective as of December 16, 2004 (the “First Amendment”), pursuant to which the parties agreed to certain amendments to the Seller Warrant Agreement;

WHEREAS, the Company and IIT entered into that certain Second Amendment to the Seller Warrant Agreement effective as of January 24, 2005 (the “Second Amendment”), pursuant to which the parties agreed to certain further amendments to the Seller Warrant Agreement (as amended by the First Amendment and the Second Amendment, the “Amended Seller Warrant Agreement”);

WHEREAS, the Company and IIT desire to amend Sections 3(l)(i) and 16(c) of the Amended Seller Warrant Agreement as set forth herein; and

WHEREAS, the Trust is a party to the Amended Seller Warrant Agreement only for the purposes of Sections 6, 7, 15 and 17 through 25 of the Amended Seller Warrant Agreement, and pursuant to Section 18 of the Amended Seller Warrant Agreement, Sections 3(l)(i) and 16(c) may be amended by the mutual written agreement of the Company and IIT, without the need to obtain the Trust’s consent.

NOW, THEREFORE, in consideration of the premises set forth above and the respective covenants and agreements contained in this Amendment, 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. Amendments to the Amended Seller Warrant Agreement.

(a) Section 3(l)(i) of the Amended Seller Warrant Agreement is hereby amended by deleting the entire text of Section 3(l)(i) and substituting in lieu thereof:

“SARs issued to employees, consultants, officers or directors of the Company or any of its Subsidiaries with an exercise price no less than Fair Value, except for such amount of SARs that, at the time of issuance, would cause the aggregate number of SARs then outstanding (excluding any SARs that have (x) been exercised, (y) expired, terminated unexercised, or become unexercisable or (z) been forfeited or otherwise terminated, surrendered or canceled) to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

(b) Section 16(c) of the Amended Seller Warrant Agreement is hereby amended by deleting the entire text of Section 16(c) and substituting in lieu thereof:

“As long as none of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the per share value of the Common Stock as set forth in the then most recent appraisal performed by an independent appraiser at the Company’s request in connection with the ESOP. If one of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the then current Current Market Price. All SARs issued by the Company will vest in accordance with the terms of the Company’s Stock Appreciation Rights Plan, as in effect at the time of issuance. The Company will not issue SARs that cause the aggregate number of outstanding SARs (excluding any SARs that have been exercised, that have expired, terminated unexercised, or become unexercisable or that have been forfeited or otherwise terminated, surrendered or cancelled), at the time of issuance, to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

2. Waivers. The parties hereto hereby agree that neither the execution of this Amendment nor any provision contained herein shall be deemed to in any way affect or act to restrict or terminate the provisions of Section 2 of the First Amendment or Section 2 of the Second Amendment, including without limitation, any waivers and releases granted to and/or given for the benefit of the Company therein.

3. Remainder of the Amended Seller Warrant Agreement Not Affected. Except as set forth in Section 1 hereof, the terms and provisions of the Amended Seller Warrant Agreement remain in full force and effect without change, amendment, waiver or modification.

4. Ratification. As modified hereby, the Amended Seller Warrant Agreement and its terms and provisions are hereby ratified for all purposes and in all respects.

5. Counterparts. This Amendment may be executed in one or more counterparts, all of which taken together shall constitute one instrument.

6. References. From and after the date provided above, all references to the Amended Seller Warrant Agreement shall be deemed to be references to the Amended Seller Warrant Agreement as modified hereby.

7. Governing Law. This Amendment 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.

8. Conflict. In the event of any conflict between the terms of this Amendment and the Amended Seller Warrant Agreement, the terms of this Amendment shall govern.

[Signatures follow on next page]

1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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/ Bahman Atefi
  By: /s/ Lewis Collens
 
   
Name: Bahman Atefi
Title: Chief Executive Officer
  Name: Lewis Collens
Title: President
 
    

2 EX-10.51 3 exhibit2.htm EX-10.51 EX-10.51

EXHIBIT 10.51

THIRD AMENDMENT TO THE MEZZANINE WARRANT AGREEMENT

THIS THIRD AMENDMENT TO THE MEZZANINE WARRANT AGREEMENT (the “Amendment”) is made effective as of March 8, 2005, 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 remain outstanding as of the date of this Amendment;

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 that certain First Amendment to the Mezzanine Warrant Agreement effective as of December 16, 2004 (the “First Amendment”), pursuant to which the parties agreed to certain amendments to the Mezzanine Warrant Agreement;

WHEREAS, the Company and IIT entered into that certain Second Amendment to the Mezzanine Warrant Agreement effective as of January 24, 2005 (the “Second Amendment”), pursuant to which the parties agreed to certain further amendments to the Mezzanine Warrant Agreement (as amended by the First Amendment and the Second Amendment, the “Amended Mezzanine Warrant Agreement”);

WHEREAS, the Company and IIT desire to amend Sections 3(l)(i) and 16(c) of the Amended Mezzanine Warrant Agreement as set forth herein; and

WHEREAS, the Trust is a party to the Amended Mezzanine Warrant Agreement only for the purposes of Sections 6, 7, 15 and 17 through 25 of the Amended Mezzanine Warrant Agreement, and pursuant to Section 18 of the Amended Mezzanine Warrant Agreement, Sections 3(l)(i) and 16(c) may be amended by the mutual written agreement of the Company and IIT, without the need to obtain the Trust’s consent.

NOW, THEREFORE, in consideration of the premises set forth above and the respective covenants and agreements contained in this Amendment, 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. Amendments to the Amended Mezzanine Warrant Agreement.

(a) Section 3(l)(i) of the Amended Mezzanine Warrant Agreement is hereby amended by deleting the entire text of Section 3(l)(i) and substituting in lieu thereof:

“SARs issued to employees, consultants, officers or directors of the Company or any of its Subsidiaries with an exercise price no less than Fair Value, except for such amount of SARs that, at the time of issuance, would cause the aggregate number of SARs then outstanding (excluding any SARs that have (x) been exercised, (y) expired, terminated unexercised, or become unexercisable or (z) been forfeited or otherwise terminated, surrendered or canceled) to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

(b) Section 16(c) of the Amended Mezzanine Warrant Agreement is hereby amended by deleting the entire text of Section 16(c) and substituting in lieu thereof:

“As long as none of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the per share value of the Common Stock as set forth in the then most recent appraisal performed by an independent appraiser at the Company’s request in connection with the ESOP. If one of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the then current Current Market Price. All SARs issued by the Company will vest in accordance with the terms of the Company’s Stock Appreciation Rights Plan, as in effect at the time of issuance. The Company will not issue SARs that cause the aggregate number of outstanding SARs (excluding any SARs that have been exercised, that have expired, terminated unexercised, or become unexercisable or that have been forfeited or otherwise terminated, surrendered or cancelled), at the time of issuance, to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

2. Waivers. The parties hereto hereby agree that neither the execution of this Amendment nor any provision contained herein shall be deemed to in any way affect or act to restrict or terminate the provisions of Section 2 of the First Amendment or Section 2 of the Second Amendment, including without limitation, any waivers and releases granted to and/or given for the benefit of the Company therein.

3. Remainder of the Amended Mezzanine Warrant Agreement Not Affected. Except as set forth in Section 1 hereof, the terms and provisions of the Amended Mezzanine Warrant Agreement remain in full force and effect without change, amendment, waiver or modification.

4. Ratification. As modified hereby, the Amended Mezzanine Warrant Agreement and its terms and provisions are hereby ratified for all purposes and in all respects.

5. Counterparts. This Amendment may be executed in one or more counterparts, all of which taken together shall constitute one instrument.

6. References. From and after the date provided above, all references to the Amended Mezzanine Warrant Agreement shall be deemed to be references to the Amended Mezzanine Warrant Agreement as modified hereby.

7. Governing Law. This Amendment 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.

8. Conflict. In the event of any conflict between the terms of this Amendment and the Amended Mezzanine Warrant Agreement, the terms of this Amendment shall govern.

[Signatures follow on next page]

1

IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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/ Bahman Atefi
  By: /s/ Lewis Collens
 
   
Name: Bahman Atefi
Title: Chief Executive Officer
  Name: Lewis Collens
Title: President
 
    

2 EX-10.52 4 exhibit3.htm EX-10.52 EX-10.52

EXHIBIT 10.52

THIRD AMENDMENT TO THE ALION MEZZANINE WARRANT AGREEMENT

THIS THIRD AMENDMENT TO THE ALION MEZZANINE WARRANT AGREEMENT (the “Amendment”) is made effective as of March 8, 2005, between Alion Science and Technology Corporation, a Delaware corporation (the “Company”), and Bahman Atefi, an individual (“Holder”).

WHEREAS, the Company, Holder, and Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust (the “Trust”) entered into that certain Alion Mezzanine Warrant Agreement dated as of the 20th day of December 2002 (the “Alion Mezzanine Warrant Agreement”), pursuant to which the Company issued to Holder warrants to purchase Twenty-Two Thousand Sixty-One and Seven-Tenths (22,061.7) shares of the Company’s $0.01 par value per share common stock (“Common Stock”);

WHEREAS, the Company and Holder entered into that certain First Amendment to the Alion Mezzanine Warrant Agreement effective as of December 15, 2004 (the “First Amendment”), pursuant to which the parties agreed to certain amendments to the Alion Mezzanine Warrant Agreement;

WHEREAS, the Company and Holder entered into that certain Second Amendment to the Alion Mezzanine Warrant Agreement effective as of January 24, 2005 (the “Second Amendment”), pursuant to which the parties agreed to certain further amendments to the Alion Mezzanine Warrant Agreement (as amended by the First Amendment and the Second Amendment, the “Amended Alion Mezzanine Warrant Agreement”);

WHEREAS, the Company and Holder desire to amend Sections 3(l)(i) and 16(a) of the Amended Alion Mezzanine Warrant Agreement as set forth herein; and

WHEREAS, the Trust is a party to the Amended Alion Mezzanine Warrant Agreement only for the purposes of Sections 6, 7, 15 and 17 through 25 of the Amended Alion Mezzanine Warrant Agreement, and pursuant to Section 18 of the Amended Alion Mezzanine Warrant Agreement, Sections 3(l)(i) and 16(a) may be amended by the mutual written agreement of the Company and Holder, without the need to obtain the Trust’s consent.

NOW, THEREFORE, in consideration of the premises set forth above and the respective covenants and agreements contained in this Amendment, 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. Amendments to the Amended Alion Mezzanine Warrant Agreement.

(a) Section 3(l)(i) of the Amended Alion Mezzanine Warrant Agreement is hereby amended by deleting the entire text of Section 3(l)(i) and substituting in lieu thereof:

“SARs issued to employees, consultants, officers or directors of the Company or any of its Subsidiaries with an exercise price no less than Fair Value, except for such amount of SARs that, at the time of issuance, would cause the aggregate number of SARs then outstanding (excluding any SARs that have (x) been exercised, (y) expired, terminated unexercised, or become unexercisable or (z) been forfeited or otherwise terminated, surrendered or canceled) to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

(b) Section 16(a) of the Amended Alion Mezzanine Warrant Agreement is hereby amended by deleting the entire text of Section 16(a) and substituting in lieu thereof:

“As long as none of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the per share value of the Common Stock as set forth in the then most recent appraisal performed by an independent appraiser at the Company’s request in connection with the ESOP. If one of the clauses (a), (b) or (c) of the definition of Current Market Price in Section 3(c)(ii) is applicable to the Common Stock, all SARs issued by the Company will be issued with an exercise price no less than the then current Current Market Price. All SARs issued by the Company will vest in accordance with the terms of the Company’s Stock Appreciation Rights Plan, as in effect at the time of issuance. The Company will not issue SARs that cause the aggregate number of outstanding SARs (excluding any SARs that have been exercised, that have expired, terminated unexercised, or become unexercisable or that have been forfeited or otherwise terminated, surrendered or cancelled), at the time of issuance, to be in excess of:

(1) two percent (2%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the first anniversary of the Effective Date;

(2) four percent (4%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities) at the second anniversary of the Effective Date;

(3) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to six percent (6%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the third anniversary of the Effective Date;

(4) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to eight percent (8%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fourth anniversary of the Effective Date; and

(5) the sum of (a) thirty-three thousand (33,000), plus (b) the amount equal to ten percent (10%) of the number of then outstanding shares of Common Stock on a fully diluted basis (assuming the exercise of all outstanding options, warrants and rights and the conversion into Common Stock of all convertible securities), at the fifth anniversary of the Effective Date.”

2. Waivers. The parties hereto hereby agree that neither the execution of this Amendment nor any provision contained herein shall be deemed to in any way affect or act to restrict or terminate the provisions of Section 2 of the First Amendment or Section 2 of the Second Amendment, including without limitation, any waivers and releases granted to and/or given for the benefit of the Company therein.

3. Remainder of the Amended Alion Mezzanine Warrant Agreement Not Affected. Except as set forth in Section 1 hereof, the terms and provisions of the Amended Alion Mezzanine Warrant Agreement remain in full force and effect without change, amendment, waiver or modification.

4. Ratification. As modified hereby, the Amended Alion Mezzanine Warrant Agreement and its terms and provisions are hereby ratified for all purposes and in all respects.

5. Counterparts. This Amendment may be executed in one or more counterparts, all of which taken together shall constitute one instrument.

6. References. From and after the date provided above, all references to the Amended Alion Mezzanine Warrant Agreement shall be deemed to be references to the Amended Alion Mezzanine Warrant Agreement as modified hereby.

7. Governing Law. This Amendment 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.

8. Conflict. In the event of any conflict between the terms of this Amendment and the Amended Alion Mezzanine Warrant Agreement, the terms of this Amendment shall govern.

[Signatures follow on next page]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by its officers thereunto duly authorized as of the date hereof.

         
Alion Science and Technology Corporation    
By: /s/ Jack Hughes
      By: /s/ Bahman Atefi
 
        
 
    
 
        
Name:
Title:
  Jack Hughes
Senior Vice President and
Chief Financial Officer 		  Name: Bahman Atefi
Title: Chief Executive Officer
 
        

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