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ALION SCIENCE & TECHNOLOGY CORP FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Material Modification to Rights of Security Holders, Changes in Control or Registrant, Change in Directors or Principal Officers, Submission of Matters to a Vote of Security Holders, Financial State

August 22, 2014

Item 1.01 Entry into a Material Definitive Agreement

On August 18, 2014, Alion Science and Technology Corporation (the "Company") completed its previously announced comprehensive refinancing of the Company's outstanding indebtedness (the "Refinancing Transactions"), which included an exchange offer, consent solicitation and unit offering (the "Exchange Offer") relating to its 10.25% Senior Notes due 2015 (the "Unsecured Notes"), the New Revolving Credit Facility, the New First Lien Term Facilities, the New Second Lien Term Facility, the Intercreditor Agreement, various guarantee and security agreements relating to these new credit facilities, the redemption of Existing Secured Notes and the termination of the Company's existing revolving credit facility, each as described below. The Refinancing Transactions were made pursuant to the terms of the previously disclosed Amended and Restated Refinancing Support Agreement dated as of May 2, 2014, as amended, between the Company and ASOF II Investments, LLC ("ASOF") and Phoenix Investment Adviser, LLC ("Phoenix," and together with ASOF, the "Supporting Noteholders") (the "Support Agreement").

On August 18, 2014, the Company issued a press release regarding the completion of the Refinancing Transactions. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Pursuant to the Exchange Offer, the Company exchanged $210,986,000 in aggregate principal amount of its Unsecured Notes, representing 89.78% of the aggregate principal amount of the Old Notes then-outstanding, for, in the aggregate, (i) $208,135,000 aggregate principal amount of Third-Lien Senior Secured Notes due 2020 (the "Third-Lien Notes"), (ii) 208,135 warrants to purchase its common stock (the "Warrants"), and (iii) $1,710,600 in cash.

Pursuant to the unit offering, the Company issued 10 units at a price of $600 per unit, for aggregate proceeds of $6,000. The units in the aggregate consisted of $10,000 principal amount of Third-Lien Notes and 10 Warrants. Pursuant to the terms of the Support Agreement, concurrently with the closing of the Exchange Offer, ASOF purchased from the Company in a private placement at a unit price of $600 per unit $2,841,000 principal amount of Third Lien Notes and 2,841 Warrants (the "ASOF Cash Funding").

Upon completion of the Exchange Offer, the amendments contained in the previously disclosed Second Supplemental Indenture relating to the Unsecured Notes, which was executed on May 29, 2014, became operative. These amendments eliminated substantially all of the negative covenants, certain events of default and the covenant restricting mergers and consolidations, modified certain provisions relating to defeasance contained in, and made other technical and conforming changes to, the indenture governing the Unsecured Notes.

The Refinancing Transactions are described in more detail in the prospectus, dated August 11, 2014, as amended (the "Prospectus"), filed pursuant to Rule 424(b)(3) of the Securities Act of 1933, as amended (the "Securities Act"), on August 14, 2014.

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Item 1.02 Termination of a Material Definitive Agreement

Redemption of Existing Secured Notes

Concurrently with the closing of the Refinancing Transactions, the Company issued a redemption notice and deposited funds sufficient to discharge the Existing Secured Notes pursuant to the optional redemption feature of the indenture governing the Existing Secured Notes. Accordingly, the Existing Secured Notes will be redeemed on September 17, 2014 at a redemption price of 100% of principal amount, plus accrued and unpaid interest to, but not including, the date of redemption, for an aggregate payment of $351,667,904.

The Company issued the Secured Notes pursuant to an indenture, dated as of March 22, 2010, among the Company, certain subsidiary guarantors of the Company and Wilmington Trust Company, as trustee. The Existing Secured Notes were set to mature on November 1, 2014.

Termination of Revolving Credit Facility

Concurrently with the closing of the Exchange Offer and upon the incurrence of the New Revolving Credit Facility, the Company terminated its existing revolving credit facility with Wells Fargo Bank, National Association, as administrative agent and sole lender that was set to mature on August 20, 2014.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities

As discussed above, as consideration for the Supporting Noteholders' agreement to fund the New Second Lien Term Facility, concurrently with the closing of the Exchange Offer, the Company issued in a private placement 75,352 and 20,551 Warrants to ASOF and Phoenix, respectively, and 55 and 15 shares of Series A Preferred Stock to ASOF and Phoenix, respectively. In addition, in connection with the ASOF Cash Funding, concurrently with the closing of the Exchange Offer, ASOF purchased from the Company in a private placement at a unit price of $600 per unit $2,841,000 principal amount of Third Lien Notes and 2,841 Warrants.

The Company relied on the exemption from registration contained in Section 4(2) of the Securities Act, and Regulation D, Rule 506 thereunder, for the issuance of these Warrants, the shares of Common Stock issuable pursuant to such Warrants, the Series A Preferred Stock to the Supporting Noteholders and these Third Lien Notes. In connection with these issuances, the Supporting Noteholders represented to the Company that they are "accredited investors" as defined in Regulation D of the Securities Act and that the securities purchased by them were being acquired solely for their own account for investment and not with a view to or for sale or distribution of these Warrants, the shares of Common Stock issuable upon exercise of such Warrants, the shares of Series A Preferred Stock or these Third Lien Notes.

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Item 3.03 Material Modification to Rights of Security Holders.

Concurrently with the closing of the Exchange Offer, the Company amended its Certificate of Incorporation by filing a Certificate of Designation, Powers, Preferences, and Rights with Secretary of State of Delaware (the "Certificate of Designation"), pursuant to which the Company set forth the respective designations, powers, rights, privileges, preferences and restrictions of new Series A preferred stock (the "Series A Preferred Stock").

The par value of the Series A Preferred Stock is $0.01 per share, and the authorized number of shares constituting the Series A Preferred Stock is 70. All of the 70 shares of Series A Preferred Stock were issued to the Supporting Noteholders, with 55 shares issued to ASOF and 15 shares issued to an affiliate of Phoenix. The Series A Preferred Stock will, upon liquidation, rank senior to the Common Stock, and in the event of liquidation will be entitled to receive $10.00 per share. The Series A Preferred Stock is not entitled to receive any dividends or other distributions from the Company, nor is it convertible into any other class of equity or other securities of the Company. The Series A Preferred Stock is not redeemable by the Company.

The holders of the Series A Preferred Stock have the right to elect a majority of the members of the Company's Board of Directors (the "Board"). Based on the current composition of the Board, the holders of the Series A Preferred Stock control the identity of five of the nine members of the Board. As disclosed below, the holders of the Series A Preferred Stock have elected Lawrence A. First and Daniel H. Clare as members of the Board. The holders of the Series A Preferred Stock have consent rights over certain actions to be taken by the Company and its subsidiaries. With respect to any and all matters on which there is a shareholder vote, the affirmative vote of the majority of the shares of Series A Preferred Stock outstanding is both necessary and sufficient to approve all such matters for all or any classes or series of shareholders of the Company. The vote of the majority of the Series A Preferred Stock is deemed to be the vote of a majority of all voting stock of the Company. The Series A Preferred stock is voted as a block, in the manner directed by the holders of a majority of the Series A Preferred Stock outstanding. Written consent of the majority of the Series A Preferred Stock is permitted in lieu of a vote.

A copy of the Certificate of Designation is attached to this current report on Form 8-K as Exhibit 3.3 and it is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Certificate of Designation and the Series A Preferred Stock is not intended to be complete, and it is qualified in its entirety by the complete text of the Certificate of Designation.

Item 5.01 Changes in Control of Registrant.

Prior to the completion of the Exchange Offer, the ESOP Trust owned all of the outstanding shares of the Common Stock. As discussed above, in connection with funding a portion of the New Second Lien Term Facility, ASOF was issued 55 shares of the Series A Preferred Stock, representing 78.6% of the outstanding shares of the Series A Preferred Stock. As a result, ASOF has the right to appoint a majority of the members of the Board and possesses voting control over all matters that require stockholder approval. ASOF's source of funds for providing a portion of the New Second Lien Term Facility was capital contributions made by its limited partners. The description of the rights of the Series A Preferred Stock in Item 3.03 is incorporated herein by reference.

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a) Director Resignation



On August 18, 2014, David J. Vitale and Edward C. (Pete) Aldridge, Jr. each resigned as a member of the Board.

(b) Director Election



On August 18, 2014, Lawrence A. First and Daniel H. Clare were each elected to the Board as Class 3 directors by the holders of the Series A Preferred Stock. As disclosed above, the Series A Preferred Stock provides holders thereof with additional rights, including the right to appoint a majority of the members of the Board. Based on the current composition of the Board, this presently represents the right to appoint five of the nine members of the Board. As a result of its majority ownership of the Series A Preferred Stock, ASOF has the right to control the vote of the holders of the Series A Preferred Stock. As disclosed above, on August 18, 2014, the Company amended its Fourth Amended and Restated Certificate of Incorporation to provide that Class 3 directors are to serve as members of the Board for a term expiring at the annual meeting of the stockholders of the Company held in the third year following the closing of the Refinancing Transactions.

Messrs. First and Clare will each serve on the Company's Compensation Committee. Either Mr. First or Mr. Clare will serve on each of the Company's other committees although at this time no determination has been made as to who will serve on any one committee. Mr. First is Chief Investment Officer and Managing Director of, and Mr. Clare is Managing Director of, American Securities Opportunities Advisors, LLC, an affiliate of ASOF.

(c) Employment Agreements



Concurrently with the closing of the Exchange Offer, on August 18, 2014 the Company entered into new five-year employment agreements with key executive officers including each of its named executive officers who are currently serving as executive officers. Pursuant to the employment agreements, the Company has agreed to pay base salaries per year to the named executive officers as set forth below, subject to adjustments to increase the base salary in the discretion of the Board, and to provide employee benefits available to executives of the Company commensurate with his or her position, subject to the terms of the applicable benefit plan or program.

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Named Executive Officer Base Salary Dr. Bahman Atefi, Chief Executive Officer and President $ 750,348.00



Barry Broadus, Senior Vice President and Chief Financial Officer $ 350,144.00Stacy Mendler, Chief Operating Officer and Executive Vice President

$ 440,134.00Robert Hirt, Technology, Engineering and Operations Solutions Senior Vice President $ 360,168.00



As previously disclosed, Scott Fry, who was a named executive officer of the Company in the Company's annual report on Form 10-K for the Company's fiscal year ended September 30, 2013, retired from his position with the Company, effective as of November 1, 2013.

The employment agreements provide that if the executive's employment is terminated without Cause, other than during a Potential Change in Control Protection Period or within the period ending 24 calendar months immediately following a Change in Control, the executive, subject to satisfying certain conditions, would receive the following severance payments and benefits:

a cash amount equal to two times his or her then base salary and a cash amount equal to two times his or her prior year's paid bonus, payable together, in four equal installments every six months following the date of termination;

his or her unpaid salary and benefits through the date of termination;

any unpaid bonus, if any, with respect to the prior fiscal year;

reimbursement of certain expenses related to COBRA group health continuation coverage, if COBRA coverage is elected by the executive, for a period up to 18 months; and

all other rights and benefits in which he or she has vested prior to or as a result of his or her termination of employment pursuant to other plans and programs of the Company.

If the executive's employment is terminated without Cause or if he or she terminates his or her employment for Good Reason within a two year period after a Change in Control or during a Potential Change in Control Protection Period, the executive, subject to satisfying certain conditions, would receive all of the foregoing benefits plus outplacement services in an amount not to exceed $25,000.00. If the executive's employment is terminated for Cause, at any time, he or she would receive the base salary through the effective date of termination and any other rights and benefits that vested prior to termination.

For purposes hereof, the terms below have the following meanings as further defined in the executives' employment agreements:

"Cause" means the executive having engaged in any of the following: (i) a conviction of, entry of a plea of guilty, nolo contendere or no contest to, a charge of, a felony or crime involving moral turpitude; (ii) commission of an act constituting fraud, deceit, or material misrepresentation with respect to the Company; (iii) commission of any negligent or willful act or omission that causes a material adverse effect on the business, to the Company or any parent or subsidiary corporation thereof; (iv) intentional failure or refusal to perform reasonably assigned duties, which is not cured, if curable, to the reasonable satisfaction of the Board within thirty (30) days after the Executive receives from the Board written notice of such failure or refusal; (v) willful and material violation

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of any provision of the Company's Code of Ethics, Conduct and Responsibility or . . .

Item 5.07 Submission of Matters to a Vote of Security Holders.

On August 15, 2014, the ESOP Trust, in its capacity as owner of all of the outstanding shares of the Common Stock approved by unanimous written consent, pursuant to the direction of the ESOP Committee, the adoption of Amendment Number One to the Fourth Amended and Restated Certificate of Incorporation of the Company (the "Amended Certificate of Incorporation"). The Amended Certificate of Incorporation was filed with the Secretary of State of Delaware on August 18, 2014. The Amendment was approved to create a staggered Board.

Article "Eighth" of the Amended Certificate of Incorporation was amended to mandate that directors be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible as determined from time to time by the Board, except that no such class shall have less than two directors, and with each such class, directors should hold office until their respective successors are duly elected and qualified. The first class ("Class 1") to be elected for a term beginning effective as of August 18, 2014, and expiring at the annual meeting of the stockholders of the Corporation to be held no earlier than the first anniversary of such date and no later than the end of the Company's fiscal year immediately succeeding such first anniversary, the second class ("Class 2") to be elected for a term beginning effective as of August 18, 2014 and expiring at the annual meeting of the stockholders of the Corporation to be held no earlier than the second anniversary of such date and no later than the end of the Company's fiscal year immediately succeeding such second anniversary, and the third class ("Class 3") to be elected for a term beginning effective as of August 18, 2014 and expiring at the annual meeting of the stockholders of the Corporation to be held no earlier than the third anniversary of such date and no later than the end of the Company's fiscal year immediately succeeding such third anniversary.

A copy of the Amended Certificate of Incorporation is attached to this current report on Form 8-K as Exhibit 3.4 is incorporated by reference as though they were fully set forth herein. The foregoing summary description of the Amended Certificate of Incorporation is not intended to be complete, and it is qualified in its entirety by the complete text of the Amended Certificate of Incorporation.

On August 18, 2014, the holders of the Series A Preferred Stock approved, by unanimous written consent, the election of Lawrence A. First and Daniel H. Clare as directors to the Board.

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits No. Description 3.3 Certificate of Designation of Series A Preferred Stock. 3.4 Amendment to Certificate of Incorporation. 4.13 Indenture dated as of August 18, 2014, among Alion Science and Technology Corporation, certain subsidiary guarantors and Wilmington Trust, National Association, as trustee. 4.14 Form of Third-Lien Senior Secured Note due 2020 (included as part of Exhibit 4.13). 4.15 Form of Warrant (included as part of Exhibit 10.50). 10.50 Warrant Agreement, dated as of August 18, 2014, by and between Alion Science and Technology Corporation and Wilmington Trust, National Association, as warrant agent. 10.51 Stockholders' Agreement, dated as of August 18, 2014, by and between Alion Science and Technology Corporation and the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust. 10.52 Credit Agreement, dated as of August 18, 2014 by and among Alion Science and Technology Corporation, Wells Fargo Bank, National Association and the lenders party thereto. 10.53 First Lien Credit and Guaranty Agreement, dated as of August 18, 2014 by and among Alion Science and Technology Corporation, Goldman Sachs Lending Partners LLC as administrative agent and the lenders party thereto. 10.54 Second Lien Credit and Guaranty Agreement, dated as of August 18, 2014 by and among Alion Science and Technology Corporation, Wilmington Trust, National Association as administrative agent and the lenders party thereto. 10.55 Intercreditor Agreement, dated as of August 18, 2014 by and among the Company, the other grantors party thereto, and Wilmington Trust, National Association, as collateral agent. 17



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10.56 First Lien Pledge and Security Agreement, dated as of August 18, 2014, by and among Alion Science and Technology Corporation, certain subsidiaries of the Company and Wilmington Trust, National Association, as collateral agent. 10.57 Second Lien Pledge and Security Agreement, dated as of August 18, 2014, by and among Alion Science and Technology Corporation, certain subsidiaries of the Company and Wilmington Trust, National Association, as collateral agent. 10.58 Third Lien Pledge and Security Agreement, dated as of August 18, 2014, by and among Alion Science and Technology Corporation, certain subsidiaries of the Company and Wilmington Trust, National Association, as collateral agent. 10.59 Guaranty Agreement, dated as of August 18, 2014, by and among Alion Science and Technology Corporation, certain subsidiaries of Alion Scienceand Technology Corporation and Wells Fargo Bank, National Association, as agent. 10.60 Employment Agreement, dated as of August 18, 2014 by and between Alion Science and Technology Corporation and Dr. Bahman Atefi. 10.61 Employment Agreement, dated as of August 18, 2014 by and between Alion Science and Technology Corporation and Barry Broadus. 10.62 Employment Agreement, dated as of August 18, 2014 by and between Alion Science and Technology Corporation and Stacy Mendler. 10.63 Employment Agreement, dated as of August 18, 2014 by and between Alion Science and Technology Corporation and Robert Hirt. 99.1 Press Release issued August 18, 2014. 18



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