Exhibit 10.123
FIFTH MODIFICATION AGREEMENT
(Increase and Extension)
          THIS FIFTH MODIFICATION AGREEMENT (this “Agreement”), effective as of
the 24th day of September 2007, is by and between UNITED BANK, a Virginia
banking corporation (the “Bank”); and VERSAR, INC. a Delaware corporation,
GEOMET TECHNOLOGIES, LLC, a Maryland limited liability company, VERSAR GLOBAL
SOLUTIONS, INC., a Virginia corporation, and VEC CORP., a Pennsylvania
corporation and successor to Versar Environmental Company, Inc. (individually
and collectively, the “Borrower”).
WITNESSETH THAT:
          WHEREAS, the Bank is the owner and holder of that certain Revolving
Commercial Note dated September 26, 2003, in the amount of $5,000,000.00 made by
the Borrower payable to the order of the Bank and bearing interest and being
payable in accordance with the terms and conditions therein set forth (the
“Note”); and
          WHEREAS, the Note is issued pursuant to the terms of a certain Loan
and Security Agreement dated September 26, 2003, between the Borrower and the
Bank (as modified in accordance with that certain First Modification Agreement
dated as of May 5, 2004, that certain Third Modification Agreement dated as of
November 30, 2005 (a second modification having been drafted but never executed
and delivered), and a certain Fourth Modification Agreement dated as of
September 28, 2006, and as otherwise amended, extended, increased, replaced and
supplemented from time to time, the “Loan Agreement”); and
          WHEREAS, as of the effective date hereof, the principal balance of the
Note is $0.00 and the parties hereto desire to extend the maturity date of the
Note, increase the amount thereof, and modify the terms thereof and of the Loan
Agreement.
          NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
          1. The maturity date of the Note is hereby extended to November 30,
2009. The definition of “Date of Maturity” in the Note and the Loan Agreement is
hereby changed to “November 30, 2009”.
          2. The amount of the Note is hereby increased to Seven Million Five
Hundred Thousand and no/100 Dollars ($7,500,000.00). The definition of
“Principal Sum” in the Note and the Loan Agreement is hereby changed to “Seven
Million Five Hundred Thousand and no/100 Dollars ($7,500,000.00)”.

31

--------------------------------------------------------------------------------

 

          3. From and after the effective date hereof, interest on the unpaid
balance of the Note shall accrue at a rate per annum equal at all times to the
Prime Rate (as defined in the Note) minus one-half of one percent (0.50%).
          4. The Loan Agreement is hereby further modified by replacing
“$8,500,000.00” with “$15,000,000.00” in Section VI(A)(4).
          5. The other “Loan Documents”, as defined in the Note, are hereby
modified to the extent necessary to carry out the purposes of this Agreement.
          6. The Borrower hereby acknowledges and agrees that, as of the
effective date hereof, the unpaid principal balance of the Note is $0.00 and
that there are no set-offs or defenses against the Note, the Loan Agreement, or
the other Loan Documents.
          7. The parties to this Agreement do not intend that this Agreement be
construed as a novation of the Note, the Loan Agreement, or any of the other
Loan Documents.
          8. Except as hereby expressly modified, the Note and Loan Agreement
shall otherwise be unchanged, shall remain in full force and effect, and are
hereby expressly approved, ratified and confirmed. A legend shall be placed on
the face of the Note indicating that its terms have been modified hereby, and
the original of this Agreement shall be affixed to the original of the Note.
          9. This Agreement shall be governed in all respects by the laws of the
Commonwealth of Virginia and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
WITNESS the following signatures and seals.

              UNITED BANK   [SEAL]      By:   /S/ E. Allen Schirmer         E.
Allen Schirmer       Vice President        VERSAR, INC.  [SEAL]      By:   /S/
Lawrence W. Sinnott         Name:   Lawrence W. Sinnott        Title:   Exec.
V.P., COO, CFO, and Treasurer   

32

--------------------------------------------------------------------------------

 

         

              GEOMET TECHNOLOGIES, LLC   [SEAL]      By:   /S/ Lawrence W.
Sinnott         Name:   Lawrence W. Sinnott       Title:   Vice President       
VERSAR GLOBAL SOLUTIONS, INC.  [SEAL]      By:   /S/ Lawrence W. Sinnott        
Name:   Lawrence W. Sinnott       Title:   Vice President        VEC CORP.  
[SEAL]      By:   /S/ Lawrence W. Sinnott         Name:   Lawrence W. Sinnott   
    Title:   Vice President     

33