SECOND AMENDED AND RESTATED


REVOLVING COMMERCIAL NOTE


 


IMPORTANT NOTICE


 


THIS INSTRUMENT CONTAINS A CONFESSION
OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN
A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.


 


	$15,000,000.00	June 30, 2014


 


FOR VALUE RECEIVED, on or before September
30, 2015 (hereinafter called "Date of Maturity") the undersigned (individually and collectively, the "Borrower")
jointly and severally promise to pay to the order of UNITED BANK (the "Bank," which term shall include any holder of
this Note) without offset, at the Bank's office located at 2071 Chain Bridge Road, Vienna, Virginia 22182 (or at such other address
as the Bank shall designate), the principal sum of Fifteen Million and no/100 Dollars ($15.000,000.00) (hereinafter called "Principal
Sum"), or so much of that sum as the Bank may advance, together with interest on the principal balance outstanding from time
to time at the rate provided in this Note.


 


This Note is an amendment and restatement
of, and replaces, that certain Amended and Restated Revolving Commercial Note dated September 13, 2012, in the original principal
amount of Fifteen Million and No/100 Dollars ($15,000,000.00), made by the Borrower payable to the order of the Bank, the obligations
of the Borrower under which are suspended.


 


This Note is the “Revolving Note”
referenced in the Loan Agreement. Reference is hereby made to the Loan Agreement for provisions of this Note with respect to conditions
for advances, remedies on Default, and other terms.


 


INTEREST RATE. This Note shall bear
interest on the principal balance outstanding from time to time, from the date of this Note until paid in full, a variable rate
per annum equal, at all times, to the Prime Rate minus one-half of one percent (0.50%); provided, however, that at
no time shall the interest rate on the Note be less than three and one-half percent (3.50%) per annum. The "Prime Rate"
shall mean that variable rate of interest published in The Wall Street Journal from time to time as the domestic prime rate
under the heading "Money Rates". If The Wall Street Journal shall cease to publish the Prime Rate, the term “Prime
Rate” shall thereafter mean the rate announced from time to time by the Bank as its prime rate of interest and evidenced
by a certificate signed by any officer of the Bank setting forth said prime rate of interest in effect on any given date, whether
or not such rate is otherwise published or announced. The Prime Rate is not necessarily the lowest rate charged by the Bank to
borrowers. Interest on this Note shall be calculated on the basis of a 360-day year, for the actual number of days elapsed.


 




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PAYMENT TERMS. The Borrower agrees
to pay accrued interest beginning July 30, 2014, and on the same day of each consecutive month thereafter until this Note is paid
in full. On the Date of Maturity, all outstanding principal, interest and fees under this Note shall be due and payable in full.


 


PREPAYMENT. The Borrower may pay the
whole or any part of the outstanding indebtedness evidenced by this Note at any time without penalty by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.


 


ADVANCES. If no Default Condition (as
defined in the Loan Agreement) has occurred and is then continuing, the Borrower may borrow at any time and from time to time from
the date hereof to the Date of Maturity, such amounts as the Borrower may request, subject to the provisions hereof and of the
Loan Agreement.


 


DEFAULT. Each of the following events
or conditions shall constitute a default ("Default") under this Note:


 


(a)            the failure to make any payment of
principal, interest or any other amount due under this Note when such payment is due;


 


(b)           any default under the terms of any
of the Loan Documents, or the failure to perform or observe any warranty, covenant, or other condition of any of the Loan Documents;
and the failure to cure said event or condition within 20 calendar days after the earlier to occur of (i) the date of notice thereof
to the Borrower, and (ii) the date notice thereof should have been given to the Bank pursuant to Section VI(C)(1)(c) of the Loan
Agreement.


 


(c)           any default by the Borrower or any
indorser or guarantor of the payment of this Note with respect to any Debt to the Bank (other than this Note) or to any other creditor
or obligee;


 


(d)           the merger, consolidation, reorganization,
dissolution, or termination of existence of any Party; or the pledge, lease or other disposition, without the prior written approval
of the Bank, of all or substantially all of the assets of any Party;


 


(e)           any change, or any transaction which
results or could result in a change, in the Control of any Party;


 


(f)            the determination by the Bank that
any warranty, representation, certificate, statement or information provided by any Party or any Person on behalf of a Party to
the Bank in connection with any of the Loan Documents, or to induce the Bank to make or extend or modify the terms of the loan
evidenced by this Note, was false or misleading, or that any Party or any Person on behalf of a Party failed to provide or disclose
any facts or information, which failure rendered such warranty, representation, certificate, statement or information misleading;


 




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(g)           the inability of any Party to pay its
debts as they mature, the insolvency of any Party, the filing of a petition by or against any Party under the provisions of any
bankruptcy, reorganization, arrangement, insolvency, liquidation or similar law for relief of debtors, the appointment or application
for appointment of any receiver for any Party or the property of any Party, the issuance or service of any attachment, levy, garnishment,
tax lien or similar process against any Party or the property of any Party, the entry of a judgment against any Party, or an assignment
for the benefit of creditors by any Party; provided, however, that said Party shall have 20 calendar days to dismiss or
discharge any of the foregoing that is an involuntary proceeding;


 


(h)           any agreement or other document granting
the Bank security for the payment of this Note shall cease for any reason to be in full force and effect as such security with
the priority stated to be created thereby, or the grantor of such security shall contest the validity or enforceability of the
security or deny that it has any further liability or obligation under such agreement or other document;


 


(i)            any indorsement or guaranty of the
payment of this Note shall cease for any reason to be in full force and effect, or any indorser or guarantor shall contest the
validity or enforceability of the indorsement or guaranty or deny that it has any further liability or obligation under the indorsement
or guaranty; or


 


(j)            the determination by the Bank that
(i) there has occurred a material adverse change in the financial condition of any Party, (ii) the value of any property securing
this Note has been materially impaired, or (iii) there has occurred or developed an event or condition which materially impairs
the prospect of payment or performance of any of the obligations of any Party under the Loan Documents; and the failure of said
Party to cure said event or condition, or satisfy the Bank as to such event, condition, change or impairment, within 20 calendar
days after notice thereof to the Borrower.


 


ACCELERATION. At the option of the
Bank, upon the occurrence of a Default as defined above, the full amount remaining unpaid on this Note shall become immediately
due and payable without presentment, demand or notice of any kind; no additional advances shall be made to the Borrower under this
Note; and the Bank may exercise any or all remedies available to it under applicable law and the Loan Documents.


 


ACCOUNT RECORD. The Bank shall maintain
records of the dates and amounts of advances of principal and payments of principal and interest, the date to which interest has
been paid, accrued interest, the unpaid principal balance, and any other account information. Such records shall be maintained
unilaterally by the Bank without notice to the Borrower and shall be presumed to be correct, provided, however, any failure of
the Bank to maintain such records or any error therein or in any notice hereunder shall not in any manner affect the obligation
of the Borrower to pay this Note in accordance with the terms hereof.


 


IMMEDIATELY AVAILABLE FUNDS. The principal
of and interest on this Note shall be payable in immediately available funds in lawful money of the United States which shall be
legal tender for public and private debts at the time of payment. The making of any payment in other than immediately available
funds which the Bank, at its option, elects to accept shall be subject to collection, and interest shall continue to accrue until
the funds by which payment is made are available to the Bank for its use.


 


ADJUSTMENT TO BILLING NOTICE. If, because
a variable interest rate or the outstanding principal balance of this Note changes between the date of a billing notice and the
end of a billing period or the Date of Maturity, the actual amount due and payable is different from the amount billed, then the
amount billed must be paid. The next following billing notice shall be adjusted by the amount of the difference, or a supplemental
billing notice or rebate, as the case may be, shall be sent to the Borrower following the Date of Maturity. A supplemental billing
notice following the Date of Maturity shall be immediately due and payable in full.


 




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APPLICATION OF PAYMENTS. Payments will
be applied to interest, principal, and late charges and other charges due at the time such payments are received, in that order.
All payments shall be applied to satisfaction of scheduled payments in the order in which they become due.


 


CONFESSION OF JUDGMENT. The Borrower
appoints William L. Stauffer, Jr., Esquire, and W. Alexander Burnett, Esquire, either of whom may act, as its duly constituted
attorney-in-fact with authority, in the name, place, and stead of the Borrower, to confess judgment in the office of the clerk
of the Circuit Court of Fairfax County, Virginia against it, in the full amount due under this Note, upon the occurrence of a Default
under this Note. By a written instrument, the Bank may appoint a substitute for the above named attorneys-in-fact (or any of them).
If a copy of this Note, verified by an affidavit, shall have been filed in the proceeding, it will not be necessary to file the
original as a warrant of attorney. The Borrower waives the right to any stay of execution and the benefit of all exemption laws
now or hereinafter in effect. No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust
the power, whether or not such exercise shall be held by any court to be invalid, voidable or void; but the power will continue
undiminished and may be exercised from time to time as the Bank may elect until all amounts owing on the Note shall have been paid
in full.


 


WAIVER. The Borrower and any indorser
of this Note (i) waive presentment, demand, protest and notice of dishonor and protest, (ii) waive the benefit of their homestead
exemptions as to this debt, (iii) waive any right which they may have to require the Bank to proceed against any other Party or
any collateral given to secure the payment of this Note, and (iv) agree that, without notice to the Borrower or any indorser and
without affecting the liability of the Borrower or any indorser, the Bank, at any time or times, may grant extensions of the time
for any payment due on this Note or any other indulgence or forbearance, release any Party from the obligation to make payments
on this Note, permit the renewal of this Note, or permit the substitution, exchange or release of any security for this Note.


 


LATE CHARGE; ATTORNEYS' FEES. If the
Borrower fails to pay any amount due under this Note within 7 days of the date due, the Borrower shall pay to the Bank on demand
a late charge equal to five percent (5%) of the amount due. The Borrower shall pay to the Bank on demand all costs incurred by
the Bank, and reasonable attorneys' fees, in the collection or enforcement of this Note in the event of Default, whether or not
suit is brought.


 


SET-OFF. The Bank will have the right,
in addition to all other remedies permitted by law (including, without limitation, other rights of set-off), to set off the amount
now or hereafter due under this Note or due under any other obligation of the Borrower to the Bank against any and all accounts,
credits, money, securities, or other property now or hereafter on deposit with, held by, or in the possession of the Bank to the
credit or for the account of the Borrower, without notice to or consent by the Borrower. In addition to the right of set-off, to
secure the payment of this Note the Borrower assigns and grants to the Bank a security interest in all accounts, credits, money,
securities, or other property now or hereafter on deposit with, held by, or in the possession of the Bank to the credit or for
the account of the Borrower.


 




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DEFINITIONS. The following terms, as
used in this Note, have the following meanings:


 


"Control" of any Person means (i)
ownership, control, or power to vote 20% or more of any class of voting securities of such Person, directly or indirectly or acting
through one or more other Persons; (ii) control in any manner over the election or appointment of a majority of the directors,
trustees, managers or general partners (or individuals exercising similar functions) of such Person; (iii) the direct or indirect
power to exercise a controlling influence over the management or policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise; or (iv) conditioning in any manner the transfer of 20% or more of any class of voting securities
of such Person upon the transfer of 20% or more of any class of voting securities of another Person.


 


“Loan Agreement” means that certain
Second Amended and Restated Loan and Security Agreement dated as of June 30, 2014, between the Borrower and the Bank, and all modifications
of, replacements for, and supplements to, said agreement.


 


"Loan Documents" means this Note,
the Loan Agreement and any other instrument or agreement which now or hereafter evidences, governs, secures or guaranties the indebtedness
evidenced by this Note, including any loan agreement, deed of trust, subordination agreement, security agreement or guaranty, and
all renewals, extensions and modifications thereof and substitutions therefor.


 


"Party" means the Borrower, any
indorser or guarantor of this Note, any grantor or debtor giving security for this Note, and any other obligor on any of the Loan
Documents.


 


"Person" means an individual, a
corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization.


 


ADDITIONAL TERMS.


 


THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
NOTE, WHETHER SUCH SUIT, ACTION, PROCEEDING, OR COUNTERCLAIM IS INSTITUTED BY THE BANK, THE BORROWER OR ANY OTHER PARTY.


 


The Borrower and any indorser of this Note
irrevocably (i) submit to the exclusive jurisdiction of any Virginia state court or federal court sitting in the Commonwealth of
Virginia with respect to any suit, action, or proceeding relating to this Note, (ii) waive any objection which they may now or
hereafter have to the laying of venue of any such suit, action, or proceeding brought in any such court and any claim that any
such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum, (iii) waive the right to
object that any such court does not have jurisdiction over them, and (iv) consent to the service of process in any such suit, action,
or proceeding by the mailing of copies of such process to them by certified mail at the addresses indicated in this Note or at
such other addresses of which the Bank shall have received notice. Nothing in this paragraph shall affect the Bank's right to serve
process in any other manner permitted by law or to bring proceedings against the Borrower and indorsers in any other court having
jurisdiction.


 




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The proceeds of this Note shall be used to
acquire or carry on a business, professional, investment, or commercial enterprise or activity.


 


The rights and remedies of the Bank under
this Note, the other Loan Documents, and applicable law shall be cumulative and concurrent, and the exercise of any one or more
of them shall not preclude the simultaneous or later exercise by the Bank of any or all such other rights or remedies. In the event
any provision of this Note is held to be invalid, illegal, or unenforceable for any reason, then such provision only shall be deemed
null and void and shall not affect any other provisions of this Note, which shall remain effective. No modification or waiver of
any provision of this Note shall be effective unless it is in writing and signed by the Bank, and any such waiver shall be effective
only in the specific instance and for the specific purpose for which it is given. The failure of the Bank to exercise its option
to accelerate this Note as provided above, or to exercise any other option, right or remedy, in any one or more instances, or the
acceptance by the Bank of partial payments or partial performance, shall not constitute a waiver of any Default, or the right to
exercise any option, right or remedy at any time. The nouns, pronouns, and verbs used in this Note shall be construed as being
of such number and gender as the context may require.


 


This Note shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia.


 


WITNESS the following signatures and seals:


 


	 	VERSAR, INC.                                                                  [SEAL]
	(As to all Borrowers):	 
	6850 Versar Center	 
	Springfield, Virginia  22151	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Senior VP & General Counsel
	 	 
	 	GEOMET TECHNOLOGIES, LLC                                 [SEAL]
	 	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Vice President & Secretary
	 	 
	 	VERSAR INTERNATIONAL, INC.         [SEAL]
	 	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Vice President & Secretary


 




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	 	GEO-MARINE, INC.                                [SEAL]
	 	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Vice President & Secretary
	 	 
	 	CHARRON CONSTRUCTION CONSULTING, INCORPORATED                                    [SEAL]
	 	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Vice President & Secretary
	 	 
	 	 
	 	J.M. WALLER ASSOCIATES, INC.      [SEAL]
	 	 
	 	By:	/s/ James D. Villa
	 	 	Name: James D. Villa
	 	 	Title: Vice President & Secretary


 




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