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): November 30,
2016
VERSAR, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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1-9309
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54-0852979
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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6850
Versar Center Springfield, Virginia 22151
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(Address
of principal executive offices)
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(Zip
Code)
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(703)
750-3000
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(Registrant’s
telephone number, including area code)
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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:
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☐
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12(b) under the Exchange
Act (17 CFR 240.14a-12(b))
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01
Other Events.
On
December 1, 2016 and effective November 30, 2016, Versar, Inc. (the
“Company”), certain of its subsidiaries and Bank of
America. N.A. (the “Lender”) as the lender and letter
of credit issuer for a revolving credit facility in the amount of
$25 million and a term facility in the amount of $5 million (the
“Loan Agreement”) entered into a Sixth Forbearance
Agreement pursuant to which the Lender agreed, among other things,
to continue to forbear from exercising any and all rights or
remedies available to it under the Loan Agreement and applicable
law related to certain covenant defaults for a period ending on the
earliest to occur of: (a) a breach by the Company of any obligation
or covenant under the Forbearance Agreement, (b) any other default
or event of default under the Loan Agreement (other than the
defaults acknowledged therein) or (c) December 9, 2016 (the
“Forbearance Period”). Under the Company’s
previously disclosed Fifth Forbearance Agreement, the Forbearance
Period was set to expire on November 30, 2016. The covenant
defaults under the Loan Agreement previously disclosed by the
Company continued through the Company’s fiscal quarter ended
October 1, 2016.
Under
the Sixth Forbearance Agreement, the Company retains the ability to
borrow funds under the revolving credit facility subject to a cap
of $13.0 million and provided that all of the terms and conditions
for borrowings are satisfied, other than the existence of the
acknowledged covenant defaults and the use of such borrowings is
consistent with the 13 Week Cash Flow Forecast provided to the
Lender pursuant to the Sixth Forbearance Agreement. The Company was
required to pay an additional forbearance fee of $10,000 as a
condition precedent to the effectiveness of the Sixth Forbearance
Agreement, and which sum is in addition to the remaining $281,250
installment of forbearance fees, payable upon the earlier of the
occurrence of a Forbearance Termination event or December 9,
2016.
The
Sixth Forbearance Agreement was entered into in consideration of
the ongoing efforts of the Company to resolve such defaults or
secure new financing to refinance and replace the Loan Agreement.
To that end, the Company and the Lender have executed a term sheet
for the purpose of finalizing an amendment to the Loan Agreement.
Among other provisions, the term sheet envisions a modification of
the covenants to address the outstanding defaults under the Loan
Agreement. In addition, the Company will continue to: (1) report
its financial status to the Lender, (2) use the services of a Chief
Restructuring Officer, and (3) work with a strategic financial
adviser to assist with the structuring and consummation of a
transaction the purpose of which will be the replacement or
repayment in full of all obligations under the Loan
Agreement.
SIGNATURE
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, thereunto duly authorized.
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Dated: December 5, 2016
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VERSAR, INC.
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By:
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/s/ JAMES D. VILLA
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James D. Villa
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Senior Vice President and General Counsel
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