Item 1.01. Entry into a Material Definitive Agreement; Item 2.03 Creation of a Direct Financial Obligation

Effective as of August 26, 2009, VSE Corporation (the "Company" or "VSE"), and its wholly owned subsidiaries, Energetics Incorporated, VSE Services International, Inc., Integrated Concepts and Research Corporation and G&B Solutions, Inc., (collectively, "Borrowers") entered into a Business Loan and Security Agreement with Citizens Bank of Pennsylvania and SunTrust Bank (collectively "Lenders") for a revolving credit facility with a committed amount of $50 million (the "Loan Agreement"). The credit facility also provides, upon Lenders' approval, an incremental revolving commitment of up to an additional $25 million for a potential maximum revolving credit facility of $75 million.

Borrowings under the Loan Agreement are secured by substantially all of the assets of the Company and its subsidiaries. The Loan Agreement contains customary representations and warranties, affirmative and negative covenants, events of default and acceleration provisions. The Loan Agreement limits the ability of Borrowers in respect of, among other things, (a) capital structure, mergers, acquisitions or sale of assets, (b) subsidiaries, (c) issuance of stock, (d) purchase or redemption of securities and dividend, (e) indebtedness,
(f) investments and loans, (g) stock of subsidiaries, (h) liens, and
(i) transactions with affiliates.

In connection with entering into the Loan Agreement, Borrowers' Business Loan and Security Agreement, dated as of August 14, 2007, with Citizens Bank of Pennsylvania was terminated.

The foregoing description of the Loan Agreement does not constitute a complete summary of its terms and conditions, and reference is made to the complete text of the Loan Agreement that is attached hereto as Exhibit 10.1.