On December 29, 2016, GSE Systems, Inc. and GSE Performance Solutions, Inc. (collectively the "Company") entered into a Credit and Security Agreement with Citizens Bank, National Association, providing for a $5.0 million revolving line of credit. On the same date, the Company entered into a Sixth Comprehensive Amendment to Financing Documents with Branch Banking and Trust Company. The Credit Agreement replaces the Company's $7.5 million revolving line of credit with BB&T that was, prior to the Sixth Amendment, scheduled to mature in March 2017. The Company intends to use the RLOC for short-term working capital needs and the issuance of letters of credit. The RLOC matures on December 29, 2019. The initial maximum availability under the RLOC is $5.0 million, subject to a borrowing base equal to 80% of eligible accounts receivable, of which no amount was drawn as of December 29, 2016. Availability under the RLOC is reduced by outstanding letters of credit issued by the Bank, of which none were outstanding as of December 29, 2016. Borrowings under the Credit Agreement generally bear interest at a variable rate equal to LIBOR plus 225 basis points per annum on the outstanding principal amount of the RLOC. Future advances under the RLOC are subject to termination of any existing letters of credit provided by BB&T. Approximately $1.1 million of letters of credit issued by BB&T for the benefit of the Company remained outstanding as of December 29, 2016 (the "BB&T Letters of Credit"). The Credit Agreement contains customary covenants and restrictions typical for a financing of this type that, among other things, require the Company to satisfy certain financial covenants and restrict the Company's ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate. Non-compliance with one or more of the covenants and restrictions after any applicable grace period could result in the obligations under the Credit Agreement becoming immediately due and payable and termination of the RLOC. In addition to non-compliance with covenants, the Credit Agreement also contains other customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the Bank may declare the obligations under the Credit Agreement to be immediately due and payable and may terminate the RLOC. The Sixth Amendment terminated all available credit under the revolving line of credit with BB&T. Pursuant to the Sixth Amendment, all security interests held by BB&T (other than interests in cash collateral) were released, the BB&T Letters of Credit were cash collateralized at an amount equal to 105% of the outstanding amount thereof and the BB&T Letters of Credit are required to be replaced by the Company by February 17, 2017.