Exhibit 10.2
SUBORDINATION AND
INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT ("AGREEMENT") is made to
be effective as of March 30, 2001, by and between NATIONAL BANK OF CANADA, a
Canadian chartered bank ("LENDER"), and MANTECH INTERNATIONAL CORPORATION, a New
Jersey corporation ("SUBORDINATING CREDITOR").
RECITALS
GSE SYSTEMS, INC., a Delaware corporation ("GSE SYSTEMS"), GSE PROCESS
SOLUTIONS, INC., a Delaware corporation, and GSE POWER SYSTEMS, INC., a Delaware
corporation (together with GSE SYSTEMS, collectively, "BORROWERS"), have
obtained various credit accommodations from the LENDER. SUBORDINATING CREDITOR,
GP STRATEGIES CORPORATION, a Delaware corporation, GSE SYSTEMS INTERNATIONAL
LTD., a Delaware corporation, MSHI, INC., a Virginia corporation, GSE ERUDITE
SOFTWARE, INC., a Delaware corporation, GSE SERVICES COMPANY L.L.C., a Delaware
limited liability company, GP INTERNATIONAL ENGINEERING & SIMULATION, INC., a
Delaware corporation (collectively, "GUARANTORS"), have agreed to guarantee to
the LENDER the repayment and performance of the subject credit accommodations.
Hereafter, the BORROWERS and the GUARANTORS (other than the SUBORDINATING
CREDITOR and GP STRATEGIES CORPORATION) are collectively referred to as the
"OBLIGORS."
The SUBORDINATING CREDITOR has extended, or has committed to extend, a
loan to GSE SYSTEMS. The SUBORDINATING CREDITOR owns a substantial ownership
interest in GSE SYSTEMS and derives substantial direct and indirect benefits
from the credit facility extended by the LENDER to GSE SYSTEMS and the other
BORROWERS.
The LENDER is unwilling to continue to provide the requested credit
accommodations to the BORROWERS unless the SUBORDINATING CREDITOR agrees to the
terms and conditions of this AGREEMENT. In order to induce the LENDER to
continue to extend the subject credit accommodations to the BORROWERS, the
SUBORDINATING CREDITOR has agreed to be bound by the terms of this AGREEMENT.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Section 1. Definitions. In addition to the terms defined in the recitals
hereto, the following terms shall have the following meanings for
the purposes of this AGREEMENT:
Section 1.1. Collection Action. The term "COLLECTION ACTION" means any of
the following actions by the SUBORDINATING CREDITOR: (a) ask, demand, xxx for,
take or receive from or on behalf of any of the OBLIGORS, by set-off or in any
other manner, the whole or any part of any monies which may now or hereafter be
owing by any of the OBLIGORS to the SUBORDINATING CREDITOR on the SUBORDINATED
DEBT; (b) initiate or participate with others in any suit, action or proceeding
against any of the OBLIGORS to enforce payment of or to collect the whole or any
part of the SUBORDINATED DEBT; (c) ask, demand, take or receive any security for
any of the SUBORDINATED DEBT; or (d) initiate or participate with others in any
action to realize upon any of the assets of any of the OBLIGORS. The mere
acceleration of the SUBORDINATED DEBT by the SUBORDINATING CREDITOR shall not in
and of itself constitute a COLLECTION ACTION, provided that the SUBORDINATING
CREDITOR does not institute, pursue or take any enforcement or collection
actions with respect thereto, including without limitation the institution of
any proceedings to collect or realize upon the SUBORDINATED DEBT or against any
of the OBLIGORS or the assets of any of the OBLIGORS, or require that payments
be made as a result of such acceleration.
Section 1.2. Default. The term "DEFAULT" has the meaning given that term in
the LOAN AND SECURITY AGREEMENT.
Section 1.3. Event Of Default. The term "EVENT OF DEFAULT" has the meaning
given that term in the LOAN AND SECURITY AGREEMENT.
Section 1.4. Lender's Documents. The term "LENDER'S DOCUMENTS" means the
LOAN AND SECURITY AGREEMENT and all documents and writings defined therein as
the "LOAN DOCUMENTS."
Section 1.5. Loan And Security Agreement. The term "LOAN AND SECURITY
AGREEMENT" means the Loan And Security Agreement dated March 23, 2000, by and
between the LENDER and the BORROWERS, as amended.
Section 1.6. Senior Debt. The term "SENIOR DEBT" means all indebtedness,
obligations and liabilities (including interest accruing on such debt after any
of the BORROWERS or GUARANTORS becomes subject to a bankruptcy proceeding,
whether or not such interest is enforceable against such BORROWER or GUARANTOR
or recoverable against the bankruptcy estate) now or hereafter owed by any of
the BORROWERS or GUARANTORS to the LENDER, whether absolute or contingent,
direct or indirect, joint or several, contemplated or uncontemplated, secured or
unsecured, including but not limited to all principal, interest, fees, charges,
reimbursements, advancements, escrows, overdrafts, and other indebtedness, and
all "OBLIGATIONS," as such term is defined in the LOAN AND SECURITY AGREEMENT,
and all obligations and duties of indemnification, reimbursement, suretyship, or
guaranty, and any replacements, renewals or refinancings thereof.
Section 1.7. Subordinated Debt. The term "SUBORDINATED DEBT" means all
indebtedness, obligations and liabilities now or hereafter owed by any of the
OBLIGORS to the SUBORDINATING CREDITOR under or in connection with the
SUBORDINATED NOTE or any of the SUBORDINATING CREDITOR'S DOCUMENTS, and any
replacements, renewals, or refinancing thereof, whether absolute or contingent,
direct or indirect, joint or several, contemplated or uncontemplated, secured or
unsecured.
Section 1.8. Subordinated Note. The term "SUBORDINATED NOTE" means the
Replacement Promissory Note dated March 30, 2001, in the originally stated
principal amount of Two Million One Hundred Thousand Dollars ($2,100,000.00)
from GSE SYSTEMS, as the maker thereof, which is payable to the order of the
SUBORDINATING CREDITOR.
Section 1.9. Subordinating Creditor's Documents. The term "SUBORDINATING
CREDITOR'S DOCUMENTS" means all documents, writings, or instruments evidencing,
securing or otherwise documenting the whole or any part of the SUBORDINATED
DEBT, and all amendments, modifications, replacements and substitutions thereto.
Without limitation of the foregoing, such term shall include the SUBORDINATED
NOTE.
Section 1.10. Subordination Notice. The term "SUBORDINATION NOTICE" means
the providing by the LENDER to the SUBORDINATING CREDITOR of written notice of
the occurrence of a DEFAULT or an EVENT OF DEFAULT.
Section 2. Subordination; Standby. The SUBORDINATING
CREDITOR agrees that payment of the SUBORDINATED DEBT is expressly subordinated
to the prior and indefeasible payment in full in cash of all SENIOR DEBT, upon
the terms and subject to the conditions contained in this AGREEMENT. Except as
expressly authorized pursuant to Section 3 of this AGREEMENT, the SUBORDINATING
CREDITOR will not take any COLLECTION ACTION unless and until the SENIOR DEBT
has been fully and indefeasibly paid in full in cash and there is no obligation,
commitment or agreement under which the LENDER is required to or may make loans
or provide other financial accommodations to or for the benefit of any of the
OBLIGORS; provided, however, that nothing in this Section 2 shall limit or
restrict the SUBORDINATING CREDITOR from filing a claim (or taking any action
necessary to achieve allowance of its claim) or, subject to the prior written
consent of the LENDER, otherwise preserving its rights, if any of the OBLIGORS
shall be the subject of a bankruptcy proceeding not commenced by SUBORDINATING
CREDITOR. Any liens, security interests, mortgages, pledges of or into any of
the assets of any of the OBLIGORS in favor of or for the benefit of the
SUBORDINATING CREDITOR, both now existing or arising in the future are hereby
expressly made subordinate and junior in priority and right of enforcement to
any liens, security interests, mortgages or pledges of or into any of the assets
of any of the OBLIGORS both now existing or arising in the future, securing any
of the SENIOR DEBT, regardless of the record priority or dates of any public
filings or documents pertaining thereto or whether any or all of the security
interests and liens securing any of the SENIOR DEBT are unperfected or
avoidable. The SUBORDINATING CREDITOR represents and warrants that, as of the
date hereof, the SUBORDINATED DEBT is unsecured. This subordination provision
shall apply with respect to all of the SENIOR DEBT, regardless of how or in what
manner the SENIOR DEBT is incurred, or whether the SENIOR DEBT has already been
incurred or may be incurred in the future by future advances or other financial
accommodations made or extended by the LENDER, or whether such future advances
or other financial accommodations are made at the discretion of the LENDER under
the LENDER'S DOCUMENTS or pursuant to commitment or otherwise. If the
SUBORDINATING CREDITOR in violation of this AGREEMENT shall attempt any
COLLECTION ACTION, any of the OBLIGORS or the LENDER may interpose as a defense
or plea the making of this AGREEMENT and the LENDER may intervene and interpose
such defense in its name or in the name of any of the OBLIGORS, and any of the
OBLIGORS or the LENDER may by virtue of this AGREEMENT restrain the enforcement
thereof in the name of any of the OBLIGORS or the LENDER.
Section 3. Permitted Payments. Notwithstanding the provisions
of Section 2 of this AGREEMENT, until the LENDER has delivered to the
SUBORDINATING CREDITOR a SUBORDINATION NOTICE, GSE SYSTEMS may pay to the
SUBORDINATING CREDITOR, and the SUBORDINATING CREDITOR may accept or receive
from GSE SYSTEMS the following payments, provided that the making of such
payments by or on behalf of GSE SYSTEMS will not result in a DEFAULT or an EVENT
OF DEFAULT:
(a) Beginning on July 1, 2001, GSE SYSTEMS may pay to the
SUBORDINATING CREDITOR regularly scheduled payments of accrued
interest provided for under the SUBORDINATED NOTE when and as
the same become due under the terms set forth in the
SUBORDINATED NOTE (but without giving effect to any amendment
or modification thereof which would have the effect of
increasing the amount of any such payment or accelerating the
due dates of such payments unless the LENDER has given its
prior written consent thereto);
(b) Beginning on April 1, 2004, GSE SYSTEMS may pay to the
SUBORDINATING CREDITOR regularly scheduled payments of
principal provided for under the SUBORDINATED NOTE when and as
the same become due under the terms set forth in the
SUBORDINATED NOTE (but without giving effect to any amendment
or modification thereof which would have the effect of
increasing the amount of any such payment or accelerating the
due dates of any such payments, unless the LENDER has given
its prior written consent thereto).
(c) GSE SYSTEMS may pay to the SUBORDINATING CREDITOR
payments of other sums and charges provided for under the
SUBORDINATED NOTE with the prior written consent of the
LENDER.
Upon the giving of a SUBORDINATION NOTICE by the LENDER to the SUBORDINATING
CREDITOR, the absolute subordination and standby provisions of Section 2 shall
govern and control and the SUBORDINATING CREDITOR shall not be entitled to
receive any payments upon the SUBORDINATED DEBT until the date the LENDER
provides the SUBORDINATING CREDITOR with written notice that there are no
currently existing DEFAULTS or EVENTS OF DEFAULT. Within ten (10) calendar days
after all DEFAULTS and EVENTS OF DEFAULT have been either expressly waived by
the LENDER in writing or are cured to the LENDER'S satisfaction, the LENDER
shall provide written notice thereof to the SUBORDINATING CREDITOR.
Section 4. Subordinated Indebtedness Owed Only to
Subordinating Creditor. The SUBORDINATING CREDITOR warrants and represents to
the LENDER that: (a) no person or entity owns an interest or any right of any
kind in or to the SUBORDINATED DEBT, the SUBORDINATING CREDITOR'S DOCUMENTS, or
the liens securing the SUBORDINATED DEBT (whether as joint holder of the
SUBORDINATED DEBT, participant, assignee, pledgee or otherwise), other than the
SUBORDINATING CREDITOR and First Union Commercial Corporation, as Agent, which
is the holder of a blanket security interest in all of the existing and future
assets of the SUBORDINATING CREDITOR as security for a syndicated credit
facility provided by First Union Commercial Corporation and other lenders to the
SUBORDINATING CREDITOR (and provided, however, First Union Commercial
Corporation, as Agent under such credit facility, has been notified that the
SUBORDINATED NOTE is subject to this AGREEMENT and has acknowledged same; and
(b) the entire SUBORDINATED DEBT is owing solely to the SUBORDINATING CREDITOR.
The SUBORDINATING CREDITOR acknowledges that the LENDER is relying upon the
above-stated representations and warranties of the SUBORDINATING CREDITOR and
that the LENDER would not continue to extend SENIOR DEBT to the BORROWERS
without obtaining such representations and warranties from the SUBORDINATING
CREDITOR and without the belief that the representations and warranties were
true, accurate and complete in all respects.
Section 5. Priority On Distribution. In the event of any
distribution, division, or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of any of the OBLIGORS or of any readjustment of the obligations and
indebtedness of any of the OBLIGORS, whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding involving the readjustment of the indebtedness
of any of the OBLIGORS, or of the sale of any assets of any of the OBLIGORS,
then, and in any such event, all of such distributions or proceeds in respect of
the SUBORDINATED DEBT shall be made to the LENDER until all SENIOR DEBT is paid
and satisfied in full.
Section 6. Payments Or Distributions Received By Subordinating
Creditor. Except as to payments or distributions which the SUBORDINATING
CREDITOR is permitted to accept or receive pursuant to Section 3 hereof, should
any payment or distribution be received by the SUBORDINATING CREDITOR upon or
with respect to the SUBORDINATED DEBT prior to the satisfaction of all SENIOR
DEBT, the SUBORDINATING CREDITOR shall receive and hold the same in trust, as
trustee, for the benefit of the LENDER and shall forthwith deliver the same to
the LENDER in precisely the same form received (except for the endorsement or
assignment of the SUBORDINATING CREDITOR where necessary) for application on the
SENIOR DEBT, due or not due, and until so delivered, the same shall be held in
trust by the SUBORDINATING CREDITOR as the property of the LENDER, and shall not
be commingled with other funds or property of the SUBORDINATING CREDITOR.
Section 7. Insolvency Proceedings. The SUBORDINATING CREDITOR
may not commence or join with any other creditor in commencing any bankruptcy,
reorganization or insolvency proceedings with respect to any of the OBLIGORS,
unless the SENIOR DEBT has been fully satisfied; provided, however, that nothing
in this Section 7 shall limit or restrict the SUBORDINATING CREDITOR from filing
a claim (or taking any action necessary to achieve allowance of its claim) or,
subject to the prior written consent of the LENDER, otherwise preserving its
rights, if any of the OBLIGORS shall be the subject of a bankruptcy proceeding
not commenced or joined by the SUBORDINATING CREDITOR. Any payments with respect
to the SUBORDINATED DEBT received by the SUBORDINATING CREDITOR during any
bankruptcy or insolvency proceedings and prior to payment in full of the SENIOR
DEBT shall be held by the SUBORDINATING CREDITOR in trust for and turned over to
the LENDER for application to the SENIOR DEBT.
Section 8. Disposition Of Assets Of Obligors. The
SUBORDINATING CREDITOR agrees that any disposition by the LENDER of the assets
of any of the OBLIGORS, whether by collection, sale, or other manner of
liquidation, shall be conclusively presumed to be commercially reasonable and
may not be challenged or contested by the SUBORDINATING CREDITOR. In this regard
and without limiting the foregoing, the LENDER may (a) use such means of
collection and exercise such diligence with respect thereto as the LENDER, in
its discretion, deems appropriate under the circumstances, and (b) enter into
such compromise with and give such releases and acquittances to account debtors
or other obligors on any of the OBLIGORS' receivables, without obtaining the
agreement or concurrence of or giving prior notice to the SUBORDINATING
CREDITOR, and the SUBORDINATING CREDITOR hereby waives all right to require that
its agreement or consent be obtained or that it be given notice.
Section 9. Release Of Liens By Subordinating Creditor. The
SUBORDINATING CREDITOR agrees that in the event of any sale or other disposition
of any of the assets of any of the OBLIGORS, whether by any of the OBLIGORS or
by the LENDER, if the LENDER agrees to such sale or other disposition and
releases its liens thereon, the SUBORDINATING CREDITOR shall: (a) be deemed ipso
facto to have released and terminated its liens thereon; (b) have no right to
object to the sale or other disposition of such assets or withhold or delay its
consent, if such consent is required for the sale or other disposition of such
assets; and (c) at the request of the LENDER, provide all necessary releases or
terminations of security interests and liens held by the SUBORDINATING CREDITOR
necessary in order to accomplish such sale or other disposition free and clear
of all security interests and liens of the SUBORDINATING CREDITOR, all without
any consideration or payment to the SUBORDINATING CREDITOR, unless the proceeds
from such sale are applied to repay the SENIOR DEBT in full, in which event any
proceeds in excess of the amount used to repay the SENIOR DEBT in full shall be
paid to the SUBORDINATING CREDITOR if the SUBORDINATING CREDITOR had a security
interest or lien in such assets subject only to the prior security interest or
lien of the LENDER and such proceeds are not required by applicable law to be
paid to any other party.
Section 10. Additional Covenants Of Subordinating Creditor.
Until all of the SENIOR DEBT has been paid, the SUBORDINATING CREDITOR shall not
permit any of the following to occur: (a) the SUBORDINATING CREDITOR shall not
take or permit any action prejudicial to or inconsistent with LENDER'S priority
position over the SUBORDINATING CREDITOR that is created by this AGREEMENT; and
(b) without the prior written consent of the LENDER, the SUBORDINATING CREDITOR
shall not extend any loans or credit accommodations (other than forgiveness of
some or all of the indebtedness evidenced by the SUBORDINATED NOTE for the
benefit of the OBLIGORS) to any of the OBLIGORS after the date hereof, or
receive or take any security interests, liens or pledges. The LENDER hereby
consents to the loan to GSE SYSTEMS as described in the specific SUBORDINATING
CREDITOR'S DOCUMENTS which are listed by title in Section 1.9 of this AGREEMENT.
Section 11. Default. The SUBORDINATING CREDITOR shall provide
the LENDER with immediate notice of the occurrence of any defaults under the
SUBORDINATING CREDITOR'S DOCUMENTS. Upon receipt by the LENDER of such written
notice of default from the SUBORDINATING CREDITOR, the LENDER shall
automatically be deemed to have given a SUBORDINATION NOTICE to the
SUBORDINATING CREDITOR.
Section 12. Instrument Legend. The SUBORDINATING CREDITOR
agrees that the SUBORDINATED NOTE, and any renewals or replacements thereof, and
all security agreements, pledges, and other security documents which secure the
SUBORDINATED DEBT will on the date hereof be inscribed with the following
legend:
THIS INSTRUMENT AND ALL RIGHTS OF THE PARTIES HEREUNDER ARE SUBJECT TO AND
GOVERNED BY THE TERMS AND CONDITIONS OF A SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED MARCH 30, 2001, BY AND BETWEEN MANTECH INTERNATIONAL
CORPORATION AND NATIONAL BANK OF CANADA. WITHOUT LIMITATION OF THE
FOREGOING, ALL RIGHTS OF PAYMENT, LIEN RIGHTS, AND ENFORCEMENT RIGHTS OF
THE HOLDER OF THIS INSTRUMENT, ARE EXPRESSLY SUBORDINATED AND SUBJECT TO
THE RIGHTS OF NATIONAL BANK OF CANADA AS PROVIDED IN THE SUBORDINATION AND
INTERCREDITOR AGREEMENT.
The SUBORDINATING CREDITOR agrees to execute and deliver UCC-3 statements, and
such other filings as the LENDER may reasonably require to reflect in the public
records the subordination of the liens securing the SUBORDINATED NOTE to the
liens of the LENDER securing the SENIOR DEBT.
Section 13. Assignees Bound By This Agreement. The
SUBORDINATING CREDITOR agrees that in the event that the SUBORDINATING CREDITOR
assigns any interest in the SUBORDINATED DEBT or the SUBORDINATING CREDITOR'S
DOCUMENTS, any assignee thereof shall take subject to the terms and conditions
of this AGREEMENT and shall be bound by each and every term contained herein.
The SUBORDINATING CREDITOR agrees to advise any proposed assignee of the
SUBORDINATED DEBT of the terms and conditions of this AGREEMENT and that such
assignee's rights in the SUBORDINATED DEBT shall be subject to the terms of this
AGREEMENT.
Section 14. Subrogation. After all of the SENIOR DEBT has been
paid in full and until the SUBORDINATED DEBT has been paid in full, the
SUBORDINATING CREDITOR shall be subrogated to the rights of the LENDER to
receive distributions with respect to the SENIOR DEBT, to the extent that
distributions otherwise payable to the SUBORDINATING CREDITOR have been applied
to the payment of the SENIOR DEBT in accordance with the provisions of this
AGREEMENT. As between GSE SYSTEMS and the SUBORDINATING CREDITOR, a distribution
applied to the payment of the SENIOR DEBT in accordance with the provisions of
this AGREEMENT which otherwise would have been made to the SUBORDINATING
CREDITOR shall not be deemed a payment by GSE SYSTEMS on the SUBORDINATED DEBT,
it being understood that the subordination provisions of this AGREEMENT are
intended solely for the purpose of defining the relative rights of the
SUBORDINATING CREDITOR, on the one hand, and the LENDER, on the other hand, and
nothing contained in this AGREEMENT shall impair the obligations of GSE SYSTEMS,
which are absolute and unconditional, to pay to the SUBORDINATING CREDITOR the
SUBORDINATED DEBT as and when the same shall become due and payable in
accordance with its terms, except as such obligation is modified by the rights
confirmed hereunder in favor of the LENDER, or affect the relative rights of the
SUBORDINATING CREDITOR and the creditors of GSE SYSTEMS other than the LENDER.
The LENDER shall have no obligation or duty to protect the SUBORDINATING
CREDITOR'S right of subrogation and shall have no liability to the SUBORDINATING
CREDITOR for any loss or impairment of the SUBORDINATING CREDITOR'S subrogation
rights.
Section 15. Term. This AGREEMENT shall
constitute a continuing agreement between the SUBORDINATING CREDITOR
and the LENDER, and the LENDER may continue, without notice to the SUBORDINATING
CREDITOR, to lend monies, extend credit and make other accommodations to or for
the account of any of the OBLIGORS in reliance upon the provisions of this
AGREEMENT. This AGREEMENT shall be irrevocable by the SUBORDINATING CREDITOR
until all of the SENIOR DEBT shall have been paid and fully satisfied and all
financing arrangements between any of the OBLIGORS and the LENDER pursuant to
the LENDER'S DOCUMENTS have been terminated in writing, or until the
SUBORDINATED DEBT shall have been paid and fully satisfied, whichever first
occurs. This AGREEMENT and the obligations of the SUBORDINATING CREDITOR under
this AGREEMENT shall continue to be effective, or be reinstated, as the case may
be, if at any time any payment in respect of the SENIOR DEBT is rescinded or
must otherwise be restored or returned by LENDER by reason of any bankruptcy,
reorganization, arrangement, composition or similar proceeding or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar official for any of the OBLIGORS or any substantial part of its
property, or otherwise, all as though such payment had not been made.
Section 16. Waivers of Subordinating Creditor. All of the
SENIOR DEBT shall be deemed to have been made or incurred in reliance upon this
AGREEMENT, and the SUBORDINATING CREDITOR expressly waives all notice of the
acceptance by the LENDER of the subordination and other provisions of this
AGREEMENT, notice of the incurring of SENIOR DEBT from time to time under the
LENDER'S DOCUMENTS and all other notices not specifically required pursuant to
the terms of this AGREEMENT or by law, and the SUBORDINATING CREDITOR expressly
waives reliance by the LENDER upon the subordination and other agreements as
herein provided. The SUBORDINATING CREDITOR agrees that the LENDER has made no
warranties or representations with respect to the due execution, legality,
validity, completeness or enforceability of the LENDER'S DOCUMENTS or the
collectibility of the SENIOR DEBT, and that the LENDER shall be entitled to
manage and supervise the SENIOR DEBT in accordance with applicable law and its
usual practices, modified from time to time as the LENDER may deem appropriate
under the circumstances.
Section 17. Actions Permitted Lender. The LENDER may extend,
modify, or renew all or any part of the SENIOR DEBT, release any surety or
security, obtain additional security or exercise any other right or make
additional loans to any of the OBLIGORS, all without any notice to or consent by
the SUBORDINATING CREDITOR and without in any way impairing or altering the
LENDER'S rights with respect to the SUBORDINATED DEBT. The SUBORDINATING
CREDITOR hereby waives all diligence in collection of the SENIOR DEBT or in the
protection or perfection of any security interest or lien the LENDER may have in
the assets of any of the OBLIGORS. The LENDER may from time to time, whether
before or after any discontinuance of this AGREEMENT and without notice to any
of the OBLIGORS or the SUBORDINATING CREDITOR, assign or transfer all or any
part of the SENIOR DEBT or any interest therein and, notwithstanding any such
assignment or transfer or any subsequent assignment or transfer thereof, such
SENIOR DEBT shall be and remain SENIOR DEBT for purposes of this AGREEMENT and
every assignee or transferee and successive assignee or transferee of any of the
SENIOR DEBT or any interest therein shall, to the extent of the interest of such
assignee or transferee in the SENIOR DEBT, be entitled to the benefits of this
AGREEMENT as if such assignee or transferee were the LENDER; provided, however,
that unless the LENDER shall otherwise consent in writing, the LENDER shall have
and retain an unimpaired right prior and superior to that of any such assignee
or transferee, of this AGREEMENT for the benefit of the LENDER as to such part
of the SENIOR DEBT that the LENDER has not assigned or transferred.
Section 18. Waivers of Lender. No waiver shall be deemed to be
made by the LENDER of any of its rights hereunder, unless the same shall be in
writing signed on behalf of the LENDER, and each waiver, if any, shall be a
waiver only with respect to the specific instance involved and shall in no way
impair the rights of the LENDER in any other respect at any other time.
Section 19. Notices. Any notice required or permitted by or in
connection with this AGREEMENT shall be in writing and shall be made by
facsimile (confirmed on the date the facsimile is sent by one of the other
methods of giving notice provided for in this Section) or by hand delivery, by
Federal Express, or other similar overnight delivery service, or by certified
mail, unrestricted delivery, return receipt requested, postage prepaid,
addressed to the LENDER or the SUBORDINATING CREDITOR at the appropriate address
set forth below or to such other address as may be hereafter specified by
written notice by the LENDER or the SUBORDINATING CREDITOR. Notice shall be
considered given as of the date of the facsimile or the hand delivery, one (1)
calendar day after delivery to Federal Express or similar overnight delivery
service, or three (3) calendar days after the date of mailing, independent of
the date of actual delivery or whether delivery is ever in fact made, as the
case may be, provided the giver of notice can establish the fact that notice was
given as provided herein. If notice is tendered pursuant to the provisions of
this Section and is refused by the intended recipient thereof, the notice,
nevertheless, shall be considered to have been given and shall be effective as
of the date herein provided.
If to the LENDER:
NATIONAL BANK OF CANADA 000 Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx
Xxxx 00000
And
x/x XXXXXXXX XXXX XX XXXXXX
000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Vice President
Facsimile: (000) 000-0000
If to the SUBORDINATING CREDITOR:
MANTECH INTERNATIONAL CORPORATION
00000 Xxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, Assistant Secretary
Fax No.: (000) 000-0000
With Courtesy Copies To:
GOLDEN & XXXXXX, PLLC
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxx, Esquire
Facsimile No.: (000) 000-0000
and
XXXXXXXXX XXXXXXX XXXXX & XXXXXXXX
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
The failure of the LENDER to send any or all of the above courtesy copies shall
not impair the effectiveness of notice given to the SUBORDINATING CREDITOR in
the manner provided herein.
Section 20. Choice Of Law. The laws of the State of New York (excluding,
however, conflict of law principles) shall govern and be applied to determine
all issues relating to this AGREEMENT and the rights and obligations of the
parties hereto, including the validity, construction, interpretation, and
enforceability of this AGREEMENT and its various provisions and the consequences
and legal effect of all transactions and events which resulted in the execution
of this AGREEMENT or which occurred or were to occur as a direct or indirect
result of this AGREEMENT having been executed.
Section 21. Consent To Jurisdiction; Agreement As To
Venue. The SUBORDINATING CREDITOR irrevocably consents to the
non-exclusive jurisdiction of the courts of the State of New York and the State
of Maryland and of the United States District Court For The Southern District Of
New York and for the District of Maryland, if a basis for federal jurisdiction
exists. The SUBORDINATING CREDITOR agrees that venue shall be proper in any
circuit court of the State of New York or the State of Maryland selected by the
LENDER or in the United States District Court For The Southern District of New
York or for the District Of Maryland if a basis for federal jurisdiction exists
and waives any right to object to the maintenance of a suit in any of the state
or federal courts of the State of New York or the State of Maryland on the basis
of improper venue or of inconvenience of forum.
Section 22. Parties. This AGREEMENT shall be binding upon, and inure to the
benefit of, the SUBORDINATING CREDITOR and the LENDER and their respective
successors and assigns. The term "OBLIGORS" as used herein shall also refer to
the successors and assigns of any of the OBLIGORS, including, without
limitation, a receiver, trustee, custodian or debtor-in-possession.
Section 23. Section Titles. The section titles contained in this AGREEMENT
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
Section 24. Authority. The SUBORDINATING CREDITOR represents and warrants
to the LENDER that it has authority to enter into this AGREEMENT and that the
person signing for it is authorized and directed to do so.
Section 25. Entire Agreement. This AGREEMENT constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, whether express or implied, oral or
written. Neither this AGREEMENT nor any portion or provision hereof may be
changed, waived or amended orally or in any manner other than by an agreement in
writing signed by the LENDER and the SUBORDINATING CREDITOR.
Section 26. Additional Documentation. The SUBORDINATING CREDITOR shall
execute and deliver to the LENDER such further instruments and shall take such
further action as the LENDER may at any time or times reasonably request in
order to carry out the provisions and intent of this AGREEMENT.
Section 27. Defects Waived. This AGREEMENT is effective notwithstanding any
defect or voidability in the validity or enforceability of any instrument or
document evidencing the SENIOR DEBT.
Section 28. Severability. The provisions of this AGREEMENT are independent
of and separable from each other. If any provision hereof shall for any reason
be held invalid or unenforceable, it is the intent of the parties that such
invalidity or unenforceability shall not affect the validity or enforceability
of any other provision hereof, and that this AGREEMENT shall be construed as if
such invalid or unenforceable provision had never been contained herein.
Section 29. Execution In Counterparts; Delivery Via Facsimile. This
AGREEMENT may be executed and delivered by the parties hereto in counterparts.
Signatures to this AGREEMENT may be delivered via facsimile with each such
signature so delivered to be of the same force and effect as if such signature
were an original signature affixed by the signatory thereof to this AGREEMENT.
Section 30. Waiver Of Trial By Jury. Each party to this AGREEMENT agrees
that any suit, action, or proceeding, whether claim or counterclaim, brought or
instituted by either party hereto or any successor or assign of any party on or
with respect to this AGREEMENT or which in any way relates, directly or
indirectly, to the dealings of the parties with respect thereto, shall be tried
only by a court and not by a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING.
[SIGNATURES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, this AGREEMENT has been duly executed by the
parties hereto as of the day and year first above written.
WITNESS/ATTEST SUBORDINATING CREDITOR:
MANTECH INTERNATIONAL CORPORATION,
By: (SEAL)
Name:
Title:
Date: March ___, 2001
LENDER:
NATIONAL BANK OF CANADA
By: (SEAL)
Xxxxxx X. Xxxxxxxxx,
Vice President
By: (SEAL)
Xxxxx X. Xxxxxxxxxxx,
Vice President
Date: March _____, 2001
[CONTINUED ON FOLLOWING PAGE]
ACKNOWLEDGMENT AND AGREEMENT OF OBLIGORS
Each of the OBLIGORS does hereby accept and acknowledge receipt of a
copy of the foregoing AGREEMENT, and agrees that it will not pay any of the
SUBORDINATED DEBT, except as expressly permitted by the terms of the AGREEMENT,
or grant any liens to secure the SUBORDINATED DEBT.
Each of the OBLIGORS hereby irrevocably and unconditionally authorizes
the LENDER and the SUBORDINATING CREDITOR, without any further notice to or
consent from the OBLIGORS, to exchange and disclose to the other from time to
time such information about the businesses, financial affairs, operations, and
status of collateral and credit facilities of the OBLIGORS as the LENDER and the
SUBORDINATING CREDITOR elect to exchange.
IN WITNESS WHEREOF, the undersigned have caused this Acknowledgment And
Agreement to be duly executed as of the day and year first above written.
WITNESS/ATTEST: OBLIGORS:
GSE SYSTEMS, INC.
________________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March ____, 2001
GSE PROCESS SOLUTIONS, INC.
_______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March _____, 2001
GSE POWER SYSTEMS, INC.
________________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March _____, 2001
GP STRATEGIES CORPORATION
______________________________ By: ______________________________(SEAL)
Name : ______________________,
Title: ______________________
Date: March _____, 2001
GSE SYSTEMS INTERNATIONAL LTD.
______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March _____, 2001
MSHI, INC.
______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March ____, 2001
GSE ERUDITE SOFTWARE, INC.
______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March ____, 2001
GSE SERVICES COMPANY L.L.C.
______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Secretary
Date: March ____, 2001
GP INTERNATIONAL ENGINEERING
& SIMULATION, INC.
_______________________________ By: ______________________________(SEAL)
Xxxxxxx X. Xxxxx,
Senior Vice President
Date: March ____, 2001
