UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Exhibit 10.18
GSE Systems, Inc.
(Exact name of registrant as specified in its charter)
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (this "Agreement") is made as of the ___ day of
January, 1999 by and among GSE POWER SYSTEMS, INC. (f/k/a Simulation, Systems &
Services Technologies Company), a Delaware corporation ("GSE Power"), MSHI,
INC., a Virginia corporation ("MSHI"), GSE PROCESS SOLUTIONS, INC., a Delaware
corporation ("GSE Process"), GSE SYSTEMS, INC., a Delaware corporation ("GSE"),
GP INTERNATIONAL ENGINEERING & SIMULATION, INC., a Delaware corporation ("GPI"),
GP STRATEGIES CORPORATION, a Delaware corporation ("GP Strategies"), MANTECH
INTERNATIONAL CORPORATION, a New Jersey corporation ("ManTech"), GSE PROCESS
SOLUTIONS B.V. (f/k/a Beleggingsmaatschappij Rivier B.V.) ("GSE B.V."), GSE
PROCESS SOLUTIONS SINGAPORE (PTE) LIMITED ("GSE Singapore") and GSE PROCESS
SOLUTIONS BELGIUM NV ("GSE Belgium") and FIRST UNION NATIONAL BANK, a national
banking association, successor by merger to CoreStates Bank, N.A. (the
"Lender"). GSE Power, MSHI and GSE Process are collectively called the
"Borrowers." GSE, GPI, GSE B.V., GSE Singapore, GSE Belgium, GP Strategies and
ManTech are collectively called the "Guarantors." The Borrowers and the
Guarantors are collectively called the "Obligors."
Recitals
A. $7,000,000 GSE Power Line of Credit
A-1. The Lender extended a line of credit in the original principal amount
of $7,000,000 (the "GSE Power Line of Credit") to GSE Power and MSHI pursuant to
a Letter of Credit, Loan and Security Agreement dated January 30, 1996, as
amended from time to time (the "GSE Power Line of Credit Agreement"). The GSE
Power Line of Credit is evidenced by a Promissory Note dated January 30, 1996 in
the original principal amount of $7,000,000, as amended from time to time (the
"GSE Power Line of Credit Note").
A-2. The GSE Power Line of Credit is secured by, among other things, (a)
the GSE Power Line of Credit Agreement, whereby GSE Power and MSHI granted to
the Lender a security interest in (i) all of GSE Power's and MSHI 's Accounts,
Inventory, Chattel Paper, Documents, Instruments, General Intangibles (including
without limitation all tax refunds) and Equipment (whether or not fixtures) (as
defined in the GSE Power Line of Credit Agreement), as more particularly
described therein and (ii) a Lockbox (the "GSE Power Lockbox"), Restricted
Account #14106-95540, the Borrowers' Account #14106-95532 (as defined in the GSE
Power Line of Credit Agreement) and any other account established by GSE Power
or MSHI with the Lender and all cash and any other assets contained therein; (b)
a Security Agreement dated January 30, 1996 between GPI and the Lender (the "GPI
Security Agreement"), whereby GPI granted to the Lender a security interest in
all of GPI's inventory (including raw materials and work-in-process), equipment,
accounts, general intangibles, chattel paper, instruments and documents, as more
particularly described therein; (c) a Collateral Assignment of Patents,
Trademarks, Copyrights, Licenses and Trade Secrets dated January 30, 1996
between GSE Power and the Lender (the "GSE Power Assignment of Patents"),
whereby GSE Power granted to the Lender a security interest in all of GSE
Power's patents, patent applications, inventions, trademarks, service marks,
trademark applications, service xxxx applications, trademark registrations,
service xxxx registrations, tradenames, trade dress, goodwill, licenses,
copyrights, copyright applications, copyright registrations and trade secrets,
as more particularly described therein; and (d) a Collateral Assignment of
Patents, Trademarks, Copyrights, Licenses and Trade Secrets dated January 30,
1996 between GPI and the Lender (the "GPI Assignment of Patents"), whereby GPI
granted to the Lender a security interest in all of GPI's patents, patent
applications, inventions, trademarks, service marks, trademark applications,
service xxxx applications, trademark registrations, service xxxx registrations,
tradenames, trade dress, goodwill, licenses, copyrights, copyright applications,
copyright registrations and trade secrets, as more particularly described
therein.
A-3. The GSE Power Line of Credit is guaranteed by GSE and GPI pursuant to
separate Guaranty Agreements dated January 30, 1996 (the "GSE Power Corporate
Guaranties").
A-4. The GSE Power Line of Credit is also guaranteed by the Export-Import
Bank ("Exim") pursuant to a Master Guarantee Agreement (No. PA-MGA-005) dated
December 12, 1995 and a Master Guarantee Agreement (No. PA-MGA-96-005) dated
February 13, 1997, as amended from time to time, including without limitation a
letter dated December 17, 1998 evidencing an extension by Exim of the
Availability Date (as defined in such Master Guarantee Agreement) to March 31,
1999 (collectively, the "Exim Guaranty"). In connection with the Exim Guaranty,
GSE Power and MSHI entered into Borrower Agreements dated December 12, 1995 and
February 13, 1997 with the Lender, as amended from time to time (collectively,
the "Exim Borrower Agreement").
A-5. Pursuant to the GSE Power Line of Credit Agreement, the Lender also
agreed to issue from time to time, subject to the provisions thereof, letters of
credit. In connection therewith, GSE Power and MSHI entered into separate Master
Letter of Credit Agreements dated January 30, 1996, in favor of the Lender (the
"GSE Power
Letter of Credit Agreements").
A-6. The GSE Power Line of Credit Agreement, the GSE Power Line of Credit
Note, the GPI Security Agreement, the GSE Power Assignment of Patents, the GPI
Assignment of Patents, the GSE Power Corporate Guaranties, the Exim Guaranty,
the Exim Borrower Agreement, the GSE Power Letter of Credit Agreements and all
other documents evidencing, securing, guaranteeing or otherwise related to the
GSE Power Line of Credit are collectively called the "GSE Power Loan Documents".
A-7. As of December 18, 1998, exclusive of any amounts which may become due
in connection with the GSE Power Letter of Credit Agreements, there is due under
the GSE Power Line of Credit principal of Five Million Eight Hundred Thousand
Nine Hundred and 00/100 Dollars ($5,800,900.00) and interest of Twenty-Three
Thousand Six Hundred Fifty-Five and 00/100 Dollars ($23,655.00), plus attorneys'
fees and other costs which are payable under the GSE Power Loan Documents.
A-8. Pursuant to Article III of the GSE Power Line of Credit Agreement, and
included within the maximum amount available to be borrowed by GSE Power and
MSHI under the GSE Power Line of Credit, there is outstanding Letter of Credit
No. SM406588 in the face amount of $180,243 issued by the Lender for the benefit
of Central Trust of China Procurement Department (the "GSE Power Letter of
Credit").
B. $3,000,000 GSE Process Line of Credit
B-1. The Lender extended a line of credit in the original principal amount
of $7,000,000 (subsequently reduced to $3,000,000) (the "GSE Process Line of
Credit") to GSE Process pursuant to a Letter of Credit, Loan and Security
Agreement dated January 31, 1995, as amended and restated by an Amended and
Restated Letter of Credit, Loan and Security Agreement dated October 13, 1995,
as amended by an Amendment Number One to Amended and Restated Letter of Credit,
Loan and Security Agreement and Promissory Note dated February 23, 1996
("Amendment Number One") and by an Amendment Number Two to Amended and Restated
Letter of Credit, Loan and Security Agreement and Promissory Note dated November
11, 1997 ("Amendment Number Two") (collectively, the "GSE Process Line of Credit
Agreement"). The GSE Process Line of Credit is evidenced by a Promissory Note
dated October 13, 1995 in the original principal amount of $7,000,000 (which
replaces a Promissory Note dated January 31, 1995 in the original principal
amount of $6,000,000), as amended by Amendment Number One and by Amendment
Number Two (collectively, the "GSE Process Line of Credit Note")
B-2. The GSE Process Line of Credit is secured by, among other things, (a)
the GSE Process Line of Credit Agreement, whereby GSE Process granted to the
Lender a security interest in (i) all of GSE Process's Accounts, Inventory,
Chattel Paper, Documents, Instruments, General Intangibles (including without
limitation all tax refunds) and Equipment (whether or not fixtures) (as defined
in the GSE Process Line of Credit Agreement), as more particularly described
therein and (ii) a Lockbox(the "GSE Process Lockbox"), Restricted Account
#2013-3257, the Borrower's Account #2013-3249 (as defined in the GSE Process
Line of Credit Agreement) and any other account established by GSE Process with
the Lender and all cash and any other assets contained therein; and (b) a Demand
Note dated January 31, 1995 from GSE to GSE Process in the original principal
amount of $750,000, which has been endorsed to the order of the Lender (the
"Assigned Note").
B-3. The GSE Process Line of Credit is guaranteed by GSE B.V., GSE
Singapore and GSE Belgium pursuant to separate Guaranties dated October 13, 1995
and by GP Strategies and ManTech pursuant to separate Guarantees dated March 6,
1998 (the "GSE Process Guaranties").
B-4. Pursuant to the GSE Process Line of Credit Agreement, the Lender also
agreed to issue from time to time, subject to the provisions thereof, letters of
credit. In connection therewith, GSE Process entered into a Master Letter of
Credit Agreement dated January 31, 1995, in favor of the Lender (the "GSE
Process Letter of Credit Agreement").
B-5. The GSE Process Line of Credit Agreement, the GSE Process Line of
Credit Note, the Assigned Note, the GSE Process Guaranties, the GSE Process
Letter of Credit Agreement and all other documents evidencing, securing,
guaranteeing or otherwise related to the GSE Process Line of Credit are
collectively called the "GSE Process Loan Documents."
B-6. As of December 18, 1998, exclusive of any amounts which may become due
in connection with the GSE Process Letter of Credit Agreement, there is due
under the GSE Process Line of Credit principal of Zero and 00/100 Dollars ($-0-)
and interest of One Thousand One Hundred Ten and 52/100 Dollars ($1,110.52),
plus attorneys' fees and other costs which are payable under the GSE Process
Loan Documents.
B-7. Pursuant to Article III of the GSE Process Line of Credit Agreement,
and included within the maximum amount available to be borrowed by GSE Process
under the GSE Process Line of Credit, there is outstanding Letter of Credit No.
405600 in the face amount of $630,000 issued by the Lender for the benefit of
0000 Xxxxxxxx Xxxxxxxxx, LLC (the "GSE Process Letter of Credit").
C. The GSE Power Line of Credit and the GSE Process Line of Credit are
called the "Lines of Credit." The GSE Power Line of Credit Agreement and the GSE
Process Line of Credit Agreement are called the "Line of Credit Agreements." The
GSE Power Line of Credit Note and the GSE Process Line of Credit Note are called
the "Notes." The GSE Power Loan Documents and the GSE Process Loan Documents are
called the "Loan Documents." The GSE Power Lockbox and the GSE Process Lockbox
are collectively called the "Lockboxes." Restricted Account #14106-95540 and
Restricted Account #2013-3257 are collectively called the "Restricted Accounts."
Borrowers' Account #14106-95532 and Borrower's Account #2013-3249 are
collectively called the "Borrowers' Accounts." The GSE Power Letter of Credit
Agreements and the GSE Process Letter of Credit Agreement are collectively
called the "Letter of Credit Agreements." The GSE Power Letter of Credit and the
GSE Process Letter of Credit (and any replacement for such Letter of Credit
issued pursuant to paragraph 10 hereof), together with any other Letters of
Credit which may be issued by the Lender pursuant to the terms of the Letter of
Credit Agreements, as amended by this Agreement, are collectively called the
"Letters of Credit."
D. Capitalized terms used herein and no otherwise defined herein shall have
the meanings set forth in the applicable Loan Documents.
E. The Lines of Credit matured on December 31, 1998.
F. The Obligors have requested that the Lender continue to make advances
under the Lines of Credit and extend the maturity dates of the Lines of Credit
until June 30, 1999 and the Lender is willing to do so subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements set forth herein, the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, the parties hereto covenant and agree as follows.
1. Recitals. The Recitals set forth above are a material part of this Agreement.
The Obligors acknowledge and affirm the accuracy of the Recitals set forth
above.
2. Confirmation and Ratification of Documents; Consent to this Agreement. The
Obligors agree that the Loan Documents are in full force and effect and that
each Loan Document shall remain in full force and effect unless and until
modified or amended in writing in accordance with its terms. The Obligors ratify
and confirm their respective obligations under the Loan Documents, and agree
that the execution and delivery of this Agreement shall not in any way diminish
or invalidate any of their respective obligations under the Loan Documents. All
parties consent to the execution and delivery of this Agreement and to all the
provisions of this Agreement to the extent that such provisions may modify the
terms and provisions of any of the Loan Documents.
3. Extension Fee/Administrative Fee.
(a) Upon execution of this Agreement, the Borrowers shall pay to the Lender by
certified or cashier's check an extension fee of $10,000.
(b) Commencing on the date of execution of this Agreement (representing the
January 1999 monthly payment) and on the first day of each month thereafter, the
Borrowers shall pay monthly to the Lender an administrative fee of approximately
$500, the exact amount to be determined by the Lender.
4. Costs and Expenses. Upon execution of this Agreement, the Borrowers shall pay
to the Lender by certified or cashier's check all actual costs and expenses,
including, without limitation, attorneys' fees, UCC search costs and recordation
costs incurred by the Lender in connection with the Lines of Credit.
5. Landlord's Waivers. Contemporaneously with the execution of this Agreement,
the Borrowers shall deliver to the Lender agreements which must be in form and
substance satisfactory to the Lender in its sole discretion, waiving any
landlord's or mortgagee's or lienholder's rights to enforce any claim against
the Borrowers against any collateral of the Lender and allowing the Lender to
have access to its collateral for purposes of inspection and/or to take
possession thereof in accordance with the Lender's rights under the Loan
Documents and applicable law. In connection therewith, and contemporaneously
with the execution of this Agreement, the Borrowers shall provide to the Lender
copies of all leases, mortgages or similar agreements relating to any facility
that is not owned by the Borrowers at which any collateral is located.
6. Permanent Reductions in GSE Process Line of Credit. Upon execution of this
Agreement, the availability under the GSE Process Line of Credit shall be
permanently reduced to $2,000,000. Effective January 31, 1999, the GSE Process
Line of Credit shall be permanently reduced to $1,750,000. Effective February 3,
1999, the GSE Process Line of Credit shall be permanently reduced to $1,120,000.
Effective March 31, 1999, the GSE Process Line of Credit shall be permanently
reduced to $1,000,000. In the event that, on the date that each of the foregoing
reductions is effective, the amount outstanding under the GSE Process Line of
Credit shall exceed the amount available under the GSE Process Line of Credit as
reduced, GSE Process shall pay to the Lender an amount equal to the difference
between the amount available as reduced and the amount outstanding on the date
that each of the foregoing reductions is effective.
7. Qualified Receivables/Eligible Receivables/Borrowing Base Certificates.
(a) For the GSE Power Line of Credit, for purposes of determining
Collateral Value, Qualified Receivables will continue to be valued at ninety
percent (90%) of their outstanding principal amount. The definition of Qualified
Receivables in the GSE Power Line of Credit Agreement is amended to provide that
the payment obligation represented by the Qualified Receivable shall not have
been outstanding more than 90 calendar days from the date of the original
invoice. Qualified Receivables shall not include any intercompany Receivables
(i.e., Receivables owed by an affiliate or subsidiary of either of the Borrowers
or any of the Guarantors). Inventory (i.e., Unbilled Receivables) shall be
valued at fifty percent (50%) of their outstanding principal amount. Qualified
Receivables and Inventory which are not included for purposes of determining
Collateral Value shall nevertheless remain as collateral for all obligations
owed to the Lender.
(b) For the GSE Process Line of Credit, Collateral Value will be equal to
80% of the amount of Eligible Receivables (as defined in the applicable loan
agreement). The definition of Eligible Receivables in the GSE Process Line of
Credit Agreement is amended to provide that the payment obligation represented
by the Qualified Receivable shall not have been outstanding more than 60
calendar days from the date of the original invoice. Eligible Receivables shall
not include any intercompany Receivables (i.e., Receivables owed by an affiliate
or subsidiary of either of the Borrowers or any of the Guarantors) or any
International Receivable. Inventory shall be valued at zero. Eligible
Receivables and Inventory which are not included for purposes of determining
Collateral Value shall nevertheless remain as collateral for all obligations
owed to the Lender. GSE Process shall maintain at all times (regardless of
whether any amounts are outstanding under the GSE Process Line of Credit or the
GSE Process Line of Credit has been paid in full) at least $3,000,000 in
Eligible Receivables.
(c) Each of the Borrowers shall furnish the Lender with borrowing base
certificates (in form acceptable to the Lender in its sole discretion) (i) not
later than 1:00 p.m. (Baltimore, Maryland time) on Tuesday of each week (for the
week ending the prior Friday) (regardless of whether any advance is requested),
(ii) not later than 1:00 p.m. (Baltimore, Maryland time) on the Business Day
following any day (which must be a Business Day) on which an advance is
requested (which must be current as of the day immediately preceding the day the
borrowing base certificate must be furnished to the Lender) and (iii) at such
other times as the Lender may request. Such borrowing base certificates should
be sent to (a) First Union National Bank, 0000 Xxxxx Xxxxxx Xxxx, XxXxxx,
Xxxxxxxx 00000, Attn: Xxxxx X. Xxx, Vice President and (b) Audit and Collateral,
Philadelphia, Pennsylvania, Attn: Xxxxx Xxxxx, Telecopy (000) 000-0000.
8. Interest Rate. The unpaid principal balances (both the existing unpaid
principal balances and future advances) of the Lines of Credit shall bear
interest at the Lender's prime rate plus one and one-half percent (11/2%)
through April 29, 1999. Commencing on April 30, 1999, the unpaid principal
balances (both the existing unpaid principal balances and future advances) of
the Lines of Credit shall bear interest at the Lender's prime rate plus three
percent (3%). The Borrowers will no longer have the option to request a
Eurodollar Loan (as defined in the applicable Line of Credit Agreements). Upon
the occurrence of an Event of Default, interest shall accrue and be payable at
the applicable interest rate plus one percent (1%).
9. Maturity Date. The Lines of Credit shall expire on June 30, 1999 (the
"Maturity Date") and all principal, interest and other sums then outstanding
shall be immediately due and payable. The Obligors acknowledge that the Lender
has previously extended the maturity dates of the Lines of Credit and further
acknowledge that the Lender has advised the Obligors that this will be the final
extension.
10. Letters of Credit.
(a) No Letters of Credit that expire after the date the Exim Guaranty
expires shall be issued under the GSE Power Line of Credit. Notwithstanding the
foregoing, any Letters of Credit issued under the GSE Power Line of Credit must
comply in all respects with Section 4.10 of the Exim Guaranty. No Letters of
Credit shall be issued under the GSE Process Line of Credit, except that upon
the expiration of existing GSE Process Letter of Credit No. 405600 in the face
amount of $630,000 issued by the Lender for the benefit of 0000 Xxxxxxxx
Xxxxxxxxx, LLC, and provided that no Event of Default has occurred hereunder,
the Lender agrees to issue a Letter of Credit in the face amount of $555,000
with an expiration date of February 3, 2000 to replace such existing GSE Process
Letter of Credit.
(b) By June 30, 1999, the Borrowers must either (i) replace any Letters of
Credit that expire after June 30, 1999 and cause the beneficiaries of such
Letters of Credit to return the original Letters of Credit to the Lender or (ii)
purchase a certificate of deposit in an amount equal to the aggregate face
amount of all Letters of Credit that expire after June 30, 1999, which shall be
pledged to the Lender and (A) applied by the Lender against any amounts due
under the Letters of Credit in the event any Letters of Credit are drawn or (B)
returned to the Borrowers at such time as the original Letters of Credit are
returned to the Lender without having been drawn, provided that all principal,
interest and other sums due under the Lines of Credit have been paid in full;
the Borrowers shall execute such documentation in connection therewith as the
Lender may require in its sole discretion.
11. Lockbox. Each of the Borrowers has established a Lockbox with the
Lender into which GSE Power and GSE Process have directed, or will direct by
written notice in form and substance satisfactory to the Lender in its sole
discretion, all account debtors of GSE Power and GSE Process to send all
payments on accounts. Amounts received in each Lockbox shall be deposited upon
collection into collateral accounts (separately, the "GSE Power Collateral
Account" and the "GSE Process Collateral Account" and collectively, the
"Collateral Accounts") over which the Lender shall have sole power of withdrawal
until such time as the Lines of Credit shall have been fully satisfied. All
amounts in the GSE Power Collateral Account shall be applied, on a daily basis,
to reduce the outstanding balance of the GSE Power Line of Credit, in such
manner as the Lender may determine in its sole discretion. All amounts in the
GSE Process Collateral Account shall be applied, on a daily basis, to reduce the
outstanding balance of the GSE Process Line of Credit, in such manner as the
Lender may determine in its sole discretion. Immediately upon an Event of
Default, all amounts in the Collateral Accounts may be applied to reduce the
outstanding balances of either or both of the Lines of Credit, in such manner as
the Lender may determine in its sole discretion (i.e., all amounts in the GSE
Power Collateral Account may be applied to reduce the outstanding balance of the
GSE Power Line of Credit and/or the GSE Process Line of Credit and all amounts
in the GSE Process Collateral Account may be applied to reduce the outstanding
balance of the GSE Process Line of Credit and/or the GSE Power Line of Credit,
in such manner as the Lender may determine in its sole discretion).
12. Financial Covenants. The financial covenants set forth in Article X of
the Line of Credit Agreements are deleted and replaced with the following:
(a) GSE shall maintain a ratio of Total Liabilities to Tangible Net Worth
(i.e., Total Stockholders' Equity less goodwill and other intangible assets and
software development costs) of not more than 3.9 to 1.0 at all times commencing
on December 31, 1998 and thereafter.
(b) GSE shall maintain a Tangible Net Worth of not less than $5,000,000 at
all times commencing on December 31, 1998 and thereafter.
(c) GSE shall maintain a ratio of EBIT/Interest of not less than 4.0 times
at all times commencing on December 31, 1998 and thereafter.
(d) GSE shall maintain Net Working Capital of not less than $1,000,000 at
all times commencing on December 31, 1998 and thereafter.
(e) GSE shall maintain EBITDA for each quarter of not less than $1,250,000
(to be tested at December 31, 1998 and quarterly thereafter).
Unless otherwise defined, all accounting terms shall have the definitions
given them in accordance with generally accepted accounting principles as
applied to GSE and its subsidiaries, on a consistent basis by its accountants in
the preparation of its previous annual financial statements, and unless
otherwise indicated, all accounting terms and covenants shall be applied on a
consolidated basis.
13. Borrowings.
(a) Section 11.3 of the Line of Credit Agreements is deleted and replaced
with the following: Neither of the Borrowers shall incur any liability for
borrowed money except for the indebtedness to the Lender.
(b) The definition of Permitted Liens is amended to delete subsection (h).
(c) Notwithstanding the foregoing, existing indebtedness to GSE or any of
the stockholders of GSE as set forth in Schedule 1 attached hereto shall be
permitted and the Borrowers shall be permitted to incur indebtedness after the
date hereof as set forth on Schedule 2 attached hereto.
14. Financial Statements and Information.
(a) Commencing on January 15, 1999 and on the fifteenth day of each month
thereafter, the Borrowers shall provide on a monthly basis a list of accounts
receivable, a listing of open unbilled contracts receivable (for GSE Power) and
accounts payable agings and listings current as of the end of the prior month.
The Borrowers shall send such list to (a) First Union National Bank, 0000 Xxxxx
Xxxxxx Xxxx, XxXxxx, Xxxxxxxx 00000, Attn: Xxxxx X. Xxx, Vice President, (b)
Audit and Collateral Management, Philadelphia, Pennsylvania, Attn: Xxxxx Xxxxx,
Telecopy (000) 000-0000 and (c) Exim.
(b) The Borrowers shall provide the Lender and Exim on a monthly basis
consolidated and consolidating financial statements in such form and detail as
the Lender may require and a certificate of the chief financial officer of GSE
stating whether any default or Event of Default has occurred under the Loan
Documents, this Agreement or any documents executed in connection with this
Agreement and, if so, stating the facts with respect thereto. The Borrowers
shall also provide the Lender and Exim on a monthly basis with both a Contract
Status Report and open export purchase order listing certified by the chief
financial officer of GSE stating whether GSE Power and MSHI are in compliance
with the terms and conditions of the Exim Guaranty and related Loan
Authorization Agreement and Borrower Agreement and, if not, stating the facts
relating to such noncompliance. Such Contract Status Report shall also include
letter of credit coverage, currency and United States made product content and
such other information as the Lender may request.
(c) Within one hundred twenty (120) days from the end of each fiscal year,
the Borrowers shall provide to the Lender and Exim the complete 10-K and
consolidating balance sheets and income and expense statements of GSE together
with its subsidiaries audited by an independent certified public accountant firm
selected by GSE and acceptable to the Lender. Within forty-five (45) days from
the end of each fiscal quarter, the Borrowers shall provide to the Lender and
Exim the complete 10-Q and consolidating balance sheets and income and expense
statements of GSE together with its subsidiaries, in reasonable detail and
prepared in accordance with GAAP and certified by the chief financial officer of
GSE. The foregoing financial statements shall be accompanied by a certificate of
the chief financial officer of GSE stating whether any default or Event of
Default has occurred under the Loan Documents, this Agreement or any documents
executed in connection with this Agreement and, if so, stating the facts with
respect thereto. Such certificate shall also state whether GSE Power and MSHI
are in compliance with the terms and conditions of the Exim Guaranty, the Exim
Borrower Agreement and the related Loan Authorization Agreement. The Borrowers
shall provide to the Lender and Exim such other financial or other information
as the Lender may request in its reasonable discretion from time to time.
(d) Within one hundred twenty (120) days from the end of each fiscal year,
GP Strategies shall provide to the Lender and Exim a copy of its 10-K and
ManTech shall provide to the Lender and Exim the consolidated balance sheets and
income and expense statements of ManTech together with its subsidiaries audited
by a national independent certified public accountant firm. Within sixty (60)
days from the end of each fiscal quarter, GP Strategies shall provide to the
Lender and Exim a copy of its 10 Q SEC reports and ManTech shall provide to the
Lender and Exim the consolidated balance sheets and income and expense
statements of Mantech in the same form currently being provided to the Lender in
connection with a separate loan made by the Lender to ManTech. If the Lender
desires additional financial information from GP Strategies and ManTech, GP
Strategies and ManTech will permit the Lender's officers or authorized
representatives or accountants to discuss GP Strategies' and ManTech's affairs,
finances and accounts with their respective officers at such reasonable times
during normal business hours, and as often as the Lender may desire. In the
event GP Strategies and/or ManTech refuses to so discuss such affairs, finances
and accounts or promptly provide such supplemental material as the Lender may
reasonably request during such discussions, an Event of Default shall be
conclusively deemed to have occurred, and the Lender may proceed to assert its
rights under this Agreement, any documents executed in connection with this
Agreement or the Loan Documents as if such Event of Default had occurred without
regard to whether an Event of Default has actually occurred.
(e) The Borrowers shall provide to the Lender such other financial or other
information as the Lender may request in its reasonable discretion from time to
time.
15. Primary Depository Account. The Borrowers shall maintain their primary
depository accounts with the Lender.
16. Cross-Default and Cross-Collateralization.
(a) A default under the GSE Power Line of Credit shall be a default under
the GSE Process Line of Credit. A default under the GSE Process Line of Credit
shall be a default under the GSE Power Line of Credit.
(b) The collateral covered by the GSE Power Line of Credit Agreement and
the GPI Security Agreement shall also secure the GSE Process Line of Credit and
the GSE Process Letter of Credit. The collateral covered by the GSE Process Line
of Credit Agreement shall also secure the GSE Power Line of Credit and the GSE
Power Letter of Credit. The term "Borrower's Obligations" as used in the GSE
Power Line of Credit Agreement shall mean collectively "Borrower's Obligations"
as defined in the GSE Power Line of Credit Agreement and "Borrower's
Obligations" as defined in the GSE Process Line of Credit Agreement. The term
"Borrower's Obligations" as used in the GSE Process Line of Credit Agreement
shall mean collectively "Borrower's Obligations" as defined in the GSE Process
Line of Credit Agreement and "Borrower's Obligations" as defined in the GSE
Power Line of Credit Agreement. The term "Liabilities" as defined in the GPI
Security Agreement shall mean "Liabilities" as defined in the GPI Security
Agreement and shall also include the obligations of GPI as guarantor of the GSE
Process Line of Credit pursuant to its Amended and Restated Guaranty executed in
connection with this Agreement. The Borrowers and GPI hereby assign and
reassign, pledge and repledge and grant and regrant to the Lender, and confirm
that the Lender has a perfected and continuing security interest, in, and lien
on the following: (a) all of the Borrowers' and GPI's Accounts, Inventory,
Chattel Paper, Documents, Instruments, General Intangibles (including, without
limitation, all tax refunds), and Equipment (whether or not fixtures), whether
now owned or existing or hereafter acquired or arising, other than vehicle
leases and equipment leases, (b) all returned, rejected or repossessed goods,
the sale or lease of which shall have given or shall give rise to an Account or
Chattel Paper, (c) all insurance policies relating to the foregoing, (d) all
books and records in whatever media (paper, electronic or otherwise) recorded or
stored, with respect to the foregoing and all equipment and general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, (e) the Lockboxes, the Borrowers'
Accounts, the Restricted Accounts, and any other account maintained by any of
the Borrowers or GPI with the Lender and all cash held therein; and (f) all cash
and non-cash proceeds and products of the foregoing, as security for all of the
Borrowers' indebtedness under the Lines of Credit, the Letter of Credit
Agreements (or any obligations related to the Letters of Credit) and all other
obligations of the Obligors under any of the Loan Documents, this Agreement or
any documents executed in connection with this Agreement.
17. Guaranties. GSE and GPI shall continue to guarantee the GSE Power Line
of Credit. GSE shall continue to guarantee the GSE Process Line of Credit. GSE
B.V., GSE Singapore, GSE Belgium, GP Strategies and ManTech, jointly and
severally, shall continue to guarantee the GSE Process Line of Credit and in
addition shall guarantee the GSE Power Line of Credit. The liability of GSE,
GPI, GSE B.V., GSE Singapore and GSE Belgium is and shall continue to be
unlimited. The liability of GP Strategies and ManTech is and shall continue to
be limited to $1,500,000 each, which shall increase by an amount equal to fifty
percent (50%) of any amounts drawn by the beneficiary of Letter of Credit No.
405600 and/or any replacement for such Letter of Credit issued pursuant to
paragraph 10 hereof on or prior to their respective expiration dates. Such
increases shall be effective immediately and automatically upon any such
draw(s). GSE Power and GSE Process shall also guarantee the Lines of Credit of
each other. In addition, all other affiliates and subsidiaries of GSE, GSE Power
and GSE Process (the "Additional Guarantors") shall jointly and severally
guarantee the Lines of Credit, such guarantees to be unlimited.
18. MIDFA Guaranty. The Borrowers shall use their best efforts to obtain
$1,000,000 in insurance from the Maryland Industrial Development Financing
Authority ("MIDFA") for the Lines of Credit. The Borrowers shall be solely
responsible for obtaining the MIDFA guarantee and for paying any premiums, fees
or other costs related thereto. Commencing on January 1, 1999 and on the first
day of each month thereafter until the Lines of Credit have been paid in full,
the Borrowers shall provide to the Lender a written status report detailing
these efforts, together with copies of all correspondence, agreements and other
writings related to such efforts.
19. Audits of Collateral. The Borrowers shall permit the Lender or any
agent or representative thereof, at any reasonable time and from time to time,
to conduct a field audit of the inventory and a book audit of the accounts
receivable and other collateral at least twice between the date of closing and
the Maturity Date. The Obligors shall be responsible for all costs and expenses
associated with such audits, which shall be deemed to be obligations which are
secured by the Loan Documents, as amended by this Agreement and the documents
executed in connection with this Agreement.
20. Refinancing. The Borrowers shall use their best efforts to secure
refinancing or seek debt and/or equity in amounts sufficient to satisfy in full
the Lines of Credit on or prior to the Maturity Date. Commencing on January 15,
1999 and on the fifteenth day of each month thereafter until the Lines of Credit
have been paid in full, the Borrowers shall provide to the Lender a written
status report detailing these efforts, together with copies of all supporting
documentation, including all material correspondence, agreements and other
writings related to such efforts.
21. Press Releases. The Borrowers shall provide the Lender and the
Export-Import Bank with copies of all press releases relating to the Obligors
and any subsidiaries or affiliates of the Obligors contemporaneously with their
release.
22. Additional Documentation/Post-Closing Items.
(a) Contemporaneously with the execution hereof, the Borrowers shall
execute modifications of the Notes, substantially in the forms attached hereto
as Exhibit A.
(b) Contemporaneously with the execution hereof, the Guarantors and
Additional Guarantors shall execute guaranties, substantially in the forms
attached hereto as Exhibit B.
(d) Within ten (10) days after the execution hereof, the Borrowers and GPI
shall deliver to the Lender a list of all of the locations at which any of the
collateral is located, the approximate value of the collateral located at each
such location and a listing of the collateral located at each such location and,
within two (2) days of a request by the Lender shall execute and deliver to the
Lender such amendments to the existing financing statements and such additional
financing statements as the Lender may request.
(e) Within (2) days of a request by the Lender, GSE Power and GPI shall
execute and deliver to the Lender such amendments/reaffirmations of the GSE
Power Assignment of Patents and the GPI Assignment of Patents and related
documents as the Lender may request.
(f) Within five (5) days after the execution hereof, the Borrowers shall
deliver to the Lender a letter signed by counsel for the Borrowers stating that
(i) Xxxx Nuclear Industries (RNI) is a division of GSE Power and is not a
separately organized legal entity; (ii) Xxxx Nuclear Industries (RNI) is the
same entity that the Borrowers report on the borrowing base certificates that
the Borrowers submit to the Lender and (iii) GSE Process Solutions BV (KOREA) is
a division of GSE Process Solutions BV (Netherlands) and is not a separately
organized legal entity.
23. Resolutions of the Obligors/Good Standing. Within fifteen (15) days
after the execution of this Agreement, the Obligors shall deliver to the Lender
resolutions prepared by the Obligors evidencing their consent to the execution
of this Agreement and the documents executed in connection with this Agreement.
Within ten (10) days after the execution of this Agreement, the Obligors shall
also obtain and deliver to the Lender current good standing certificates for all
of the jurisdictions in which the Obligors are incorporated or doing business.
Notwithstanding the foregoing, GP Strategies and ManTech shall only be required
to obtain and deliver to the Lender, within ten (10) days after the execution of
this Agreement, current good standing certificates for the jurisdictions in
which GP Strategies and ManTech are incorporated and for the State of Maryland
if GP Strategies or ManTech are doing business in Maryland.
24. Representations and Warranties. In order to induce the Lender to enter
into this Agreement, the Obligors represent and warrant to the Lender as
follows:
(a) Existing Representations and Warranties. The representations and
warranties set forth in the Loan Documents are true and correct in all material
respects (references to financial statements of the Borrowers and GSE shall be
deemed to be references to the latest financial statements of the Borrowers and
GSE) with the same effect as though made on and as of the date hereof, except to
the extent that such representations and warranties expressly relate to an
earlier date.
(b) No Defaults or Events of Default. The Borrowers are in compliance with
all terms and provisions of the Loan Documents, except for the financial
covenants set forth in Article X of the Line of Credit Agreements.
(c) Organization and Standing. Each Obligor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with corporate power adequate to own and
operate the properties owned by it, to carry on the business conducted by it, to
enter into and perform this Agreement and to carry out the transactions
contemplated hereby.
(d) Authorization and Validity. The execution and delivery of this
Agreement by each of the Obligors and the performance of each Obligor's
obligations hereunder have been duly authorized by proper corporate action and
this Agreement constitutes the legal, valid and binding obligations of each
Obligor and is enforceable in accordance with its terms.
(e) Compliance with Other Instruments. None of the Obligors are in
violation of any provision of its articles of incorporation or by-laws and are
not in default under any existing judgment or decree or of any existing law,
governmental order, rule or regulation applicable to it, or of any agreement or
other instrument to which it is a party or by which it or its assets are bound
to the extent that any such violation would affect the ability of any of the
Obligors to perform any of their obligations under this Agreement, any documents
executed in connection with this Agreement or the Loan Documents in any material
respect. Neither the execution and delivery of this Agreement nor the
consummation of the transactions herein contemplated, nor compliance with the
terms and provisions hereof, has constituted or resulted in or will constitute
or result in a breach of the articles of incorporation or by-laws of any
Obligor, or the violation of any presently existing applicable governmental
requirement or will conflict or will be inconsistent with or will result in any
breach of, any of the terms, covenants, conditions or provisions thereof, or
will constitute a default under, any indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which any Obligor is
a party or by which any Obligor may be bound or subject to the extent that any
such breach or default would affect the ability of any of the Obligors to
perform any of their obligations under this Agreement, any documents executed in
connection with this Agreement or the Loan Documents in any material respect.
(f) Assets. The Borrowers' and GPI's assets are not subject to any existing
liens or encumbrances except that granted to the Lender except as shown on
Exhibit C attached hereto.
(g) No Claims, etc. There are no claims, defenses or setoffs with respect
to the Notes or with respect to any of the other Loan Documents, or with respect
to the indebtedness evidenced or secured thereby or with respect to the
collection or enforcement of any of the same (and to the extent any such claim,
setoff or defense exists, they are each waived and relinquished in their
entirety).
(h) Disclosure. This Agreement and all agreements, documents, certificates
or statements furnished to the Lender by or on behalf of the Obligors in
connection with the transactions contemplated hereby are true, correct and
complete and do not contain any untrue statement of material fact.
(i) Benefit. Each Obligor has derived direct or indirect benefit from this
Agreement and the transactions contemplated hereby.
(j) Free Act and Will. The Obligors are not entering into this Agreement in
reliance upon any statement, representation or warranty of any nature whatsoever
made by the Lender, or any other person or entity whatsoever, which is not
expressly stated herein, and each Obligor has entered into this Agreement
entirely of its own free act and will.
(k) Xxxx Nuclear Industries (RNI). Xxxx Nuclear Industries (RNI) is a
division of GSE Power and is not a separately organized legal entity. Xxxx
Nuclear Industries (RNI) is the same entity that the Borrowers report on the
borrowing base certificates that the Borrowers submit to the Lender.
(l) GSE Process Solutions BV (KOREA). GSE Process Solutions BV (KOREA) is a
division of GSE Process Solutions BV (Netherlands) and is not a separately
organized legal entity.
25. Events of Default. The occurrence of one or more of any of the
following events (the "Events of Default") shall constitute an Event of Default
under this Agreement:
(a) Failure to pay to the Lender when due any amounts required by this
Agreement or any document executed in connection with this Agreement.
(b) Failure to comply with or perform as and when required, or to observe,
any of the terms, conditions or covenants of this Agreement or any document
executed in connection with this Agreement.
(c) If any representation or warranty made herein, in any document executed
in connection with this Agreement or in any report, certificate, financial
statement or other instrument furnished in connection with this Agreement, shall
prove to have been materially false or misleading on the date as of which it was
made.
(d) If the Lender determines in good faith that a material adverse change
has occurred in the financial condition or business condition of GSE, GSE Power
and/or GSE Process.
(e) If the Exim Guaranty has not been extended fourteen (14) days before it
is due to expire;
(f) If the Exim Guaranty otherwise ceases to be in full force and effect or
a default occurs thereunder or under the Exim Borrower Agreement.
(g) If any of the Letters of Credit are drawn and not repaid by the
Borrowers immediately upon demand by the Lender.
(h) If the Borrower fails to provide satisfactorily, in the Lender's sole
determination, for the Borrower's year 2000 compatibility and the same is not
cured within thirty (30) days after written notice thereof.
(i) If a default which remains uncured after the expiration of any
applicable cure period or an Event of Default occurs under any of the Loan
Documents and such default shall not be cured within any applicable cure periods
set forth therein.
26. Remedies. Immediately upon the occurrence of any Event of Default, the
Lender shall have the right to exercise any and all rights available to it under
this Agreement, any document executed in connection with this Agreement or any
of the Loan Documents and applicable law. All rights and remedies available to
the Lender under this Agreement, any document executed in connection with this
Agreement or any of the Loan Documents and applicable law may be asserted
concurrently, cumulatively or successively, from time to time, as long as the
parties hereto shall be indebted to the Lender.
27. Release. Each Obligor, for itself and its directors, officers,
employees, agents, members, predecessors, successors and assigns, hereby
releases and forever waives and relinquishes all claims, demands, obligations,
liabilities and causes of action of whatsoever kind or nature, whether known or
unknown, which it or he has, may have or might have or assert now or in the
future against the Lender and/or any affiliates or entities related to such
entity, and any of the directors, officers, employees, agents, predecessors
(including CoreStates Bank, N.A.), successors and assigns, as the case may be,
of all such entities, in connection with, directly or indirectly, this
Agreement, the Loan Documents, any document executed in connection with this
Agreement or any transactions contemplated hereby or thereby, any prior loan
made or credit extended to the Borrowers by the Lender or otherwise to any
relationship between any Obligor and the Lender.
28. Further Assurances and Corrective Instruments. The Obligors will
execute, acknowledge and deliver, from time to time, such supplements hereto and
such further instruments and documents, as the Lender may require in its
reasonable discretion to protect, perfect and enforce the Lender's interest in
any collateral security for the Lines of Credit or to facilitate the carrying
out of the intentions of the parties to this Agreement.
29. Waiver of Trial by Jury. Each Obligor and the Lender hereby waive trial
by jury in any action or proceeding to which any Obligor and the Lender may be
parties, arising out of or in any way pertaining to this Agreement, any of the
documents executed in connection with this Agreement or the Loan Documents. It
is agreed and understood that this waiver constitutes a waiver of trial by jury
of all claims against all parties to such actions or proceedings, including
claims against parties who are not parties to this Agreement. This waiver is
knowingly, willingly and voluntarily made by each Obligor and each Obligor
hereby represents that no representations of fact or opinion have been made by
any individual to induce this waiver of trial by jury or to in any way modify or
nullify its effect. Each Obligor further represents that it has been represented
or has had the opportunity to be represented in the signing of this Agreement
and in the making of this waiver by independent legal counsel, selected of its
own free will, and that it has had the opportunity to discuss this waiver with
counsel.
30. Bankruptcy.
(a) Each of the Borrowers and GPI warrants and represents to the Lender
that it has no present intent (i) to file any voluntary petition in bankruptcy
under any Chapter of the Bankruptcy Code or directly or indirectly to cause any
of the Borrowers, GPI or any other person or entity that may hereafter own any
interest in, or claim any beneficial interest in, any collateral for the Lines
of Credit, to file any voluntary petition in bankruptcy under any Chapter of the
Bankruptcy Code or to have any involuntary petition in bankruptcy filed against
it under any Chapter of the Bankruptcy Code or (ii) in any manner directly or
indirectly to cause any of the Borrowers, GPI or any other person or entity that
may hereafter own any interest in, or claim any beneficial interest in, any
collateral for the Lines of Credit, to seek relief, protection, reorganization,
liquidation, dissolution, or similar relief for debtors under any federal,
state, or local law, or in equity, or (iii) in any manner directly or indirectly
to cause any of the collateral for the Lines of Credit to be the subject of any
bankruptcy or insolvency proceedings or the property of any bankruptcy or
insolvency estate.
(b) Each of the Borrowers and GPI acknowledges and agrees that in the event
the collateral for the Lines of Credit or any portion thereof shall ever become
the subject of any bankruptcy or insolvency estate, then the Lender shall
immediately become entitled, among other relief to which the Lender may be
entitled under this Agreement, the Loan Documents, the documents executed in
connection with this Agreement and at law or in equity, to obtain upon ex parte
application therefor and without further notice or action of any kind, (i) an
order from the court prohibiting the use by the trustee in bankruptcy or by any
of the Borrowers or GPI as debtor in possession of the Lender's "cash
collateral" (as such term is defined in Section 363 of the Bankruptcy Code) in
connection with the Lines of Credit, and (ii) an order from the court granting
immediate relief from the automatic stay pursuant to Section 362 of the
Bankruptcy Code so as to permit the Lender to exercise all of its rights and
remedies pursuant to this Agreement, the Loan Documents, the documents executed
in connection with this Agreement and at law and in equity, and each of the
Borrowers and GPI further acknowledges and agrees that the occurrence or
existence of any Event of Default under this Agreement shall, in and of itself,
constitute "cause" for relief from the automatic stay pursuant to the provisions
of Section 362(d)(1) of the Bankruptcy Code.
(c) Each of the Borrowers and GPI further acknowledges and agrees that in
the event of the filing of any voluntary or involuntary petition in bankruptcy
by or against any of the Borrowers or GPI, none of the Borrowers or GPI shall
assert or request any other party to assert that the automatic stay provided by
Section 362 of the Bankruptcy Code shall operate or be interpreted to stay,
interdict, condition, reduce, or inhibit the ability of the Lender to enforce
any rights it has by virtue of this Agreement the Loan Documents or the
documents executed in connection with this Agreement, or any other rights the
Lender has, whether now or hereafter acquired, against any person or entity
which is not a debtor in such bankruptcy proceedings or against any property
owned by any such non-debtor; and further that, in the event of the filing of
any voluntary or involuntary petition in bankruptcy by or against any of the
Borrowers or GPI, none of the Borrowers or GPI shall seek a supplemental stay or
any other relief, whether injunctive or otherwise, pursuant to Section 105 of
the Bankruptcy Code or any other provision of the Bankruptcy Code, to stay,
interdict, condition, reduce, or inhibit the ability of the Lender to enforce
any rights it has by virtue of this Agreement, the Loan Documents, the documents
executed in connection with this Agreement or at law or in equity, or any other
rights the Lender has, whether now or hereafter acquired, against any person or
entity which is not a debtor in such bankruptcy proceedings, or against any
property owned by any such non-debtor.
31. Consent to Assignment of Lines of Credit and Disclosure of Documents.
Each of the Obligors consents to the sale and assignment by the Lender of any or
all of their interest in the Lines of Credit at any time in the Lender's sole
and absolute discretion. Within fifteen (15) days after any such sale or
assignment, the Lender shall provide the Obligors with notice of the name of the
individual or entity purchasing such Lines of Credit. In conjunction with such
assignment, each of the Obligors consents to the disclosure of any and all
books, records, files, loan agreements, notes, deeds of trust, guaranties,
financing statements, assignments of leases, statements, ledger cards, signature
cards, corporate and/or partnership documents, financial statements, leases,
appraisals, environmental audits, hazard and liability insurance policies, title
insurance policies, loan payment histories, income tax returns, credit analyses,
notes, correspondence, internal memoranda, checks, deposit account records and
other documents which are in the Lender's possession or control or to which the
Lender is entitled under the terms of this Agreement, any documents executed in
connection with this Agreement or the Loan Documents relating to the Lines of
Credit to prospective assignees.
32. Power of Attorney. Each of the Obligors makes, constitutes and appoints
the Lender and any agent of the Lender designated by the Lender as their true
and lawful attorney-in-fact with full power and authority to endorse, execute
and sign for them and in their name all documents and writings which they are
required to execute and deliver to the Lender under this Agreement, any document
executed in connection with this Agreement or the Loan Documents, which the
Lender deems necessary or appropriate to create, perfect, preserve, protect, or
enforce the Lender's security interest or rights under this Agreement, any
document executed in connection with this Agreement or the Loan Documents.
Notwithstanding the foregoing, the Lender agrees not to exercise the foregoing
power unless the Obligors have not complied with any request by the Lender to
endorse or execute such documents and writings and delivered such endorsed and
executed documents and writings to the Lender within five (5) days of a request
by the Lender.
33. Year 2000 Compatibility. By June 30, 1999, the Borrowers shall take all
reasonable action necessary to assure that the Borrowers' computer-based system
is able to operate and effectively process data (including dates) on and after
January 1, 2000, in order to (a) conduct normal internal business operations
(i.e., processing of timesheets, running of payroll, the operation of internal
automated financial operations and human resources computer systems, periodic
progress reports for work performed and invoices to enable payment for work
performed), and (b) avoid any material adverse effect that may occur to any
Borrower's business operations performed for the benefit of such Borrower's
customers as a result of any Borrower's failure to provide satisfactorily, in
the Lender's sole determination, for such Borrower's year 2000 compatibility.
All such systems (i) shall not cease to perform or provide (and shall not cause
any software and/or system which is material to the operations of such Borrower
or any interface therewith to provide) invalid or incorrect results as a
consequence of date functionality and/or data; (ii) shall not experience any
degradation of performance or functionality arising from or relating to date
functionality and/or data which is material to the operations of such Borrower
or any material interface therewith and which represents or references different
centuries, more than one century or leap years; (iii) shall effectively and
accurately manage and manipulate data which is material to the operations of
such Borrower or any material interface therewith and used by such business
computer related systems and derived from, involving or relating in any way to
dates, including single century formulas and multi-century or leap year
formulas; and (iv) shall not cause an abnormal ending scenario within such
business computer related systems or in any software and/or system with which
such systems interface (or generate incorrect values or invalid results
involving such dates) that could have a material adverse effect on such
Borrower's business operations. By February 28, 1999, the Borrowers shall
provide the Lender with an assessment with respect to the Borrowers' year 2000
vulnerability. By March 31, 1999, the Borrowers shall provide the Lender with
its written plan setting forth in reasonable detail the actions the Borrowers
intend to take to ensure the Borrowers' year 2000 compatibility and shall
provide the Lender quarterly, or more frequently upon the Lender's request, with
reports evidencing the Borrowers' progress toward year 2000 compatibility. By
June 30, 1999, the Borrowers shall also provide the Lender with its written plan
setting forth in reasonable detail a contingency plan in the event that the
Borrowers have not completed the actions the Borrowers intend to take to ensure
year 2000 compatibility by December 31, 1999. The Borrowers' failure to provide
satisfactorily, in the Lender's sole determination, for the Borrowers' year 2000
compatibility shall be an Event of Default.
34. Miscellaneous.
(a) Waivers by the Lender. Neither any failure nor any delay on the part of
the Lender in exercising any right, power or remedy under this Agreement, any
documents executed in connection with this Agreement or the Loan Documents, or
under applicable law shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercises thereof or the
exercise of any other right, power or remedy. No waiver or forbearance by the
Lender as to any of the Obligors shall waive or release any rights or claims
which the Lender may now have or hereafter have against any other person, firm
or individual. The Lender reserves all rights except to the extent expressly
provided herein.
(b) Modifications. No modification or waiver of any provision of this
Agreement, any documents executed in connection with this Agreement or the Loan
Documents, and no consent by the Lender to any departure by the Obligors
therefrom shall in any event be effective unless the modification, waiver or
consent shall be in writing. Any such waiver or consent shall be effective only
in the specific instance or for the purpose for which given. No notice to, or
demand upon the Obligors in any case shall entitle the Obligors to any other or
further notice or demand in the same, similar or other circumstances.
(c) No Novation. Nothing set forth in this Agreement or in any of the
documents executed in connection with this Agreement shall cause a novation nor
shall it extinguish, terminate, or impair the Obligors' obligations under the
Loan Documents, as amended by this Agreement, or affect the priority of the lien
of the Lender established by the Loan Documents.
(d) Applicable Law. The performance, construction and enforcement of this
Agreement, the documents executed in connection with this Agreement and the Loan
Documents shall be governed by the laws of the State of Maryland.
(e) Survival; Successors and Assigns. All covenants, agreements,
representations and warranties made herein, in any documents executed in
connection with this Agreement and in the Loan Documents shall continue in full
force and effect. Whenever in this Agreement any of the parties is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All covenants, agreements, representations and warranties by or on behalf
of the Obligors which are contained in this Agreement, in any documents executed
in connection with this Agreement and the Loan Documents shall inure to the
benefit of the Lender and its successors and assigns.
(f) Severability. If any term, provision or condition, or any part thereof,
of this Agreement, any documents executed in connection with this Agreement or
the Loan Documents shall for any reason be found or held to be invalid or
unenforceable by any court or governmental agency of competent jurisdiction,
such invalidity or enforceability shall not affect the remainder of such term,
provision or condition or any other term, provision or condition, and this
Agreement, any documents executed in connection with this Agreement and the Loan
Documents shall survive and be construed as if such invalid or unenforceable
term, provision or condition had not been contained therein.
(g) Merger and Integration. This Agreement, any documents executed in
connection with this Agreement and the Loan Documents contain the entire
agreement of the parties hereto with respect to the matters covered and the
transactions contemplated hereby, and no other agreement, statement or promise
made by any party hereto, or any employee, officer, agent or attorney of any
party hereto, shall be valid or binding.
(h) Headings. The headings and subheadings contained in the titling of this
Agreement are intended to be used for convenience only and shall not be used or
deemed to limit or diminish any of the provisions hereof.
(i) Gender, Singular. All references made (a) in the neuter, masculine or
feminine gender shall be deemed to have been made in all such genders, and (b)
in the singular or plural number shall be deemed to have been made,
respectively, in the plural or singular number as well.
(j) Time of Essence. Time is of the essence of this Agreement.
35. Notices. Any notices required or permitted by this Agreement shall be
in writing and shall be deemed delivered if hand delivered or delivered by
certified mail, postage prepaid, return receipt requested, or by facsimile or
telegraph as follows, unless such address is changed by written notice
hereunder:
If to the Obligors: GSE Systems, Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
Senior Vice President/Chief Financial Officer
If to ManTech: ManTech International Corporation
00000 Xxx Xxxxxxx Xxxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esquire
If to GP Strategies: GP Strategies Corporation
0 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxx X. Xxxxxx, Esquire
with a copy to: Xxxx X. Xxxxxx, Esquire
0000 X Xxxxxx, X.X.
Xxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
If to the Lender: First Union National Bank
0000 Xxxxx Xxxxxx Xxxx
0xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxx
Vice President
with a copy to: Piper & Marbury L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esquire
36. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one in the same agreement.
37. Condition Precedent to Effectiveness. Within five (5) days after the
execution of this Agreement, the Borrowers shall obtain and provide to the
Lender the written consent of Exim to this Agreement and the documents executed
in connection with this Agreement. This Agreement and the documents executed in
connection with this Agreement shall be effective as of January 1, 1999 on the
earlier of the date the Borrowers provide such written consent of Exim to the
Lender or the date which is five (5) business days after Exim receives a written
request for such consent in the event that Exim does not respond to such
request. In the event that the Borrowers fail to obtain and provide such written
consent of Exim to the Lender within five (5) days after the execution of this
Agreement, this Agreement and the documents executed in connection with this
Agreement shall not become effective. In such event, the Lines of Credit shall
have matured on December 31, 1998 and the Lender shall have the right to
exercise any and all rights available to it under any of the Loan Documents and
applicable law.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed, this Agreement under seal as of the date first written above.
WITNESS/ATTEST: BORROWERS: GSE POWER SYSTEMS, INC.
f/k/a Simulation, Systems & Services
Technologies Company
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
--------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
MSHI, INC.
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
---------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
--------------------------
GSE PROCESS SOLUTIONS, INC.
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
----------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
--------------------------
GUARANTORS:
GSE SYSTEMS, INC.
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
----------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
GP INTERNATIONAL ENGINEERING
& SIMULATION, INC.
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
----------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
GP STRATEGIES CORPORATION
By:/S/ XXXXX XXXXXXXXX (SEAL)
------------------------------------ --------------------------------
Name: Xxxxx Xxxxxxxxx
---------------------------
Title: Executive Vice President
---------------------------
MANTECH INTERNATIONAL CORPORATION
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
------------------------------------ --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Vice President
---------------------------
GSE PROCESS SOLUTIONS B.V.
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
------------------------------------ --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Senior Vice President
---------------------------
GSE PROCESS SOLUTIONS
SINGAPORE (PTE) LIMITED
By:/S/XXXXXXXXXXX X. XXXXXXXX (SEAL)
------------------------------------- --------------------------------
Name:Xxxxxxxxxxx X. Xxxxxxxx
---------------------------
Title:Director
---------------------------
GSE PROCESS SOLUTIONS BELGIUM NV
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
-------------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------
Title: Director
---------------------------
LENDER: FIRST UNION NATIONAL BANK
By:/S/ XXXXX X. XXX (SEAL)
-------------------------------
Name:Xxxxx X. Xxx
--------------------------
Title:Vice President
-------------------------
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Power
Systems, Inc., f/k/a Simulation, Systems & Services Technologies Company, and
that (s)he, in such capacity, being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the name of GSE Power
Systems, Inc., as ____________________ of GSE Power Systems, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
---------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of MSHI, Inc., and
that (s)he, in such capacity, being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the name of MSHI,
Inc., as ____________________ of MSHI, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
----------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF _______________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Process
Solutions, Inc., and that (s)he, in such capacity, being authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of GSE Process Solutions, Inc., as ____________________ of GSE Process
Solutions, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
---------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF _______________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Systems,
Inc., and that (s)he, in such capacity, being authorized to do so, executed the
foregoing instrument for the purposes therein contained, by signing the name of
GSE Systems, Inc., as ____________________ of GSE Systems, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF _______________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GP International
Engineering & Simulation, Inc., and that (s)he, in such capacity, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained, by signing the name of GP International Engineering & Simulation,
Inc., as ____________________ of GP International Engineering & Simulation, Inc.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GP Strategies
Corporation, and that (s)he, in such capacity, being authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of GP Strategies Corporation, as ____________________ of GP Strategies
Corporation.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of ManTech
International Corporation, and that (s)he, in such capacity, being authorized to
do so, executed the foregoing instrument for the purposes therein contained, by
signing the name of ManTech International Corporation, as ____________________
of ManTech International Corporation.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Process
Solutions B.V., and that (s)he, in such capacity, being authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of GSE Process Solutions B.V., as ____________________ of GSE Process
Solutions B.V.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF _______________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Process
Solutions Singapore (PTE) Limited, and that (s)he, in such capacity, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained, by signing the name of GSE Process Solutions Singapore (PTE) Limited,
as ____________________ of GSE Process Solutions Singapore (PTE) Limited.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF _______________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared ____________________, who
acknowledged himself/herself to be the ____________________ of GSE Process
Solutions Belgium NV, and that (s)he, in such capacity, being authorized to do
so, executed the foregoing instrument for the purposes therein contained, by
signing the name of GSE Process Solutions Belgium NV, as ____________________ of
GSE Process Solutions Belgium NV.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
STATE OF ______________________
SS:
CITY/COUNTY OF ________________
I HEREBY CERTIFY that on this __________ day of ___________, 19____, before
me, the undersigned officer, personally appeared Xxxxx X. Xxx, who acknowledged
himself to be a Vice President of First Union National Bank, and that he, in
such capacity, being authorized to do so, executed the foregoing instrument for
the purposes therein contained, by signing the name of First Union National
Bank, as a Vice President of First Union National Bank.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
--------------------------------
Notary Public
My Commission expires:
