EXHIBIT 10.23
GSE SYSTEMS, INC.
FORM 10-K
For the Year Ended December 31, 1997
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement") is made as of this 2nd day
of February, 1998 by and between GENUS CORPORATION, a Maryland corporation
("Genus") and GSE POWER SYSTEMS, INC., a Delaware corporation ("GSE").
RECITALS:
A. Pursuant to that certain Amended and Restated Lease Agreement dated
January 27, 1993 (the "Lease") between GSE, as tenant, and CCP Development
Limited Partnership No., LLC, a Maryland limited liability company ("CCP"), as
landlord, GSE leased certain space in an office building located at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx (the " Building ").
B. 0000 Xxxxxxxx Xxxxxxxxx, LLC, a Delaware limited liability company
("Allied") has entered into an agreement to purchase the Building from CCP. Upon
closing of that transaction, Allied will succeed to all of CCP's rights under
the Lease.
C. Pursuant to that certain Lease Termination Agreement between GSE and
Allied, executed simultaneously herewith, (the "Termination Agreement") GSE and
Allied have agreed that the Lease shall terminate on April 30, 1998, and that
GSE shall vacate the Building on or before April 30, 1998.
D. Simultaneously with the termination of the Lease, Allied shall enter
into a new lease with Genus for the Building (the "New Lease").
E. As a condition to its entering into the New Lease, Allied has
required that GSE provide Allied a letter of credit (the "Letter of Credit") in
the initial amount of Six Hundred Thirty Thousand Dollars ($630,000.00) to
secure Genus's obligations under the New Lease for five (5) years.
F. GSE is willing to give Allied the Letter of Credit to secure Genus's
obligations under the New Lease in consideration for Genus's agreement to
indemnify, hold harmless and defend GSE on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the foregoing premises, Genus, GSE
and GSE Systems hereby agree as follows:
1. Genus' Indemnification of GSE. Genus shall indemnify, hold harmless
and defend GSE from and against, to the extent arising pursuant to Section
6(b)(ii) of the Termination Agreement: (a) any and all amounts drawn by Allied
on the Letter of Credit or any replacement thereof; and (b) all reasonable costs
and expenses (including reasonable attorney's fees) incurred by GSE in
connection with any action, suit, proceeding, demand or judgment incident to any
draw or attempt by Allied to draw on the Letter of Credit or any replacement
thereof.
2. Liquidated Damages and Expenses on Account of Holdover. In the event
that (i) GSE does not vacate the Building on or before September 15, 1998, (ii)
that Allied fails to deliver the Building to Genus in accordance with Article 3
of the New Lease as a result of GSE's failure to timely vacate as required under
the Termination Agreement, and (iii) Genus terminates the New Lease in
accordance with Article 3 of the New Lease, GSE shall pay to Genus, an amount
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equal to the Annual Base Rental that would have been abated pursuant to Article
3 of the New Lease on account of delay in delivery of the Building by Allied,
which amount is stipulated as one million one hundred seventy thousand eight
hundred twenty-one and 10/100 dollars ($1,170,821.10) it being agreed that such
payment is liquidated damages and not a penalty and such liquidated damages are
a reasonable estimation of Genus' damages on account of such termination); and
(b) all reasonable costs and expenses (including reasonable attorneys' fees)
incurred by Genus in connection with any action, suit, proceeding, demand or
judgment incident to GSE failure to timely vacate the Building.
3. Payments and Interest. Genus shall pay to GSE any and all amounts due
pursuant to Section 1 within ten days of written notice from GSE that Allied has
made a draw on the Letter of Credit or that GSE has incurred the costs and
expenses identified in Section l(b). GSE shall pay to Genus any and all amounts
pursuant to Section 2 herein thirty days after written notice from Genus that
all of the preconditions in Section 2 have been satisfied. Any amount not paid
within such ten-day or thirty-day period, as appropriate, shall bear interest
from the date due until paid at a rate per annum equal to three (3) percentage
points above the prime rate of interest charged by U.S. money center commercial
banks as published in The Wall Street Journal, such prime rate to change from
time to time as and when the change is reported.
5. Miscellaneous. This Agreement (a) shall be governed by and construed
in accordance with the laws of the State of Maryland, (b) may be executed in
multiple counterparts, each of which shall constitute an original and all of
which shall constitute one and the same agreement, (c) constitutes the final and
entire agreement between Genus and GSE with respect to the matters set forth
herein, and (d) shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, successors and assigns. If any provision
shall be deemed severable, the remaining provisions hereof shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENUS CORPORATION
By: /S/ Xxxxxxxx X. Xxxxxx
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Title: President
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GSE POWER SYSTEMS, INC.
By: /S/ Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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JOINDER OF PARENT
By its execution hereof, GSE Systems, Inc., a Delaware corporation,
parent of GSE Power Systems, Inc., hereby guarantees to Genus, GSE's payment in
full of its obligations to Genus under this Indemnification Agreement and all
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees) incurred by Genus in connection with collecting any amounts not paid by
GSE when due to Genus hereunder.
GSE SYSTEMS, INC.
By: /S/ Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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