Exhibit 10.5
BORROWER: GSE
Systems, Inc.
GSE Power
Systems, Inc.
GUARANTOR:
MSHI,
Inc.
CONTINUING AND UNCONDITIONAL GUARANTY
(Ex-Im
Bank-Guaranteed Transaction Specific Revolving Line of
Credit)
To: Bank
of America, N.A.
1. The
Guaranty . For valuable consideration, the
undersigned ("Guarantor") hereby unconditionally guarantees
and promises to pay promptly to Bank of America, N.A., its
subsidiaries and affiliates (collectively, "Bank"), or order,
in lawful money of the United States, any and all
Indebtedness of GSE Systems, Inc. and GSE Power Systems, Inc.
(collectively, the "Borrower") to Bank when due, whether at
stated maturity, upon acceleration or otherwise, and at all
times thereafter. The liability of Guarantor under
this Guaranty is not limited as to the principal amount of
the Indebtedness guaranteed and includes, without limitation,
liability for all interest, fees, indemnities (including,
without limitation, hazardous waste indemnities), and other
costs and expenses relating to or arising out of the
Indebtedness and for all Swap Obligations now or hereafter
owing from Borrower to Bank. The liability of
Guarantor is continuing and relates to any Indebtedness,
including that arising under successive transactions which
shall either continue the Indebtedness or from time to time
renew it after it has been satisfied. This
Guaranty is cumulative and does not supersede any other
outstanding guaranties, and the liability of Guarantor under
this Guaranty is exclusive of Guarantor's liability under any
other guaranties signed by Guarantor. If multiple
individuals or entities sign this Guaranty, their obligations
under this Guaranty shall be joint and several. If
Guarantor is a subsidiary or affiliate of Borrower,
Guarantor's liability hereunder shall not exceed at any one
time the largest amount during the period commencing with
Guarantor's execution of this Guaranty and thereafter that
would not render Guarantor's obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Code (Title 11,
United States Code) or any comparable provisions of any
applicable state law.
2. Definitions
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(a) "Bank
Agreements" shall mean all agreements, documents, and instruments
evidencing any of the Indebtedness, including but not limited to
all loan agreements between Borrower and Bank and promissory notes
from Borrower in favor of Bank, and all deeds of trust, mortgages,
security agreements, and other agreements, documents, and
instruments executed by Borrower in connection with the
Indebtedness, all as now in effect and as hereafter amended,
restated, renewed, or superseded.
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(b) "Borrower"
shall mean the individual or the entity named in Paragraph 1
of this Guaranty and, if more than one, then any one or more of
them.
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(c) "Guarantor"
shall mean the individual or the entity signing this Guaranty and,
if more than one, then any one or more of them.
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(d) "Indebtedness"
shall mean, with respect to that certain Ex-Im Bank-Guaranteed
Transaction Specific Revolving Line of Credit and related
agreements, documents and instruments entered into between
Bank and Borrower as of even date herewith, as now in effect
and as amended, renewed or restated in the future, any and all
debts, liabilities, and obligations of Borrower to Bank, now
or hereafter existing, whether voluntary or involuntary and
however arising, whether direct or indirect or acquired by
Bank by assignment, succession, or otherwise, whether due or
not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, held or to be held by Bank for its
own account or as agent for another or others, whether
Borrower may be liable individually or jointly with others,
whether recovery upon such debts, liabilities, and obligations
may be or hereafter become barred by any statute of
limitations, and whether such debts, liabilities, and
obligations may be or hereafter become otherwise
unenforceable. Indebtedness includes, without
limitation, any and all Swap Obligations and any and all
obligations of Borrower to Bank for reasonable attorneys' fees
and all other costs and expenses incurred by Bank in the
collection or enforcement of any debts, liabilities, and
obligations of Borrower to Bank.
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(e) “Swap
Obligations” shall mean all obligations of Borrower arising
under any interest rate, credit, commodity or equity swap, cap,
floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, securities puts, calls,
collars, options or forwards or any combination of, or option with
respect to, these or similar transactions now or hereafter entered
into between Borrower and Bank.
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3. Obligations
Independent . The obligations hereunder are
independent of the obligations of Borrower or any other
guarantor, and a separate action or actions may be brought
and prosecuted against Guarantor whether action is brought
against Borrower or any other guarantor or whether Borrower
or any other guarantor be joined in any such action or
actions. Anyone executing this Guaranty shall be
bound by its terms without regard to execution by anyone
else.
4. Rights of
Bank . Guarantor authorizes Bank, without
notice or demand and without affecting its liability
hereunder, from time to time to:
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(a) renew,
compromise, extend, accelerate, or otherwise change the time for
payment, or otherwise change the terms, of the Indebtedness or any
part thereof, including increase or decrease of the rate of
interest thereon, or otherwise change the terms of any Bank
Agreements;
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(b) receive
and hold security for the payment of this Guaranty or any
Indebtedness and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such
security;
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(c) apply
such security and direct the order or manner of sale thereof as
Bank in its discretion may determine;
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(d) release
or substitute any Guarantor or any one or more of any endorsers or
other guarantors of any of the Indebtedness; and
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(e) permit
the Indebtedness to exceed Guarantor's liability under this
Guaranty, and Guarantor agrees that any amounts received by Bank
from any source other than Guarantor shall be deemed to be applied
first to any portion of the Indebtedness not guaranteed by
Guarantor.
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5. Guaranty to be
Absolute . Guarantor agrees that until the
Indebtedness has been paid in full and any commitments of
Bank or facilities provided by Bank with respect to the
Indebtedness have been terminated, Guarantor shall not be
released by or because of the taking, or failure to take, any
action that might in any manner or to any extent vary the
risks of Guarantor under this Guaranty or that, but for this
paragraph, might discharge or otherwise reduce, limit, or
modify Guarantor's obligations under this
Guaranty. Guarantor waives and surrenders any
defense to any liability under this Guaranty based upon any
such action, including but not limited to any action of Bank
described in the immediately preceding paragraph of this
Guaranty. It is the express intent of Guarantor
that Guarantor’s obligations under this Guaranty are
and shall be absolute and unconditional.
6. Guarantor's
Waivers of Certain Rights and Certain Defenses
. Guarantor waives:
(a) any
right to require Bank to proceed against Borrower, proceed
against or exhaust any security for the Indebtedness, or
pursue any other remedy in Bank's power
whatsoever;
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(b) any
defense arising by reason of any disability or other defense of
Borrower, or the cessation from any cause whatsoever of the
liability of Borrower;
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(c) any
defense based on any claim that Guarantor's obligations exceed or
are more burdensome than those of Borrower; and
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(d) the
benefit of any statute of limitations affecting Guarantor's
liability hereunder.
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No
provision or waiver in this Guaranty shall be construed as
limiting the generality of any other waiver contained in this
Guaranty.
7. Waiver of
Subrogation . Until the Indebtedness has
been paid in full and any commitments of Bank or facilities
provided by Bank with respect to the Indebtedness have been
terminated, even though the Indebtedness may be in excess of
Guarantor’s liability hereunder, Guarantor waives to
the extent permitted by applicable law any right of
subrogation, reimbursement, indemnification, and contribution
(contractual, statutory, or otherwise) including, without
limitation, any claim or right of subrogation under the
Bankruptcy Code (Title 11, United States Code) or any
successor statute, arising from the existence or performance
of this Guaranty, and Guarantor waives to the extent
permitted by applicable law any right to enforce any
remedy that Bank now has or may hereafter have against
Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by
Bank.
8. Waiver of
Notices . Guarantor waives all
presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of
dishonor, notices of intent to accelerate, notices of
acceleration, notices of any suit or any other action against
Borrower or any other person, any other notices to any party
liable on any Bank Agreement (including Guarantor), notices
of acceptance of this Guaranty, notices of the existence,
creation, or incurring of new or additional Indebtedness to
which this Guaranty applies or any other Indebtedness of
Borrower to Bank, and notices of any fact that might increase
Guarantor’s risk.
9. Security
. To secure all of Guarantor's obligations
hereunder, Guarantor assigns and grants to Bank a security
interest in all moneys, securities, and other property of
Guarantor now or hereafter in the possession of Bank, all
deposit accounts of Guarantor maintained with Bank, and all
proceeds thereof. Upon default or breach of any of
Guarantor's obligations to Bank, Bank may apply any deposit
account to reduce the Indebtedness, and may foreclose any
collateral as provided in the Uniform Commercial Code and in
any security agreements between Bank and
Guarantor.
10. Subordination
. Any obligations of Borrower to Guarantor, now or
hereafter existing, including but not limited to any
obligations to Guarantor as subrogee of Bank or resulting
from Guarantor's performance under this Guaranty, are hereby
subordinated to the Indebtedness. In addition to
Guarantor's waiver of any right of subrogation as set forth
in this Guaranty with respect to any obligations of Borrower
to Guarantor as subrogee of Bank, Guarantor agrees that, if
Bank so requests, Guarantor shall not demand, take, or
receive from Borrower, by setoff or in any other manner,
payment of any other obligations of Borrower to Guarantor
until the Indebtedness has been paid in full and any
commitments of Bank or facilities provided by Bank with
respect to the Indebtedness have been
terminated. If any payments are received by
Guarantor in violation of such waiver or agreement, such
payments shall be received by Guarantor as trustee for Bank
and shall be paid over to Bank on account of the
Indebtedness, but without reducing or affecting in any manner
the liability of Guarantor under the other provisions of this
Guaranty. Any security interest, lien, or other
encumbrance that Guarantor may now or hereafter have on any
property of Borrower is hereby subordinated to any security
interest, lien, or other encumbrance that Bank may have on
any such property.
11. Revocation of
Guarant
