Exhibit 10.2
FIRST AMENDMENT TO LOAN
AGREEMENT
(Ex-Im Bank-Guaranteed
Transaction Specific Revolving Line of Credit)
This First Amendment to Loan Agreement (this “
Amendment ”) dated as of May 5, 2009 is between
Bank of America, N.A. (the “ Bank ”) and
GSE Systems, Inc. , a Delaware corporation (“
GSE ”), and GSE Power Systems, Inc. , a
Delaware corporation (“Power”), as co-borrowers (GSE
and Power are referred to collectively as, the “
Borrower ”).
BACKGROUND
A. The Borrower
and the Bank entered into that certain Loan Agreement (Ex-Im
Bank-Guaranteed Transaction Specific Revolving Line of Credit)
dated as of March 28, 2008 ( the “ Original Loan
Agreement ”).
B. The Borrower
has requested that the Bank modify the revolving line of credit
established by the Original Loan Agreement, and the Bank has agreed
to do so, upon the terms and conditions set forth in this
Amendment.
C. The purpose
of the modification is to amend certain definitions of the
following financial covenants effective as of March 31, 2009:
(i) Debt Service Coverage Ratio and (ii) Funded Debt to
EBITDA Ratio.
AGREEMENT
Now, therefore, in consideration of the premises and the mutual
agreements contained herein, the parties hereby amend the Original
Loan Agreement on the following terms and conditions:
SECTION 1.
DEFINITIONS. All capitalized terms
used herein that are not defined herein shall have the meanings
ascribed to them in the Original Loan Agreement, unless the context
specifically requires otherwise.
SECTION 2.
AMENDMENTS TO ORIGINAL LOAN
AGREEMENT. The following amendments are hereby made to the
Original Loan Agreement:
(A) Section 9.5 of the Original
Loan Agreement is hereby amended and restated in its entirety
effective as of March 31, 2009 to read as follows:
“9.5
Debt
Service Coverage Ratio.
To maintain, with respect to GSE on a consolidated basis, a Debt
Service Coverage Ratio of at least 1.25:1.00.
“ Debt Service Coverage Ratio
” means the ratio of Cash Flow to Debt Service. This ratio
will be calculated at the end of each reporting period for which
the Bank requires financial statements, using the results of the
twelve-month period ending with that reporting
period.
“ Cash Flow ” is defined as
(a) net income, after income tax, (b) less income or plus loss from
discontinued operations and extraordinary items, (c) plus
depreciation, depletion, amortization, (d) plus interest expense on
all obligations, (e) plus non-cash charges related to foreign
exchange, (f) minus dividends, withdrawals, and other
distributions, and (g) minus any unfinanced capital
expenditures.
“ Debt Service ” is defined
as all regularly scheduled principal and interest payments, during
the twelve-month period ending with the last day of the calculation
period, on all indebtedness.”
(B) Section 9.6 of the Original
Loan Agreement is hereby amended and restated in its entirety
effective as of March 31, 2009 to read as follows:
“9.6 Funded Debt
to EBITDA Ratio.
To maintain, with respect to GSE on
a consolidated basis, a ratio of Funded Debt to EBITDA not
exceeding 2.50:1.00.
“ Funded Debt ” means all
outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term debt,
and including the stated amount of any Letter of Credit (other than
a Letter of Credit that is cash-secured) issued for the account of
the Borrower or any reimbursement obligation owing by the Borrower
with respect to any Letter of Credit (other than a Letter of Credit
that is cash-secured).
“ EBITDA ” means net income,
less income or plus loss from discontinued operations and
extraordinary items, plus income taxes, plus interest expense, plus
depreci
