exh10-5.htm


    Exhibit 10.5

    RATIFICATION
OF GUARANTY

    (Ex-Im
Bank-Guaranteed Transaction Specific Revolving Line of Credit)

    


    THIS RATIFICATION OF GUARANTY (this
“Ratification”), dated
as of May 5, 2009, is made by each of the undersigned guarantors (each, a “Guarantor” and, collectively,
the “Guarantors”) in
favor of BANK OF AMERICA, N.A., its successors and assigns (“Bank”).

     

    RECITALS

    


    A.           Each
Guarantor executed a separate Continuing and Unconditional Guaranty (Ex-Im
Bank-Guaranteed Transaction Specific Revolving Line of Credit) dated as of March
28, 2008, (each, a “Guaranty”) in favor of Bank in
connection with that certain Loan Agreement (Ex-Im Bank-Guaranteed Transaction
Specific Revolving Line of Credit) dated as of March 28, 2008, (the “Loan Agreement”) by and among
GSE Systems, Inc., a Delaware corporation, GSE Power Systems, Inc., a Delaware
corporation. (collectively, “Borrower”), and
Bank.

    


    B.           Borrower
has requested that Bank amend the Loan Agreement to modify the revolving line of
credit established by the Loan Agreement.  Bank has agreed to so amend
the Loan Agreement, subject to, among other things, Guarantors providing to Bank
the representations, assurances and other agreements hereinafter set
forth.

    


    C.           In
connection with the foregoing, Bank and Borrower shall execute a First Amendment
to Loan Agreement of even date herewith (the “First Amendment”) to evidence
the modification of the revolving line of credit.

    


    AGREEMENT

    


    NOW, THEREFORE, for Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and because the Guarantors will benefit from
some of the changes to the Loan Agreement, each Guarantor does hereby agree as
follows:

    


    1.           The
Recitals hereinabove contained are true and correct and are made a part
hereof.

    


    2.           Guarantor
acknowledges receipt of the First Amendment and agrees,
ratifies and confirms that such Guarantor’s Guaranty remains in full force and
effect with respect to the Loan Agreement, as amended by the First
Amendment.

    


    3.           Guarantor
represents and warrants unto Bank that (i) such Guarantor’s Guaranty and all
other documents executed by Guarantor in connection therewith are valid and
binding obligations of Guarantor, enforceable in accordance with their terms;
(ii) all of the terms, covenants, conditions, representations, warranties and
agreements contained in such Guarantor’s Guaranty are hereby ratified and
confirmed in all respects; and (iii) no oral representations, statements, or
inducements have been made by Bank with respect to the First Amendment, this
Ratification or such Guarantor’s  Guaranty.

    


    4.           Guarantor
does not now have, nor had at any prior time, any defenses (including, without
limitation, the defense of usury), claims, counterclaims, cross-actions or
equities or rights of rescission, setoff, abatement or diminution, with respect
to the Loan Agreement, such Guarantor’s Guaranty or any other document executed
in connection therewith, or the enforcement of Bank's rights thereunder, and
Guarantor further waives and releases any and all such defenses, claims,
counterclaims, cross-actions and equities, and rights of rescission, set-off,
abatement and diminution with respect thereto.

    


    
      
        
        

      

      
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    IN WITNESS WHEREOF, each of the
undersigned Guarantors has caused this Ratification to be made as of the date
first written above.

    


    
      	 
      	 
      	
              “GUARANTOR”

            
	 
      	 
      	 
      
	 
      	 
      	
              MSHI,
      INC.

               

               

              By:                                                                

              Jeffery Hough

              Chief Financial
      Officer

               

            
	 
      	 
      	 
      
	 
      	 
      	
              GSE
      PROCESS SOLUTIONS, INC.

               

               

              By:                                                                

              Jeffery Hough

              Chief Financial
      Officer

               

            
	 
      	 
      	 
      


    

    


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