Document:

exh_102.htm

EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into effective as of January 10, 2014 (the “Effective Date”), by and between Global Geophysical Services, Inc., a Delaware Corporation (“GGS” or “Company”), and Sean M. Gore (“Executive”).  Executive and the Company are collectively referred to in this Agreement as the “Parties” and individually as a “Party.”

 

RECITALS:

 

WHEREAS, Executive is to be employed as Sr. Vice President and Chief Financial Officer of the Company;

WHEREAS, it is the desire of the Company to engage Executive as Sr. Vice President and Chief Financial Officer of the Company;

 

WHEREAS, Executive desires to be employed with the Company on the terms herein provided; and

 

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the Parties agree as follows:

 

AGREEMENT TERMS

 

1. Term.  Beginning on the Effective Date, the Company employs Executive, and Executive accepts such employment, on the terms and conditions set forth in this Agreement, for the period (the “Term”) commencing on the Effective Date and expiring at the earlier to occur of (a) 11:59 p.m. on December 31, 2014 (“the Expiration Date”) or (b) the Termination Date (as defined in Section 4).  Beginning on January 1, 2015, this Agreement shall be automatically renewed each January 1st for twelve (12) month terms, unless either the Company or Executive provides written notice of election not to renew, at least ninety (90) days before the applicable renewal date.

 

2. Duties as Executive of the Company.  Subject to the Agreement’s terms, Executive agrees to serve as the Sr. Vice President and Chief Financial Officer of the Company and act in the ordinary course of its business with all the powers reasonably incident to the position(s) or other responsibilities or duties that may be from time to time assigned to Executive by the Company’s Board of Directors (hereafter “GGS Board of Directors”) or the Company’s Chief Executive Officer.

 

3. Compensation and Related Matters.

 

(a) Base Salary.  Executive shall receive an initial Base Salary (defined below) paid by the Company of $295,000 per year during the Term.  Executive’s Base Salary may be increased annually, on January 1 of each year based upon Executive’s performance determined through an annual review process, by an amount to be determined by GGS, within its sole discretion. For purposes of this Agreement, “Base Salary” shall mean Executive’s initial base salary or, as adjusted from time to time, then the adjusted base salary at the time in question.  The Base Salary shall be paid, subject to all applicable withholdings and deductions, in substantially equal semi-monthly installments.

 

  

 

  

(b) Bonus Plan.  During the Term, Executive shall be eligible for consideration of, in addition to the Base Salary, an annual cash and/or stock bonus payment in an amount to be determined at the sole discretion of the GGS Board of Directors or such other person as shall be designated by the GGS Board of Directors in accordance with Company policies (“Annual Bonus”).  To the extent any GGS stock is granted to Executive as part of the Annual Bonus, Executive acknowledges and agrees that all stock grants shall be done in accordance with the Company’s then-applicable stock grant plan.  Subject to Sections 4(b), 4(c), and 4(d), no Annual Bonus shall be paid to Executive for a calendar year if Executive’s Termination Date occurs at any time during such year. Moreover, even if Executive is employed by the Company on the last day of the calendar year for which an Annual Bonus may be payable, Executive shall not be eligible for the payment of bonus compensation for such year if this Agreement or his employment with the Company terminates for Cause (as defined below), before the payment of such bonus compensation.

 

(c) Additional Stock Incentive.  As additional consideration for entering into this Agreement and in exchange for agreeing to the restrictions in Section 8 herein, the Executive shall receive an award of restricted stock of fifty thousand (50,000) shares of common stock pursuant to the Global Geophysical Services, Inc. Amended and Restated 2006 Incentive Compensation Plan, subject to the terms and conditions set forth in the applicable award agreement and this Agreement (including customary vesting based on continued employment over three years).

 

(d) Expenses.  During the Term, Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by him, in accordance with the policies and procedures established by the Company, in performing services under this Agreement and during his employment with the Company, provided that Executive properly accounts for the expenses in accordance with Company policies.  The amount of expenses eligible for reimbursement during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year.  Reimbursement of eligible expenses shall be made on or before the last day of the calendar month following the calendar month in which the expenses were incurred, or as otherwise provided in the Company’s business expense reimbursement policy.

 

(e) Other Benefits.  From time to time, the Company may make available other compensation and employee benefit plans and arrangements. Executive shall be eligible to participate in such other compensation and employee benefit plans and arrangements in which executives at or above the level of Executive participate, subject to and on a basis consistent with the terms, conditions, and overall administration of such plans and arrangements, as amended from time to time.  Nothing in this Agreement shall be deemed to confer upon Executive or any other person, including any beneficiary, any rights under or with respect to any such plan or arrangement or to amend any such plan or arrangement, and Executive and each other person, including any beneficiary, shall be entitled to look only to the express terms of any such plan or arrangement for his or her rights thereunder.  Nothing paid to Executive under any such plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary and other benefits payable to Executive pursuant to this Agreement.

 

  

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(f)Vacation.  Executive shall be entitled to twenty (20) days of vacation each year of full employment during the Term, exclusive of holidays, as long as the scheduling of Executive's vacation does not interfere with the Company's normal business operation.  Vacation will accrue and forfeit as provided by the terms of the Company's policy governing vacation, as that policy is updated or revised from time to time in the Company's sole discretion.  For purposes of this Section, weekends shall not count as Vacation days. Executive shall also be entitled to all paid holidays given by the Company.

 

(g) Proration.  The Base Salary payable to Executive hereunder in respect of any calendar year during which Executive is employed by the Company for less than the entire year shall be prorated in accordance with the total number of calendar days in such calendar year during which he is so employed.

 

4. Termination.

 

(a) Definitions.

 

(1) “Cause” shall mean:

 

(i) Executive’s failure or refusal to substantially perform his material duties, responsibilities and obligations, other than a failure resulting from Executive’s incapacity due to physical or mental illness, which failure continues for a period of at least thirty (30) days after a detailed written notice of alleged Cause and a demand for substantial performance has been delivered to Executive specifying the manner in which Executive has failed substantially to perform;

 

(ii) any intentional act involving fraud, misrepresentation, theft, embezzlement, or dishonesty on a material matter which actually results in harm to the Company;

 

(iii) conviction of or a plea of nolo contendere to an offense which is a felony or which is a misdemeanor that involves fraud; or

 

(iv) a material breach of this Agreement by Executive.

 

Regarding these Sections 4(a)(1)(i), (ii) and (iv), the Company shall provide written notice to Executive describing the specific facts of any alleged Cause event within thirty (30) days of any such Cause event and Executive shall thereafter have thirty (30) calendar days to cure the Cause event to the reasonable satisfaction of the Company

 

(2) A “Disability” or “Disabled” shall mean the inability of Executive to substantially engage in the duties that he is normally expected to perform in his role at the Company by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than three (3) months.  Executive shall be considered to have a Disability (i) if he is determined to be totally disabled by the Social Security Administration or (ii) if he is determined to be disabled under GGS’s long-term disability plan in which Executive participates and if such plan defines “disability” in a manner that is consistent with the immediately preceding sentence.

 

  

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(3) A “Good Reason” shall mean any of the following (without Executive’s express written consent):

 

(i) A diminution in Executive’s Base Salary;

 

(ii) A change in the location where Executive is expected or required the majority of Executive’s job duties at the time Executive executes this Agreement (“Base Location”) to a location that is more than twenty-five (25) miles from the Base Location, without Executive’s written consent, except for travel reasonably required of Executive on the Company’s business;

 

(iii) A substantial and adverse diminution in Executive’s duties, authority, responsibility or position with the Company; or

 

(iv) Any breach by the Company of any material provision of this Agreement.

 

Regarding these Sections 4(a)(3)(i), (ii), (iii), and (iv), the Executive shall provide written notice to Company describing the specific facts of any alleged Good Reason event within thirty (30) days of any such Good Reason event, and Company shall thereafter have thirty (30) calendar days to cure the Good Reason event to the reasonable satisfaction of the Executive.  Any such notice from Executive must be provided within ninety (90) calendar days after the initial existence of the specified Good Reason event.

 

(4) “Termination Date” shall mean the date Executive’s employment with the Company terminates or is terminated for any reason under this Agreement, and which constitutes a “separation from service” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, or any regulations or Treasury guidance promulgated under Section 409A (the “Code”).

 

(b) Termination Without Cause or for Good Reason: Benefits.  In the event the Company involuntarily terminates Executive’s employment with the Company without Cause or if Executive terminates employment with the Company for Good Reason (a “Termination Event”), this Agreement shall terminate, but Executive shall be entitled to the following severance benefits:

 

(1) Payment of accrued but unpaid Base Salary and unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy;

 

  

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(2) An amount equal to the greater of the compensation required for the remaining term of this Agreement or one year of Base Salary (as defined in Section 3(a)) (the “Severance Payment”), at the rate in effect immediately before the Termination Event, payable in a lump sum within ten (10) days after Executive executes the Release referenced in Section 6;

 

(3) An amount equal to the greater of; (i) the full, unprorated, amount of the Annual Bonus, relating to the calendar year immediately preceding the year containing the Termination Date, that has been paid or is payable to Executive or (ii) the average of the Annual Bonus amounts, if any, relating to the two (2) consecutive calendar years immediately preceding the year containing the Termination Date that have been paid or are payable to Executive, or (iii) if the Termination Date occurs in calendar year 2014 or before a bonus amount for 2014 is otherwise determined, 40% of Executive’s Base Salary, (the “the Additional Severance Payment”), payable in a lump sum within ten (10) days after Executive executes the Release referenced in Section 6; and

 

(4) Full vesting of all unvested restricted stock and stock options outstanding on Executive’s Termination Date, including the restricted stock granted under Section 3(c) herein, after Executive enters into the Release referenced in Section 6.

 

(c) Termination In Event of Death:  Benefits.  If Executive’s employment with the Company is terminated by reason of Executive’s death during the Term, this Agreement shall terminate without further obligation to Executive’s legal representatives under this Agreement, other than for payment of all accrued Base Salary through the Termination Date, unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d), and the amount of any bonus under Section 3(b) that relates to a prior year and that is unpaid as of the date of death.  The accrued but unpaid Base Salary shall be paid to Executive’s estate in a lump sum in cash within six (6) days after the Termination Date or by the next regularly scheduled payday.  Unreimbursed business expenses shall be paid to Executive’s estate within the time period required by the Company’s business expense reimbursement policy.  Executive shall be entitled to consideration for the Annual Bonus payment under Section 3(b) with respect to the calendar year in which Executive dies; provided that the payment of such bonus, if any, shall be payable within thirty (30) days after the Termination Date (if calculable), but in no event later than March 15 of the year following the year of death; and further provided, that the amount of the Annual Bonus shall be prorated in accordance with the number of days in such calendar year during which he is so employed.  In addition, Executive or his estate shall become fully vested in all unvested restricted stock and stock options outstanding on Executive’s Termination Date in the event of death, including the restricted stock granted under Section 3(c) herein.

 

(d) Termination In Event of Disability: Benefits.  If Executive’s employment with the Company is terminated by reason of Executive’s Disability during the Term, this Agreement shall terminate, but the Company shall pay Executive all accrued Base Salary through the Termination Date, unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d), and the amount of any bonus under Section 3(b) that relates to a prior year and that is unpaid as of the date of Disability.  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy.  Executive shall be entitled to consideration for the Annual Bonus payment under Section 3(b) with respect to the calendar year in which Executive’s employment terminates due to Disability; provided that the payment of such bonus, if any, shall be payable within thirty (30) days after the Termination Date (if calculable), but in no event later than March 15 of the year following the year of containing such Termination Date; and further provided, that the amount of the Annual Bonus shall be prorated in accordance with the number of days in such calendar year during which he is so employed.  In addition, Executive shall become fully vested in all unvested restricted stock and stock options outstanding on Executive’s Termination Date in the event of Disability, including the restricted stock granted under Section 3(c) herein.

 

  

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(e) Voluntary Termination by Executive and Termination for Cause: Benefits.  Executive may terminate his employment with the Company by giving written notice of his intent and stating an effective Termination Date at least thirty (30) days after the date of such notice; provided, however, that the Company may accelerate such effective date by paying Executive through the proposed Termination Date (but not to exceed thirty (30) days).  Upon such a termination by Executive or upon termination of Executive’s employment with the Company for Cause by the Company, this Agreement shall terminate, but the Company shall pay to Executive all accrued Base Salary and all unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash within six (6) days after the Termination Date or by the next regularly scheduled payday.  Unreimbursed business expenses shall be paid to Executive within the time period required by the Company’s business expense reimbursement policy. Executive shall have no entitlement to any Annual Bonus for the year in which the Termination Date occurs.

 

(f) No Duty to Mitigate.  Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.  No such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

 

5. Non-Renewal of Agreement.  If the Company or Executive elects not to renew this Agreement under the terms provided in Section 1, this Agreement shall terminate without further obligation of the Company, but the Company shall pay Executive all accrued Base Salary through the Termination Date and unreimbursed business expenses through the Termination Date in accordance with Sections 3(a) and 3(d).  If the Company elects not to renew this Agreement, Executive shall be eligible to receive any unpaid Annual Bonus(es) attributable to prior year(s), if any, and the Annual Bonus(es) for the year in which the non-renewal notice is provided along with full vesting of all restricted stock granted under Section 3(c) herein.  Payment of the prior year(s) Annual Bonus(es) shall be paid within thirty (30) days of any such non-renewal notification (if calculable), but in no event later than January 15th of the year following the year in which the non-renewal notice is provided.  Payment of the Annual Bonus for the year in which notice of non-renewal is given shall be paid by January 15th of the year following the year in which the non-renewal notice is provided (if calculable); and further provided, that the amount of the Annual Bonus for the year in which the non-renewal notice is provided shall be prorated in accordance with the number of days in such calendar year during which Executive is so employed.

 

  

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6. Release Agreement.  Notwithstanding any provision of this Agreement to the contrary, in order to receive the Severance Payment, the Additional Severance Payment, and the immediate vesting of unvested restricted stock under Section 4(b)(2)-(4), Executive must first execute, enter into and not revoke a reasonable release and hold harmless agreement (in a form substantially similar to the form attached hereto as Exhibit A) (“Release”), within the time period specified under the release and hold harmless agreement, whereby Executive agrees to release and waive, in return for the Severance Payment and Additional Severance Payment, any claim or cause of action that Executive may have against the Company and any of its affiliates, including, without limitation, for unlawful discrimination or retaliation; provided, however, such agreement shall not release any claim by Executive for any payment or benefit that is due under the express terms of this Agreement at the time the time Executive executes the release agreement.

 

7.  Change in Control.  Upon the occurrence of a Change in Control (as defined in the Global Geophysical Services, Inc. Amended and Restated 2006 Incentive Compensation Plan), Executive shall become fully vested in all unvested equity awards and option grants outstanding as of such date and shall receive the Severance Payment set forth in Section 4(b)(2).

 

8. Non-Competition, Non-Solicitation and Confidentiality.  During Executive’s employment with the Company, the Company shall give Executive access to some or all of its Confidential Information, as defined below, that Executive has not had access to or knowledge of before the execution of this Agreement.

 

(a) Non-Competition During Employment.  Executive agrees that, in consideration for the Company’s promise to provide Executive with Confidential Information, during the Term, he will not compete with the Company by engaging in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that he will not work for, in any capacity, assist, or become affiliated with as an owner, partner, etc., either directly or indirectly, any individual or business which offers or performs services, or offers or provides products substantially similar to the services and products provided by Company; provided, however, Executive shall not be prevented from owning no more than 2% of any company whose stock is publicly traded.

 

(b) Conflicts of Interest.  Executive agrees that during the Term, he will not engage, either directly or indirectly, in any activity (a “Conflict of Interest”) that might adversely affect the Company, including ownership of a material investment in a competitor of the Company, ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or acceptance of any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the CEO or the GGS Board of Directors as to each offer received by Executive to engage in any such activity.  As used in this Section 8(b), “materiality” shall be viewed from the perspective of Executive.  Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which in Executive’s good faith judgment could reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

 

  

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(c) Confidential Information.  Executive agrees that he will not, except as the Company may otherwise consent or direct in writing, reveal or disclose, sell, use, lecture upon, publish or otherwise disclose to any third party any Confidential Information or proprietary information of the Company, or authorize anyone else to do these things at any time either during or subsequent to his employment with the Company.  This Paragraph shall continue in full force and effect after termination of Executive’s employment and after the termination of this Agreement.  Executive’s obligations under this Paragraph with respect to any specific Confidential Information and proprietary information shall cease when that specific portion of the Confidential Information and proprietary information becomes publicly known, in its entirety and without combining portions of such information obtained separately.  It is understood that such Confidential Information and proprietary information of the Company include matters that Executive conceives or develops, as well as matters Executive learns from other employees of the Company.  “Confidential Information” is defined to include information:  (1) disclosed to or known by Executive as a consequence of or through his employment with the Company; (2) not generally known outside the Company; and (3) that relates to any aspect of the Company or its business, finances, operation plans, budgets, research, or strategic development.  “Confidential Information” includes, but is not limited to, the Company’s trade secrets, proprietary information, financial documents, long range plans, customer or supplier lists, employer compensation, marketing strategy, data bases, costing data, computer software developed by the Company, investments made by the Company, and any information provided to the Company by a third party under restrictions against disclosure or use by the Company or others.

 

(d) Non-Solicitation.  To protect the Company’s Confidential Information, and in the event of Executive’s termination of employment for any reason whatsoever, whether by Executive or the Company, it is necessary to enter into the following restrictive covenant, which is ancillary to the enforceable promises between the Company and Executive otherwise contained in this Agreement.  Executive covenants and agrees that during Executive’s employment and for a period of twelve (12) months from the date of termination of Executive’s employment for any reason whatsoever (the “Non-Solicitation Period”), Executive will not, directly or indirectly, either individually or as a principal, partner, agent, consultant, contractor, employee or as a director or officer of any corporation or association, or in any other manner or capacity whatsoever, except on behalf of the Company, solicit business, or attempt to solicit business, and products or services competitive with products or services sold by the Company, from the Company’s clients, suppliers or customers, or those individuals or entities with whom the Company did business during Executive’s employment. Executive further agrees that during Executive’s employment and for the Non-Solicitation Period, Executive will not, either directly or indirectly, or by acting in concert with others, solicit or influence any Company employee to leave the Company’s employment.

 

(e) Return of Documents, Equipment, Etc.  All writings, records, and other documents and things comprising, containing, describing, discussing, explaining, or evidencing any Confidential Information, and all equipment, components, parts, tools, and the like in Executive’s custody or possession that have been obtained or prepared in the course of Executive’s employment with the Company shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without Executive retaining any copies, upon notification of the termination of Executive’s employment or at any other time requested by the Company.  The Company shall have the right to retain, access, and inspect all property of Executive of any kind in the office, work area, and on the premises of the Company upon termination of Executive’s employment and at any time during employment by the Company to ensure compliance with the terms of this Agreement.

 

  

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(f) Reaffirmation of Obligations.  Upon termination of Executive’s employment with the Company, Executive, if requested by Company, shall reaffirm in writing Executive’s recognition of the importance of maintaining the confidentiality of the Company’s Confidential Information and proprietary information, and reaffirm any other obligations set forth in this Agreement.

 

(g) Prior Disclosure.  Executive represents and warrants that Executive has not used or disclosed any Confidential Information he may have obtained from the Company prior to signing this Agreement, in any way inconsistent with the provisions of this Agreement.

 

(h) No Previous Restrictive Agreements.  Executive represents that, except as disclosed in writing to the Company, Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of Executive’s employment by the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party.  Executive further represents that Executive’s performance of all the terms of this Agreement and Executive’s work duties for the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by Executive in confidence or in trust prior to Executive’s employment with the Company, and Executive will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or other party.

 

(i) Breach.  Executive agrees that any breach of Sections 8(a) through (e) above cannot be remedied solely by money damages, and that in addition to any other remedies Company may have, Company is entitled to obtain injunctive relief against Executive.  Nothing herein, however, shall be construed as limiting the Company’s right to pursue any other available remedy at law or in equity, including recovery of damages and termination of this Agreement and/or any termination or offset against any payments that may be due pursuant to this Agreement.

 

(j) Enforceability.  The agreements contained in this Section 8 are independent of the other agreements contained herein.  Accordingly, failure of the Company to comply with any of its obligations outside of this Section does not excuse Executive from complying with the agreements contained herein.

 

(k) Survivability.  The agreements contained in this Section 8 shall survive the termination of this Agreement for any reason.

 

9. Reformation.  If a court concludes that any time period or the geographic area specified in Section 8(d) of this Agreement are unenforceable, then the time period will be reduced by the number of months, or the geographic area will be reduced by the elimination of the overbroad portion, or both, so that the restrictions may be enforced in the geographic area and for the time to the fullest extent permitted by law.

 

  

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10. Director and Officer Positions.  Executive agrees that, upon termination of employment, for any reason, Executive will immediately tender his resignation from any and all Board or officer positions held with the Company and/or any of its direct or indirect parents or subsidiaries.

 

11. Indemnification & D&O

 

(a) Claims.  The Company shall, to the maximum extent not prohibited by law, indemnify Executive if Executive is made, or threatened to be made, a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company to procure a judgment in its favor (collectively, a “Proceeding”), by reason of the fact that Executive is or was a director or officer of the Company or an affiliate, or is or was serving in any capacity at the request of the Company for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys’ fees and disbursements) paid or incurred in connection with any such Proceeding.

(b) Expenses.  The Company shall, from time to time, reimburse or advance to Executive the funds necessary for payment of expenses, including attorneys’ fees and disbursements, incurred in connection with any Proceeding in advance of the final disposition of such Proceeding; provided, however, that such expenses incurred by or on behalf of Executive may be paid in advance of the final disposition of a Proceeding only upon receipt by the Company of an undertaking, by or on behalf of Executive, to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that Executive is no entitled to be indemnified for such expenses.

(c) Non-Exclusivity.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall not be deemed exclusive of any other rights which Executive may now or hereafter have under any law, bylaw, constituency document, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in Executive’s official capacity and as to action in another capacity while holding such office.

(d) Continuation of Rights.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall continue as to Executive after Executive has ceased to be a director, officer, or employee of the Company and shall inure to the benefit of the heirs, executors and administrators of Executive’s estate, both with respect to proceedings that are threatened, pending or completed at the date of such termination and with respect to proceedings that are threatened, pending or completed after the date.

  

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(e) Enforcement.  The right to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 11 shall be enforceable by Executive in any court of competent jurisdiction.  The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Company.  Neither the failure of the Company (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Company (including its board of directors, independent legal counsel, or its stockholders) that Executive is not entitled to such indemnification or reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that Executive is not so entitled.  The Executive shall also be indemnified for any expenses incurred in connection with successfully establishing the Executive’s right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any proceeding.

(f) Other Services.  If Executive serves (i) an affiliate of the Company, or (ii) any employee benefit plan of the Company or any corporation referred to in clause (i), in any capacity, then Executive shall be deemed to be doing so at the request of the Company.

 12. Assignment.  In entering into this Agreement, the Company is relying on the unique personal services of Executive; services from another person will not be an acceptable substitute.  Except as provided in this Agreement, Executive may not assign this Agreement or any of the rights or obligations set forth in this Agreement without the written consent of the Company.  Any attempted assignment by Executive in violation of this Section 12 shall be void.  This Agreement, and any rights and obligations hereunder, may be assigned by the Company to a successor by merger or a purchaser of substantially all of the assets of the Company.

 

 13. Binding Agreement.  Executive understands that his obligations under this Agreement are binding upon Executive’s heirs, successors, personal representatives, and legal representatives.

 

14. Notices.  All notices pursuant to this Agreement shall be in writing and sent certified mail, return receipt requested, addressed as set forth below, or by delivering the same in person to such party, or by transmission by email (which shall not constitute notice).  Notice deposited in the United States Mail, mailed in the manner described hereinabove, shall be effective upon deposit.  Notice given in any other manner shall be effective only if and when received:

 

If to Executive:                                      Sean M. Gore

20111 Kindle Oaks Drive

Katy, TX  77450

	 	
If to the Company:

	
Global Geophysical Services, Inc.

13927 South Gessner Rd.

Missouri City, TX  77489

Attn:  Board of Directors

  

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 15. Waiver.  No waiver by either Party to this Agreement of any right to enforce any term or condition of this Agreement, or of any breach hereof, shall be deemed a waiver of such right in the future or of any other right or remedy available under this Agreement.

 

 16. Entire Agreement.   Except as may be provided in the Indemnification Agreement between Executive and the Company, and any stock option or restricted stock grant agreement(s), the terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral. In the event of a conflict between these agreements, it is intended that Executive shall be granted the greater of rights for Executive’s benefit(s). Notwithstanding the foregoing, this Agreement will not in any way affect the Executive’s stock options which are governed by his option agreement and the Company’s stock option plan, except to the extent expressly provided for in such agreement or plan. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

 

17. Modification of Agreement.  This Agreement may not be changed or modified or released or discharged or abandoned or otherwise terminated, in whole or in part, except by an instrument in writing signed by Executive and an officer or other authorized executive of the Company.

 

18. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflicts of laws principles thereof.

 

19. Jurisdiction and Venue.  With respect to any litigation regarding this Agreement, Executive and the Company agree to venue in the state or federal courts in Harris County, Texas, and agrees to waive and does hereby waive any defenses and/or arguments based upon improper venue and/or lack of personal jurisdiction.  By entering into this Agreement, Executive and the Company agree to personal jurisdiction in the state and federal courts in Harris County, Texas.

 

20. Independent Representation.  Executive has not relied upon Company for legal or tax advice regarding this Agreement and Executive has been advised to consult legal, accounting or other advisors of Executive’s choice before executing this Agreement.

 

21. Compliance With Section 409A.

 

(a) Delay in Payments. Notwithstanding anything to the contrary in this Agreement, if upon the Termination Date, any stock of the Company is publicly traded on an established securities market within the meaning of Code Section 409A, and in the opinion of reputable outside counsel engaged by the Company and acceptable to Executive, Executive is a “specified employee” within the meaning of Code Section 409A and the deferral of any amounts otherwise payable under this Agreement as a result of Executive’s termination of employment is necessary in order to prevent any accelerated or additional tax to Executive under Code Section 409A, then the Company will defer the payment of any such amounts hereunder until the earlier of: (i) the date that is six (6) months following the date of Executive’s termination of employment with the Company, or (ii) the date of Executive’s death, at which time any such delayed amounts will be paid to Executive in a single lump sum.

 

  

12

  

(b) Reformation.  If any compensation or benefits provided by this Agreement may result in the application of Code Section 409A, the Company shall, in consultation with Executive, modify the Agreement in the least restrictive manner necessary in an effort to exclude such compensation from the definition of “deferred compensation” within the meaning of such Code Section 409A or in an effort to comply with the provisions of Code Section 409A, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions, without any diminution in the value of the payments or benefits to Executive.  Notwithstanding the foregoing, the Company shall not be required to assume any increased economic burden.

 

(c) Overall Compliance.  In the event that it is reasonably determined by the Company and Executive that, as a result of Code Section 409A, any of the payments that Executive is entitled to under the terms of this Agreement or any nonqualified deferred compensation plan (as defined under Section 409A) may not be made at the time contemplated by the terms hereof or thereof, as the case may be, without causing Executive to be subject to an income tax penalty and interest, the Company will make such payment on the first day that would not result in Executive incurring any tax liability under Section 409A.

 

(d) Consultation with Tax Advisor.  Executive is hereby advised to consult immediately with his own tax advisor regarding the tax consequences of this Agreement, including the consequences of Code Section 409A.

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement in multiple copies, effective as of the Effective Date.

 

	
EXECUTIVE:

 

 

 

/s/ Sean M. Gore

Sean M. Gore

	
COMPANY:

Global Geophysical Services, Inc.

 

 

/s/ Richard C. White

Richard C. White

President and CEO

 

 

  

13

  

EXHIBIT A

FORM OF WAIVER AND RELEASE

Global Geophysical Services, Inc. (“Company”) has offered to Sean M. Gore (“Executive”) certain benefits (the “Benefits”) pursuant to Section ____ of Executive’s employment agreement with the Company, dated as of January 10, 2014 (the “Employment Agreement”), which were offered to Executive in exchange for Executive’s agreement as follows (the “Agreement”).

1.           Mutual Release

(a)           In consideration of the payments to be made hereunder and having acknowledged the above-stated consideration as full compensation for and on account of any and all injuries and damages which Executive has sustained or claimed, or may be entitled to claim, Executive, for himself, and his heirs, executors, administrators, successors and assigns, does hereby release, forever discharge and promise not to sue the Company, its parents, subsidiaries, affiliates, successors and assigns, and its past and present officers, directors, partners, employees, members, managers, shareholders, agents, attorneys, accountants, insurers, heirs, administrators, executors (collectively the “Company Released Parties”) from any and all claims, liabilities, costs, expenses, judgments, attorney fees, actions, known and unknown, of every kind and nature whatsoever in law or equity, which Executive had, now has, or may have against the Company Released Parties relating in any way to Executive’s employment with the Company or termination thereof, including but not limited to, all claims for contract damages, tort damages, special, general, direct, punitive and consequential damages, compensatory damages, loss of profits, attorney fees and any and all other damages of any kind or nature; all contracts, oral or written, between Executive and any of the Company Released Parties except as otherwise described herein; any business enterprise or proposed enterprise contemplated by any of the Company Released Parties, as well as anything done or not done prior to and including the date of execution of this Agreement.  Nothing in this Agreement shall be construed to release the Company from any indemnification obligations under any indemnification agreement.

Executive understands and agrees that this release and covenant not to sue shall apply to any and all claims or liabilities arising out of or relating to Executive’s employment with the Company and the termination of such employment, including, but not limited to:  claims of discrimination based on age, race, color, sex (including sexual harassment), religion, national origin, marital status, parental status, veteran status, union activities, disability or any other grounds under applicable federal, state or local law, including, but not limited to, claims arising under the Age Discrimination in Employment Act of 1967, as amended; the Americans with Disabilities Act; the Fair Labor Standards Act; the Family and Medical Leave Act; and Title VII of the Civil Rights Act, as amended, the Civil Rights Act of 1991; 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended, the Rehabilitation Act of 1973, the Equal Pay Act of 1963 (EPA) as well as any claims regarding wages; benefits; vacation; sick leave; business expense reimbursements; wrongful termination; breach of the covenant of good faith and fair dealing; intentional or negligent infliction of emotional distress; retaliation; outrage; defamation; invasion of privacy; breach of contract; fraud or negligent misrepresentation; harassment; breach of duty; negligence; discrimination; claims under any employment, contract or tort laws; claims arising under any other federal law, state law, municipal law, local law, or common law; any claims arising out of any employment contract, policy or procedure; and any other claims related to or arising out of his employment or the separation of his employment with the Company except for any claims based on the indemnification provisions of any indemnification agreement.

  

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In addition, Executive agrees not to cause or encourage any legal proceeding to be maintained or instituted against any of the Company Released Parties.

This release does not apply to any claims for unemployment compensation or any other claims or rights which, by law, cannot be waived, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however that Executive disclaims and waives any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding with respect to any claims released herein.

Notwithstanding the foregoing, the release, discharge and waiver contained herein shall not apply to the following types of claims: (i) any rights Executive may have under this Agreement and under the Employment Agreement; (ii) any rights Executive may have under the Global Geophysical Services, Inc. 401(k) Profit Sharing Plan; (iii) Executive’s right under COBRA to continued health/dental/vision benefits coverage for Executive and participating dependents; (iv) any rights Executive may have under the Company or the Company Released Parties benefit plans and programs subject to and in accordance with the terms of such plans and programs and related agreements; (v) any rights to contribution, advancement of expenses, defense or indemnification Executive has under the Company or the Company Released Parties’ current Articles of Incorporation or Bylaws, Director and Officer Liability Insurance, Employed Lawyers Liability Insurance or under any separate indemnification contract between the Company or a Company Released Party and Executive, or as provided by applicable law; (vi) any rights Executive has as a shareholder of the Company or a Company Released Party; or (vii) any rights Executive has to apply for and receive unemployment benefits, which application the Company will not contest or challenge.

With respect to the period of Executive’s employment by the Company and representation of the Company Released Parties, the Company and the Company Released Parties agree to keep in effect or obtain tail coverage under the Employed Lawyer Liability Insurance coverage for Executive for a period of not less than three years following Executive’s date of termination of employment.  Terms of coverage including policy limits shall be on substantially the same terms as in effect on Executive’s date of termination of employment.

  

15

  

(b)           In consideration of the payments to be made hereunder and having acknowledged the above-stated consideration as full compensation for and on account of any and all injuries and damages which the Company has sustained or claimed, or may be entitled to claim, the Company, for itself, and its administrators, successors and assigns, does hereby release, forever discharge and promise not to sue Executive, his heirs, executors, administrators, successors and assigns, (collectively the “Executive Released Parties”) from any and all claims, liabilities, costs, expenses, judgments, attorney fees, actions, known and unknown, of every kind and nature whatsoever in law or equity, which the Company had, now has, or may have against the Executive Released Parties relating in any way to the Company’s employment of Executive or termination thereof, including but not limited to, all claims for contract damages, tort damages, special, general, direct, punitive and consequential damages, compensatory damages, loss of profits, attorney fees and any and all other damages of any kind or nature; all contracts, oral or written, between the Company and any of the Executive Released Parties; any business enterprise or proposed enterprise contemplated by any of the Executive Released Parties, as well as anything done or not done prior to and including the date of execution of this Agreement.  Nothing in this Agreement shall be construed to release Executive from any obligations set forth in this Agreement.  Notwithstanding the foregoing, the Company is not waiving or releasing any action related to the commission of any crime or act of willful misconduct by any of the Executive Released Parties.

In addition, the Company agrees not to cause or encourage any legal proceeding to be maintained or instituted against any of the Executive Released Parties with respect to any claims released herein.

2.           Acknowledgement of Waiver of Claims under ADEA.

Executive expressly acknowledges that he is voluntarily, irrevocably and unconditionally releasing and forever discharging the Company and its respective present and former parents, subsidiaries, divisions, affiliates, branches, insurers, agencies, and other offices from all rights or claims he has or may have against the Company including, but not limited to, without limitation, all charges, claims of money, demands, rights, and causes of action arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of ADEA.  Executive further acknowledges that the consideration given for this waiver of claims under the ADEA is in addition to anything of value to which he was already entitled in the absence of this waiver.  Executive further acknowledges:  (a) that he has been informed by this writing that he should consult with an attorney prior to executing this Agreement; (b) that he has carefully read and fully understands all of the provisions of this Agreement; (c) he is, through this Agreement, releasing the Company from any and all claims he may have against it; (d) he understands and agrees that this waiver and release does not apply to any claims that may arise under the ADEA after the date he executes this Agreement; (e) he has at least 21 days within which to consider this Agreement; and (f) he has seven days following his execution of this Agreement to revoke the Agreement (as provided in Section 4 of this Agreement); and (g) this Agreement shall not be effective until the revocation period has expired and Executive has signed and has not revoked the Agreement.

3.           Sufficient Time to Review.

Executive acknowledges and agrees that: (a) he has had reasonable and sufficient time to read and review this Agreement and that he has, in fact, read and reviewed this Agreement; (b) that he has the right to consult with legal counsel regarding this Agreement and is encouraged to consult with legal counsel with regard to this Agreement; (c) that he has had (or has had the opportunity to take) 21 calendar days to discuss the Agreement with a lawyer of his choice before signing it and, if he signs before the end of that period, he does so of his own free will and with the full knowledge that he could have taken the full period; (d) that he is entering into this Agreement freely and voluntarily and not as a result of any coercion, duress or undue influence; (e) that he is not relying upon any oral representations made to him regarding the subject matter of this Agreement; (f) that by this Agreement he is receiving consideration in addition to that which he was already entitled; and (g) that he has received all information he requires from the Company in order to make a knowing and voluntary release and waiver of all claims against the Company.

  

16

  

4.           Revocation/Payment.

Executive acknowledges and agrees that he has seven days from the date of the execution of this Agreement within which to rescind or revoke this Agreement by providing notice in writing to the Company.  Executive further understands that the Agreement will have no force and effect if revoked by Executive on or before the end of that seventh day (the “Waiver Effective Date”), and that he will receive the Benefits after the Waiver Effective Date, provided this Agreement has not been revoked by Executive on or before the Waiver Effective Date.  If Executive revokes the Agreement pursuant to this Section 4, the Company will not be obligated to pay or provide Executive with the Benefits, and this Agreement shall be deemed null and void.

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple copies, effective as ______________, 20___.

 

	
EXECUTIVE:

 

 

 

_______________________________

Sean M. Gore

	
COMPANY:

Global Geophysical Services, Inc.

 

 

By:            ___________________________

 

 

Title:          ___________________________

 

 

17exh_101.htm

Exhibit 10.1

 

LIMITED WAIVER AND SEVENTH AMENDMENT TO FIRST LIEN CREDIT AGREEMENT

 

THIS LIMITED WAIVER AND SEVENTH AMENDMENT TO FIRST LIEN CREDIT AGREEMENT (this “Amendment”) is entered into as of January 10, 2014 by and among GSE ENVIRONMENTAL, INC., a Delaware corporation f/k/a Gundle/SLT Environmental, Inc. (the “Borrower”), the other Persons party hereto that are designated as a “Credit Party” on the signature pages hereof, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE”), as Agent and as a Lender, and the other LENDERS signatory hereto.

 

W I T N E S S E T H:

 

WHEREAS, Borrower, the other Credit Parties, GE, as Agent and as a Lender, and the other Lenders from time to time party thereto are parties to that certain First Lien Credit Agreement dated as of May 27, 2011 (as the same has been and may hereafter be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, Borrower has requested that Agent and Lenders (i) waive certain potential Events of Default under the Credit Agreement and (ii) amend certain provisions of the Credit Agreement; and

 

WHEREAS, subject to the satisfaction (or waiver by the Lenders) of the conditions set forth herein, Agent and the Lenders signatory hereto constituting the Required Lenders and Required Revolving Lenders are willing to waive such Events of Default and to amend the Credit Agreement in certain respects, in each case, on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

 

1. Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

2. Limited Waiver.  Events of Default (a) may have, or have, occurred and be, or are, continuing pursuant to subsection 7.1(c) of the Credit Agreement with respect to potential violations of (i) Section 6.2 of the Credit Agreement for the periods ended as of September 30, 2013, October 31, 2013, November 30, 2013 and December 31, 2013 and (ii) Section 6.3 of the Credit Agreement for the period ended as of December 31, 2013, in each case, as a result of the Designated Reporting Items and (b) may occur pursuant to subsections 7.1(b) or 7.1(c) due to the Credit Parties’ failure to comply with the financial covenants set forth in Section 6.2 and Section 6.3 of the Credit Agreement as of any date of measurement occurring during the period from the Seventh Amendment Effective Date through and including the Sale Process Completion Date (any and all such Events of Default described in foregoing clauses (a) and (b) above, together with any Event of Default arising from the Borrower’s failure to provide notice of same to the Agent, collectively, the “Designated Potential Defaults”).  Effective as of the date hereof, subject 

 

  

  

  

to the satisfaction of the conditions set forth in Section 4 hereof, to the extent constituting Events of Default, Agent and the Lenders signatory hereto, constituting Required Lenders and Required Revolving Lenders, hereby waive the Designated Potential Defaults.

 

The  waiver contained in this Section 2 is a limited waiver and (i) shall only be relied upon and used for the specific purposes expressly set forth herein, (ii) shall not constitute nor be deemed to constitute a waiver, except as otherwise expressly set forth herein, of (a) any Default or Event of Default (other than the Designated Potential Defaults) or (b) any term or condition of the Credit Agreement and the other Loan Documents (including, but not limited to, the obligations to deliver a Compliance Certificate as required by Section 4.2(b)), (iii) shall not constitute nor be deemed to constitute a consent by the Agent or any Lender to anything other than the specific purpose set forth herein and (iv) shall not constitute a custom or course of dealing among the parties hereto.

 

3. Amendments to Credit Agreement.  Upon satisfaction (or waiver by the Lenders) of the conditions set forth in Section 4 hereof, the Credit Agreement is hereby amended as follows:

 

(a) Subsection 1.1(b) of the Credit Agreement is hereby amended by deleting such subsection in its entirety and substituting the following therefor:

 

“(b) The Revolving Credit.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Revolving Lender severally and not jointly agrees to make Loans to the Borrower (each such Loan, a “Revolving Loan”) from time to time on any Business Day during the period from the Closing Date through the Final Availability Date, in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender’s name in Schedule 1.1(b) under the heading “Revolving Loan Commitments” (such amount, as the same may be reduced or increased from time to time in accordance with this Agreement (including pursuant to Section 1.12), being referred to herein as such Revolving Lender’s “Revolving Loan Commitment”); provided, however, that, after giving effect to any Borrowing of Revolving Loans, the aggregate principal amount of all outstanding Revolving Loans shall not exceed the Maximum Revolving Loan Balance.  Subject to the other terms and conditions hereof, amounts borrowed under this subsection 1.1(b) may be repaid (without premium or penalty except as, and to the extent, set forth in Section 10.4) and reborrowed from time to time.  The “Maximum Revolving Loan Balance” from time to time will equal (i) the Aggregate Revolving Loan Commitment then in effect less (ii) the sum of (I) the aggregate amount of Letter of Credit Obligations plus (II) the aggregate principal amount of outstanding Swing Loans plus (III) the Interest Reserve (after giving effect to any reduction thereof to the extent a requested Revolving Loan shall be utilized to pay interest for which the Interest Reserve has been established).  If at any time the then outstanding principal balance of Revolving Loans exceeds the Maximum Revolving Loan Balance, then the Borrower shall immediately prepay outstanding Revolving Loans in an amount sufficient to eliminate such excess.

  

  

  

As of the Seventh Amendment Effective Date, the aggregate outstanding principal amount of Revolving Loans (such outstanding Revolving Loans, the “Seventh Amendment Revolving Loans”) is $18,815,125.99 (as such amount may be reduced by any payments in respect thereof, the “Revolving Loan Cap”) and the aggregate face value of all Letters of Credit (such outstanding Letters of Credit, the “Seventh Amendment LCs”) Issued and outstanding under this Agreement is $1,988,026.03 (as such amount may be reduced by the cancellation or termination of any Letter of Credit Existing as of the Seventh Amendment Effective Date, the “LC Facility Cap”; the LC Facility Cap together with the Revolving Loan Cap are sometimes referred to herein collectively as the “Revolving Facility Cap”), in each case, as set forth on Schedule 1.1(b).  Notwithstanding anything to the contrary set forth in this Section 1.1(b) or anywhere else in the Credit Agreement or any other Loan Document, from and after the Seventh Amendment Effective Date (a) prior to the repayment in full of all revolving loans and other obligations under (including the cash collateralization of all letters of credit issued thereunder) and the termination of, the First Lien Revolving Facility, no further Revolving Loans shall be made or funded or Letters of Credit Issued hereunder (provided, Revolving Loans may be funded solely to pay any L/C Reimbursement Obligations that may arise in respect of Seventh Amendment LCs, whereupon the Revolving Loan Cap shall be deemed to have increased, and the LC Facility Cap reduced, by such amount) and (b) until the Required Leverage Date shall occur, no (i) Letters of Credit shall be Issued if, after giving effect to such Issuance, the aggregate face amount of all Issued and outstanding Letters of Credit shall exceed the LC Facility Cap, (ii) Revolving Loans shall be made or funded if, after giving effect to such making or funding, the aggregate outstanding principal amount of Revolving Loans shall exceed the Revolving Loan Cap (except in respect of Revolving Loans funded solely to pay L/C Reimbursement Obligation arising in respect of a Letter of Credit Issued in accordance herewith, whereupon the Revolving Loan Cap shall be deemed to have increased, and the LC Facility Cap reduced, by such amount) and (iii) Revolving Loans shall be made or funded and no Letters of Credit shall be Issued if, after giving effect to such making, funding or Issuance, the sum of (y) aggregate outstanding principal amount of Revolving Loans and (z) all Issued and outstanding Letters of Credit, shall exceed the Revolving Facility Cap.”

(b) Section 1.8 of the Credit Agreement is hereby amended by deleting each reference to “three hundred sixty-five (365)” set forth in subsection (c) thereof and substituting “ninety (90)” therefor.

 

(c) Section 4.2 of the Credit Agreement is hereby amended by deleting clause (g) thereof in its entirety and substituting the following therefor:

 

“(g) promptly, such additional business, financial, corporate affairs and other information with regards to Holdings and its Subsidiaries (excluding confidential information that is subject to a binding confidentiality agreement with a third party that is neither an Affiliate of Holdings nor a Secured Party, in its capacity as such, and which is 

 

  

  

  

in effect as of the Seventh Amendment Effective Date) as Agent may from time to time request on its own behalf or on behalf of the request of any Lender;”

 

(d) Section 4.2 of the Credit Agreement is hereby further amended by (i) deleting clause (h) thereof and substituting “[Intentionally Omitted];” therefor and (ii) adding the following language as new clauses (i) and (j) thereto in appropriate alphabetical order:

 

“(i)  all of the following documents, agreements, reports and other information:

 

(1) on or before the Seventh Amendment Effective Date:

 

(i) the engagement agreement with respect to the retention of (y) Moelis & Company (“Moelis”) by the Borrower with respect to the Junior Capital (such term used in this Section 4.2(i) as defined in this Agreement immediately prior to the Seventh Amendment Effective Date) and (z) the Investment Banker (defined below) with respect to the sale process described in Section 4.19;

 

(ii) all marketing materials prepared by Moelis on behalf of the Borrower with respect to the process to obtain the Junior Capital;

 

(iii) all reports regarding quality of earnings and cost savings initiatives of the Credit Parties, in each case, prepared by Alvarez & Marsal on behalf of the Credit Parties after January 1, 2013 and on or before the Seventh Amendment Effective Date; and

 

(iv) the liquidity projections prepared by the Credit Parties, for both global and North American operations, through the second fiscal quarter of 2014, including detail on assumptions (including, but not limited to, any potential change in continuing trade credit and any costs and expenses associated with the implementation of cost savings initiatives) used to build such projections;

 

(2) a report setting forth in reasonable detail the Credit Parties’ current order backlog and estimated pipeline, with project level details, as of the last day of the calendar month, delivered no later than 15th day of the following month;

 

(3) promptly upon receipt by any Credit Party or Subsidiary of a Credit Party, any of the following:

 

(i) any supplement, amendment, update, replacement, modification or superseding document in respect of any of the items described in foregoing clauses (1) or (2); and

 

(ii) all reports prepared by Alvarez & Marsal on behalf of the Credit Parties following the Seventh Amendment Effective Date;

 

(4) any other information (excluding confidential information that is subject to a binding confidentiality agreement with a third party that is neither an Affiliate of Holdings nor a Secured Party, in its capacity as such, and which is in effect as of the Seventh Amendment Effective Date) related to the sale process described in Section 4.19 promptly upon request by the Agent;

 

  

  

  

(5)  on or prior to January 17, 2014;

 

(i) the Credit Parties’ revised and updated long-term business plans, including financial projections, prepared in connection with the process to obtain the Junior Capital or the sale process described in Section 4.17 or otherwise presented to the Borrower’s board of directors;

 

(ii) identification and detail on of the amount available to the Credit Parties for North American operations to obtain cash from foreign sources over the liquidity projection time period; and

 

(j) to the extent required to be delivered thereunder, copies of the forecasts, budgets, reports and other items to be delivered to the First Lien Revolving Agent and the lenders under the First Lien Revolving Facility pursuant to Sections 4.2(j), 4.14 and 4.15 of the First Lien Revolving Credit Agreement promptly following delivery thereof to the First Lien Revolving Agent and such lenders.”

 

(e) Section 4.9 of the Credit Agreement is hereby amended by adding the following language as new clause (c) thereto in appropriate alphabetical order:

 

“(c) On Wednesday of each week, the Borrower and Alvarez & Marsal shall hold a conference call with the Agent and its counsel and Lenders to discuss current liquidity levels and the most recently delivered Variance Report (as defined in the First Lien Revolving Credit Agreement).”

 

(f) Section 4.19 of the Credit Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor:

 

“4.19  Sale Process.  (a) The Credit Parties shall (i) pursue a sale of all or substantially all of the assets of the Credit Parties or all of the outstanding Stock of Holdings or the Borrower, in either case, and use the proceeds thereof to indefeasibly repay all of the Obligations (other than contingent indemnification Obligations for which no unsatisfied claim giving rise thereto has been asserted) together with all indebtedness, fees, liabilities and other obligations (other than contingent indemnification obligations for which no unsatisfied claim giving rise thereto has been asserted) under the First Lien Revolving Facility, in full in cash and the cash collateralization of all letters of credit issued thereunder at the closing thereof and without subjecting Agent or any Lender to any liability or obligation, which sale transaction shall be consummated on or prior to the Sale Process Completion Date (as defined below) (an “Acceptable Sale”), (ii) promptly deliver all marketing materials once prepared by Moelis in its capacity as the investment banker engaged in connection with the sale process described in this Section 4.19 (in such capacity, the “Investment Banker”) on behalf of the Credit Parties with respect to such sale process and (iii) achieve each of the following interim milestones for consummating an Acceptable Sale:

 

(v) the Credit Parties shall distribute a final confidential information memorandum to prospective buyers no later than January 17, 2014;

 

  

  

  

(w) the Credit Parties shall cause prospective buyers to submit indications of interest in respect of a transaction and provide full and complete copies thereof to Agent and the Lenders, in each case, no later than February 7, 2014;

 

(x) the Credit Parties shall cause prospective buyers to submit letters of intent in respect of a transaction that would constitute an Acceptable Sale or another sale transaction agreed to by Required Lenders and shall provide full and complete copies thereof to Agent and the Lenders, in each case, no later than February 21, 2014;

 

(y) the board of directors of the Credit Parties shall accept and approve a letter of intent providing for the consummation of an Acceptable Sale or another sale transaction agreed to by Required Lenders, in each case, no later than March 7, 2014; and

 

(z) the Credit Parties shall consummate an Acceptable Sale no later than March 30, 2014 (the “Sale Process Completion Date”);

 

provided, the Agent shall be permitted, in its sole discretion, to extend or defer each of the foregoing individual milestone dates by up to five (5) Business Days.

 

 (b) The Credit Parties shall direct the Investment Banker and the Credit Parties’ senior management and professionals, including Alvarez & Marsal to the extent actively engaged by the Credit Parties, in each case, to meet, separately or collectively, as the Agent may so desire, including telephonic meetings, at such reasonable times during normal business hours and as often as may be reasonably requested by the Agent, with the Agent or the Agent and the Lenders and their respective representatives collectively as a group, and in any event not less frequently than once a week, to answer questions, to provide updates and to deliver such materials (including any and all written materials and data room access) relating to the sale process described in this Section 4.19, any proposed sale transaction or any indication of interest or other proposal or offer from any prospective buyer or prospective lender, as well as the status of the Credit Parties’ cost-savings initiatives, and/or the financial condition or the actual or projected financial or operating results of the Credit Parties’ businesses or financial operations, in each case, promptly upon request by the Agent.  The Credit Parties acknowledge and agree that the foregoing covenants and agreements are in addition to, and not in substitution for, the terms and provisions set forth in Section 4.9.”

 

(g) Article IV of the Credit Agreement is hereby amended by adding the following new Section 4.20 thereto in appropriate numerical order:

 

“Section 4.20  Retention of CRO by Holdings.  Within five (5) Business days of a written request by Agent, or at the direction of Required Lenders, following the occurrence of an Event of Default with respect to any of subsections 4.19(w), (x), (y) or 

 

  

  

  

(z), Holdings shall retain and continue to retain a chief restructuring officer (the “CRO”) reasonably acceptable to Agent, on terms and conditions reasonably acceptable to Agent, which terms and conditions shall include retention of such CRO as an officer of Holdings, with direct reporting to Holdings’ board of directors and direct availability thereto by the Agent and the Lenders.”

 

(h) Section 5.5 of the Credit Agreement is hereby further amended by deleting clause (d) thereof in its entirety and substituting the following therefor:

 

“(d) Indebtedness consisting of Capital Lease Obligations or secured by Liens permitted by subsection 5.1(h) and Permitted Refinancings thereof in an amount not to exceed the lesser of (y) $6,000,000 and (z) the aggregate principal amount thereof outstanding as of the Seventh Amendment Effective Date; provided, in no event shall Borrower and its Domestic Subsidiaries incur any Indebtedness of the type described in the foregoing provisions of this clause (d) in an aggregate amount in excess of the lesser of (y) $3,000,000 and (z) such Indebtedness of such Persons outstanding as of the Seventh Amendment Effective Date.”

 

(i) Section 5.5 of the Credit Agreement is hereby further amended by deleting clause (q) thereof in its entirety and substituting “(q)  Reserved; and” therefor.

 

(j) Section 5.5 of the Credit Agreement is hereby further amended by deleting clause (r) thereof in its entirety and substituting the following therefor:

 

“(r) secured Indebtedness under the First Lien Revolving Facility in an aggregate principal amount not to exceed $15,000,000.”

 

(k) Section 5.6 of the Credit Agreement is hereby further amended by deleting clauses (f) and (g) thereof in their entirety and substituting “(f)  Reserved;” and “(g) Reserved;”, respectively, therefor.

 

(l) Section 7.1 of the Credit Agreement is hereby amended by deleting subsection (c) thereof in its entirety and substituting the following therefor:

 

“(c) Specific Defaults. Any Credit Party fails to (i) perform or observe any term, covenant or agreement contained in any of subsection 4.2(i), subsection 4.2(j), subsection 4.3(a), subsection 4.4(a) (in respect of Holdings or the Borrower), Section 4.10, Section 4.17, Section 4.19, Section 4.20, Article V or Article VI or (ii) deliver any of the financial statements, certificates and other information required to be delivered pursuant to Section 4.1 or subsection 4.2(a), 4.2(b) or 4.2(g) within five (5) Business Days following the stated delivery date therefor; or”

(m) Section 7.1 of the Credit Agreement is hereby amended by deleting the last sentence thereof in its entirety.

 

  

  

  

(n) Section 7.5 of the Credit Agreement is hereby amended by deleting such section in its entirety and substituting “[Reserved]” therefor.

 

(o) Section 9.10 of the Credit Agreement is hereby amended by deleting subsection (b) thereof in its entirety and substituting the following therefor:

 

“(b) Confidential Information.  Each Lender, each L/C Issuer and Agent agrees to maintain, in accordance with its customary practices, the confidentiality of information obtained by it pursuant to any Loan Document and designated by any Credit Party as confidential (and use only with respect to obligations under the Loan Documents), except that such information may be disclosed (i) with the Borrower’s consent, (ii) to Related Persons of such Lender, L/C Issuer or Agent, as the case may be, or to any Person that any L/C Issuer causes to issue Letters of Credit hereunder, that are advised of the confidential nature of such information and are instructed to keep such information confidential in accordance with the terms hereof, (iii) to the extent such information presently is or hereafter becomes (A) publicly available other than as a result of a breach of this Section 9.10 or (B) available to such Lender, L/C Issuer or Agent or any of their Related Persons, as the case may be, on a non-confidential basis from a source (other than any Credit Party) not known by them to be subject to disclosure restrictions, (iv) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority (and, in any such case, the Person disclosing such information shall use commercially reasonable efforts to promptly notify the Borrower prior to any disclosure, to the extent same would not be prohibited by applicable law or order), (v) to the extent necessary or customary for inclusion in league table measurements (but limited to only such customary information as required for such league tables), (vi) (A) to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized rating agency or (B) otherwise to the extent consisting of general portfolio information that does not identify Credit Parties, (vii) to current or prospective assignees, other than any Person on the List of Indentified Disqualified Financial Institutions, SPVs (including the investors or prospective investors therein) or participants, direct or contractual counterparties to any Secured Rate Contracts and to their respective Related Persons, in each case to the extent such assignees, investors, participants, counterparties or Related Persons agree to be bound by provisions substantially similar to the provisions of this Section 9.10 (and such Person may disclose information to their respective Related Persons in accordance with clause (ii) above), (viii) to any other party hereto, and (ix) in connection with the exercise or enforcement of any right or remedy under any Loan Document, in connection with any litigation or other proceeding to which such Lender, L/C Issuer or Agent or any of their Related Persons is a party or bound, or to the extent necessary to respond to public statements or disclosures by Credit Parties or their Related Persons referring to a Lender, L/C Issuer or Agent or any of their Related Persons.  Without limiting any of the foregoing, each Lender, each L/C Issuer and Agent hereby acknowledge and agree that all confidential information provided to such Person pursuant to the Credit Agreement, including, but not limited to, all information regarding the sale process described in Section 4.19 or delivered pursuant to the requirements of Section 

 

  

  

  

4.2(i) or Section 4.19 (such information, specifically excluding the regular and recurring financial information and other notices and reports required to be provided pursuant to Section 4.1, Section 4.2 (excluding subsection 4.2(i)) and Section 4.3, the “Sale Process Information”) is provided to such Person solely in such Person’s capacity as a Lender, L/C Issuer or Agent, as applicable and shall not be used by such Person or any of such Person’s Affiliates for any other purpose.  In no event shall any Lender, L/C Issuer or Agent who intends, or who has Affiliates who intend to participate in the sale process described in Section 4.19 as a bidder or potential bidder, receive, or be authorized to receive, any Sale Process Information without establishing appropriate internal information sharing restrictions acceptable to Agent.  To the extent any such Person subsequently participates, or has an Affiliate who subsequently participates, in such sale process as a bidder or potential bidder, without having established said restrictions, no Sale Process Information previously delivered to such Person or such Affiliate shall be used, and each Lender, L/C issuer and Agent hereby covenants and agrees not to use Sale Process Information, in connection with such Person’s or such Affiliates participation in the sale process, and shall promptly return to the Agent or destroy all such information, including all copies, reproductions or other duplicates thereof, whether hardcopy or electronic form.  In the event of any conflict between the terms of this Section 9.10 and those of any other Contractual Obligation entered into with any Credit Party (whether or not a Loan Document), the terms of this Section 9.10 shall govern.”

 

(p) Section 11.1 of the Credit Agreement is hereby amended by deleting the definitions of “Aggregate Revolving Loan Commitment,” “Applicable Margin” and “Consolidated EBITDA” set forth therein in its entirety and substituting the following language therefor:

 

“Aggregate Revolving Loan Commitment” means the combined Revolving Loan Commitments of the Lenders, which shall, as of the Seventh Amendment Effective Date, be in the amount of $20,803,152.02, as such amount may be reduced or increased from time to time pursuant to this Agreement.

 

“Applicable Margin” means:

 

(a) with respect to Revolving Loans and Swing Loans:  (x) if a Base Rate Loan, six and one-half percent (6.50%) per annum and (y) if a LIBOR Rate Loan, seven and one-half percent (7.50%) per annum (as such percentages may be increased as, and to the extent, necessary to comply with Section 1.12);

 

(b) with respect to Initial Term Loans:  (x) if a Base Rate Loan, six and one-half percent (6.50%) per annum and (y) if a LIBOR Rate Loan, seven and one-half percent (7.50%) per annum (as such percentages may be increased as, and to the extent, necessary to comply with Section 1.12);

 

  

  

  

(c) with respect to Incremental Term Loans of any Tranche, that percentage per annum for Base Rate Loans and LIBOR Loans of such Tranche as specified pursuant to Section 1.12; and

 

(d) with respect to any Tranche of Extended Term Loans or Extended Revolving Loans, that percentage per annum for Base Rate Loans and LIBOR Loans for such Tranche as set forth in the relevant Extension Offer.

 

Notwithstanding anything to the contrary set forth above or elsewhere in this Agreement, each of the interest rate margins set forth in clauses (a) and (b) above shall, without any further action of, consent by or notice to Agent, any Lender, any Credit Party or any other Person, automatically increase by (i) 50 basis points effective as of November 1, 2013 and (ii) an additional 50 basis points for each subsequent period of three consecutive months, such increase being effective as of the first day immediately succeeding the last day of each such three month period (the increases to the Applicable Margin described in foregoing clauses (i) and (ii) being referred to herein as the “Pricing Increases”).

 

           “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, adjusted by (A) adding thereto (in each case to the extent deducted in determining Consolidated Net Income for such period), without duplication, the amount of (i) total interest expense (inclusive of amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees)) of Holdings and its Subsidiaries determined on a consolidated basis for such period, (ii) provision for taxes based on income and foreign withholding taxes for Holdings and its Subsidiaries determined on a consolidated basis for such period, (iii) all depreciation and amortization expense of Holdings and its Subsidiaries determined on a consolidated basis for such period, (iv) the amount of all Transaction Expenses for such period that are approved by the Arrangers, (v) the amount of all non-cash deferred compensation expense of Holdings and its Subsidiaries determined on a consolidated basis for such period resulting from the issuance of Stock or Stock Equivalents to former or current directors, officers or employees of Holdings or any Subsidiary of Holdings, or the exercise of such Stock Equivalents, (vi) the amount of all non-cash charges of Holdings and its Subsidiaries relating to the impairment or write-down of fixed assets, intangible assets (other than Accounts) or goodwill for such period, excluding any non-cash charge that is an expense, loss, charge or accrual of a reserve for or in respect of a cash expenditure or payment to be made, or anticipated to be made, in a future period, (vii) the amount of all other non-cash charges of Holdings and its Subsidiaries determined on a consolidated basis for such period, excluding any non-cash charge (y) that is an expense, loss, charge or accrual of a reserve for or in respect of a cash expenditure or payment to be made, or anticipated to be made, in a future period or (z) relating to a write-down, write off or reserve with respect to Accounts and inventory, (viii) reserved, (ix) any losses from sales of assets for such period other than inventory sold in the Ordinary Course of Business, (x) any extraordinary cash losses for such period, (xi) currency translation non-cash losses for such period related to currency remeasurements (including any loss resulting from Rate Contracts for currency exchange 

 

  

  

  

risk), (xii) any unrealized non-cash losses for such period in connection with any hedging agreements, (xiii) [reserved], (xiv) reserved, (xv) any fees and expenses incurred for such period in connection with the initial public offering of voting common Stock of Holdings (including fees and expenses incurred in connection with an unconsummated initial public offering of such Stock), including, without limitation, fees and expenses incurred in connection with the Second Amendment and the termination fee with respect to the Management Agreement paid in accordance with the Second Amendment, (xvi) costs and expenses actually incurred and paid in cash by Holdings or any Subsidiary of Holdings in connection with the restructuring efforts of Holdings and its Subsidiaries commenced during Fiscal Year 2013, together with severance expenses, in an aggregate amount for all such costs and expenses described in this clause (xvi) not to exceed (y) $4,500,000 during Fiscal Year 2013 and (z) $500,000 during Fiscal Year 2014, and (xvii) fees and expenses paid to Agent and/or the Lenders and legal expenses paid by the Borrower, in each case, pursuant to or in connection with the Sixth Amendment and, to the extent paid by the Borrower, the consulting fees and related expenses pursuant to the Consulting Agreement (as defined in the Sixth Amendment), and (B) subtracting therefrom (to the extent not otherwise deducted in determining Consolidated Net Income for such period) the amount of (i) all cash payments and cash charges made during such period relating to any non-cash charges taken in a previous period pursuant to preceding clauses (A)(vi) or (A)(vii), (ii) any gains from sales of assets for such period other than inventory sold in the Ordinary Course of Business, (iii) any extraordinary cash gains for such period, (iv) any non-cash income or gains for such period (including any non-cash from the cancellation of Indebtedness), (v) currency translation gains for such period related to currency remeasurements (including any net gain resulting from Rate Contracts for currency exchange risk), (vi) any unrealized gains for such period in connection with any hedging agreements and (vii) solely for purposes of calculating the Interest Coverage Ratio for such period, all cash interest income for such period. For the avoidance of doubt, it is understood and agreed that, to the extent any amounts are excluded from Consolidated Net Income by virtue of the proviso to the definition thereof contained herein, add backs to Consolidated Net Income in determining Consolidated EBITDA as provided above shall be limited (or denied) in a fashion consistent with the proviso to the definition of Consolidated Net Income contained herein. Notwithstanding anything to the contrary contained above, for purposes of determining Consolidated EBITDA for any Test Period which ends prior to the first anniversary of the Closing Date, Consolidated EBITDA for all portions of such period occurring prior to the Closing Date shall be calculated in accordance with the definition of Test Period contained herein.

 

(q) Section 11.1 of the Credit Agreement is hereby further amended by adding the following new definitions thereto in appropriate alphabetical order:

 

“Acceptable Sale” shall have the meaning ascribed thereto in Section 4.19(a)(i).

 

“CRO” shall have the meaning ascribed thereto in Section 4.20.

 

  

  

  

“Designated Reporting Items” means the “Designated Reporting Items” as defined in that certain Notice of Reservation of Rights Letter dated as of November 25, 2013 delivered by Agent to the Borrower, including reporting with respect to same for the periods ending September 30, 2013, October 31, 2013 and November 30, 2013.

 

“First Lien Revolving Agent” means General Electric Capital Corporation, in its capacity as “Agent” under the First Lien Revolving Facility, together with its successors and assigns.

 

“First Lien Revolving Credit Agreement” means that certain First Lien Revolving Credit Agreement dated as of January 10, 2014 by and among the Borrower, the other Credit Parties party thereto, First Lien Revolving Agent and the financial institutions from time to time party thereto as lenders or letter of credit issuers thereunder

 

“First Lien Revolving Facility” means the revolving credit facility evidenced by the First Lien Revolving Credit Agreement.

 

“First Lien Revolving Facility Intercreditor Agreement” means that certain Intercreditor Agreement dated as of January 10, 2014 by and among First Lien Revolving Agent and Agent and acknowledged by the Credit Parties.

 

“Interest Reserve” means a reserve against the Aggregate Revolving Loan Commitment that may from time to time be established by the Agent, in its sole discretion, on the first day of each month in an amount equal to the aggregate amount of interest in respect of the Loans accrued, or to be accrued, in respect of such month, but, in any event, not to exceed $1,750,000, as such reserve may be reduced during any such month by the amount of Revolving Loans, if any, funded specifically for the purpose of paying the interest for which such reserve was established; provided, such reserve shall not be implemented while the First Lien Revolving Facility shall be in effect.

 

“Investment Banker” shall have the meaning ascribed thereto in Section 4.19(a)(ii)(u).

 

“Moelis” shall have the meaning ascribed thereto in Section 4.2(i)(i).

 

“Seventh Amendment” means that certain Limited Waiver and Seventh Amendment to First Lien Credit Agreement dated as of the Seventh Amendment Effective Date by and among Borrower, the other Credit Parties, Agent and the Lenders party thereto.

 

“Seventh Amendment Effective Date” means January 10, 2014.

 

(r) The Credit Agreement and the other Loan Documents hereby amended by deleting (i) the definition of “Permitted Acquisition” set forth in Section 11.1 of the Credit Agreement and (ii) all references to such term appearing elsewhere in the Credit Agreement and in any other Loan Documents (and the relevant provisions thereof adjusted accordingly to give 

 

  

  

  

effect thereto), such that the Borrower shall have no right to consummate any further Permitted Acquisitions from and after the Seventh Amendment Effective Date.

 

(s) Schedule 1.1(b) of the Credit Agreement maintained by the Agent is hereby amended to reflect the reduction in the Aggregate Revolving Loan Commitment effectuated hereby and that the Revolving Loan Commitment of each Revolving Lender shall equal the sum of such Lender’s pro rata share of all outstanding Revolving Loans and Letter of Credit Obligations.

 

4. Conditions.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent or concurrent:

 

(a) the execution and delivery to Agent of this Amendment by each Credit Party, Agent, Required Lenders and Required Revolving Lenders;

 

(b) the payment by Borrower to Agent of a fully-earned, non-refundable amendment fee for the ratable benefit of each applicable Lender that has delivered and released to Agent its executed signature page to this letter agreement by no later than 9:00 a.m. CST on January 10, 2014 (each such Lender, a “Consenting Lender”), equal to 0.50% of the sum of (y) the aggregate Revolving Loan Commitments of all Consenting Lenders and (z) the outstanding principal amount of the Initial Term Loan held by Consenting Lenders, in each case, as of the date hereof;

 

(c) the First Lien Revolving Facility shall have been consummated and the Borrower shall have obtained the benefits thereof and Agent shall have received copies of the principal documentation evidencing such facility, in each case, duly executed by all of the parties thereto;

 

(d) after giving effect to this Amendment and the waiver contained herein, the truth and accuracy in all material respects of the representations and warranties contained in Section 5 hereof; and

 

(e) no Default or Event of Default (other than the Designated Potential Defaults) shall have occurred and be continuing or arise as a direct result of the effectiveness of this Amendment.

 

5. Representations and Warranties.   Each Credit Party hereby represents and warrants to Agent and each Lender as follows:

 

(a) the representations and warranties made by such Credit Party contained in the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof, except to the extent such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date;

 

  

  

  

(b) such Credit Party is a corporation or limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable;

 

(c) such Credit Party has the power and authority to execute, deliver and perform its obligations under this Amendment and the Credit Agreement, as amended hereby;

 

(d) the execution, delivery and performance by such Credit Party of this Amendment and the Credit Agreement, as amended hereby, have been duly authorized by all necessary action;

 

(e) this Amendment and the Credit Agreement, as amended hereby, constitutes the legal, valid and binding obligation of such Credit Party, enforceable against such Person in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditor’s rights generally or by equitable principles relating to enforceability;

 

(f) the execution, delivery and performance by each of the Credit Parties of this Amendment have been duly authorized by all necessary action, and do not and will not: (a) contravene the terms of any of that Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any material order, injunction, writ or decree of any Governmental Authority to which such Person or its Property is subject; or (c) violate any material Requirement of Law in any material respect; and

 

(g) no Default or Event of Default (other than the Designated Potential Defaults) exists or shall arise as a direct result of the effectiveness of this Amendment.

 

6. No Modification.  Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties.  Except as expressly stated herein, the Agent and Lenders reserve all rights, privileges and remedies under the Loan Documents.  Except as amended, waived or consented to hereby, the Credit Agreement and other Loan Documents remain unmodified and in full force and effect.  All references in the Loan Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended and waived hereby.

 

7. Counterparts.  This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Amendment by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

  

  

  

8. Successors and Assigns.  The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that none of the Credit Parties may assign or transfer any of its rights or obligations under this Amendment without the prior written consent of the Agent.

 

9. Further Assurance.  Borrower hereby agrees from time to time, as and when requested by the Agent or Lender, to execute and deliver or cause to be executed and delivered, all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment, the Credit Agreement and the Loan Documents.

 

10. Governing Law and Jurisdiction.

 

(a) Governing Law.  The laws of the State of New York shall govern all matters arising out of, in connection with or relating to this Amendment, including, without limitation, its validity, interpretation, construction, performance and enforcement (including, without limitation, any claims sounding in contract or tort law arising out of the subject matter hereof and any determinations with respect to post-judgment interest) (without regard to conflicts of law principles (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law)).

 

(b) Submission to Jurisdiction.  Any legal action or proceeding with respect to this Amendment shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America sitting in the Southern District of New York and, by execution and delivery of this Amendment, each Credit Party hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.

 

(c) Service of Process.  Each Credit Party hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with this Agreement by any means permitted by applicable Requirements of Law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of such Person specified in the Credit Agreement (and shall be effective when such mailing shall be effective, as provided therein).  Each Credit Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(d) Non-Exclusive Jurisdiction.  Nothing contained in this Section 10 shall affect the right of Agent to serve process in any other manner permitted by applicable 

 

  

  

  

Requirements of Law or commence legal proceedings or otherwise proceed against any Credit Party in any other jurisdiction.

 

(e) Waiver of Jury Trial.  THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS

 

(f) AMENDMENT, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

 

11. Severability.  The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment or any instrument or agreement required hereunder.

 

12. Reaffirmation. Each of the Credit Parties as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Credit Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party (after giving effect hereto) and (ii) to the extent such Credit Party granted liens on or security interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the Borrower’s Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby.  Each of the Credit Parties hereby consents to this Amendment and acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and reaffirmed.  Except as expressly set forth herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations.  In addition, the Credit Parties hereby acknowledge and agree that (x) pursuant to that certain Consulting Services Agreement dated as of July 2, 2013 (as the same may be amended, supplemented or otherwise modified from time to time, the “Consulting Agreement”) by and among, inter alia, Agent and Richter Consulting, Inc. (“Consultant”), Agent has engaged Consultant to assist Agent and the Lenders in evaluating, among other things, the current and projected financial performance of the Credit Parties, (y) the Credit Parties shall cooperate in good faith with (1) Consultant in connection with the performance by Consultant of its engagement pursuant to the Consulting Agreement or any other consulting arrangement for which Consultant may be engaged by Agent in connection with the Credit Agreement and (2) such other consultant or advisor as may be engaged by Agent in connection with the Credit Agreement and shall provide Consultant or any such other consultant or advisor access to the Credit Parties’ senior management and professionals and (z) all expenses incurred by Agent in connection with any of the foregoing shall constitute Obligations and shall be paid by the Credit Parties (or the Credit Parties shall reimburse Agent therefor) within five (5) 

 

  

  

  

Business Days after demand by Agent (and notwithstanding the waiver set forth in Section 2 hereof).

 

13. Release of Claims.  In consideration of the Lenders’ and the Agent’s agreements contained in this Amendment, each Credit Party hereby irrevocably releases and forever discharge the Lenders and the Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Credit Party ever had or now has against Agent, any Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of Agent, any Lender or any other Released Person relating to the Credit Agreement or any other Loan Document on or prior to the date hereof.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

  

  

  

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date set forth above.

 

	  	
BORROWER:

	  
	  	  	  	  
	  	  	  	  
	  	
GSE ENVIRONMENTAL, INC.

	  	  	  	  
	  	
By:

	
/s/ Daniel C. Storey

	  
	  	
Name:

	
Daniel C. Storey

	  
	  	
Title:

	
Senior Vice President and CFO

	  	  	  	  
	  	  	  	  
	  	
CREDIT PARTIES:

	  
	  	  	  	  
	  	  	  	  
	  	
GSE HOLDING, INC.

	  	
 

	  	  
	  	
By:

	
/s/ Daniel C. Storey

	  
	  	
Name:

	
Daniel C. Storey

	  
	  	
Title:

	
Senior Vice President and CFO

	  	  	  	  
	  	  	  	  
	  	
GSE ENVIRONMENTAL, LLC

	  	
 

	  	  
	  	
By:

	
/s/ Daniel C. Storey

	  
	  	
Name:

	
Daniel C. Storey

	  
	  	
Title:

	
Senior Vice President and CFO

	  	  	  	  
	  	  	  	  
	  	
SYNTEC LLC

	  	  	
 

	  
	  	
By GSE Environmental, LLC, its Sole Member

	 	 
	  	
By:

	
/s/ Daniel C. Storey

	  
	  	
Name:

	
Daniel C. Storey

	  
	  	
Title:

	
Senior Vice President and CFO

 

  

  

  

IN WITNESS WHEREOF, the each of the undersigned has executed this Amendment as of the date set forth above.

 

AGENT AND LENDERS:

 

GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and as a Lender

By:           /s/ Brad Kimme

Name:      Brad Kimme

Title:        Duly Authorized Signatory

 

  

  

  

IN WITNESS WHEREOF, the each of the undersigned has executed this Amendment as of the date set forth above.

 

AGENT AND LENDERS:

 

GE CAPITAL BANK, as a Lender

 

By:           /s/ Woodrow Broadesr

Name:      Woodrow Broaders

Title:        Duly Authorized Signatory

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

MUBADALA GE CAPITAL LTD., as a Lender

By:           /s/ Pierre Abinakle

Name:      Pierre Abinakle

Title:        Director

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

ING CAPITAL LL,C  as a Lender

By:           /s/ Andrew C. Sepe

Name:      Andrew C. Sepe

Title:        Director

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

FIFTH STREET FUNDING II, LLC, as a Lender

By:           /s/ Ivelin M. Dimitrov

Name:      Iveline M. Dimitrov

Title:        Chief Investment Officer

 

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Black Diamond CLO 2005-1 LTD.

By:  Black Diamond CLO 2005-1 Adviser, L.L.C.,

As Its Collateral Manager, as a Lender

By:           /s/ Stephen H. Deckoff

Name:      Stephen H. Deckoff

Title:        Managing Principal

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

GSC Group CDO Fund VIII, Limited

 

By:  GSC Acquisition Holdings, L.L.C., as its Collateral Manager

By: GSC MANAGER, LLC, in its capacity as Manager

By: BLACK DIAMOND CPAITAL MANAGEMENT, L.L.C., in its capacity as Member, as a Lender

By:           /s/ Stephen H. Deckoff

Name:      Stephen H. Deckoff

Title:        Managing Principal

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

GSC Partners CDO Fund VII, Limited

 

By:  GSC Acquisition Holdings, L.L.C., as its Collateral Manager

By: GSC MANAGER, LLC, in its capacity as Manager

By: BLACK DIAMOND CAPITAL MANAGEMENT, L.L.C., in its capacity as Member, as a Lender

By:           /s/ Stephen H. Deckoff

Name:      Stephen H. Deckoff

Title:        Managing Principal

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Black Diamond CLO 2005-2 LTD

 

Black Diamond CLO 2005-2 Adviser, L.L.C., as its Collateral Manager, as a Lender

By:           /s/ Stephen H. Deckoff

Name:      Stephen H. Deckoff

Title:        Managing Principal

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Black Diamond CLO 2006-1 (CAYMAN) LTD

 

Black Diamond CLO 2006-1 Adviser, L.L.C., as its Collateral Manager, as a Lender

By:           /s/ Stephen H. Deckoff

Name:      Stephen H. Deckoff

Title:        Managing Principal

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

SUNS SPV LLC, as a Lender

By:           /s/ Bruce Spohler

Name:      Bruce Spohler

Title:        Chief Operating Officer

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Cetus Capital II LLC, as a Lender

By:           /s/ Richard Maybaum

Name:      Richard Maybaum

Title:        Managing Director

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

SG Distressed Fund, LP, as a Lender

By:           /s/ Richard Maybaum

Name:      Richard Maybaum

Title:        Managing Director

 

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Littlejohn Opportunities Master Fund LP, as a Lender

By:           /s/ Richard Maybaum

Name:      Richard Maybaum

Title:        Managing Director

 

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Harleysville Life Insurance Company, as a Lender

By:           /s/ Ronald R. Serpico

Name:      Ronald R. Serpico

Title:        Authorized Signatory

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Nationwide Mutual Insurance Company, as a Lender

By:           /s/ Ronald R. Serpico

Name:      Ronald R. Serpico

Title:        Authorized Signatory

 

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

JEFFERIES FINANCE LLC, as a Lender

By:           /s/ Paul J. Loomis

Name:      Paul J. Loomis

Title:        Managing Director

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

JFIN CLO 2012 LTD, as a Lender

By: Jefferies Finance, LLC, as Portfolio Manager

By:           /s/ Paul McDonnell

Name:      Paul McDonnell

Title:        Managing Director

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

JFIN CLO 2013 LTD, as a Lender

By: Jefferies Finance, LLC, as Portfolio Manager

By:           /s/ Paul McDonnell

Name:      Paul McDonnell

Title:        Managing Director

 

 

 

 

 

 

 

  

  

  

IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date set forth above.

 

Wells Fargo Principal Lending, LLC, as a Lender

By:            /s/ Jeff Nikora

Name:      Jeff Nikora

Title:        Executive Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00225-of-00352.parquet"}]]