Exhibit
10.12


 


FIRST
AMENDMENT TO


CREDIT
FACILITIES AGREEMENT


 


This FIRST AMENDMENT TO
CREDIT FACILITIES AGREEMENT (this “Agreement”) is entered into and effective as
of March 12, 2004, by and among GTSI Corp, a Delaware corporation (“Borrower”),
GE Commercial Distribution Finance Corporation (“GECDF”), as Administrative
Agent, and GECDF and the other Lenders.


 


Recitals:


 


A.                                    Borrower, Administrative Agent and Lenders
are party to that certain Credit Facilities Agreement dated as of October 20
2003 (the “Original Credit Agreement”).


 


B.                                    Administrative Agent, Lenders and Borrower
have agreed to the provisions set forth herein on the terms and conditions
contained herein.


 


Agreement


 


Therefore, in consideration
of the mutual agreements herein and other sufficient consideration, the receipt
of which is hereby acknowledged, Borrower, Administrative Agent and the Lenders
hereby agree as follows:


 


1.              Definitions.  All references to the “Agreement” or the “Credit
Agreement” in the Original Credit Agreement and in this Agreement shall be
deemed to be references to the Original Credit Agreement as it may be amended,
restated, extended, renewed, replaced, or otherwise modified from time to
time.  Capitalized terms used and not
otherwise defined herein have the meanings given them in the Original Credit
Agreement.


 


2.              Effectiveness
of Agreement.  This Agreement shall become effective as of
the date first written above, but only if this Agreement has been executed by
Borrower, Administrative Agent and the Lenders, and only if all of the
documents listed on Exhibit A to this Agreement have been delivered and, as
applicable, executed, sealed, attested, acknowledged, certified, or
authenticated, each in form and substance satisfactory to Administrative Agent
and the Lenders, and the other fundings required by this Agreement have
occurred.


 


3.              New Lender.


 


3.1.              In connection with this Agreement, and
simultaneously with its effectiveness and certain fundings as set forth herein,
SunTrust Bank (“New Lender”) will become a Lender for all purposes under the
Original Credit Agreement and Loan Documents together with the existing Lender
(the “Existing Lender”).  Simultaneously
with the effectiveness of this Agreement and certain fundings as set forth
herein, Exhibit 3 to the Original Credit Agreement is deleted and replaced with
the Exhibit 3 attached hereto.


 


3.2.              Upon the full and
complete execution of this Agreement, the Administrative Agent shall arrange,
and each Lender (including New Lender and the Existing Lender) shall fully cooperate,
in making or receiving, as directed by the Administrative Agent, wire transfers
and fund transfers reasonably necessary to effectuate the pro-rata shares set
forth on Exhibit 3.  Upon such transfer
of funds, this


 





















 


Agreement shall be effective
and such effectiveness shall relate back to 8:00 a.m. St. Louis time on the
date of this Agreement.


 


3.3.              New Lender agrees
that, to the extent it has purchased and assumed or be found to have purchased
and assumed from Existing Lender any interest in any Loan that it has purchased
and assumed such interest, without recourse and without representation or
warranty except as expressly set forth in Section 3.4.  Such purchase and assumption shall include
that portion of the Existing Lender’s obligations to fund unfunded Approvals
equal to its percentage of the Floorplan Loans.


 


3.4.              Existing Lender
represents and warrants that it is the legal and beneficial owner of its Loans
and that such interest is free and clear of any adverse claim.


 


3.5.              New Lender
(i) confirms, covenants and agrees that it has received a copy of the
Original Credit Agreement and all prior amendments (if any), the Loan
Documents, together with copies of the Financial Statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement and become a
Lender, and confirms and covenants that it has entered into this Agreement and
agreed to become a Lender based on its own credit analysis and decision and
without reliance upon any information provided by, or statement made by,
Administrative Agent or any other Lender; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, any Existing
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Original Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Original Credit Agreement
as are delegated to the Administrative Agent by the terms thereof, together
with such powers and discretion as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Original Credit Agreement and the other
Loan Documents are required to be performed by it as a Lender; and
(vi) promptly provide to Administrative Agent any U.S. Internal Revenue
Service or other forms required under the Original Credit Agreement.


 


3.6.              Upon the
effectiveness of this Agreement and the funding by the New Lender of the
amounts directed to be funded by it by the Administrative Agent as set forth in
Section 3.2 hereof, such New Lender shall be a Lender for all purposes
under the Original Credit Agreement and the other Loan Documents.  From and after the effective date of this
Agreement, the Administrative Agent shall make all payments under the Original
Credit Agreement and the Notes consistent with the pro-rata shares of the
Lenders.


 


4.              Amendment.  The
Original Credit Agreement is hereby amended as follows:


 


4.1.              Termination.  A
new Section 3.7 is hereby added to the Credit Agreement as follows:


 


3.7.                            Co-Lender’s Share;
Terminating Lender.               Until all of the Loan Obligations are fully
and indefeasibly paid, no Letters of Credit remain outstanding, the Letter of
Credit Exposure is irreversibly zero and all Facilities are terminated, each
Lender must, subject to Section 18.4 of the Agreement, retain its pro-rata
share of all of the Aggregate Facilities that have not been previously
terminated in accordance with this Agreement and perform all of its obligations
as a Lender hereunder.  Notwithstanding
the preceding sentence, not less than 105 (one hundred five) days prior to the
Initial Maturity Date and each anniversary of the Initial Maturity Date thereafter
(each a “Maturity Date”), each Lender shall notify Administrative Agent in
writing whether or not it desires to terminate the Aggregate Facilities as of
the next Maturity Date.  Any Lender
giving such notice


 


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shall be known as a “Terminating Lender.”  The Administrative Agent shall deliver to
each other Lender any such notice received from a Terminating Lender
immediately upon the Administrative Agent’s receipt.  In the absence of timely notice required
above, Lender shall be deemed to have expressed its desire to renew the
Agreement and to continue as a Lender hereunder through the next Maturity
Date.  Provided that (i) no Event of
Default has occurred and is continuing, (ii) Terminating Lender has given
timely notice of its desire to terminate the Aggregate Facilities as of the
next Maturity Date, and (iii) the Aggregate Facilities are to be renewed by
Borrower and the remaining Lender(s), then, as of the Maturity Date, a
Terminating Lender shall, at the direction of Administrative Agent, assign its
pro-rata share of the Aggregate Facilities to either a substitute Lender or the
remaining Lender(s) on a pro-rata basis. 
Such Lender(s) shall pay the Terminating Lender in full for its pro-rata
share of all Loan Obligations, including the outstanding Loans and accrued but
unpaid interest and fees.  Thereafter,
such Terminating Lender shall be released from its obligations as a Lender
hereunder.


 


4.2.              Maturity.  Section 6.1.2.3
of the Original Credit Agreement is deleted and replaced with the following:


 


6.1.2.3.        Maturity.   Borrower shall repay the entire amount of the Aggregate Revolving Loan
on February 28, 2005 (“Initial Maturity Date”), unless the Aggregate
Revolving Loan Facility continues after the Initial Maturity Date as provided below
in this Section 6.1.2.3.  Borrower
shall repay the amount of the Swingline Loans on demand.  The Aggregate Revolving Loan Facility will
continue from year to year on each anniversary of the Initial Maturity Date
unless Borrower or the Required Lenders give each party hereto written notice
of termination of not less than 90 days prior to the start of a renewal
period.  Each of the Aggregate Floorplan
Loan Facility, the Interim Floorplan Loan Facility and the Swingline Facility
are discretionary and may be terminated at any time as set forth herein, with
or without notice or demand as set forth herein; provided, however, if Borrower
shall give notice of termination of the Aggregate Revolving Loan Facility, then
such notice shall be deemed to be notice of termination for all Facilities in
which case Borrower shall pay the entire amount of the outstanding Loan
Obligations upon the effective date of such notice of termination, including
payment of cash collateral satisfactory to Administrative Agent as security for
Borrower’s obligation to reimburse Administrative Agent or the Letter of Credit
Issuer, as the case may be, for 105% of all draws and expenses under all
outstanding Letters of Credit and 100% of any unfunded Approvals, in which case
such Approvals shall be otherwise paid in accordance with the applicable
Statements of Transaction.


 


4.3.              Maximum Total Liabilities to
Tangible Net Worth.  Section 15.3
of the Original Credit Agreement is deleted and replaced with the following:


 


15.3          Maximum Total Liabilities to Tangible Net Worth.  Borrower
covenants that the ratio of Total Liabilities minus Subordinated Indebtedness
to Tangible Net Worth plus Subordinated Indebtedness calculated as of the last
day of each fiscal month specified in the table below, shall not be more than
the ratio specified in such table opposite said fiscal month


 


	
  Fiscal Month Ended

  	
   

  	
  Maximum Ratio

  
	
  Each July 31, August 31,
  and September 30

  	
   

  	
  6.00:1.00

  
	
   

  	
   

  	
   

  
	
  Each
  January 31, February 28/29, March 31, April 30, May 31, June 30,
  October 31, November 30 and December 31

  	
   

  	
  4.00:1.00

  



 


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4.4.              Additional Definitions.  The following defined terms are hereby added to Exhibit 2.1 Glossary and Index of Defined
Terms:


 


COMMITMENT — a Lender’s
pro rata share of the Aggregate Facilities.


 


EXISTING
DEFAULT — a Default which has occurred and is continuing, or an Event of
Default which has occurred, and which has not been waived in writing by the
Required Lenders.


 


5.              Representations and
Warranties of Borrower.  Borrower hereby represents and warrants to
Administrative Agent and the Lenders that (i) Borrower’s execution of this
Agreement has been duly authorized by all requisite action of Borrower; (ii) no
consents are necessary from any third parties for Borrower’s execution,
delivery or performance of this Agreement, (iii) this Agreement, the Credit
Agreement, and each of the other Loan Documents, constitute the legal, valid
and binding obligations of Borrower enforceable against each such Borrower in
accordance with their terms, except to the extent that the enforceability
thereof against Borrower may be limited by bankruptcy, insolvency or other laws
affecting the enforceability of creditors rights generally or by equity
principles of general application, (iv) except as disclosed on the supplemental
disclosure schedule attached hereto as Exhibit B and the disclosure schedule attached
to the Original Credit Agreement, all of the representations and warranties
contained in Section 12 of the Credit Agreement are true and correct with
the same force and effect as if made on and as of the date of this Agreement,
and (v) after giving effect to this Agreement, there is no Existing Default.


 


6.              Reaffirmation.  Borrower
hereby represents, warrants, acknowledges and confirms that (i) the Credit
Agreement and the other Loan Documents remain in full force and effect, (ii)
Borrower has no defenses to its obligations under the Credit Agreement and the
other Loan Documents, (iii) the Security Interests of the Administrative Agent
(held for the ratable benefit of the Lenders) under the Security Documents
secure all the Loan Obligations under the Credit Agreement, continue in full
force and effect, and have the same priority as before this Agreement, and (iv)
Borrower has no claim against Administrative Agent or any Lender arising from
or in connection with the Credit Agreement or the other Loan Documents and any
such claim is hereby irrevocably waived and released and discharged forever.


 


7.              Governing Law.  This
Agreement shall be governed by and construed under the laws of the State of
Missouri without giving effect to choice or conflicts of law principles
thereunder.


 


8.              Fees and Expenses.  Borrower
shall promptly pay to Administrative Agent an amount equal to 50% of all reasonable
and documented third party fees, costs and expenses incurred by the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of this First Amendment to Credit Facilities Agreement
(notwithstanding the fact that Section 18.5 of the Original Credit
Agreement may otherwise require Borrower to pay all of such fees, costs and
expenses), and the 50% balance thereof shall be paid by the Administrative
Agent.


 


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9.              Section Titles.  The section titles
in this Agreement are for convenience of reference only and shall not be
construed so as to modify any provisions of this Agreement.


 


10.       Counterparts; Facsimile
Transmissions.  This Agreement may be executed in one or more
counterparts and on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  Signatures to this Agreement
may be given by facsimile or other electronic transmission, and such signatures
shall be fully binding on the party sending the same.


 


11.       Incorporation By Reference. 
Administrative Agent, Lenders
and Borrower hereby agree that all of the terms of the Loan Documents are
incorporated in and made a part of this Agreement by this reference.


 


12.       Notice—Oral Commitments Not
Enforceable.  The following notice is given pursuant to Section 432.045
of the Missouri Revised Statutes; nothing contained in such notice shall be
deemed to limit or modify the terms of the Loan Documents:


 


ORAL AGREEMENTS
OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT
ENFORCEABLE.  TO PROTECT YOU (BORROWER)
AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY
LATER AGREE IN WRITING TO MODIFY IT.


 


13.       Statutory Notice-Insurance.  The
following notice is given pursuant to Section 427.120 of the Missouri
Revised Statutes; nothing contained in such notice shall be deemed to limit or
modify the terms of the Loan Documents:


 


UNLESS YOU
PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US,
WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL.  THIS INSURANCE MAY, BUT NEED
NOT, PROTECT YOUR INTERESTS.  THE
COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT
IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE PURCHASED
BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS
REQUIRED BY OUR AGREEMENT.  IF WE
PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF
THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES
WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TO
YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. 
THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU
MAY BE ABLE TO OBTAIN ON YOUR OWN.


 


{remainder of page intentionally left blank;
signature page immediately follows}


 


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                                          IN WITNESS WHEREOF, this Agreement has been
duly executed as of the date first above written.


 


	
  GTSI
  CORP., as Borrower

  
	
   

  
	
  By:

  	
       /s/
  Thomas A. Mutryn

  	
   

  
	
  Name: Thomas A. Mutryn

  
	
  Title: Senior Vice
  President and Chief Financial Officer

  
	
   

  
	
   

  
	
  GE
  COMMERCIAL DISTRIBUTION FINANCE CORPORATION,

  
	
  as
  Administrative Agent and a Lender

  
	
   

  
	
  By:

  	
       /s/
  David Mintert

  	
   

  
	
  Name: David Mintert

  
	
  Title: Vice President of
  Operations

  
	
   

  
	
   

  
	
  SUNTRUST
  BANK, as a Lender

  
	
   

  
	
  By:

  	
       /s/
  Mark Swaak

  	
   

  
	
  Name: R. Mark Swaak

  
	
  Title: Vice President

  



 


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Exhibit A


 


Documents
and Requirements


 


1.               First Amendment to Credit Facilities
Agreement.


 


2.               Amended and Restated Revolving Note in the
amount of $72,000,000.00 to GE Commercial Distribution Finance Corporation.


 


3.               Revolving Note in the amount of
$18,000,000.00 to SunTrust Bank.


 


4.               Assignment and Acceptance Agreement between
GE Commercial Distribution Finance Corporation and SunTrust Bank.


 


5.               Notice of Borrowing Officers, certified by
Secretary or Assistant Secretary of Borrower.


 





















 


Exhibit B


 


Disclosure
Schedule


 


Nothing, if nothing listed.


 





















 


Exhibit 3


 


LENDERS’
FACILITIES AND PRO-RATA SHARES


 


 


	
  LENDER

  	
   

  	
  TOTALS(1)

  	
   

  	
  REVOLVING

  LOAN

  FACILITY

  	
   

  	
  FLOORPLAN

  LOAN

  FACILITY

  	
   

  	
  PRO-RATA

  SHARES

  	
   

  
	
  GE Commercial Distribution Finance

  	
   

  	
  $

  	
  100,000,000.00

  	
   

  	
  $

  	
  72,000,000.00

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  	
  80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SunTrust
  Bank

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGGREGATES

  	
   

  	
  $

  	
  125,000,000.00

  	
   

  	
  $

  	
  90,000,000.00

  	
   

  	
  $

  	
  75,000,000.00

  	
   

  	
  100.00000

  	
  %

  



 










(1)  Subject to the Total Aggregate Credit
Facility Limit of $125,000,000 - which can be composed in any combination of
Aggregate Revolving Loans (subject to the $90,000,000 Aggregate Revolving Loan
Facility) and Aggregate Floorplan Loans (subject to the $75,000,000 Aggregate
Floorplan Loan Facility).