Exhibit
10.1


FIRST
AMENDMENT AND WAIVER TO CREDIT AGREEMENT


THIS FIRST AMENDMENT AND WAIVER TO CREDIT
AGREEMENT (this “Amendment”) is made and entered into
as of July 13, 2006, by and among GTSI CORP., a Delaware corporation (the “Borrower”),
the Lenders (as defined below) signatory hereto, the other Borrower Parties (as
defined below) signatory hereto, and SUNTRUST BANK, in its capacity as
Administrative Agent for the Lenders (the “Administrative Agent”).


W
I  T  N  E  S  S  E  T  H:


WHEREAS,
the Borrower, certain Subsidiaries of the Borrower signatory thereto as
Guarantors (together with the Borrower, collectively, the “Borrower Parties”),
the lenders signatory thereto from time to time (the “Lenders”), the
other Agents party thereto and the Administrative Agent are parties to a
certain Credit Agreement, dated as of June 2, 2006 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement), pursuant to which the Lenders
have made certain financial accommodations available to the Borrower;


WHEREAS,
the Borrower has requested that the Lenders and the Administrative Agent amend
certain provisions of the Credit Agreement, and subject to the terms and
conditions hereof, the Lenders are willing to do so;


NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt of
all of which are acknowledged, the Borrower, the Lenders and the Administrative
Agent agree as follows:


1.             Amendments
to Section 1.1.              Section 1.1 of the Credit Agreement,
“Definitions”, is hereby amended and modified by deleting the definition of “Average
Availability” and “Borrowing Base” in their entirety and inserting the
following in lieu thereof:


“Average Availability”
shall mean for any monthly period, an amount equal to the sum of the actual
amount of Availability on each day or week, as applicable, during such month,
divided by the number of days or weeks, as applicable, in such month, as
evidenced by the applicable schedule attached to the Borrowing Base Certificate
for such month, which shall be in form and substance satisfactory to the
Administrative Agent.”


“Borrowing Base”
shall mean, at any particular time, the lesser of:


(a)           sum of:


(i) up to 90% of Federal
Government Eligible Accounts, less the amount of the applicable Dilution
Reserve; plus









 



(ii)           up to 85% of Other Eligible Accounts,
less the amount of the applicable Dilution Reserve; plus


(iii)          during the Inventory Eligibility
Period, the lesser of (A) $10,000,000 and (B) the lesser of (1) up to 35% of
the cost of Eligible Inventory and (2) up to 80% of the NOLV of Eligible
Inventory; minus


(iv)          the Availability
Block; minus


(v)           the Reserves; and


(b)           the Term Loan Borrowing Base minus
the aggregate outstanding principal amount of the Subordinated Debt.”


2.             Amendment
to Section 2.5.  Section 2.5 of the
Credit Agreement, “Prepayment/Reduction/Increase of Commitment”, is hereby
amended and modified by deleting subsection (c)(i) thereof in its entirety and
by substitution the following in lieu thereof:


“(i)          So long as no Event of Default has
occurred and is continuing or would result therefrom, from time to time after
the Agreement Date and on or before June 2, 2008, Borrower may, upon at least
30 days’ written notice to the Administrative Agent (who shall promptly provide
a copy of such notice to each Lender), 
propose to increase the Revolving Loan Commitments by an amount not to
exceed $25,000,000 (the amount of any such increase, the “Additional
Commitment Amount”); provided, however, the Borrower shall
not be permitted to request such increase in the Revolving Loan Commitments
more than three (3) times during the term of this Agreement and the aggregate
amount of all Additional Commitment Amounts shall not exceed $25,000,000.  Each Lender shall have the right for a period
of 15 days following receipt of such notice, to elect by written notice to the
Borrower and the Administrative Agent to increase its Revolving Loan Commitment
by a principal amount equal to the product of (i) its Revolving Commitment
Ratio, multiplied by (ii) the Additional Commitment Amount.  No Lender (or any successor thereto) shall
have any obligation to increase its Revolving Loan Commitment or its other
obligations under this Agreement and the other Loan Documents, and any decision
by a Lender to increase its Revolving Loan Commitment shall be made in its sole
discretion independently from any other Lender.”


3.             Amendment
to Section 6.18.  Section 6.18 of the
Credit Agreement, “Indemnity”, is hereby amended and modified by deleting such
section in its entirety and by substituting the following in lieu thereof:


“Section 6.18         Indemnity.  Each Borrower Party will indemnify and hold
harmless the Administrative Agent, Co-Collateral Agents, Lender and each of



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their Affiliates,
employees, representatives, officers and directors (each a “Borrower
Indemnified Person”) from and against any and all claims, liabilities,
investigations, losses, damages, actions, demands, penalties, judgments, suits,
investigations and costs, expenses (including fees and expenses of experts,
agents, consultants and reasonable fees and expenses of counsel) and
disbursements, in each case, of any kind or nature (whether or not any Borrower
Party or the Borrower Indemnified Person is a party to any such action, suit or
investigation) whatsoever which may be imposed on, incurred by, or asserted
against a Borrower Indemnified Person resulting from any breach or alleged
breach by the Borrower Parties of any representation or warranty made
hereunder, or otherwise in any way relating to or arising out of the
Commitments, this Agreement, the other Loan Documents, the Bank Products
Documents, if any, or any other document contemplated by this Agreement, the
making, administration or enforcement of the Loan Documents and the Loans or
any Bank Products Documents, any transaction contemplated hereby or any related
matters unless, with respect to any of the above, such Borrower Indemnified Person
is determined by a final non-appealable judgment of a court of competent
jurisdiction to have acted or failed to act with gross negligence or willful
misconduct.  NO BORROWER INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT
OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT
OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT.  This Section 6.18
shall survive termination of this Agreement.”


4.             Amendment
to Section 7.6.  Section 7.6 of the
Credit Agreement, “Notice of Litigation and Other Matters”, is hereby
amended and modified by deleting the second reference to “the end of” in clause
(i) thereof.


5.             Amendment
to Exhibit D.  The Credit Agreement
is hereby amended by deleting Exhibit D (Form of Borrowing Base Certificate) in
its entirety and inserting the attached Exhibit D in lieu thereof.


6.             Amendment
to Exhibit H.  The Credit Agreement
is hereby amended by deleting Exhibit H (Form of Request for Advance) in its
entirety and inserting the attached Exhibit H in lieu thereof.


7.             Waiver
of Events of Default.  The Lenders
hereby waive all Events of Default under Sections 9.1(a) of the Credit
Agreement as a result of the Borrower’s representations and warranties
contained in Section 5.1(dd) of the Credit Agreement (Debarment and
Suspension)  relating solely to the
receipt of that certain Show Cause Letter (the “Show Cause Letter”) from
the United States Department of the Army (the “Army”), indicating
that in accordance with



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Section
9.4 of the Federal Acquisition Regulations, the Army is considering the
Borrower for debarment from future contracting with agencies of the executive
branch of the United States Government.  The Show Cause Letter
states that the Army is considering debarment proceedings because
of a proposal submitted by the Borrower in response to a March
14, 2001, solicitation (No. N65236-01-R-002) (the “Specified Contract”)
by the Space and Naval Warfare Systems Center (SPAWAR).  Notwithstanding anything to the contrary
contained herein, the waiver contained in this Section 7 shall not apply to (i)
any other investigation, inquiry or show cause letter that is related to any
contract (other than the Specified Contract) between the Federal Government and
the Borrower or a Subsidiary of the Borrower or any activities of the Borrower
or any Subsidiary of the Borrower or (ii) any findings, determination or other
actions taken by the Federal Government in connection with the Show Cause
Letter that is adverse to the Borrower or any Subsidiary of the Borrower or may
result in the debarment or suspension of the Borrower or any of its
Subsidiaries from any contracting with the Federal Government.


8.             Conditions
to Effectiveness of this Amendment. Notwithstanding
any other provision of this Amendment, it is understood and agreed that this
Amendment shall not become effective, and the parties shall have no rights
under this Amendment, until the Administrative Agent shall have received:


                (a)
          executed counterparts to this
Amendment from the Borrower, each of the other Borrower Parties and the
Lenders; and


       (b)           a
fully executed amendment and waiver (the “Subdebt Amendment”) containing
corresponding amendments and waivers to those contained herein (where
applicable) under the Subordinated Debt Documents, which shall be in form and
substance satisfactory to the Administrative Agent.


9.             Representations
and Warranties.  To induce the Lenders and the Administrative
Agent to enter into this Amendment, each Borrower Party hereby represents and
warrants to the Lenders and the Administrative Agent that:


(a)           The execution, delivery and
performance by such Borrower Party of this Amendment (i) are within such
Borrower Party’s power and authority; (ii) have been duly authorized by
all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of such Borrower Party’s certificate of
incorporation or bylaws or other organizational documents; (iv) do not
violate any law or regulation, or any order or decree of any Governmental
Authority; (v) do not conflict with or result in the breach or termination
of, constitute a default under or accelerate any performance required by, any
Material Contract to which such Borrower Party is a party; (vi) do not result
in the creation or imposition of any Lien upon any of the property of such
Borrower Party or any of its Subsidiaries; and (vii) do not require the
consent or approval of any Governmental Authority or any other Person;


(b)           This Amendment has been duly executed
and delivered for the benefit of or on behalf of each Borrower Party and
constitutes a legal, valid and binding obligation of each Borrower Party,
enforceable against such Borrower Party in accordance with its terms except as
the enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization,



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moratorium or
similar laws affecting the enforcement of creditor’s rights generally or by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and


(c)  After giving effect to this Amendment, the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true and correct in all material respects, and no Default or
Event of Default has occurred and is continuing as of the date hereof.


10.           Reaffirmations
and Acknowledgments.


(a)  Reaffirmation of Guaranty.  Each Guarantor consents to the execution and
delivery by the Borrower of this Amendment and jointly and severally ratify and
confirm the terms of the Guaranty contained in Article 3 of the Credit
Agreement with respect to the indebtedness now or hereafter outstanding under
the Credit Agreement as amended hereby and all promissory notes issued
thereunder.


(b)  Acknowledgment of Security Interests.
Each Borrower Party hereby acknowledges that, as of the date hereof, the
security interests and liens granted to the Administrative Agent and the
Lenders under the Credit Agreement and the other Loan Documents are in full
force and effect and are enforceable in accordance with the terms of the Credit
Agreement and the other Loan Documents.


11.           Covenants Regarding Show Cause Letter.  The Borrower shall, and shall cause each of
the other Borrower Parties to:


(a)          cooperate
with the Co-Collateral Agents in their ongoing review of the facts and
circumstances relating to the Show Cause Letter and the investigation and
inquiry by the Army and other branches of the United States Government related
to the Show Cause Letter (collectively, the “Investigation”); such assistance
shall include (but not be limited to): (i) making senior management and
representatives of the Borrower available to participate in meetings and to
provide information to the Lenders (and potential Lenders) at such times and
places as the Co-Collateral Agents may reasonably request; and (ii) providing
to the Co-Collateral Agents all information reasonably requested by the
Co-Collateral Agents with request to the Investigation; and


(b)         immediately
provide to the Co-Collateral Agents (i) any and all material information
received by the Borrower, or its counsel, agents or advisors, with respect to
the Show Cause Letter and the Investigation, including, without limitation, any
additional documentation received from the Army or any other Branch of the Federal
Government related to the Investigation, (ii) any work product produced in
connection with the Internal Investigation which the Co-Collateral Agents agree
to treat as protected “joint defense work product” and (iii) copies of any and
all information provided to the Army or any other Branch of the Federal
Government by the Borrower (including its counsel, agents and advisors) in
connection with, or related to, the Investigation.



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12.           Effect of Amendment.  Except as set forth expressly herein,
all terms of the Credit Agreement, as amended hereby, and the other Loan
Documents shall be and remain in full force and effect.  The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Lenders under the Credit Agreement, nor constitute a waiver of any
provision of the Credit Agreement.  This
Amendment shall constitute a Loan Document for all purposes of the Credit
Agreement.


13.           Governing
Law.   This Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of Georgia and all
applicable federal laws of the United States of America.


14.           No
Novation. 
This Amendment is not intended by the parties to be, and shall not be
construed to be, a novation of the Credit Agreement or an accord and
satisfaction in regard thereto.


15.           Costs and Expenses. 
The Borrower agrees to pay, in accordance with the terms and conditions
contained in the Credit Agreement, all costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, the reasonable fees and out-of-pocket
expenses of outside counsel for the Administrative Agent with respect thereto.


16.           Counterparts.  This Amendment may
be executed by one or more of the parties hereto in any number of separate
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this
Amendment by facsimile transmission or by electronic mail in pdf form shall be
as effective as delivery of a manually executed counterpart hereof.


17.           Binding
Nature. 
This Amendment shall be binding upon and inure to the benefit of the
parties hereto, their respective successors, successors-in-titles, and assigns.


18.           Entire
Understanding. 
This Amendment sets forth the entire understanding of the parties with
respect to the matters set forth herein, and shall supersede any prior negotia­tions
or agreements, whether written or oral, with respect thereto.


[Signature Pages To Follow]



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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed, under seal in the case of the Borrower and the Guarantors, by their
respective authorized officers as of the day and year first above written.


	
  BORROWER:

  	
  GTSI CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
  GTSI FINANCIAL SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TECHNOLOGY LOGISTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGENT AND LENDERS:

  	
  SUNTRUST BANK, as the
  Administrative Agent, the Issuing Bank, a Lender, the Swing Bank and as a
  Co-Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as a
  Lender and as a Co-Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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