**Exhibit10.12**

 

**FIRSTAMENDMENT TO**

**CREDITFACILITIES AGREEMENT**

 

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

 

**Recitals****:**

 

**A.**                                    Borrower, Administrative Agent and Lendersare party to that certain Credit Facilities Agreement dated as of October 202003 (the “Original Credit Agreement”).

 

**B.**                                    Administrative Agent, Lenders and Borrowerhave agreed to the provisions set forth herein on the terms and conditionscontained herein.

 

**Agreement**

 

Therefore, in considerationof the mutual agreements herein and other sufficient consideration, the receiptof which is hereby acknowledged, Borrower, Administrative Agent and the Lendershereby agree as follows:

 

**1.****              Definitions. **All references to the “Agreement” or the “CreditAgreement” in the Original Credit Agreement and in this Agreement shall bedeemed to be references to the Original Credit Agreement as it may be amended,restated, extended, renewed, replaced, or otherwise modified from time totime.  Capitalized terms used and nototherwise defined herein have the meanings given them in the Original CreditAgreement.

 

**2**.              **Effectivenessof Agreement**.  This Agreement shall become effective as ofthe date first written above, but only if this Agreement has been executed byBorrower, Administrative Agent and the Lenders, and only if all of thedocuments listed on Exhibit A to this Agreement have been delivered and, asapplicable, executed, sealed, attested, acknowledged, certified, orauthenticated, each in form and substance satisfactory to Administrative Agentand the Lenders, and the other fundings required by this Agreement haveoccurred.

 

**3.****              New Lender.**

 

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

 

**3.2.**              Upon the full andcomplete 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 transfersand fund transfers reasonably necessary to effectuate the pro-rata shares setforth on Exhibit 3.  Upon such transferof funds, this

 

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Agreement shall be effectiveand such effectiveness shall relate back to 8:00 a.m. St. Louis time on thedate of this Agreement.

 

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

 

**3.4.**              Existing Lenderrepresents and warrants that it is the legal and beneficial owner of its Loansand 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 theOriginal Credit Agreement and all prior amendments (if any), the LoanDocuments, together with copies of the Financial Statements referred to thereinand such other documents and information as it has deemed appropriate to makeits own credit analysis and decision to enter into this Agreement and become aLender, and confirms and covenants that it has entered into this Agreement andagreed to become a Lender based on its own credit analysis and decision andwithout 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 ExistingLender or any other Lender and based on such documents and information as itshall deem appropriate at the time, continue to make its own credit decisionsin taking or not taking action under the Original Credit Agreement;(iii) confirms that it is an Eligible Assignee; (iv) appoints andauthorizes the Administrative Agent to take such action as agent on its behalfand to exercise such powers and discretion under the Original Credit Agreementas are delegated to the Administrative Agent by the terms thereof, togetherwith such powers and discretion as are reasonably incidental thereto;(v) agrees that it will perform in accordance with their terms all of theobligations that by the terms of the Original Credit Agreement and the otherLoan Documents are required to be performed by it as a Lender; and(vi) promptly provide to Administrative Agent any U.S. Internal RevenueService or other forms required under the Original Credit Agreement.

 

**3.6.**              Upon theeffectiveness of this Agreement and the funding by the New Lender of theamounts directed to be funded by it by the Administrative Agent as set forth inSection 3.2 hereof, such New Lender shall be a Lender for all purposesunder the Original Credit Agreement and the other Loan Documents.  From and after the effective date of thisAgreement, the Administrative Agent shall make all payments under the OriginalCredit Agreement and the Notes consistent with the pro-rata shares of theLenders.

 

**4.****             ****Amendment.**  TheOriginal Credit Agreement is hereby amended as follows:

 

**4.1.****              Termination.**  Anew 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 fullyand indefeasibly paid, no Letters of Credit remain outstanding, the Letter ofCredit Exposure is irreversibly zero and all Facilities are terminated, eachLender must, subject to Section 18.4 of the Agreement, retain its pro-ratashare of all of the Aggregate Facilities that have not been previouslyterminated in accordance with this Agreement and perform all of its obligationsas a Lender hereunder.  Notwithstandingthe preceding sentence, not less than 105 (one hundred five) days prior to theInitial Maturity Date and each anniversary of the Initial Maturity Date thereafter(each a “Maturity Date”), each Lender shall notify Administrative Agent inwriting whether or not it desires to terminate the Aggregate Facilities as ofthe next Maturity Date.  Any Lendergiving such notice

 

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shall be known as a “Terminating Lender.”  The Administrative Agent shall deliver toeach other Lender any such notice received from a Terminating Lenderimmediately upon the Administrative Agent’s receipt.  In the absence of timely notice requiredabove, Lender shall be deemed to have expressed its desire to renew theAgreement and to continue as a Lender hereunder through the next MaturityDate.  Provided that (i) no Event ofDefault has occurred and is continuing, (ii) Terminating Lender has giventimely notice of its desire to terminate the Aggregate Facilities as of thenext Maturity Date, and (iii) the Aggregate Facilities are to be renewed byBorrower and the remaining Lender(s), then, as of the Maturity Date, aTerminating Lender shall, at the direction of Administrative Agent, assign itspro-rata share of the Aggregate Facilities to either a substitute Lender or theremaining Lender(s) on a pro-rata basis. Such Lender(s) shall pay the Terminating Lender in full for its pro-ratashare of all Loan Obligations, including the outstanding Loans and accrued butunpaid interest and fees.  Thereafter,such Terminating Lender shall be released from its obligations as a Lenderhereunder.

 

**4.2.****              Maturity.**  Section 6.1.2.3of 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 Loanon February 28, 2005 (“Initial Maturity Date”), unless the AggregateRevolving Loan Facility continues after the Initial Maturity Date as provided belowin this Section 6.1.2.3.  Borrowershall repay the amount of the Swingline Loans on demand.  The Aggregate Revolving Loan Facility willcontinue from year to year on each anniversary of the Initial Maturity Dateunless Borrower or the Required Lenders give each party hereto written noticeof termination of not less than 90 days prior to the start of a renewalperiod.  Each of the Aggregate FloorplanLoan Facility, the Interim Floorplan Loan Facility and the Swingline Facilityare discretionary and may be terminated at any time as set forth herein, withor without notice or demand as set forth herein; provided, however, if Borrowershall give notice of termination of the Aggregate Revolving Loan Facility, thensuch notice shall be deemed to be notice of termination for all Facilities inwhich case Borrower shall pay the entire amount of the outstanding LoanObligations upon the effective date of such notice of termination, includingpayment of cash collateral satisfactory to Administrative Agent as security forBorrower’s obligation to reimburse Administrative Agent or the Letter of CreditIssuer, as the case may be, for 105% of all draws and expenses under alloutstanding Letters of Credit and 100% of any unfunded Approvals, in which casesuch Approvals shall be otherwise paid in accordance with the applicableStatements of Transaction.

 

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

 

**15.3**          **Maximum Total Liabilities to Tangible Net Worth.**  Borrowercovenants that the ratio of Total Liabilities minus Subordinated Indebtednessto Tangible Net Worth plus Subordinated Indebtedness calculated as of the lastday of each fiscal month specified in the table below, shall not be more thanthe 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 DefinedTerms:

 

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

 

EXISTINGDEFAULT — a Default which has occurred and is continuing, or an Event ofDefault which has occurred, and which has not been waived in writing by theRequired Lenders.

 

**5.**              **Representations andWarranties of Borrower.**  Borrower hereby represents and warrants toAdministrative Agent and the Lenders that (i) Borrower’s execution of thisAgreement has been duly authorized by all requisite action of Borrower; (ii) noconsents are necessary from any third parties for Borrower’s execution,delivery or performance of this Agreement, (iii) this Agreement, the CreditAgreement, and each of the other Loan Documents, constitute the legal, validand binding obligations of Borrower enforceable against each such Borrower inaccordance with their terms, except to the extent that the enforceabilitythereof against Borrower may be limited by bankruptcy, insolvency or other lawsaffecting the enforceability of creditors rights generally or by equityprinciples of general application, (iv) except as disclosed on the supplementaldisclosure schedule attached hereto as Exhibit B and the disclosure schedule attachedto the Original Credit Agreement, all of the representations and warrantiescontained in Section 12 of the Credit Agreement are true and correct withthe 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.**  Borrowerhereby represents, warrants, acknowledges and confirms that (i) the CreditAgreement and the other Loan Documents remain in full force and effect, (ii)Borrower has no defenses to its obligations under the Credit Agreement and theother Loan Documents, (iii) the Security Interests of the Administrative Agent(held for the ratable benefit of the Lenders) under the Security Documentssecure all the Loan Obligations under the Credit Agreement, continue in fullforce and effect, and have the same priority as before this Agreement, and (iv)Borrower has no claim against Administrative Agent or any Lender arising fromor in connection with the Credit Agreement or the other Loan Documents and anysuch claim is hereby irrevocably waived and released and discharged forever.

 

**7.****             ****Governing Law.**  ThisAgreement shall be governed by and construed under the laws of the State ofMissouri without giving effect to choice or conflicts of law principlesthereunder.

 

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

 

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**9.****             ****Section Titles.**  The section titlesin this Agreement are for convenience of reference only and shall not beconstrued so as to modify any provisions of this Agreement.

 

**10.****      ****Counterparts; FacsimileTransmissions.**  This Agreement may be executed in one or morecounterparts and on separate counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument.  Signatures to this Agreementmay be given by facsimile or other electronic transmission, and such signaturesshall be fully binding on the party sending the same.

 

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

 

**12.****      ****Notice—Oral Commitments NotEnforceable.**  The following notice is given pursuant to Section 432.045of the Missouri Revised Statutes; nothing contained in such notice shall bedeemed to limit or modify the terms of the Loan Documents:

 

**ORAL AGREEMENTSOR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCINGREPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOTENFORCEABLE.  TO PROTECT YOU (BORROWER)AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WEREACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THECOMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAYLATER AGREE IN WRITING TO MODIFY IT.**

 

**13.****      ****Statutory Notice-Insurance.**  Thefollowing notice is given pursuant to Section 427.120 of the MissouriRevised Statutes; nothing contained in such notice shall be deemed to limit ormodify the terms of the Loan Documents:

 

**UNLESS YOUPROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US,WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOURCOLLATERAL.  THIS INSURANCE MAY, BUT NEEDNOT, PROTECT YOUR INTERESTS.  THECOVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THATIS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE PURCHASEDBY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE ASREQUIRED BY OUR AGREEMENT.  IF WEPURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OFTHAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGESWE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THEEFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TOYOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOUMAY 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 beenduly 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**

 

**Documentsand Requirements**

 

1.               First Amendment to Credit FacilitiesAgreement.

 

2.               Amended and Restated Revolving Note in theamount 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 betweenGE Commercial Distribution Finance Corporation and SunTrust Bank.

 

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

 

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**Exhibit B**

 

**DisclosureSchedule**

 

Nothing, if nothing listed.

 

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**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 | % |

 

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

 

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