Document:

Exhibit 10.1

 

July 15, 2005

 

Ms. Terri Allen

 

Dear Terri:

 

We understand your desire to change your employment status with
GTSI.  As we set out in our draft letter
to you dated July 8, 2005, we accepted your resignation date as of July 8,
2005. In your resignation notice you provided two weeks notice, therefore we will
reflect your separation date from GTSI as July 22, 2005 (your “separation
date”), however, as set out below, you will remain an active employee until October 22,
2005 (“End Date”), at which date you will no longer be employed by GTSI.  We appreciate the contributions you have made
to GTSI in the past.

 

With your final paycheck, regardless of whether or not you sign this
letter, you will receive:

 

•      Payment of
an amount equal to your accumulated vacation and PTO entitlements earned
through your separation date;

 

•      Reimbursement
for all approved business expenses, provided you submit your expense report to
your manager within two weeks of the separation date;

 

In
addition, if you sign and date this letter (the “Letter” or “Separation Letter”)
to show that you accept its terms (and do not later revoke it, as described
below), and you work in a full time productive manner through your separation
date, GTSI will provide you with separation benefits exceeding those otherwise
due you under your current compensation arrangement with us (“Incremental
Benefits”).  Following your separation
date, and so long as you comply with the terms of this Separation Letter, we
will provide you with Incremental Benefits consisting of three months (3) of
base compensation ($62,500.00 cumulative). 
These monies will be processed in the normal payroll process for this
time period.  Additionally, GTSI has no
intention of contesting any legal right you may have to receive any
unemployment benefits relating to this separation.

 

GTSI
will agree to pay concurrent COBRA expenses during the months of August,
September, and October 2005, with the same cost sharing arrangement that
is in place today.

 

Your
status will remain as an active employee through the End Date.  Accordingly, any options that are scheduled
to vest during this period will vest pursuant to the terms outlined in the Plan
documents.  Towards the end of your
employment, GTSI will discuss with you the potential buy-back of your Stock
Options, and if agreed upon, we will agree to the terms at such time.

 

1

 

GTSI
will also allow you to retain the current Gateway laptop computer, associated
peripherals, and docking station for your personal use as well as your
Blackberry and its docking station.  We
expect that anything GTSI Confidential will be deleted in a timely fashion as
soon as you are no longer an active full time employee of the company.

 

In
order to qualify for the Incremental Benefits referred to above, you need to (1) sign
and return this Separation Letter to us within the time period indicated below
(not later than July 29, 2005), and (2) comply with the terms of this
Separation Letter.  By signing this
Separation Letter, you will be agreeing to the following terms, in
consideration for receiving the Incremental Benefits:

 

1.               In addition
to the terms of any confidentiality, proprietary rights, non-solicitation or
nondisclosure agreements you have agreed to with GTSI, you agree that for a
period of twelve months after the expiration of the separation period (October 22,
2005) that you will not directly or indirectly solicit or offer employment to
or hire any person who then is an employee of GTSI, or work as an employee or
independent consultant for any of the entities listed (CDW-G, Dell, DLT,
Northrop Grumman CS, GMR, PC Connections, Pomeroy, ComTek, TIG) that have an
office within a fifty (50) mile radius of GTSI’s Chantilly office, where such
employment involves your support of one of these entities to provide products
or services to the Federal Government that are the same as, or substantially
similar to, the goods or services provided by GTSI.

 

2.               Because of
the unique nature of the above provisions, you understand and agree that GTSI
will suffer irreparable harm in the event that you fail to comply with any of
your obligations under Sections 1 above and that monetary damages will be
inadequate to compensate GTSI for such a breach.  Accordingly, you agree that GTSI will, in
addition to any other remedies available to it at law or in equity, be entitled
to injunctive relief to enforce the terms of Sections 1 above.  (“Injunctive relief” means a legal order from
a court prohibiting a person or corporate entity from carrying out a given
action, or ordering a given action to be done.)

 

3.               You will
return to GTSI immediately any and all GTSI assets or property that you have in
your possession or control outside of those listed earlier.

 

4.               You
will not publicly disparage, whether in writing, electronically or orally,
GTSI, or any of its employees or members of the board of directors, and that
you will not communicate to or with any governmental body regarding GTSI unless
compelled by law.  In addition, GTSI
agrees to take every reasonable effort to ensure that that any employee or
member of the board of directors will not publicly disparage you, whether in
writing, electronically or orally.

 

5.               You forever
release and discharge GTSI and its successors, its current and prior
stockholders of record, officers, directors, and employees, past or present,
from any and all causes of action, actions, judgments, liens, indebtedness,
damages, losses, claims, liabilities, expenses and demands of any kind or
character whatsoever:  whether known or
unknown, suspected to exist or not suspected to exist, anticipated or not
anticipated; whether or not previously brought before any state or federal

 

2

 

agency, court or other governmental entity
and whether existing on or arising prior to the date of this Separation Letter;
and which, directly or indirectly, in whole or in part, relate or are
attributable to, connected with, or incidental to your previous employment by
GTSI, the separation of that employment, and any dealings between the parties
concerning your employment existing prior to the date of execution of this
Separation Letter.  This expressly
includes any and all claims of discrimination on account of sex, race, age,
handicap, veteran status, national origin or religion, and claims or causes of
action based upon any equal employment opportunity laws, ordinances,
regulations or orders, including Title VII of the Civil Rights Act of 1964 and
the Age Discrimination In Employment Act, the Americans With Disabilities Act,
Executive Order 11246, the Rehabilitation Act and any applicable state or local
anti-discrimination statutes.  It
also includes claims for breach of any contract, agreement or promises made
prior to this date; claims for wrongful termination actions of any type, breach
of express or implied covenant of good faith and fair dealing; intentional or
negligent infliction of emotional distress; claims for fraud, libel, slander or
invasion of privacy. You and GTSI agree that you are not waiving any rights
or claims under the Age Discrimination In Employment Act that may arise after
your execution of this Separation Letter. 
This is intended to exclude from release only claims “that arise after”
execution of this Separation Letter as provided for by the Older Workers
Benefit Protection Act.  This release
also applies to any claims or rights that you might have or assert with respect
to any claims or rights, if any, concerning any GTSI bonus plan.

 

6.               You agree to
provide GTSI with any requested reasonable support and consultation regarding
any legal matter, to include making yourself reasonably available at GTSI’s
facilities to discuss background matters or appearances in court or at
Deposition hearings. You also agree, if requested, to provide any affidavits or
other written statements, and to sign such statements so long as they represent
your actual knowledge and belief.

 

Terri, in addition to the Incremental Benefits, GTSI will upon your
acceptance of the terms of this Separation Letter, agree to waive any claims
against you. Specifically, GTSI will forever release you, and your heirs, from
any and all cause or causes of action, actions, judgments, liens, indebtedness,
damages, losses, claims, liabilities, expenses and demands of any kind or
character whatsoever, whether known or unknown, anticipated or not anticipated,
whether or not previously brought before any state or federal agency, court or
other governmental entity which are existing on or arising prior to the date of
this Separation Letter and which, directly or indirectly, in whole or in part,
relate or are attributable to, connected with, or incidental to your employment
by GTSI, your separation from GTSI, and any dealings between the parties
concerning your employment existing prior to the date of execution of this
Agreement (excepting only claims arising from a breach by your of the terms of
this Separation Letter).

 

******

 

This Separation Letter is governed by Virginia law, contains the full
and complete understanding between you and GTSI concerning its subject matter,
and supersedes all prior or concurrent representations and understandings
between you and GTSI regarding your separation. 
In the event that any of its provisions or any obligation or waiver or
grant of rights

 

3

 

by you under it is found invalid or unenforceable pursuant to a
judicial decree or decision, any such provision, obligation, waiver or grant of
rights shall remain enforceable to the maximum extent permitted by law, and the
remainder of this agreement shall remain valid and enforceable according to its
terms.

 

YOU ACKNOWLEDGE THAT YOU HAVE READ THIS SEPARATION LETTER IN ITS
ENTIRETY, HAVE HAD THE OPPORTUNITY TO ASK QUESTIONS ABOUT THIS SEPARATION
LETTER AND TO SEEK INDEPENDENT LEGAL COUNSEL, AND UNDERSTAND AND AGREE TO EACH
PROVISION. YOU HAVE RECEIVED (OR HAVE VOLUNTARILY AND KNOWINGLY ELECTED NOT TO
RECEIVE) INDEPENDENT LEGAL ADVICE WITH RESPECT TO THE ADVISABILITY OF ENTERING
INTO THIS SEPARATION LETTER.  YOU
ACKNOWLEDGE THAT YOU ARE NOT ENTITLED TO RELY UPON, NOR HAVE YOU IN FACT RELIED
UPON, THE LEGAL OR OTHER ADVICE OF GTSI OR ITS AGENTS, INCLUDING ATTORNEYS OR
OTHER EMPLOYEES, IN ENTERING INTO THIS SEPARATION LETTER.

 

If the terms and conditions of this Separation Letter are acceptable to
you, please sign and date the enclosed copy in the space provided below.  Please be aware that as set out in the
initial draft Letter provided to you on July 8, 2005: (i) GTSI
advises you to consult with an attorney prior to executing this Separation
Letter; (ii) you have twenty one days from the date the original draft was
provided to you (until July 29, 2005) within which to accept the terms and
conditions of this Separation Letter before our offer of the Incremental
Benefits expires; (iii) you may revoke your acceptance of this Separation
Letter within seven days of signing it (the “Revocation Period”); and (iv) this
Separation Letter will not become effective or enforceable until the Revocation
Period expires (the “Effective Date”).

 

Again, we appreciate the contributions you have made to GTSI in the
past and the efforts you have expended on its behalf.  We wish you well in whatever future endeavor
awaits you.

 

Sincerely,

 

 

Bridget Atkinson

Vice President,

Human Resources

 

 

I, Terri Allen, acknowledge that I have read and understand this
Separation Letter in its entirety, and agree to be legally bound by its terms
and conditions.

 

 

	
  /s/ Terri Allen

  	
   

  	
  July 18, 2005

  	
   

  
	
  Terri Allen

  	
  Date

  

 

4Exhibit 10.2

 

FIFTH
AMENDMENT TO

CREDIT
FACILITIES AGREEMENT

 

This FIFTH AMENDMENT TO CREDIT FACILITIES AGREEMENT
(this “Agreement”) is entered into and effective as of August 8, 2005, by
and among GTSI Corp., a Delaware corporation (“GTSI”), Technology Logistics, Inc.,
a Delaware corporation (“TLI”; separately and collectively with GTSI, “Borrower”),
GE Commercial Distribution Finance Corporation (“GECDF”), as Administrative
Agent, and GECDF and the other Lenders.

 

Recitals:

 

A.                                    GTSI, Administrative Agent and Lenders are
party to that certain Credit Facilities Agreement dated as of October 20,
2003, as amended by that certain First Amendment to Credit Facilities Agreement
dated as of March 12, 2004, as further amended by that certain Second
Amendment to Credit Facilities Agreement dated as of July 29, 2004, as
further amended by that certain Third Amendment to Credit Facilities Agreement
dated as of November 22, 2004, and as further amended by that certain
Fourth Amendment to Credit Facilities Agreement dated as of April 28, 2005
(the “Original Credit Agreement”).

 

B.                                    Administrative Agent, Lenders and Borrowers
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, GTSI, TLI, 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
(by this Agreement and others), 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
each of GTSI, TLI, 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, by each of GTSI, TLI, and/or GTSI Financial Services, Inc.
(“GTSIFS”), as applicable, and the waiver fee described in Section 3.2 of
this Agreement has been paid in cash to the Administrative Agent.  Each document, note, certificate or agreement
listed on Exhibit A and signed by GTSI, TLI, or GTSIFS, as applicable, is
and shall be deemed (together with all prior documents, notes, certificates and
other agreements defined as Loan Documents in the Original Credit Agreement) to
be a “Loan Document.”

 

3.             Certain Covenant Waivers; Fee.

 

3.1.  Borrowers hereby acknowledge that Defaults
and Events of Default have occurred under the following Section of the
Credit Agreement:  Section 15.5
(Minimum EBIT to Net Sales) for the April 30, 2005,

 

 

May 31, 2005 and June 30, 2005
computation dates.  Subject to the terms
and conditions contained herein, Administrative Agent and Lenders hereby waive
the Defaults and Events of Default described in the preceding sentence;
provided, however, that such waiver shall not constitute or be deemed to be a
waiver of any subsequent Defaults or Events of Default under such Sections, or
of any other existing or future Defaults or Events of Default under the Credit
Agreement or the other Loan Documents at any time.  Upon any further Defaults or Events of
Default, including without limitation any Default or Event of Default arising
as a result of Borrower’s financial performance, all rights and remedies of Administrative
Agent and Lenders with respect to such Defaults and Events of Default, whether
pursuant to the Credit Agreement, the other Loan Documents, or available at law
or equity, shall be available to Administrative Agent and Lenders.  Borrowers, Administrative Agent and Lenders
each agree that the waivers granted herein do not apply to the breach of any
other term, provision, covenant, representation or warranty of the Credit
Agreement or the other Loan Documents or the breach of the covenants described
above for any periods other than the periods specifically described above.

 

3.2.  Borrowers shall pay to Administrative Agent,
for the account of each Lender in accordance with its pro-rata share of the
Aggregate Facility, a fully-earned, non-refundable, waiver fee of $82,500.

 

4.             Decrease in Existing Lenders’
Facilities.  In connection with this Agreement, and
simultaneously with its effectiveness, (i) GE Commercial Distribution
Finance Corporation will decrease its share of the Total Aggregate Facility
Limit and Aggregate Floorplan Loan Facility from $90,000,000 to $73,636,364.25
as further set forth on Exhibit 3 attached hereto; (ii) SunTrust Bank
will decrease its share of the Total Aggregate Facility Limit and Aggregate
Floorplan Loan Facility from $25,000,000 to $20,454,545.25 as further set forth
on Exhibit 3 attached hereto; (iii) Wachovia Bank, National
Association will decrease its share of the Total Aggregate Facility Limit and
Aggregate Floorplan Loan Facility from $30,000,000 to $24,545,454.30 as further
set forth on Exhibit 3 attached hereto; and (iv) Manufacturers
Traders and Trust Company will decrease its share of the Total Aggregate
Facility Limit and Aggregate Floorplan Loan Facility from $20,000,000 to $16,363,636.20
as further set forth on Exhibit 3 attached hereto.

 

5.             Amendments to Credit Agreement.  The Original Credit Agreement is hereby
amended as follows:

 

5.1.         Replacement Exhibit 3.  Exhibit 3 of the Original Credit Agreement is hereby
deleted and replaced with a new Exhibit 3, attached hereto.

 

5.2.         Maximum Available
Amount of Revolving Advances.  The definition of Maximum Available Amount in Section 3.1.2
of the Original Credit Agreement is hereby deleted and replaced with the
following:

 

“The “Maximum
Available Amount” (which can be a negative number) on any date shall be a
Dollar amount equal to the lesser of (i) the amount of the Aggregate
Revolving Loan Facility and (ii) the Borrowing Base, on such date, minus
the sum of (a) the Aggregate Revolving Loan, (b) the Swingline Loan, (c) the
Other Creditor Indebtedness (unless an Intercreditor Agreement has been
executed between Administrative Agent and the holders of such Other Creditor
Indebtedness), (d) the GSA Fee, and (e) the Letter of Credit Exposure
on such date (except to the extent that a Revolving Loan Advance will be used
immediately to reimburse Letter of Credit Issuer for unreimbursed draws on a
Letter of Credit).”

 

5.3.         Borrowing Base.  Section 3.1.4 of the Original Credit Agreement is hereby
deleted and replaced with the following:

 

2

 

“3.1.4.    Borrowing Base.  The “Borrowing Base” on any date shall be 85%
of the total outstanding principal balance of all Eligible Accounts (i) as
of the close of business on such date, or (ii) as certified in the
Borrowing Base Certificate most recently furnished to Administrative Agent as
required in Section 13.15.1, whichever is less; plus the Floorplan Excess
Amount, minus the Floorplan Shortfall, minus the Collateral Reserve and, minus (to
the extent not deducted from Eligible Accounts pursuant to Section 3.1.5)
the Dollar amount, if any, of Inventory that Borrower has been requested
(orally or in writing) to repurchase under any repurchase agreement or similar
arrangement, including the Textron Agreement.”

 

5.4.         Floorplan Loan
Facility Generally.  The first sentence of Section 3.2.1 of the
Original Credit Agreement is deleted and replaced with the following:

 

“Each
Lender may, subject to the terms and conditions hereof, make available to
Borrower such Lender’s pro-rata share (as listed on Exhibit 3) of an “Aggregate
Floorplan Loan Facility” that is One Hundred Thirty-Five Million Dollars ($135,000,000)
by funding such Lender’s pro-rata share thereof as provided for herein.”

 

5.5.         Total Aggregate Facility
Limit.  Section 3.5
of the Original Credit
Agreement is deleted and replaced with the following:

 

“3.5.       Total
Aggregate Facility Limit. 
Notwithstanding the Facilities herein, Borrower, Administrative Agent
and each Lender acknowledge and agree that at no time shall the Aggregate
Revolving Loan Facility, the Swingline Loan Facility, the Aggregate Floorplan
Loan Facility, the Interim Floorplan Loan Facility, all unfunded Approvals, and
the Letter of Credit Exposure exceed $135,000,000 in the aggregate (“Total
Aggregate Facility Limit”).”

 

5.6.         Annual Projections.  Section 13.14.2 of the Original Credit Agreement is deleted
and replaced with the following:

 

“13.14.2.               Annual
Projections.  No later than October 31st
of each year, projected balance sheets and statements of income and expense for
the next fiscal year, on a consolidated basis, and with such other detail as
Administrative Agent may reasonably require.”

 

5.7.         Distributions.  Notwithstanding
the provisions of Section 14.10
of the Credit Agreement, Borrowers shall not directly or indirectly, declare or
make, or incur any liability to make, any Distribution to any Person during
2005.

 

5.8.         Temporary Increase in
Maximum Total Liabilities to Tangible Net Worth.  Notwithstanding the provisions of Section 15.3 of the Credit Agreement,
for the fiscal months ended September 30, 2005, October 31, 2005 and November 30,
2005 only, the ratio of Total Liabilities minus Subordinated Indebtedness to
Tangible Net Worth plus Subordinated Indebtedness shall not exceed 7.00:1.00.

 

5.9.         Temporary Suspension of
Certain Financial Covenants.  The
application and effectiveness of the financial covenants set forth in Section 15.4 (Maximum Total Funded
Indebtedness to EBITDA) and Section 15.5
(Minimum EBIT to Net Sales) of the Credit Agreement shall be temporarily suspended,
effective as of July 1, 2005 and such suspensions shall continue through December 31,
2005.

 

3

 

5.10.       Third Quarter 2005
Profit Covenant; Maximum Year 2005 Loss Covenant.  Section 15 of the Original Credit Agreements is hereby
amended by adding the following sections thereto:

 

“15.6.     Minimum Third Quarter
2005 Pre-Tax Profit. 
For the fiscal quarter ended September 30,
2005, Borrower covenants that its EBITDA minus interest, depreciation and
amortization expense for such fiscal quarter shall not be less than Two Million
Dollars ($2,000,000).

 

15.7.       Maximum 2005 Pre-Tax Loss.  For the fiscal year ended December 31,
2005, Borrower covenants that its loss before taxes shall not be more than Twenty
Million Dollars ($20,000,000), based on the calculation of Borrowers EBITDA minus
interest, depreciation and amortization expense for such fiscal year.”

 

5.11.       Defined Terms.  The
following defined terms are hereby added to Exhibit 2.1
Glossary and Index of Defined Terms of the Original Credit Agreement or, as
applicable, replace such previously existing terms in their entirety:

 

COLLATERAL
RESERVE —  shall be $20,000,000, unless
the Floorplan Inventory Value Differential shall be more than $0, in which case
the amount of the reserve shall be the amount by which $20,000,000 exceeds the Floorplan
Inventory Value Differential.

 

EXCESS ELIGIBLE ACCOUNTS —  on any date of determination, the amount, if
any, by which the Borrowing Base exceeds the sum of (i) the Aggregate
Revolving Loan, (ii) the Swingline Loan, (iii) the Letter of Credit
Exposure, (iv) the GSA Fee, and (v) that amount of Other Creditor
Indebtedness owing to Persons for which an Intercreditor Agreement has not been
executed between Administrative Agent and the holders of such Other Creditor
Indebtedness.

 

FLOORPLAN EXCESS AMOUNT — means the amount, if any,
by which (a) the Floorplan Inventory Value as determined by Administrative
Agent as of such date of determination, exceeds (b) the sum of the
Aggregate Floorplan Loans and Interim Floorplan Loans outstanding on any date
of determination.

 

FLOORPLAN INVENTORY VALUE — means, as of any date of
determination, (but excluding in all circumstances Inventory manufactured or
sold by or on behalf of IBM Corporation, Hewlett-Packard Company (including
Compaq Inventory), Lexmark International and each of their respective
Subsidiaries and Affiliates) (i) one hundred percent (100%) of the total
aggregate wholesale invoice price of all of Borrower’s Inventory aged 180 days
or less which is GE Financed Inventory, (ii) fifty percent (50%) of the
total aggregate wholesale invoice price of all of Borrower’s Inventory aged 180
days or less which is not GE Financed Inventory, and zero percent (0%) of the
total aggregate wholesale invoice price of all of Borrower’s Inventory aged
more than 180 days, in each case, with respect to clauses (i) and (ii) of
this sentence, in which Administrative Agent has a first priority, perfected
Security Interest (subject to no
other Security Interest other than Permitted Security Interests) that is unsold
and not leased by Borrower and is in Borrower’s possession and control as of
the date of determination, less the amount of any such Inventory reported by Borrower
(if Borrower is required by Administrative Agent or the Required Lenders to
report) as demonstration items or Inventory that is obsolete or otherwise
unmerchantable as determined by Administrative Agent.  If any Inventory financed under the Aggregate
Floorplan Loan Facility or in the Interim Floorplan Loan Facility with a value
in excess of $200,000 for each location is located on any premises that are not
owned by Borrower (not including any lessee or other Person to whom Inventory
is leased or rented in the ordinary course of such Covered Person’s business,
or other locations where Borrower is not obligated to pay rent for up to 30
consecutive days) and Borrower has not

 

4

 

obtained or caused to be obtained written waivers or consents, in form
and substance satisfactory to Administrative Agent, then such Inventory shall
be deemed to have a “Floorplan Inventory Value” of Zero Dollars ($0.00).

 

FLOORPLAN INVENTORY VALUE DIFFERENTIAL — the extent
to which the calculation of Floorplan Inventory Value using the Prior Method would
exceed the method of calculating Floorplan Inventory Value as set forth in this
Agreement.  For the purposes of this
definition only, the “Prior Method” means the valuation of Borrowers Inventory,
with identical exclusions and conditions, but in which Inventory is valued at (i) one
hundred percent (100%) of the total aggregate wholesale invoice price of all of
Borrower’s Inventory aged 90 days or less, (ii) fifty percent (50%) of the
total aggregate wholesale invoice price of all of Borrower’s Inventory aged
between 91 and 180 days, and zero percent (0%) of the total aggregate wholesale
invoice price of all of Borrower’s Inventory aged more than 180 days, in each
case without regard to whether or not such Inventory is GE Financed Inventory,
except as otherwise expressly excluded before (e.g. IBM, Lexmark, HP/Compaq).

 

GE FINANCED INVENTORY — means, the brands and
manufacturers listed by Administrative Agent and provided to Borrowers from
time to time which identify those which are financed by GECDF or it’s
affiliates on a regular basis, as determined in its reasonable discretion.

 

GSA FEE — means, the fee due to the General Services
Administration of the United States of America as a result of certain sales.

 

6.             Representations and Warranties of
Borrower.  Each Borrower hereby represents and warrants
to Administrative Agent and the Lenders that (i) Borrowers’ execution of
this Agreement has been duly authorized by all requisite actions of each
Borrower; (ii) no consents are necessary from any third parties for
Borrowers’ execution, delivery or performance of this Agreement, (iii) this
Agreement, the Original Credit Agreement, and each of the other Loan Documents,
constitute the legal, valid and binding obligations of each Borrower
enforceable against each such Borrower in accordance with their terms, except
to the extent that the enforceability thereof against Borrowers 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 11 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 Default or no Event of Default Exists.

 

7.             Reaffirmation.  Each
Borrower hereby represents, warrants, acknowledges and confirms that (i) the
Original Credit Agreement and the other Loan Documents remain in full force and
effect as amended by this Agreement, (ii) no Borrower has a defense to its
obligations under the Original 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 Original Credit Agreement, continue in full force and effect, and have the
same priority as before this Agreement, and (iv) no Borrower has a claim
against Administrative Agent or any Lender arising from or in connection with
the Original Credit Agreement or the other Loan Documents and any such claim is
hereby irrevocably waived and released and discharged forever.

 

8.             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.

 

9.             Fees and Expenses.  Borrowers
shall promptly pay to Administrative Agent an amount equal to all reasonable
and documented third party fees, costs and expenses incurred by the Administrative
Agent in

 

5

 

connection with the preparation, negotiation,
execution and delivery of this Fifth Amendment to Credit Facilities Agreement.

 

10.          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.

 

11.          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.

 

12.          Incorporation By Reference.  Administrative Agent, Lenders and Borrowers
hereby agree that all of the terms of the Loan Documents are incorporated in
and made a part of this Agreement by this reference (except to the extent
amended hereby).

 

13.          Notice—Oral Commitments Not
Enforceable.  The following notice is given pursuant to Section 432.057
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, REGARDLESS
OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE
CREDIT AGREEMENT.  TO PROTECT YOU
(BORROWER(S)) 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.

 

14.          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

 

6

 

OR OBLIGATION.  THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE
ABLE TO OBTAIN ON YOUR OWN.

 

[Signature Pages Follow]

 

7

 

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

 

 

	
  GTSI CORP., as a Borrower

  
	
   

  
	
  By:

  	
    /s/ THOMAS A. MUTRYN

  	
   

  
	
  Name:
  Thomas A. Mutryn

  
	
  Title:
  Senior Vice President and Chief Financial Officer

  
	
   

  
	
   

  
	
  TECHNOLOGY LOGISTICS, INC., as a Borrower

  
	
   

  
	
  By:

  	
    /s/ TODD LETO

  	
   

  
	
  Name:
  Todd Leto

  
	
  Title:
  Vice President of Operations

  
	
   

  
	
   

  
	
  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

  
	
   

  
	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender

  
	
   

  
	
  By:

  	
    /s/ JOHN CARPENTER

  	
   

  
	
  Name:
  John Carpenter

  
	
  Title:
  Director

  
	
   

  
	
   

  
	
  MANUFACTURERS AND TRADERS TRUST COMPANY, as a
  Lender

  
	
   

  
	
  By:

  	
    /s/ LOUIS J. NOPPENBERGER

  	
   

  
	
  Name:
  Louis J. Noppenberger

  
	
  Title:
  Vice President

  

 

8

 

ACKNOWLEDGEMENT, CONSENT AND REAFFIRMATION OF GUARANTY

 

The
undersigned, GTSI Financial Services, Inc., acknowledges and consents to
all changes in the Original Credit Agreement set forth in this Fifth Amendment
to Credit Facilities Agreement, by and among Administrative Agent, Borrower and
the Lenders (“Fifth Amendment”) and agrees that all such changes are in the
best interests of Borrowers and the undersigned.  In consideration of financial accommodations
granted and which may hereafter be granted to Borrowers by Administrative Agent
and the Lenders, in consideration of Administrative Agent’s and the Lenders’
reliance on that certain Unlimited Guaranty, dated as of November 22,
2004, given by the undersigned, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned,
GTSI Financial Services, Inc., irrevocably and unconditionally reaffirms
pursuant to the terms of the Unlimited Guaranty its continuing guarantee of the
payment and performance of all current and future Guarantied Obligations,
including, without limitation, all Loan Obligations.  The undersigned, GTSI Financial Services, Inc.,
further agrees that the validity and enforceability of the Unlimited Guaranty
is not and shall not be affected in any way or manner by any of the changes in
the financing set forth in the Fifth Amendment, that the Unlimited Guaranty is
in full force and effect, and the undersigned, GTSI Financial Services, Inc.,
has no defenses of any kind or nature with respect to his obligations under the
Unlimited Guaranty.

 

The
undersigned, GTSI Financial Services, Inc., has reviewed the attached Fifth
Amendment and all other documents and financial statements the undersigned
deems necessary relating to the Borrowers and the Guarantied Obligations,
including, without limitation, the Loan Obligations.

 

	
   

  	
  GTSI Financial Services, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ JACK HELMLY

  	
   

  
	
   

  	
  Name:
  Jack Helmly

  
	
   

  	
  Title:
  President

  

 

9

 

Exhibit A

 

Documents and Requirements

 

1.               Fifth Amendment
to Credit Facilities Agreement.

 

2.               Ratification of
Unlimited Guaranty of Loan Obligations executed by GTSI Financial Services, Inc.

 

3.               Payment of
$82,500 Waiver Fee to the Administrative Agent.

 

4.               Secretary’s
Certificate of GTSI (certifying no modification to Articles of Organization or
By-laws since the Effective Date, no modification to the incumbency certificate
last delivered and authorizing resolutions). 
Such resolutions shall specifically authorize the execution and delivery
of the Fifth Amendment to Credit Facilities Agreement.

 

5.               Good Standing
Certificate of GTSI from the Secretary of State of Delaware.

 

6.               Secretary’s
Certificate of TLI (certifying no modification to Articles of Organization or
By-laws since the Effective Date, no modification to the incumbency certificate
last delivered and authorizing resolutions). 
Such resolutions shall specifically authorize the execution and delivery
of the Fifth Amendment to Credit Facilities Agreement.

 

7.               Good Standing
Certificate of TLI from the Secretary of State of Delaware.

 

 

Exhibit B

 

Disclosure Schedule 

 

None, unless listed below.

 

11

 

Exhibit 3

 

LENDERS’ FACILITIES AND PRO-RATA SHARES

 

	
  LENDER

  	
   

  	
  TOTALS(1)

  	
   

  	
  REVOLVING LOAN

  FACILITY

  	
   

  	
  FLOORPLAN

  LOAN

  FACILITY

  	
   

  	
  PRO-RATA SHARES

  	
   

  
	
  GE Commercial Distribution Finance

  	
   

  	
  $

  	
  73,636,364.25

  	
   

  	
  $

  	
  49,090,909.23

  	
   

  	
  $

  	
  73,636,364.25

  	
   

  	
  54.54

  	
  %

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  20,454,545.25

  	
   

  	
  $

  	
  13,636,363.59

  	
   

  	
  $

  	
  20,454,545.25

  	
   

  	
  15.15

  	
  %

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  24,545,454.30

  	
   

  	
  $

  	
  16,363,636.29

  	
   

  	
  $

  	
  24,545,454.30

  	
   

  	
  18.18

  	
  %

  
	
  Manufacturers and Traders Trust Company

  	
   

  	
  $

  	
  16,363,636.20

  	
   

  	
  $

  	
  10,909,090.89

  	
   

  	
  $

  	
  16,363,636.20

  	
   

  	
  12.12

  	
  %

  
	
  AGGREGATES

  	
   

  	
  $

  	
  135,000,000.00

  	
   

  	
  $

  	
  90,000,000.00

  	
   

  	
  $

  	
  135,000,000.00

  	
   

  	
  100.00

  	
  %

  

 

(1) Subject to
the Total Aggregate Credit Facility Limit of $135,000,000 - 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 $135,000,000 Aggregate Floorplan Loan Facility).

 

12

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