Document:

Exhibit 10.16

 

SURETY AGREEMENT

THIS SURETY
AGREEMENT is made
this 29th day of November, 2006 by NEW AGE TRANSLATION, INC.,
a Delaware corporation (to be known as InfoLogix, Inc., “Guarantor”) in favor of SOVEREIGN BANK (“Bank”).

BACKGROUND

A.            Bank has agreed to
extend or continue to extend certain credit facilities to Info Logix Inc., (to
be known as InfoLogix Systems Corporation) Embedded Technologies, LLC and Opt
Acquisition, LLC (jointly, severally and collectively, “Borrower”), in consideration of, inter
alia, the covenants and obligations made and assumed by Guarantor as herein
set forth.

B.            Guarantor will
benefit directly and indirectly from the extension or continuation of such
credit facilities to Borrower.

NOW,
THEREFORE, for good
and valuable consideration, and intending to be legally bound hereby, Guarantor
irrevocably and unconditionally agrees as follows:

1.             Definitions.  For
purposes of this Surety Agreement:

1.1           “Bank Indebtedness” shall mean all
obligations, indebtedness and liabilities 
of Borrower to Bank of any nature, whether primary, secondary, absolute,
contingent, sole, joint, several or joint and several, secured or unsecured,
and whether owed to Bank by Borrower as maker, endorser, guarantor, surety or
otherwise, and all interest thereon (including without limitation, any interest
accruing thereon after maturity, or after the filing of any bankruptcy,
insolvency or similar proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) and all fees, costs and
expenses (including attorney’s fees and legal expenses) related thereto, now or
at any time or times hereafter existing, contracted or incurred, of or by
Borrower to Bank including, without limitation: (a) all obligations of Borrower
to Bank under the Loan Documents, and all increases, decreases, extensions,
amendments, replacements and renewals of any of such liabilities and
obligations; (b) all other obligations or undertakings now or hereafter made by
or for the benefit of Borrower to or for the benefit of Bank under any
agreement, promissory note or undertaking now existing or hereafter entered
into by Borrower with Bank, and (c) all obligations of Borrower to immediately
pay to Bank the amount of any overdraft on any deposit account maintained with
Bank, together with all interest, fees, costs, attorneys’ fees and other sums
payable in connection with any of the foregoing.

1.2           “Event of Default” shall include
each of the following:

(a)           An Event of Default
as defined under the Loan Agreement  or
any of the other Loan Documents;

(b)           Guarantor’s failure
to perform any of Guarantor’s obligations under this Surety Agreement; and

(c)           Guarantor notifies Bank that
Guarantor does not intend to be liable for any future Guaranteed Obligations or
contests the validity or enforceability of this Surety Agreement.

1.3           “Guaranteed Obligations” means (a) the
full and timely payment of all Bank Indebtedness, and (b) the full, timely and
complete compliance with, and punctual performance by Borrower of, each and
every obligation, covenant, agreement, representation and warranty to be
complied with or performed by Borrower under the Loan Documents.

1.4           “Loan Agreement” means that certain
Loan and Security Agreement dated March 16, 2006 by and between Borrower and
Bank (as amended by that certain First Amendment and Modification to Loan and
Security Agreement dated August 25, 2006, that certain Second Amendment and
Modification to Loan and Security Agreement dated October 31, 2006 and as the
same may be further amended, modified, supplemented or restated from time to
time).

1.5           “Loan Documents” means the Loan
Agreement, each of the Notes referenced therein, this Surety Agreement and all
other documents executed or delivered by Borrower, Guarantor or any other
person or entity in connection with the Loan Agreement or this Surety
Agreement, or otherwise evidencing or executed in connection with the Bank
Indebtedness, as any of the foregoing may be amended, extended, supplemented or
replaced from time to time.

2.             Unlimited Guaranty.

2.1           Unlimited Continuing Guaranty and Suretyship
Obligation.  Guarantor
guarantees to Bank and becomes a surety to Bank for each of the Guaranteed
Obligations.  The liability of Guarantor
hereunder is unlimited.  THIS SURETY
AGREEMENT IS A CONTINUING GUARANTY AND SURETYSHIP AGREEMENT AND SHALL CONTINUE
IN FORCE UNTIL ALL GUARANTEED OBLIGATIONS HAVE BEEN PAID OR SATISFIED IN FULL
AS DETERMINED BY BANK AND BANK HAS NO FURTHER OBLIGATION OR COMMITMENT TO
ADVANCE SUMS OR EXTEND ANY CREDIT FACILITY TO BORROWER AND ALL SUMS RECEIVED BY
BANK IN PAYMENT OF THE BANK INDEBTEDNESS ARE NO LONGER SUBJECT TO RECISSION OR
REPAYMENT.  GUARANTOR EXPRESSLY AGREES
THAT BORROWER MAY CREATE OR INCUR BANK INDEBTEDNESS AND MAY REPAY AND
SUBSEQUENTLY CREATE OR INCUR BANK INDEBTEDNESS, ALL WITHOUT NOTICE TO
GUARANTOR, AND GUARANTOR SHALL BE BOUND THEREBY.  ALL ADVANCES TO AND BORROWINGS OF BORROWER
FROM BANK SHALL CONSTITUTE ONE SINGLE OBLIGATION GUARANTEED BY GUARANTOR PURSUANT
TO THE TERMS HEREOF.

2.2           Exercise of Bank’s Rights.  Guarantor understands and agrees that (a)
Bank may, at any time following an Event of Default, at its discretion, proceed
against Guarantor and/or any security for this Surety Agreement in such order
and manner as Bank shall determine in its sole discretion; (b) Guarantor’s liability under this Surety
Agreement is not limited to the value or proceeds realized by Bank from a sale
or other liquidation of any collateral for this Surety Agreement; (c) Bank may,
at any time following an Event of Default, proceed against any and all assets
of Guarantor to obtain payment of the Guaranteed Obligations; and (d) to
the extent any collateral for this Surety Agreement secures any other
obligations of Guarantor to Bank, Bank may apply such collateral and proceeds
thereof to the Guaranteed Obligations and/or such other obligations in such
order or manner as Bank shall determine in its sole discretion.

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3.             Scope and Duration of Liability.

3.1           Primary Liability.  The Guaranteed Obligations are primary, absolute,
independent, irrevocable and unconditional. 
This agreement is an agreement of suretyship as well as of guaranty and
without being required to proceed first against Borrower or any other person or
entity, or against any other security for the Guaranteed Obligations, Bank may
proceed directly against Guarantor upon the occurrence of an Event of Default.

3.2           Duration.  This Surety Agreement shall remain in full
force and effect until all of the Guaranteed Obligations are fully, finally and
irrevocably paid, complied with and performed and until all sums received by
Bank thereunder are no longer subject to rescission or repayment upon the
bankruptcy, insolvency or reorganization of Borrower or Guarantor.  If at any time a payment or payments by
Borrower or Guarantor on any of the Guaranteed Obligations, or any part
thereof, are subsequently invalidated, declared to be fraudulent or
preferential, set aside or are required to be repaid to a trustee, receiver or
any other person or entity under any bankruptcy act, state or federal law,
common law or equitable cause, then to the extent of such payment or payments,
the Guaranteed Obligations intended to be satisfied shall be revived and
continued in full force and effect as if such payment or payments had not been
made.

3.3           Remedies.  Upon the occurrence of an Event of Default,
Guarantor shall immediately pay, comply with and perform such of the Guaranteed
Obligations as Bank shall direct, irrespective of whether the Guaranteed
Obligations directed by Bank to be paid, complied with and performed by
Guarantor are those which gave rise to the Event of Default.

4.             Unconditional Enforceability.

4.1           Enforceability. The Guaranteed
Obligations shall be unconditional and irrevocable, irrespective of:

(a)           the genuineness,
validity or enforceability of any of the Loan Documents;

(b)           any limitation of
liability of Borrower or any other person or entity contained in the Loan
Documents;

(c)           the existence of any
security given to secure the Loan Documents;

(d)           any change in Borrower’s
financial condition, operations, loan status or collateral position;

(e)           the impossibility or
illegality of performance on the part of Borrower of Borrower’s obligations
under the Loan Documents;

(f)            any defense that
may arise by reason of the incapacity or lack of authority of Borrower, any
other guarantor or other person or entity or the failure of Bank to file or
enforce a claim against the estate of Borrower in any bankruptcy or other
proceedings; or

(g)           any other
circumstances, occurrences or conditions, whether similar or dissimilar to any
of the foregoing, which might otherwise constitute a legal or equitable
defense, discharge or release of a guarantor or surety.

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4.2           Acceleration.  If Borrower or any other person or entity
defaults under the Loan Documents and Bank is prevented from accelerating
payment thereunder, either by operation of any bankruptcy laws or otherwise,
Bank shall be entitled to receive from Guarantor, upon demand by Bank, the
Guaranteed Obligations which would have otherwise been due and payable had such
acceleration occurred.

5.             Release/Modification/Information.  Bank
may at any time and from time to time, with or without consideration, release
or discharge Guarantor, Borrower or any one or more other guarantors of or
sureties for any or all of the Guaranteed Obligations, agree to the
substitution, exchange or release of all or any part of the collateral securing
the Bank Indebtedness, obtain or receive any additional collateral or
suretyship obligations securing the Loan Documents, and/or modify, amend,
increase, extend, renew or supplement any of the Guaranteed Obligations or the
Loan Documents, all without notice to or further consent from Guarantor.  Except as may be expressly agreed to by Bank
in writing, none of the foregoing actions shall in any way affect or diminish
the liability of Guarantor under this Surety Agreement.  Bank has no obligation or commitment of any
kind to inform or advise Guarantor of any information, occurrences or events
regarding Borrower or Borrower’s financial condition, operations, loan status
or collateral position, including, without limitation, any material adverse
change in such financial condition, operations, loan status or collateral
position.  Guarantor acknowledges that
Guarantor shall be solely responsible for keeping informed as to any of the
foregoing matters.

6.             Subrogation. 
Guarantor hereby agrees that:

6.1           Subordination.  Any and all rights of subrogation that
Guarantor may have against Borrower or against any collateral or security for
any Bank Indebtedness, and any and all rights of contribution, indemnity and/or
substitution that Guarantor may have against Borrower or any other guarantor or
surety, shall be junior and subordinate to all Bank Indebtedness, to any rights
that Bank may have against Borrower, to all right, title and interest that Bank
may have in any such collateral or security for the Bank Indebtedness, and to
any right Bank may have against such other guarantor or surety.  Bank may use, sell or dispose of any item of
collateral or security for the Bank Indebtedness as it sees fit without regard
to any subrogation rights Guarantor may have, and upon any such disposition or
sale of such collateral or security any rights of subrogation that Guarantor
may have with respect to such collateral or security shall terminate.

6.2           Limitations.  Until the Guaranteed Obligations shall have
been indefeasibly paid in full, Guarantor shall not take, or permit to be
taken, any action to exercise (a) any right of subrogation arising in respect
of the Guaranteed Obligations, (b) any right of contribution arising in respect
of the Guaranteed Obligations that Guarantor may have against any other
guarantor or surety of the Guaranteed Obligations, (c) any right to enforce any
remedy which Bank now has or may hereafter have against Borrower or (d) any
benefit of, and any right to participate in, any security now or hereafter held
by Bank.  If any amount shall be paid to
Guarantor on account of such subrogation or contribution rights at any time
when all Guaranteed Obligations shall not have been paid in full, such amount
shall be held in trust for Bank and shall forthwith be paid over to Bank to be
credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents.

7.             Subordination of Other
Obligations.  The advance of any sums to Borrower by
Guarantor, together with all indebtedness of Borrower, now owed or hereafter
incurred, to Guarantor shall be and hereby are subordinated in payment and in
all other respects to all Bank Indebtedness. If

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Guarantor
collects any of such sums or indebtedness from Borrower at any time when an
Event of Default exists, or when there exists any event which with the passage
of time, delivery of notice or both would constitute an Event of Default, or
when it is reasonably foreseeable that the payment of such sums to Guarantor
will render Borrower financially unable to duly perform any of Borrower’s
subsequent obligations under the Loan Documents, such collected funds shall be
deemed collected and received by Guarantor in trust for Bank and shall be paid
upon demand to Bank for application, when received, on account of Borrower’s
obligations under the Loan Documents. Nothing herein contained shall be
construed to give Guarantor any rights of subrogation in or to the Loan
Documents or in all or any part of Bank’s interest in the Loan Documents.

8.             Representations. 
Guarantor represents and warrants to Bank that:

8.1           Valid Organization; Good Standing and
Qualification.  Guarantor
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, has full power and authority to execute,
deliver and comply with the Loan Documents, and to carry on its business as it
is now being conducted and is duly licensed or qualified as a foreign
corporation in good standing under the laws of each jurisdiction in which the
character or location of the properties owned by it or the business transacted
by it requires such licensing or qualification, except where the failure to be
so licensed or qualified would not have a material adverse effect on the
collateral, assets, business, operations or financial condition of Guarantor or
the ability of Guarantor to perform its obligations under this Surety Agreement
or the other Loan Documents.

8.2           Due Authorization; No Legal Restrictions.  The execution and delivery by Guarantor of
the Loan Documents, the consummation of the transactions contemplated by the
Loan Documents and the fulfillment and compliance with the respective terms,
conditions and provisions of the Loan Documents:  (a) have been duly authorized by all
requisite corporate action of Guarantor, (b) will not conflict with or result
in a breach of, or constitute a default (or might, upon the passage of time or
the giving of notice or both, constitute a default) under, any of the terms,
conditions or provisions of any applicable statute, law, rule, regulation or
ordinance or Guarantor’s Certificates or Articles of Incorporation or By-Laws
or any indenture, mortgage, loan or credit agreement or instrument to which
Guarantor is a party or by which it may be bound or affected, or any judgment
or order of any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and (c) will not result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of Guarantor under the terms or
provisions of any such agreement or instrument, except liens in favor of Bank.

8.3           Enforceability.  The Loan Documents have been duly executed by
Guarantor and delivered to Bank and constitute legal, valid and binding
obligations of Guarantor, enforceable in accordance with their terms, except as
enforceability may be limited by any bankruptcy, insolvency, reorganization,
moratorium or other laws or equitable principles affecting creditors’ rights
generally.

8.4           No Default Under Other Obligations, Orders or
Governmental Regulations. 
Guarantor is not in violation of its Certificate or Articles of
Incorporation or in default in the performance or observance of any of its
obligations, covenants or conditions contained in any indenture or other
agreement creating, evidencing or securing any indebtedness or obligation or
pursuant to which any such indebtedness or obligations are issued and Guarantor
is not in violation of or in default under any other agreement or instrument or
any judgment, decree, order, statute, rule or governmental regulation, applicable
to it or by which its properties may be bound or affected.

 5
 

8.5           Governmental Consents.  No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of Guarantor is required in connection with the execution, delivery or
performance by Guarantor of the Loan Documents or the consummation of the
transactions contemplated thereby.

8.6           Review of Loan Documents.  Guarantor’s authorized officers have either
examined the Loan Documents or have had an opportunity to examine the Loan
Documents and Guarantor has waived the right to examine them.

8.7           Benefit.  Guarantor has a direct financial interest in
Borrower and will benefit directly and indirectly from the execution of the
Loan Documents.

8.8           Independent Review.  Guarantor has executed this Surety Agreement
after conducting its own independent review and analysis of the financial
condition and operations of Borrower, and Guarantor has not relied upon any
representation, statement or information of or from Bank in connection with the
same.

8.9           Judgments.  There are no judgments outstanding or
actions, suits or proceedings pending or, to the best of Guarantor’s knowledge,
threatened against or affecting Guarantor, at law or in equity or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.

8.10         Taxes.  Guarantor has filed all tax returns which it
is required to file and has paid, or made provision for the payment of, all
taxes which have or may have become due pursuant to such returns or pursuant to
any assessment received by them.  Such
tax returns are complete and accurate in all respects.

8.11 Compliance.  Guarantor is currently in compliance with all
of the terms and conditions of the Loan Documents.

8.12         Accuracy of Loan Documents.  No representation or warranty by Guarantor
contained herein or in any certificate or other document furnished by Guarantor
pursuant hereto or in connection herewith fails to contain any statement of
material fact necessary to make such representation or warranty not misleading
in light of the circumstances under which it was made.  There is no fact which Guarantor knows or
should know and has not disclosed to Bank, which does or may materially and
adversely affect Guarantor.

9.             Covenants. 
Guarantor will deliver or cause to be delivered to Bank, with reasonable promptness, all such data and
information in respect of the condition, operation and affairs of Guarantor as
Bank may request from time to time.

10.           Cross-Default. 
Guarantor covenants and agrees that (a) 
the occurrence of an Event of Default shall constitute a default by
Guarantor under any other agreements between Bank and Guarantor, whether now
existing or hereafter arising; and (b) 
the occurrence of a default or event of default under any other
agreements between Bank and Guarantor, whether now existing or hereafter
arising, shall constitute an Event of Default hereunder.

11.           CONFESSION OF JUDGMENT.  GUARANTOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY
OR THE PROTHONOTARY OR CLERK OF ANY

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COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR IN ANY OTHER
JURISDICTION WHICH PERMITS THE ENTRY OF JUDGMENT BY CONFESSION, TO APPEAR FOR
GUARANTOR AT ANY TIME AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, IN ANY
ACTION BROUGHT AGAINST GUARANTOR ON THIS SURETY AGREEMENT AT THE SUIT OF BANK,
WITH OR WITHOUT COMPLAINT OR DECLARATION FILED, WITHOUT STAY OF EXECUTION, AS
OF ANY TERM OR TIME, AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR
FOR THE ENTIRE UNPAID AMOUNT OF THE GUARANTEED OBLIGATIONS AND ALL ARREARAGES
OF INTEREST THEREON, TOGETHER WITH ALL COSTS AND OTHER EXPENSES AND AN ATTORNEY’S
COLLECTION COMMISSION OF FIFTEEN PERCENT (15%) OF THE AGGREGATE AMOUNT OF THE FOREGOING
SUMS, BUT IN NO EVENT LESS THAN FIVE THOUSAND DOLLARS ($5,000.00); AND FOR SO
DOING THIS SURETY AGREEMENT OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE A
SUFFICIENT WARRANT.

THE AUTHORITY GRANTED HEREIN TO
CONFESS JUDGMENT SHALL NOT BE EXTINGUISHED BY ANY EXERCISE THEREOF, BUT SHALL
CONTINUE FROM TIME TO TIME AND AT ALL TIMES DURING THE DURATION OF THIS SURETY
AGREEMENT.  GUARANTOR ACKNOWLEDGES THAT
GUARANTOR HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THIS SURETY AGREEMENT. 
GUARANTOR KNOWINGLY WAIVES GUARANTOR’S RIGHT TO BE HEARD PRIOR TO THE
ENTRY OF SUCH JUDGMENT AND UNDERSTANDS THAT, UPON SUCH ENTRY, SUCH JUDGMENT
SHALL BECOME A LIEN ON ALL REAL PROPERTY OF GUARANTOR IN THE COUNTY IN WHICH
SUCH JUDGMENT IS ENTERED AND THAT EXECUTION MAY IMMEDIATELY BE ISSUED ON THE
JUDGMENT TO GARNISH, LEVY ON OR ATTACH ANY PERSONAL PROPERTY OF GUARANTOR.

GUARANTOR WAIVES AND RELINQUISHES
ALL ERRORS, DEFECTS AND IMPERFECTIONS IN THE ENTRY OF JUDGMENT AS AFORESAID, OR
IN ANY PROCEEDING PURSUANT THERETO, AND ALL BENEFITS THAT MAY ACCRUE TO
GUARANTOR BY VIRTUE OF ANY LAW OR RULE OF COURT RELATING TO A STAY OF EXECUTION
OR EXEMPTING ANY PROPERTY FROM LEVY OR SALE UNDER EXECUTION.

12.           Notices.  All
notices, requests and other communication made or given in connection with this
Surety Agreement shall be in writing and, unless receipt is stated herein to be
required, shall be deemed to have been validly given if delivered personally to
the individual, division or department to whose attention notices to a party
are to be addressed, or by private carrier, or by registered or certified mail,
return receipt requested, or by telecopy with the original forwarded by first
class mail, in all cases with postage prepaid, addressed as follows until some
other address (or individual, division or department for attention) shall be
designated by notice given in accordance with this paragraph:

	
  To Guarantor:

  	
  New Age Translation, Inc.

  
	
   

  	
  101 East County
  Line Road, Suite 210

  
	
   

  	
  Hatboro, PA
  19040

  
	
   

  	
  Attention: David
  T. Gulian, Chief Executive Officer

  
	
   

  	
  Telecopy No.
  (215) 604-0695

  

 

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  With a copy to:

  	
  Drinker Biddle & Reath, LLP

  
	
   

  	
  One Logan Square

  
	
   

  	
  18th & Cherry
  Streets

  
	
   

  	
  Philadelphia, PA
  19103

  
	
   

  	
  Attention: Guy
  Winters, Esquire

  
	
   

  	
  Telecopy No.
  (215) 988-2757

  
	
   

  	
   

  
	
  To Bank:

  	
  Sovereign Bank

  
	
   

  	
  Centre Square
  West, 25th Floor

  
	
   

  	
  1500 Market
  Street

  
	
   

  	
  Philadelphia, PA
  19102

  
	
   

  	
  Attention:
  Steven G. Fahringer

  
	
   

  	
  Telecopy Number:
  215-568-9587

  
	
   

  	
   

  
	
  With a copy to:

  	
  Wolf, Block, Schorr and Solis-Cohen

  
	
   

  	
  1650 Arch Street

  
	
   

  	
  22nd Floor

  
	
   

  	
  Philadelphia, PA
  19103

  
	
   

  	
  Attention:
  Richard Zucker, Esquire

  
	
   

  	
  Telecopy Number:
  (215) 405-3908

  

 

13.           Set-Off. 
Without limiting the rights of Bank under applicable law, Bank has and
may exercise a right of set-off, a lien against and a security interest in all
property of Guarantor now or at any time in Bank’s possession in any capacity
whatsoever, including but not limited to any balance of any deposit, trust or
agency account, or any other bank account with Bank, as security for all
Guaranteed Obligations.  At any time and
from time to time following the occurrence of an Event of Default, or an event
which with the giving of notice or passage of time or both would constitute an
Event of Default, Bank may without notice or demand, set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by Bank to or for the credit
of Borrower or Guarantor against any or all of the Guaranteed Obligations.

14.           Cumulative Remedies.  The
rights, remedies, powers and privileges provided to Bank herein or in any of
the Loan Documents shall not be deemed exclusive, but shall be cumulative and
shall be in addition to any other rights, remedies, powers and privileges of
Bank at law or in equity.

15.          Waivers.  Guarantor hereby fully, finally,
unconditionally and irrevocably waives the following:

15.1        Notices.  Notice of acceptance of this Surety Agreement
by Bank and any notice of the incurring by Borrower of any Guaranteed
Obligations; presentment for payment, notice of nonpayment or demand, demand,
protest, notice of protest and notice of dishonor or default to any party
including Borrower and Guarantor; notice of any change in Borrower’s financial
condition, operations, loan status or collateral position; notice of any of the
actions described in Section 5 hereof; and all other notices to which
Guarantor may be entitled but which may legally be waived.

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15.2        Demand.  Demand for payment as a condition of
liability under this Surety Agreement.

15.3        Disability.  Any disability of Borrower or defense
available to Borrower, including absence or cessation of Borrower’s liability
for any reason whatsoever.

15.4        Defenses.  Any defense or circumstance which might
otherwise constitute a legal or equitable discharge of a guarantor or surety,
including, without limitation, any obligation of Bank to proceed against
Borrower prior to exercising its rights against Guarantor hereunder.

15.5        Possession/Marshalling.  Any demand for possession of any collateral
and any and all rights to subrogation or realization on any of Borrower’s
property, including any right to require or participate in the marshalling of
Borrower’s assets.

15.6        Termination.  Any and all right to terminate Guarantor’s
obligations hereunder by delivery of written notice to Bank or otherwise.

15.7        Limitations on
Actions.  All benefits under any
present or future laws exempting any property, real or personal, or any part of
any proceeds thereof, from attachment, levy or sale under execution, or
providing for any stay of execution to be issued on any judgment recovered
under any of the Loan Documents or in any replevin or foreclosure proceedings,
or otherwise providing for any valuation, appraisal or exemption.

15.8        Bond.  Any requirement for bonds, security or
sureties required by statute, court rule or otherwise.

15.9        Expenses.  All rights to claim or recover attorney’s
fees and costs in the event that Guarantor is successful in any action to
remove, suspend or prevent the enforcement of a judgment entered by confession.

15.10      Imperfections.  Any and all errors, defects and imperfections
in any action by Bank in replevin, foreclosure or other court process or in
connection with any other action related to any of the Loan Documents or the
transactions contemplated therein.

16.           Delay or Omission Not Waiver. 
Neither the failure nor any delay on the part of Bank to exercise any
right, remedy, power or privilege under the Loan Documents upon the occurrence
of any Event of Default or otherwise shall operate as a waiver thereof or
impair any such right, remedy, power or privilege.  No waiver of any Event of Default shall
affect any later Event of Default or shall impair any rights of Bank.  No single, partial or full exercise of any
rights, remedies, powers and privileges by the Bank shall preclude further or
other exercise thereof.  No course of
dealing between Bank and Borrower or Guarantor shall operate as or be deemed to
constitute a waiver of Bank’s rights under the Loan Documents or affect the
duties or obligations of Borrower or Guarantor.

17.           Binding Effect.  This
Surety Agreement and all rights and powers granted hereby will bind and inure
to the benefit of the parties hereto and their respective successors and
assigns.

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18.           Prior Guaranties. 
Nothing contained in this Surety Agreement is intended to release,
supersede, modify or otherwise affect any other guaranty or suretyship
agreement from Guarantor to Bank.

19.           Construction.  For
purposes of this Surety Agreement, the singular shall be deemed to include the
plural and the neuter shall be deemed to include the masculine and feminine as
the context may require.

20.           Severability.  The
provisions of this Surety Agreement and all other Loan Documents are deemed to
be severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force
and effect.

21.           Governing Law.  This
Surety Agreement has been made, executed and delivered in the Commonwealth of
Pennsylvania and will be construed in accordance with and governed by the laws
of such Commonwealth without regard to conflict of law principles.

22.           Joint and Several Liability.  All
obligations of Guarantor hereunder are joint and several with those of any
other guarantor of or surety for all or any part of the Guaranteed Obligations.

23.           Counterparts.  This
Surety Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Surety Agreement by signing any such
counterpart.

24.           Submission to Jurisdiction. 
Guarantor hereby consents to the exclusive jurisdiction of any state or
federal court located within the Commonwealth of Pennsylvania, and irrevocably
agrees that, subject to Bank’s election, all actions or proceedings relating to
the Loan Documents or the transactions contemplated hereunder shall be litigated
in such courts, and Guarantor waives any objection which Guarantor may have
based on lack of personal jurisdiction, improper venue or forum non
conveniens to the conduct of any proceeding in any such court and waives
personal service of any and all process upon Guarantor, and consents that all
such service of process be made by mail or messenger directed to Guarantor at
the address set forth in Section
12.  Nothing contained in this Section 24 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Guarantor or Guarantor’s property in
the courts of any other jurisdiction.

25.           JURY TRIAL WAIVER. 
GUARANTOR AND BANK, BY ITS ACCEPTANCE HEREOF, WAIVE ANY RIGHT TO TRIAL
BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER ANY
OF THE LOAN DOCUMENTS OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF BORROWER, GUARANTOR OR BANK WITH RESPECT TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. 
GUARANTOR AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THE LOAN DOCUMENTS MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR AND
BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. GUARANTOR ACKNOWLEDGES THAT
IT HAS HAD THE OPPORTUNITY TO

 10
 

CONSULT
WITH COUNSEL REGARDING THIS SECTION, THAT IT FULLY UNDERSTANDS ITS TERMS,
CONTENTS AND EFFECT, AND THAT IT VOLUNTARILY
AND KNOWINGLY AGREES TO THE TERMS OF THIS SECTION.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 11

IN WITNESS WHEREOF,
Guarantor has caused this Surety Agreement to be executed the day and year
first above written.

	
  

  	
  NEW AGE TRANSLATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  John Fahlberg

  	
   

  
	
   

  	
  Name/Title: John Fahlberg, PresidentExhibit
10.1

 

SECOND
AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”) is made and entered into as of November 30, 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 by that certain
First Amendment to Credit Agreement dated as of July 12, 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; and

WHEREAS,
the Borrower has requested that the Lenders, the Administrative Agent and the
Co-Collateral Agents waive the Specified Event of Default and amend certain
provisions of the Credit Agreement, and subject to the terms and conditions
hereof, the Lenders, the Administrative Agent and the Co-Collateral Agents 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 adding the
following definitions in the appropriate alphabetical order (in the case of any
new definition) and amending and restating in their entirety the following
definitions (in the case of any definition already included in the Credit
Agreement):

“Availability Block”
shall mean (a) at all times prior to the FCCR Election Date, $15,000,000, and
(b) at all times on or after the FCCR Election Date, $10,000,000.

“EBITDA” shall mean, with
respect to the Borrower on a consolidated basis with its Subsidiaries for any
period, the net income for such period determined in accordance with GAAP, plus,
without duplication and to the extent reflected as charges in the statement of
net income for such period, the sum of (i) income taxes, (ii) Interest Expense,
and (iii) depreciation and amortization expense; provided, however,
that if any such calculation includes any period in 

 

which an acquisition or
sale of a Person or all or substantially all of the assets of a Person
occurred, then such calculation shall be made on a Pro Forma Basis; provided,
further, the net income (or loss) of the Borrower and its Subsidiaries
for any such period shall exclude therefrom (to the extent otherwise included
therein) (a) any extraordinary gains, (b) any non-cash extraordinary losses,
(c) with respect to any such amount that was deducted under clause (b) of this
definition as an expense in a prior period, any cash payments of accrued expenses
that were not included in the calculation of EBITDA when the applicable accrual
was made, (d) any gains attributable to write-ups of assets or gains due to the
forgiveness of debt or trade liabilities, (e) any equity interest of the
Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary, (f) any income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated
with the Borrower or any Subsidiary on the date that such Person’s assets are
acquired by the Borrower or any Subsidiary, (g) any non-cash gains, income,
loss, expense, or charge to earnings due to change in GAAP accounting rules and
(h) non-cash interest income on lease transactions recognized by the Borrower
due to the release of any purchase option retained by the Borrower in
connection any such lease transaction.

“FCCR Election Date”
means the earlier of (a) the date on which the Borrower elects to implement the
Fixed Charge Coverage Ratio covenant test set forth in Section 8.10,
which date shall be the last day of a fiscal quarter of Borrower, so long as
(i) no Default or Event of Default has occurred and is continuing on the
proposed FCCR Election Date, (ii) the Administrative Agent receives written
notice of such election within 10 Business Days prior to the proposed FCCR
Election Date, (iii) Borrower delivers to the Administrative Agent pro forma
financial statements demonstrating that the Borrower and its Subsidiaries will
be in compliance with the Fixed Charge Coverage Ratio covenant set forth in Section
8.10 for a period of twelve (12) months after the proposed FCCR Election
Date, together with an officer’s certificate certifying that such financial
statements are true and correct, and (iv) the Administrative Agent has received
written confirmation from the Subordinated Debt Agent that the Availability
Block under (and as defined in) the Subordinated Debt Agreement has been or
will be reduced to $10,000,000 on the proposed FCCR Election Date, and (b)
September 30, 2008.

“Fixed Charge Coverage
Ratio” shall mean, with respect to the Borrower and its Subsidiaries on a
consolidated basis for any period, calculated on a Pro Forma Basis during such
period, the ratio of (a) the greater of (i) (x) EBITDA for such period minus
(y) the sum of (A) Capital Expenditures made during such period, (B) cash tax
payments made during such period and (C) to the extent included in EBITDA,
non-cash interest income from lease transactions during such period, or (ii) zero,
to (b) the sum of (i) scheduled payments of principal made with respect to
Funded Debt during such period, (ii) Interest Expense paid or payable in cash
during such period and (iii) Restricted Purchases and Restricted Payments paid
during such period.

 2
 

 

2.             Amendment to Section 2.3.  Section 2.3 of the Credit Agreement, “Interest”,
is hereby amended and modified by adding the following new sentence to the end
of subsection (c), “Applicable Margin”, therein:

“At all times prior to
the FCCR Election Date, the “Applicable Margin” as defined in this subsection
(c) (other than the Applicable Margin with respect to Unused Line Fees) shall
be increased by a per annum rate equal to 0.25%.”

3.             Amendment
to Section 8.9.  Section 8.9
of the Credit Agreement, “Minimum EBITDA” is hereby amended and modified by
deleting such section in its entirety and by substituting the following in lieu
thereof:

“Section 8.9           Minimum EBITDA.  Until the FCCR Election Date, the Borrower
Parties shall not permit the EBITDA of the Borrower Parties to be less than the
amounts set forth in the table below for the applicable periods set forth in
such table:

	
  Period

  	
   

  	
  Minimum EBITDA:

  	
   

  
	
  Four fiscal quarter period ending December 31, 2006

  	
   

  	
  $

  	
  2,151,000

  	
   

  
	
  Four fiscal quarter period ending March 31, 2007

  	
   

  	
  $

  	
  5,556,000

  	
   

  
	
  Four fiscal quarter period ending June 30, 2007

  	
   

  	
  $

  	
  878,000

  	
   

  
	
  Four fiscal quarter period ending September 30, 2007

  	
   

  	
  $

  	
  6,204,000

  	
   

  
	
  Four fiscal quarter period ending December 31, 2007

  	
   

  	
  $

  	
  5,632,000

  	
   

  
	
  Four fiscal quarter period ending March 31, 2008

  	
   

  	
  $

  	
  6,000,000

  	
   

  
	
  Four fiscal
  quarter period ending June 30, 2008

  	
   

  	
  $

  	
  8,000,000

  	
   

  

 

4.             Amendment
to Section 8.10.  Section 8.10
of the Credit Agreement, “Fixed Charge Coverage Ratio” is hereby amended and
modified by deleting such section in its entirety and by substituting the
following in lieu thereof:

“8.10       Fixed Charge Coverage Ratio.  The Borrower Parties shall not permit as of
the FCCR Election Date, and as of the end of each fiscal quarter 

 3
 

 

thereafter, the Fixed
Charge Coverage Ratio for the immediately preceding four (4) fiscal quarter
period to be less than 1.10 to 1.00.”

5.             Waiver.
As a result of the Borrower’s failure to achieve the Minimum EBITDA requirement
under Section 8.9 of the Credit Agreement for the period ended September 30,
2006, an Event of Default (the “Specified Event of Default”) would have
occurred but for the fact that the Borrower, Administrative Agent,
Co-Collateral Agents and the Majority Lenders entered into that certain Waiver
dated as of November 6, 2006 (the “Existing Waiver”).  The Existing Waiver will terminate and be of
no further force or effect as of the date hereof and the Borrower has requested
that the Majority Lenders waive the Specified Event of Default on a permanent
basis as set forth herein.  Therefore,
subject to the terms and conditions set forth in this Amendment, the
Administrative Agent, Co-Collateral Agents and the Majority Lenders hereby
waive the Specified Event of Default.  In
no event shall such waiver act as a waiver of any other requirement or hinder,
restrict or otherwise modify the rights and remedies of the Lender Group
following the occurrence of any other failure to comply with Section 8.9 of the
Credit Agreement, or the occurrence of any Default or Event of Default under
this Amendment, the Credit Agreement or any other Loan Document.

6.             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
Majority Lenders;

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

(c)           payment of an Upfront Fee to each
Lender executing this Amendment in an amount equal to 0.15% of such Lender’s
portion of the Revolving Loan Commitment, which 
shall be fully earned when due and non-refundable when paid.

7.             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

 4
 

 

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, 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)           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.

8.             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.

9.             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.

10.           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.

11.           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.

 5
 

 

12.           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.

13.           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.

14.           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.

15.           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]

 6
 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed 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:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO SECOND
AMENDMENT]

 7
 

 

 

	
  

  	
  PNC BANK, NATIONAL ASSOCIATION,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  LASALLE BUSINESS CREDIT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TEXTRON FINANCIAL CORPORATION,

  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS CREDIT,
  INC.,

  as a Lender 

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO SECOND
AMENDMENT]

 8

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