Credit Agreement (2006)Full Document 

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CREDIT AGREEMENT

among

GTSI CORP., as the Borrower,

The Persons party hereto as the Guarantors,

The financial institutions party hereto as the Lenders,

SUNTRUST BANK, as the Issuing Bank,

SUNTRUST BANK and BANK OF AMERICA, N.A.,
as Co-Collateral Agents,

BANK OF AMERICA, N.A.,
as Syndication Agent,

and

SUNTRUST BANK, as the Administrative Agent

SUNTRUST CAPITAL MARKETS, INC. and
BANC OF AMERICA SECURITIES LLC, as
Co-Lead Arrangers and Co-Book Runners

June 2, 2006




INDEX

 

 

 

Page

ARTICLE 1.

 

DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER INTERPRETIVE MATTERS

 

1

Section 1.1

 

Definitions

 

1

Section 1.2

 

Accounting Principles

 

27

Section 1.3

 

Other Interpretive Matters

 

27

 

 

 

 

 

ARTICLE 2.

 

THE LOANS AND THE LETTERS OF CREDIT

 

28

Section 2.1

 

Extension of Credit

 

28

Section 2.2

 

Manner of Borrowing and Disbursement of Loans

 

31

Section 2.3

 

Interest

 

35

Section 2.4

 

Fees

 

37

Section 2.5

 

Prepayment/Reduction of Commitment

 

39

Section 2.6

 

Repayment

 

40

Section 2.7

 

Notes; Loan Accounts

 

41

Section 2.8

 

Manner of Payment

 

42

Section 2.9

 

Reimbursement

 

45

Section 2.10

 

Pro Rata Treatment

 

45

Section 2.11

 

Application of Payments

 

46

Section 2.12

 

Use of Proceeds

 

47

Section 2.13

 

All Obligations to Constitute One Obligation

 

47

Section 2.14

 

Maximum Rate of Interest

 

47

Section 2.15

 

Letters of Credit

 

48

Section 2.16

 

Bank Products

 

52

 

 

 

 

 

ARTICLE 3.

 

GUARANTY

 

53

Section 3.1

 

Guaranty

 

53

Section 3.2

 

Special Provisions Applicable to Subsidiary Guarantors

 

57

 

 

 

 

 

ARTICLE 4.

 

CONDITIONS PRECEDENT

 

57

Section 4.1

 

Conditions Precedent to Initial Advance

 

57

Section 4.2

 

Conditions Precedent to Each Advance

 

61




 

Section 4.3

 

Conditions Precedent to Each Letter of Credit

 

62

 

 

 

 

 

ARTICLE 5.

 

REPRESENTATIONS AND WARRANTIES

 

63

Section 5.1

 

General Representations and Warranties

 

63

Section 5.2

 

Representations and Warranties Relating to Accounts

 

74

Section 5.3

 

Representations and Warranties Relating to Inventory

 

74

Section 5.4

 

Survival of Representations and Warranties, etc

 

74

 

 

 

 

 

ARTICLE 6.

 

GENERAL COVENANTS

 

74

Section 6.1

 

Preservation of Existence and Similar Matters

 

75

Section 6.2

 

Compliance with Applicable Law

 

75

Section 6.3

 

Maintenance of Properties

 

75

Section 6.4

 

Accounting Methods and Financial Records

 

75

Section 6.5

 

Insurance

 

75

Section 6.6

 

Payment of Taxes and Claims

 

76

Section 6.7

 

Visits and Inspections

 

76

Section 6.8

 

Conduct of Business

 

77

Section 6.9

 

ERISA

 

77

Section 6.10

 

Lien Perfection

 

77

Section 6.11

 

Location of Collateral

 

77

Section 6.12

 

Protection of Collateral

 

78

Section 6.13

 

Assignments and Records of Accounts

 

78

Section 6.14

 

Administration of Accounts

 

78

Section 6.15

 

The Blocked Account

 

79

Section 6.16

 

Further Assurances

 

80

Section 6.17

 

Broker’s Claims

 

81

Section 6.18

 

Indemnity

 

81

Section 6.19

 

Environmental Matters

 

82

Section 6.20

 

Assignment of Claims Act

 

83

Section 6.21

 

Formation of Subsidiaries

 

83

Section 6.22

 

Notifications Relating to Contracts with the Federal Government

 

83

2




 

ARTICLE 7.

 

INFORMATION COVENANTS

 

84

Section 7.1

 

Monthly and Quarterly Financial Statements and Information

 

84

Section 7.2

 

Annual Financial Statements and Information; Certificate of No Default

 

85

Section 7.3

 

Compliance Certificates

 

85

Section 7.4

 

Access to Accountants

 

86

Section 7.5

 

Additional Reports

 

86

Section 7.6

 

Notice of Litigation and Other Matters

 

87

 

 

 

 

 

ARTICLE 8.

 

NEGATIVE COVENANTS

 

89

Section 8.1

 

Funded Debt

 

89

Section 8.2

 

Guaranties

 

90

Section 8.3

 

Liens

 

90

Section 8.4

 

Restricted Payments and Purchases

 

90

Section 8.5

 

Investments

 

90

Section 8.6

 

Affiliate Transactions

 

91

Section 8.7

 

Liquidation; Change in Ownership, Name, or Year; Disposition or Acquisition of Assets; Etc

 

91

Section 8.8

 

Minimum Availability

 

92

Section 8.9

 

Minimum EBITDA

 

93

Section 8.10

 

Fixed Charge Coverage Ratio

 

93

Section 8.11

 

Capital Expenditures

 

93

Section 8.12

 

Limitation on Leases

 

94

Section 8.13

 

Sales and Leasebacks

 

94

Section 8.14

 

Amendment and Waiver

 

94

Section 8.15

 

ERISA Liability

 

94

Section 8.16

 

Prepayments

 

95

Section 8.17

 

Negative Pledge

 

95

Section 8.18

 

Inconsistent Agreements

 

95

 

 

 

 

 

ARTICLE 9.

 

DEFAULT

 

95

Section 9.1

 

Events of Default

 

95

3




 

Section 9.2

 

Remedies

 

98

 

 

 

 

 

ARTICLE 10.

 

THE ADMINISTRATIVE AGENT

 

99

Section 10.1

 

Appointment and Authorization

 

99

Section 10.2

 

Interest Holders

 

100

Section 10.3

 

Consultation with Counsel

 

100

Section 10.4

 

Documents

 

100

Section 10.5

 

Administrative Agent and Affiliates

 

100

Section 10.6

 

Responsibility of the Administrative Agent

 

101

Section 10.7

 

Action by Administrative Agent

 

101

Section 10.8

 

Notice of Default

 

101

Section 10.9

 

Responsibility Disclaimed

 

102

Section 10.10

 

Indemnification

 

102

Section 10.11

 

Credit Decision

 

103

Section 10.12

 

Successor Administrative Agent

 

103

Section 10.13

 

Administrative Agent May File Proofs of Claim

 

104

Section 10.14

 

Collateral

 

104

Section 10.15

 

Release of Collateral

 

104

 

 

 

 

 

ARTICLE 11.

 

MISCELLANEOUS

 

105

Section 11.1

 

Notices

 

105

Section 11.2

 

Expenses

 

107

Section 11.3

 

Waivers

 

107

Section 11.4

 

Set-Off

 

108

Section 11.5

 

Assignment

 

108

Section 11.6

 

Counterparts

 

111

Section 11.7

 

Under Seal; Governing Law

 

111

Section 11.8

 

Severability

 

111

Section 11.9

 

Headings

 

111

Section 11.10

 

Source of Funds

 

111

Section 11.11

 

Entire Agreement

 

111

Section 11.12

 

Amendments and Waivers

 

112

Section 11.13

 

Other Relationships

 

113

4




 

Section 11.14

 

Pronouns

 

113

Section 11.15

 

Disclosure

 

113

Section 11.16

 

Replacement of Lender

 

113

Section 11.17

 

Confidentiality

 

114

Section 11.18

 

Revival and Reinstatement of Obligations

 

114

 

 

 

 

 

ARTICLE 12.

 

YIELD PROTECTION

 

115

Section 12.1

 

Eurodollar Rate Basis Determination

 

115

Section 12.2

 

Illegality

 

115

Section 12.3

 

Increased Costs

 

116

Section 12.4

 

Effect On Other Advances

 

117

Section 12.5

 

Capital Adequacy

 

118

 

 

 

 

 

ARTICLE 13.

 

JURISDICTION, VENUE AND WAIVER OF JURY TRIAL

 

118

Section 13.1

 

Jurisdiction and Service of Process

 

118

Section 13.2

 

Consent to Venue

 

119

Section 13.3

 

Waiver of Jury Trial

 

119

 

EXHIBITS

 

 

 

 

 

Exhibit A

Form of Administrative Questionnaire

Exhibit B

Form of Assignment and Acceptance

Exhibit C

Form of Blocked Account Agreement

Exhibit D

Form of Borrowing Base Certificate

Exhibit E-1

Form of Collateral Access Agreement — Landlord

Exhibit E-2

Form of Collateral Access Agreement — Bailee

Exhibit F

Form of Compliance Certificate

Exhibit G

Form of Notice of Conversion/Continuation

Exhibit H

Form of Request for Advance

Exhibit I

Form of Request for Issuance of Letter of Credit

Exhibit J

Form of Revolving Loan Note

Exhibit K

Form of Guaranty Supplement

 

 

 

5




 

SCHEDULES

 

 

 

 

 

Schedule 1(a)

Commitment Ratios

Schedule 1(b)

Liens

Schedule 1.1(c)

Permitted Investments

Schedule 1.1(d)

Corporate Qualifications

Schedule 5.1(c)-1

Subsidiaries

Schedule 5.1(c)-2

Partnerships/Joint Ventures

Schedule 5.1(d)

Outstanding Capital Stock Ownership

Schedule 5.1(h)

Material Contracts

Schedule 5.1(i)

Labor Matters

Schedule 5.1(j)

Taxes

Schedule 5.1(m)

Investments/Guaranties as of the Agreement Date

Schedule 5.1(n)

Litigation

Schedule 5.1(o)

ERISA

Schedule 5.1(p)

Intellectual Property; Licenses and Certifications

Schedule 5.1(v)

Insurance

Schedule 5.1(w)

Brokers’ Fees

Schedule 5.1(x) – 1

Leased Real Property

Schedule 5.1(x) – 2

Owned Real Property

Schedule 5.1(y) – 1

Environmental Matters — Hazardous Materials

Schedule 5.1(y) – 2

Environmental Matters — Compliance

Schedule 5.1(y) – 3

Environmental Matters — Notices

Schedule 5.1(y) – 4

Environmental Matters — Handling of Hazardous Materials

Schedule 5.1(y) – 5

Environmental Matters — Actions and Orders

Schedule 5.1(y) – 6

Environmental Matters — Releases

Schedule 6.11

Location of Collateral

Schedule 6.15

Bank and Investment Accounts

Schedule 8.6

Affiliate Transactions

 

6




CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of June 2, 2006, is by and among GTSI CORP., a Delaware corporation (the “Borrower”), the Persons party hereto from time to time as Guarantors, the financial institutions party hereto from time to time as Lenders, SUNTRUST BANK, as the Issuing Bank, and SUNTRUST BANK, as the Administrative Agent, and SUNTRUST BANK and BANK OF AMERICA, N.A., as Co-Collateral Agents.

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Administrative Agent, the Issuing Bank and the Lenders make available to it the Commitments, on the terms and conditions set forth herein, to, among other things, refinance existing Funded Debt and to fund transaction costs and working capital needs of the Borrower; and

WHEREAS, the Administrative Agent, the Issuing Bank and the Lenders are willing to make the Commitments available to the Borrower upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS, ACCOUNTING PRINCIPLES AND
OTHER INTERPRETIVE MATTERS

Section 1.1             Definitions. For the purposes of this Agreement:

Account Debtor” shall mean any Person who is obligated to make payments in respect of an Account.

Accounts” shall mean all “accounts,” as such term is defined in the UCC, of each Borrower Party whether now existing or hereafter created or arising, including, without limitation, (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by chattel paper (as defined in the UCC) or instruments (as defined in the UCC)) (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all of each Borrower Party’s rights in, to and under all purchase orders or receipts for goods or services, (c) all of each Borrower Party’s rights to any goods represented by any of the foregoing




(including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all rights to payment due to a Borrower Party for property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered by such Borrower Party or in connection with any other transaction (whether or not yet earned by performance on the part of such Borrower Party), (e) all health care insurance receivables and (f) all collateral security of any kind, given by any Account Debtor or any other Person with respect to any of the foregoing.

ACH Transactions” shall mean any cash management or related services including the automated clearinghouse transfer of funds by the Co-Collateral Agents (or any Affiliate of a Co-Collateral Agent) for the account of the Borrower Parties pursuant to agreement or overdrafts.

additional amounts” shall have the meaning specified in Section 2.8(b)(i).

Additional Commitment Amount” shall have the meaning specified in Section 2.5(c).

Additional Lender” shall have the meaning specified in Section 2.5(c).

Administrative Agent” shall mean SunTrust Bank, acting as administrative agent for the Lender Group, and any successor Administrative Agent appointed pursuant to Section 10.12.

 “Administrative Agent’s Office” shall mean the office of the Administrative Agent located at 303 Peachtree Street, Second Floor, Atlanta, Georgia 30308, Attention: Lauren Carrigan, or such other office as may be designated by the Administrative Agent pursuant to the provisions of Section 11.1.

Administrative Questionnaire” shall mean a questionnaire substantially in the form of Exhibit A.

Advance” or “Advances” shall mean amounts of the Loans advanced by the Lenders to, or on behalf of, the Borrower pursuant to Section 2.2 on the occasion of any borrowing and shall include, without limitation, all Agent Advances and Swing Loans.

Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or that is a director, officer, manager or partner of such Person. For purposes of this definition, “control”, when used with respect to any Person, includes, without limitation, the direct or indirect beneficial ownership of ten percent (10%) or more of the

2




outstanding Equity Interests of such Person or the power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

Agent Advances” shall have the meaning specified in Section 2.1(f).

Aggregate Commitment Ratio” shall mean, with respect to any Lender, the ratio, expressed as a percentage, of (a) the unutilized Commitments plus Loans (other than Swing Loans and Agent Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing Loans and Agent Advances outstanding of such Lender, divided by (b) the sum of the aggregate unutilized Commitments plus Loans (other than Swing Loans and Agent Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing Loans and Agent Advances of all Lenders, which, as of the Agreement Date, are set forth (together with Dollar amounts thereof) on Schedule 1(a).

Aggregate Revolving Credit Obligations” shall mean, as of any particular time, the sum of (a) the aggregate principal amount of all Revolving Loans then outstanding, plus (b) the aggregate principal amount of all Swing Loans then outstanding, plus (c) the aggregate principal amount of all Agent Advances then outstanding, plus (d) the aggregate amount of all Letter of Credit Obligations then outstanding.

Agreement” shall mean this Credit Agreement, together with all Exhibits and Schedules hereto.

Agreement Date” shall mean the date as of which this Agreement is dated.

Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.

Applicable Law” shall mean, in respect of any Person, all provisions of constitutions, statutes, rules, regulations, and orders of governmental bodies or regulatory agencies applicable, whether by law or by virtue of contract, to such Person, and all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.

Applicable Margin” shall have the meaning specified in Section 2.3(c).

Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity that administers or manages a Lender.

Assignment and Acceptance” shall mean that certain form of Assignment and Acceptance attached hereto as Exhibit B, pursuant to which each Lender may, as further provided in Section 11.5, sell a portion of its Loans or Commitments.

Authorized Signatory” shall mean, with respect to any Borrower Party, such senior personnel of such Borrower Party as may be duly authorized and designated in

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