(ii) “Affiliate” shall mean any Person (1) which directly or indirectlycontrols, or is controlled by, or is under common control with the Company or a Subsidiary;(2) which directly or indirectly beneficially owns or holds five percent (5%) or more of anyclass of voting stock of the Company or any Subsidiary; or (3) five percent (5%) or more ofthe voting stock of which is directly or indirectly beneficially owned or held by theCompany or a Subsidiary. The term “control” means the possession, directly or indirectly, ofthe power to direct or cause the direction of the management and policies of a Person,whether through the ownership of voting securities, by contract, or otherwise.     (iii) “Available Principal Balance” shall mean an amount equal to the MaximumRevolving Commitment minus (a) the outstanding principal balance of Revolving Credit Loansand (b) the aggregate of both all amounts drawn and not repaid by Company under the Lettersof Credit, as defined in Section 2.7 as well as all remaining liabilities of Bank under saidLetters of Credit.     (iv) “Business Day” means any day other than a Saturday, Sunday, or other dayon which commercial banks in Chicago, Illinois are authorized or required to close under thelaws of the State of Illinois and, if the applicable day relates to a LIBOR Loan, LIBORInterest Period, or notice with respect to a LIBOR Loan, a day on which dealings in Dollardeposits are also carried on in the London interbank market and banks are open for businessin London.     (v) “Capital Lease” means all leases which have been or should be capitalizedon the books of the lessee in accordance with GAAP.     (vi) “Code” means the Internal Revenue Code of 1986, as amended from time totime, and the regulations and published interpretations thereof.     (vii) “Company Demand Deposit Account” shall mean that certain demand depositaccount maintained by the Company at the Bank.     (viii) “Debt” means (1) indebtedness or liability for borrowed money; (2)obligations evidenced by bonds, debentures, notes, or other similar instruments; (3)obligations for the deferred purchase price of property or services (including tradeobligations); (4) obligations as lessee under Capital Leases; (5) current liabilities inrespect of unfunded vested benefits under Plans covered by ERISA; (6) obligations underletters of credit; (7) obligations under acceptance facilities; (8) all guaranties,endorsements (other than for collection of deposit in the ordinary course of business), andother contingent obligations to purchase, to provide funds for payment, to supply funds toinvest in any Person or entity, or otherwise to assure a creditor against loss; and (9)obligations secured by any Liens, whether or not the obligations have been assumed.     (ix) “Default” shall mean the occurrence or existence of any one or more of thefollowing events.     (a) The Company fails to pay any of the “Liabilities” (as hereinafter defined)when due;
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     (b) Company fails or neglects to perform, keep or observe any of the covenants,conditions or agreements contained in this Agreement (other than those as stated inSections 5.2, 5.3 and 5.10, and all negative covenants and financial covenantscontained in Section 6 and Section 7 hereof to which no notice and cure period areapplicable; and those stated in Section 5.11 which shall not be considered a groundof Default unless the failure to comply with same continues for a period of five (5)days after written notice of same from the Bank to the Company) or in any of theother Loan Documents executed by Company and said failure continues for a period ofthirty (30) days after written notice of same from the Bank to the Company;     (c) Any warranty or representation now or hereafter made by the Company inconnection with this Agreement or any of the other Loan Documents is untrue orincorrect in any material respect, or any schedule, certificate, statement, report,financial data, notice, or any material writing furnished at any time by the Companyto the Bank is untrue or incorrect in any material respect, on the date as of whichthe facts set forth therein are stated or certified;     (d) A proceeding under any bankruptcy, reorganization, arrangement of debt,insolvency, readjustment of debt or receivership law or statute is filed againstCompany which is not dismissed within sixty (60) days of its filing, or a proceedingunder any bankruptcy, reorganization, arrangement of debt, insolvency, readjustmentof debt or receivership law or statute is filed by Company or the Company makes anassignment for the benefit of creditors or Company takes any corporate action toauthorize any of the foregoing;     (e) Company voluntarily or involuntarily dissolves or is dissolved, terminatesor is terminated;     (f) Company becomes insolvent or fails generally to pay its debts as theybecome due;     (g) A default under any of the other Loan Documents;     (h) One or more judgments, decrees, or judicial orders for the payment of moneywhich in the aggregate, in any fiscal year of Company, exceeds $250,000.00 shall berendered against the Company or any of its Subsidiaries, and such judgments,decrees, or judicial orders shall continue unsatisfied and in effect for a period ofthirty (30) consecutive days without being vacated, discharged, satisfied, or stayedor bonded pending appeal;     (i) The Guaranty shall at any time after its execution and delivery and for anyreason cease to be in full force and effect or shall be declared null and void byany court of competent jurisdiction, or the validity or enforceability thereof shallbe contested by Guarantor or Guarantor shall deny it has any further liability orobligation under, or shall fail to perform its obligations under the Guaranty;
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     (j) Any of the following events shall occur or exist with respect to theCompany or any Subsidiary under the Employee Retirement Income Security Act of 1974,as amended from time to time and the regulations and published interpretationthereof (“ERISA”): any Reportable Event shall occur; any Prohibited Transactionshall occur; a notice of intent to terminate a Plan shall be filed, or a Plan shallbe terminated; or circumstances shall exist which constitute grounds entitling thePension Benefit Guaranty Corporation (the “PBGC”) to institute proceedings toterminate a Plan, or the PBGC shall institute such proceedings; and in each caseabove, such event or condition, together with all other events or conditions, ifany, could subject the Company or any Subsidiary to any tax, penalty, or otherliability;     (k) If the Bank receives its first notice of a hazardous discharge of which theCompany has knowledge or an environmental complaint of which the Company hasknowledge from a source other than the Company, and the Bank does not receive notice(which may be given in oral form, provided same is followed with all due dispatch bywritten notice given by Certified Mail, Return Receipt Requested) of such hazardousdischarge or environmental complaint from the Company, as applicable within three(3) business days of the time the Bank first receives said notice from a sourceother than the Company; or if any federal, state or local agency asserts or createsa lien upon any or all of the assets, equipment, property, leaseholds or otherfacilities of the Company by reason of the occurrence of a hazardous discharge or anenvironmental complaint; or if any federal, state or local agency asserts a claimagainst the Company and/or the assets, equipment, property, leaseholds or otherfacilities of the Company for damages or cleanup costs relating to a hazardousdischarge or an environmental complaint; provided, however, that such claim shallnot constitute a Default if, within (10) business days of the occurrence giving riseto the claim, (a) the Company can, by providing to the Bank a written report and/orevaluation of the steps being taken by the Company in connection with said claim orhazardous discharge, prove to the Bank’s reasonable satisfaction that the Companyhas commenced and is diligently pursuing either: (i) a cure or correction of theevent which constitutes the basis for the claim, and continues diligently to pursuesuch cure or correction to completion or (ii) proceedings for an injunction, arestraining order or other appropriate emergent relief preventing such agency oragencies from asserting such claim, which relief is granted within twenty (20)business days of the occurrence giving rise to the claim and the injunction, orderor emergency relief is not thereafter resolved or reversed on appeal; and (b) ineither of the foregoing events, the Company has posted a bond, letter of credit orother security satisfactory in form, substance and amount to both the Bank and theagency or entity asserting the claim to secure the proper and complete cure orcorrection of the event which constitutes the basis for the claim; or     (x) “Eurocurrency Reserve Requirement” means, for any LIBOR Loan for anyInterest Period therefor, the daily average of the stated maximum rate (expressed as adecimal) at which reserves (including any marginal, supplemental, or emergency reserves) arerequired to be maintained during such Interest Period under Regulation D by the Bank against“Eurocurrency Liabilities” (as such term is used in Regulation D) but without benefit
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or credit of proration, exemptions, or offsets that might otherwise beavailable to the Bank from time to time under Regulation D. Without limiting the effect ofthe foregoing, the Eurocurrency Reserve Requirement shall reflect any other reservesrequired to be maintained by the Bank against (1) any category of liabilities that includesdeposits by reference to which the LIBOR Interest Rate for LIBOR Loans is to be determined;or (2) any category of extension of credit or other assets that include LIBOR Loans.     (xi) “GAAP” means generally accepted accounting principles in the UnitedStates.     (xii) “Guarantor” means Diamond Management & Technology Consultants NA, Inc., aDelaware corporation.     (xiii) “Guaranty” means the 2007 Restated Guaranty of even date herewithexecuted by Guarantor.     (xiv) “Interest Period” means with respect to any LIBOR Loan, the periodcommencing on the date such loan is made and ending, as the Company may select, pursuant toSection 2, on the numerically corresponding day in the first, second, third or sixthcalendar month thereafter, except that each such Interest Period that commences on the lastBusiness Day of a calendar month (or on any day for which there is no numericallycorresponding day in the appropriate subsequent calendar month) shall end on the lastBusiness Day of the appropriate subsequent calendar month provided that all of the foregoingprovisions relating to Interest Periods are subject to the following:     (a) No Interest Period may extend beyond the Termination Date; and     (b) If an Interest Period would end on a day that is not a Business Day, suchInterest Period shall be extended to the next Business Day unless, in the case of aLIBOR Loan, such Business Day would fall in the next calendar month, in which eventsuch Interest Period shall end on the immediately preceding Business Day.     (xv) “Liabilities” shall mean all of Company’s liabilities, obligations, andindebtedness to Bank of any and every kind and nature, whether heretofore, now or hereafterowing, arising, due or payable and howsoever evidenced, created, incurred, acquired, orowing, whether primary, secondary, direct, contingent, fixed or otherwise (includingobligations of performance and all Rate Hedging Obligations) whether arising under or inaccordance with the Loan Documents or otherwise.     (xvi) “LIBOR Interest Rate” means, with respect to each Interest Period, therate of interest per annum determined by the Bank obtained by dividing (a) the TelerateScreen Rate for such Interest Period or (b) if the Telerate Screen Rate is unavailable atthe time the LIBOR rate is to be determined, a rate determined on the basis of the offeredrates for deposits in U.S. dollars for a period approximately equal to such Interest Periodwhich appear on the Reuters Screen LIBOR Page, as of 11:00 a.m., London time, on the daythat is two London banking days preceding the beginning of such Interest Period by(c) a percentage equal to 100 percent minus the stated maximum rate (expressed as apercentage)
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as prescribed by the Federal Reserve Board of all reserve requirements (including,without limitation, any Eurocurrency Reserve Requirements, any marginal, emergency,supplemental, special or other reserves) applicable on the first day of such Interest Periodto any member bank of the Federal Reserve System in respect of Eurodollar funding orliabilities.     (xvii) “LIBOR Loan” means any Loan when and to the extent that the interestrate therefor is determined by reference to the LIBOR Interest Rate.     (xviii) “Lien” means any mortgage, deed of trust, pledge, security interest,hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), orpreference, priority, or other security agreement or preferential arrangement, charge, orencumbrance of any kind or nature whatsoever (including, without limitation, any conditionalsale or other title retention agreement, any financing lease having substantially the sameeconomic effect as any of the foregoing, and the filing of any financing statement under theIllinois Uniform Commercial Code or comparable law of any jurisdiction to evidence any ofthe foregoing).     (xix) “Loan Document(s)” means this Agreement, the Revolving Note, and theGuaranty.     (xx) “Maximum Revolving Commitment” shall mean $10,000,000.00.     (xxi) “PBGC” means the Pension Benefit Guaranty Corporation or any entitysucceeding to any or all of its functions under ERISA.     (xxii) “Permitted Liens” shall mean (i) Liens securing the payment of taxes,either not yet due or the validity amount or imposition of which is being contested in goodfaith by appropriate proceedings, (ii) the Liens and security interests in favor of theBank, (iii) currently existing liens as of the date of the Agreement and (iv) purchase moneyliens to third parties in connection with new equipment purchases or Capital Leases providedthe aggregate purchase price for said equipment and total lease payments under any CapitalLeases does not exceed $3,000,000.00 in any fiscal year of Company.     (xxiii) “Plan” means any pension plan which is covered by Title IV of ERISA andin respect of which the Company or a Commonly Controlled Entity is an “employer” as definedin Section 3(5) of ERISA.     (xxiv) “Person” shall mean any individual, sole proprietorship, partnership,joint venture, trust, unincorporated organization, association, corporation, institution,entity, party, or government (whether national, federal, state, provincial, county, city,municipal or otherwise, including, without limitation, any instrumentality, division,agency, body or department thereof).     (xxv) “Prime Rate” shall mean the rate of interest announced from time to timeby Bank at its Principal Office as its Prime Rate. Any change in the Prime Rate shall beeffective as of the date announced. The use of the term “Prime Rate” does not mean nor
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shall it be implied that said rate is a preferred rate of interest or one offered byBank only to its most creditworthy customers.     (xxvi) “Prime Loan” means any Loan when and to the extent that the interestrate therefor is determined by reference to the Prime Rate.     (xxvii) “Principal Office” means the Bank’s office at 120 South LaSalle Street,Chicago, Illinois.     (xxviii) “Prohibited Transaction” means any transaction set forth in Section406 of ERISA or Section 4975 of the Code.     (xxix) “Rate Hedging Obligations” shall mean any and all obligations of theCompany or any Subsidiary, whether absolute or contingent and howsoever and whensoevercreated, arising, evidenced or acquired (including all renewals, extensions andmodifications thereof and substitutions therefor), under (i) any and all agreements with theBank and/or any of the Bank’s subsidiaries or affiliates designed to protect the Company orany Subsidiary from the fluctuations of interest rates, exchange rates or forward ratesapplicable to such party’s assets, liabilities or exchange transactions, including, but notlimited to: interest rate swap agreements, dollar-denominated or cross-currency interestrate exchange agreements, forward currency exchange agreements, interest rate cap, floor orcollar agreements, forward rate currency agreements or agreements relating to interest rateoptions, puts and warrants, and (ii) any and all agreements with the Bank and/or any of theBank’s subsidiaries or affiliates relating to cancellations, buy backs, reversals,terminations or assignments of any of the foregoing.     (xxx) “Regulation D” means Regulation D of the Board of Governors of theFederal Reserve System as amended or supplemented from time to time.     (xxxi) “Reportable Event” means any of the events set forth in Section 4043 ofERISA.     (xxxii) “Revolving Credit Loans” shall have the meaning assigned to such termin Section 2.1.     (xxxiii) “Revolving Note” shall mean that certain 2007 Restated Ten Million andNo/100 Dollar ($10,000,000.00) note dated of even date herewith executed by Company and madepayable to the order of Bank.     (xxxiv) “Subsidiary” shall mean, as to the Company, a corporation of whichshares of stock having ordinary voting power (other than stock having such power only byreason of the happening of a contingency) to elect a majority of the board of directors orother managers of such corporation are at the time owned, or the management of which isotherwise controlled, directly, or indirectly through one or more intermediaries, or both,by the Company.
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     (xxxv) “Telerate Screen Rate” means, for any Interest Period to be applicableto a LIBOR Loan, the rate for deposits in U.S. dollars for a period approximately equal tosuch Interest Period which appears on Page 3750 of the Dow Jones Telerate Service (or suchother page that may replace that page on such service for the purpose of displayingcomparable rates) as of 11:00 a.m., London time, on the day that is two London banking dayspreceding the beginning of such Interest Period.     (xxxvi) “Termination Date” shall mean July 31, 2009.     1.2. Accounting Terms. Any accounting terms used in this Agreement which are notspecifically defined herein shall have the meanings customarily given them in accordance with GAAP.     1.3. Others Defined in Illinois Uniform Commercial Code. All other terms contained inthis Agreement (and which are not otherwise specifically defined herein) shall have the meaningsprovided by the Uniform Commercial Code of the State of Illinois (the “Commercial Code”) to theextent the same are used or defined therein.2. CREDIT.     2.1. Revolving Loan. If a Default does not exist, and subject to the provisions ofArticle 3 below, the Bank shall, until but not after the Termination Date, advance to the Company,on a revolving credit basis loans (the “Revolving Credit Loans”), in an amount not to exceed at anytime the Available Principal Balance. Subject to Section 2.2, each Revolving Credit Loan to theCompany shall, on the day of such advance be deposited, in immediately available funds, in theCompany’s Demand Deposit Account with the Bank, or in such other account as the Company may, fromtime to time, designate. The indebtedness of Company under all Revolving Credit Loans shall beevidenced by the Revolving Note. Each Revolving Credit Loan shall be in an amount not less thanTen Thousand and No/100 ($10,000.00) Dollars in connection with each Prime Loan and One HundredThousand and No/100 ($100,000.00) Dollars in connection with each LIBOR Loan. Within the terms ofthis Agreement, the Company may borrow, repay pursuant to Section 2.6, and reborrow under thisSection 2.1. On such terms and conditions as set forth herein, the Revolving Credit Loans may beoutstanding as Prime Loans or LIBOR Loans.     2.2. Maximum Principal Balance of Revolving Loan. The aggregate outstanding principalbalance of all Revolving Credit Loans together with the aggregate of both all amounts drawn and notrepaid by Company under the Letters of Credit as well as the remaining liability of Bank under theLetters of Credit shall at no time exceed the Maximum Revolving Commitment. The aggregateoutstanding principal balance of the Revolving Credit Loans at any time shall be the amountsadvanced from time to time to Company and not repaid under Section 2.6. The Company agrees that ifat any time any such excess shall arise, the Company shall upon written request of Bank immediatelypay to the Bank such amount as may be necessary to eliminate such excess.     2.3. Notice and Manner of Borrowing. The Company shall give the Bank written ortelefax notice (effective upon receipt) of any Revolving Credit Loans under this Agreement, atleast one (1) Business Day before each Prime Loan, and at least two (2) Business Days before, butno
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earlier than five (5) Business Days before, each LIBOR Loan, specifying: (1) the date of suchLoan;(2) the amount of such Loan; (3) the type of Loan; and (4) in the case of a LIBOR Loan, theduration of the Interest Period applicable thereto. Not later than 1:00 P.M. CST on the date ofsuch Revolving Credit Loan and upon fulfillment of the applicable conditions set forth herein, theBank will make such Revolving Credit Loan available to the Company in immediately available fundsby crediting the amount thereof to the Company Demand Deposit Account with the Bank.     2.4. Conversion and Renewals. The Company may elect from time to time to convert allor a part of one type of Revolving Credit Loan into another type of Loan or to renew all or part ofa Revolving Credit Loan by giving the Bank notice at least one (1) Business Day before theconversion into or renewal of a Prime Loan, and at least two (2) Business Days before theconversion into or renewal of a LIBOR Loan, specifying: (1) the renewal or conversion date; (2) theamount of the Loan to be converted or renewed; (3) in the case of conversions, the type of Loan tobe converted into; and (4) in the case of renewals of or a conversion into LIBOR Loans, theduration of the Interest Period applicable thereto; provided that (a) the minimum principal amountof each Loan outstanding after a renewal or conversion shall be $100,000.00 in the case of LIBORLoans; and (b) LIBOR Loans can be converted only on the last day of the Interest Period for suchLoan. All notices given under this Section 2.5 shall be irrevocable and shall be given not laterthan 10:00 A.M. CST on the day which is not less than the number of Business Days specified abovefor such notice. If the Company shall fail to give the Bank the notice as specified above for therenewal or conversion of a LIBOR Loan prior to the end of the Interest Period with respect thereto,such LIBOR Loan shall automatically be converted into a Prime Loan on the last day of the InterestPeriod for such Revolving Credit Loan.     2.5. Interest. The Company shall pay interest to the Bank on the outstanding andunpaid principal amount of the Revolving Credit Loans made under this Agreement at a rate per annumas follows: (i) For a Prime Loan at a rate equal to the Prime Rate minus fifty (50) basispoints; and  (ii) For a LIBOR Loan at a rate equal to the LIBOR Interest Rate plus seventy-five(75) basis points.     Any change in the interest rate based on the Prime Rate resulting from a change in the PrimeRate shall be effective as of the opening of business on the day on which such change in the PrimeRate becomes effective.     Interest on each Prime Loan shall be calculated on the basis of a year of 360 days for theactual number of days elapsed. Interest on each LIBOR Loan shall be calculated on the basis of ayear of 360 days for the actual number of days elapsed.     Interest on each LIBOR Loan shall be payable on the last day of the Interest Period of theLIBOR Loan. Interest on each Prime Loan shall be payable monthly on the first day of each monthcommencing with the first month following the disbursement of the Prime Loan.
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     Any principal amount not paid when due (at maturity, by acceleration or otherwise) shall bearinterest thereafter until paid in full, payable on demand, at a rate per annum equal to four (4%)percent over the then applicable interest rate due under each Loan as changing from time to time(the “Default Rate”).     2.6. Prepayments. The Company may, upon at least one (1) Business Day notice to theBank in the case of Prime Loans, and at least two (2) Business Days notice to the Bank in the caseof LIBOR Loans, prepay the Revolving Note in whole or in part with accrued interest to the date ofsuch prepayment on the amount prepaid, provided that LIBOR Loans may be prepaid only on the lastday of the Interest Period for such LIBOR Loan.     2.7. Letters of Credit. In addition to requesting Revolving Credit Loans under thisAgreement, the Company shall have the right to request issuance by the Bank of stand-by letters ofcredit (the “Letters of Credit”). In connection with the Letters of Credit it is agreed:     (i) That Company shall execute such forms or documents as is customarily required byBank in connection with the issuance of Letters of Credit.     (ii) Company shall pay the Stand-By Letter of Credit Fees described in Section 2.8hereof.     (iii) Any amount drawn under any Letter of Credit shall immediately be repaid byCompany to Bank.     (iv) The aggregate amount of both all amounts drawn and not repaid by Company under theLetters of Credit as well as the remaining outstanding liability of Bank under all Lettersof Credit issued by Bank shall be included in determining the Maximum Principal Balance ofall Revolving Credit Loans as described in Section 2.2 hereof.     (v) Bank shall be under no obligation to issue or to renew any Letter of Creditcontaining an expiration date beyond the Termination Date.     (vi) Following a Default, Bank shall have the right in connection with the collectionof all other amounts due under the Revolving Note to also add to and collect in connectionwith said other amounts, an amount equal to the remaining liability of the Bank under theLetters of Credit (the “Letter of Credit Cash Collateral”) which shall be held by Bank andat Bank’s sole discretion said Letter of Credit Cash Collateral shall be used to eitherrepay such other of the Liabilities as Bank may elect in its sole discretion or to reimburseBank for any draws of any beneficiary under a Letter of Credit. At such time as allLiabilities have been paid in full and Bank has no further obligations under this Agreementor the Letters of Credit, any remaining portion of the Letter of Credit Cash Collateralshall be returned to Company.     (vii) Any amount drawn on any Letter of Credit by any beneficiary thereof and notimmediately repaid to Bank by Company shall bear interest at a floating rate of interestequal to the Base Rate plus four (4%) percent from the date drawn until repaid.
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     (viii) The aggregate total face amount on all Letters of Credit issued and outstandingunder this Agreement shall not exceed Ten Million and No/100 Dollars ($10,000,000.00).     2.8. Stand-By Letter of Credit Fees. The Company agrees to pay to the Bank Stand-ByLetter of Credit Fees equal to one (1%) percent per annum of the face amount of each Letter ofCredit which shall be paid in quarterly installments equal to twenty-five (25%) of the Stand-ByLetter of Credit Fee for the Letter of Credit commencing on the date of the issuance of the Letterof Credit and continuing on the first day of each third calendar month thereafter until such timeas the Bank has no further liability under any Letter of Credit.     2.9. Commitment Fee. [Intentionally Deleted]     2.10. Method of Payment. The Company shall make each payment under this Agreement andunder the Revolving Note not later than 1:00 P.M. CST on the date when due in lawful money of theUnited States to the Bank at its Principal Office in immediately available funds. The Companyhereby authorizes the Bank, if and to the extent payment is not made when due under this Agreementor under the Revolving Note, to charge from time to time against any account of the Company withthe Bank any amount so due. Whenever any payment to be made under this Agreement or under theRevolving Note shall be stated to be due on a day other than a Business Day, such payment shall bemade on the next succeeding Business Day, and such extension of time shall in such case be includedin the computation of the payment of interest, as the case may be, except, in the case of a LIBORLoan, if the result of such extension would be to extend such payment into another calendar month,such payment shall be made on the immediately preceding Business Day.     2.11. Use of Proceeds. The Company will use the proceeds of the Loans for generalworking capital purposes and to provide working capital for its Subsidiaries. The Company will notuse any of the proceeds of the Loans to purchase or carry any “margin stock” (as defied inRegulation U of the Board of Governors of the Federal Reserve System) or to make any Acquisitionunless it constitutes a Permitted Acquisition. The Company’s use of the proceeds of any advancesand readvances made by the Bank to the Company pursuant to this Agreement are, and will continue tobe, legal and proper corporate uses (duly authorized by its Board of Directors, if necessarypursuant to applicable corporate law, rule or regulation) and such uses are and will be consistentwith all applicable laws and statutes, as in effect as of the date hereof.     2.12. Illegality. Notwithstanding any other provision in this Agreement, if the Bankdetermines that any applicable law, rule, or regulation, or any change therein, or any change inthe interpretation or administration thereof by any governmental authority, central bank, orcomparable agency charged with the interpretation or administration thereof, or compliance by theBank with any request or directive (whether or not having the force of law) of any such authority,central bank, or comparable agency shall make it unlawful or impossible for the Bank to (1)maintain its commitment under this Agreement, then upon notice to the Company by the Bank thecommitment of the Bank under this Agreement shall terminate; or (2) maintain or fund its LIBORLoans, then upon notice to the Company by the Bank the outstanding principal amount of the LIBORLoans, together with interest accrued thereon, and any other amounts payable to the Bank under this
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Agreement shall be repaid (a) upon demand of the Bank if such change or compliance with suchrequest, in the judgment of the Bank, requires immediate repayment; or (b) at the expiration of thelast Interest Period to expire before the effective date of any such change or request, provided,however, that notwithstanding any provision herein, the Company shall not have more than ninety(90) days following the Bank’s notice to repay amounts payable pursuant to this Section 2.12.     2.13. Increased Cost. The Company shall pay to the Bank from time to time suchamounts as the Bank may determine to be necessary to compensate the Bank for any costs incurred bythe Bank which the Bank reasonably determines are directly attributable to its making ormaintaining any LIBOR Loans hereunder or its obligation to make any such Loans hereunder, or anyreduction in any amount receivable by the Bank under this Agreement or the Revolving Note inrespect of any such loans or such obligation (such increases in costs and reductions in amountsreceivable being herein called “Additional Costs”), resulting from any change after the date ofthis Agreement in U.S. federal, state, municipal, or foreign laws or regulations (includingRegulation D and any Eurocurrency Reserve Requirements), or the adoption or making after such dateof any interpretations, directives, or requirements applying to a class of banks including the Bankof or under any U.S. federal, state, municipal, or any foreign laws or regulations (whether or nothaving the force of law) by any court or governmental or monetary authority charged with theinterpretation or administration thereof (“Regulatory Change”), which: (1) changes the basis oftaxation of any amounts payable to the Bank under this Agreement or the Revolving Note in respectof any of such Loans (other than taxes imposed on the overall net income of the Bank for any ofsuch Loans by the jurisdiction where the Principal Office is located); or (2) imposes or modifiesany reserve, special deposit, compulsory loan, or similar requirements relating to any extensionsof credit or other assets of, or any deposits with or other liabilities of, the Bank (including anyof such Loans or any deposits referred to in the definition of Eurocurrency Reserve Requirements);or (3) imposes any other conditions affecting this Agreement or the Revolving Note (or any of suchextensions of credit or liabilities). The Bank will notify the Company in writing of any eventoccurring after the date of this Agreement which will entitle the Bank to compensation pursuant tothis Section 2.13 as promptly as practicable after it obtains knowledge thereof and determines torequest such compensation.     Determinations by the Bank for purposes of this Section 2.13 of the effect of any RegulatoryChange on its costs of making or maintaining Loans or on amounts receivable by it in respect ofLoans, and of the additional amounts required to compensate the Bank in respect of any AdditionalCosts, shall be conclusive, provided that such determinations are made on a reasonable basis, arenot subject to manifest error and the written basis for said determinations are given to Company.     2.14. Risk-Based Capital. In the event the Bank determines that (1) compliance withany judicial, administrative, or other governmental interpretation of any law or regulation or (2)compliance by the Bank or any corporation controlling the Bank with any guideline or request fromany central bank or other governmental authority (whether or not having the force of law) has theeffect of requiring an increase in the amount of capital required or expected to be maintained bythe Bank or any corporation controlling the Bank, and the Bank determines that such increase isbased upon its obligations hereunder, and other similar obligations, the Company shall pay to theBank such additional amount as shall be certified by the Bank to be the amount allocable to theBank’s obligations to the Company hereunder. The Bank will notify the Company in writing of anyeventoccurring after the date of this Agreement that will entitle the Bank to compensation pursuantto this
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Section 2.14 as promptly as practicable after it obtains knowledge thereof and determinesto request such compensation.     Determinations by the Bank for purposes of this Section 2.14 of the effect of any increase inthe amount of capital required to be maintained by the bank and of the amount allocable to theBank’s obligations to the Company hereunder shall be conclusive, provided that such determinationsare made on a reasonable basis, are not subject to manifest error and the written basis for saiddeterminations are given to Company.     2.15. Funding Loss Indemnification. The Company shall pay to the Bank, upon therequest of the Bank, such amount or amounts as shall be sufficient (in the reasonable opinion ofthe Bank) to compensate it for any loss, cost or expense incurred as a result of: (1) Any payment of a LIBOR Loan on a date other than the last day of the InterestPeriod for such Loan including, but not limited to, acceleration of the Loans by theBank pursuant to Section 8.1; or  (2) Any failure by the Company to borrow or convert, as the case may be, a LIBORLoan on the date for borrowing or conversion, as the case may be, specified in therelevant notice under Section 2.3 or 2.4, as the case may be.     2.16. Availability of LIBOR Loans. If Bank determines that maintenance of its LIBORLoans would violate any applicable law, rule, regulation, or directive, whether or not having theforce of law, or if Bank determines that deposits of a type and maturity appropriate to match fundLIBOR Loans are not available to it then Bank shall forthwith give notice thereof to Borrower,whereupon, until Bank notifies Borrower that the circumstances giving rise to such suspension nolonger exist, the obligations of the Bank to make LIBOR Loans shall be suspended.3. CONDITIONS OF ADVANCES.     Notwithstanding any other provisions contained in this Agreement, the making of any advance inconnection with any Revolving Loan or the issuance of any Letters of Credit shall be conditionedupon the following:     3.1. Certification and Delivery of Documents     (i) The following statements shall be true and the Bank shall have received acertificate signed by a duly authorized officer of Company dated the date of such advance,stating that:     (a) The representation and warranties contained in Section 4 of this Agreement,are correct on and as of the date of such advance as though made on and as of suchdate; and     (ii) No Default has occurred and is continuing, or would result from such advance; and
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     (iii) The Bank shall have received the executed Loan Documents in a form and contentreasonably acceptable to Bank.     (iv) The Bank shall have received such other approvals, opinions, or documents as theBank may reasonably request including but not limited to an opinion of counsel to Company,in a form and content acceptable to Bank; and tax, judgment, pending litigation and UniformCommercial Code searches showing no matters objectionable to Bank.     3.2. Financial Condition. No material adverse change, as determined by Bank in itsreasonable discretion, in the financial condition or operations of the Company or any Subsidiary,shall have occurred and be continuing at any time or times subsequent to, as applicable the mostrecent financial statement provided by the Company. In no event shall Bank’s agreement to continueto honor requests for advances be deemed to constitute a waiver by the Bank of its absolute rightat any time in the future to notify the Company of a material adverse change in the financialcondition or operations of the Company or any Subsidiary, based upon information in the possessionof Bank prior to any advance of funds hereunder.     3.3. No Default. No Default shall have occurred and be continuing.     3.4. Other Requirements. Bank shall have received, in form and substance reasonablysatisfactory to Bank, all certificates, orders, authorities, consents, affidavits, schedules,instruments, security agreements, financing statements, mortgages, financial statements includingany other documents which carry out the purposes of this Agreement and which are provided forhereunder, or which Bank may at any time reasonably request.4. WARRANTIES.     The Company represents and warrants that as of the date of the execution of this Agreement,and continuing so long as any Liabilities remain outstanding, and (even if there shall be noLiabilities outstanding) so long as this Agreement remains in effect:     4.1. Corporate Existence. Company and any Subsidiary are corporations duly organizedand in good standing under the laws of the state of their incorporation or such other state as maybe permitted under this Agreement. Company and any Subsidiary is duly qualified as a foreigncorporation and in good standing in all other states where the nature and extent of the businesstransacted by it or the ownership of its assets makes such qualification necessary.     4.2. Corporate Authority. The execution and delivery by the Company of this Agreementand of all of the other Loan Documents by Company or Guarantor to which either is a party and theperformance of the Company’s obligations hereunder and of Company’s and Guarantor’s obligationsthereunder: (i) are within the Company’s and Guarantor’s corporate powers; (ii) are dulyauthorized by the Company’s and Guarantor’s Board of Directors and, if necessary, the Company’sstockholders; (iii) are not in contravention of the terms of the Company’sor Guarantor’s Articles of Incorporation, or By-Laws, or of any indenture, agreement orundertaking to which the Company or Guarantor is a party or by which the Company or Guarantor orany of its property is bound; (iv) do
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not, as of the execution hereof, require any governmentalconsent, registration or approval; (v) to the best of the Company’s knowledge, do not contraveneany contractual or governmental restriction binding upon the Company or Guarantor.     4.3. Financial Data. The financial statements to be furnished to the Bank will be inaccordance with the books and records of the Company and will fairly present the financialcondition of the Company at the dates thereof and the results of operations for the periodsindicated (subject, in the case of unaudited financial statements, to normal year-end adjustments),and such financial statements will be prepared in conformity with generally accepted accountingprinciples consistently applied throughout the periods involved. All information, reports andother papers and data furnished to the Bank are or will be, at the time the same are so furnishedto the Bank, accurate, correct and complete in all material respects.     4.4. Collateral. [Intentionally Deleted].     4.5. Solvency. The Company and any Subsidiary is solvent, is able to pay its debts asthey become due and has capital sufficient to carry on its businesses and all business in which itis about to engage. The Company will not be rendered insolvent by the execution and delivery ofthis Agreement or any of the Loan Documents to which it is a signatory or by the transactionscontemplated hereunder or thereunder.     4.6. Chief Place of Business. As of the execution hereof, the principal place ofbusiness of the Company and Guarantor is located at 875 North Michigan Avenue, Suite 3000, Chicago,Illinois 60611. If any change in such location occurs, the Company and Guarantor shall promptlynotify the Bank thereof. As of the execution hereof, the books and records of the Company andGuarantor and all chattel paper and all records of account are located at the aforesaid office ofthe Company and Guarantor and if any change in such location occurs, the Company and Guarantorshall promptly notify the Bank thereof.     4.7. Other Corporate Names. As of the date hereof, Company is not using any corporateor fictitious names other than the corporate name shown on the Company’s Articles of Incorporationor those of its Subsidiaries.     4.8. Tax Liabilities. The Company will file and will cause any Subsidiary to file allfederal, state and local tax reports and returns required by any law or regulation to be filed byit or said Subsidiary, except for extensions duly obtained, and has either duly paid all taxes,duties and charges indicated due on the basis of such returns and reports, or made adequateprovision for the payment thereof, and the assessment of any material amount of additional taxes inexcess of those paid and reported is not reasonably expected. The reserves for taxes reflected onthe balance sheets of Company submitted to Bank in accordance with this Agreement will be adequatein amount for the payment of all liabilities for all taxes (whether or not disputed) of the Companyaccrued through the date of such balance sheet. There are no material unresolved questions orclaims concerning any tax liability of the Company that have not been properly reserved for on thebalance sheets of the Company.
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     4.9. Contingent Obligations. Except as specifically referenced in the financialstatements described in this Agreement and delivered to Bank prior to the date hereof or other thanas permitted by this Agreement, Company and any Subsidiary has not guaranteed the obligation of anyother Person.     4.10. Margin Security. The Company’s execution and delivery of this Agreement andeach of the Loan Documents to which it is a party does not directly or indirectly violate or resultin a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulationsissued pursuant thereto, including without limitation, Regulation U, G, T or X of the Board ofGovernors of the Federal Reserve System (12 CFR 221, 207, 220 and 224, respectively; “RegulationU”, “Regulation G”, “Regulation T” and “Regulation X”, respectively) and Company does not own orintend to purchase or carry any “margin security,” as defined in Regulations U, G, T or X.     4.11. Survival of Warranties. All representations and warranties contained in thisAgreement or any of the other Loan Documents shall survive the execution and delivery of thisAgreement for the applicable statute of limitations period(s).     4.12. Litigation and Proceedings. There are no judgments outstanding against theCompany or any Subsidiary and, there is no pending or, to the Company’s knowledge, threatenedlitigation, contested claim, or governmental proceeding by or against the Company which would havea materially adverse effect on the financial condition or operation of the Company or anySubsidiary other than that certain lawsuit titled, “Bailey v. Diamond, et. al.”, anemployment discrimination case currently pending in the Superior Court of San Francisco County,California.     4.13. Other Agreements. Neither the Company nor any Subsidiary is in default underany material contract, lease, loan, mortgage, indenture or commitment to which it is a party or bywhich it or its property is bound which would have a materially adverse effect on the financialcondition or operation of the Company or any Subsidiary.     4.14. Labor Relations. There are no controversies pending or threatened between theCompany or any Subsidiary and any of the Company’s or Subsidiary’s employees, other than employeegrievances arising in the ordinary course of business which are not, in the aggregate, material tothe continued financial success and well-being of the Company or any Subsidiary.     4.15. Compliance with Laws and Regulations. The execution and delivery by the Companyof this Agreement and the execution and delivery by the Company and Guarantor of all of the otherLoan Documents to which it or Guarantor is a signatory and the performance of the Company’sobligations hereunder and the Company’s and Guarantor’s obligations thereunder are not incontravention of any law or laws. The Company and each Subsidiary is in material compliance withall laws, orders, regulations and ordinances of all federal, foreign, state and local governmentalauthorities relating to the business operations and the assets of the Company and each Subsidiary.     4.16. Patents, Trademarks and Licenses. The Company and any Subsidiary possessadequate assets, licenses, patents, patent applications, copyrights, service marks, trademarks andtrade names or applications therefor to continue to conduct its businesses as heretoforeconducted by it.
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     4.17. Pension Reform Act. No events, including, without limitation, any “ReportableEvent” or “Prohibited Transactions”, as those terms are defined in the Employee Retirement IncomeSecurity Act of 1974, as the same may be amended from time to time (herein, including any and allsuch amendments, called “ERISA”), have occurred in connection with any Pension Plan of the Companyor any Subsidiary which might reasonably be expected to constitute grounds for the termination ofany such Pension Plan by the Pension Benefit Guaranty Corporation or for the appointment by theappropriate United States District Court of a trustee to administer any such Pension Plan. All ofthe Company’s and any Subsidiary’s Pension Plans meet the minimum funding standards of Section 302of ERISA. Company and any Subsidiary is in compliance in all material respects with ERISA and theregulations and published interpretations thereunder.     4.18. Enforceable Agreement. This Agreement is, and each of the other Loan Documentswhen delivered under this Agreement will be, legal, valid, and binding obligations of the Companyand Guarantor, enforceable against the Company and Guarantor in accordance with their respectiveterms, except to the extent that such enforcement may be limited by applicable bankruptcy,insolvency, and other similar laws affecting creditors’ rights generally.     4.19. Environment. The Company and each Subsidiary has duly complied in all materialrespects with, and their businesses, operations, assets, equipment property, leaseholds or otherfacilities are in material compliance with, the provisions of all applicable federal, state andlocal environmental, health and safety laws, codes and ordinances, and all rules and regulationspromulgated thereunder. The Company and each Subsidiary has been issued and will maintain allrequired federal, state, and local permits, licenses, certificates and approvals relating to(1) air emissions; (2) discharges to surface water or groundwater; (3) noise emissions; (4) solidor liquid waste disposal; (5) the use, generation, storage, transportation, or disposal of toxic orhazardous substances or wastes (intended hereby and hereafter to include any and all such materialslisted in any federal, state, or local law, code or ordinance and all rules and regulationspromulgated thereunder as hazardous or potentially hazardous); or (6) other environmental, health,or safety matters. The Company and each Subsidiary has not received notice of, or knows of, orsuspects facts which might constitute any violations of any federal, state, or local environmental,health, or safety laws, codes or ordinances and any rules or regulations promulgated thereunderwith respect to its businesses, operations, assets, equipment, property, leaseholds, or otherfacilities. Except in accordance with a valid governmental permit, license, certificate orapproval, there has been no emission, spill, release, or discharge into or upon (1) the air;(2) soils, or any improvements located thereon; (3) surface water or groundwater; or (4) the sewer,septic system or waste treatment, storage or disposal system servicing the premises of any toxic orhazardous substances or wastes at or from the premises; and accordingly the premises of Company andeach Subsidiary, are free of all such toxic or hazardous substances or wastes. There has been nocomplaint, order, directive, claim, citation, or notice by any governmental authority or any personor entity with respect to (1) air emissions; (2) spills, releases, or discharges to soils orimprovements located thereon, surface water, groundwater or the sewer, septic system or wastetreatment, storage or disposal systems servicing the premises; (3) noise emissions; (4) solid orliquid waste disposal; (5) the use, generation, storage, transportation, or disposal of toxic orhazardous substances or waste; or(6) other environmental, health, or safety matters affecting the Company and each Subsidiaryor its business, operations, assets, equipment, property, leaseholds, or other facilities. TheCompany does not have any indebtedness, obligation or liability, absolute or contingent, matured ornot matured, with respect
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to the storage, treatment, cleanup, or disposal of any solid wastes,hazardous wastes, or other toxic or hazardous substances (including without limitation any suchindebtedness, obligation, or liability with respect to any current regulation, law, or statuteregarding such storage, treatment, cleanup, or disposal).     4.20. Material Adverse Change. There has been no material and adverse change in theassets, liabilities or financial or other condition of Company and any Subsidiary since the date ofany of the Financial Statements delivered to Bank under this Agreement.     4.21. Year 2000. [Intentionally Deleted].5. AFFIRMATIVE COVENANTS.     The Company covenants and agrees that so long as any Liabilities remain outstanding, and (evenif there shall be no Liabilities outstanding) so long as this Agreement remains in effect:     5.1. Financial Statements. The Company shall keep and cause each Subsidiary to keepproper books of record and account in which full and true entries will be made of all dealings ortransactions of or in relation to the businesses and affairs of the Company in accordance with GAAPconsistently applied.     5.2. Inspection. The Bank, or any Person designated by Bank in writing, shall havethe right, from time to time hereafter, to call at the Company’s place or places of business duringreasonable business hours upon one (1) day notice, and, without hindrance or delay, (i) to inspect,audit, check and make copies of and extracts from the Company’s and Subsidiary’s respective books,records, journals, orders, receipts and any correspondence and other data relating to the Company’sand any Subsidiary’s businesses or to any transactions between the parties hereto, and (ii) todiscuss the respective affairs, finances and businesses of the Company and any Subsidiary with anyof the respective officers, employees or directors of the Company or Subsidiary.     5.3. Company Demand Deposit Account. Not as a condition to the granting of any Loansto Company but in order to allow Bank to further monitor the financial information given by Companyto Bank and the compliance of Company with the Company covenants as contained herein, the Companyshall utilize the Bank as the Company’s primary U.S. bank of account. In the event any of Bank’soperating costs relating to non-credit services to Company exceed the earnings credit associatedwith the available account balances in any month, the deficiency will be charged (and Bank shallgive written notice of said charge to Company) to the Company Demand Deposit Account on a quarterlybasis according to the Bank’s published fee schedule and earning credit rates.     5.4. Conduct of Business. The Company shall maintain and cause each operatingSubsidiary to maintain its corporate existence, shall maintain in full force and effect alllicenses, bonds, franchises, leases, trademarks, patents, contracts and other rights necessary orreasonablydesirable to the profitable conduct of its and its Subsidiary’s businesses, shall continue in,and limit its operations to, the same general type of business as that presently conducted by itand shall comply in all material respects with all applicable laws and regulations of any federal,state or local governmental authority.
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     5.5. Claims and Taxes. The Company agrees to indemnify and hold the Bank harmlessfrom and against any and all claims, demands, liabilities, losses, damages, penalties, costs, andexpenses (including reasonable attorneys’ fees) relating to or in any way arising out of thepossession, use, operation or control of any of the Company’s assets. The Company shall pay orcause to be paid all license fees, bonding premiums and related taxes and charges, and shall pay orcause to be paid all taxes, assessments and government charges or levies on it or its properties,at such times and in such manner as to prevent any penalty from accruing or any lien or charge fromattaching to such property, provided that the Company shall have the right to contest in goodfaith, by an appropriate proceeding promptly initiated and diligently conducted, the validity,amount or imposition of any such tax, assessment, charge or levy.     5.6. Lender’s Closing Costs and Expenses. The Company shall reimburse the Bank ondemand for all reasonable expenses and fees paid or incurred in connection with the documentation,negotiation and closing of the transactions described herein, including, without limitation, filingand recording fees and reasonable attorneys’ fees of Bank’s counsel.     5.7. Maintain Property. The Company will maintain and cause each Subsidiary tomaintain its property in good condition (reasonable wear and tear excepted) and make all necessaryrenewals, repairs, replacements, additions, betterments and improvements thereto.     5.8. Company’s Property and Liability Insurance. The Company shall, and shall causeeach Subsidiary to, at its expense, keep and maintain its assets insured against loss or damage byfire, theft, explosion, spoilage and all other hazards and risks ordinarily insured against byother owners or users of such properties in similar businesses in an amount reasonably acceptableto Bank. All such policies of insurance shall be in form and substance satisfactory to Bank. TheCompany shall deliver to the Bank the original (or a certified) copy of each policy of insuranceand evidence of payment of all premiums therefor upon request. In addition, Company shall maintainadequate liability insurance in an amount, form and content reasonably acceptable to Bank.     5.9. Pension Plans. The Company shall and cause each Subsidiary to (i) keep in fullforce and effect any and all Pension Plans which are presently in existence or may, from time totime, come into existence under ERISA, unless such Pension Plans can be terminated without materialliability to the Company or any Subsidiary in connection with such termination (as distinguishedfrom any continuing funding obligation); (ii) make all required contributions to all of theCompany’s or any Subsidiary’s Pension Plans in a timely manner and in a sufficient amount to complywith the requirements of ERISA; (iii) comply with all material requirements of ERISA which relateto such plans; (iv) notify Bank immediately of any fact, including, but not limited to, anyReportable Event or Prohibited Transaction arising in connection with any Pension Plan which mightconstitute grounds for termination thereof by the Pension Benefit Guaranty Corporation or for theappointment by a court of competent jurisdiction of a Trustee to administer the Pension Plan; and(v) notify the Bank immediately upon receipt by the Company or any Subsidiary of anynotice of the institution of any proceeding or other action which may result in thetermination of any Pension Plans.     5.10. Notice of Suit or Adverse Change in Business. The Company shall, as soon aspossible, and in any event within fifteen (15) days after it learns of the following, give writtennotice
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to the Bank of (i) any material proceeding(s) being instituted or threatened to beinstituted by or against the Company or any Subsidiary, in any federal, state, local or foreigncourt or before any commission or other regulatory body (federal, state, local or foreign), and(ii) any material adverse change in the business, assets or condition, financial or otherwise, ofthe Company or any Subsidiary.     5.11. Reporting Requirements. The Company shall furnish to the Bank:     (i) Quarterly Financial Statements. As soon as available and in any eventwithin forty (40) days after the end of each fiscal quarter balance sheets of the Company asof the end of such quarter, statements of income and retained earnings of the Company forthe period commencing at the end of the previous quarter and ending with the end of suchquarter, and statements of changes in financial position of the Company, all in reasonabledetail and stating in comparative form the respective figures for the year to date and allprepared in accordance with generally accepted accounting principles consistently appliedand certified by the chief financial officer of the Company.     (ii) Annual Financial Statements. As soon as available and in any event withinone hundred twenty (120) days after the end of each fiscal year of the Company, balancesheets of the Company and each Subsidiary as of the end of such fiscal year, and statementsof income and retained earnings of the Company and each Subsidiary for such fiscal year, andstatements of changes in financial position of the Company and each Subsidiary for suchfiscal year, all in reasonable detail and stating in comparative form the respective figuresfor the corresponding date and period in the prior fiscal year and all prepared on anaudited basis, and in accordance with generally accepted accounting principles consistentlyapplied by an accounting firm acceptable to the Bank.     (iii) Management Letters. Promptly upon receipt thereof, copies of any reportssubmitted to the Company, by independent certified public accountants in connection withexamination of the financial statements of the Company.     (iv) Notice of Litigation. Promptly after the commencement thereof, notice ofall actions, suits, and proceedings before any court or governmental department, commission,board, bureau, agency, or instrumentality, domestic or foreign affecting the Company or anySubsidiary which, if determined adversely to the Company or Subsidiary, would have amaterial adverse effect on the financial condition, properties, or operations of the Companyor Subsidiary.     (v) Notice of Defaults and Events of Default. As soon as possible and in anyevent within seven (7) days after the occurrence of each Default, a written notice settingforth the details of such Default and the action which is proposed to be taken by theCompany, with respect thereto.     (vi) Financial Covenant Compliance Certificate. A Financial CovenantCompliance Certificate in the form as shown in Schedule I attached hereto
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contemporaneouslywith the execution of this Agreement and within forty (40) days of the end of each calendarquarter.     (vii) General Information. Such other information respecting the condition oroperations, financial or otherwise, of the Company or any Subsidiary as the Bank may fromtime to time reasonably request including without limitation customer lists includingaddresses of account debtors. Bank agrees to hold any confidential information which it mayreceive from Company pursuant to this Agreement in confidence except for disclosure on aneed to know basis (i) to affiliates of Bank or any participants in the Loans, (ii) to legalcounsel, accountants and other professional advisors to Bank, (iii) to regulatory officers,or (iv) to any Person as requested pursuant to or as required by law, regulation or legalprocess.     5.12. Environment. Be and remain, and cause each Subsidiary to be and remain, inmaterial compliance with the provisions of all federal, state and local environmental, health andsafety laws, codes and ordinances, and all rules and regulations issued thereunder; notify the Bankimmediately of any notice of a hazardous discharge or environmental complaint received from anygovernmental agency or any other party; notify the Bank immediately of any hazardous discharge fromor affecting its premises; immediately contain and remove the same, in compliance with allapplicable laws; promptly pay any fine or penalty assessed in connection therewith except to theextent that same is being contested in good faith through appropriate proceedings; permit the Bankin its reasonable discretion to inspect the premises, to conduct tests thereon, and to inspect allbooks, correspondence and records pertaining thereto; and at the Bank’s request, and at theCompany’s expense, provide a report of a qualified environmental engineer, satisfactory in scope,form, and content to the Bank, and such other and further assurances reasonably satisfactory to theBank that the condition has been corrected.6. NEGATIVE COVENANTS.     The Company covenants and agrees that so long as any Liabilities remain outstanding, and (evenif there shall be no Liabilities outstanding) so long as this Agreement remains in effect (unlessthe Bank shall give its prior written consent thereto):     6.1. Encumbrances. Except for the Permitted Liens, the Company will not create andwill not allow any Subsidiary to create, incur, assume, or suffer to exist, or permit anySubsidiary to create, incur, assume, or suffer to exist, any mortgage, deed of trust, pledge, lien,security interest, hypothecation, assignment, deposit arrangement, or other preferentialarrangement, charge, or encumbrance (including, without limitation, any conditional sale, or othertitle retention agreement, or finance lease) of any nature, upon or with respect to any of itsproperties, now owned or hereafter acquired, or sign or file, or permit any Subsidiary to sign orfile, under the Uniform Commercial Code of any jurisdiction a financing statement (other thanfinancing statements related to Permitted Liens and financing statements required to be executed bylessors under operating leases entered into by Company or any Subsidiary with said lessors) whichnames the Company or any Subsidiary as a debtor, or sign, or permit any Subsidiary to sign, anysecurity agreement authorizing any secured party thereunder to file such financing statement.
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     6.2. Disposal of Property. The Company shall not nor allow any Subsidiary to sell,assign, transfer or otherwise dispose of any of its respective equipment to any Person without theBank’s prior written consent, which shall not be unreasonably withheld, other than in the normalcourse of business in connection with the sale of obsolete or no longer used equipment of Companyor any Subsidiary.     6.3. Amendment of Certificate of Incorporation or By-Laws. Company shall not amendits Articles of Incorporation or By-Laws in any material respect without the Bank’s prior writtenconsent, which shall not be unreasonably withheld.     6.4. Transactions with Affiliates. Company will not, without the prior writtenconsent of the Bank, enter into any transaction including, without limitation, the lending orborrowing of monies, the purchase, sale or exchange of property or the rendering of any service toany Affiliate, except in the ordinary course of and pursuant to the reasonable requirements ofCompany’s business and upon fair and reasonable terms no less favorable to Company than would beobtained in a comparable arm’s length transaction with an unaffiliated person or corporation.     6.5. Acquisitions. The Company shall not directly or indirectly execute anUnpermitted Acquisition with any other Person without the prior written consent of Bank. TheCompany shall not directly or indirectly execute multiple Permitted Acquisitions with any otherPerson(s) which collectively exceed the transaction value of $40,000,000.00 in the aggregate in anytwelve (12) month period during the term of this Agreement without the prior written consent ofBank. Compliance with the aforesaid limitation shall be tested on the last day of each fiscalquarter of the Company and on a trailing twelve (12) month basis.     6.6. Debt. Company shall not incur any further Debt from any other Person other than(i) Debt owed by Company to Bank or (ii) Debt to the Persons disclosed to Bank in the financialstatements of Company delivered to Bank prior to the date hereof or (iii) accounts payable incurredin the ordinary course of business to trade creditors for goods or services which are not morethan 90 days past due or (iv) current operating liabilities incurred in the ordinary course ofbusiness (other than for borrowed money) not more than 90 days past due or (v) Debt in connectionwith purchase money financing and Capital Leases but not exceeding the amount as set forth inSection 1.1(xxii).     6.7. Dividends and Stock Redemptions. Company may pay any dividends to anyshareholder of Company, issue further stock of Company, or purchase, retire, redeem or otherwiseacquire for value any issued and outstanding stock of Company provided that (i) in any twelve (12)month period, the aggregate payment of dividends shall not exceed Seventeen Million Five HundredThousand and No/100 Dollars ($17,500,000.00) and (ii) in any twelve (12) month period, theaggregate amount expended for any stock purchase, retirement or redemption shall not exceed anamount equal to twenty percent (20%) of the “Market Capitalization” of the outstanding stock ofCompany. “Market Capitalization” shall be determined by multiplying the number of all sharesoutstanding of the Company by the price quoted on a per share value on the National Association ofSecurities Dealers Automated Quotations (the “NASDAQ”). Compliance with said paragraphs (i) and(ii) hereof shall be tested on the last day of each fiscal quarter of Company and on a trailingtwelve (12) month basis, and payment of a dividend or stock purchases, redemptions or retirements
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shall be deemed in compliance with this Agreement if at the time they were made, they wouldhave been permitted under the results of the test most recently applied pursuant to the precedingsentence.     6.8. Guaranties. Company shall not, nor allow any Subsidiary, to assume, guaranty,endorse or otherwise be or become directly or contingently responsible or liable for obligations ofany Person except (i) guaranties by endorsement of negotiable instruments for deposit or collectionin the ordinary course of business, (ii) guaranties of loans to its shareholder employees fromthird party financial institutions to facilitate acquisition by said shareholder employees ofcapital stock of the Company provided written consent is obtained from Bank which shall not beunreasonably withheld, and (iii) that certain Guaranty of the Liabilities executed by DiamondManagement & Technology Consultants NA, Inc., an Illinois corporation.     6.9. Mergers, Etc. The Company shall not wind up, liquidate or dissolve itself,reorganize, merge or consolidate with or into, or convey, sell, assign, transfer, lease, orotherwise dispose of (whether in one transaction or in a series of transactions) all orsubstantially all of its assets (whether now owned or hereafter acquired) to any Person, or acquireall or substantially all of the assets or the business of any Person, or permit any Subsidiary todo so, except that any Subsidiary may merge into or consolidate with or transfer assets to anyother Subsidiary.     6.10. Investments. The Company shall not make, or permit any Subsidiary to make, anyloan or advance to any Person, or purchase or otherwise acquire, or permit any Subsidiary topurchase or otherwise acquire, any investment securities of, make any capital contribution to, orotherwise invest in or acquire any investment interest in any Person, or participate as aninvestment partner or joint venturer with any other Person, except: (1) direct obligations of theUnited States or any agency thereof with maturities of one year or less from the date ofacquisition; (2) commercial paper of a domestic issuer rated at least “A-1” by Standard & Poor’sCorporation or “P-1” by Moody’s Investors Service, Inc. at the time of said investment; (3)certificates of deposit with maturities of one year or less from the date of acquisition issued byany commercial bank having capital and surplus in excess of Four Hundred Million and No/100 Dollars($400,000,000.00) at the time of said investment; (4) stock, obligations, or securities received insettlement of debts (created in the ordinary course of business) owing to the Company or anySubsidiary; and (5) repurchase agreements or eurodollar currency deposit investments with anycommercial bank which meets the financial requirements of subsection (3) hereof at the time of saidinvestment.     Notwithstanding the foregoing, Company shall (a) be allowed to receive notes (“ShareholderEmployee Notes”) from its individual shareholder employees representing the balance due from saidshareholder employees for any common stock of Company acquired by them but only on the conditionthat said Shareholder Employee Notes provide that all amounts due thereunder will be due andpayable consistent with the present and future policies of the Company in connection with theissuance of stock to said shareholder employee, (b) be allowed to make individual loans (“EmployeeLoans”) to its employees provided any one individual may not have Employee Loans outstandingaggregating over $100,000.00 and that all Employee Loans may not at any one time exceed$500,000.00, and (c) be allowed to receive stock in customers of Company or its Subsidiaries aspartial payment for amounts due from said customers for services rendered by Company or itsSubsidiaries.
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     6.11 Government Regulation. The Company shall not (1) be or become subject at anytime to any law, regulation, or list of any government agency (including without limitation, theU.S. Office of Foreign Asset Control list) that prohibits or limits Bank from making any advance orextension of credit to the Company or from otherwise conducting business with the Company, or (2)fail to provide documentary and other evidence of the Company’s identity as may be requested byBank at any time to enable Bank to verify the Company’s identity or to comply with any applicablelaw or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31U.S.C. Section 5318.7. FINANCIAL COVENANTS.     The Company covenants and agrees that so long as any Liabilities remain outstanding, and (evenif there shall be no Liabilities outstanding) so long as this Agreement remains in effect (unlessthe Bank shall give its prior written consent thereto):     7.1. Minimum Working Capital. [Intentionally Deleted]     7.2. Tangible Net Worth. The Company will maintain at all times a consolidatedTangible Net Worth of no less than Fifty Million and No/100 ($50,000,000.00) Dollars. Tangible NetWorth means the excess of total assets over total liabilities, total assets and total liabilitieseach to be determined in accordance with generally accepted accounting principles consistent withthose applied in the preparation of the financial statements referred to in Section 5.11 excluding,however, from the determination of total assets all assets which would be classified as intangibleassets under generally accepted accounting principles, including, without limitation, goodwill,trademarks, patents, copyrights, organization expenses, franchises, licenses, trade names, brandnames, mailing lists, catalogs, prepaid expenses, excess of cost over book value of assetsacquired, and bond discount and underwriting expenses; and loans or advances to, investments in, orreceivables from affiliates, officers, directors, employees or shareholders of the Borrower or anyPerson or entity if such loan, advance, investment or receivable is outside the Borrower’s normalcourse of business.     7.3. Minimum Cash/Cash Equivalent. The Company will maintain, as measured at eachquarter end, an aggregate Cash/Cash Equivalent (as hereinafter defined) of no less than TwentyMillion and No/100 ($20,000,000.00) Dollars. The term “Cash/Cash Equivalent” means the sum of (a)cash on hand or on deposit in banks in the United States, (b) readily marketable securities issuedby the United States, (c) readily marketable commercial paper rated “A-1” by Standard & PoorsCorporations (or similar rating by any similar organization which rates commercial paper), and (d)certificates of deposit or banker’s acceptances issued by commercial banks of recognized standingoperating in the United States.8. DEFAULT, RIGHTS AND REMEDIES OF THE LENDER.     8.1. Liabilities. If a Default described in Section 1.1(ix) shall exist or occur andbe continuing, and upon the expiration of any applicable cure period, the Bank may without noticedeclare all of the Liabilities immediately due and payable.
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     8.2. Rights and Remedies Generally. If a Default shall exist or occur and becontinuing, and upon the expiration of any applicable cure period, the Bank shall have, in additionto any other rights and remedies contained in this Agreement and the Loan Documents, all of therights and remedies under applicable laws, all of which rights and remedies shall be cumulative,and none exclusive, to the extent permitted by law.     8.3. Termination of Agreements. Upon the occurrence of any Default, Bank may also,with or without proceeding with sale or foreclosure or demanding payment of the Liabilities,without notice, terminate Bank’s further performance under this Agreement or any other agreement oragreements between Bank and Company and in addition may suspend Bank’s obligation to make anyfurther advances hereunder during any cure period provided for in paragraph 1.1(ix) without furtherliability or obligation by Bank, and may also, upon the occurrence of any Default, appropriate andapply on any Liabilities any and all balances, credits, deposits, accounts, reserves, indebtedness,or other monies due or owing to Company or held by Bank hereunder or under any such financingagreement or otherwise, whether accrued or not. Neither such termination, nor the termination ofthis Agreement by lapse of time, the giving of notice, or otherwise, shall absolve, release, orotherwise affect the liability of Company in respect of transactions had prior to such termination,nor affect any of the liens, security interests, rights, powers and remedies of Bank, but theyshall, in all events, continue until all indebtedness and Liabilities of Company to Bank aresatisfied. Bank shall not, in any manner, be liable to Company for any failure to make or continueto make any Loans or advances to Company hereunder as a result of Bank refusal to so make saidLoans or advances in accordance with the terms of this paragraph.     8.4. Waiver of Demand. Demand, presentment, protest and notice of nonpayment arehereby waived by the Company. The Company also waives the benefit of all valuation, appraisal andexemption laws.9. MISCELLANEOUS.     9.1. Waiver. The Bank’s failure, at any time or times hereafter, to require strictperformance by the Company of any provision of this Agreement shall not waive, affect or diminishany right of the Bank thereafter to demand strict compliance and performance therewith. Anysuspension or waiver by the Bank of a Default under this Agreement shall not suspend, waive oraffect any other Default under this Agreement, whether the same is prior or subsequent thereto andwhether of the same or of a different kind or character. None of the undertakings, agreements,warranties, covenants and representations of the Company contained in this Agreement and no Defaultunder this Agreement shall be deemed to have been suspended or waived by the Bank unless suchsuspension or waiver is in writing signed by an officer of the Bank, and directed to the Companyspecifying such suspension or waiver. If requested in writing by Company, Bank shall give writtenconfirmation to Company of any suspension or waiver by Bank as described in this Section.     9.2. Costs and Attorneys’ Fees. If at any time or times hereafter the Bank employscounsel in connection with a breach of any of the Company’s representations and/or warrantieshereunder and/or under the Revolving Note and/or any failure of the Company to perform itsobligations hereunder and/or under the Revolving Note, irrespective of whether the foregoingbreach
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and/or failure constitutes a Default, whether (a) to commence, defend, or intervene inany litigation or to file a petition, complaint, answer, motion or other pleadings, (b) to take anyother action in or with respect to any suit or proceeding (bankruptcy or otherwise), (c) to consultwith officers of the Bank to advise the Bank, or (d) enforce any rights of the Bank to collect anyof the Liabilities, then in any of such events, all of the reasonable attorneys’ fees arising fromsuch services, and any expenses, costs and charges relating thereto, including, without limitation,all fees of all paralegals, together with interest at the Default Rate described in Section 2.6above then in effect, shall be part of the Liabilities, payable on demand.     9.3. Expenditures by the Lender. In the event Company shall fail to pay taxes,insurance, assessments, costs or expenses which the Company is, under any of the terms hereof,required to pay, the Bank may, in its sole discretion, make expenditures for any or all of suchpurposes, and the amount so expended, together with interest thereon at the Default Rate describedin subsection 2.6 above, shall be part of the Liabilities, payable on demand.     9.4. Reliance by the Bank. All covenants, agreements, representations and warrantiesmade herein by the Company, shall, notwithstanding any investigation by the Bank, be deemed to bematerial to, and to have been relied upon by, the Bank.     9.5. Parties. Whenever in this Agreement there is reference made to any of theparties hereto, such reference shall be deemed to include, wherever applicable, a reference to therespective successors and assigns of each of the Company, and the Bank.     9.6. Applicable Law; Severability. This Agreement shall be construed in all respectsin accordance with, and governed by, the internal laws (as opposed to conflicts of law provisions)of the State of Illinois. Wherever possible, each provision of this Agreement shall be interpretedin such manner as to be effective and valid under applicable law, but if any provision of thisAgreement shall be prohibited by or invalid under applicable law, such provision shall beineffective only to the extent of such prohibition or invalidity, without invalidating theremainder of such provisions or the remaining provisions of this Agreement.     9.7. Cumulative Effect. All covenants, conditions, provisions, warranties,guaranties, indemnities and other undertakings of the Company contained in this Agreement, or inthe Loan Documents or in any schedule given to Bank or contained in any other agreement betweenBank and the Company, heretofore, concurrently, or hereafter entered into, shall be deemedcumulative to and not in derogation or substitution of any of the terms, covenants, conditions oragreements of the Company herein contained. The failure or delay of Bank to exercise or enforceany rights, liens, powers or remedies hereunder or under the Loan Documents or the other aforesaidagreements or other documents or against any security or collateral shall not operate as a waiverof such liens, rights, powers and remedies, but all such liens, rights powers and remedies shallcontinue in full force and effect until all Liabilities shall have been fully satisfied, and allliens, rights, powers and remedies herein provided for are cumulative and none are exclusive.     9.8. Amendments, Etc. No amendment, modification, termination, or waiver of anyprovision of the Agreement, any Loan Document, nor consent to any departure by any of the partiesfrom any Loan Document to which it is a party, shall in any event be effective unless the sameshall
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be in writing and signed by the Bank, and then such waiver or consent shall be effective onlyin the specific instance and for the specific purpose for which given.     9.9. Integration. This Agreement and the Loan Documents contain the entire agreementbetween the parties relating to the subject matter hereof and supersedes all oral statements andprior writings with respect thereto.     9.10. Indemnity. The Company hereby agrees to defend, indemnify, and hold the Bankharmless from and against any and all claims, damages, judgments, penalties, costs and expenses(including reasonable attorney fees and court costs now or hereafter arising from the aforesaidenforcement of this clause) (collectively, the “Indemnified Liabilities”) arising directly orindirectly from the activities of the Company and its Subsidiaries, its predecessors in interest,or third parties with whom it has a contractual relationship, or arising directly or indirectlyfrom the violation of any environmental protection, health, or safety law, whether such claims areasserted by any governmental agency or any other Person, except for any such IndemnifiedLiabilities arising on account of the Bank’s gross negligence or willful misconduct as determinedby a final, non-appealable judgment by a court of competent jurisdiction. This indemnity shallsurvive termination of this Agreement for the applicable statute of limitations period(s).     9.11. Submission to Jurisdiction; Waiver of Jury Trial. TO INDUCE THE BANK TO MAKETHE LOAN EVIDENCED BY THIS AGREEMENT, THE COMPANY, IRREVOCABLY AGREES THAT, ALL ACTIONS ARISINGDIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS AGREEMENT OR ANY OTHER AGREEMENT WITHTHE BANK SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE CITY OF CHICAGO,ILLINOIS, AND THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE ORFEDERAL COURT LOCATED AND HAVING ITS SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUMNONCONVENIENS, AND THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTSTHAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTEDTO THE COMPANY AT THE ADDRESSES INDICATED IN THE BANK’S RECORDS IN THE MANNER PROVIDED BYAPPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.     THE BANK AND THE COMPANY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THERIGHT IT MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISINGOUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER OBLIGATIONS OR ANYAGREEMENT, EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCTOR COURSE OF DEALING, IN WHICH THE BANK AND THE COMPANY, OR ANY ONE OF THEM, ARE ADVERSE PARTIES.THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THECOMPANY. ALL WAIVERS HEREIN ARE MADE ONLY TO THE EXTENT PERMITTED BY APPLICABLE LAW.
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     9.12. Application of Payments. Notwithstanding any contrary provision contained inthis Agreement, the Company irrevocably waives the right to direct the application of any and allpayments at any time or times hereafter received by the Bank from or on behalf of the Company, andthe Company does hereby irrevocably agree that the Bank shall have the continuing exclusive rightto apply and reapply any and all payments received at any time or times hereafter, against theLiabilities in such manner as the Bank may deem advisable, notwithstanding any entry by the Bankupon any of its books and records.     9.13. Marshalling; Payments Set Aside. The Bank shall be under no obligation tomarshall any assets in favor of the Company or any other party or against or in payment of any orall of the Liabilities. To the extent that the Company makes a payment or payments to the Bank orBank enforces its security interests or exercises its rights of setoff, and such payment orpayments or the proceeds of such enforcement or setoff or any part thereof are subsequentlyinvalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to atrustee, receiver or any other party under any bankruptcy law, state or federal law, common law orequitable cause, then to the extent of such recovery, the obligation or part thereof originallyintended to be satisfied shall be revived and continued in full force and effect as if such paymenthad not been made or such enforcement or setoff had not occurred.     9.14. Section Titles. The section titles contained in this Agreement shall be withoutsubstantive meaning or content of any kind whatsoever and are not a part of the agreement betweenthe parties.     9.15. Continuing Effect. This Agreement shall continue in full force and effect solong as any Liabilities shall be owed to the Bank, and (even if there shall be no Liabilitiesoutstanding) so long as this Agreement has not been terminated.     9.16. Notices. Except as otherwise expressly provided herein, any notice required ordesired to be served, given or delivered hereunder shall be in writing, and shall be deemed to havebeen validly served, given, delivered and/or received when (i) presented personally, or (ii) on thesecond business day next following deposit in the United States mails, with proper postage prepaid,registered or certified, return receipt requested, or (iii) on the first business day nextfollowing the day of delivery to Federal Express for delivery to the addressee, addressed to theparty to be notified as follows:     (i) If to the Bank:JP Morgan Chase Bank, N.A.