Exhibit
10.1


CREDIT AGREEMENT


THIS
CREDIT AGREEMENT (as amended, restated and supplemented from time to time, this
“Agreement”) by and between THOMAS
GROUP, INC., a Delaware corporation (“Borrower”)
and JPMORGAN CHASE BANK, N.A., a national banking association (“Bank”), is dated as of December 5,
2006 (the “Effective Date”).


The
parties hereto agree as follows:


ARTICLE
I.


THE LOANS


SECTION 1.01.      Revolving
Credit Note.  Subject to the terms
and conditions hereof, Bank agrees to make loans (“Loan” or “Loans”) to Borrower from time to time before the
Termination Date, not to exceed at any one time outstanding Five Million Five
Hundred Thousand and No/100 Dollars ($5,500,000) (the “Commitment”).  Borrower has the right to borrow, repay and
reborrow.  Each Loan must be at least
$100,000 or the balance of the Commitment, whichever is less, and each
repayment must be at least $100,000 or the principal balance of the Note (as
defined below), whichever is less.  The
Loans may only be used for working capital needs, capital expenditures and
other general corporate purposes. Chapter 346 of the Texas Finance Code (which
governs certain revolving loan accounts) will not apply to this Agreement, the
Note or any Loan.  The Loans will be
evidenced by, and will bear interest and be payable as provided in, the
promissory note of Borrower dated of even date herewith (together with any and
all renewals, extensions, modifications and replacements thereof and
substitutions therefor, the “Note”).  “Termination
Date” means the earlier of: (a) March 31, 2009; (b) the date
specified by Bank pursuant to Section 6.1 hereof, or (c) the date
specified by Bank pursuant to Section 5.12 hereof.


SECTION 1.02.      Reserved.


SECTION 1.03.      Required
Payment. 
If the unpaid amount of the Loans at any time exceeds the
Commitment then in effect, Borrower must make a payment on the Note in an
amount sufficient to reduce the unpaid principal balance of the Note to an
amount no greater than the Commitment. 
Such payment shall be accompanied by any prepayment charge required by
the Note.


SECTION 1.04.      Commitment Fee. 
Borrower agrees to pay to Bank a commitment fee in the amount of the
product of the average daily unused amount of the Commitment times 0.25% per
annum (“Commitment Fee”).  Accrued Commitment Fees payable under this
Section shall be payable in arrears on the last day of each fiscal quarter and
on the date on which the Commitment terminates, commencing on the first such
date to occur after the date hereof.  All









 



Commitment Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).


SECTION 1.05.      Past-Due
Amounts. 
Each amount due to Bank in connection with the Loan Documents
will bear interest from its due date until paid at the lesser of: (a) three
percent (3%) per annum plus the then applicable rate under the Note, or (ii)
the Highest Lawful Rate.


SECTION 1.06.      Capital
Adequacy.  If Bank determines after the date of this
Agreement that any change in applicable laws, rules or regulations regarding
capital adequacy, or any change in the interpretation or administration thereof
by any appropriate governmental agency, or compliance with any request or
directive to Bank regarding capital adequacy (whether or not having the force
of law) of any such agency, increases the capital required to be maintained
with respect to the Loan or Note and therefore reduces the rate of return on
Bank’s capital below the level Bank could have achieved but for such change or
compliance (taking into consideration Bank’s policies with respect to capital
adequacy), then Borrower will pay to Bank from time to time, within fifteen
(15) days of Bank’s request, any additional amount required to compensate Bank
for such reduction.  Bank will request
any additional amount by delivering to Borrower a certificate of Bank setting
forth the amount necessary to compensate Bank. 
The certificate will be conclusive and binding, absent manifest
error.  Bank may make any assumptions, and
may use any allocations of costs and expenses and any averaging and attribution
methods, which Bank in good faith finds reasonable.


ARTICLE
II.


CONDITIONS
PRECEDENT


SECTION 2.01.      All Loans. 
Bank is not obligated to make any Loan unless:(a) Bank has received the
following, duly executed and in Proper Form: (1) a Request for Loan,
substantially in the form of Exhibit A attached hereto, not later than
the period required under the Note before the date (which shall also be a
Business Day) of the proposed Loan; provided however, Bank may accept and act
upon verbal advance requests received from Borrower’s representative reasonably
believed by Bank to be authorized to make such requests; and (2) such other
documents as Bank reasonably may require; (b) no Event of Default exists; and
(c) the making of the Loan is not prohibited by, or subjects Bank to any
penalty or onerous condition under any Legal Requirement.


SECTION 2.02.      First Loan.  In
addition to the matters described in the preceding section, Bank will not be
obligated to make the first Loan unless Bank has received all of the documents
specified on Annex I attached hereto in Proper Form.



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ARTICLE
III.


REPRESENTATIONS
AND WARRANTIES


To induce Bank to enter
into this Agreement and to make the Loans, Borrower represents and warrants as
of the Effective Date and as of the date of each request for a Loan that each
of the following statements is and shall remain true and correct throughout the
term of this Agreement:


SECTION 3.01.      Organization
and Status.  Borrower and each Subsidiary of Borrower is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; has all power and authority to conduct its
business as presently conducted, and is duly qualified to do business and in
good standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification desirable.  Borrower has no Subsidiary other than those
listed on Annex II, as supplemented from time to time to include any new
Subsidiaries created or acquired in accordance with this Agreement, and each
Subsidiary is owned by Borrower in the percentage set forth on Annex II.


SECTION 3.02.      Financial
Statements.  All financial statements delivered
to Bank are complete and correct and fairly present, in accordance with
generally accepted accounting principles, consistently applied (“GAAP”), the financial condition and the
results of operations of Borrower and each Subsidiary of Borrower as at the
dates and for the periods indicated.  No
material adverse change has occurred in the assets, liabilities, financial
condition, business or affairs of Borrower or any Subsidiary of Borrower since
the dates of such financial statements. 
Neither Borrower nor any Subsidiary of Borrower is subject to any
instrument or agreement having a Material Adverse Effect on Borrower or any
Subsidiary.


SECTION 3.03.      Enforceability.  The
Loan Documents are legal, valid and binding obligations of the Parties
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency and other similar laws affecting creditors’ rights
generally.  The execution, delivery and
performance of the Loan Documents have all been duly authorized by all
necessary action; are within the power and authority of the Parties; do not and
will not violate any Legal Requirement, the Organizational Documents of the
Parties or any agreement or instrument binding or affecting the Parties or any
of their respective Property.


SECTION 3.04.      Compliance. 
Borrower and each Subsidiary of Borrower has filed all applicable tax
returns and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith
and for which adequate reserves have been established.  Borrower and each Subsidiary of Borrower is
in compliance with all applicable Legal Requirements for which noncompliance
could result in a Material Adverse Effect on Borrower. Borrower and each Subsidiary
of Borrower manage and operate (and will continue to manage and operate) their
respective businesses in accordance with good industry practices.  Neither Borrower nor any Subsidiary of
Borrower is in default in the payment of any other indebtedness in an aggregate
amount in excess of $250,000 or under any material agreement to which it is a
party.  The Parties have obtained all
consents of and



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registered
with all Governmental Authorities or other Persons required to execute, deliver
and perform the Loan Documents.


SECTION 3.05.      Litigation. 
Except as previously disclosed to Bank in writing, there is no
litigation or administrative proceeding pending or, to the knowledge of
Borrower, threatened against, nor any outstanding judgment, order or decree affecting
Borrower or any Subsidiary of Borrower before or by any Governmental Authority
which could have a Material Adverse Effect on Borrower.


SECTION 3.06.      Intentionally
Deleted.


SECTION 3.07.      Regulation
U; Business Purpose.  None of the proceeds of any Loan will be used
to purchase or carry, directly or indirectly, any margin stock or for any other
purpose which would make this credit a “purpose credit” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System.  All Loans will be used for business,
commercial, investment, agricultural or other similar purpose and not primarily
for personal, family, or household use.


SECTION 3.08.      Environment. 
Borrower and each Subsidiary of Borrower have complied with applicable
Legal Requirements in each instance in which any of them have generated,
handled, used, stored or disposed of any hazardous or toxic waste or substance,
on or off its premises (whether or not owned by any of them).  Neither Borrower nor any Subsidiary of
Borrower has any material contingent liability for non-compliance with
environmental or hazardous waste laws. 
Neither Borrower nor any Subsidiary of Borrower has received any notice
that it or any of its Property or operations does not comply with, or that any
Governmental Authority is investigating its compliance with, any environmental
or hazardous waste laws.


SECTION 3.09.      Investment
Company Act/Public Utility Holding Company Act.  Neither Borrower nor
any Subsidiary of Borrower is an “investment company” within the meaning of the
Investment Company Act of 1940 or a “holding company” or an “affiliate” of a “holding
company” or a “public utility” within the meaning of the Public Utility Holding
Company Act of 1935, as amended.


ARTICLE IV.


AFFIRMATIVE COVENANTS


Borrower agrees to
do, and if necessary cause to be done, and cause each of its Subsidiaries to
do, each of the following:


SECTION 4.01.      Corporate
Fundamentals.


(a)                                  Pay
when due all taxes and governmental charges of every kind upon it or against
its income, profits or Property, unless and only to the extent that the same
shall be contested in good faith and adequate reserves have been established
therefor;



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(b)                                 Renew
and keep in full force and effect all of its licenses, permits and franchises
necessary for the conduct of its business;


(c)                                  Do
all things necessary to preserve its corporate existence and its qualifications
and rights in all jurisdictions where such qualification is necessary; and


(d)                                 Comply
with all applicable Legal Requirements for which noncompliance could result in
a Material Adverse Effect on Borrower; and


(e)                                  Protect,
maintain and keep in good repair its Property and make all replacements and
additions to its Property as may be reasonably necessary to conduct its
business properly and efficiently.


SECTION 4.02.      Insurance.  Maintain insurance with such reputable
financially sound insurers, on such of its Property and personnel, in such
amounts and against such risks as is customary with similar Persons in similar
businesses, and furnish Bank satisfactory evidence thereof promptly upon request.


SECTION 4.03.      Financial
Information.  Furnish to Bank in Proper Form:


(a)                                  the
financial statements prepared in conformity with GAAP on consolidated and
consolidating bases and the other information described in, and within the
times required by, the Reporting Requirements, Financial Covenants and
Compliance Certificate attached hereto as Exhibit B and incorporated
herein by reference (“Compliance Certificate”);


(b)                                 within
the time required by the Compliance Certificate, a completed Compliance Certificate
signed and certified by the chief financial officer or president of the Party
required to submit the information;


(c)                                  promptly
after such request is submitted to the appropriate Governmental Authority, any
request for waiver of funding standards or extension of amortization periods
with respect to any employee benefit plan; and


(d)                                 such
other information relating to the financial condition and affairs of Borrower,
each Obligor and their Subsidiaries as Bank may reasonably request from time to
time.


SECTION 4.04.      Matters
Requiring Notice.  Notify Bank immediately, upon acquiring
knowledge of (a) the institution or threatened institution of any lawsuit or
administrative proceeding which, if adversely determined, might have a Material
Adverse Effect on Borrower; (b) any material adverse change in the assets,
liabilities, financial condition, business or affairs of Borrower; (c) any
Event of Default; (d) any reportable event or any prohibited transaction in
connection with any employee benefit plan; or (e) any sale, transfer,
hypothecation, assignment or other disposition by any of the Current Owners of
any shares of the
capital stock of the Borrower except (i) in one or more transactions in which
one or more of the Current Owners retains beneficial ownership of such shares
(within the meaning of the Securities



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Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), (ii) in sales made into the public securities markets pursuant to
Rule 144 under the Securities Act of 1933, as amended, or any similar provision
or (iii) in connection with a public offering or registered sale unless such
transaction is reasonably expected to cause a Change in Control (and provided
that no such notice shall be required during any period in which notification
of such registered sale or public offering is not permitted by or is
inadvisable in light of applicable Legal Requirements).


SECTION 4.05.      Inspection. 
Upon prior notice to Borrower, permit Bank and its affiliates to inspect
and photograph its Property, to examine and copy its files, books and records,
and to discuss its affairs with its officers and accountants, at such times and
intervals and to such extent as Bank reasonably desires.


SECTION 4.06.      Assurances. 
Promptly execute and deliver any and all further agreements, documents,
instruments, and other writings that Bank may request to cure any defect in the
execution and delivery of any Loan Document or more fully to describe
particular aspects of the agreements set forth or intended to be set forth in
the Loan Documents.


SECTION 4.07.      Certain
Changes.  Notify Bank at least thirty (30) days prior
to the date that any of the Parties changes its name or the location of its
chief executive office or principal place of business.


SECTION 4.08.      Compliance
Certificate.  Comply with each of the other covenants set
forth in the Compliance Certificate attached hereto as Exhibit B.


SECTION 4.09.      Accounts. 
Maintain primary operating and collection bank accounts with Bank.


SECTION 4.10.      Minimum Tangible Net
Worth.


(a)                                  For
the period commencing on the date of this Agreement through and including
December 31, 2006, maintain, as of any fiscal quarter end, Tangible Net Worth
greater than or equal to (i) $8,000,000, plus (ii) 50% of the sum of (a)
positive Net Income for the Initial Measurement Period, minus (b) Stock
Repurchases for the Initial Measurement Period, minus (c) Distributions for the
Initial Measurement Period.


(b)                                 For
the period commencing on January 1, 2007 and at all times thereafter, maintain,
as of any fiscal quarter end, Tangible Net Worth greater than or equal to (i)
$8,000,000, plus (ii) 50% of the sum of (a) positive Net Income for the
four-quarter period then ending, minus (b) Stock Repurchases for the four-quarter
period then ending, minus (c) Distributions for the four-quarter period then
ending.


 



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SECTION 4.11.      Compliance with Agreements.  Comply, and cause each Subsidiary to comply,
in all material respects with all material agreements, contracts, and
instruments binding on it or affecting its properties or business.


SECTION 4.12.      Additional
Subsidiaries.  If any additional
Subsidiary is formed or acquired, with the Bank’s prior consent (in accordance
with Section 5.08), after the Effective Date and if such Subsidiary is a
Domestic Subsidiary, Borrower will cause such Domestic Subsidiary to become a
Guarantor within five Business Days after such Domestic Subsidiary is formed or
acquired, provided that if Borrower has not received a form of guaranty from
the Bank on or before the date such Domestic Subsidiary is formed or acquired,
then Borrower will have five (5) Business Days from the date of receipt of such
guaranty to comply with this Section, and promptly after delivery of such
guaranty form from the Bank, Borrower shall take such actions to create and
perfect Liens on such Domestic Subsidiary’s Accounts and Proceeds to secure the
Obligations as the Bank shall request. 
If such Subsidiary is a Foreign Subsidiary and any equity interest in or
Indebtedness of such Foreign Subsidiary are owned by or on behalf of the
Borrower or any Guarantor, Borrower will cause to be pledged to Bank within
five (5) Business Days after such Foreign Subsidiary is formed or acquired,
provided that if Borrower has not received a form of security agreement from
the Bank on or before the date such Foreign Subsidiary is formed or acquired,
then Borrower will have five (5) Business Days from the date of receipt of such
security agreement to comply with this Section, all shares of common stock of
the Foreign Subsidiary and all other shares of capital stock of whatever class
of the Foreign Subsidiary now or hereafter owned by or on behalf of the
Borrower or any Guarantor and all equity rights of any such Foreign Subsidiary,
subject, however, to the limitation that shares of capital stock of any such
Foreign Subsidiary which represent in excess of 65% of the combined voting
power of all classes of capital stock of such Foreign Subsidiary shall not be
pledged; provided, however, that if following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder which would
permit a pledge of 66-2/3% or more of the total combined voting power of all
classes of capital stock of any Foreign Subsidiary entitled to vote without
causing the undistributed earnings of such Foreign Subsidiary as determined for
Federal income taxes to be treated as a deemed dividend to the Borrower for
Federal income tax purposes, then the 65% limitation set forth above shall no
longer be applicable and the Borrower shall cause to be duly pledged and
delivered to Bank such of the capital stock not theretofore required to be
pledged under this Agreement.


ARTICLE
V.


NEGATIVE
COVENANTS


Borrower will not, and no
Subsidiary of Borrower will:


SECTION 5.01.      Indebtedness. 
Create, incur, or permit to exist, or assume or guarantee, directly or
indirectly, or become or remain liable with respect to, any Indebtedness,
contingent or otherwise except:



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(a)                                  Indebtedness
to Bank, or secured by Liens permitted by this Agreement, or otherwise approved
in writing by Bank, and renewals and extensions (but not increases) thereof;


(b)                                 Purchase
money Indebtedness owing to Persons other than Bank, so long as the amount of
such purchase money Indebtedness incurred by Borrower does not exceed $250,000, in the aggregate at any
time outstanding;


(c)                                  Indebtedness
(other than the purchase money Indebtedness referenced in Section 5.01(b))
owing to Persons other than Bank, so long as the amount of such Indebtedness
incurred by Borrower does not exceed $250,000,
in the aggregate at any time outstanding;


(d)                                 Indebtedness
outstanding as of the date hereof more particularly described in Schedule
5.01 attached hereto, and all renewals and extensions (but not increases)
thereto; and


(e)                                  Current
accounts payable and unsecured current liabilities, not the result of
borrowing, to vendors, suppliers and Persons providing services, for
expenditures for goods and services normally required by it in the ordinary
course of business and on ordinary trade terms.


SECTION 5.02.      Liens. 
Create or permit to exist any Lien upon any of its Property now owned or
hereafter acquired, except:


(a)                                  Liens,
not for borrowed money, arising in the ordinary course of business;


(b)                                 Liens
for taxes not delinquent or being contested in good faith by appropriate
proceedings;


(c)                                  Liens
in effect on the date hereof and set forth in Schedule 5.02, so long as neither
the indebtedness secured thereby nor the Property covered thereby increases;


(d)                                 Liens
securing purchase money Indebtedness that is otherwise permitted under Section
5.01(b) of this Agreement; and


(e)                                  Liens
in favor of Bank, or otherwise approved in writing by Bank.


SECTION 5.03.      Financial
and Other Covenants.  Fail to comply with the required financial
covenants and other covenants described, and calculated as set forth, in Exhibit
B.  Unless otherwise provided on Exhibit
B, all such amounts and ratios will be calculated: (a) on the basis of
GAAP; and (b) on a consolidated basis. 
Compliance with the requirements of Exhibit B will be determined
as of the dates of the financial statements to be provided to Bank.


SECTION 5.04.      Corporate
Changes.  In any single transaction or series of
transactions, directly or indirectly:



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(a)                                  liquidate
or dissolve except for Subsidiaries into Subsidiaries that are Guarantors or
into Borrower;


(b)                                 be
a party to any merger, acquisition or consolidation except between Subsidiaries
that are Guarantors, or with Borrower as long as Borrower is the surviving
entity;


(c)                                  sell
or dispose of any interest in any of its Subsidiaries, or permit any of its
Subsidiaries to issue any additional equity other than to Borrower or to a
Subsidiary that is a Guarantor;


(d)                                 sell,
convey or lease all or any substantial part of its assets, except for
sale of inventory in the ordinary course of business; or


(e)                                  permit
any Change in Control of Borrower, without the consent of Bank, which consent
shall not be unreasonably withheld, conditioned, or delayed.


SECTION 5.05.      Restricted
Payments.  Unless otherwise permitted on Exhibit B,
at any time: (a) redeem, retire or otherwise acquire, directly or indirectly,
any shares of its capital stock or other equity interest except a
Permitted Redemption; (b) declare or pay any dividend (except (i) stock
dividends and dividends paid to Borrower, and/or (ii) any other dividends to
the extent that (A) an Event of Default has not occurred and is not then
continuing, and (B) giving effect to such dividend will not result in the
occurrence of an Event of Default); or (c) make any other distribution or contribution
of any Property or cash or obligation to owners of an equity interest or to a
Subsidiary in their capacity as such.


SECTION 5.06.      Nature of
Business; Management.  Change the nature of its business or enter
into any business which is substantially different from the business in which
it is presently engaged.


SECTION 5.07.      Affiliate
Transactions.  Enter into any transaction or agreement with
any Affiliate except upon terms substantially similar to those obtainable from
wholly unrelated sources.


SECTION 5.08.      Subsidiaries. 
Form, create or acquire any Subsidiary without Bank’s prior written
consent, which consent (a) may be withheld in Bank’s sole and absolute
discretion with respect to the formation, creation or acquisition of any
Foreign Subsidiary, and (b) shall not be unreasonably withheld or delayed with
respect to any Domestic Subsidiary so long as (i) no Default or Event of
Default exists or would result therefrom, and (ii) Borrower promptly complies
with Section 4.12 of this Agreement.


SECTION 5.09.      Loans and
Investments.  Unless otherwise provided on Exhibit B,
make any advance, loan, extension of credit, or capital contribution to or
investment in, or purchase, any stock, bonds, notes, debentures, or other
securities of, any Person, except:


(a)                                  readily
marketable direct obligations of the United States of America or any agency
thereof with maturities of one year or less from the date of acquisition;



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(b)                                 a
Permitted Redemption;


(c)                                  Permitted
Investments;


(d)                                 fully
insured certificates of deposit with maturities of one year or less from the
date of acquisition issued by any commercial bank operating in the United
States of America having capital and surplus in excess of $50,000,000.00; and


(e)                                  commercial
paper of a domestic issuer if at the time of purchase such paper is rated in
one of the two highest rating categories of Standard and Poor’s Corporation or
Moody’s Investors Service.


SECTION 5.10.      Capital Expenditures.  Permit the aggregate Capital
Expenditures of Borrower and its Subsidiaries to exceed $500,000 on an annual
basis during the term of this Agreement.


SECTION 5.11.      Government Regulation.  (1) be or become subject at any time to any
law, regulation, or list of any government agency (including, without
limitation, the U.S. Office of Foreign Asset Control list) that prohibits or
limits Bank from making any advance or extension of credit to Borrower or from
otherwise conducting business with Borrower, or (2) fail to provide documentary
and other evidence of Borrower’s identity as may be requested by Bank at any
time to enable Bank to verify Borrower’s identity or to comply with any
applicable law or regulation, including, without limitation, Section 326 of the
USA Patriot Act of 2001, 31 U.S.C. Section 5318.


SECTION 5.12.      Change Of
Chief Executive Officer. Cause or permit the Chief Executive Officer of the
Borrower to cease being directly involved in the executive management of the
Borrower (as Chief Executive Officer, or otherwise) without notifying the Bank
in writing (“CEO Change Notice”) of the occurrence of such event within
five (5) Business Days after such occurrence (“Change Notice Period”).  Upon delivery of such notice to the Bank, the
Borrower may, for a period of 90 days from the date of such notice (the “Substitution
Period”), seek a qualified replacement for the Chief Executive Officer that
is reasonably acceptable to the Bank. If the Borrower fails to provide the CEO
Change Notice, or fails to find a qualified replacement reasonably acceptable
to the Bank within the Substitution Period, then the Bank may elect to (i)
terminate the Commitment by so notifying the Borrower in writing (such notice
being referred to herein as the “Termination Notice”) within thirty (30)
days after the expiration date of the Substitution Period (or, in the case of a
failure of Borrower to timely provide the CEO Change Notice, at any time after
the of end of Change Notice Period), and (ii) accelerate the Termination Date
to a date which is thirty (30) days after the date of the Termination Notice.


 



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ARTICLE VI.



EVENTS OF DEFAULT AND REMEDIES


SECTION 6.01.      Events
of Default.  Each of the following is
an “Event of Default”:


(a)                                  Any Obligor fails to
pay any principal of the Note as and when due; or


(b)                                 Any Obligor fails to
pay any interest on the Note or any other obligation under any Loan Document as
and when due and such failure remains unremedied for five (5) days; or


(c)                                  Any
Obligor or any Subsidiary of Borrower fails to pay at maturity, or within any
applicable period of grace, any principal of or interest on any other borrowed
money obligation in excess of $250,000; or


(d)                                 Any
representation or warranty made in any Loan Document was incorrect, false or
misleading when made; or


(e)                                  Any
Obligor violates any term, covenant or other provision contained in any Loan
Document and, only in respect of the
violation of covenants in Sections 4.01, 4.02, 4.05, 4.06 and 4.07 of this
Agreement, such failure shall continue unremedied for ten (10) business days;
or


(f)                                    An
event of default (other than an event of default covered by (a), (b) or (d)
above) occurs under any other Loan Document; or


(g)                                 Final
judgment for the payment of money in excess of $50,000 is rendered against any
Obligor or any Subsidiary of Borrower and remains undischarged for a period of
thirty (30) days during which execution is not effectively stayed; or


(h)                                 The
making of any levy, seizure, garnishment, sequestration or attachment of or on
any of the Collateral; or


(i)                                     Any
order is entered in any proceeding against any Obligor or any Subsidiary of
Borrower decreeing the dissolution, liquidation or split-up thereof, and such
order shall remain in effect for thirty (30) days; or


(j)                                     Any
Obligor or any Subsidiary of Borrower makes a general assignment for the
benefit of creditors or shall petition or apply to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or any
substantial part of its business, estate or assets or shall commence any
proceeding under any bankruptcy, insolvency, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect; or any such petition or
application shall be filed or any such proceeding shall be commenced against
any Obligor or any Subsidiary of Borrower and the Obligor or such Subsidiary by
any act or omission shall indicate



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approval thereof, consent thereto or
acquiescence therein, or an order shall be entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of the assets
of any Obligor or any Subsidiary of Borrower or granting relief to any Obligor
or any Subsidiary of Borrower or approving the petition in any such proceeding,
and such order shall remain in effect for more than thirty (30) days; or any
Obligor or any Subsidiary of Borrower shall fail generally to pay its debts as
they become due or suffer any writ of attachment or execution or any similar
process to be issued or levied against it or any substantial part of its
property which is not released, stayed, bonded or vacated within thirty (30)
days after its issue or levy; or


(k)                                  A
material adverse change occurs in the assets, liabilities, financial condition,
business or affairs of any Obligor or any Subsidiary of Borrower; or


(l)                                     Any
Change of Control for which Borrower has not obtained the written consent of
Bank.


SECTION 6.02.      If any Event of
Default occurs, then Bank may do any or all of the following, at its sole
discretion: (1) declare the Obligations to be immediately due and payable
without notice of acceleration or of intention to accelerate, presentment and
demand or protest, all of which are hereby expressly waived; (2) without notice
to any Obligor, terminate the Commitment and accelerate the Termination Date;
(3) set off, in any order, against the indebtedness of any Obligor under the
Loan Documents any debt owing by Bank to the Obligor (whether such debt is owed
individually or jointly), including, but not limited to, any deposit account,
which right is hereby granted by each Obligor to Bank; and (4) exercise any and
all other rights pursuant to the Loan Documents, at law, in equity or
otherwise.  Nothing in this Agreement is
intended to waive or vary the duties of Bank or the rights of any Obligor in
violation of Section 9.602 of the Texas Business and Commerce Code.


SECTION 6.03.      Remedies
Cumulative.  No remedy, right or power of Bank is
exclusive of any other remedy, right or power now or hereafter existing by
contract, at law, in equity, or otherwise, and all remedies, rights and powers
are cumulative.


ARTICLE VII.



MISCELLANEOUS.


SECTION 7.01.      No Waiver.  No
waiver of any default or Event of Default will be a waiver of any other default
or Event of Default.  No failure to
exercise or delay in exercising any right or power under any Loan Document will
be a waiver thereof, nor shall any single or partial exercise of any such right
or power preclude any further or other exercise thereof or the exercise of any
other right or power.  The making of any
Loan during either the existence of any default or Event of Default, or
subsequent to the occurrence of an Event of Default will not be a waiver of any
such default or Event of Default.  No
amendment, modification or waiver of any Loan Document will be effective unless
the same is in writing and signed by the Person against whom such amendment,
modification or waiver is sought to be enforced.  No notice to or demand on



 12
 






 



any Person
shall entitle any Person to any other or further notice or demand in similar or
other circumstances.


SECTION 7.02.      Notices. 
All notices required under the Loan Documents shall be in writing and
either delivered against receipt therefor, or mailed by registered or certified
mail, return receipt requested, in each case addressed to the address shown on
the signature page hereof or to such other address as a party may designate, or
by facsimile to the facsimile number shown on the last page (provided that a
copy of such facsimile shall also be sent by registered or certified mail,
return receipt requested).  Except for
the notices required by Section 2.1, which shall be given only upon actual
receipt by Bank, notices shall be deemed to have been given (whether actually
received or not) when delivered (or, if mailed, on the next Business Day).


SECTION 7.03.      Governing
Law.  UNLESS OTHERWISE SPECIFIED THEREIN, EACH LOAN
DOCUMENT IS GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.


SECTION 7.04.      Survival;
Parties Bound; Term of Agreement.  All representations, warranties, covenants
and agreements made by or on behalf of Borrower in the Loan Documents will
survive the execution and delivery of the Loan Documents; will not be affected
by any investigation made by any Person, and will bind Borrower and the
successors, trustees, receivers and assigns of Borrower and will benefit the
successors and assigns of Bank; provided that Bank’s agreement to make
Loans to Borrower will not inure to the benefit of any successor or assign of
Borrower.  Except as otherwise provided
herein, the term of this Agreement will be until the later of the final maturity
of the Note and the full and final payment of all Obligations and all amounts
due under the Loan Documents.


SECTION 7.05.      Documentary
Matters.  This Agreement may be executed in several
identical counterparts, on separate counterparts; each counterpart will constitute
an original instrument, and all separate counterparts will constitute but one
and the same instrument.  The headings
and captions in the Loan Documents have been included solely for convenience
and should not be considered in construing the Loan Documents.  If any provision of any Loan Document is
invalid, illegal or unenforceable in any respect under any applicable law, the
remaining provisions will remain effective.


SECTION 7.06.      Expenses.  Any provision to the contrary notwithstanding,
and whether or not the transactions contemplated by this Agreement are
consummated, Borrower agrees to pay on demand all out-of-pocket expenses
(including, without limitation, the reasonable fees and expenses of counsel for
Bank) in connection with the negotiation, preparation, execution, filing,
recording, modification, supplementing and waiver of the Loan Documents and the
making, servicing and collection of the Loans. 
Borrower agrees to pay Bank’s standard Documentation Preparation and
Processing Fee for preparation, negotiation and handling of this
Agreement.  The obligations of Borrower
under this and the following section will survive the termination of this
Agreement.


SECTION 7.07.      Indemnification.  Borrower agrees to indemnify, defend and hold
Bank harmless from and against any and all loss, liability, obligation, damage,
penalty, judgment,



 13
 






 



claim,
deficiency and expense (including interest, penalties, attorneys’ fees and
amounts paid in settlement) to which Bank may become subject arising out of or
based upon the Loan Documents, or any Loan, INCLUDING
ALL LOSS, LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY
AND EXPENSE RESULTING FROM BANK’S OWN NEGLIGENCE, except and
to the extent caused by Bank’s gross negligence or willful misconduct.


SECTION 7.08.      Nature of
Obligations.  If more than one Borrower executes this
Agreement, all of the representations, warranties, covenants and agreements of
Borrower shall be joint and several obligations of all Borrowers.


SECTION 7.09.      Usury Not
Intended.  No provision of this Agreement or of any other
Loan Document shall require the payment or the collection of interest in excess
of the maximum amount permitted by applicable law.  If any excess of interest in such respect is
hereby provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the provisions
of this Section shall govern and prevail and neither the Borrower nor the
sureties, guarantors, successors, or assigns of the Borrower shall be obligated
to pay the excess amount of such interest or any other excess sum paid for the
use, forbearance, or detention of sums loaned pursuant hereto.  In the event Bank ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by the Note; and, if
the principal of the Note has been paid in full, any remaining excess shall
forthwith be paid to the Borrower.  In
determining whether or not the interest paid or payable exceeds the Highest
Lawful Rate, the Borrower and Bank shall, to the extent permitted by applicable
law, (a) characterize any non-principal payment as an expense, fee, or
premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal
or unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness evidenced by the Note so that interest for the entire
term does not exceed the Highest Lawful Rate.


SECTION 7.10.      No
Course of Dealing.  NO COURSE OF DEALING BY BORROWER WITH BANK,
NO COURSE OF PERFORMANCE AND NO TRADE PRACTICES OR OTHER EXTRINSIC EVIDENCE OF
ANY NATURE MAY BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF
THIS AGREEMENT.


SECTION 7.11.      Jury
Trial Waiver.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW, BORROWER AND BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE
ANY RIGHT TO TRIAL BY JURY THAT BORROWER OR BANK MAY HAVE IN ANY ACTION OR
PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR THE
OBLIGATIONS. BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT
OF BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WILL NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THIS RIGHT TO JURY TRIAL WAIVER. BORROWER
ACKNOWLEDGES THAT BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE PROVISIONS OF THIS SECTION.


 



 14














 


SECTION 7.12.      NO
ORAL AGREEMENTS.  THIS AGREEMENT, THE
NOTE AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO.  THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES HERETO.


SECTION
7.13.      USA PATRIOT ACT NOTIFICATION.
The following notification is provided to Borrower pursuant to Section 326 of
the USA Patriot Act of 2001, 31 U.S.C. Section 5318:


IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A
NEW ACCOUNT. To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury management
account, loan, other extension of credit, or other financial services product.
What this means for Borrower: When Borrower opens an account, if Borrower is an
individual Bank will ask for Borrower’s name, taxpayer identification number,
residential address, date of birth, and other information that will allow Bank
to identify Borrower, and if Borrower is not an individual Bank will ask for
Borrower’s name, taxpayer identification number, business address, and other
information that will allow Bank to identify Borrower. Bank may also ask, if
Borrower is an individual to see Borrower’s driver’s license or other
identifying documents, and if Borrower is not an individual to see Borrower’s
legal organizational documents or other identifying documents.


ARTICLE
VIII.


DEFINITIONS.


Unless
the context otherwise requires, capitalized terms used in Loan Documents and
not defined elsewhere shall have the meanings provided by GAAP, except as
follows:


Affiliate means, as to any Person,
any other Person that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
such Person.  The term “control” means to
possess, directly or indirectly, the power to direct the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.  Bank is not
under any circumstances to be deemed an Affiliate of Borrower or any of its
Subsidiaries.


Authority Documents means certificates of
authority to transact business, certificates of good standing, borrowing
resolutions (with secretary’s certificate), secretary’s certificates of
incumbency, and other documents which empower and enable Borrower or its
representatives to enter into agreements evidenced by Loan Documents or
evidence such authority.



 15
 






 



Business Day means a day when the
main office of Bank is open for the conduct of commercial lending business.


Capital Expenditures means, for any period, the additions to property, plant and equipment
and other capital expenditures of the Borrower and its Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP.


Change
in Control means
(a) other than the purchase by an underwriter in connection with a public
offering, the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), of shares representing more than
35% of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding capital stock of the Borrower, other
than by the Current Owners or either of them); or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of
the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated.


Chief
Executive Officer means
James Taylor or any successor Bank may approve in accordance with this
Agreement.


Collateral means all accounts receivable for sales of products and
services provided by the Borrower or any Subsidiary to their respective
customers in the ordinary course of business, now or hereafter subject to Security Documents,
or intended so to be, as well as certain equity interest of Borrower in its
Subsidiaries, all as more particularly set forth in the Security Documents.


Control  means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.


Corporation means corporations,
partnerships, limited liability companies, joint ventures, joint stock
associations, associations, banks, business trusts and other business entities.


Current Owners means Edward P. Evans
and General John T. Chain.


Distributions means all dividends and
distributions made by Borrower to its shareholders, partners, owners or
members, as the case may be, other than salary, bonuses or other compensation
for services expending in the current accounting period.


Domestic Subsidiaries means Subsidiaries other than Foreign Subsidiaries.


Effective Prime Rate has the meaning attributed to such term in the Note.


Foreign
Subsidiary means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any state
thereof or the District of Columbia.



 16
 






 



Governmental Authority means any foreign
governmental authority, the United States of America, any state of the United
States and any political subdivision of any of the foregoing, and any agency,
department, commission, board, bureau, court or other tribunal having
jurisdiction over Bank or any Obligor, or any Subsidiary of Borrower or their
respective Property.


Highest Lawful Rate means the maximum
nonusurious rate of interest permitted to be charged by applicable Federal or
Texas law (whichever permits the higher lawful rate) from time to time in
effect.  To the extent that Texas law determines the Highest Lawful Rate, the
Highest Lawful Rate is the weekly rate ceiling as defined in the Texas Finance
Code Chapter 303.


Indebtedness means and includes (a)
all items which in accordance with GAAP would be included on the liability side
of a balance sheet on the date as of which Indebtedness is to be determined
(excluding capital stock, surplus, surplus reserves and deferred credits); (b)
all guaranties and other contingent obligations in respect of, or any
obligations to purchase or otherwise acquire, Indebtedness of others, and (c)
all Indebtedness secured by any Lien existing on any interest of the Person
with respect to which Indebtedness is being determined, in Property owned
subject to such Lien, whether or not the Indebtedness secured thereby has been
assumed.


Initial Measurement Period means, with respect to
the Tangible Net Worth requirement in Section 4.10, the period commencing
January 1, 2006 and ending as of the date of such determination.


Intangible Assets means patent rights, trademarks, trade names,
franchises, copyrights, licenses, goodwill, and all other intangible assets of
such Person.


Legal Requirement means any law,
ordinance, decree, requirement, order, judgment, rule, regulation (or
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority.


Lien shall mean any mortgage,
pledge, charge, encumbrance, security interest, collateral assignment or other
lien or restriction of any kind, whether based on common law, constitutional
provision, statute or contract.


Loan Documents means this Agreement,
the Note and the agreements, documents and instruments required to be executed
by the Parties in connection with this Agreement or listed as items 1 through 4
on Annex I, all other assignments, deeds, guaranties, pledges,
instruments, certificates and agreements now or hereafter executed or delivered
to Bank pursuant to any of the foregoing, and all amendments, modifications,
renewals, extensions, increases and rearrangements of, and substitutions for,
any of the foregoing.


Material Adverse Effect means, with respect to a
Person, a material and adverse affect on the financial
condition, business or affairs.



 17
 






 



Net Income means the net income (or loss) of a Person for any
applicable period of determination, determined in accordance with GAAP, but
excluding, in any event:


(a)                                  any
gains or losses on the sale or other disposition, not in the ordinary course of
business, of investments or fixed or capital assets, and any taxes on the
excluded gains and any tax deductions or credits on account of any excluded
losses; and


(b)                                 in
the case of Borrower, net earnings of any Person in which Borrower has an
ownership interest, unless such net earnings shall have actually been received
by Borrower in the form of cash distributions.


Note means the Revolving
Promissory Note identified on Annex I to this Agreement, as such Note may be
amended, restated, renewed or otherwise modified from time to time.


Obligations means all debts,
obligations and liabilities of every kind and character of Borrower, whether
joint or several, contingent or otherwise, now or hereafter existing in favor
of Bank and arising out of or in connection with the Loan Documents, including
without limitation, all principal, interest and other amounts which are or
become owing under this Agreement, the Note or any other Loan Document.  Borrower and Bank specifically contemplate
that Obligations include indebtedness hereafter incurred by Borrower to Bank
pursuant to the Loan Documents.


Obligor means each Borrower and
any guarantor, surety, co-signer, general partner or other person who may now
or hereafter be obligated to pay all or any part of the Obligations.


Organizational Documents means, with respect to a
corporation, the certificate of incorporation, articles of incorporation and
bylaws of such corporation; with respect to a limited liability company, the
articles of organization, regulations and other documents establishing such
entity, with respect to a partnership, joint venture, or trust, the agreement,
certificate or instrument establishing such entity; in each case including all
modifications and supplements thereof as of the date of the Loan Document
referring to such Organizational Document and any and all future modifications
thereof which are consented to by Bank.


Parties  means all Persons other than Bank executing
any Loan Document.


Permitted Investments means
any advances, loans, extensions of credit, or capital contributions to or
investments in, or purchases of any stock, bonds, notes, debentures, or other
securities of, any Person or Persons, which, when combined, do not exceed $500,000 in the aggregate.


Permitted Redemption means any redemption by
Borrower from time to time of all or any portion of its capital stock, and/or
treasury stock but only to the extent that (i) an Event of Default has not
occurred and is not then continuing, (ii) giving effect to such redemption will
not result in the occurrence of an Event of Default, (iii) the combined
consideration for all such redemptions during any twelve month period does not
exceed in the aggregate positive Net
Income for the twelve month period ending immediately ending prior to the date
of such Permitted Redemption after giving affect to same, and (iv) the cashless
exercise of stock options.



 18
 






 



Person means any individual,
Corporation, trust, unincorporated organization, Governmental Authority or any
other form of entity.


Proper Form means in form and
substance satisfactory to Bank.


Property means any interest in
any kind of property or asset, whether real, personal or mixed, tangible or
intangible.


Security Documents means item number 4
listed on Annex I and all supplements, modifications, amendment,
extensions thereof and all other agreements hereafter executed and delivered to
Bank to secure the Loans.


Stock Repurchases means any redemption by
Borrower from time to time of all or any portion of its capital stock, and/or
treasury stock.


Subsidiary means, as to a
particular parent Corporation, any Corporation of which 50% or more of the
indicia of equity rights is at the time directly or indirectly owned by such
parent Corporation or by one or more Persons controlled by, controlling or
under common control with such parent Corporation.


Tangible Net Worth means total assets less
the sum of Intangible Assets and total liabilities.


THIS WRITTEN LOAN AGREEMENT
TOGETHER WITH THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
BANK AND THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF BANK AND THE PARTIES.


THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN BANK AND THE PARTIES.


This Agreement may be executed in any number of
counterparts, each of which will for all purposes be deemed to be an original
and all of which are identical.


[Signatures on following
page]


 



 19














 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the Effective Date.


	
  BORROWER:

  	
  THOMAS GROUP, INC., a Delaware corporation

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


	
  

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  5221 N. O’Connor Blvd., Suite 500

  
	
   

  	
  Irving, Texas 75039

  
	
   

  	
  Attn: David English

  
	
   

  	
  Fax:

  	
   

  



 


	
  BANK:

  	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
   

  	
  a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Debbie Sowards

  
	
   

  	
   

  	
  Senior Vice
  President

  



 


	
  

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  1717 Main Street, 3rd Floor

  
	
   

  	
  Dallas, Texas 75201

  
	
   

  	
  Attn: Debbie Sowards

  
	
   

  	
  Fax: (214) 290-2765

  



 















 


EXHIBITS


A.            Request
For Loan


B.            Reporting
Requirements, Financial Covenants, and Compliance Certificate


C.            Reserved


 


ANNEXES


I.              Loan
Documents


II.            Subsidiaries


 















 


EXHIBIT A


REQUEST FOR LOAN


[Letterhead of Borrower]


JPMorgan
Chase Bank


[branch
address to be inserted]


 


	
  Re: 

  	
  Request for Loan under Agreement

  
	
  Account #:

  	
   

  	
   

  
	
  Note #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
				



 


Ladies and Gentlemen:


This letter confirms our oral or telephonic request of
________________, 200__, for a Loan in accordance with that certain Credit
Agreement dated as of September ___, 2006 (as amended, restated and
supplemented from time to time, the “Agreement”)
between you and us.  Any term defined in
the Agreement and used in this letter has the same meaning as in the Agreement.


(check if applicable)


                1.             The proposed Loan is to be in the amount of $                    
and is to be made on                      ,
200     , which is a Business Day at least             
Business Days after the date of this letter. 
The proceeds of the proposed Loan should be (check one:)  ̈ deposited into account number
                 
with Bank o                                     . The Borrower confirms the request that
the Loan be of the following Type:


(i) Type (check
whichever is applicable)


	
         

  	
  LIBOR Loan having an
  Interest Period of (check whichever is applicable):

  	
   

  	
   

  
	
   

  	
  one month

  	
   

  	
   

  
	
   

  	
   

  	
  two months

  	
   

  	
   

  
	
   

  	
   

  	
  three months

  	
   

  	
   

  
	
   

  	
   

  	
  four months

  	
   

  	
   

  
	
   

  	
   

  	
  six months

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
         

  	
  Prime Rate Loan

  	
   

  	
   

  



 



 1
 






 



(check if applicable)


                2.             With
respect to an existing Loan, Borrower requests that the Bank do as follows:


                Requests that the Bank convert a LIBOR
Loan into a Prime Rate Loan in the amount of $                    .


                The Borrower confirms the request that the
Bank convert a Prime Rate Loan into a LIBOR Loan in the amount of $                   ,
having an Interest Period of (check whichever is applicable):


	
  

  	
   

  	
  one month

  
	
   

  	
   

  	
  two months

  
	
   

  	
   

  	
  three months

  
	
   

  	
   

  	
  four months

  
	
   

  	
   

  	
  six months

  



 


                Requests that the Bank continue a LIBOR
Loan in the amount of $       , having an
Interest Period of (check whichever is applicable):


	
  

  	
   

  	
  one month

  
	
   

  	
   

  	
  two months

  
	
   

  	
   

  	
  three months

  
	
   

  	
   

  	
  four months

  
	
   

  	
   

  	
  six months

  



 


The
undersigned hereby certifies that:


(1)     The representations and warranties made by
Borrower or by any other Person in the Agreement and                                        the
other Loan Documents are true and correct on and as of this date as though made
on this date.


(2)     The proposed Loan complies with all
applicable provisions of the Agreement.


(3)     No Event of Default has occurred and is
continuing.


Sincerely,


	
  

  	
  THOMAS GROUP, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  :

  
	
   

  	
   

  	
  Title

  	
   

  



 



 2














 


EXHIBIT B


to Credit Agreement between


Thomas Group, Inc. (“Borrower”)
and JPMorgan Chase Bank, N.A. (“Bank”)


dated the Effective Date, as same may be amended, restated and
supplemented in writing.


 


REPORTING REQUIREMENTS, FINANCIAL
COVENANTS AND


COMPLIANCE CERTIFICATE FOR
CURRENT REPORTING PERIOD ENDING           ,
200        (“END DATE”)


 


A.                                   REPORTING PERIOD.  THIS EXHIBIT WILL BE IN PROPER FORM AND
SUBMITTED WITHIN  45 DAYS OF THE END OF
EACH CALENDAR QUARTER AND WITH THE FISCAL YEAR END FINANCIAL STATEMENT.


BORROWER’S FISCAL YEAR
ENDS ON DECEMBER 31


B. Financial Reporting.  Borrower will provide the following financial
information in Proper Form within the times indicated:


 


	
  

  	
  WHO

  	
   

  	
   

  	
   

  	
  WHEN DUE

  	
   

  	
   

  	
   

  	
  WHAT

  	
   

  
	
  BORROWER

  	
   

  	
  Within 120 days of fiscal
  year end

  	
   

  	
  Annual financial
  statements (balance sheet, income statement, cash flow statement), audited
  (with unqualified opinion) by independent certified public accountants
  satisfactory to Bank, accompanied by Compliance Certificate

  
	
  BORROWER

  	
   

  	
  Within 45 days of each Reporting Period End Date.

  	
   

  	
  Unaudited interim financial statements accompanied
  by Compliance Certificate

  



 









 



 


	
  C. FINANCIAL COVENANTS.
  Borrower will comply with the following financial covenants, defined in
  accordance with GAAP and the definitions in Section 8, and incorporating
  the calculation adjustments indicated on the Compliance Certificate:

  	
   

  	
  COMPLIANCE
  CERTIFICATE

  	
   

  	
   

  	
   

  
	
  REQUIRED

  Except as
  specified otherwise, each covenant will be complied with at all times and reported
  for each Reporting Period or as of each Reporting Period End Date, as
  appropriate:

  	
   

  	
  ACTUAL REPORTED

  For Current
  Reporting Period/as of the End Date

  	
   

  	
   

  	
  COMPLIANCE

  Yes   No

  (Circle One)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   1.
  Have a Tangible Net Worth greater than or equal to (i) $8,000,000, plus (ii)
  50% of the sum of (a) positive Net Income for the four quarter period then
  ending/Initial Measurement Period (as applicable), minus (b) Stock
  Repurchases for the four quarter period then ending/Initial Measurement
  Period (as applicable), minus (c) Distributions for the four quarter period
  then ending/Initial Measurement Period (as applicable)

  	
   

  	
  Tangible Net Worth equals:

   

  Covenant Calculation

  Positive Net Income

   

  Minus: Stock
  Repurchases

  Distributions

   

  Equals: Times 50%: 

   

  Plus $8,000,000

   

  Equals (Covenant Requires):

   

  	
  $

   

   

  $

   

  $

  $

   

  $

   

  $

   

  $

   

  	
        

   

   

        

   

        

        

   

        

   

        

   

        

  	
  Yes    No

  
	
  2. Outstanding Purchase Money Indebtedness (not to exceed $250,000 per Section 5.01(b))

  	
   

  	
    $                          

  	
   

  	
   

  	
  Yes   No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. Outstanding Indebtedness permitted under Section 5.01(c) (not
  to exceed $250,000)

  	
   

  	
    $                          

  	
   

  	
   

  	
  Yes   No

  



 









 



 


	
  4. Permitted Redemption
  consideration obligation to date (total not to exceed in the aggregate
  positive Net Income for the twelve month period ending as of the date of such
  Permitted Redemption upon giving affect to same per Section 5.09(b))

  	
   

  	
    $                     

  	
   

  	
   

  	
  Yes   No

  
	
  5. Permitted Investments to date (not to exceed $500,000 per Section 5.09(c))

  	
   

  	
    $                     

  	
   

  	
   

  	
  Yes   No

  



 


THE ABOVE SUMMARY REPRESENTS SOME OF THE COVENANTS
AND AGREEMENTS CONTAINED IN THE AGREEMENT AND DOES NOT IN ANY WAY RESTRICT OR
MODIFY THE TERMS AND CONDITIONS OF THE AGREEMENT.  IN CASE OF CONFLICT BETWEEN THIS EXHIBIT B
AND THE AGREEMENT, THE AGREEMENT SHALL CONTROL.


The undersigned hereby certifies that the above
information and computations are true and correct and not misleading in any
material respect as of the date hereof, and that since the date of Borrower’s
most recent Compliance Certificate (if any):


 ̈            No default or Event of Default has occurred under the
Agreement during the current Reporting Period, or been                             discovered
from a prior period, and not reported.


 ̈            A default or Event of Default (as described below) has
occurred during the current Reporting Period or has                                   been
discovered from a prior period and is being reported for the first time and:


 ̈ was cured on                           .


 ̈ was waived by Bank in
writing on                       .


 ̈ is continuing.


 


Description of Event of Default:










 



 


Executed this            
day of                             ,
200              .


	
  BORROWER: THOMAS GROUP, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
  (Chief Financial Officer or President)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 















 


EXHIBIT C


RESERVED


 















 


ANNEX I


Loan
Documents


“Loan Documents” includes, but is not limited to,
the following, all of which must be in Proper Form:


	
  1.

  	
   

  	
  Agreement

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Revolving Promissory Note (the “Note”)

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  One or more Security
  Agreements, in Proper Form, covering all Collateral

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Financing Statements

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Opinion of Borrower’s and Guarantor’s Counsel

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Certified Copies of Organizational and Authority
  Documents

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Insurance policies and certificates

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Financial Statements of Borrower

  
	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  UCC search

  



 















 


ANNEX II


Subsidiaries


[To be provided]


 















 


Schedule 5.1


Existing Indebtedness


(to be inserted)