FIRST MODIFICATION AGREEMENT
Exhibit 10.11
This First Modification Agreement (“Agreement”) dated as of this 31st day of March,
2008 by and among XX XXXXXX XXXXX BANK, N.A. (“Bank”), DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS,
INC., a Delaware corporation (“Company”), DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS, NA, INC., an
Illinois corporation (“US Subsidiary”), and DIAMOND PARTNERS LIMITED, a United Kingdom corporation
(“UK Subsidiary”) (hereinafter, the US Subsidiary and the UK Subsidiary are collectively referred
to herein as, the “Guarantors”) (hereinafter, the Company and the Guarantors are collectively
referred to herein as, the “Borrowing Parties”),
RECITALS:
WHEREAS, Bank and the Company have entered into that certain Amended and Restated Credit
Agreement dated July 31, 2007 (“Credit Agreement”) relating to a revolving loan (the “Loan”) in the
maximum principal amount of Ten Million and No/100 Dollars ($10,000,000.00) granted by Bank to the
Company;
WHEREAS, in connection with the Credit Agreement and to evidence all amounts due to Bank in
connection therewith the Company has executed and delivered to Bank that certain 2007 Restated
Revolving Note (the “Existing Revolving Note”) of even date with the Credit Agreement in the
original principal amount of Ten Million and No/100 Dollars ($10,000,000.00);
WHEREAS, the repayment in full of all amounts due and owing to Bank from the Company in
connection with the Credit Agreement and the Existing Revolving Note has been guaranteed by the US
Subsidiary, which is a wholly owned subsidiary of the Company, pursuant to that certain 2007
Restated Guaranty (the “US Subsidiary Guaranty”) of even date with the Credit Agreement and
Existing Revolving Note executed by the US Subsidiary and delivered to Bank;
WHEREAS, the Borrowing Parties have requested the Bank to: (a) increase the Maximum Revolving
Commitment from Ten Million and No/100 Dollars ($10,000,000.00) to Twenty Million and No/100
Dollars ($20,000,000.00); and (b) to amend certain of the financial covenants in the Credit
Agreement which among other things will enable the Company to repurchase up to Fifty-Five Million
and No/100 Dollars ($55,000,000.00) of its stock during calendar year 2008 subject to the
restrictions for applicable repurchase amounts and time frames contained in Section 6.7(b) of the
Credit Agreement, as amended by this Agreement (collectively, the “Borrowing Parties’ Request”);
WHEREAS, the Company intends to use a portion of the proceeds of the Loan to extend
intercompany loans to and/or make investments in each of the Guarantors and as such, the Guarantors
hereby each acknowledge they will be benefited by the Bank’s increase of the Loan and amendment of
the Loan and the Loan Documents in accordance with the Borrowing Parties’ Request;
WHEREAS, the Bank is willing to consent to the Borrowing Parties’ Request subject to the terms
and conditions of this Agreement and the satisfaction of all of the “Bank’s Conditions Precedent,”
as such term is defined in Paragraph 3 of this Agreement;
WHEREAS, the Borrowing Parties hereby consent to the terms and conditions of this Agreement
and the Bank’s Conditions Precedent for increasing the Loan and amending the Loan and the Loan
Documents in accordance with Borrowing Parties’ Request; and
WHEREAS, the Bank and the Borrowing Parties are desirous of further amending the Existing
Revolving Note, the Credit Agreement and the US Subsidiary Guaranty to modify certain terms
contained therein.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual promises of the
parties hereto and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by all parties hereto, it is agreed as follows:
1. Recitals; Defined Terms. The foregoing recitals to this Agreement are fully
incorporated herein by this reference thereto with the same force and effect as though restated
herein. Except as specifically defined herein, all capitalized terms used in the recitals and in
the body of this Agreement shall have the definitions ascribed therefore in the Credit Agreement.
2. Amendment of Credit Agreement. The Bank, the Company and the Guarantors agree that
the Credit Agreement is hereby modified contemporaneously with the execution of this Agreement as
follows:
(a) Subsection 1.1(ix)(i) which defines one of the events which constitutes a “Default”
is hereby restated to read as follows:
“(i) Either of the Guaranties shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void by any court of competent jurisdiction, or the
validity or enforceability thereof shall be contested by either Guarantor or
either Guarantor shall deny it has any further liability or obligation
under, or shall fail to perform its obligations under its respective
Guaranty, or if either Guarantor at any time terminates its respective
Guaranty.”
(b) The following is hereby added as a new Subsection 1.1(ix)(1) to add a new event
which constitutes a “Default” :
“(1) The failure of Diamond Partners Limited, a United Kingdom corporation
to maintain at all times during the term of this Agreement a principal
balance of no less than Ten Million and No/100 Dollars ($10,000,000.00) in
its money market account pledged to the Bank under the Charge of Deposit.”
(c) The definition of “Guarantor” as set forth in Section 1.1(xii) is hereby restated
to read as follows:
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“Guarantor” shall mean, respectively, each of and collectively,
Diamond Management & Technology Consultants NA, Inc., an Illinois
corporation and Diamond Partners Limited, a United Kingdom corporation.
(d) The definition of “Guaranty” as set forth in Section 1.1(xiii) is hereby restated
to read as follows:
“Guaranty” shall mean, respectively, each of and collectively, the
2007 Restated Guaranty dated July 31, 2007 executed by Diamond Management &
Technology Consultants NA, Inc., an Illinois corporation, as amended by the
First Modification Agreement and the Guaranty dated as of March 31, 2008
executed by Diamond Partners Limited, a United Kingdom corporation. The
term, “Guaranties” shall mean the aforesaid two (2) Guaranties.
(e) The definition of “Loan Document(s)” as set forth in Section 1.1(xix) is hereby
restated to read as follows:
“Loan Document(s)” means this Agreement, the Revolving Note, the
Guaranties, the Security Agreement and the Charge of Deposit.
(f) The definition of the “Maximum Revolving Commitment” as set forth in Section
1.1(xx) is hereby restated to read as follows:
“Maximum Revolving Commitment” shall mean Twenty Million and No/100
Dollars ($20,000,000.00).
(g) The definition of “Revolving Note” as set forth in Section 1.1(xxxiii) is hereby
restated to read as follows:
“Revolving Note” shall mean that certain 2008 Restated Revolving
Note dated as of March 31, 2008 executed by the Company and made payable to
the order of the Bank in the principal amount of Twenty Million and No/100
Dollars ($20,000,000.00).
(h) The following is hereby added as a new Section 1.1(xxxvii) entitled, “Security
Agreement”:
“Security Agreement” shall mean that certain Continuing Security
Agreement dated as of March 31, 2008 executed by the US Subsidiary in favor
of the Bank to secure the US Subsidiary’s obligations under its Guaranty.
(i) The following is hereby added as a new Section 1.1(xxxviii) entitled, “Charge of
Deposit”:
“Charge of Deposit” shall mean that certain Charge of Deposit dated
as of March 31, 2008 executed by Diamond Partners Limited, a United Kingdom
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corporation in order to secure the obligations of Diamond Partners Limited
under the Guaranty executed by it.
(j) The following is hereby added as a new Section 1.1(xxxix) entitled, “First
Modification Agreement”:
“First Modification Agreement” shall mean that certain First
Modification Agreement dated as of March 31, 2008 executed by and among the
Company, the Guarantors and the Bank which increased the Maximum Revolving
Commitment of the Loan to $20,000,000.00 and further amended the Loan and
certain of the Loan Documents as set forth therein.
(k) The following is hereby added as a new Section 1.1(xl) entitled, “Applicable
Margin”:
“Applicable Margin” shall mean the rate per annum added to the Prime
Rate and/or the LIBOR Interest Rate to determine the applicable interest
rate as determined by the “Total Leverage Ratio” (as defined below) as set
forth below:
| Applicable Margin | Applicable Margin | |||||
| Level | Total Leverage Ratio | for Prime Loans | for LIBOR Loans | |||
| I | Less than or equal to 30% | 50 basis points | 75 basis points | |||
| II | Greater than 30% | 50 basis points | 100 basis points |
The “Total Leverage Ratio” shall equal the ratio of the Company’s total liabilities divided by
the sum of the Company’s total liabilities plus the Tangible Net Worth of the Company (as defined
in Section 7.2 of this Agreement) for the prior fiscal quarter, with the Company’s total
liabilities to be determined in accordance with generally accepted accounting principles as set
forth in Section 7.2 of this Agreement.
Notwithstanding the foregoing, in the event that any financial statement or related Financial
Covenant Compliance Certificate is shown to be inaccurate (regardless of whether this Agreement is
in effect or any of the Revolving Credit Loans are outstanding when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin
for any period (an “Applicable Period”) than the Applicable Margin actually applied during
such Applicable Period, then (i) the Company shall immediately deliver to the Bank a corrected
Financial Covenant Compliance Certificate for such Applicable Period, (ii) the Applicable Margin
shall be determined as if Level II were applicable for such Applicable Period, and (iii) the
Company shall immediately pay to the Bank the accrued additional interest owing as a result of such
increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by
the Bank in accordance with the terms of this Agreement. This paragraph shall not limit the rights
of the Bank with respect to its remedies under Section 8 hereof.
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(l) The first paragraph of Section 2.5 entitled, “Interest” is hereby amended and
restated as follows:
“2.5 Interest. The Company shall pay interest to the Bank on the
outstanding and unpaid principal amount of the Revolving Credit Loans made
under this Agreement at a rate per annum as follows:
(i) For a Prime Loan at a rate equal to the Prime Rate plus the
Applicable Margin; and
(ii) For a LIBOR Loan at a rate equal to the LIBOR Interest Rate plus
the Applicable Margin.”
(m) Section 2.7 (viii) is hereby restated to read:
“(viii) The aggregate total face amount of all Letters of Credit issued and
outstanding under this Agreement shall not exceed Four Million and No/100
Dollars ($4,000,000.00).”
(n) Section 2.9 entitled, “Commitment Fee” is hereby amended and restated to read as
follows:
“2.9. Commitment Fee. (a) The Company agrees to pay to the
Bank a commitment fee equal to one-quarter of one percent (1/4%) per annum
(the “Commitment Fee”) on the average daily unused portion of the Maximum
Revolving Commitment from September 1, 2008 to and including the Termination
Date; payable quarterly commencing on October 1, 2008 and continuing on the
first day of each January, April, July and October thereafter. All
Commitment Fees shall be payable on the effective date of any termination of
the obligations of the Bank to make Revolving Credit Loans hereunder
calculated from said date through and including the Termination Date. In
determining the unused portion of the Maximum Revolving Commitment, Bank
shall compute the daily average of both all outstanding Revolving Credit
Loans and the face amount of Letters of Credit for each applicable quarter
or portion thereof and the amount arrived at by said computation shall be
subtracted from the Maximum Revolving Commitment (said amount herein
referenced to as the “Unused Balance”) and the difference multiplied by the
Commitment Fee and the quotient so arrived at by said calculation pro-rated
for the applicable quarter or portion thereof. All calculations of the
Commitment Fee shall be on the basis of a year of 360 days for the actual
number of days elapsed.”
(o) The following is hereby added as a new Section 4.22 entitled, “Distribution of
Shares in Diamond Partners Limited and the Liquidation of DiamondCluster International
B.V.”:
“4.22 Distribution of Shares in Diamond Partners Limited and the
Liquidation of DiamondCluster International B.V. The transfer of one
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hundred (100%) percent of the shares in Diamond Partners Limited, a United
Kingdom corporation from DiamondCluster International B.V., a Netherlands
corporation to its sole shareholder, the Company (the “UK
Subsidiary Stock Transfer”) has occurred on January 24, 2008, that it
constitutes a valid transfer of full title to all of said shares under
English law, that all formalities required to give full force and effect to
said transfer have been properly executed/complied with and that any and all
applicable taxes whether stamp duties or otherwise payable in connection
with the transfer have been paid or that the transfer of shares is exempt
from any such taxes and that all statements, applications and/or
certificates required to be made or delivered in connection with the
applicable exemption(s) have been so made or delivered. The liquidation of
DiamondCluster International B.V. was completed on March 26, 2008 by a
transfer of all of its assets and liabilities to the Company made on January
24, 2008 and March 26, 2008 and the Company assumed all of DiamondCluster
International B.V.’s assets and liabilities in connection with said
liquidation (the “Liquidation”). DiamondCluster International B.V. was
solvent at all times since its organization through and including the dates
of the UK Subsidiary Stock Transfer and the Liquidation, was able to pay its
debts as they became due and had sufficient capital at all times since its
organization through and including the Liquidation to carry on its
businesses.”
(p) Subsection 5.11(vi) under Section 5.11 entitled, “Reporting Requirements” is hereby
amended and restated to read as follows:
“(vi) Financial Covenant Compliance Certificate. A Financial
Covenant Compliance Certificate (which shall also include confirmation of
compliance with Section 6.7 entitled, “Dividends and Stock Redemptions”) in
the form as shown in Schedule I attached hereto contemporaneously with the
execution of this Agreement and within forty (40) days of the end of each
calendar quarter.”
(q) The Financial Covenant Compliance Certificate in the form attached to the Credit
Agreement in Schedule I is hereby restated as set forth in Schedule I to this Agreement.
(r) The following is hereby added as a new Section 5.13 to the Credit Agreement
entitled, “Future Subsidiary Guaranties”:
“5.13 Future Subsidiary Guaranties. The Company shall cause any
future Subsidiaries which represent ten percent (10%) or more of the
Company’s consolidated assets or sales to execute a guaranty of the
Liabilities in favor of Bank in the form of the Guaranty.”
(s) Section 6.7 entitled, “Dividends and Stock Redemptions” is hereby restated as
follows:
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“6.7 Dividends and Stock Redemptions. The Company shall not pay any
dividends or purchase, retire, redeem or otherwise acquire for value any
issued and outstanding stock of the Company except as follows:
(a) Dividends. Company may pay dividends to any shareholder of
the Company, or issue further stock of the Company, provided that in any
twelve (12) calendar month period, the aggregate payment of dividends shall
not exceed Seventeen Million Five Hundred Thousand and No/100 Dollars
($17,500,000.00). Compliance with this Subparagraph 6.7(a) shall be tested
on the last day of each fiscal quarter of Company and on a trailing twelve
(12) calendar month basis, and payment of a dividend shall be deemed in
compliance with this Agreement if at the time the dividends were paid, they
would have been permitted under the results of the test most recently
applied pursuant to the preceding sentence.
(b) Stock Redemptions. The Company may purchase, retire,
redeem or otherwise acquire for value any issued and outstanding stock of
Company provided that the aggregate amount expended for any stock purchase,
retirement or redemption shall not exceed the applicable amounts for the
applicable time periods set forth below:
| Time Period of Stock | Maximum Amount of | |
| Redemption and Stock | Permitted Stock Redemption and | |
| Repurchase | Stock Purchase | |
| From January 1, 2008 to March 31, 2008 | Not to Exceed $40,000,000.00 | |
| From January 1, 2008 to June 30, 2008 | Not to Exceed $45,000,000.00 | |
| From January 1, 2008 to September 30, 2008 | Not to Exceed $50,000,000.00 | |
| From January 1, 2008 to December 31, 2008 | Not to Exceed $55,000,000.00 | |
| From April 1, 2008 to March 31, 2009 | Not to Exceed $40,000,000.00 | |
| From July 1, 2008 to June 30, 2009 | Not to Exceed $40,000,000.00 |
During the calendar year 2008, compliance with this Subparagraph 6.7(b)
shall be tested on the last day of each fiscal quarter of the Company and on
a calendar year to date basis. Thereafter, compliance with this
Subparagraph
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6.7(b) shall be tested on the last day of each fiscal quarter
of the Company and on a trailing twelve (12) calendar month basis. Any
stock purchases, redemptions or retirements shall be deemed in compliance
with this Agreement if at the time they were made, they would have been
permitted
under the results of the applicable test most recently applied pursuant to
the preceding two sentences.”
(t) The first sentence of Section 7.2 entitled, “Tangible Net Worth” is hereby restated
to read as follows:
“The Company will maintain at all times a consolidated Tangible Net Worth of
no less than Thirty Million and No/100 Dollars ($30,000,000.00).”
(u) Section 6.8 entitled, “Guaranties” is hereby restated as follows:
“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 of any Person except (i) guaranties by
endorsement of negotiable instruments for deposit or collection in the
ordinary course of business, (ii) guaranties of loans to its shareholder
employees from third party financial institutions to facilitate acquisition
by said shareholder employees of capital stock of the Company provided
written consent is obtained from Bank which shall not be unreasonably
withheld, (iii) that certain Guaranty of the Liabilities executed by Diamond
Management & Technology Consultants NA, Inc., an Illinois corporation, (iv)
that certain Guaranty of the Liabilities executed by Diamond Partners
Limited, a United Kingdom corporation, and (v) all guaranties of the
Liabilities executed by any Subsidiary in accordance with Section 5.13 of
this Agreement.”
(v) The first paragraph of Section 9.11 entitled, “Submission to Jurisdiction, Waiver
of Jury Trial” is hereby restated to read as follows:
“TO INDUCE THE BANK TO MAKE THE LOAN EVIDENCED BY THIS AGREEMENT, THE COMPANY IRREVOCABLY
AGREES THAT, ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF
THIS AGREEMENT OR ANY OTHER AGREEMENT WITH THE BANK, SHALL BE INSTITUTED AND LITIGATED ONLY
AS FOLLOWS: (A) ALL ACTIONS INSTITUTED BY THE COMPANY SHALL ONLY BE INSTITUTED IN COURTS
HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS, AND (B) ALL ACTIONS INSTITUTED BY BANK, SHALL
AT BANK’S SOLE DISCRETION, ONLY BE INSTITUTED IN COURTS HAVING SITUS EITHER IN THE CITY OF
CHICAGO, ILLINOIS OR THE CITY OF LONDON, ENGLAND AND THE COMPANY HEREBY CONSENTS TO THE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING ITS SITUS IN
CHICAGO, ILLINOIS OR OF THE HIGH COURT OF ENGLAND AND WALES HAVING ITS SITUS IN LONDON,
ENGLAND, AND WAIVES ANY OBJECTION BASED ON FORUM NONCONVENIENS, AND THE COMPANY HEREBY
WAIVES PERSONAL SERVICE
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OF ANY AND ALL PROCESS, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AT
THE ADDRESS INDICATED IN THE BANK’S RECORDS IN THE MANNER PROVIDED BY APPLICABLE
STATUTE, LAW, RULE OF COURT OR OTHERWISE.”
3. Bank’s Conditions Precedent. The Bank’s execution of this Agreement and consent to
increase and amend the Loan in accordance with the Borrowing Parties’ Request is conditioned upon
receipt by Bank of the following documents in a form and content acceptable to Bank and its counsel
and receipt of the payments provided for in Paragraph 4 of this Agreement which shall all be
delivered by the Borrowing Parties to Bank contemporaneously with this execution of this Agreement
(collectively, the “Bank’s Conditions Precedent”):
(a) The full execution of this Agreement by the Borrowing Parties;
(b) The 2008 Restated Revolving Note in the original principal amount of Twenty Million
and No/100 Dollars ($20,000,000.00) (the “Restated Revolving Note”) executed by the Company
and made payable to the order of Bank;
(c) The Continuing Security Agreement executed by the US Subsidiary in favor of the
Bank granting a blanket lien to Bank in all of the US Subsidiary’s existing and
after-acquired assets and all proceeds thereof;
(d) UCC-1 Financing Statement from the US Subsidiary as Debtor in favor of the Bank as
Secured Party in proper filing form to be filed with the Illinois Secretary of State;
(e) The Guaranty executed by the UK Subsidiary guaranteeing all of the Liabilities (the
“UK Subsidiary Guaranty”);
(f) The Charge of Deposit to be executed by the UK Subsidiary to secure its obligations
under the UK Subsidiary Guaranty (the “UK Charge of Deposit”);
(g) An opinion of counsel for the UK Subsidiary in favor of the Bank in connection with
the UK Subsidiary Guaranty and the UK Charge of Deposit;
(h) Assistant Secretary’s Certificate for Company with attached corporate resolution
and complete copy of By-Laws, as may be amended to date;
(i) Assistant Secretary’s Certificate for the US Subsidiary with attached corporate
resolution and complete copy of By-Laws, as may be amended to date;
(j) Assistant Secretary’s Certificate for the UK Subsidiary with attached corporate
resolution and complete copy of By-laws, as may be amended to date;
(k) Certificate of Good Standing issued by the Delaware Secretary of State for Company;
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(l) Certificate of Qualification To Do Business of Company in Illinois issued by the
Illinois Secretary of State;
(m) Certificate of Good Standing issued by the Illinois Secretary of State for the US
Subsidiary;
(n) Certified organizational documents and Certificate of Good Standing issued by the
applicable United Kingdom authority for the UK Subsidiary; and
(o) The execution and delivery to Bank of such other documents as Bank shall reasonably
require in connection with this Agreement.
4. Payment of Legal Fees and Costs. Concurrently with the execution of this
Agreement, the Borrowing Parties shall be jointly and severally liable for and shall pay or cause
to be paid to Bank in immediately available funds all fees and expenses of Bank relating to this
Agreement and the transactions contemplated herein, including, without limitation, reasonable fees
and expenses of Bank’s counsel.
5. Amendment of US Subsidiary Guaranty. The US Subsidiary guaranty is hereby amended
as follows:
(a) The second paragraph on Page 7 of the US Subsidiary Guaranty is hereby restated to
read as follows:
“GUARANTOR HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS AND OF THE HIGH COURT OF ENGLAND AND WALES SITTING IN LONDON, ENGLAND AND
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTY
(INCLUDING WITHOUT LIMITATION ANY OF THE OTHER LOAN DOCUMENTS) OR THE TRANSACTIONS
CONTEMPLATED HEREBY. GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH GUARANTOR MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SAID COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.”
(b) This Guaranty is secured by that certain Continuing Security Agreement executed by
the US Subsidiary in favor of the Bank dated as of March 31, 2008, granting a blanket lien
to Bank in all of the US Subsidiary’s existing and after-acquired assets and all proceeds
thereof.
6. US Subsidiary Guarantor’s Affirmation. The US Subsidiary, by its execution of this
Agreement, reaffirms all of its obligations and liabilities to Bank under its Guaranty, as amended
by this Agreement, including, but not limited to, the repayment in full of all principal and
interest due Bank under the Restated Revolving Note.
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7. References. All other Loan Documents are hereby modified to provide that any
reference to the Credit Agreement therein shall be deemed to be a reference to the Credit Agreement
as modified by this Agreement. All references herein to any of the Loan Documents shall be
understood to be to the Loan Documents as modified hereby. All references in any of the Loan
Documents to any other one or more of the Loan Documents shall hereafter be deemed to be to such
document(s) as modified hereby. All references in any of the Loan Documents to
the Existing Revolving Note shall hereafter be deemed to be references to the Restated
Revolving Note.
8. No Defenses, Counterclaims. Each Borrowing Party hereby represents and warrants
to, and covenants with Bank that as of the date hereof, (a) each Borrowing Party has no defenses,
offsets or counterclaims of any kind or nature whatsoever against Bank with respect to any of the
Loan Documents, or any action previously taken or not taken by Bank with respect thereto, or with
respect to any security interest, encumbrance, lien or collateral in connection therewith to
secure the liabilities of each Borrowing Party as applicable, and (b) that Bank has fully performed
all obligations to each Borrowing Party which it may have had or has on and as of the date hereof.
9. No Custom. Except as expressly provided herein, this Agreement shall not establish
a custom or waive, limit or condition the rights and remedies of Bank under the Loan Documents, all
of which rights and remedies are expressly reserved.
10. Reaffirmation of Loan Documents, No Novation. Except as may be expressly set
forth herein to the contrary, the Loan Documents remain unmodified, and all other terms and
conditions thereof remain in full force and effect. Notwithstanding anything to the contrary
contained herein, the Borrowing Parties and Bank expressly state, declare and acknowledge that this
Agreement is intended only to modify the Borrowing Parties’ continuing obligations in the manner
set forth herein, and is not intended as a novation of any and all amounts presently due and owing
from the Borrowing Parties.
11. Captions; Counterparts. The captions used herein are for convenience of reference
only and shall not be deemed to limit or affect the construction and interpretation of the terms of
this Agreement. This Agreement may be signed in counterparts, each of which shall be deemed an
original and all of which shall be deemed one agreement.
12. Event of Default. Each of the Borrowing Parties hereby acknowledges and agrees
that a breach by any one of them of any term, provision, covenant or condition herein set forth or
herein required of any one of them to be kept or performed, and which is not kept or performed
pursuant to the terms hereof, shall constitute an Default and/or Event of Default under the Loan
Documents if said Default and/or Event of Default is not cured within any applicable cure or grace
period provided for in the Loan Documents.
13. Choice of Law, Severability and Submission to Jurisdiction. This Agreement shall
be governed by and construed under the laws of the State of Illinois (without giving effect to the
conflicts of law principles thereof). If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement will not be affected thereby and the provisions of
this Agreement shall be severable in any such instance.
TO INDUCE THE BANK TO INCREASE AND AMEND THE LOAN AND THE LOAN
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DOCUMENTS IN ACCORDANCE WITH
THIS AGREEMENT, EACH OF THE BORROWING PARTIES IRREVOCABLY AGREES THAT, ALL ACTIONS ARISING DIRECTLY
OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS AGREEMENT OR ANY OTHER AGREEMENT WITH THE BANK,
SHALL BE INSTITUTED AND LITIGATED ONLY AS FOLLOWS: (A) ALL ACTIONS INSTITUTED BY THE COMPANY
AND/OR THE
US SUBSIDIARY SHALL ONLY BE INSTITUTED IN COURTS HAVING SITUS IN THE CITY OF CHICAGO, ILLINOIS, AND
(B) ALL ACTIONS INSTITUTED BY BANK AND/OR THE UK SUBSIDIARY, IN BANK’S SOLE DISCRETION OR IN THE UK
SUBSIDIARY’S SOLE DISCRETION AS APPLICABLE, SHALL ONLY BE INSTITUTED IN COURTS HAVING SITUS EITHER
IN THE CITY OF CHICAGO, ILLINOIS OR THE CITY OF LONDON, ENGLAND AND EACH OF THE BORROWING PARTIES
HEREBY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING ITS
SITUS IN CHICAGO, ILLINOIS OR OF THE HIGH COURT OF ENGLAND AND WALES HAVING ITS SITUS IN LONDON,
ENGLAND, AND WAIVES ANY OBJECTION BASED ON FORUM NONCONVENIENS, AND EACH OF THE BORROWING PARTIES
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTIES
BORROWING PARTIES AT THE APPLICABLE ADDRESSES INDICATED IN THE BANK’S RECORDS IN THE MANNER
PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.
(SIGNATURE PAGE IMMEDIATELY FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| BANK: | ||||||
| XX XXXXXX XXXXX BANK, N.A., a national banking association | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| COMPANY: | ||||||
| DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS, INC., a Delaware corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
| GUARANTORS: | ||||||
| US SUBSIDIARY: DIAMOND MANAGEMENT & TECHNOLOGY CONSULTANTS NA, INC., an Illinois corporation |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| UK SUBSIDIARY: DIAMOND PARTNERS LIMITED, a United Kingdom corporation |
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