Exhibit 10.44

Silicon Valley Bank

 

Amendment to Loan Documents

 

Borrower:                ZAMBA CORPORATION

Address:                  3033 Excelsior Boulevard, Suite 200

                                   Minneapolis, Minnesota 55416

 

Date:                         as of December 31, 2001

 

THIS AMENDMENT TO LOAN DOCUMENTS is entered into between SILICON VALLEY BANK, 
COMMERCIAL FINANCE DIVISION (“Silicon”), whose address is 3003 Tasman Drive,
Santa Clara, California  95054, and the borrower(s) named above (individually
and collectively, jointly and severally, the “Borrower”), whose chief executive
office is located at the above address (“Borrower’s Address”).

 

The Parties agree to amend the Loan and Security Agreement between them, dated
as of February 27, 2001 (as otherwise amended, the “Loan Agreement”), as
follows, effective as of the date hereof.  (Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.):

 

1.             Modification of Definition of Eligible Receivables.  The
following is hereby added (in proper numerical order) as a new clause (xi) in
the definition of “Eligible Receivables” set forth in Section 8 of the Loan
Agreement:

 

, and (xi) the Receivable must not be owing from a Dot Com Account Debtor (as
defined below) other than BestBuy.com; as used herein, the term “Dot Com Account
Debtor” means an Account Debtor that, in Silicon’s sole discretion, is an
internet-based company.

 

2.             Modification of Cash Management Sublimit.  The portion of Section
1 of the Schedule that currently reads as follows:

 

Cash Management Services and Reserves.  Borrower may use up to $152,500 (the
“Cash Management Sublimit”) of Loans available hereunder for Silicon’s Cash
Management Services (as defined below) consisting of (i) ACH services for the
reimbursement of Borrower’s employee expenses (“ACH Services”), and (ii)
business credit card services (“Business Credit Card Services”), in each case,
as such services are identified in one or more cash management services
agreements between Borrower and Silicon related to such service

 

1

--------------------------------------------------------------------------------

 

(collectively, the “Cash Management Services”); provided, however, that not more
than $62,500 of the Cash Management Sublimit may be available for Business
Credit Card Services, and not more than $90,000 of the Cash Management Sublimit
may be available for ACH Services.  Silicon may, in its sole discretion, reserve
against Loans which would otherwise be available hereunder such sums as Silicon
shall determine in connection with the Cash Management Services, and Silicon may
charge to Borrower’s Loan account, any amounts that may become due or owing to
Silicon in connection with the Cash Management Services.  Borrower agrees to
execute and deliver to Silicon all standard form applications and agreements of
Silicon in connection with the Cash Management Services, and, without limiting
any of the terms of such applications and agreements, Borrower will pay all
standard fees and charges of Silicon in connection with the Cash Management
Services. All amounts that Silicon pays or expends in respect of any Cash
Management Services shall constitute Obligations hereunder. Borrower hereby
agrees to indemnify, save, and hold Silicon harmless from any loss, cost,
expense, or liability, including payments made by Silicon, expenses, and
reasonable attorneys’ fees incurred by Silicon arising out of or in connection
with any Cash Management Services. The Cash Management Services shall terminate
on the Maturity Date or any earlier effective date of termination of this
Agreement (or such later date requested by Borrower as Silicon may agree in
writing in its sole discretion if and to the extent Borrower’s reimbursement and
indemnity obligations with respect to such Cash Management Services are secured
by cash in amounts and on terms and conditions acceptable to Silicon in its sole
discretion).

 

is hereby amended in its entirety to read as follows:

 

Cash Management Services and Reserves.  Borrower may use up to $90,000 (the
“Cash Management Sublimit”) of Loans available hereunder for Silicon’s Cash
Management Services (as defined below) consisting of (i) ACH services for the
reimbursement of Borrower’s employee expenses (“ACH Services”), and (ii)
[reserved], in each case, as such services are identified in one or more cash
management services agreements between Borrower and Silicon related to such
service (collectively, the “Cash Management Services”).  Silicon may, in its
sole discretion, reserve against Loans which would otherwise be available
hereunder such sums as Silicon shall determine in connection with the Cash
Management Services, and Silicon may charge to Borrower’s Loan account, any
amounts that may become due or owing to Silicon in connection with the Cash
Management Services.  Borrower agrees to execute and deliver to Silicon all
standard form applications and agreements of Silicon in connection with the Cash
Management Services, and, without limiting any of the terms of such applications
and agreements, Borrower will pay all standard fees and

 

2

--------------------------------------------------------------------------------

 

charges of Silicon in connection with the Cash Management Services. All amounts
that Silicon pays or expends in respect of any Cash Management Services shall
constitute Obligations hereunder. Borrower hereby agrees to indemnify, save, and
hold Silicon harmless from any loss, cost, expense, or liability, including
payments made by Silicon, expenses, and reasonable attorneys’ fees incurred by
Silicon arising out of or in connection with any Cash Management Services. The
Cash Management Services shall terminate on the Maturity Date or any earlier
effective date of termination of this Agreement (or such later date requested by
Borrower as Silicon may agree in writing in its sole discretion if and to the
extent Borrower’s reimbursement and indemnity obligations with respect to such
Cash Management Services are secured by cash in amounts and on terms and
conditions acceptable to Silicon in its sole discretion).

 

3.             Modification of Maturity Date. Section 4 of the Schedule is
hereby amended in its entirety to read as follows:

 

4.  MATURITY DATE

(Section 6.1):                            December 31, 2002

 

4.             Modification of Profitability Covenant.  The portion of Section 5
of the Schedule that currently reads as follows:

 

Profitability:                          Borrower shall have positive net income,
determined in accordance with generally accepted accounting principles, for the
fiscal quarter of Borrower ending December 31, 2001.

 

is hereby amended in its entirety to read as follows:

 

Profitability:                          Borrower shall have positive net income,
determined in accordance with generally accepted accounting principles, for the
fiscal quarter of Borrower ending June 30, 2002 and for each fiscal quarter of
Borrower thereafter.

 

5.             Modification of TNW Covenant.  The portion of Section 5 of the
Schedule that currently reads as follows:

 

Minimum Tangible

Net Worth:                                      As of any date of determination,
Borrower shall maintain a Tangible Net Worth of not less than the result of:

 

3

--------------------------------------------------------------------------------

 

(i)            the TNW Base Amount; plus

 

(ii)           the TNW Capital Increase (if any); plus

 

(iii)          the TNW Income Increase (if any); minus

 

(iv)          the Lifescape Writeoff Amount (if any).

 

                                                                                     
For purposes of this Tangible Net Worth covenant:

 

The term “TNW Base Amount” means, as of any date of determination, the amount
set forth below corresponding to the time period set forth below:

 

(A) during the period commencing on the date of this Agreement and ending on
June 30, 2001, $4,500,000;

 

(B) during the period commencing on July 1, 2001 and ending on September 30,
2001, $3,291,000; and

 

(C) from and after October 1, 2001, $3,416,000.

 

The term “TNW Capital Increase” means, as of any date of determination, the
greater of (a) $-0- and (b) 50% of all consideration (if any) received after the
date of this Agreement for equity securities and subordinated debt of the
Borrower. In no event shall the amount of the TNW Capital Increase be decreased.

 

The term “TNW Income Increase” means, as of any date of determination: (A) on or
before September 30, 2001, $-0-; and (B) from and after October 1, 2001, the
greater of (a) $-0- and (b) 50% of the aggregate amount of positive net income
(if any), determined in accordance with generally accepted accounting
principles, earned by Borrower subsequent to October 1, 2001. In no event shall
the amount of the TNW Income Increase be decreased. The term “Lifescape Writeoff
Amount” means, as of any date of determination: (A) from and after

 

4

--------------------------------------------------------------------------------

 

the date (if ever) that Borrower writes off all or a portion of the Lifescape
Note (as such term is defined in the definition of “Eligible Receivables”) in
accordance with generally accepted accounting principles, the lesser of (1)
$1,500,000, and (2) the amount of such actual write-off of all or a portion of
the Lifescape Note; and (B) prior to such date (if ever), $-0-.

 

is hereby amended in its entirety to read as follows:

 

Minimum Tangible

Net Worth:                                  As of any date of determination,
Borrower shall maintain a Tangible Net Worth of not less than the result of:

 

(i)            the TNW Base Amount; plus

 

(ii)           the TNW Capital Increase (if any); minus

 

(iii)          the Lifescape Writeoff Amount (if any) and the Permitted Sublease
Loss Amount (if any).

 

                                                                                     
For purposes of this Tangible Net Worth covenant:

 

The term “TNW Base Amount” means, as of any date of determination, the amount
set forth below corresponding to the time period set forth below:

 

(A)  during the period commencing on November 1, 2001 and ending on December 31,
2001, $1,700,000;

 

(B)  during the period commencing on January 1, 2002 and ending on March 31,
2002, $900,000;

 

(C) during the period commencing on April 1, 2002 and ending on June 30, 2002,
$940,000;

 

(D) during the period commencing on July 1, 2002 and ending on September 30,
2002, $1,225,000;

 

(C)  from and after October 1, 2002, $1,500,000.

 

5

--------------------------------------------------------------------------------

 

The term “TNW Capital Increase” means, as of any date of determination, the
greater of (a) $-0- and (b) 50% of all consideration (if any) received after the
date of this Agreement for equity securities and subordinated debt of the
Borrower (other than up to $2,000,000 of cash consideration (if any) received
from Mr. Joseph Costello after December 31, 2001 for equity securities or
Subordinated Debt of the Borrower issued to Mr. Joseph Costello after December
31, 2001). In no event shall the amount of the TNW Capital Increase be
decreased.

 

The term “Lifescape Writeoff Amount” means, as of any date of determination: (A)
from and after the date (if ever) that Borrower writes off all or a portion of
the Lifescape Note (as such term is defined in the definition of “Eligible
Receivables”) in accordance with generally accepted accounting principles, the
lesser of (1) $1,500,000, and (2) the amount of such actual write-off of all or
a portion of the Lifescape Note; and (B) prior to such date (if ever), $-0-.

 

The term “Permitted Sublease Loss Amount” means, as of any date of
determination: (A) from and after the later of December 31, 2001 and the date
(if ever) that Borrower accrues a one-time loss, in accordance with generally
accepted accounting principles, resulting from Borrower’s net revenues from the
subleasing by Borrower (as sublessor) to one or more third parties (as
sublessees) of premises leased by Borrower (as lessee) from other third parties
(as lessors) being less than Borrower’s net rental expenses paid by Borrower for
such premises, the lesser of (1) $2,000,000, and (2) the amount of such accrued
one-time loss; and (B) prior to the later of December 31, 2001 and such date (if
ever), $-0-.

 

6.             Additional Warrants.  The following hereby is added to the
Schedule, in proper numerical order, as a new Section 9(6) thereof:

 

6

--------------------------------------------------------------------------------

 

 

(6)                        Warrants.  On the date of execution and delivery of
that certain Amendment to Loan Documents dated as of December 31, 2001 between
Silicon and Borrower (the “December 31, 2001 Amendment”) (such date, the
“12-2001 Target Date”), Borrower shall provide Silicon with additional five-year
warrants to purchase an additional 20,000 shares of common stock of the
Borrower, at a price per share equal to the 12-2001 Target Date Designated Price
(as defined herein), on terms acceptable to Silicon, all as set forth in the
Warrant to Purchase Stock (the “12-2001 Target Date Warrant”) and related
Registration Rights Agreement being executed concurrently with the December 31,
2001 Amendment.  The 12-2001 Target Date Warrant shall be deemed fully earned on
the 12-2001 Target Date, shall be in addition to all interest and other fees,
and shall be non-refundable. As used herein, the term “12-2001 Target Date
Designated Price” means the average closing price of the Shares reported for the
5 trading days immediately before the 12-2001 Target Date.

 

7.             Representations True.  Borrower represents and warrants to
Silicon that all representations and warranties set forth in the Loan Agreement,
as amended hereby, are true and correct.

 

8.             Fees.  In consideration for Silicon entering into this Amendment,
Borrower shall concurrently pay Silicon a renewal fee in the amount of
$32,500.00 and a modification fee in the amount of $5,000.00, each of which
shall be non-refundable and in addition to all interest and other fees payable
to Silicon under the Loan Documents.  Silicon is authorized to charge said fees
to Borrower’s loan account.

 

[remainder of page intentionally left blank; signature page follows]

 

7

--------------------------------------------------------------------------------

 

9.             General Provisions.  This Amendment, the Loan Agreement, any
prior written amendments to the Loan Agreement signed by Silicon and Borrower,
and the other written documents and agreements between Silicon and Borrower set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and under­standings between the parties with respect
to the subject hereof.  Except as herein expressly amended, all of the terms and
provisions of the Loan Agreement, and all other documents and agreements between
Silicon and Borrower shall continue in full force and effect and the same are
hereby ratified and confirmed. 

 

Borrower:

 

Silicon:

 

 

 

 

 

ZAMBA CORPORATION

 

SILICON VALLEY BANK

 

 

 

 

 

 

 

 

 

By

/s/ Michael H. Carrel

 

By

/s/ J. Anthony Clarkson

 

 

 

President or Vice President

 

Title

Market Manager

 

 

 

 

 

 

 

 

By

/s/ Ian Nemerov

 

 

 

 

 

Secretary or Ass’t Secretary

 

 

 

 

8

--------------------------------------------------------------------------------