Silicon Valley Bank









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 




 




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(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 




 




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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:




 




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(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




 




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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.




 




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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:




 




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(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]




 




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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


  	

   


  	

   


  	

   


  





 




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