Document:

Prepared by MerrillDirect

	 
	 
	Exhibit 10.06

	 	 	 
	 	 	 
	Silicon
  Valley Bank

	 	 
	Amendment to Loan Documents	 
				

 

	 
	Borrower:	ZAMBA CORPORATION

	Address:	3033 Excelsior
  Boulevard, Suite 200
	 	Minneapolis,
  Minnesota 55416

	Date:	as of June 30, 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 TNW
Base Amount.  The
definition of “TNW Base Amount” set forth in Section 5 of the Schedule is hereby
amended in its entirety to read as follows:

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.

 

                2.             Additional Warrants.  The following hereby is added to the Schedule,
in proper numerical order, as a new Section 9(5) thereof:

(5)   Warrants. 
On the
date of execution and delivery of that certain Amendment to Loan Documents
dated as of June 30, 2001 between Silicon and Borrower (the “June 30, 2001
Amendment”) (such date, the “Target Date”), Borrower shall provide Silicon with
additional five-year warrants to purchase an additional 35,000 shares of common
stock of the Borrower, at a price per share equal to the Target Date Designated
Price (as defined herein), on terms acceptable to Silicon, all as set forth in
the Warrant to Purchase Stock (the "Target Date Warrant") and related
Registration Rights Agreement being executed concurrently with the June 30,
2001 Amendment.  The Target Date Warrant
shall be deemed fully earned on the Target Date, shall be in addition to all
interest and other fees, and shall be non-refundable. As used herein, the term
"Target Date Designated Price" means the average closing price of the
Shares reported for the 5 trading days immediately before the Target Date.

                3.             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.

                4.             Fee.  In consideration for Silicon entering into
this Amendment, Borrower shall concurrently pay Silicon a fee in the amount of
$5,000.00, 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 fee to
Borrower’s loan account.

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

                5.             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	     Vice President
	 	 	 	

	 	 	 	 
	By	\s\ Ian
  Nemerov	 	 
	 	

	 	 
	 	SecretaryPrepared by MerrillDirect

Exhibit
10.07

THIS WARRANT
AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE
144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

WARRANT TO PURCHASE STOCK

Corporation:  ZAMBA CORPORATION

Number of Shares:  35,000

Class of Stock:  Common

Initial Exercise Price: $0.86 (which is the average closing price of the Shares
reported for the 5 trading days immediately before the Issue Date)

Issue Date: August 2, 2001

Expiration Date: the fifth (5th) anniversary of the Issue Date

             THIS WARRANT CERTIFIES THAT, for
the agreed upon value of $1.00 and for other good and valuable consideration,
SILICON VALLEY BANK ("Holder") is entitled to purchase the number of
fully paid and nonassessable shares of the class of securities (the
"Shares") of the corporation (the "Company") at the initial
exercise price per Share (the "Warrant Price") all as set forth above
and as adjusted pursuant to Article 2 of this Warrant, subject to the
provisions and upon the terms and conditions set forth in this Warrant.    Concurrently herewith, the Company and
Holder are entering into that certain Amendment to Loan Documents, dated as of
June 30, 2001, and this Warrant is the “Target Date Warrant” referred to
therein.

ARTICLE 1. EXERCISE.

                              1.1             Method of Exercise.  Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversion
right set forth in Section 1.2, Holder shall also deliver to the Company a
check for the aggregate Warrant Price for the Shares being purchased.

                              1.2             Conversion Right.  In lieu of exercising this Warrant as
specified in Section 1.1, Holder may from time to time convert this
Warrant, in whole or in part, into a number of Shares determined by dividing
(a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant
Price of such Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall be
determined pursuant to Section 1.4.

                              1.3             Intentionally Omitted

                              1.4             Fair Market Value.  If the Shares are traded in a public market,
the fair market value of the Shares shall be the closing price of the Shares
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company.  If the Shares
are not traded in a public market, the Board of Directors of the Company shall
determine fair market value in its reasonable good faith judgment.  The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a
reputable investment banking firm to undertake such valuation.  If the valuation of such investment banking
firm is greater than that determined by the Board of Directors, then all fees
and expenses of such investment banking firm shall be paid by the Company.  In all other circumstances, such fees and
expenses shall be paid by Holder.

                              1.5             Delivery of Certificate and New
Warrant.  Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.

                              1.6             Replacement of Warrants.  On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant,
a new warrant of like tenor.

                              1.7             Repurchase on Sale, Merger, or
Consolidation of the Company.

                                              1.7.1.         "Acquisition".  For the purpose of this Warrant,
"Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

                                              1.7.2.         Assumption of Warrant.  Upon the closing of any Acquisition the
successor/acquiring entity shall assume the obligations of this Warrant, and
this Warrant shall be exercisable for the same securities, cash, and property
as would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record date
for the Acquisition and subsequent closing. 
The Warrant Price shall be adjusted accordingly.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

                              2.1             Stock Dividends, Splits, Etc.   If the Company declares or pays a dividend
on its common stock (or the Shares if the Shares are securities other than
common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired,
Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend or subdivision occurred.

                              2.2             Reclassification, Exchange or
Substitution.  Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event.  Such an event shall
include any automatic conversion of the outstanding or issuable securities of
the Company of the same class or series as the Shares to common stock pursuant
to the terms of the Company's Articles of Incorporation upon the closing of a
registered public offering of the Company's common stock.  The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property.  The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. 
The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.

                              2.3             Adjustments for Combinations,
Etc.  If the outstanding shares are
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.

                              2.4             Intentionally Omitted

                              2.5             No Impairment.  The Company shall not, by amendment of its
Articles of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions
of this Article 2 and in taking all such action as may be necessary or
appropriate to protect Holder's rights under this Article against
impairment.  If the Company takes any
action affecting the Shares or its common stock other than as described above
that adversely affects Holder's rights under this Warrant, the Warrant Price
shall be adjusted downward and the number of Shares issuable upon exercise of
this Warrant shall be adjusted upward in such a manner that the aggregate
Warrant Price of this Warrant is unchanged.

                              2.6             Fractional Shares.  No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share.  If a fractional share interest arises upon any exercise or
conversion of the Warrant, the Company shall eliminate such fractional share
interest by paying Holder an amount computed by multiplying the fractional
interest by the fair market value of a full Share.

                              2.7             Certificate as to Adjustments.  Upon each adjustment of the Warrant Price,
the Company at its expense shall promptly compute such adjustment, and furnish
Holder with a certificate of its Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based.  The Company shall, upon written request,
furnish Holder a certificate setting forth the Warrant Price in effect upon the
date thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND
COVENANTS OF THE COMPANY.

                              3.1             Representations and Warranties.  The Company hereby represents and warrants
to the Holder as follows:

                                        (a)         [intentionally omitted]

                                        (b)        All Shares which may be issued upon the exercise
of the purchase right represented by this Warrant, and all securities, if any,
issuable upon conversion of the Shares, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.

                                        (c)         The Capitalization Table attached to
this Warrant is true and complete as of the Issue Date in all material
respects.

                              3.2             Notice of Certain Events.  If the Company proposes at any time
(a) to declare any dividend or distribution upon its common stock, whether
in cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights; (c) to effect any reclassification or
recapitalization of common stock; (d) to merge or consolidate with or into
any other corporation, or sell, lease, license, or convey all or substantially
all of its assets, or to liquidate, dissolve or wind up; or (e) offer
holders of registration rights the opportunity to participate in an
underwritten public offering of the company's securities for cash, then, in
connection with each such event, the Company shall give Holder (1) at
least 20 days prior written notice of the date on which a record will be
taken for such dividend, distribution, or subscription rights (and specifying
the date on which the holders of common stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to
above; (2) in the case of the matters referred to in (c) and (d) above at
least 20 days prior written notice of the date when the same will take
place (and specifying the date on which the holders of common stock will be
entitled to exchange their common stock for securities or other property
deliverable upon the occurrence of such event); and (3) in the case of the
matter referred to in (e) above, the same notice as is given to the holders of
such registration rights.

                              3.3             Information Rights.  So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder
(a) promptly after mailing, copies of all notices or other written
communications to the shareholders of the Company, (b) within one hundred
twenty (120) days after the end of each fiscal year of the Company, the annual
audited financial statements of the Company certified by independent public
accountants of recognized standing and (c) such other financial statements
required under and in accordance with any loan documents between Holder and the
Company (or if there are no such requirements [or if the subject loan(s) no
longer are outstanding]), then within forty–five (45) days after the
end of each of the first three quarters of each fiscal year, the Company's
quarterly, unaudited financial statements.

                              3.4             Registration Under Securities
Act of 1933, as amended. The Company agrees that the Shares shall be
subject to the registration rights set forth for the Shares in that certain
Registration Rights Agreement, dated as of the Issue Date, between the Company
and Holder (as the same may be amended, restated, supplemented, or otherwise modified
from time to time).

ARTICLE 4. MISCELLANEOUS.

                              4.1             Term.  This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above.

                              4.2             Legends.  This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form (unless and
until registered under the Securities Act (and, upon such registration, the
Company agrees to cooperate in the prompt removal of such legend requested by
the Holder)):

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

                              4.3             Compliance with Securities Laws
on Transfer.  This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as
reasonably requested by the Company). 
The Company shall not require Holder to provide an opinion of counsel if
the transfer is to an affiliate of Holder or if there is no material question
as to the availability of current information as referenced in
Rule 144(c), Holder represents that it has complied with Rule 144(d)
and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of
Holder s notice of proposed sale.

                              4.4             Transfer Procedure.  Subject to the provisions of
Section 4.3, Holder may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the securities issuable, directly or
indirectly, upon conversion of the Shares, if any) at any time to Silicon
Valley Bancshares or The Silicon Valley Bank Foundation, or to any affiliate of
Holder, or, to any other transferree by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if
applicable).  Unless the Company is
filing financial information with the SEC pursuant to the Securities Exchange
Act of 1934, the Company shall have the right to refuse to transfer any portion
of this Warrant to any person who directly competes with the Company.

                              4.5             Notices.  All notices and other communications from
the Company to the Holder, or vice versa, shall be deemed delivered and
effective when given personally or mailed by first–class registered or
certified mail at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.   All notices to be provided
under this Warrant shall be sent to the following address:

                                                Silicon
Valley Bank

                                                Attn:
Treasury Department

                                                3003
Tasman Drive

                                                Santa
Clara, CA  95054

 

                              4.6             Waiver.  This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.

                              4.7             Attorneys Fees.  In the event of any dispute between the
parties concerning the terms and provisions of this Warrant, the party
prevailing in such dispute shall be entitled to collect from the other party
all costs incurred in such dispute, including reasonable attorneys' fees.

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

                              4.8             Governing Law.  This Warrant shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to its principles regarding conflicts of law.

 

"COMPANY"

ZAMBA
CORPORATION

 

By:       \s\ Doug M. Holden

Name:  Doug M. Holden

             (Print)

Title:    President

 

By:       \s\ Michael H. Carrel

Name:  Michael H. Carrel

             (Print)

Title:    Chief Financial Officer

APPENDIX 1

 

NOTICE OF EXERCISE

 

             1.          The
undersigned hereby elects to purchase __________ shares of the Common/Preferred
Series _____ [Strike one] Stock of __________, pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.

             1.          The
undersigned hereby elects to convert the attached Warrant into Shares/cash
[strike one] in the manner specified in the Warrant.  This conversion is exercised with respect to ____________ of the
Shares covered by the Warrant.

             [Strike paragraph that does not
apply.]

             2.          Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

___________________________________________

             (Name)

___________________________________________

___________________________________________

             (Address)

             3.          The
undersigned represents it is acquiring the shares solely for its own account
and not as a nominee for any other party and not with a view toward the resale
or distribution thereof except in compliance with applicable securities laws.

____________________________________

             (Signature)

____________________

             (Date)

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