Document:

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 

 

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:

 

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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

 

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

  	

   

  	

   

  	

   

  

 

8THIS 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 O

Exhibit 10.45

 

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:  20,000

Class of

Stock:  Common

Initial Exercise

Price: $0.51 (which is the average closing price of the Shares reported for the

5 trading days immediately before the Issue Date)

Issue Date:

December 31, 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 December 31, 2001, and this

Warrant is the “12-2001 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

 

1

 

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

 

 

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

 

3

 

 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

 

4

 

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]

 

5

 

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/ Michael H. Carrel

  
	

   

  	

   

  
	

   

  	

  Name:

  	

  Michael H. Carrel

  
	

   

  	

   

  
	

   

  	

  Title:

  	

  Chairman of the Board, President or Vice President

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Ian Nemerov

  
	

   

  	

   

  
	

   

  	

  Name:

  	

  Ian Nemerov

  
	

   

  	

   

  
	

   

  	

  Title:

  	

  Chief Financial Officer, Secretary, Assistant

  Treasurer or Assistant Secretary

  

 

6

 

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)

  
					

 

7

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