0001104659-02-000691.txt : 20020415 0001104659-02-000691.hdr.sgml : 20020415 ACCESSION NUMBER: 0001104659-02-000691 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20020131 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZAMBA CORP CENTRAL INDEX KEY: 0000883741 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 411636021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22718 FILM NUMBER: 02574849 BUSINESS ADDRESS: STREET 1: 7301 OHMS LANE STE 200 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 BUSINESS PHONE: 6128329800 MAIL ADDRESS: STREET 1: 7301 OHMS LANE STREET 2: STE 200 CITY: MINNEAPOLIS STATE: MN ZIP: 55439 FORMER COMPANY: FORMER CONFORMED NAME: RACOTEK INC DATE OF NAME CHANGE: 19931025 8-K 1 j3198_8k.htm 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 31, 2002

ZAMBA CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware		41-1636021
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

0-22718

(Commission File No.)

3033 Excelsior Blvd, Suite 200, Minneapolis, Minnesota 55416

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, Including Area Code: (952) 832-9800

ITEM 5. OTHER EVENTS.

On January 31, 2002, we entered into a Stock Purchase Agreement with Joseph B. Costello, our Chairman, in which Mr. Costello purchased 626,504 shares of our common stock at a purchase price of $0.479 per share, or an aggregate purchase price of Three Hundred Thousand Dollars ($300,000). The purchase price of the common stock was set at 90% of the average of the closing bid prices of our common stock on the Nasdaq National Market System for the twenty business days prior to February 1, 2002. In connection with the purchase of the common stock, we issued to Mr. Costello a warrant to purchase up to 313,252 shares of our common stock at an exercise price of $0.599 per share. The exercise price of the warrant represents 125% of the average of the closing bid prices of our common stock on the Nasdaq National Market System for the twenty business days prior to February 1, 2002. The Stock Purchase Agreement is attached as Exhibit 99.1 to this Current Report on Form 8-K, and the Warrant is attached as Exhibit 99.2 to this Current Report on Form 8-K.

On February 8, 2002, we entered into stock purchase agreements with seven individual investors in private transactions. The terms and conditions of the stock purchase agreements with the investors substantially the same as those contained in the agreement with Mr. Costello. We sold an aggregate of 793,383 shares to the investors for a total consideration of Three Hundred Eighty Thousand Dollars ($380,000). In connection with the sale of the common stock, we issued warrants entitling the investors to purchase up to 396,691 shares of our common stock at an exercise price of $0.599 per share. The Form of the Stock Purchase Agreement is attached as Exhibit 99.3 to this Current Report on Form 8-K, and the Form of the Warrant is attached as Exhibit 99.4 to this Current Report on Form 8-K.

As of February 21, 2002, we entered into a Strategic Alliance Agreement with HCL Technologies America, Inc. (“HCL America”) and HCL Technologies Limited, India (“HCL”), in which we will work with HCL and HCL America to pursue service opportunities in certain identified markets. In connection with the Strategic Alliance Agreement, HCL America purchased 2,460,025 shares of our common stock from us in a private transaction, for an aggregate consideration of One Million Dollars ($1,000,000), and we issued HCL America a warrant to purchase up to 615,006 shares of our common stock. This warrant may be exercised at a per share purchase price of $0.61 at any time through the close of business on February 21, 2007. The final date of closing for these agreements occurred on March 5, 2002. The Strategic Alliance Agreement is attached as Exhibit 99.5 to this Current Report on Form 8-K, the Stock Purchase Agreement is attached as Exhibit 99.6 to this Current Report on Form 8-K, and the Warrant is attached as Exhibit 99.7 to this Current Report on Form 8-K.

On February 26, 2002, we entered into a Stock Purchase Agreement with Mr. Costello to sell to him certain of our Series A Preferred Stock in NextNet Wireless, Inc. (“NextNet”). Mr. Costello paid us Three Hundred Thousand Dollars ($300,000). In exchange, we will transfer to Mr. Costello that number of our Series A preferred shares that is obtained by dividing the purchase price by the per share price for NextNet stock at the earliest of the following occurrences: (a) the price per share of the NextNet Preferred Stock received by the shareholders of NextNet upon the merger, consolidation, sale of all or substantially all of the assets or any other change-in-control of NextNet; (b) the price per share of the NextNet Preferred Stock established upon the Company’s sale of any shares of NextNet Preferred Stock to any third party; or (c) if the items described in “(a)” or “(b)” do not occur by December 31, 2002, the price per share determined by an independent accountant, valuation expert or other entity experienced in the valuation of companies substantially similar to NextNet. The NextNet Stock Purchase Agreement is attached as Exhibit 99.8 to this Current Report on Form 8-K.

All transactions described in this Current Report on Form 8-K, including transactions between the Company and any current executive officer or director, have been approved by a majority of the disinterested members of the Company’s Board of Directors.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(a) Financial Statements

None.

(b) Pro forma Financial Statements

None.

Exhibit No.		Document
99.1		Stock Purchase Agreement dated January 31, 2002, between Zamba Corporation and Joseph B. Costello
99.2		Warrant to Purchase Common Stock dated January 31, 2002, issued by Zamba Corporation to Joseph B. Costello
99.3		Form of Stock Purchase Agreement dated February 1, 2002
99.4		Form of Warrant to Purchase Common Stock dated February 1, 2002
99.5		Strategic Alliance Agreement between Zamba Corporation and HCL Technologies America, Inc. and HCL Technologies Limited, India dated the 21^st day of February, 2002
99.6		Stock Purchase Agreement dated February 21, 2002, between Zamba Corporation and HCL Technologies America, Inc.
99.7		Warrant to Purchase Common Stock dated February 21, 2002, issued by Zamba Corporation to HCL Technologies America, Inc.
99.8		Stock Purchase Agreement dated February 26, 2002, between Zamba Corporation and Joseph B. Costello

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ZAMBA CORPORATION


By:	/s/ Ian L. Nemerov
	Ian L. Nemerov
	Secretary and General Counsel

Dated: March 14, 2002

EXHIBIT INDEX

Exhibit No.		Document
99.1		Stock Purchase Agreement dated January 31, 2002, between Zamba Corporation and Joseph B. Costello
99.2		Warrant to Purchase Common Stock dated January 31, 2002, issued by Zamba Corporation to Joseph B. Costello
99.3		Form of Stock Purchase Agreement dated February 1, 2002
99.4		Form of Warrant to Purchase Common Stock dated February 1, 2002
99.5		Strategic Alliance Agreement between Zamba Corporation and HCL Technologies America, Inc. and HCL Technologies Limited, India dated the 21^st day of February, 2002
99.6		Stock Purchase Agreement dated February 21, 2002, between Zamba Corporation and HCL Technologies America, Inc.
99.7		Warrant to Purchase Common Stock dated February 21, 2002, issued by Zamba Corporation to HCL Technologies America, Inc.
99.8		Stock Purchase Agreement dated February 26, 2002, between Zamba Corporation and Joseph B. Costello

EX-99.1 3 j3198_ex99d1.htm EX-99.1 LLC MEMBERSHIP INTEREST

Exhibit 99.1

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is made and entered into as of the 31st day of January, 2002, by and between Zamba Corporation, a Delaware corporation (the “Company”), and Joseph B. Costello (the “Purchaser”).

WHEREAS, the Purchaser is the Chairman of the Company’s Board of Directors, and therefore is thoroughly familiar with the Company’s business, financial condition and prospects; and

WHEREAS, the Purchaser desires to purchase shares of the Company’s common stock, $.01 par value per share (the “Common Stock”), pursuant to the terms of this Agreement.

Accordingly, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Purchase and Sale of Common Stock. The Company hereby sells to the Purchaser, and the Purchaser hereby purchases from the Company, 626,504 shares of Common Stock (the “Shares”), at an exercise price of $0.479 per share, for an aggregate purchase price of $300,000. The exercise price of the Shares is equal to 90% of the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days prior to February 1, 2002. Promptly following the execution of this Agreement, the Purchaser shall pay the full amount of the purchase price to the Company by wire transfer in immediately available funds to an account designated in writing by the Company. Within five business days after receiving the full amount of the purchase price, the Company shall deliver to the Purchaser a certificate registered in the Purchaser’s name representing the Shares.

2. Warrants. In consideration of this Agreement, the Company hereby agrees to issue to the Purchaser a warrant (the “Warrant”) to purchase up to 313,252 shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.599 per share, in the form attached hereto as Exhibit A. The exercise price of the warrant represents 125% of the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days prior to February 1, 2002. The Holder and the Company have entered into a Warrant Agreement, dated as of the date hereof, governing the terms of the warrant and the Warrant Shares issuable thereunder.

3. Representations and Warranties. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the undersigned represents, warrants, covenants and acknowledges to the Company that:

(a) The Purchaser understands that the issuance of the Shares and the Warrant has not been, and any issuance of the Warrant Shares will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Instead, the Company is issuing the Shares and the Warrant, and will issue any Warrant Shares, pursuant to exemptions from such laws and in doing so is and would be relying on, among other things, the Purchaser’s representations, warranties, covenants and acknowledgements contained herein.

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(c) As the Chairman of the Company’s Board of Directors, the Purchaser has detailed knowledge of the Company’s business, financial condition and prospects. In addition, the Purchaser has been provided with or given access to such additional information as the Purchaser has requested, including access to the Company’s management, and has utilized such access to his satisfaction for the purpose of obtaining information regarding the Company’s business, financial condition and prospects.

(d) The Purchaser is acquiring the Shares and the Warrant, and will acquire any Warrant Shares, for his own account, for investment purposes only, and without the intention of reselling or redistributing the Shares or any Warrant Shares;

(e) The Purchaser is aware that, in the view of the Securities and Exchange Commission, a purchase of the Shares, the Warrant or any Warrant Shares with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market values, or any change in the Company’s condition, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Shares, the Warrant or any Warrant Shares and for which the Shares, the Warrant or any Warrant Shares were pledged, would constitute an intent inconsistent with the foregoing representation.

(f) If, contrary to the Purchaser’s foregoing intentions, he should later desire to dispose of or transfer any of the Shares, the Warrant or any Warrant Shares in any manner, the undersigned shall not do so without (i) first obtaining an opinion of counsel satisfactory to the Company that such proposed disposition or transfer may lawfully be made without registration pursuant to the Securities Act and applicable state securities laws or (ii) registering the resale of the Shares and any Warrant Shares under the Securities Act and applicable state securities laws.

(g) Except as otherwise provided in the Warrant or the registration rights provisions attached as Exhibit B hereto, the Company has no obligation to register the Shares, the Warrant or any Warrant Shares for resale under the Securities Act or any applicable state securities laws, or to take any other action which would facilitate the availability of federal or state registration exemptions in connection with any resale of the Shares, the Warrant or any Warrant Shares. Accordingly, the Purchaser may be prohibited by law from selling or otherwise transferring or disposing of the Shares, the Warrant or any Warrant Shares and may have to bear the economic risk of his investment in the Company for an indefinite period.

4. Registration Rights. Holder shall be entitled to the registration rights attached hereto as Exhibit B. Holder’s participation in any such registration by the Company shall be in accordance with the procedures, and subject to the limitations, set forth on such Exhibit B.

5. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THESE SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (i) AN OPINION OF COUNSEL SATISFACTORY TO ZAMBA CORPORATION THAT SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.

(d) Notices. All notices, consents, requests, demands, instructions or other communications provided for herein shall be in writing and shall be deemed validly given, made and served when (a) delivered personally, (b) sent by certified or registered mail, postage prepaid, (c) sent by reputable overnight delivery service, or (d) sent by telephonic facsimile transmission, and, pending the designation of another address, addressed as follows:

If to the Company:		Zamba Corporation
		3033 Excelsior Blvd., Suite 200
		Minneapolis, Minnesota 55416
		Attn: Chief Financial Officer
		Fax: (952) 893-3948

If to the Purchaser:		Joseph B. Costello
		2880 Lakeside Drive, Suite 250
		Santa Clara, California 95054
		Fax: (408) 727-0235

(e) Entire Agreement and Counterparts. This Agreement evidences the entire agreement between the Company and the Purchaser relating to the subject matter hereof and supersedes in all respects any and all prior oral or written agreements or understandings. This Agreement may not be amended or modified, and no provisions hereof may be waived, except by written instrument signed by both the Company and the Purchaser. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one Agreement.

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Agreement as of the date set forth in the first paragraph.

THE COMPANY:		THE PURCHASER:

ZAMBA CORPORATION

By:		/s/ Joseph B. Costello
Name:	Michael H. Carrel	Joseph B. Costello
Title:	Executive Vice President and Chief Financial Officer

EX-99.2 4 j3198_ex99d2.htm EX-99.2 DRAFT 6/26/01

Exhibit 99.2

EXHIBIT A

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (i) AN OPINION OF COUNSEL SATISFACTORY TO ZAMBA CORPORATION THAT SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.

ZAMBA CORPORATION

WARRANT

TO PURCHASE

SHARES OF COMMON STOCK

For value received, Joseph B. Costello, or his successors or assigns (“Holder”), is entitled to purchase from Zamba Corporation, a Delaware corporation (the “Company”), up to 313,252 fully paid and nonassessable shares of the Company’s common stock, $.01 par value per share, or such greater or lesser number of such shares as may be determined by application of the anti-dilution provisions of this warrant, at the price of $.0599 per share, subject to adjustments as noted below (the “warrant exercise price”). This warrant is being issued pursuant to the terms of a Stock Purchase Agreement, dated the date hereof, between Holder and the Company.

This warrant may be exercised by Holder at any time or from time to time prior to the close of business on January 31, 2007.

This warrant is subject to the following terms and conditions:

1. Exercise. The rights represented by this warrant may be exercised by the Holder, in whole or in part, by written election, in the form set forth below, by the surrender of this warrant (properly endorsed if required) at the principal office of the Company, by payment to it by cash, certified check or bank draft of the warrant exercise price for the shares to be purchased and by delivery of a subscription agreement, an investment letter and/or similar documents acceptable to the Company demonstrating that the sale of the shares to be purchased is exempt from registration under the Securities Act of 1933, as amended, and any state securities law. The shares so purchased shall be deemed to be issued as of the close of business on the date on which this warrant has been exercised by payment to the Company of the warrant exercise price. Certificates for the shares of stock so purchased, bearing an appropriate restrictive legend, shall be delivered to the Holder within 15 days after the rights represented by this warrant shall have been so exercised, and, unless this warrant has expired, a new warrant representing the number

of shares, if any, with respect to which this warrant has not been exercised shall also be delivered to the Holder hereof within such time. No fractional shares shall be issued upon the exercise of this warrant.

2. Shares. All shares that may be issued upon the exercise of the rights represented by this warrant shall, upon issuance, be duly authorized and issued, fully paid and nonassessable shares. During the period within which the rights represented by this warrant may be exercised, the Company shall at all times have authorized and reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this warrant a sufficient number of shares of its common stock to provide for the exercise of the rights represented by this warrant.

3. Adjustment. The warrant exercise price shall be subject to adjustment from time to time as hereinafter provided in this Section 3:

(a) If the Company at any time divides the outstanding shares of its common stock into a greater number of shares (whether pursuant to a stock split, stock dividend or otherwise), and conversely, if the outstanding shares of its common stock are combined into a smaller number of shares, the warrant exercise price in effect immediately prior to such division or combination shall be proportionately adjusted to reflect the reduction or increase in the value of each such common share.

(b) If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of the Company’s common stock shall be entitled to receive stock, securities or assets with respect to or in exchange for such common stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, the Holder shall have the right to purchase and receive upon the basis and upon the terms and conditions specified in this warrant and in lieu of the shares of the common stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such shares of stock, other securities or assets as would have been issued or delivered to the Holder if Holder had exercised this warrant and had received such shares of common stock immediately prior to such reorganization, reclassification, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed to the Holder at the last address of the Holder appearing on the books of the Company the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase.

(c) If the Company takes any other action, or if any other event occurs, which does not come within the scope of the provisions of Section 3(a) or 3(b), but which should result in an adjustment in the warrant exercise price and/or the number of shares subject to this warrant in order to fairly protect the purchase rights of the Holder, an appropriate adjustment in such purchase rights shall be made by the Company.

(d) Upon each adjustment of the warrant exercise price, the Holder shall thereafter be entitled to purchase, at the warrant exercise price resulting from such adjustment, the number of shares obtained by multiplying the warrant exercise price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the warrant exercise price resulting from such adjustment.

(e) Upon any adjustment of the warrant exercise price, the Company shall give written notice thereof to the Holder stating the warrant exercise price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

4. No Rights as Shareholder. This warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company.

5. Registration Rights. Holder shall be entitled to participate in any registered offering of shares of Company’s common stock that the Company initiates prior to January 31, 2007. Holder’s participation in any such offering shall be in accordance with the procedures, and subject to the limitations, attached hereto.

6. Transfer. This warrant and all rights hereunder shall not be transferable, in whole or in part, by the holder hereof without the prior written consent of the Company, which consent shall not be unreasonably withheld; provided, however, that any such proposed transfer must be in compliance with applicable securities laws and in compliance with the legend set forth above. The bearer of this warrant, when endorsed, may be treated by the Company and all other persons dealing with this warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented by this warrant.

7. Notices. All demands and notices to be given hereunder shall be delivered or sent by first class mail, postage prepaid; in the case of the Company, addressed to its corporate headquarters, 3033 Excelsior Boulevard, Suite 200, Minneapolis, Minnesota 55416, Attention: Chief Financial Officer, until a new address shall have been substituted by like notice; and in the case of Holder, addressed to Holder at the address written below, until a new address shall have been substituted by like notice.

8. Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it of the ownership of, and the loss, theft, destruction or mutilation of, this warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it, and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new warrant.

9. Governing Law. This warrant shall in all respects by governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

10. Severability and Enforceability. If any provision of this warrant, or the application thereof, shall for any reason and to any extent, be invalid or unenforceable, the remainder of this warrant and application of such provisions to other persons or circumstances shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by law so as to effectuate the parties’ intent to the maximum extent. The parties further agree to replace such void or unenforceable provisions of this warrant with valid or enforceable provisions which will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provisions; provided, however, that if any government or regulatory authority shall declare this warrant (and any shares issuable hereunder) to be invalid and unenforceable, then this warrant (and any shares issuable hereunder) shall be null and void and shall be of no further force or effect.

11. Amendment and Waiver. Any provision of this warrant may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Holder and the Company or, in the case of a waiver, by the party against whom such waiver is to be effective.

[The remainder of this page has been left blank intentionally.]

IN WITNESS WHEREOF, the Company has caused this warrant to be executed and delivered by a duly authorized officer.

Dated: January 31, 2002

	ZAMBA CORPORATION

	By
		Name:
		Title:

	JOSEPH B. COSTELLO

	/s/ Joseph B. Costello
	Joseph B. Costello
	2880 Lakeside Drive, Suite 250
	Santa Clara, California 95054

WARRANT EXERCISE

(To be signed only upon exercise of this warrant)

The undersigned, the Holder of the foregoing warrant, hereby irrevocably elects to exercise the purchase right represented by such warrant for, and to purchase thereunder, __________ shares of common stock of Zamba Corporation, to which such warrant relates and herewith makes payment of $__________ therefor in cash, certified check or bank draft and requests that the certificates for such shares be issued in the name of, and be delivered to ____________________, whose address is set forth below the signature of the undersigned.

Dated:


	Signature

If shares are to be issued other than to Holder:		Social Security or other Tax Identification No.





Please print present name and address

WARRANT ASSIGNMENT

(To be signed only upon transfer of this warrant in accordance with Section 6)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _______________ the right represented by the foregoing warrant to purchase the shares of common stock of Zamba Corporation and appoints ____________________ attorney to transfer such right on the books of Zamba Corporation, with full power of substitution in the premises.

Dated:


		Signature

	Social Security or other Tax Identification No.


Please print present name and address

EX-99.3 5 j3198_ex99d3.htm EX-99.3 LLC MEMBERSHIP INTEREST

Exhibit 99.3

FORM OF STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is made and entered into as of the 1st day of February , 2002, by and between Zamba Corporation, a Delaware corporation (the “Company”), and _______ (the “Purchaser”).

WHEREAS, the Purchaser is the Chairman of the Company’s Board of Directors, and therefore is thoroughly familiar with the Company’s business, financial condition and prospects; and

WHEREAS, the Purchaser desires to purchase shares of the Company’s common stock, $.01 par value per share (the “Common Stock”), pursuant to the terms of this Agreement.

Accordingly, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Purchase and Sale of Common Stock. The Company hereby sells to the Purchaser, and the Purchaser hereby purchases from the Company, _ shares of Common Stock (the “Shares”), at an exercise price of $0.479 per share, for an aggregate purchase price of $. The exercise price of the Shares is based on the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days preceding the date of this Agreement. Promptly following the execution of this Agreement, the Purchaser shall pay the full amount of the purchase price to the Company by wire transfer in immediately available funds to an account designated in writing by the Company. Within five business days after receiving the full amount of the purchase price, the Company shall deliver to the Purchaser a certificate registered in the Purchaser’s name representing the Shares.

2. Warrants. In consideration of this Agreement, the Company hereby agrees to issue to the Purchaser a warrant (the “Warrant”) to purchase up to _____ shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.599 per share, in the form attached hereto as Exhibit A. The exercise price of the warrant represents 125% of the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days preceding the date of this Agreement. The Holder and the Company have entered into a Warrant Agreement, dated as of the date hereof, governing the terms of the warrant and the Warrant Shares issuable thereunder.

3. Representations and Warranties. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the undersigned represents, warrants, covenants and acknowledges to the Company that:

(a) The Purchaser understands that the issuance of the Shares and the Warrant has not been, and any issuance of the Warrant Shares will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Instead, the Company is issuing the Shares and the Warrant, and will issue any Warrant Shares, pursuant to exemptions from such laws and in doing so is and would be relying on, among other things, the Purchaser’s representations, warranties, covenants and acknowledgements contained herein.

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(c) The Purchaser has been provided with or given access to such additional information as the Purchaser has requested, including access to the Company’s management, and has utilized such access to his satisfaction for the purpose of obtaining information regarding the Company’s business, financial condition and prospects.

(d) The Purchaser is acquiring the Shares and the Warrant, and will acquire any Warrant Shares, for his own account, for investment purposes only, and without the intention of reselling or redistributing the Shares or any Warrant Shares;

(e) The Purchaser is aware that, in the view of the Securities and Exchange Commission, a purchase of the Shares, the Warrant or any Warrant Shares with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market values, or any change in the Company’s condition, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Shares, the Warrant or any Warrant Shares and for which the Shares, the Warrant or any Warrant Shares were pledged, would constitute an intent inconsistent with the foregoing representation.

(f) If, contrary to the Purchaser’s foregoing intentions, he should later desire to dispose of or transfer any of the Shares, the Warrant or any Warrant Shares in any manner, the undersigned shall not do so without (i) first obtaining an opinion of counsel satisfactory to the Company that such proposed disposition or transfer may lawfully be made without registration pursuant to the Securities Act and applicable state securities laws or (ii) registering the resale of the Shares and any Warrant Shares under the Securities Act and applicable state securities laws.

(g) Except as otherwise provided in the Warrant or the registration rights provisions attached as Exhibit B hereto, the Company has no obligation to register the Shares, the Warrant or any Warrant Shares for resale under the Securities Act or any applicable state securities laws, or to take any other action which would facilitate the availability of federal or state registration exemptions in connection with any resale of the Shares, the Warrant or any Warrant Shares. Accordingly, the Purchaser may be prohibited by law from selling or otherwise transferring or disposing of the Shares, the Warrant or any Warrant Shares and may have to bear the economic risk of his investment in the Company for an indefinite period.

4. Registration Rights. Holder shall be entitled to the registration rights attached hereto as Exhibit B. Holder’s participation in any such registration by the Company shall be in accordance with the procedures, and subject to the limitations, set forth on such Exhibit B.

5. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(d) Notices. All notices, consents, requests, demands, instructions or other communications provided for herein shall be in writing and shall be deemed validly given, made and served when (a) delivered personally, (b) sent by certified or registered mail, postage prepaid, (c) sent by reputable overnight delivery service, or (d) sent by telephonic facsimile transmission, and, pending the designation of another address, addressed as follows:

If to the Company:		Zamba Corporation
		3033 Excelsior Blvd., Suite 200
		Minneapolis, Minnesota 55416
		Attn: Chief Financial Officer
		Fax: (952) 893-3948

If to the Purchaser:

(e) Entire Agreement and Counterparts. This Agreement evidences the entire agreement between the Company and the Purchaser relating to the subject matter hereof and supersedes in all respects any and all prior oral or written agreements or understandings. This Agreement may not be amended or modified, and no provisions hereof may be waived, except by written instrument signed by both the Company and the Purchaser. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one Agreement.

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Agreement as of the date set forth in the first paragraph.

THE COMPANY:		THE PURCHASER:

ZAMBA CORPORATION


By:	/s/ Michael H. Carrel
Name:	Michael H. Carrel
Title:	Executive Vice President and Chief Financial Officer

EX-99.4 6 j3198_ex99d4.htm EX-99.4 DRAFT 6/26/01

Exhibit 99.4

EXHIBIT A

ZAMBA CORPORATION

FORM OF WARRANT

TO PURCHASE

SHARES OF COMMON STOCK

For value received, ________________, or his successors or assigns (“Holder”), is entitled to purchase from Zamba Corporation, a Delaware corporation (the “Company”), up to _______________ fully paid and nonassessable shares of the Company’s common stock, $.01 par value per share, or such greater or lesser number of such shares as may be determined by application of the anti-dilution provisions of this warrant, at the price of $.0599 per share, subject to adjustments as noted below (the “warrant exercise price”). This warrant is being issued pursuant to the terms of a Stock Purchase Agreement, dated the date hereof, between Holder and the Company.

This warrant may be exercised by Holder at any time or from time to time prior to the close of business on February 1, 2007.

This warrant is subject to the following terms and conditions:

been so exercised, and, unless this warrant has expired, a new warrant representing the number of shares, if any, with respect to which this warrant has not been exercised shall also be delivered to the Holder hereof within such time. No fractional shares shall be issued upon the exercise of this warrant.

3. Adjustment. The warrant exercise price shall be subject to adjustment from time to time as hereinafter provided in this Section 3:

4. No Rights as Shareholder. This warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company.

[The remainder of this page has been left blank intentionally.]

IN WITNESS WHEREOF, the Company has caused this warrant to be executed and delivered by a duly authorized officer.

Dated: 2/8/01

	ZAMBA CORPORATION

	By	/s/ Michael H. Carrel
		Name: Michael Carrel
		Title: CFO


By:
Name:
Address:

WARRANT EXERCISE

(To be signed only upon exercise of this warrant)

Dated:


			Signature

If shares are to be issued other than to Holder:			Social Security or other Tax Identification No.





Please print present name and address

WARRANT ASSIGNMENT

(To be signed only upon transfer of this warrant in accordance with Section 6)

Dated:


			Signature

			Social Security or other Tax Identification No.


Please print present name and complete address

EX-99.5 7 j3198_ex99d5.htm EX-99.5 SUBSCRIPTION AGREEMENT

Exhibit 99.5

STRATEGIC ALLIANCE AGREEMENT

BETWEEN

ZAMBA Corporation

AND

HCL Technologies America, Inc.

AND

HCL Technologies Limited, India

Dated the 22nd day of February, 2002

AGREEMENT

This Business Alliance Agreement (“Agreement”) is made and entered into effective this 22nd day of February, 2002 by and among ZAMBA Corporation, a Delaware Corporation, having its principal office at 3033 Excelsior Blvd, Suite 200, Minneapolis, Minnesota 55416, U.S.A. (hereinafter referred to as “ZAMBA”); HCL Technologies America Inc., a California Corporation, having its principal office at 330 Potrero Avenue, Sunnyvale, California 94085, U.S.A (hereinafter referred to as “HCL”); and HCL Technologies Limited, India (hereinafter referred to as “HCL India”) having its principal place of business at A-10&11, Sector 3, Noida 201 301, U.P. India.

WHEREAS:

(A) ZAMBA is a leading corporation providing consulting and systems integration services in the customer relationship management industry and operates under the name and style of “ZAMBA Solutions;”

(B) HCL is engaged in the marketing and provision of software services and is a wholly-owned subsidiary of HCL India;

(D) ZAMBA, HCL and HCL India intend to jointly pursue, facilitate, manage and maintain business opportunities with AMDOCS and Blue Cross Blue Shield (“BCBS”) for the provision of CRM services through the use of the services offered by, and the particular experience and expertise of, ZAMBA, HCL and HCL India pursuant to the terms and conditions of this Agreement; and

(E) The Parties do not, however, desire or intend to co-own a business for profit or otherwise create or participate in or with, whether formally or informally, any partnership, corporate or business entity or other business combination between ZAMBA, HCL and HCL India with respect to the provision of CRM services pursuant to this Agreement or otherwise.

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Parties (as hereinafter defined) agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1 Definitions

“Alliance” shall mean the business alliance among the Parties as described in this Agreement to pursue the Business;

“Affiliate” in relation to a body corporate means any other person directly or indirectly controlling, controlled by or under common control with such body corporate; provided, however, that, for purposes of this definition the terms “controlling”, “controlled by” or “under common control with” shall have the meaning assigned to the term “Control” below;

“Ancillary Agreement” means each Exhibit to this Agreement, including attachments thereto, the Business Plan, as amended from time to time, and each agreement contemplated under this Agreement;

“Business” shall have the meaning set forth in Section 2.1;

“Business Plan” means the business plan of the Alliance as agreed between the Parties in accordance with Section 2.2.

“Change of Control” shall mean the sale, lease, exchange or other transfer of all or substantially all of the assets of a Party, whether in a single transaction or in a series of transactions, to a person or entity that is not controlled, directly or indirectly, by such Party, or a merger or consolidation in which a Party is involved whereby the shareholders of such Party immediately before the effective date of such merger or consolidation do not beneficially own at least fifty percent (50%) of the combined voting power of the surviving entity’s outstanding securities immediately following the effective date of such merger or consolidation;

“Clarify” means CRM based software application program as offered under “Clarify” trade name;

“Control” means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a person or entity, whether through the ownership of, or entitlement to acquire ownership of, voting securities, by contract or otherwise, or the power to elect or appoint a majority of the directors, managers, partners or other individuals exercising similar authority with respect to such person or entity or the right to receive a majority of the income of such person on any distribution by it of all of its income or the majority of its assets on a winding up of its operations and existence; and the terms “controlling”, “controlled by” and “under common control with” shall be construed accordingly;

“Consent” means any consent, approval, authorization or waiver of or by a Governmental Authority or any other person or entity;

“CRM” means customer relationship management and includes such services as are required to manage and maintain client contracts and other client relationships;

“Governmental Authority” means any governmental or regulatory authority or subdivision, whether federal, state, local or foreign, or any agency or instrumentality of any such governmental or regulatory authority or subdivision, or any court or tribunal (irrespective of whether or not such court or tribunal is federal, state, local, foreign or otherwise);

“Offshore” shall mean at the facilities located in India or elsewhere outside of North America.

“Offshore Services” shall mean services provided out of the facilities in India or elsewhere outside of North America, including, without limitation, custom software development, modification, maintenance and programming carried out using the resources outside of North America which also includes less than predominant resources onsite;

“Parties” shall mean the parties to this Agreement;

“Tax/Taxes” shall mean all taxes, including, without limitation, any central/federal, state, local or foreign taxes that have been or may be imposed by any Governmental Authority, including (i) any service tax, any tax based upon or measured by income, receipts, services, sales, use or value added; (ii) any taxes denominated as ad valorem, transfer, franchise, capital stock, payroll, social security, employment, excise, occupation, property, windfall profits, environmental, customers, or withholding taxes; and (iii) any interest, penalties, charges or costs relating thereto;

“Team” means the sales, marketing and administrative personnel of ZAMBA and HCL that are assigned to pursue the Business.

1.2 Headings

The headings and subheadings in this Agreement are included for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof in any manner whatsoever.

1.3 Interpretation, Number and Gender

The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neutral form. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless the context otherwise requires, (a) all references to Articles, Sections, paragraphs, clauses, Exhibits and Schedules are to Articles, Sections, paragraphs, clauses, Exhibits and Schedules in this Agreement; and (b) the terms “herein,” “hereof,” “hereto,” “hereunder,” “hereinafter” and words of similar import refer to this Agreement as a whole.

ARTICLE II

STRATEGIC ALLIANCE

2.1 Business Objective

The objective of the Alliance is to utilize the services offered by, and the particular experience and expertise of, ZAMBA, with respect to CRM services, and HCL and HCL India, with respect to Offshore software application development, modification and maintenance, solely to: (1) succeed AMDOCS in the management and maintenance of clarify client base in respect of Clarify software; and (2) jointly pursue, facilitate, manage and maintain business opportunities with Blue Cross Blue Shield (“BCBS”) excluding supplementary staffing not related to CRM (the “Business”). It is likely that ZAMBA offers and sells HCL’s services to its client base or HCL offers and sells ZAMBA’s services to its client base. In such an event, the Parties shall be entitled to a finder’s fee from

the other in accordance with the terms of this Agreement. Notwithstanding anything herein to the contrary, the Parties DO NOT desire or intend to co-own a business for profit or otherwise create or participate in or with, whether formally or informally, any partnership, corporate or business entity or other business combination between ZAMBA, HCL and HCL India with respect to the provision of Business pursuant to this Agreement or otherwise.

2.2 Business Plan

Within one (1) month of the date of execution of this Agreement, the Parties shall agree in writing on a Business Plan, which shall include the customers to be approached, the estimated revenue from each customer, the time over which the revenues are expected to be derived, manpower plan, the expenditures proposed to be incurred by the Team broken into expenditures to be incurred by each of the Parties, as well as other information describing the Parties’ plans, expectations and responsibilities with respect to the Business. This Business Plan shall be reviewed and supplemented in writing on a quarterly basis and each supplement shall be approved in writing by the Parties. Every quarter the Parties shall meet to review the Business Plan and suggest amendments, modifications or supplements thereto. The Business Plan so amended, modified or supplemented shall be the Business Plan, except that any and all amendments, modifications or supplements to the Business Plan will not be effective unless made in writing and signed by the Parties hereto. In the absence of a meeting of the Parties or an agreement on the expenditures to be incurred, none of the Parties shall commit any expenditure and may not charge the same to the Alliance.

2.3 Sales, Marketing and Administrative

The Parties have decided to pool their selling and marketing resources to pursue, facilitate, manage and maintain the Business as follows:

a. The Parties shall establish a sales and marketing Team which shall consist of personnel nominated by HCL and ZAMBA as agreed to in the Business Plan.

b. The personnel who are nominated to the Team shall be jointly selected by HCL and ZAMBA.

c. The Team shall be managed by ZAMBA, who shall control and manage the Team’s operations and expenses in its sales and marketing efforts for the Alliance within the approved Business Plan.

d. The Team shall be responsible for selling and marketing in accordance with the agreed upon Business Plan.

e. The expenditures incurred by the Parties pursuant to this Section 2.3 shall be aggregated and shared between the parties as described in this Section 2.3 irrespective of the volume of business generated.

f. The sharing of expenditures incurred under this Section 2.3 shall (i) for the first 18 months’ from the date of closing be in the ratio of **:** and (ii) thereafter be in the ratio of **:** between ZAMBA and HCL, respectively, provided, however, that, without limiting any of ZAMBA’s other obligations or responsibilities hereunder, the maximum amount which ZAMBA shall be required to pay with respect to sales, marketing & administrative expenses over the term of this Agreement shall not exceed the project management fee and/or commission which accrues to ZAMBA under this Agreement.

g. The expenditures made by any Party shall be exactly as described and agreed to by the Parties in the Business Plan. With respect to any expenditure by any Party, which exceeds the amount specifically described in the Business Plan, no other Party hereto shall be bound to pay its proportionate share of such expenditure, unless otherwise previously agreed to in writing by the Parties.

2.4 Review and Execution of Business Plan

a. Steering Committee:

The review, modification and amendment of the Business Plan and the evaluation of the performance of the Alliance will be conducted by a steering committee (“Steering Committee”), which shall be comprised of three (3) representatives designated by HCL and three (3) representatives designated by ZAMBA. The Steering Committee will be responsible for: (1) the initial completion of, and periodic amendment, modification and supplement to, the Business Plan; (2) conducting periodic review of operations; and (3) approving the hiring of critical Team members. In order to carry out its duties, the Steering

Committee will meet at least once per quarter of each fiscal year. The members of the Steering Committee will be nominated on or before February 28, 2002, and the first meeting of the Steering Committee will be held on or before March 15, 2002, to review and approve the initial Business Plan.

The Business Plan shall be reviewed at each quarterly meeting of the Steering Committee. Based on feedback from the Team, the Steering Committee shall modify the Business Plan as the Steering Committee deems appropriate. The modifications shall not be effective unless approved in writing by the authorized member of each Party on the Steering Committee. The modified Business Plan shall then be treated as the Business Plan for all purposes as described herein. In the event the Steering Committee is unable to agree on the terms of the Business Plan, or the performance of the Alliance is significantly below the expectations of the Parties set forth in a previous Business Plan, either party shall have the option, in its sole discretion, to terminate the Agreement in accordance with the provisions hereof.

b. Duties and Responsibilities

i. Selection: The selection of members of the Team shall be conducted jointly by HCL and ZAMBA.

ii. Delivery: ZAMBA will be responsible for ensuring proper and timely delivery of integrated solutions and onsite services to the clients. HCL will be responsible for ensuring proper and timely delivery of Offshore centric services.

iii. Human Resources, Accounts & Administration: Any and all Human Resources, Accounts and Administration personnel seconded or assigned to the Alliance, shall be and remain employees of the Party from whom such personnel were originally provided, seconded, assigned or otherwise deployed, and such Party shall continue to provide, and be exclusively responsible for, all compensation, insurance and other benefits provided to any such employees, including, without limitation, workers’ compensation insurance and

withholding taxes. The administrative and accounting support required by the Alliance for the initial six (6) months period from the Closing Date shall be provided by the respective parties who are responsible for the same and that the Alliance shall not be charged the same during this period.

iv. Compliance with employment laws: Each Party shall ensure that it would continue to be responsible for compliance with the employment, benefit and tax laws in respect of the personnel who are hired or assigned to the Alliance, including without limitation, workman compensation insurance and withholding taxes.

2.5 Funding

HCL and ZAMBA shall each fund the sales and marketing expenses of the Alliance in accordance with the terms of the Business Plan.

However, HCL has agreed to fund the initial sales and marketing expenditure of the Team so long as the cumulative funding by HCL does not exceed US Dollar two (2) million and for a period not exceeding 18 months from the Closing Date. HCL may at its option (but shall not be bound to) increase this limit of $ 2 million where it feels that the same is required to support the growth of business. Nothing herein shall prevent HCL to reduce its commitment from $2 million above should the Team’s achievement for three consecutive quarters be below those as agreed to by the Parties under the Business Plan. In the event ZAMBA owes HCL any amount for its proportionate share of sales and marketing expenses as described herein, HCL may remit a lesser amount of project management fees owed to Zamba to reflect such amount due and payable by ZAMBA to HCL for sales, marketing and administrative expenses. The account will be reconciled and adjusted on a quarterly basis.

Any funding required in accordance with the approved business plan will be paid monthly into a separate bank account managed and maintained by ZAMBA and HCL for the Alliance in accordance with the ratio set forth in Section 2.3 (f) above.

ARTICLE III

CONDUCT OF BUSINESS

3.1 The Parties have agreed to conduct Business as follows:

a. HCL and ZAMBA shall agree to appoint and authorize one (1) person each who would be authorized to negotiate and bid contracts and orders on behalf of the Alliance. Such authorized person s shall have the authority to negotiate contracts and orders with clients for the Business on behalf of the respective Parties. Nothing herein shall be construed to provide the Team, or any member thereof, with the authority to sign on behalf of, or otherwise contractually bind, ZAMBA, HCL and/or HCL India without the express prior written consent of ZAMBA, HCL and/or HCL India.

b. HCL shall be the named party in all contracts and orders obtained on behalf of the Alliance. Upon receipt of a client contract, HCL shall contract with ZAMBA for ZAMBA to deliver any performance required by such contract, including any consulting and systems integration solutions provided by ZAMBA and software application services provided by HCL and/or HCL India. In order to deliver CRM services to a client under such contract, ZAMBA shall manage the entire project, which may consist of work and services performed both onsite and Offshore. With respect to onsite services, ZAMBA will staff onsite resources with the onsite resources of ZAMBA and HCL in order to maximize gross margins on the contract for the Alliance. To the extent Offshore services are necessary or appropriate to deliver effective and efficient CRM and other services under the contract, ZAMBA will subcontract to HCL India the Offshore Services portion of the contract in order to maximize gross margins under the contract for the Alliance. HCL India will only be responsible to ZAMBA for performance of the Offshore Services portion of work required under a client contract.

c. ZAMBA, and its successors and permitted assigns, shall indemnify, defend and hold HCL and/or HCL India, and their respective officers, directors, agents, employees, successors and

permitted assigns, harmless from, against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorneys’ fees, that HCL and/or HCL India incurs from third parties, arising or resulting from a breach of a client contract because of a failure to act or perform by ZAMBA or by reason of any grossly negligent act or performance or wilful misconduct on the part of ZAMBA in its provision of services pursuant to any client contract. This indemnification relates only to that portion of the client contract for which Zamba is providing the services.

d. HCL, and its successors and permitted assigns, shall indemnify, defend and hold HCL India and ZAMBA, and its respective officers, directors, agents, employees, successors and permitted assigns, harmless from, against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorneys’ fees, that ZAMBA incurs from third parties, arising or resulting from a breach of a client contract because of a failure to act or perform by HCL or by reason of any grossly negligent act or performance or wilful misconduct on the part of HCL in its provision of services pursuant to any client contract. This indemnification relates only to that portion of the client contract for which HCL is providing the services.

e. HCL India, and its successors and permitted assigns, shall indemnify, defend and hold HCL and or ZAMBA, and its respective officers, directors, agents, employees, successors and permitted assigns, harmless from, against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and reasonable attorneys’ fees, that ZAMBA incurs from third parties, arising or resulting from a breach of a client contract because of a failure to act or perform by HCL India or by reason of any grossly negligent act or performance or wilful misconduct on the part of HCL India in its provision of services pursuant to any client contract. This indemnification relates only to that portion of the client contract for which HCL India is providing the services.

ARTICLE IV

PRICING AND PAYMENT

4.1 Service Charges to HCL

In consideration of HCL agreeing to enter into contracts with clients, HCL shall be entitled to retain a five percent (5%) service charge on all amounts received from such clients and subcontract the work to Zamba at 95% of the order value.

4.2 Fee for Project Management Services

ZAMBA shall be entitled to a fee for project management services, which project management service fee shall be calculated in accordance with the method described in Exhibits 1(a) and 1(b) attached hereto.

4.3 Charge for Onsite Resources Payable to ZAMBA

In addition to a fee for project management services, ZAMBA shall be entitled to a charge for onsite resources, which onsite resources charge shall be calculated in accordance with Exhibit 3.

4.4 Fee for Onsite Services Payable to HCL

In the event a client contract requires HCL to perform onsite services, such services shall be provided by HCL in exchange for payment of the onsite service rates in accordance with Exhibit 3.

4.5 Fee for Offshore Services

ZAMBA shall sub-contract to HCL India all Offshore Services to be provided under all new client contracts in respect of the Business. The amount for Offshore Services shall be payable to HCL India and calculated in accordance with the method described in Exhibits 1(a) and 1(b). Where no Offshore Services are required to be provided by HCL India, the amount set forth in Exhibits 1(a) and 1(b) shall become payable by ZAMBA to HCL.

4.6 Collections and credit risk

It is agreed between the Parties that the Team shall be responsible for all collections, in spite of the fact that the invoice will be in HCL’s name. In the event that there is a default in payment by the client or customer, both of the Parties shall bear the risk of and responsibility for such default equally.

4.7 Joint Account

Both HCL and ZAMBA shall open a joint account to deposit all monies whether by way of advance or otherwise received from clients or customers, which joint account shall be managed and maintained jointly by and between ZAMBA and HCL. Any and all amounts held in the joint account shall first be allocated to between Zamba onsite cost, HCL onsite cost and HCL India offshore cost in the ratio thereof; and thereafter pay HCL for any cumulative sales marketing and administrative expenses which are to be recovered from ZAMBA in accordance with section 2.5. If there is still any amount left to be disbursed, the same shall be disbursed in the ratio of **:** (which ratio shall be **:** after a period of 18 months from the Closing Date) between HCL India/HCL and Zamba. Any un-recovered sales, marketing and administrative expenses incurred by HCL in accordance with section 2.5 shall be carried forward to be recovered from subsequent payments for project management fees which become due to Zamba, without any limitation of time.

4.8 Sale of HCL services by ZAMBA

In the event ZAMBA offers and sells to its client base services offered by HCL, ZAMBA shall be entitled to commission calculated in accordance with the schedule of commissions set forth in Exhibit 2 attached hereto depending upon the type of HCL services sold. Each such contract shall be taken by HCL/HCL India directly in its name.

4.9 Sale of ZAMBA services by HCL

In the event HCL offers and sells to its client base services offered by ZAMBA, the Parties agree that HCL shall be entitled to a finder’s fee of ten percent (10%) of the value of such contract for ZAMBA’s services. Each such contract shall be taken by Zamba directly in its name.

4.10 Maintenance of Financial Records and Reports

The Parties shall maintain at their respective principal offices, and furnish to each other Party upon such Party’s reasonable request, adequate financial records and reports with respect to services rendered pursuant to the Alliance by such Party to clients and amounts received therefrom in connection with this Agreement. Such financial records and reports shall be summarized and provided to each Party hereto on a monthly basis. Each Party shall have the right to audit the financial records and reports of each other Party as reasonably required to verify the amounts received from clients for services rendered and expenses incurred, and to validate the proper allocation of proceeds received from all client contracts in accordance with the terms of this Agreement.

ARTICLE V

EXCLUSIVITY

5.1 Non-compete

During the term of this Agreement, the Alliance will not compete with any of the Parties for their respective service offerings. Except as stated in Section 5, during the term of the Agreement, and for a period of six (6) months thereafter, the Parties will not compete with the Alliance with respect to the Business.

5.2 Offshore Services

The Alliance agrees that during the term of this Agreement, HCL India shall be the exclusive entity for the provision of Offshore Services required for the Business. ZAMBA hereby agrees that during the term of this agreement and for a period of six (6) months thereafter, it shall exclusively use HCL India to provide any Offshore Services. This obligation of ZAMBA to use HCL India for provision of Offshore Services for a period of six (6) months beyond the term of the agreement shall not apply where HCL is a defaulting party in terms of Section 8.1. During the period of this Agreement and for six (6) months thereafter, Zamba agrees that it shall not set up any Offshore facility or enter into a joint venture or alliance of any form with any other party, which involves the provision of Offshore Services. However, there could

be a situation where ZAMBA’S clients insist on working directly with a different offshore services provider in which case Zamba shall refer such matter during the term of this Agreement to the Steering Committee for its prior approval, not to be unreasonably withheld, conditioned, or delayed. Further, HCL and HCL India acknowledge and agree that Zamba may continue to use its existing subsidiary in Chennai, India to perform Offshore Services for current engagements as deemed appropriate by Zamba. Zamba agrees that it will not grow the subsidiary and will work with HCL on transitioning the work to HCL as soon as possible.

5.3 CRM’s Service Offerings

Notwithstanding anything herein to the contrary, the Parties agree that HCL has made, and will continue to make, a considerable investment in pursuing opportunities in CRM space. However provisions of the section 5.1 above still continue to apply.

Zamba will also continue to address the CRM market as it is currently doing, however provisions of sections 5.1 and 5.2 above will apply.

ARTICLE VI

STRATEGIC INVESTMENT

6.1 Investment in ZAMBA

As part of the consideration to induce ZAMBA to enter into this Alliance and work towards the objectives set forth herein, HCL has agreed to make the investments in ZAMBA set forth below:

(i) On the Closing Date, HCL shall purchase 2,460,025shares of ZAMBA common stock, with a par value of $.01 per share, at a per share purchase price of $0.407, as set forth in the Stock Purchase Agreement attached as Exhibit 4 to this Agreement. The per share purchase price is based upon the average of the closing bid prices of ZAMBA’s common stock on the Nasdaq National Market System for the twenty (20) business days preceding, but not including, February 21, 2002.

(ii) In connection with HCL’s purchase of equity, ZAMBA shall issue to HCL a warrant to purchase up to 615,006 shares

of ZAMBA common stock at an exercise price of $0.610 per share, pursuant to the Warrant Agreement attached to this Agreement as Exhibit 5. The exercise price of the warrant represents one hundred fifty percent (150%) of the per share purchase price for the purchase of common stock set forth above. ZAMBA shall also grant HCL certain rights to register the shares of ZAMBA common stock purchased under Section 6.1(i) pursuant to the Registration Rights Agreement attached as Exhibit 6 to this Agreement.

6.2 Board Representation

As long as this Agreement remains in force, ZAMBA shall nominate one (1) representative of HCL to be a member of the ZAMBA Board of Directors (“HCL Director”), and recommend that shareholders vote for the HCL Director and take reasonable action in this regard. For so long as the HCL Director is a member of the ZAMBA Board of Directors, ZAMBA shall, with respect to such person:

a. maintain D&O liability insurance as may be decided by the board, which shall not be less than $5 million.

b. make such D&O liability insurance coverage applicable to the HCL Director;

c. enter into an indemnification agreement with the HCL Director on terms substantially similar those in effect with other ZAMBA directors; and

d. pay to the HCL Director the same compensation paid to any and all other non-employee directors of ZAMBA

16 ARTICLE VII

REPRESENTATIONS AND WARRANTIES

7.1 The Parties warrant to each other as follows:

a. Authority and Authorization of the Parties. Each of the Parties have full corporate power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and thereby and to perform each of their respective obligations hereunder. The execution and delivery by the Parties of this Agreement, the performance by each of the Parties of its obligations and the consummation by it of the transactions contemplated herein, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of the Parties. No other corporate or other proceedings on the part of any Party is necessary to authorize the execution and delivery of this Agreement, or the performance by it of its obligations hereunder and thereunder. This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by the Parties and constitute valid and binding obligations of each of the Parties, enforceable against each of them in accordance with their terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to creditors’ rights generally.

b. Organization and Standing of the Parties. ZAMBA is a Delaware Corporation that is duly organized and validly existing under the corporate laws of such state, and has the requisite power and authority to carry on its business as it is now being conducted. HCL is a California Corporation that is duly organized and validly existing under the corporate laws of such state, and has the requisite power and authority to carry on its business as it is now being conducted. HCL India is an Indian company that is duly organized and validly existing under the corporate laws of India, and has the requisite power and authority to carry on its business as it is now being conducted. The Parties are in all material respects in good standing in each jurisdiction where the character of its properties or the nature of its business makes such qualification or licensing necessary.

c. No Conflict; Required Filings and Consents. Neither the execution and delivery by each of the Parties of this Agreement nor the consummation by the Parties of the transactions contemplated hereby will (a) conflict with, or result in a breach or violation of, any of the provisions of the Certificate of Incorporation, Articles of Incorporation,

Bylaws or other organizational documents of the Party; (b) constitute or result in a breach or violation of any term, condition or provision of, or constitute a default under, or give rise to any right of termination, cancellation or acceleration with respect to, or result in the creation of any Liens upon any property or assets of the Party pursuant to, any contract to which the Party is a party or to which the Party may be subject; or (c) violate any laws, rules, regulations or orders applicable to the Party or any of its properties or assets. Except as described in this Agreement, no notice to, consent from, order of, or registration, declaration or filing with, any person, entity, agency or authority is required to be obtained or made by the Parties in connection with the execution and delivery by the Parties of this Agreement or the consummation or performance by the Parties of the transactions contemplated by this Agreement.

ARTICLE VIII

EVENT OF DEFAULT

8.1 Event of Default

An “Event of Default” shall have occurred in the event any of the following takes place:

a. any action or proceeding is commenced by ZAMBA to seek the protection afforded under any applicable bankruptcy or insolvency laws, or any procedure is initiated to wind-up the business of, or other reorganize, ZAMBA (other than for the purpose of a solvent amalgamation or reconstruction with the prior approval of HCL, such approval not to be unreasonably withheld or delayed), and that action, proceeding or procedure is not terminated or discharged within ninety (90) days;

b. any action or proceeding is commenced by HCL to seek the protection afforded under any applicable bankruptcy or insolvency laws, or any procedure is initiated to wind-up the business of, or other reorganize, HCL (other than for the purpose of a solvent amalgamation or reconstruction with the prior approval of ZAMBA, such approval not to be unreasonably withheld or delayed), and that action, proceeding or procedure is not terminated or discharged within ninety (90) days;

c. the holder of any security over all or substantially all of the assets of either of the Parties takes any step to enforce that security, and that enforcement action is not discontinued or stayed within ninety (90) days;

d. all or substantially all of the assets of any of the Parties is subject to attachment, sequestration, execution or any similar process, and that process is not terminated, discharged or stayed within ninety (90) days

e. a Change of Control of any of the Parties occurs;

f. any Party defaults in making a payment due under the Agreement and such defaulting Party fails to cure such default within thirty (30) days of the date such Party received notice of the default;

g. any of the Parties enters into a composition or arrangement with its creditors or any class thereof; or

h. any of the Parties ceases conducting its business operations.

ARTICLE IX

TERMINATION

9.1 Term and Termination

This Agreement shall continue for an indefinite period of time unless terminated by the Parties pursuant hereto. This Agreement shall terminate immediately (except for those provisions expressly stated to continue beyond termination of this Agreement or without limit in time):

a. in the event a Party receives notice of an Event of Default and fails to cure such Event of Default within fifteen (15) days;

b. by either Party providing the other with written notice of termination for any reason or no reason whatsoever at least one hundred eighty (180) days before the effective date of such termination except that ZAMBA shall not be entitled to terminate this Agreement under this section 9.1b so long as it

owes any monies to HCL or HCL India pursuant to the terms hereof related to any unrecovered sales, marketing and administrative expenses from the project management fees; or

c. by mutual written consent of the Parties.

9.2 Effect of Termination

Except as otherwise provided herein, following termination of this Agreement by reason of the occurrence of an Event of Default, the non-defaulting party shall have the option of continuing to service the client contracts and relationships established under the Alliance. Following termination of this Agreement by reason of an Event of Default, the defaulting party shall not enjoy any of the benefits deriving from this Agreement after the date of receipt of notice of the Event of Default, unless such Event of Default is cured within the prescribed period. In the event that the Parties mutually agree to terminate the Agreement, the Parties shall amicably determine the best way to fairly and equitably maintain, manage, divide and partition the client contracts and relationships established under the Alliance. Notwithstanding any of the foregoing, upon termination of this Agreement, each Party shall immediately discontinue the further use of, and shall immediately return to the originating Party, any and all Intellectual Property (as defined below) of, and confidential information (including all copies thereof) received from, any other Party. Further on termination, any monies due to any Party under this Agreement shall become immediately payable and shall be accrued forthwith, provided that ZAMBA shall not be obligated to HCL and/or HCL India for any sales, marketing and administrative expenses in excess of the project management fees that accrues to Zamba hereunder.

ARTICLE X

GENERAL

10.1 Indemnification

Each Party, and its respective successors and assigns, shall indemnify, defend and hold each other Party, and its respective officers, directors, agents, employees, successors and permitted assigns, harmless from, against and in respect of any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties

and reasonable attorneys’ fees, that such other Parties may incur or suffer, or which may arise or result, by reason of: (1) a material breach of any of the representations or warranties contained in this Agreement; (2) the failure to disclose any material fact or information in connection with the negotiation, preparation, execution or performance of this Agreement; (3) any infringement claims with respect to any Party’s Intellectual Property, Work Product or other claimed confidential or proprietary rights; (4) the failure to perform any obligation pursuant to the provisions of this Agreement; (5) the breach of the non-competition and confidentiality restrictions set forth in this Agreement; or (6) any gross negligence or willful misconduct with respect to any performance contemplated by this Agreement. The Party required to provide indemnification hereunder shall have sole control over, and authority to, defend and settle, at its own expense, any claims relating to the foregoing, provided, however, that the Party or Parties receiving indemnification provide such indemnifying Party prompt written notice of any such claims and all information reasonably available and assistance reasonably necessary to effectively defend or settle such claim.

10.2 Delays in Performance

None of the Parties shall be in breach of this Agreement in the event any delay in such Party’s performance is caused by any other Party’s failure to provide services, materials or information in a timely manner. None of the Parties shall be in breach of this Agreement in the event such Party is unable to perform its obligations under this Agreement, and/or a client contract by reason of a natural disaster, war, emergency conditions, labor strife, the substantial inoperability of technical infrastructures, the inability to obtain supplies or other reasons or conditions beyond such Party’s reasonable control; provided, however, that if such reasons or conditions remain in effect for a period of more than sixty (60) days, any Party hereto may terminate the Agreement without further liability to the other Party.

10.3 Intellectual Property Ownership

Except as otherwise specifically provided in a client contract between the Alliance and a customer, during the term of this Agreement, each Party shall separately be and remain the exclusive owner of all right, title and interest in and to any and all proprietary information, including, without limitation, computer

hardware and software (including object and source code formats), technology, methods, trade secrets, processes, graphics, and other materials, items and work product (the “Work Product”) that such Party uses in the conduct of their business or provides to customers and clients, including, without limitation, all rights of copyright, patent, trade secrets, trademarks, service marks, trade dress, artistic and moral rights, character rights, publicity rights, and any and all other proprietary rights of any kind whosoever relating to the Work Product, together with any and all applications, registrations, renewals and extension rights, and rights to sue for past, present or future infringement (the “Intellectual Property”).

10.4 Survival

The terms and provisions of this Agreement that require performance after the termination of this Agreement, or have application to events which are set to occur after the termination of this Agreement, shall survive the termination of this Agreement. In addition, notwithstanding any investigation made by or on behalf of any of the Parties hereto or the results of any such investigation, the representations and warranties contained herein will survive the termination of this Agreement for a period of two (2) years. Representations and warranties provided by the Parties in any of the Ancillary Agreements will survive the date of this Agreement for the period of time set forth in such Ancillary Agreement, or if no such period of time is set forth therein, for a period of two (2) years consistent herewith.

10.5 Binding Effect

Each and every provision of this Agreement shall be binding on, and inure to the benefit of, each of the Parties hereto and their respective successors and permitted assigns. No Party shall assign (or declare any trust in favor of a third party over) all or any part of the benefit of, or its rights or benefits under, this Agreement, without the prior written consent of the other Parties.

10.6 Entire Agreement; Amendment

a. Whole and only agreement: This Agreement, together with the Ancillary Agreements, constitute the whole and only agreements between the Parties relating to the subject matter of this Agreement and the Ancillary Agreements.

b. Exclusion of other rights of action: Except in the case of fraud, no Party shall have any right of action against any other Party to this Agreement arising out of, or in connection with, any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Agreement or any Ancillary Agreement if such draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement is made or given by any person at any time prior to the date of this Agreement, except to the extent that it is included in this Agreement or in any Ancillary Agreement.

c. Variation or Amendment: This Agreement may only be varied or amended pursuant to a written instrument signed by each of the Parties.

10.7 Notices

a. Notices to be in Writing: A notice under this Agreement shall only be effective if it is in writing. Faxes are permitted, but writing on the screen of a visual display unit and e-mail are not permitted and shall be not effective notice hereunder.

b. Addresses: Notices under this Agreement shall be sent to a Party at its address or number, and for the attention of the individual, set forth below:

Party and title	Address	Facsimile no.
ZAMBA Corporation Attn. Chief Financial or Legal Officer	3033 Excelsior Blvd., Suite 200, Minneapolis, MN 55416 USA	952-893-3938

HCL Technologies America, Inc. Attn. Mr. Raj Sirohi, President	330, Potrero Avenue, Sunnyvale, California 94085, USA

HCL Technologies Limited (Attn. Chief Financial Officer)	A 10 & 11, Sector III, Noida, Uttar Pradesh 201 301, India	+91 11 91 452 6907

PROVIDED, HOWEVER, that a Party may change its notice details by giving notice to the other Parties of the change in accordance with this Section 10.7, which notice of a change of address shall be effective five (5) business days after such notice is received, or such later date as may be specified in the notice.

c. Receipt of Notices: Any notice given under this Agreement shall, in the absence of earlier receipt, be deemed to have been duly given as follows:

i. if delivered personally or by courier, on delivery;

ii. if sent by first class inland post, two (2) business days after the date of posting;

iii. if sent by airmail, six (6) business days after the date of posting;

iv. if sent by facsimile, when dispatched, subject to receipt of confirmation of receipt.

d. Any notice given under this Agreement outside working hours in the place to which it is addressed shall be deemed not to have been given until the start of the next period of working hours in such place.

10.8 Delay or Omission

No delay or omission by any Party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement shall operate as, or be construed to be, a waiver of, or otherwise affect in any manner, any right, power or remedy.

10.9 Single or Partial Exercise

The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of such right, power or remedy or otherwise restrict in any manner the exercise of any other right, power or remedy.

10.10 Cumulative Rights

The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law or in equity.

10.11 Damages Not an Adequate Remedy

Notwithstanding any express remedies provided under this Agreement, and without prejudice to any other right or remedy which any Party may have, each Party acknowledges and agrees that damages alone may not be an adequate remedy for any breach by it of the provisions of this Agreement, so that in the event of a breach or anticipated breach of such provisions, the remedies of injunction and/or an order for specific performance would be available in appropriate circumstances.

10.12 No Third Party Rights

Except as set forth herein, this Agreement shall not confer any rights or remedies upon any person or entity, or inure to the benefit of any person or entity other than the Parties and their respective successors and permitted assigns.

10.13 No Partnership

Nothing in this Agreement, and no action taken by the Parties under this Agreement, shall constitute a partnership, association or other cooperative entity between any of the Parties, authorize any party to act as an agent for, or otherwise on behalf of, any other Party for any purpose.

10.14 Costs and expenses

Except as otherwise stated in this Agreement, each Party shall pay its own costs and expenses in relation to the negotiation, preparation, execution and performance of this Agreement and the Ancillary Agreements.

10.15 Counterparts

This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, including by facsimile, but shall not be effective until each Party has executed at least one counterpart. Each counterpart shall constitute an original of this Agreement, and all the counterparts together shall constitute one and the same instrument.

10.16 Language

This Agreement may be translated into languages other than English; provided, however, that for purposes of interpretation, construction and performance of the terms and provisions hereof, the English language version of this Agreement shall control.

10.17 Choice of Governing Law

This Agreement is to be governed by, and construed and interpreted in accordance with, the laws of the State of California, USA, which shall be the proper law of this agreement notwithstanding any rules of conflicts of laws or private international law under which any other law would be made applicable.

10.18 Arbitration

Any dispute, controversy or claim arising out of, or relating to, this Agreement, or the breach thereof or the relationship created thereby, which is not settled by mutual consultation within a period of thirty (30) business days, shall be resolved exclusively by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce then in effect. Any arbitration proceedings shall be heard before a panel of three (3) arbitrators, one (1) to be chosen by ZAMBA, one (1) to be chosen by HCL and the third to be chosen by those two (2) arbitrators; provided, however, that such arbitrators shall be selected within fifteen (15) business days of the date either Party institutes arbitration proceedings. In the event any Party refuses to participate in the arbitration proceedings or fails to appoint its arbitrator within the specified period, or the two (2) selected arbitrators are unable to agree on the selection of the third, the ICC shall appoint an arbitrator or arbitrators to complete the three-member panel. Any arbitration proceedings shall be conducted in the English language and held in San Jose, California, USA. The decision of the arbitrators shall be final and binding on the Parties, shall be enforceable in any competent court having jurisdiction over the Parties and shall not be subject to any appeal. The losing Party, as determined by the arbitrators, shall pay all reasonable out-of-pocket expenses (including, without limitation, reasonable attorneys’ fees) incurred by the prevailing Party, as determined by the arbitrators, in connection with any such dispute, unless the arbitrators shall direct otherwise.

10.19 Announcements

a. Restriction on Announcements

No public announcement concerning this Agreement shall be made by any Party without the prior written approval of the others, such approval not to be unreasonably withheld or delayed.

b. Permitted Announcements

Notwithstanding the previous provisions of this Section 10.19, any Party may, whenever practicable after consultation with the other Parties, make an announcement concerning this Agreement if required by:

i. law; or

ii. any securities exchange or over-the-counter market or regulatory or governmental body to which that Party is subject or will be subject, whether or not the requirement has the force of law.

c. Duration of Restrictions

The restrictions contained in this Section 10.19 shall continue to apply to each Party (including any Shareholder who has ceased to hold Shares) without limit in time.

10.20 Confidentiality

a. Each party shall treat as confidential all information received or obtained as a result of entering into or performing this Agreement, which relates to:

(i) the provisions of this Agreement;

(ii) the negotiations relating to this Agreement;

(iii) the subject matter of this Agreement;

(iv) the other party; or

(v) the other party or its businesses, assets, technology, services, know-how, clients, partners, employees, services, finances, business plans.

b. Notwithstanding the other provisions of this clause, either party may disclose confidential information:

(i) if and to the extent required by the Law of any relevant jurisdiction;

(ii) if and to the extent required by, or if and to the extent it would customarily notify such information to, any securities exchange or

over the counter market or regulatory or governmental body to which that party is subject or submits, or will be subject to or will submit to after the date of this Agreement, wherever situated, whether or not any such requirement has the force of law;

(iii) if and to the extent required to vest the full benefit of this Agreement in that party to its professional advisers, auditors and bankers;

(v) if and to the extent the information has come into the public domain through no fault of that party;

(vi) if and to the extent the other party has given prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed; or

(vii) in arbitration proceedings or proceedings in a court if required pursuant to an order of the arbitration panel or court and appropriate protection sought against dissemination or publication outside of the arbitration or court proceedings.

(c) Duration of Obligations. The restrictions contained in this Section shall continue to apply to each Party (including any Party which has ceased to be a Party to the Alliance) for a period of two (2) years following the termination of this Agreement.

10.21 Situs and Jurisdiction

Venue for any proceeding arising from any dispute under this Agreement which is not subject to arbitration under Section 10.19 hereof, shall be in San Jose, California, USA, and the Parties hereby consent to and agree that the federal and state courts in San Jose, California, USA shall have exclusive jurisdiction in any such proceeding.

10.23 Nature of Relationship

The Parties acknowledge and agree that the provisions of this Agreement shall not in any respect whatsoever be deemed to constitute co-ownership of any business for profit within the meaning of the California Uniform Partnership Act of 1994 or otherwise create a partnership, corporate or business entity, or other business combination between ZAMBA, HCL and HCL India. ZAMBA, HCL and HCL India shall conspicuously identify themselves to all persons and organizations as independent contractors and shall not represent or imply to any other person or organization that this Agreement authorizes ZAMBA, HCL or HCL India to act as an agent for or on behalf of any other Party, other than as provided for in this Agreement. Neither ZAMBA, HCL nor HCL India shall be obligated by any agreement, representation or warranty made by

any other Party, nor shall ZAMBA, HCL or HCL India be obligated for damages to any person or organization for personal injuries or property damage directly or indirectly arising out of the conduct of the other Party’s business or caused by the other Party’s negligence, willful act, or failure to act. As independent contractors, ZAMBA, HCL and HCL India shall be separately responsible for the payment of their income or other taxes. In addition, ZAMBA, HCL and HCL India shall be separately responsible for carrying workers’ compensation insurance on themselves and their employees and agents.

10.24 Export Restrictions

ZAMBA and HCL are subject to the laws and regulations of the United States governing the export of United States products and technology. The Parties hereby agree not to directly or indirectly engage in any acts that would constitute a violation of such laws or regulations. The Parties further agree not to ship, export, re-export, divert, dispose of, or otherwise authorize or permit the shipment, exportation, diversion or disposition of, any equipment, know-how, technical data, documentation or other materials furnished pursuant to this Agreement originating in or from the United States.

10.25 Closing

The closing shall happen after the Parties have executed this Agreement, together the agreements in Exhibits 4, 5 and 6 and the Parties have secured the consent of their respective Board of Directors to entering into this Alliance transactions contemplated thereby and Either one of HCL, HCL India or an HCL Affiliate has remitted $1 million towards equity investments in terms of section 6.1 above.

HCL, HCL India or an HCL Affiliate shall remit $1 Million towards equity investment in terms of section 6.1 above within 7 business days of the parties having executed this agreement together with the agreements in exhibits 4,5 and 6 and recited of consent of Zamba’s Board of Directors to enter into this alliance and transactions contemplated thereby.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered effective as of the day and year first above written.

For and on behalf of:
ZAMBA CORPORATION

/s/ D. Holden
Name: Doug Holden
Title: CEO

For and on behalf of:
HCL TECHNOLOGIES AMERICA, INC.

/s/ Ashok Jain
Name: Ashok Jain
Title: Supervisory Director

For and on behalf of:
HCL TECHNOLOGIES LIMITED, INDIA

/s/ Ashok Jain
Name: Ashok Jain
Title: EVP

Index of Exhibits

Strategic Alliance Agreement

Number		Description

1(a)		Fees for Services for Initial 18 Months

1(b)		Fees for Services for the Period After 18 Months

2		Commission Payable to Zamba for Sale of HCL Service
		Offerings by Zamba

3		Pricing Model

4		Form of Stock Purchase Agreement

5		Form of Warrant

6		Form of Registration Rights Agreement

EX-99.6 8 j3198_ex99d6.htm EX-99.6 Exhibit 99

Exhibit 99.6

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is made and entered into as of the 21 day of February, 2002, by and between Zamba Corporation, a Delaware corporation (the “Company”), and HCL Technologies America, Inc., a California corporation (the “Purchaser”).

WHEREAS, the Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and is very familiar with the Company’s business, financial condition and prospects; and

WHEREAS, the Purchaser is a wholly-owned subsidiary of one of India’s leading global IT services and product engineering companies, providing value-added, software-led IT solutions and services to large and medium-scale organizations; and

WHEREAS, the Purchaser desires to purchase shares of the Company’s common stock, $.01 par value per share (the “Common Stock”), pursuant to the terms of this Agreement.

Accordingly, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Purchase and Sale of Common Stock. The Company hereby sells to the Purchaser, and the Purchaser hereby purchases from the Company, 2,460,025 shares of Common Stock (the “Shares”), at a purchase price of $0.407 per share, for an aggregate purchase price of $1,000,000.00. The price of the Shares is based on the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days prior to February 21, 2002. Promptly following the execution of this Agreement, the Purchaser shall pay the full amount of the purchase price to the Company by wire transfer in immediately available funds to an account designated in writing by the Company. Upon receipt of the full amount of the purchase price, the Company shall deliver to the Purchaser a certificate registered in the Purchaser’s name representing the Shares. The Company agrees to pay all expenses associated with the issuance of the Shares and Warrant Shares including listing the Shares on the Nasdaq Stock Market.

2. Warrants. In consideration of this Agreement, the Company hereby agrees to issue to the Purchaser a warrant (the “Warrant”) to purchase up to 615,006 shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.610 per share, in the form attached hereto as Exhibit A. The exercise price of the warrant represents 150% of the average of the closing bid prices of the Common Stock on the Nasdaq National Market System for the twenty business days prior to February 21, 2002. The Holder and the Company have entered into a Warrant Agreement, dated as of the date hereof, governing the terms of the warrant and the Warrant Shares issuable thereunder.

3. Closing Date; Delivery.

(a) The closing (the “Closing”) of the purchase and sale of the Shares and the issuance of the Warrant will be held at the offices of the Company, 3033 Excelsior Boulevard, Suite 200, Minneapolis, Minnesota, at ____ a.m. on February __, 2002, or at such other time and place as the Company and the Purchaser may agree upon (the “Closing Date”).

(b) At the Closing, the Company will deliver to the Purchaser the Warrant and the stock certificate representing the Shares. At the Closing, the Purchaser will pay to the Company the amount of the purchase price for the Shares by check, wire transfer or any combination of the foregoing.

3. Representations and Warranties of the Company. As a material inducement for the Purchaser’s purchase of the Shares, the Warrant and any Warrant Shares, the Company represents, warrants, covenants and acknowledges to the Purchaser that:

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted and presently proposed to be conducted. The Company is duly qualified to do business as a foreign corporation in all jurisdictions where it is required due to the nature of its business to be qualified.

(b) The Shares, when issued and paid for pursuant to the terms of this Agreement, will be duly and validly authorized, issued and outstanding, fully paid, nonassessable and free and clear of all liens and restrictions (except for such legends or restrictions on such shares as may be required under the Securities Act). The shares of Warrant Stock issuable upon exercise of the Warrants have been or, as of the Closing, will be reserved for issuance and, when issued upon such conversion, will be duly and validly authorized, issued and outstanding, fully paid, nonassessable and free and clear of all liens and restrictions (except for such legends or restrictions on such shares as may be required under the Securities Act).

(c) Based upon the representations and warranties of the Purchaser contained in Section 5 of this Agreement, no consent, authorization, approval, permit or order of or filing with any governmental or regulatory authority is required under current laws and regulations in connection with the execution and delivery of this Agreement or the offer, issuance, sale or delivery of the Shares, the Warrant or the Warrant Shares, other than the qualifications and filings under certain applicable state securities laws, which qualifications and filings have been or will be effected within the period required by law. The Company has not, directly or through an agent, offered the Shares, the Warrant or the Warrant Shares or any similar securities for sale to, or solicited any offers to acquire such securities from, persons other than the Purchaser. Under the circumstances contemplated hereby, the offer, issuance, sale and delivery of the Shares, the Warrant and the Warrant Shares will not under current laws and regulations require compliance with the prospectus delivery or registration requirements of the Securities Act.

(d) The execution and delivery of this Agreement has been duly authorized by all requisite corporate action on behalf of the Company, and this Agreement has been duly executed and delivered by an authorized officer of the Company. This Agreement is a valid and binding

obligation of the Company enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and as to limitations on the enforcement of the remedy of specific performance and other equitable remedies. The requisite corporate action necessary to the authorization, creation, issuance (or reservation for issuance) and delivery of the Shares, the Warrant and the Warrant Shares has been or will be taken by the Company prior to the issuance of such Shares, Warrant or Warrant Shares.

(e) Neither the execution or delivery of, the performance or compliance with, this Agreement nor the consummation of the transactions contemplated hereby will, with or without the giving of notice or passage of time, (i) result in any breach of, or constitute a default under, or result in the imposition of any lien upon any asset or property of the Company pursuant to, any agreement or other instrument to which the Company is a party or by which it or any of its properties is bound or affected or (ii) violate its Certificate of Incorporation or its Bylaws.

(f) The Company will comply in all material respects with all applicable periodic public reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will use its best efforts to timely file all reports required to satisfy the current public information requirements under Rule 144 of the Securities Act, unless the Company’s Board of Directors determines that the filing of such reports would not be in the best interests of the Company or its stockholders.

(g) All of the information and documentation provided to the Purchaser do not as of the date of such information or documentation: (i) contain any untrue statement of a material fact, or (ii) omit to state any material fact necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(h) Since September 30, 2001 and except as disclosed in publicly available documents filed with the Securities and Exchange Commission or except as otherwise disclosed to the purchaser: (i) the Company has not incurred any material liabilities or obligations, contingent or otherwise, not in the ordinary course of business, (ii) the Company has not paid or declared any dividend or other distribution with respect to its outstanding capital stock, (iii) there has not been any material change in the capital stock or any material increase in the long-term debt of the Company, or any material issuance of shares of capital stock of the Company or of options, warrants, or rights to purchase capital stock of the Company, (iv) no material loss or damage (whether or not insured) to the property of the Company has been sustained, and (v) no material legal or governmental proceeding, domestic or foreign, affecting the Company or the transactions contemplated by this Agreement has been instituted or threatened, and (vi) to the knowledge of executive management of the Company, there has not been any material adverse change in the business, condition (financial and other) or properties of the Company.

5. Representations and Warranties of the Purchaser. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the Purchaser represents, warrants, covenants and acknowledges to the Company that:

(a) The Purchaser understands that the issuance of the Shares and the Warrant has not been, and any issuance of the Warrant Shares will not be, registered under the Securities Act, or applicable state securities laws. Instead, the Company is issuing the Shares and the Warrant, and will issue any Warrant Shares, pursuant to exemptions from such laws and in doing so is and would be relying on, among other things, the Purchaser’s representations, warranties, covenants and acknowledgements contained herein.

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(c) The Purchaser has sufficient knowledge of the Company’s business, financial condition and prospects. In addition, the Purchaser has been provided with or given access to such additional information as the Purchaser has requested, including access to the Company’s management, and has utilized such access to his satisfaction for the purpose of obtaining information regarding the Company’s business, financial condition and prospects.

(d) The Purchaser is acquiring the Shares and the Warrant, and will acquire any Warrant Shares, for its own account, for investment purposes only, and without the intention of reselling or redistributing the Shares or any Warrant Shares, except that the Purchaser may transfer the Shares and/or the Warrant to an affiliate of the Purchaser;

(e) The Purchaser is aware that, in the view of the Securities and Exchange Commission, a purchase of the Shares, the Warrant or any Warrant Shares with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market values, or any change in the Company’s condition, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Shares, the Warrant or any Warrant Shares and for which the Shares, the Warrant or any Warrant Shares were pledged, would constitute an intent inconsistent with the foregoing representation.

(f) If, contrary to the Purchaser’s foregoing intentions, it should later desire to dispose of or transfer any of the Shares, the Warrant or any Warrant Shares in any manner, the undersigned shall not do so without (i) first obtaining an opinion of counsel satisfactory to the Company that such proposed disposition or transfer may lawfully be made without registration pursuant to the Securities Act and applicable state securities laws or (ii) registering the resale of the Shares and any Warrant Shares under the Securities Act and applicable state securities laws.

(g) Except as otherwise provided in the Warrant or in the Registration Rights Agreement, dated as of the date hereof, between the Company and the Purchaser (the “Registration Rights Agreement”), the Company has no obligation to register the Shares, the Warrant or any Warrant Shares for resale under the Securities Act or any applicable state securities laws, or to take any other action which would facilitate the availability of federal or state registration exemptions in connection with any resale of the Shares, the Warrant or any Warrant Shares. Accordingly, the Purchaser may be prohibited by law from selling or otherwise transferring or disposing of the Shares, the Warrant or any Warrant Shares and may have to bear the economic risk of its investment in the Company for an indefinite period.

(h) Purchaser understands its obligations regarding the restriction on trading in the Company’s securities while in possession of material nonpublic information.

6. Registration Rights. Holder shall be entitled to the registration rights described in the Registration Rights Agreement. Holder’s participation in any such registration by the Company shall be in accordance with the procedures, and subject to the limitations, set forth on such Exhibit B in the Registration Rights Agreement, the form of which is attached hereto.

7. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law; Venue. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of California, except with respect to its rules relating to conflicts of laws. Venue for any dispute arising under this Agreement shall be in courts located in the State of California and the parties agree that the state and federal courts located in such state shall have the exclusive jurisdiction over the parties hereto in any matter hereunder.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(d) Notices. All notices, consents, requests, demands, instructions or other communications provided for herein shall be in writing and shall be deemed validly given, made and served when (a) delivered personally, (b) sent by certified or registered mail, postage prepaid, (c) sent by reputable overnight delivery service, or (d) sent by telephonic facsimile transmission, and, pending the designation of another address, addressed as follows:

If to the Company:		Zamba Corporation
		3033 Excelsior Blvd., Suite 200
		Minneapolis, Minnesota 55416
		Attn: Chief Financial Officer
		Fax: (952) 893-3948

If to the Purchaser:		HCL Technologies America, Inc.
		330 Potrero Avenue
		Sunnyvale, California 94085
		Fax:

(e) Entire Agreement and Counterparts. This Agreement and the Exhibits attached hereto evidence the entire agreement between the Company and the Purchaser relating to the subject matter hereof and supersede in all respects any and all prior oral or written agreements or understandings. This Agreement and the Exhibits attached hereto may not be amended or modified, and no provisions hereof may be waived, except by written instrument signed by both the Company and the Purchaser. This Agreement and the Exhibits attached hereto may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one Agreement.

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

(h) Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement, the Warrant and the Registration Rights Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of the Warrant and any Warrant Shares); provided, however, that any such successor or assign shall only be to an affiliate of the Company or the Purchaser unless the Company approves the assignment or transfer of the Shares, the Warrant or the Warrant Shares to another third party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, the Warrant or any Warrant Shares except as expressly provided in this Agreement.

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Agreement as of the date set forth in the first paragraph.

THE COMPANY:		THE PURCHASER:

ZAMBA CORPORATION		HCL TECHNOLOGIES AMERICA, INC.


By:	/s/ D. Holden	/s/ Ashok Jain
Name:	Doug Holden	Name:	Ashok Jain
Title:	CEO	Title:	Supervisory Director

EX-99.7 9 j3198_ex99d7.htm EX-99.7 Exhibit C

Exhibit 99.7

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 COMMON STOCK

Corporation: ZAMBA CORPORATION

Number of Shares: 615,006

Class of Stock: Common

Initial Exercise Price: $.610 (which is 150% of the average closing price of the Shares reported for the 20 trading days immediately before the Issue Date) Issue Date: February 21, 2002

Expiration Date: February 21, 2007

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, HCL TECHNOLOGIES AMERICA, INC. (“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 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. This Warrant is being issued pursuant to the terms of a Stock Purchase Agreement, dated the date hereof, between Holder and the Company.

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. Holder shall also deliver to the Company a check or a document evidencing cancellation of indebtedness, in payment of the aggregate Warrant Price for the Shares being purchased. The Shares so purchased shall be deemed to be issued as of the close of business on the date on which this Warrant has been exercised by payment to the Company of the Warrant exercise price. No fractional shares shall be issued upon the exercise of this Warrant. Instead of any fractional shares that would otherwise be issuable to Holder, the Company will pay to such holder a cash adjustment with respect to such fractional interest in an amount equal to that fractional interest of then then-current closing price per share of the Company’s Common Stock.

1.2. (Deleted)

1.3. Delivery of Certificate and New Warrant. Ten (10) days after Holder exercises this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised and has not expired, a new Warrant representing the Shares not so acquired.

1.4. 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.

1.5. Repurchase On Sale, Merger, or Consolidation of the Company.

1.5.1. “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.

1.5.2. 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 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.

2.5 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.

2.6 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) During the period within which the rights represented by this Warrant may be exercised, the Company shall at all times have authorized and reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this Warrant a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant.

(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, security interests, charges and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

(c) The Company shall use its best efforts to list the Shares on the Nasdaq Stock Market or any exchange or other market on which the Company’s shares are then trading or being quoted.

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) unless, in the reasonable judgment of counsel to the Company, notification could violate any securities law or regulation, to complete an Acquisition or otherwise 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) 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 February 21, 2002, 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. Holder may transfer this Warrant by delivering a duly executed Notice of Transfer in substantially the form attached as Appendix 2 to the principal

office of the Company. 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 HCL Technologies Ltd. India 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).

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:

HCL Technologies America, Inc.

Attn: ______________________

330 Potrero Avenue

Sunnyvale, CA 94085

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/ D. Holden
	Name:	Doug Holden
		(Print)
	Title:	CEO

	By:	/s/ Ashok Jain
	Name:	Ashok Jain
		(Print)
	Title:	Supervisory Director HCL Technologies America, Inc.

APPENDIX 1

NOTICE OF EXERCISE

1. The undersigned hereby elects to purchase ___________ shares of the Common Stock of ______________ pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2. The undersigned hereby elects to exercise the attached Warrant and purchase _____________ of the Shares covered by the Warrant by reducing the amount of indebtedness owed to the undersigned by $__________.

[Strike paragraph that does not apply.]

3. 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)

4. 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)

APPENDIX 2

NOTICE OF TRANSFER

Dated:


		Signature

	Social Security or other Tax Identification No.

Please print present name and complete address

EX-99.8 10 j3198_ex99d8.htm EX-99.8 LLC MEMBERSHIP INTEREST

Exhibit 99.8

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is made and entered into as of the 26^th day of February, 2002, by and between Zamba Corporation, a Delaware corporation (the “Company”), and Joseph B. Costello (the “Purchaser”).

WHEREAS, the Company owns 2,400,000 shares of Series A preferred stock, $.0001 par value per share (the “NextNet Preferred Stock”) of NextNet Wireless, Inc., a Delaware corporation (“NextNet”), which represents approximately 33% of the outstanding capital stock of NextNet.

WHEREAS, the Purchaser is the Chairman of the Company’s Board of Directors and the Chairman of NextNet’s Board of Directors, and therefore is thoroughly familiar with the Company’s and NextNet’s business, financial condition and prospects; and

WHEREAS, the Purchaser desires to purchase shares (the “Shares”) of NextNet Preferred Stock pursuant to the terms of this Agreement.

WHEREAS, the Purchaser acknowledges that there is no established trading market or other current valuation for the NextNet Preferred Stock or the Shares to be issued hereunder;

WHEREAS, Purchaser agrees that the number of Shares to be issued to the Purchaser hereunder shall be determined in accordance with the procedures set forth in Section 1(b) below.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1. Purchase and Sale of Preferred Stock. In consideration of this Agreement, the Company hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Company, the Shares in accordance with the following terms:

(a) Purchaser agrees to pay to the Company an aggregate purchase price of $300,000 (the “Purchase Price”) for the Shares. Promptly following the execution of this Agreement, the Purchaser shall pay the full amount of the Purchase Price to the Company by wire transfer in immediately available funds to an account designated in writing by the Company.

(b) In order to determine the number of Shares to be received by the Purchaser from the Company in exchange for the Purchase Price, the Company and the Purchaser hereby agree that the number of Shares shall be determined by dividing the Purchase Price by the price per share of the NextNet Preferred Stock, with the price per share determined by the first to occur of the following events:

(i) the price per share of the NextNet Preferred Stock received by the shareholders of NextNet upon the merger, consolidation, sale of all or substantially all of the assets or any other change-in-control of NextNet in which NextNet is not the continuing corporation after such merger, consolidation, sale of all or substantially all of the assets or other such change-in-control;

(ii) the price per share of the NextNet Preferred Stock established upon the Company’s sale of any shares of NextNet Preferred Stock to any third party; provided, however, that the Company shall have sold not less than ____ shares of NextNet Preferred Stock to such third party in connection with such sale;

(iii) if the events specified in (i) or (ii)above have not occurred by 12/31, 2002, the Company and the Purchaser shall agree to engage an independent accountant, valuation expert or other entity experienced in the valuation of companies substantially similar to NextNet to prepare a valuation of the NextNet Preferred Stock, which valuation shall be binding upon the Company and the Purchaser.

(c) Notwithstanding the foregoing, if the valuation determined pursuant to Section 1(b) above would otherwise result in the issuance of a greater number of shares of NextNet Preferred Stock than the number of shares of NextNet Preferred Stock then owned by the Company, the number of Shares to be issued to the Purchaser shall be limited to the number of shares of NextNet Preferred Stock then owned by the Company.

(d) Within ten business days after the determination of the number of Shares to be issued to the Purchaser in accordance with the provisions set forth in Section 1(b) above, the Company shall deliver to NextNet a notice pursuant to the Right of First Offer set forth in Section 1.1 of the Right of First Refusal Agreement (the “Refusal Agreement”) dated September 21, 1998 by and among Zamba Corporation (“Zamba”) (formerly known as “Racotek, Inc.”), NextNet Wireless, Inc. (“NextNet”) (formerly known as “NextNet, Inc.”) and the holders of the Series B Preferred Stock of NextNet.

(e) If NextNet elects to exercise its right of first refusal pursuant to Section 1(d) above, the Purchase Price shall be refunded to the Purchaser within ten business days of the Company’s receipt of full payment from NextNet for the Shares, and the Purchaser shall not receive any of the Shares. If NextNet declines to exercise its right of first refusal, the Company shall, within ten business days after the Company’s receipt of NextNet’s notice to decline its right, notify each investor in NextNet eligible under the Refusal Agreement of its opportunity to exercise its pro rata right of first refusal pursuant to the Refusal Agreement

(f) If any of the eligible investors in NextNet elects to exercise its pro rata right of first refusal pursuant to Section 1(e) above, the Company will forward to the Purchaser the payments the Company receives from such investor(s) within ten business days of the Company’s receipt of such payment, and the number of Shares that the Purchaser will receive pursuant to this Agreement shall be reduced on a pro rata basis. Within ten business days after the expiration of the investor refusal period, and subject to the limitations set forth in Section 1(c) above, the Company shall deliver to the Purchaser a certificate registered in the Purchaser’s name representing the number of Shares purchased.

2. Representations and Warranties of the Purchaser. As a material inducement for the Company’s issuance and sale of the Shares, the Purchaser represents, warrants, covenants and acknowledges to the Company that:

(a) The Purchaser understands that the issuance of the Shares has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Instead, the Company is issuing the Shares pursuant to exemptions from such laws and in doing so is and would be relying on, among other things, the Purchaser’s representations, warranties, covenants and acknowledgements contained herein.

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(c) As the Chairman of the Company’s and NextNet’s Board of Directors, the Purchaser has detailed knowledge of the Company’s and NextNet’s business, financial condition and prospects. In addition, the Purchaser has been provided with or given access to such additional information as the Purchaser has requested from the Company and has utilized such information to his satisfaction for the purpose of obtaining information regarding the Company’s and NextNet’s business, financial condition and prospects.

(d) The Purchaser is acquiring the Shares for his own account, for investment purposes only, and without the intention of reselling or redistributing the Shares;

(e) The Purchaser is aware that, in the view of the Securities and Exchange Commission, a purchase of the Shares with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market values, or any change in NextNet’s condition, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Shares and for which the Shares were pledged, would constitute an intent inconsistent with the foregoing representation.

(f) If, contrary to the Purchaser’s foregoing intentions, he should later desire to dispose of or transfer any of the Shares in any manner, the undersigned shall not do so without (i) first obtaining an opinion of counsel satisfactory to the Company and NextNet that such proposed disposition or transfer may lawfully be made without registration pursuant to the Securities Act and applicable state securities laws or (ii) registering the resale of the Shares under the Securities Act and applicable state securities laws.

(g) Neither the Company nor NextNet has any obligation to register the Shares for resale under the Securities Act or any applicable state securities laws, or to take any other action which would facilitate the availability of federal or state registration exemptions in connection with any resale of the Shares. Accordingly, the Purchaser may be prohibited by law from selling or otherwise transferring or disposing of the Shares and may have to bear the economic risk of his investment in NextNet for an indefinite period.

3. Representations and Warranties of the Company. As a material inducement for the Purchaser’s purchase of the Shares, the Company represents, warrants, covenants and acknowledges to the Purchaser that:

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted and presently proposed to be conducted.

(b) The Shares are being transferred to the Purchaser free and clear of any liens, encumbrances or other restrictions, other than restrictions on transfer imposed by applicable securities laws.

4. Merger, Consolidation or Other Change in Control of the Company or NextNet.

(a) If the Company shall at any time consolidate with or merge into to another corporation (where the Company is not the continuing corporation after such merger, consolidation, sale of all or substantially all of its assets or other change-in-control), or the Company shall sell, transfer or lease all or substantially all of its assets, then, in any such case, the Purchaser thereupon (and thereafter) shall continue to be entitled to be bound by the terms of this Agreement and shall be entitled to receive the number of Shares determined in accordance with Section 1(b) above.

(b) If NextNet shall at any time consolidate with or merge into another corporation (where NextNet is not the continuing corporation after such merger, consolidation or other change-in-control), or NextNet shall sell, transfer or lease all or substantially all of its assets, then, in any such case, the Purchaser thereupon (and thereafter) shall be entitled to receive the number of Shares (or the proceeds resulting from the sale of such Shares in connection with such merger, consolidation, or other change-in-control) determined in accordance with Section 1(b)(ii) above.

5. Insolvency or Bankruptcy of the Company or NextNet. Upon the insolvency or bankruptcy (whether voluntary or involuntary) of the Company or NextNet, or the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Company or NextNet or any substantial part of the Company’s or NextNet’s property, or any general assignment for the benefit of creditors of the Company or NextNet, the Purchaser shall be an unsecured general creditor of the Company or NextNet, as applicable, and shall not have any security interest or other rights in connection with this Agreement or the Shares purchased hereunder.

6. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(d) Notices. All notices, consents, requests, demands, instructions or other communications provided for herein shall be in writing and shall be deemed validly given, made and served when (a) delivered personally, (b) sent by certified or registered mail, postage prepaid, (c) sent by reputable overnight delivery service, or (d) sent by telephonic facsimile transmission, and, pending the designation of another address, addressed as follows:

If to the Company:		Zamba Corporation
		3033 Excelsior Blvd., Suite 200
		Minneapolis, Minnesota 55416
		Attn: Chief Financial Officer
		Fax: (952) 893-3948

If to the Purchaser:		Joseph B. Costello
		2880 Lakeside Drive, Suite 250
		Santa Clara, California 95054
		Fax: (408) 727-0235

(e) Entire Agreement and Counterparts. This Agreement evidences the entire agreement between the Company and the Purchaser relating to the subject matter hereof and supersedes in all respects any and all prior oral or written agreements or understandings. This Agreement may not be amended or modified, and no provisions hereof may be waived, except by written instrument signed by both the Company and the Purchaser. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one Agreement.

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

IN WITNESS WHEREOF, the Company and the Purchaser have executed this Agreement as of the date set forth in the first paragraph.

THE COMPANY:		THE PURCHASER:

ZAMBA CORPORATION


By:	/s/ Michael H. Carrel	/s/ Joseph B. Costello
Name:	Michael H. Carrel	Joseph B. Costello
Title:	CFO

FORM 8-K

ZAMBA CORPORATION

Delaware

41-1636021

Exhibit 99.1

STOCK PURCHASE AGREEMENT

3. Representations and Warranties. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the undersigned represents, warrants, covenants and acknowledges to the Company that:

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(d) The Purchaser is acquiring the Shares and the Warrant, and will acquire any Warrant Shares, for his own account, for investment purposes only, and without the intention of reselling or redistributing the Shares or any Warrant Shares;

4. Registration Rights. Holder shall be entitled to the registration rights attached hereto as Exhibit B. Holder’s participation in any such registration by the Company shall be in accordance with the procedures, and subject to the limitations, set forth on such Exhibit B.

5. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

Exhibit 99.3

FORM OF STOCK PURCHASE AGREEMENT

3. Representations and Warranties. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the undersigned represents, warrants, covenants and acknowledges to the Company that:

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(d) The Purchaser is acquiring the Shares and the Warrant, and will acquire any Warrant Shares, for his own account, for investment purposes only, and without the intention of reselling or redistributing the Shares or any Warrant Shares;

4. Registration Rights. Holder shall be entitled to the registration rights attached hereto as Exhibit B. Holder’s participation in any such registration by the Company shall be in accordance with the procedures, and subject to the limitations, set forth on such Exhibit B.

5. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(b) Governing Law. This Agreement shall in all respects be governed by, and enforced and interpreted in accordance with, the laws of the State of Minnesota, except with respect to its rules relating to conflicts of laws.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.

STRATEGIC ALLIANCE AGREEMENT

ZAMBA Corporation

WHEREAS:

ARTICLE I

DEFINITIONS AND INTERPRETATION

16

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

ARTICLE X

GENERAL

STOCK PURCHASE AGREEMENT

3. Representations and Warranties of the Company. As a material inducement for the Purchaser’s purchase of the Shares, the Warrant and any Warrant Shares, the Company represents, warrants, covenants and acknowledges to the Purchaser that:

(d) The execution and delivery of this Agreement has been duly authorized by all requisite corporate action on behalf of the Company, and this Agreement has been duly executed and delivered by an authorized officer of the Company. This Agreement is a valid and binding

5. Representations and Warranties of the Purchaser. As a material inducement for the Company’s issuance and sale of the Shares, the Warrant and any Warrant Shares, the Purchaser represents, warrants, covenants and acknowledges to the Company that:

(b) The Purchaser qualifies as an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(h) Purchaser understands its obligations regarding the restriction on trading in the Company’s securities while in possession of material nonpublic information.

7. Miscellaneous.

(a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and permitted assigns.

(c) Legend. The Shares issued to the Purchaser pursuant to this Agreement shall contain the following legend:

(f) Headings. Section headings used in this Agreement have no legal significance and are used solely for convenience of reference.

(g) Expenses. Each party shall pay for its own legal, accounting and other similar expenses incurred in connection with the transaction contemplated by this Agreement.