TERM LOAN AGREEMENT Dated as of February 20, 2007
Exhibit
10.1
Dated
as of February 20, 2007
CorVu
Corporation, a Minnesota corporation (the “Borrower”), located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Commerce Bank, a Minnesota state banking
corporation (the “Bank”), located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, agree as follows:
ARTICLE
I.
DEFINITIONS
Section
1.1 Definitions.
As used in this Agreement the following terms shall have the following meanings
(such meanings to be equally applicable to singular and plural forms of the
terms defined):
(a) “Affiliates”
means any of the following Persons:
(i) any
director, officer or employee of the Borrower;
(ii) any
person who, individually or with his immediate family, beneficially owns or
holds 5% or more of the voting equity interests in the Borrower; or
(iii) any
Subsidiary and any company in which any Person described above owns a 5% or
greater equity interest.
(b) “Applicable
Percentage” means the following percentages relating to the principal amounts
outstanding on the Note from time to time:
(i) with
respect to all principal amounts then outstanding on the Note not in excess
of
the amount on deposit in the Cash Collateral Account as of the end of the
previous month, a percentage equal to 2.60% plus the nominal annual interest
rate being paid by the Bank on the Cash Collateral Account as of the end of
the
previous month;
(ii) with
respect to all principal amounts then outstanding on the Note in excess of
the
amount on deposit in the Cash Collateral Account as of the end of the previous
month if such amount on deposit did not equal at least $2,300,000.00, a
percentage equal to the then Prime Rate plus 1.50%;
(iii) with
respect to all principal amounts then outstanding on the Note in excess of
the
amount on deposit in the Cash Collateral Account as of the end of the previous
month if such amount on deposit equaled at least $2,300,000.00, a percentage
equal to the then Prime Rate plus 1.0%.
(c) “Business
Day” means any day other than a Saturday, Sunday or a public holiday or the
equivalent under the laws of the State of Minnesota or the United States of
America.
(d) “Cash
Collateral Account” means a deposit account established and maintained by the
Borrower at the Bank under Section 2.7 with respect to which the only Persons
with “control” (as defined in Minn. Stat. §336.9-104) are the Borrower and the
Bank.
(e) “Debt”
means (i) indebtedness for borrowed money or for the deferred purchase price
of
property or services, (ii) obligations as lessee under leases that have been
or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases, (iii) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clause (i)
or
(ii) above, and (iv) liabilities in respect of unfunded vested benefits under
plans covered by Title IV of ERISA.
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(f) “Debt
Service Coverage Ratio” for any time period means a ratio the numerator of which
is the sum of the Borrower’s net income during that period plus interest,
depreciation and amortization expense during that period less any distributions
or dividends paid to equity holders during that period and the denominator
of
which is the sum of interest expense during that period plus that portion of
the
principal of the Borrower’s Debt coming due during that period.
(g) “Event
of Default” means one of the events specified in Section 6.1.
(h) “Loan
Documents” means this Agreement, the Note, the Security Agreement, the Corporate
Guaranty, the Personal Guaranty and all other documents to be executed in
connection with this Agreement.
(i) “Loan
Party” means any Person obligated under any Loan Document.
(j) “Note”
means the Note described in Section 2.2.
(k) “Person”
means an individual, corporation, limited liability company, partnership, joint
venture, trust or unincorporated organization or governmental agency or
political subdivision thereof.
(l) “Prime
Rate” means the prime rate published in the Wall
Street Journal
as the base rate on corporate loans posted by at least 75% of the nation’s 30
largest banks.
(m) “Subsidiary”
means any entity of which more than 50% of the outstanding equity interests
having ordinary voting power to elect a majority of the Board of Directors,
Board of Governors or comparable governing body of such entity (irrespective
of
whether or not at the time equity interests of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly
or
indirectly owned by the Borrower, by the Borrower and one or more other
Subsidiaries, or by one or more other Subsidiaries.
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(n) “Tangible
Net Worth” means the aggregate of the capital stock, paid in surplus and
retained earnings of the Borrower (excluding stock of the Borrower held by
the
Borrower), determined and computed in accordance with generally accepted
accounting principles consistently applied from year to year, less the book
value of all assets of the Borrower that would be treated as intangibles under
generally accepted accounting principles including without limitation, such
items as goodwill, trademarks, tradenames, service marks, copyrights, patents,
licenses, internet domain names, uniform resource locators, and website
contracts and registration rights and less the book value of all obligations
owed to the Borrower by any of its Affiliates.
Section
1.2 Accounting
and Other Terms.
All accounting terms not specifically defined in this Agreement shall be
construed in accordance with generally accepted accounting principles
consistently applied as such principles may change from time to time. Other
terms defined herein shall have the meanings ascribed to them
herein.
ARTICLE
II.
TERM
LOAN
Section
2.1 Commitment
for Term Loan.
The Bank hereby lends to the Borrower, and the Borrower hereby borrows from
the
Bank, the amount of $3,200,000.00 (the “Term Loan”).
Section
2.2 The
Note.
The Term Loan shall be evidenced by a promissory note (the “Note”) that is in
substantially the form of Exhibit A attached hereto and is delivered to the
Bank
pursuant to Article III.
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Section
2.3 Interest
and Payments.
The Borrower shall repay, and shall pay interest on, the aggregate unpaid
principal amount of the Term Loan in accordance with the Note, except that
after
and during the continuance of an Event of Default the Borrower shall pay
interest at an annual rate equal to 3.0% in excess of the rate of interest
otherwise provided under the Note. All payments of principal, interest and
fees
under this Agreement shall be made when due to the Bank in immediately available
funds. All computations of interest shall be made by the Bank on the basis
of
the actual number of days elapsed in a year of 360 days. Whenever any such
payment shall be due on a non-Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included
in
the computation of interest or fees, as the case may be. The Bank is expressly
authorized to charge any principal or interest payment, when due, to Borrower’s
demand deposit account maintained at the Bank, or, if that account shall not
contain sufficient funds, to any other account maintained by the Borrower at
the
Bank.
Section
2.4 Voluntary
Prepayment.
The Borrower may prepay the Note in whole, but not in part, at any
time.
Section
2.5 Mandatory
Prepayment. The Note in its entirety shall become due and payable
contemporaneously with the closing of any merger or consolidation of the
Borrower with any other Person or the sale, transfer, conveyance, lease or
other
disposition of (whether in one transaction or in a series of transactions)
all
or a substantial portion of the Borrower’s assets (whether now owned or
hereafter acquired) to any other Person.
Section
2.6 Use
of Proceeds.
The proceeds of the Term Loan shall be used to repay existing Debt owed by
the
Borrower to ComVest Investment Partners II LLC (“ComVest”) and to redeem up to
17,000 shares of Series C preferred stock in the Borrower by ComVest at a price
not to exceed $100.00 per share plus any accrued and unpaid dividends on such
stock.
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Section
2.7 Cash
Collateral Provisions.
On or about the date of this Agreement, the Borrower has established the Cash
Collateral Account with the Bank in an amount of not less than $2,000,000.00.
So
long as any amount remains unpaid on the Note, (i) the Borrower will have no
right to withdraw any principal from the Cash Collateral Account and (ii) the
Borrower will maintain the Cash Collateral Account with the Bank in the
following minimum amounts:
|
Time
Period:
|
Minimum
Amount:
|
|
Through
April 29, 2007
|
$2,000,000.00
|
|
April
30, 2007 through June 29, 2007
|
$2,100,000.00
(First Threshold)
|
|
June
30, 2007 through July 30, 2007
|
$2,200,000.00
(Second Threshold)
|
|
After
July 30, 2007
|
$2,300,000.00
(Third Threshold)
|
If
by April 30, 2007, the Borrower has met the First Threshold with respect to
the
Cash Collateral Account at a time that no Event of Default has then occurred
and
is continuing, the maximum principal amount subject to the Personal Guaranty
shall permanently be reduced to $200,000.00. If by June 30, 2007, the Borrower
has met the Second Threshold with respect to the Cash Collateral Account at
a
time that no Event of Default has then occurred and is continuing, the maximum
principal amount subject to the Personal Guaranty shall permanently be reduced
to $100,000.00. If by July 31, 2007, the Borrower has met the Third Threshold
with respect to the Cash Collateral Account at a time that no Event of Default
has then occurred and is continuing, the Personal Guaranty shall released in
its
entirety and shall be returned to the Personal Guarantor. The Borrower is
authorized to meet each or all of the Thresholds prior to the dates set forth
above. The reduction in, and release of, respectively, the Personal Guaranty
shall become effective at the time the Borrower meets the Threshold in question,
so long as no Event of Default has occurred and is continuing at such
time.
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ARTICLE
III.
CONDITIONS
OF LENDING
Section
3.1 Conditions
Precedent to Term Loan Advance.
The Bank shall have no obligation to make the Term Loan unless the Bank shall
have received on or before the date of disbursement the following documents
or
items:
(a) The
Note, properly executed and delivered on behalf of the Borrower.
(b) A
security agreement (the “Security Agreement”), in a form acceptable to the Bank,
properly executed and delivered on behalf of the Borrower and the Corporate
Guarantor, granting to the Bank a security interest in all of the Borrower’s and
Corporate Guarantor’s inventory, accounts, equipment, general intangibles and
other property described therein as security for the performance of the
Borrower’s obligations under this Agreement and the Note, together with any
UCC-1 Financing Statement or other document deemed necessary or desirable by
the
Bank to perfect the security interest granted by the Security
Agreement.
(c) A
certified copy of the resolutions of the Board of Directors of the Borrower
and
the Corporate Guarantor, approving the execution and delivery of the Loan
Documents to which it is a party and approving all other matters contemplated
by
this Agreement.
(d) A
certificate by the Secretary or any Assistant Secretary of the Borrower and
the
Corporate Guarantor certifying the names of the officer or officers of the
Borrower and the Corporate Guarantor authorized to sign the Loan Documents
to
which it is a party, together with a sample of the true signature of such
officer.
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(e) Favorable
opinion of counsel to the Borrower and the Corporate Guarantor in a form and
as
to such matters as the Bank may request
(f) The
Cash Collateral Account in a principal amount of not less than
$2,000,000.00.
(g) A
guaranty (the “Corporate Guaranty”) of CorVu North America, Inc. (the “Corporate
Guarantor”), in a form satisfactory to the Bank, guaranteeing the Borrower’s
obligations under this Agreement and the Note.
(h) A
guaranty (the “Personal Guaranty”) of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (collectively, the “Personal Guarantor” and, together with the
Corporate Guarantor, the “Guarantors”), in a form satisfactory to the Bank,
guaranteeing the Borrower’s obligations under this Agreement and the Note,
provided
that the Personal Guaranty shall be subject to reduction and release under
the
circumstances described in Section 2.7.
In
addition, the Bank shall have no obligation to make the Term Loan if on or
before the date of disbursement, any event has occurred and is continuing,
or
will result from such Term Loan, that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given
or
time elapse or both.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES
Section
4.1 Representations
and Warranties of the Borrower.
To induce the Bank to make the Term Loan, the Borrower represents and warrants
as follows:
(a) Existence
of Borrower.
The Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the state indicated at the beginning of this
Agreement. The Borrower has not, in the past five years, operated under any
name, including any trade name or assumed name, other than the name indicated
at
the beginning of this Agreement.
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(b) Authority
to Execute.
The execution, delivery and performance by the Borrower of the Loan Documents
to
which it is a party are within the Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, do not and will not conflict
with
any provision of law or of the charter or bylaws of the Borrower or of any
agreement or contractual restriction binding upon or affecting the Borrower
or
any of its property, and need no further shareholder or creditor
consent.
(c) Binding
Obligation.
This Agreement is, and the other Loan Documents when delivered hereunder will
be, legal, valid and binding obligations of the Loan Parties enforceable against
such Persons in accordance with their respective terms.
(d) Governmental
Approval.
No consent of, or filing with, any governmental authority is required on the
part of any Loan Party in connection with the execution, delivery or performance
of any Loan Documents.
(e) Financial
Statements.
The audited financial statements of the Borrower as of June 30, 2006, copies
of
which have been furnished to the Bank, have been prepared in conformity with
generally accepted accounting principles consistently applied and present fairly
the financial condition of the Borrower as of such dates, and the results of
the
operations of the Borrower for the financial periods then ended, and since
such
date, there has been no materially adverse change in such financial
condition.
9
(f) Litigation.
No litigation or governmental proceeding is pending or threatened against the
Borrower that may have a materially adverse effect on the financial condition
or
operations of the Borrower.
(g) Title
to Assets.
The Borrower has good and marketable title to all assets used in connection
with
its trades or businesses, and none of such assets is subject to any mortgage,
pledge, lien, security interest or encumbrance of any kind, except for current
taxes not delinquent, security interests in favor of ComVest and purchase money
liens on, and leases of, equipment as have been disclosed to the Bank prior
to,
or contemporaneously with, this Agreement.
(h) Taxes.
The Borrower has filed all federal and state income tax returns that are
required to be filed, and has paid all taxes shown on such returns to be due
and
all other tax assessments received by it to the extent that such assessments
have become due.
(i) ERISA.
No plan (as that term is defined in the Employee Retirement Income Security
Act
of 1974 (“ERISA”)) of the Borrower (a “Plan”) that is subject to Part 3 of
Subtitle B of Title 1 of ERISA had an accumulated funding deficiency (as such
term is defined in ERISA) as of the last day of the most recent fiscal year
of
such Plan ended prior to the date hereof, or would have had such an accumulated
funding deficiency on such date if such year were the first year of such Plan,
and no material liability to the Pension Benefit Guaranty Corporation has been,
or is expected by the Borrower to be, incurred with respect to any such Plan.
No
Reportable Event (as defined in ERISA) has occurred and is continuing in respect
to any such Plan.
(j) Defaults.
The Borrower is not in default in the payment of principal or interest on any
indebtedness for borrowed money and is not in default under any instrument
or
agreement under or subject to which any indebtedness for borrowed money has
been
issued, and no event has occurred and is continuing that, with or without the
lapse of time or the giving of notice, or both, constitutes or would constitute
an event of default under any such instrument or agreement or an Event of
Default hereunder.
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(k) Patents
Trademarks, Etc.
The Borrower has good and marketable title to, or licenses to use, all patents,
trademarks, processes, copyrights, franchises and licenses title to which is
necessary for the operation of the Borrower’s businesses.
(l) Regulation
U.
The Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and, except
for
the stock purchase described in Section 2.6, no proceeds of the Term Loan will
be used to purchase or carry any margin stock or to extend credit to others
for
the purpose of purchasing or carrying any margin stock.
ARTICLE
V.
COVENANTS
OF THE BORROWER
Section
5.1 Affirmative
Covenants.
So long as the Note shall remain unpaid, the Borrower will, unless the Bank
shall give its prior written consent:
(a) Financial
Reporting.
Furnish to the Bank: (i) as soon as available and in any event within 60 days
after the end of each quarter of each fiscal year of the Borrower, consolidated
and consolidating balance sheets of the Borrower as of the end of such quarter
and consolidated and consolidating statements of income and retained earnings
of
the Borrower for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, certified by the chief financial
officer of the Borrower; (ii) as soon as available and in any event within
120
days after the end of each fiscal year of the Borrower, (A) a copy of the annual
report for such year for the Borrower, containing consolidated and consolidating
financial statements for such year certified in a manner acceptable to the
Bank
by independent public accountants acceptable to the Bank and (B) a budget and
projections prepared by the Borrower in a form acceptable to the Bank for the
following fiscal year; (iii) promptly upon the sending or filing thereof copies
of all public reports issued by the Borrower to any of its security holders,
to
the Securities and Exchange Commission or to any national securities exchange;
(iv) promptly upon the filing or receiving thereof, copies of all reports that
the Borrower files under ERISA or that the Borrower receives from the Pension
Benefit Guaranty Corporation if such report shows any material violation or
potential violation by the Borrower of its obligations under ERISA; (v) such
other information concerning the conditions or operations, financial or
otherwise, of the Borrower and the Corporate Guarantor as the Bank from time
to
time may reasonably request; (vi) until the Personal Guaranty has been released
pursuant to Section 2.7, a signed and current personal financial statement
of
each Personal Guarantor by May 31 of each year.
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(b) Visitation
Rights.
At any reasonable time and from time to time, permit the Bank or any agents
or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower
and
the Corporate Guarantor, and to discuss the affairs, finances and accounts
of
the Borrower and the Corporate Guarantor with any of its respective officers
or
directors. The Borrower will reimburse the Bank for its reasonable costs and
expenses of conducting such periodic examinations.
(c) Notification
of Default, Etc.
Notify the Bank as promptly as practicable (but in any event not later than
5
Business Days) after the Borrower obtains knowledge of: (i) the occurrence
of
any event that constitutes an Event of Default or that would constitute an
Event
of Default with the passage of time or the giving of notice or both; or (ii)
the
commencement of any litigation or governmental proceedings of any type that
could materially adversely affect the financial condition or business operations
of the Borrower.
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(d) Compliance
Certificate.
At the time any financial statement is required to be provided to the Bank
under
this Agreement, the Borrower will provide to the Bank a certificate of the
chief
financial officer of the Borrower substantially in the form of Exhibit B
attached hereto (appropriately completed). If that certificate shows that an
Event of Default or any event that would constitute an Event of Default with
the
passage of time or the giving of notice or both, has occurred, the certificate
shall state in reasonable detail the circumstances surrounding such event and
action proposed by the Borrower to cure such event.
(e) Keeping
of Financial Records and Books of Account.
Maintain proper financial records in accordance with generally accepted
accounting principles consistently applied that fully and correctly reflect
all
financial transactions and all assets and liabilities of the Borrower and the
Corporate Guarantor.
(f) Tangible
Net Worth.
Maintain at all times Tangible Net Worth according to the following
schedule:
|
Calendar
Year
|
Required
Level of Tangible Net Worth
|
|
2007
|
Not
less than a negative $4,500,000
|
|
2008
|
Not
less than a negative $3,750,000
|
|
2009
|
Not
less than a negative $3,000,000
|
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(g) Debt
Service Coverage Ratio.
Maintain as of the end of each calendar quarter, beginning with December 31,
2007, a Debt Service Coverage Ratio for the 12-month period ending at the end
of
such quarter of not less than 1.25 to 1.
(h) Maintenance
of Insurance.
Maintain such insurance with reputable insurance carriers as is normally carried
by companies engaged in similar businesses and owning similar property, and
name
the Bank as loss payee on all policies insuring personal property in which
the
Bank has a security interest and provide the Bank with certificates of insurance
evidencing its status as a loss payee. The loss payee endorsement shall provide
for payment to the Bank notwithstanding any acts or omissions of the Borrower
and shall require notice to the Bank 30 days prior to the expiration or
cancellation of the insurance.
(i) Maintenance
of Properties, Etc.
Maintain and preserve all of its properties, necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear
and
tear excepted.
(j) Payment
of Taxes.
Pay all taxes, assessments and governmental charges of any kind payable by
it as
such taxes, assessments and charges become due and before any penalty shall
be
imposed, except as the Borrower shall contest in good faith and by appropriate
proceedings providing such reserves as are required by generally accepted
accounting principles.
(k) Compliance
with ERISA.
Cause each benefits Plan to comply and be administered in accordance with those
provisions of ERISA that are applicable to such Plan.
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(l) Preservation
of Corporate Existence, Etc.
Preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified,
as a
foreign corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the ownership
of its properties, and cause the Corporate Guarantor to do so.
Section
5.2 Negative
Covenants.
So long as the Note shall remain unpaid, the Borrower will not, unless the
Bank
shall give its prior written consent which consent shall not be unreasonably
withheld:
(a) Liens.
Create or suffer to exist any mortgage, pledge, lien, security interest or
other
encumbrance with respect to any assets now owned or hereafter acquired by the
Borrower or the Corporate Guarantor except those encumbrances made in favor
of
the Bank or purchase money liens on, or leases of, equipment.
(b) Transactions
with Affiliates.
Engage in any transaction (including, without limitation, loans or financial
accommodations of any kind) with any Affiliate, provided that such transactions
are permitted if they are on terms no less favorable to the Borrower than would
be obtainable if no such relationship existed.
(c) Investments
in Other Persons.
Make any loan or advance to any Person, or purchase or otherwise acquire the
capital stock, assets, or obligations of, or any interest in, any other Person
other than readily marketable direct obligations of the United States of
America, deposits in commercial banks of recognized standing operating in the
United States of America, transactions with the Corporate Guarantor and existing
transactions with Subsidiaries.
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(d) Change
in Nature of Business.
Make any material change in the nature of the business of the Borrower, taken
as
a whole, as carried on at the date hereof.
(e) Dividends,
Etc.
Purchase or redeem any of its capital stock, declare or pay any dividends (other
than stock dividends) thereon, make any cash or property distribution to
shareholders, or set aside any funds for such purpose, except that so long
as no
Event of Default has occurred and is continuing the Borrower may pay dividends
on its Series B Convertible Preferred Stock as such dividends come
due.
ARTICLE
VI.
DEFAULT
Section
6.1 Events
of Default.
“Events of Default” in this Agreement means any of the following
events:
(a) Failure
of the Borrower to pay the principal of the Note when due or, if payable on
demand, upon demand;
(b) Failure
of the Borrower to pay any interest or fees required to be paid hereunder or
under the Note when due;
(c) Any
representation or warranty made by, or on behalf of, any Loan Party in, or
pursuant to, any Loan Document shall prove to have been incorrect in any
material respect when made or the Borrower or the Corporate Guarantor shall
dispose of any collateral described in the Security Agreement in violation
of
the Security Agreement;
(d) Default
in performance of any other covenant or agreement of any Loan Party in, or
pursuant to, any Loan Document and continuance of such default or breach for
a
period of 30 days after written notice thereof to such Person by the
Bank;
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(e) Any
Loan Party shall generally not pay its or his debts as such debts become due,
or
shall admit in writing its or his inability to pay its or his debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any Loan Party seeking to
adjudicate it or him a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, custodianship, protection, relief,
or composition of it or him or its or his debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief, or the appointment of a receiver, custodian,
trustee, or other similar official for it or him or for any substantial part
of
its or his property; or any Loan Party shall take any corporate action to
authorize any of the actions set forth above in this subsection; and in the
case
of a proceeding of the type described in this paragraph commenced against any
Loan Party, that proceeding shall not be dismissed within 60 days or that Loan
Party shall consent to that proceeding;
(f) The
Borrower or any Subsidiary shall fail to pay any Debt (but excluding Debt
evidenced by the Note) of the Borrower or such Subsidiary, or any interest
or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event, shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or any such Debt shall
be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity
thereof;
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(g) Any
guaranty or any third party security agreement securing any indebtedness of
the
Borrower to the Bank shall be repudiated or revoked, or purported to be
repudiated or revoked;
(h) The
entry against any Loan Party of a final judgment, decree or order for the
payment of money in excess of $100,000.00 and the continuance of such judgment,
decree or order unsatisfied for a period of 30 days without a stay of
execution;
(i) Any
Reportable Event (as defined in ERISA) shall have occurred with respect to
a
Plan and continue for 30 days; or any Plan shall have been terminated by the
Borrower not in compliance with ERISA, or a trustee shall have been appointed
by
a court to administer any Plan, or the Pension Benefit Guaranty Corporation
shall have instituted proceedings to terminate any Plan or to appoint a trustee
to administer any Plan.
Section
6.2 Rights
and Remedies.
If any Event of Default shall occur and be continuing, the Bank may exercise
any
or all of the following rights and remedies:
(a) Declare
the Note, all interest thereon, and all other obligations under, or pursuant
to,
any Loan Document to be immediately due and payable, and upon such declaration
such Note, interest and other obligations shall immediately be due and payable,
without presentment, demand, protest or any notice of any kind, all of which
are
expressly waived;
18
(b) Exercise
any right or remedy under the Security Agreement, or any other right or remedy
of a secured party under the Uniform Commercial Code as in effect in
Minnesota;
(c) Exercise
any other right or remedy available to the Bank at law or in
equity.
ARTICLE
VII.
MISCELLANEOUS
Section
7.1 No
Waiver; Cumulative Remedies.
No failure or delay on the part of the Bank in exercising any right or remedy
under, or pursuant to, any Loan Document shall operate as a waiver thereof,
nor
shall any single or partial exercise of any such right, remedy or power preclude
other or further exercise thereof, or the exercise of any other right, remedy
or
power. The remedies in the Loan Documents are cumulative and are not exclusive
of any remedies provided by law.
Section
7.2 Amendments
and Waivers.
No amendment or waiver of any provision of any Loan Document shall be effective
unless such amendment or waiver is in writing and is signed by the Bank, and
such amendment or waiver shall be effective only in the specific instance and
for the specific purpose for which it was given.
Section
7.3 Notices,
Etc.
All notices and other communications provided for hereunder shall be in writing
(including telecopier communication) and mailed or telecopied or delivered,
if
to the Borrower, at its address stated in the preamble hereof, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇; and if to the Bank, at its address stated in the preamble hereof,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇; or, as to each party, at such other address as shall
be
designated by such party in a written notice to the other party. All such
notices and communications shall, when mailed or telecopied, be effective when
deposited in the mails or transmitted by telecopier, respectively, addressed
as
provided above, except that notices to the Bank pursuant to the provisions
of
Article II shall not be effective until received by the Bank.
19
Section
7.4 Costs and Expenses.
The Borrower agrees to pay on demand all costs and expenses of the Bank in
connection with the preparation of the Loan Documents, including reasonable
attorneys fees and legal expenses, as well as all costs and expenses of the
Bank, including reasonable attorneys fees and expenses, in connection with
the
administration and enforcement of the Loan Documents (whether suit is commenced
or not).
Section
7.5 Right
of Set-off.
Upon the occurrence and during the continuance of any Event of Default the
Bank
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at
any time owing by the Bank to or for the credit or the account of the Borrower
or any Guarantor against any and all of the obligations of the Borrower now
or
hereafter existing under any Loan Document, irrespective of whether or not
the
Bank shall have made any demand under any Loan Document and although such
obligations may be unmatured. The Bank agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Bank may
have.
Section
7.6 Governing
Law.
All Loan Documents shall be governed by the laws of the State of Minnesota.
Any
term used in this Agreement and not otherwise defined shall have the definition
given that term in the Uniform Commercial Code as in effect in the State of
Minnesota from time to time, and such definition automatically shall change
on
the effective date of any amendment to the Uniform Commercial Code that changes
such definition. If any term in this Agreement shall be held to be illegal
or
unenforceable, the remaining portions of this Agreement shall not be affected,
and this Agreement shall be construed and enforced as if this Agreement did
not
contain the term held to be illegal or unenforceable. The Borrower hereby
irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth
District, and the Federal District Court, District of Minnesota, Fourth
Division, over any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of such action or proceeding
may
be heard and determined in any such court.
20
Section
7.7 Binding
Effect; Assignment.
All Loan Documents shall be binding upon and inure to the benefit of the Loan
Parties and the Bank and their respective successors and assigns. No Loan Party
shall have the right to assign its rights or interest under any such agreement
without the prior written consent of the Bank.
[Signatures
follow on next page]
21
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
| CorVu Corporation | |||
| By | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ | ||
|
Its President |
|||
| Commerce Bank | |||
| By | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
|
Its President |
|||
22
EXHIBIT
A
PROMISSORY
NOTE
| $3,200,000.00 |
Dated:
February 20,
2007
|
For
value received, CorVu Corporation, a Minnesota corporation (the “Borrower”)
promises to pay to the order of Commerce Bank (the “Bank”), at its offices in
Minneapolis, Minnesota, in lawful money of the United States of America, the
principal amount of $3,200,000.00; together with interest on any and all
principal amounts remaining unpaid hereon from the date of this Note until
said
principal amounts are fully paid at a fluctuating annual rate equal to the
Applicable Percentage (as defined in the Loan Agreement). Each change in the
fluctuating interest rate shall take effect simultaneously with the
corresponding change in the Applicable Percentage.
Interest
shall be due and payable on the first day of each calendar month starting on
March 1, 2007 and continuing until this Note is paid in full. Principal shall
be
paid in quarterly installments of $75,000.00 each on the first day of each
March, June, September and December in each year, starting on September 1,
2007
and continuing until February 28, 2008 when all principal and accrued interest
shall be due and payable in full.
A-1
This
Note is the Note referred to in, and is entitled to the benefits of, the Term
Loan Agreement dated as of the date hereof (the “Loan Agreement”) between the
Borrower and the Bank, which Loan Agreement, among other things, contains
provisions for the acceleration of the maturity of this Note upon the happening
of certain stated events, for an increase to the interest
rate upon the happening of certain stated events, and for prepayments of the
principal amount due under this Note upon stated terms and
conditions.
EXHIBIT
B
FORM
OF COMPLIANCE CERTIFICATE
I,
the _________________________ of CorVu Corporation (the “Borrower”), hereby
provide this Compliance Certificate in accordance with Section 5.1(d) of the
Term Loan Agreement (the “Agreement”) dated as of February 20, 2007 between the
Borrower and Commerce Bank.
I
certify that as of the date hereof:
|
(1)
|
The
representations and warranties of the Borrower contained in Article
IV of
the Agreement are correct as though made on the date
hereof.
|
|
(2)
|
No
event has occurred and is continuing that constitutes an Event of
Default
under the Agreement or would constitute an Event of Default but for
the
requirement that notice be given or time elapse or
both.
|
|
(3)
|
The
Borrower’s State of formation is
Minnesota.
|
I
further certify that as of _____________________, 20__:
|
(1)
|
Tangible
Net Worth as defined in the Agreement was a negative $______________
compared to a requirement in the Agreement of a negative
$__________________.
|
|
(2)
|
The
Debt Service Coverage Ratio as defined in the Agreement was ____
to 1
compared to a minimum in the Agreement of 1.25 to
1.
|
|
Dated:
_______________________________
|
Title:
_______________________________
|
B-1