Exhibit 10.4
PROMISSORY NOTE
(Facility 1 - Revolving Line
of Credit Loan)
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$15,000,000.00
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May 16, 2007
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Phoenix, Arizona
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1.
Borrower’s Promise To Pay .
FOR
VALUE RECEIVED, THE INVENTURE GROUP, INC. , a Delaware
corporation (the “Borrower”), promises to pay to
the order of U.S. BANK NATIONAL ASSOCIATION , a national
banking association (the “Bank”), at 101 N. First Avenue, Suite 1600, Phoenix,
Arizona 85003 , Attention: Commercial Banking
, or at such other place as the holder of this Note may from time
to time designate, the principal sum of Fifteen Million and No/100
Dollars ($15,000,000.00) (“Maximum Loan Amount”), or
such lesser amount as may be advanced and outstanding under this
promissory note (the “Note”), plus interest as
specified in this Note. Bank shall not be required to make
any advance if that would cause the outstanding principal of this
Note to exceed the Maximum Loan Amount. This Note evidences a
revolving line of credit loan
(“Loan”) made by Bank to Borrower pursuant to the terms
of a loan agreement (the “Loan Agreement”) between Bank
and Borrower of even date herewith. During the availability period described in
the Loan Agreement, Borrower may repay principal amounts and
reborrow them upon the terms and conditions set forth in the Loan
Agreement.
This Note is secured by
a certain Security Agreement (Blanket - All Business Assets)
being executed by Borrower in favor of Bank dated of even date
herewith (the “Security Agreement”) and may be secured
by other collateral . This Note and the Loan
Agreement, together with all other documents which evidence,
guaranty, secure, or otherwise pertain to the Loan collectively
constitute the “Loan Documents.” Some or all of the Loan Documents,
including the Loan Agreement, contain provisions for the
acceleration of the maturity of this Note. This Note is
subject to the terms and conditions of the Loan Agreement.
Capitalized terms used but not defined herein shall have the
meanings set forth in the Loan Agreement.
2.
Maturity Date . All principal and all accrued and unpaid
interest and other sums due hereunder shall be due and payable on
June 30, 2011 (the “Maturity Date”)
.
3.
Interest Rate and Payment Terms .
3.1
Interest Rate . Interest on each advance hereunder
shall accrue at one of the following per annum rates selected by
Borrower (i) upon notice to Bank, zero percent (0%) (0 basis
points) plus the prime rate announced by Bank from time to
time, as and when such rate changes (a “Prime Rate
Loan”); or (ii) upon a minimum of two New York Banking Days
prior notice, the LIBOR Rate Margin (as such term is defined below)
plus the 1, 2, 3, 6 or 12 month LIBOR rate quoted by Bank
from Reuters Screen LIBOR01 Page or any successor thereto (which
shall be the LIBOR rate in effect two New York Banking Days prior
to commencement of the advance), adjusted for any reserve
requirement and any subsequent costs arising from a change in
government regulation (a “LIBOR Rate Loan”). The
term “New York Banking Day” means any day (other than a
Saturday or Sunday) on which commercial banks are open for business
in New York, New York. The term “Money Markets”
refers to one or more wholesale funding markets available to and
selected by Bank, including negotiable certificates of deposit,
commercial paper, eurodollar deposits, bank notes, federal funds,
interest rate swaps or others. The term “LIBOR Rate
Margin” means (A) through and including November 15,
2007 , one and sixty-five hundredths percent (1.65%) (165 basis
points), and (B) thereafter the tiered LIBOR Rate Margin
determined in accordance with
the Fee and Rate Schedule attached as Exhibit C to the Loan Agreement,
adjusted quarterly, as determined by Bank, based upon Bank’s
testing of the Leverage Ratio (as such term is defined in the Loan
Agreement) in accordance with the terms of the Loan Agreement.
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In the event Borrower
does not timely select another interest rate option at least two
New York Banking Days before the end of the Loan Period for a LIBOR
Rate Loan, Bank may at any time after the end of the Loan Period
convert the LIBOR Rate Loan to a Prime Rate Loan, but until such
conversion, the funds advanced under the LIBOR Rate Loan shall
continue to accrue interest at the same rate as the interest rate
in effect for such LIBOR Rate Loan prior to the end of the Loan
Period. The term “Loan Period” means the period
commencing on the advance date of the applicable LIBOR Rate Loan
and ending on the numerically corresponding day 1, 2, 3, 6 or 12
months thereafter matching the interest rate term selected by
Borrower; provided, however, (a) if any Loan Period would otherwise
end on a day which is not a New York Banking Day, then the Loan
Period shall end on the next succeeding New York Banking Day unless
the next succeeding New York Banking Day falls in another calendar
month, in which case the Loan Period shall end on the immediately
preceding New York Banking Day; or (b) if any Loan Period begins on
the last New York Banking Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of the Loan Period), then the Loan Period shall
end on the last New York Banking Day of the calendar month at the
end of such Loan Period.
No LIBOR Rate Loan may
extend beyond the maturity of this Note. In any event, if the
Loan Period for a LIBOR Rate Loan should happen to extend beyond
the maturity of this Note, such loan must be prepaid at the time
this Note matures. Bank’s internal records of
applicable interest rates shall be determinative in the absence of
manifest error. Each LIBOR Rate Loan shall be in a minimum
principal amount of Five Hundred Thousand and No/100 Dollars
($500,000.00).
The aggregate number of
LIBOR Rate Loans in effect at any one time may not exceed three
(3).
If a LIBOR Rate Loan is
prepaid prior to the end of the Loan Period, as defined above, for
such loan, whether voluntarily or because prepayment is required
due to this Note maturing or due to acceleration of this Note upon
default or otherwise, Borrower agrees to pay all of Bank’s
costs, expenses and Interest Differential (as determined by Bank)
incurred as a result of such prepayment. The term
“Interest Differential” shall mean that sum equal to
the greater of zero or the financial loss incurred by Bank
resulting from prepayment, calculated as the difference between the
amount of interest Bank would have earned (from like investments in
the Money Markets as of the first day of the LIBOR Rate Loan) had
prepayment not occurred and the interest Bank will actually earn
(from like investments in the Money Markets as of the date of
prepayment) as a result of the redeployment of funds from the
prepayment. Because of the short-term nature of this
facility, Borrower agrees that the Interest Differential shall not
be discounted to its present value. Any prepayment of a LIBOR
Rate Loan shall be in an amount equal to the remaining entire
principal balance of such loan.
3.2
Separate Principal Plus Interest Payments .
(a)
Interest Payments . Interest is payable beginning
July 1, 2007 , and on the same date of each CONSECUTIVE
month thereafter, with a final interest payment with the final
payment of principal.
(b)
Principal Payment on Maturity Date . If not sooner
paid, all principal shall be
due and payable on the
Maturity Date.
3.3
Principal Prepayments . Borrower may prepay some
or all of the principal under any Prime Rate Loan, from time to
time, without payment of any prepayment premium or fee. Any
prepayment of some or all of the principal under any LIBOR Rate
Loan is subject to the terms and conditions set forth in
Section 3.1 above.
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4.
General Interest and Payment Terms .
4.1
Note Rate . The
interest rate in effect from time to time under this note is herein
referred to as the “Note Rate.”
4.2
Effective Contracted Rate
. Borrower agrees to pay
an effective contracted for rate of interest equal to the rate of
interest resulting from all interest payable as provided in this
Note plus the additional rate of interest resulting from (a)
any loan or facility fee(s) or other similar fees described or
defined in the Loan Documents, and (b) all Other Sums.
For purposes hereof, the “Other Sums” shall mean all
fees, charges, goods, things in action, or any other sums or things
of value (other than interest payable as provided in this Note and
any loan or facility fee) paid or payable by Borrower, whether
pursuant to this Note, any of the other Loan Documents, or any
other document or instrument in any way pertaining to this lending
transaction, that may be deemed to be interest for the purpose of
any law of the State of Arizona, or any other applicable
law, that may limit the
maximum amount of interest to be charged with respect to this
lending transaction. The Other Sums shall be deemed to be
interest and part of the “contracted for rate of
interest” for the purposes of any such law only.
4.3
Usury Savings Clause
. It is expressly stipulated and agreed to be the intent of
Borrower and Bank at all times to comply with applicable state law
or applicable United States federal law (to the extent that it
permits Bank to contract for, charge, take, reserv
