Exhibit 10.5
PROMISSORY NOTE
(Facility 2 - Term
Loan)
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$6,000,000.00
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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 Six Million and No/100
Dollars ($6,000,000.00) (“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
Loan Amount. This Note
evidences a term 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.
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
May 31, 2014 (the “Maturity Date”)
.
3.
Interest Rate and Payment Terms .
3.1
Interest Rate . Interest on each advance hereunder
shall accrue at an annual rate equal to the LIBOR Rate Margin (as
such term is defined below) plus the one-month LIBOR rate
quoted by Bank from Reuters Screen LIBOR01 Page or any successor
thereto, which shall be that one-month LIBOR rate in effect two New
York Banking Days prior to the beginning of each calendar month,
adjusted for any reserve requirement and any subsequent costs
arising from a change in government regulation, such rate to be
reset at the beginning of each succeeding month. 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. If the initial advance under
this Note occurs other than on the first day of the month, the
initial one-month LIBOR rate shall be that one-month LIBOR rate in
effect two New York Banking Days prior to the date of the initial
advance, which rate plus the percentage described above shall be in
effect for the remaining days of the month of the initial advance;
such one-month LIBOR rate to be reset at the beginning of each
succeeding month. Bank’s internal records of applicable
interest rates shall be determinative in the absence of manifest
error.
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
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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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)
Monthly Principal Payments . Borrower shall make
monthly payments of principal each in the amount of Seventy-One
Thousand Four Hundred Twenty-Eight and 57/100 Dollars ($71,428.57)
on the first day of each month beginning on July 1, 2007
.
3.3
Principal Prepayments . Borrower may prepay some
or all of the principal under the Loan, from time to time, without
payment of any prepayment premium or fee.
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, reserve, or receive
greater amount of interest than under state law) and that this
Section shall control every other covenant and agreement in this
Note and the other Loan Documents. If applicable state or
federal law should at any time be judicially interpreted so as to
render usurious any amount charged, taken, reserved, or received
with respect to the Loan, or if Bank’s exercise of the option
to accelerate the Maturity Date, or if any prepayment by Borrower,
results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is Bank’s express intent
that all such excess amounts theretofore collected by Bank shall be
credited to the principal balance of this Note and all other
indebtedness, and that the provisions of this Note and the other
Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of
the fullest amount otherwise called for hereunder or
thereunder. All sums paid or agreed to be paid to Bank for
the use, forbearance, or detention of the Loan shall, to the extent
not prohibited by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan
until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the maximum lawful rate from
time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
4.4
Calculation of Interest
. Interest will be computed for the actual days elapsed on
the basis of a three hundred sixty (360) day year, which results in
more interest than if a three hundred sixty-five (365) day year
method were used.
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4.5
Payments . Except as otherwise provided herein, a
ll amounts payable under this
Note are payable in lawful money of the United States during normal
business hours on a Banking Day. For purposes hereof,
“Banking Day” means a day, other than a Saturday
or Sunday, on whic