Exhibit 10.4
PROMISSORY NOTE
(Facility 2 - Term
Loan)
|
$756,602.56
|
August 19, 2005
|
Phoenix, Arizona
|
1.
Borrower’s Promise To
Pay .
FOR VALUE RECEIVED, POORE
BROTHERS, 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 Seven Hundred
Fifty Six Thousand Six Hundred and Two and 56/100 Dollars
($756,602.56) (“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. 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
July 1, 2006 (the “Maturity Date”) .
3.
Interest Rate and Payment
Terms .
3.1
Interest Rate
. The unpaid principal balance
will bear interest at an annual rate equal to the prime rate
announced by Bank. The interest rate hereunder will be
adjusted each time that the prime rate changes.
3.2
Payment of Principal Plus
Interest .
Borrower shall make monthly payments of principal plus
interest on the first day of each month beginning on September 1,
2005 . The principal
portion of each monthly installment is Sixty Eight
Thousand Seven Hundred Eighty Two and 05/100 Dollars
($68,782.05)
3.3
Principal
Prepayments .
Borrower may prepay some or all of the principal under this Note,
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.”
1
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 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
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.
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 which Bank is open for business for all
banking functions in Phoenix,
Arizona. Checks and drafts constitute payment only when
collected. All payments made under this Note shall be made
without offset, demand, counter-claim, deduction or recoupment
(each of which is hereby waived), and acceptance by Bank of any
payment in an amount less than the amount then due shall be deemed
an acceptance on account only, notwithstanding any notation on or
accompanying such partial payment to the contrary, and shall not
constitute a waiver by Bank of any Event of Default. Except
as otherwise set forth herein or in any other Loan Document,
payments shall be applied in such order and manner as Bank may
determine in its sole and absolute discretion.
5.
Late Payments; Default
Rate
5.1
Late Charge for Overdue
Payments . If
Ba
