Exhibit 10.4

PROMISSORY NOTE

(Facility 1 - Revolving Line of Credit Loan)

$15,000,000.00

 

May 16, 2007

 

Phoenix, Arizona

 

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, 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, all 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.

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5.             Late Payments; Default Rate

5.1          Late Charge for Overdue Payments. If Bank has not received the full
amount of any payment scheduled to be made under this Note, other than the final
principal payment, by the end of ten (10) calendar days after the date it is
due, Borrower shall pay a late charge to Bank in the amount of five percent (5%)
of the overdue payment; provided, however, in no event shall any late charge be
payable hereunder without Bank first having provided Borrower with any notice
required by applicable law.  Borrower shall pay this late charge only once on
any late payment.  This late charge shall not be construed as in any way
extending the due date of any payment, and is in addition to, and not in lieu
of, any other remedy Bank may have.

5.2          Default Rate. Upon the occurrence of any Event of Default (subject
to any applicable notice and cure periods), the unpaid balance of the Loan shall
bear interest at the rate which is five percent (5%) above the then applicable
Note Rate as it may thereafter change pursuant to the terms of this Note (the
“Default Rate”).  Additionally, from and after the Maturity Date, or such
earlier date as all sums owing on this Note become due and payable by
acceleration or otherwise, the Loan shall bear interest at the Default Rate. 
Accrued interest, at the Note Rate, if not paid when due, shall accrue interest
at the Default Rate, as hereinabove provided, which may result in compounding of
interest.  Except as otherwise set forth herein or in any other Loan Document,
payments under this Note or under any other Loan Document that are due on
demand, shall bear interest at the Default Rate (i) from the date costs or
expenses are incurred by Bank that give rise to the demand or (ii) if there is
no such date, then from the date of demand, until Borrower pays the full amount
of such payment, including interest.

6.             Events of Default.  If any of the following “Events of Default”
occur, any obligation of the holder to make advances under this Note terminates
and, at the holder’s option, exercisable in its sole and absolute discretion,
all sums of principal and interest under this note immediately become due and
payable without notice of default, presentment, demand for payment, protest, or
notice of nonpayment or dishonor, or other notices or demands of any kind or
character:

6.1          Borrower fails to perform any obligation under this Note to pay
principal or interest within ten (10) days after the date when due; or

6.2          Borrower fails to perform any other obligation under this Note to
pay money within ten (10) days after the date when due; or

6.3          Under any of the Loan Documents, a default or Event of Default
occurs, except as provided in Section 7 below.

7.             Insolvency.  It is an “Event of Default” under this Note if
Borrower becomes the subject of any bankruptcy or other voluntary or involuntary
proceeding, in or out of court, for the adjustment of debtor-creditor
relationships (“Insolvency Proceeding”), and as to any involuntary Insolvency
Proceeding, it either: (i) is consented to or (ii) has not been dismissed within
ninety (90) days.  Upon such an Event of Default, all sums of principal and
interest under this Note automatically become immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or
character.  If Borrower becomes the subject of any Insolvency Proceeding, any
obligation of the holder to make advances under this Note shall automatically
terminate, and in the case of an involuntary Insolvency Proceeding which is
dismissed within ninety (90) days, the holder’s obligation to make advances
under this Note shall resume upon the dismissal thereof.

8.             Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW, BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER
AND BANK MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY

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PERTAINING TO, THIS NOTE, THE LOAN AGREEMENT, OR ANY OF THE OTHER LOAN
DOCUMENTS.  IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.  THIS WAIVER
IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER, AND BORROWER HEREBY
REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT.  BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

9.             Miscellaneous.

9.1          Waivers.  Borrower hereby waives presentment, demand, notice of
dishonor, notice of default or delinquency, notice of acceleration, notice of
nonpayment, notice of costs, expenses, or losses and interest thereon; and
notice of interest on interest and late charges.

9.2          Delay In Enforcement.  If Bank delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure does not
constitute a waiver of any of Bank’s rights, or of any breach, default or
failure of condition of or under this Note.  No waiver by Bank of any of its
rights, or of any breach, default or failure of condition is effective, unless
the waiver is expressly stated in writing by Bank.

9.3          Joint and Several Liability.  If more than one person or entity is
signing this Note as Borrower, their obligations under this Note shall be joint
and several.   As to any Borrower that is a partnership, the obligations of
Borrower under this Note are the joint and several obligations of each general
partner thereof.  Any married person signing this Note agrees that recourse may
be had against community property assets and against his or her separate
property for the satisfaction of all obligations contained herein.

9.4          Heirs, Successors, and Assigns; Participations.  This Note inures
to and binds the heirs, legal representatives, successors and assigns of
Borrower and Bank; provided, however, Borrower may not assign this Note or any
Loan funds, or assign or delegate any of its rights or obligations, without the
prior written consent of Bank in each instance, which consent is at the sole and
absolute discretion of Bank.  Bank, in its sole and absolute discretion, may
transfer this Note, and may sell or assign participations or other interests in
all or part of the Loan, on the terms and subject to the conditions of the Loan
Documents, all without notice to or the consent of Borrower.  Without notice to
or the consent of Borrower, Bank may disclose to any actual or prospective
purchaser of any securities issued or to be issued by Bank or its affiliates,
and to any actual or prospective purchaser or assignee of any participation or
other interest in this Note, the Loan, or any other loans made by Bank to
Borrower (whether evidenced by this Note or otherwise), any financial or other
information, data or material in Bank’s possession relating to Borrower, or the
Loan.  If Bank so requests, Borrower shall sign and deliver a new note, in the
form and substance of this Note, to be issued in exchange for this Note.

9.5          Cumulative Remedies.  All of Bank’s remedies in connection with
this Note or under applicable law are cumulative, and Bank’s exercise of any one
or more of those remedies shall not constitute an election of remedies.

9.6          Governing Law.  This Note shall be governed by, and construed in
accordance with, the laws of the State of Arizona, without regard to the choice
of law rules of that State, except to the extent that any of such laws may now
or hereafter be preempted by Federal law.  Borrower consents to the jurisdiction
of any Federal or State court within the State of Arizona, submits to venue in
such state, and

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also consents to service of process by any means authorized by Federal law or
the law of such state.  Without limiting the generality of the foregoing,
Borrower hereby waives and agrees not to assert by way of motion, defense, or
otherwise in such suit, action, or proceeding, any claim that (i) Borrower is
not subject to the jurisdiction of the courts of the above-referenced state or
the United States District Court for such state, or (ii) such suit, action, or
proceeding is brought in an inconvenient forum, or (iii) the venue of such suit,
action, or proceeding is improper.

9.7          Attorney’s Fees and Costs.  In any lawsuit or arbitration arising
out of or relating to this Note, the Loan Documents or the Loan, the prevailing
party will be entitled to recover from each other party such sums as the court
or arbitrator adjudges to be reasonable attorneys’ fees in the action or
arbitration, in addition to costs and expenses otherwise allowed by law.  In all
other actions or proceedings, including any matter arising out of or relating to
any Insolvency Proceeding, Borrower agrees to pay all of Bank’s costs and
expenses, including reasonable attorneys’ fees, incurred in enforcing or
protecting Bank’s rights or interests.  From the time(s) incurred until paid in
full to Bank, all such sums shall bear interest at the Default Rate.  Whenever
Borrower is obligated to pay or reimburse Bank for any attorneys’ fees, those
fees shall include the allocated costs for services of in-house counsel.

9.8          Holder’s Rights.  Borrower agrees that the holder of this Note may
accept additional or substitute security for this Note, or release any security
or any party liable for this Note, or extend or renew this Note, all without
notice to Borrower and without affecting the liability of Borrower.

9.9          Interpretation.  As used in this Note, the terms “Bank,” “holder”
and “holder of this Note” are interchangeable.  As used in this Note, the word
“include(s)” means “include(s), without limitation,” and the word “including”
means “including, but not limited to.”

9.10        Time of the Essence.  Time is of the essence with regard to all
payment obligations under this Note.

9.11        Amendments.  This Note may not be modified or amended except by a
written agreement signed by the parties.

9.12        Counterparts.  This Note may be executed in counterparts, and all
counterparts constitute but one and the same document.

IN WITNESS WHEREOF, Borrower has duly executed and delivered this Note to Bank
as of the date first above written.

BORROWER:

THE INVENTURE GROUP, INC.,

 

Address for notices to Borrower:

a Delaware corporation

 

 

 

 

The Inventure Group, Inc.

 

 

5050 N. 40TH Street, Suite 300

By:

/s/ Steve Weinberger

 

Phoenix, AZ 85018

Name:

Steve Weinberger

 

Attention: Steve Weinberger - SVP, CFO

Title:

CFO

 

 

 

 

Tax I.D. #: 86-0786101

 

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