Exhibit 10.5


 


EXECUTION COPY


 


PROMISSORY NOTE


 


$2,500,000.00


 


January 19, 2006


 


CGI Holding Corporation


5 Revere Drive


Suite 510


Northbrook, Illinois 60062


(Hereinafter
referred to as “Borrower”)


 


Wachovia Bank, National Association


301 South Tryon Street


Charlotte, North Carolina 28202


(Hereinafter referred
to as “Bank”)


 


Borrower promises to
pay to the order of Bank, in lawful money of the United States of America, at
its office indicated above or wherever else Bank may specify, the sum of Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00) or such sum as may be advanced and outstanding from time to time, with
interest on the unpaid principal balance at the rate and on the terms provided
in this Promissory Note (including all renewals, extensions or modifications
hereof, this “Note”).


 


LOAN AGREEMENT.  This
Note is subject to the provisions of that certain Loan Agreement between Bank
and Borrower of even date herewith, as modified from time to time.


 


USE OF
PROCEEDS.  Borrower shall use the proceeds of the
loan(s) evidenced by this Note to purchase all of the outstanding capital stock
of Morex Marketing Group
LLC.  


 


SECURITY. 
Borrower and Guarantors have granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, personal
property collateral described in that certain Security Agreement of even date
herewith. 


 


INTEREST
RATE.  Interest shall accrue on the
unpaid principal balance of this Note from the date hereof at the LIBOR Market
Index Rate plus 2.15%, as that rate may change from day to day in accordance
with changes in the LIBOR Market Index Rate (“Interest Rate”).  “LIBOR Market Index Rate”, for any day, means
the rate for 1 month U.S. dollar deposits as reported on Telerate page 3750
as of 11:00 a.m., London time, the second London business day before the
relevant interest period begins, or if such day is not a London business day,
then the immediately preceding London business day (or if not so reported, then
as determined by Bank from another recognized source or interbank quotation).


 


DEFAULT
RATE.  In addition to all other rights
contained in this Note, if a Default (as defined herein) occurs and as long as
a Default continues, all outstanding Obligations, other than Obligations under any swap agreements (as defined in 11
U.S.C. § 101, as in effect from time to


 

















 


time) between Borrower and Bank or its
affiliates, shall bear interest at the
Interest Rate plus 3% (“Default Rate”). 
The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.


 


INTEREST
AND FEE(S) COMPUTATION (ACTUAL/360).  Interest and fees, if any, shall be computed
on the basis of a 360-day year for the actual number of days in the applicable
period (“Actual/360 Computation”).  The
Actual/360 Computation determines the annual effective interest yield by taking
the stated (nominal) rate for a year’s period and then dividing said rate by
360 to determine the daily periodic rate to be applied for each day in the applicable
period.  Application of the Actual/360
Computation produces an annualized effective rate exceeding the nominal rate.


 


REPAYMENT
TERMS.  This Note shall be due and payable
in consecutive monthly payments of
equal principal in the amount of $208,333.33 plus accrued interest, commencing
on February 19, 2006, and continuing on the same day of each
month thereafter until fully paid.  In
any event, all principal and accrued interest shall be due and payable on January 19,
2007.


 


APPLICATION
OF PAYMENTS.  Monies received
by Bank from any source for application toward payment of the Obligations shall
be applied to accrued interest and then to principal.  If a Default occurs, monies
may be applied to the Obligations in any manner or order deemed appropriate by
Bank.


 


If any payment received
by Bank under this Note or other Loan Documents is rescinded, avoided or for
any reason returned by Bank because of any adverse claim or threatened action,
the returned payment shall remain payable as an obligation of all persons
liable under this Note or other Loan Documents as though such payment had not
been made.


 


DEFINITIONS.  Loan Documents.  The term “Loan Documents,” as used in this
Note and the other Loan Documents, refers to all documents executed in
connection with or related to the loan evidenced by this Note, the $15,000,000
revolving credit promissory note executed on the date hereof (the “Revolving
Note”) and any prior notes which evidence all or any portion of the loan
evidenced by this Note, and any letters of credit issued pursuant to any loan
agreement to which this Note is subject, any applications for such letters of
credit and any other documents executed in connection therewith or related
thereto, and may include, without limitation, a
loan agreement, this Note, the Revolving Note, guaranty agreements, security
agreements, security instruments, financing statements, mortgage instruments,
any renewals or modifications, whenever any of the foregoing are executed, but
does not include swap agreements (as defined in 11 U.S.C. § 101, as in
effect from time to time).  Obligations.  The term
“Obligations”, as used in this Note and the other Loan Documents, refers to any
and all indebtedness and other obligations under this Note, the Revolving Note,
all other obligations under any other Loan Documents, and all obligations under
any swap agreements (as defined in 11 U.S.C. § 101, as in effect from
time to time) between Borrower and Bank, or its affiliates, whenever
executed.  Certain
Other Terms.  All terms that
are used but not otherwise defined in any of the Loan Documents shall have the
definitions provided in the Uniform Commercial Code.


 


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LATE
CHARGE.  If any payments are not timely
made, Borrower shall also pay to Bank a late charge equal to 4% of each payment past due for 15 or more
days.  


 


Acceptance by Bank of
any late payment without an accompanying late charge shall not be deemed a
waiver of Bank’s right to collect such late charge or to collect a late charge
for any subsequent late payment received.


 


ATTORNEYS’
FEES AND OTHER COLLECTION COSTS.  Borrower
shall pay all of Bank’s reasonable expenses incurred to enforce or collect any
of the Obligations including, without limitation, reasonable arbitration,
paralegals’, attorneys’ and experts’ fees and expenses, whether incurred
without the commencement of a suit, in any trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.


 


USURY.  If at any time the effective interest rate
under this Note would, but for this paragraph, exceed the maximum lawful rate,
the effective interest rate under this Note shall be the maximum lawful rate,
and any amount received by Bank in excess of such rate shall be applied to
principal and then to fees and expenses, or, if no such amounts are owing,
returned to Borrower.


 


GRACE/CURE
PERIOD.  Grace Period.  The failure of timely payment of the
Obligations shall not be a Default until 5 days after such payment is due.  Cure Period.  Except as provided below, any Default, other
than non-payment, may be cured within 30 days after written notice thereof is
mailed to Borrower by Bank. Borrower’s right to cure shall be applicable only
to curable defaults and shall not apply, without limitation, to Defaults based
upon False Warranty or Cessation; Bankruptcy set forth below.  Borrower shall have the right to cure a
Default only once during any 12 month period. 
Bank shall not exercise its remedies to collect the Obligations except
as Bank reasonably deems necessary to protect its interest in collateral
securing the Obligations during a cure period.


 


DEFAULT.  If any of the following occurs and is not
cured within the applicable cure period, a default (“Default”) under this Note
shall exist:  Nonpayment; Nonperformance.  The failure of timely payment or performance
of the Obligations or Default under this Note or any other Loan Documents.  Loan
Document Default.  A default under any Loan Document.  Breach.  Any
breach of any agreement contained or referred to in this Note or any other Loan
Document.  False Warranty.  A warranty or representation made in the Loan
Documents or furnished to Bank in connection with the loan evidenced by this
Note is materially false when made.  Cross Default. At Bank’s option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower or any Guarantor, any general partner of or the holder(s) of the
majority ownership interests of Borrower with Bank or its affiliates which
default is not cured within any applicable cure period, unless, but only as
long as, the existence of any such default is being contested by the Borrower or such Guarantor in good faith by
appropriate proceedings and adequate reserves in respect thereof have been
established on the books of the Borrower or such Guarantor to the extent
required by GAAP.  Cessation; Bankruptcy.  The death of, appointment of a guardian for,
dissolution or termination of existence of (subject to the provisions set forth in clause
(iv) of the subparagraph entitled “Material
Capital Structure or Business Alteration” below), loss of good standing status by


 


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(unless such loss would not have a material
adverse effect upon the operations or financial condition of the Borrower), appointment of a
receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower or any
Guarantor, or any general partner of or the holder(s) of the majority ownership
interests of Borrower, or any party to the Loan Documents.  Material Capital Structure or Business
Alteration.  Without prior
written consent of Bank, (i) a material alteration in the kind or type of
Borrower’s business or that of any Guarantor; (ii) the sale of
substantially all of the business or assets of Borrower or any Guarantor, or a
material portion (10% or more) of such business or assets if such a sale is
outside the ordinary course of business of Borrower or any Guarantor, or more
than 50% of the outstanding stock or voting power of or in any such entity in a
single transaction or a series of transactions; (iii) any acquisition that
does not constitute a Permitted Acquisition or (iv) should any Guarantor
enter into any merger or consolidation; provided that any Guarantor may merge
with any other Guarantor so long as the surviving entity is a Guarantor. 


 


REMEDIES UPON DEFAULT.  If a
Default occurs under this Note or any Loan Documents, Bank may at any time
thereafter, take the following actions:  Bank Lien.  Foreclose its security interest or lien
against Borrower’s and Guarantors’ accounts without notice.  Acceleration Upon Default.  Accelerate the maturity of this Note and, at
Bank’s option, any or all other Obligations, other than Obligations under any
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) between Borrower and Bank, or its affiliates, which shall be due in
accordance with and governed by the provisions of said swap agreements;
whereupon this Note and the accelerated Obligations shall be immediately due
and payable; provided, however, if the Default is based upon a bankruptcy or
insolvency proceeding commenced by or against Borrower or endorser of this
Note, all Obligations (other than Obligations under any swap agreement as
referenced above) shall automatically and immediately be due and payable.  Cumulative.  Exercise any rights and remedies as provided
under the Note and other Loan Documents, or as provided by law or equity.


 


WAIVERS AND
AMENDMENTS.  No waivers, amendments or
modifications of this Note and other Loan Documents shall be valid unless in
writing and signed by an officer of Bank. 
No waiver by Bank of any Default shall operate as a waiver of any
other Default or the same Default on a future occasion.  Neither the failure nor any delay on the part
of Bank in exercising any right, power, or remedy under this Note and other
Loan Documents shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.


 


Except to the extent otherwise provided by
the Loan Documents or prohibited by law, each Borrower and each other person
liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice
of acceleration of maturity, notice of sale and all other notices of any
kind.  Further, each agrees that Bank may
(i) extend, modify or renew this
Note or make a novation of the loan evidenced by this Note, and/or (ii) grant
releases, compromises or indulgences with respect to any collateral securing
this Note, or with respect to Borrower or other person liable under this Note
or any other Loan Documents, all without notice to or consent of Borrower and
other such person, and without affecting the liability of Borrower and other
such person; provided, Bank may not extend,


 


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modify or renew this Note or make a novation
of the loan evidenced by this Note without the consent of Borrower which
increases the burdens of Borrower without the consent of Borrower.


 


MISCELLANEOUS
PROVISIONS.  Assignment.  This Note and the other Loan Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns.  Bank’s interests in and rights under this
Note and the other Loan Documents are freely assignable, in whole or in part,
by Bank.  In addition, nothing in this
Note or any of the other Loan Documents shall prohibit Bank from pledging or
assigning this Note or any of the other Loan Documents or any interest therein
to any Federal Reserve Bank.  Borrower
shall not assign its rights and interest hereunder without the prior written
consent of Bank, and any attempt by Borrower to assign without Bank’s prior
written consent is null and void.  Any
assignment shall not release Borrower from the Obligations.  Applicable Law; Conflict Between
Documents.  This Note and, unless otherwise provided in
any other Loan Document, the other Loan Documents shall be governed by and
construed  under the laws of the
state named in Bank’s address on the first page hereof without regard to that state’s conflict of laws
principles.  If the terms of this Note
should conflict with the terms of any loan agreement, the terms of this Note
shall control.  Security
Interest.  Except as
prohibited by law, Borrower and Guarantors grant Bank a security interest in
the collateral described in the Security Agreement of even date herewith.  Swap Agreements.  All
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and Bank
or its affiliates are independent agreements governed by the written provisions
of said swap agreements, which will remain in full force and effect, unaffected
by any repayment, prepayment, acceleration, reduction, increase or change in
the terms of this Note, except as otherwise expressly provided in said written
swap agreements, and any payoff statement from Bank relating to this Note shall
not apply to said swap agreements unless expressly referred to in such payoff
statement.  Jurisdiction.  Borrower irrevocably agrees to non-exclusive
personal jurisdiction in the state named in Bank’s address on the first page hereof.  Severability.  If any
provision of this Note or of the other Loan Documents shall be prohibited or
invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Note or other
such document.  Notices.  Any notices to Borrower shall be sufficiently
given, if in writing and mailed, hand delivered or sent via telecopy (or
other facsimile device), recognized overnight courier service or certified mail to the Borrower’s address shown above or such
other address as provided hereunder, and to Bank, if in writing and, hand
delivered or sent via telecopy (or other facsimile device), recognized
overnight courier service or certified mail
to Bank’s office address shown above or
such other address as Bank may specify in writing from time to time.  Notices to Bank must include the mail
code.  In the event that Borrower changes Borrower’s address at any time prior
to the date the Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. 



 


Plural;
Captions.  All references in the Loan
Documents to Borrower, person, document or other nouns of reference mean both
the singular and plural form, as the case may be, and the term “person” shall
mean any individual, person or entity. 
The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the Loan
Documents.  Advances.  Bank may, in its sole discretion and if requested
by Borrower,


 


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make other advances
which shall be deemed to be advances under this Note, even though the stated
principal amount of this Note may be exceeded as a result thereof.  Posting of Payments.  All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above
shall be deemed received at the opening of the next banking day.  Joint and Several
Obligations.  Each entity executing this Note is jointly
and severally obligated.  Fees and Taxes.  Borrower shall promptly pay all documentary,
intangible recordation and/or similar taxes on this transaction whether
assessed at closing or arising from time to time.  LIMITATION
ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES
HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL,
MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR
AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR
AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT
SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE
OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.  Patriot Act Notice. 
To help fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.  For purposes of this section, account shall
be understood to include loan accounts.  Final Agreement. 
This Note and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements
between the parties.


 


ARBITRATION.  Upon demand of any party hereto, whether made
before or after institution of any judicial proceeding, any claim or
controversy arising out of or relating to the Loan Documents between parties
hereto (a “Dispute”) shall be resolved by binding arbitration conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration
Rules”) of the American Arbitration Association (the “AAA”) and the Federal
Arbitration Act.  Disputes may include,
without limitation, tort claims, counterclaims, a dispute as to whether a
matter is subject to arbitration, claims brought as class actions, or claims
arising from documents executed in the future. 
A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding the foregoing, this arbitration provision does
not apply to disputes under or related to swap agreements.  Special Rules.  All arbitration hearings shall be conducted
in the city named in the address of Bank first stated above.  A hearing shall begin within 90 days of
demand for arbitration and all hearings shall conclude within 120 days of
demand for arbitration.  These time
limitations may not be extended unless a party shows cause for extension and
then for no more than a total of 60 days. 
The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.00.  Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA.  The parties do not waive
applicable Federal or state substantive


 


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law except as provided
herein.  Preservation
and Limitation of Remedies. 
Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought.  The parties shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute
the following remedies, as applicable: (i) all rights to foreclose against
any real or personal property or other security by exercising a power of sale
or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment.  Any claim or controversy with regard to any
party’s entitlement to such remedies is a Dispute.  Waiver of Jury Trial.  THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO
BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE
TO JURY TRIAL WITH REGARD TO A DISPUTE AS TO WHICH BINDING ARBITRATION HAS BEEN
DEMANDED.


 


DISCLOSURE OF INFORMATION;
CONFIDENTIALITY.  Bank shall hold all non-public information
with respect to Borrower and its subsidiaries obtained pursuant to the Loan
Documents in accordance with its customary procedures for handling confidential
information; provided, that Bank may disclose any such information to
the extent such disclosure is (i) required by law or requested or required
pursuant to any legal process, (ii) requested by, or required to be
disclosed to, any regulatory agency or authority, (iii) used in any suit,
action or proceeding for the purpose of defending itself, reducing its
liability or protecting any of its claims, rights, remedies or interests under
or in connection with the Loan Documents or (iv) which had been publicly
disclosed other than as a result of a disclosure by Bank prohibited by this
Agreement; provided  futher, Bank shall notify Borrower of any
potential disclosure pursuant to (i), (ii) or (iii) above and Borrower
may defend against the disclosures set forth in (i), (ii) or (iii) above.


 


 


[Signature Page Follows]


 


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IN WITNESS
WHEREOF, Borrower, on the day and year first above written, has caused this Note
to be executed under seal.


 


 


	
  [CORPORATE SEAL]

  	
  CGI HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerard M. Jacobs

  
	
   

  	
   

  	
  Name:

  	
  Gerard M. Jacobs

  
	
   

  	
   

  	
  Title:

  	
  CEO

  



 


 


[Promissory Note – CGI Holding Corporation]