Document:

Exhibit 10.5

PROMISSORY NOTE

(Facility
2 - Term  Loan)

	
  $6,000,000.00

  	
   

  	
  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 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, 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.

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 

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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 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 

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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 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.

(Remainder
of page intentionally left blank.

See the following page for Borrower’s signatory.)

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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

  
						

 

 6Exhibit 10.6

SECURITY AGREEMENT

(Blanket - All Business Assets)

This Security Agreement (Blanket - All Business Assets) (the
“Agreement”) is dated for reference purposes as of May 16, 2007 by THE INVENTURE GROUP, INC., a Delaware
corporation (the “Borrower”), and LA COMETA
PROPERTIES, INC., an Arizona corporation (“La Cometa”), POORE BROTHERS - BLUFFTON, LLC, a Delaware
limited liability company (the “PBC”), TEJAS
PB DISTRIBUTING, INC., an Arizona corporation (“Tejas”), BOULDER NATURAL FOODS, INC., an Arizona
corporation (“Boulder”), BN FOODS INC., a
Colorado corporation (“BN Foods”), RADER
FARMS ACQUISITION CORP., a Delaware corporation (“RFAC”) in favor of
U.S. BANK NATIONAL ASSOCIATION, a
national banking association (the “Bank”). For purposes hereof, “Obligated
Group” and “Obligated Group Parties” shall mean, collectively, (a) Borrower,
(b) La Cometa, (c) PBC, (d) Tejas, (e) Boulder, (f) BN Foods, and (g) RFAC
(each, individually, an “Obligated Group Party”).

Borrower’s Organizational Identification Number is: DE-2483575.

La Cometa’s Organizational Identification Number is: AZ-08064380.

PBC’s Organizational Identification Number is: DE-2867321.

Tejas’ Organizational Identification Number is: AZ-08541660.

Boulder’s Organizational Identification Number is: AZ-09522220.

BN Foods’ Organizational Identification Number is: CO-19971102791.

RFAC’s Organizational Identification Number is: DE-4351069.

Unless defined elsewhere in
this Agreement, defined terms used herein have the meanings given them in the
Definitions Section hereof.

Factual Background

A.            Bank
is extending credit and/or other financial accommodations to Borrower, now
and/or in the future, including a revolving line of credit loan in the maximum
principal amount of Fifteen Million and No/100 Dollars ($15,000,000.00)
(“Facility 1”) and a term loan in the principal amount of Six Million and
No/100 Dollars ($6,000,000.00) (“Facility 2”) (each, individually, a “Loan” and
collectively, the “Loans”). The Loans are is being made under a loan agreement
(the “Loan Agreement”) between Bank and Borrower dated as of the date hereof.
Each Loan is evidenced by a promissory note (the “Notes”) made payable to Bank
in the principal amount of such Loan, is secured by the collateral described
below, and may also be secured by other collateral. Borrower is a holding
company for several affiliated entities, and each of the Obligated Group
Parties (other than the Borrower) is an Affiliate of, and a wholly owned
subsidiary of Borrower.

B.            Each
of the Obligated Group Parties other than the Borrower is a Guarantor or the
Loans. It is intended (i) that each Obligated Group Party shall be liable for
the Credit Facilities, directly or indirectly, as a Borrower or as a Guarantor,
and (ii) that all business assets of each Obligated Group Party shall be
pledged to Bank as collateral for the Credit Facilities and other Obligations.

C.            This
Agreement, and all other documents which evidence, secure, or otherwise pertain
to any of the Obligations, including the Loans, collectively constitute the
“Loan Documents.” Capitalized terms used in this Agreement without definition
have the meanings given them in the Loan Agreement. All terms not defined
herein or in the Loan Agreement shall have the meaning given them in the
Uniform Commercial Code, as enacted in the state of formation of the Borrower
and as enacted in the state of formation of each of the other Obligated Group
Parties, or under the Uniform Commercial Code in any other state to the extent
the same is applicable law (collectively, as amended, recodified, and in effect

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from time to time, the “UCC”). If a term is defined
differently in Article 9 of the UCC than in another Article, Article 9 shall
control.

D.           As a
material condition to Bank extending credit and/or other financial accommodations
to Borrower, including but not limited to the Loans, Bank has required that
Borrower and the other Obligated Group Parties pledge to Bank, and create a
security interest in favor of Bank, in and to all of the Collateral described
below, pursuant to the terms and conditions set forth below.

NOW THEREFORE, in
consideration of Bank’s agreement to extend credit and/or other financial
accommodations to Borrower, now and/or in the future, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and the other Obligated Group Parties and Bank hereby agree as
follows:

AGREEMENT

Definitions: The
following capitalized words and terms shall have the meanings set forth in the
“Factual Background” section above, or if not defined therein, shall have the
following meanings when used in this Agreement. All references to dollar
amounts shall mean amounts in lawful money of the United States of America.
Words and terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require.

“Credit Facilities” means all extensions of credit from the Bank
to Borrower or any other Obligated Party, whether now existing or hereafter
arising, including but not limited to the Loans described in Recital A above.

“Insolvency Obligations” means all monetary obligations incurred
or accrued during the pendency of any Insolvency Proceeding regardless of
whether allowed or allowable in such proceeding.

“Insolvency Proceeding” means any bankruptcy, receivership, or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships

“Obligations”
means, collectively, all obligations, indebtedness, and liabilities of Borrower
or any other Obligated Party to Bank, or any of Bank’s Affiliates, successors
or assigns, of every kind and nature, including but not limited to all loans,
advances, interest, costs, drafts, overdrafts, checks, credit card
indebtedness, lease obligations, obligations under any Rate Management
Agreement, and all other debts, liabilities, and obligations of every kind
owning by the Borrower or any other Obligated Party to the Bank, whether direct
or indirect, voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated, of the same or a different nature, whether now
existing or hereafter incurred or created, or whether incurred directly or
acquired by Bank by assignment or otherwise, together with all renewals,
extensions, modifications, consolidations, and substitutions of any of the
them, including interest thereon and all costs, expenses, and reasonable
attorney’s fees paid or incurred by Bank at any time before or after judgment
in attempting to collect any of the foregoing, to realize on any collateral
securing any of the foregoing, to realize on any guaranty or indemnity executed
in connection with the foregoing, and to enforce this Agreement. The
“Obligations” specifically include, but are not limited to, all indebtedness of
Borrower to Bank under the Credit Facilities, and all advances made by Bank to
or for the benefit of Borrower thereunder. The “Obligations” also specifically
include all Insolvency Obligations and all Surrendered Payments.. Unless
Borrower or any other Obligated Party shall have otherwise agreed in writing,
for the purposes of this Agreement, “Obligations” shall not include “consumer
credit” subject to the disclosure requirements of the Federal Truth in Lending
Act or any regulations promulgated thereunder.

“Rate
Management Agreement” means any rate lock agreement or interest rate
protection agreement (such as any interest rate swap agreement, International
Swaps and Derivatives Association, Inc. Master 

 2
 

Agreement,
or similar agreement or arrangements now existing or hereafter entered into by
Borrower or any other Obligated Party and Bank in connection with any Credit
Facility to hedge the risk of variable rate interest volatility or fluctuations
in interest rates as any such agreement or arrangement may be modified,
supplemented and in effect from time to time).

“Surrendered
Payments” means, collectively, the amount of any payments made to Bank or
any other party on behalf of Borrower or any other Obligated Party (including
payments resulting from liquidation of collateral) which are recovered from the
Bank by a trustee, receiver, creditor, or other party pursuant to applicable
federal or state law.

1.             Assignment and Grant of
Security. For
the purpose of securing payment and performance of the Obligations, including
the prompt payment and performance of all obligations and indebtedness of
Borrower to Bank under the Loan Documents, and all renewals, extensions,
modifications, amendments, and/or supplements thereto, in such order of
priority as Bank may determine in its sole and absolute discretion, the
Obligated Parties each hereby irrevocably and unconditionally assign, grant,
pledge, transfer, and set over to Bank, and there is hereby created a security
interest in favor of Bank, in and to all of each Obligated Party’s right, title,
and interest in, to, and under all of the following, whether now or hereafter
existing, or now owned or hereafter acquired (all or any part of such property,
or any interest in all or any part of it, as the context may require, the
“Collateral”):

1.1           All
assets of each such Obligated Party, including all personal and fixture
property of every kind and nature including but not limited to those
specifically described below.

1.2           All
of the following, whether now owned or hereafter acquired by each such Obligated
Party: accounts (including health-care-insurance receivables) and other rights
of such Obligated Party to the payment of money no matter how evidenced,
including but not limited to accounts receivable, pledges receivable, grants
receivable, capital campaign receivables, and any other receivables, contract
rights, instruments, documents, promissory notes, certificates of deposit,
chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), supporting obligations, and general intangibles of every nature, all
permits, regulatory approvals, copyrights, copyright applications, patents,
trademarks, trademark applications, service marks, trade names, software, symbols,
mask works, engineering drawings, customer lists, goodwill, licenses, permits,
all agreements of any kind or nature by which such Obligated Party possesses,
uses, or has authority to possess or use property (whether tangible or
intangible) of others or others possess, use, or have authority to possess or
use property (whether tangible or intangible) of such Obligated Party, all
recorded data of any kind or nature (regardless of the medium of recording)
including but not limited to all software, writings, plans, specifications, and
schematics, and all other intellectual property owned by such Obligated Party
or used in such Obligated Party’s business.

1.3           All
fixed assets, machinery, furniture, fixtures, and other equipment of every type
now owned or hereafter acquired by each such Obligated Party.

1.4           All
inventory now owned or hereafter acquired by each such Obligated Party,
including, without limitation, all raw materials, work in process, materials
used or consumed in such Obligated Party’s business, finished goods, and
supplies.

1.5           All other property of each such Obligated
Party now or hereafter in the possession, custody, or control of Bank,
including, without limitation, all deposit accounts of each such Obligated
Party with Bank, and all property of each such Obligated Party in which Bank
now has or hereafter acquires a security interest.

 3
 

1.6           All
investment property, including all investment securities and investment
securities accounts (each, and “ISA”), now owned or hereafter acquired,
together with all assets and investment of any kind or nature now or hereafter
held in each ISA, including cash, certificated or uncertificated securities,
notes, instruments, documents, general intangibles, and commercial paper,
together with (a) all new substituted and additional documents, instruments,
and general intangibles issued with respect thereto, (b) all voting and rights
to and interest in all cash, non-cash dividends and all other property now or
hereafter distributable on account of or receivable with respect thereto, (c)
interest thereon, stock and subscription rights; dividends and dividend rights;
and new securities or other property such Obligated Party receives in
connection therewith, which such Obligated Party agrees to deliver to the Bank
immediately, and (d) all proceeds thereof, including, without limitation,
proceeds consisting of cash, dividends (including dividends consisting of
stock), stock splits, distributions, interest, certificated or uncertificated
securities, notes, instruments, documents, general intangibles, commercial
paper, and any other earnings of whatever nature.

1.7           All tort claims and insurance claims and
proceeds, including commercial tort claims.

1.8           All
software embedded within or used in connection with any of the above-described
property.

1.9           All
negotiable and nonnegotiable documents of title now owned or hereafter acquired
by each such Obligated Party covering any of the above-described property.

1.10         All
rights under contracts of insurance now owned or hereafter acquired by each
such Obligated Party covering any of the above-described property.

1.11 All books and records now owned or hereafter
acquired by each such Obligated Party pertaining to any of the above-described
property, including but not limited to any computer-readable memory and any
computer hardware or software (including embedded software) necessary to
process such memory (collectively, the “Books and Records”).

1.12         All
products, rents, and profits now owned or hereafter acquired by each such
Obligated Party of any of the above-described property.

1.13         All
cash and non-cash proceeds of, additions and accretions to, substitutions and
replacements for, and changes in any of the above-described property
(collectively, “Proceeds”), including without limitation (i) all interest and
dividends earned on the Proceeds; (ii) all monies and other tangible or
intangible property received upon a sale or other disposition of any of the
Proceeds; (iii) all rights to payment in connection with any cause of action
with respect to any Proceeds and all proceeds of any voluntary or involuntary
disposition or claim respecting any of the foregoing (arising out of any
judgment or award, or otherwise arising) and (iv) all goods, documents, general
intangibles, chattel paper and accounts, wherever located, acquired with cash
proceeds of any of the foregoing or its proceeds, and all supporting
obligations ancillary to or arising in any way in connection with any of the
above-described property.

2.                                 Further Assurances;
Authorization to File Financing Statements; Attorney-in-Fact.

2.1           Further Assurances. Each Obligated Party agrees that, from
time to time, at its own expense, it will:

(a)           Protect and defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein, and preserve and
protect Bank’s security interest in the Collateral.

 4
 

(b)           Promptly execute and deliver to Bank all instruments and documents, and
take all further action necessary or desirable, as Bank may reasonably request
to (i) correct any defect, error, or omission which may be discovered in the
contents, execution, or acknowledgment of this Agreement; (ii) continue,
perfect, or protect any security interest granted or purported to be granted
hereby, and (iii) enable Bank to exercise and enforce any of its rights and
remedies hereunder with respect to any Collateral. Such actions may include but
not be limited to executing, authenticating, authorizing, acknowledging,
delivering, procuring, and recording and/or filing such further documents
(including, without limitation, further security agreements, financing
statements, financing statement amendments, and continuation statements), and
doing such further acts as may be necessary, desirable, or proper to (A) carry
out more effectively the purposes of this Agreement or (B) more fully identify
and subject to the liens and security interests hereof any property intended to
be covered hereby (including specifically, but without limitation, any
renewals, additions, substitutions, or replacements, of or to the Collateral),
(C) protect the lien or the security interest hereunder against the rights or
interests of third persons, and/or (D) enable Bank to exercise and enforce any
of its rights and remedies hereunder with respect to any Collateral.

(c)           Permit
Bank’s representatives to inspect and make copies of all Books and Records
relating to the Collateral, wherever such Books and Records are located, and to
conduct an audit relating to the Collateral at any reasonable time or times.

(d)           Provide,
promptly on request of Bank, such certificates, documents, reports,
information, affidavits, and other instruments to Bank, and do such further
acts as may be necessary, desirable, or proper in the reasonable determination
of Bank, to enable Bank to comply with the requirements or requests of any
agency having jurisdiction over Bank, and/or any examiners of such agencies,
with respect to the Obligations, Borrower, each other Obligated Party, or the
Collateral.

2.2          Authorization to File
Financing Statements. Each
Obligated Party hereby irrevocably authorizes Bank at any time, and from time
to time, to file in any Uniform Commercial Code jurisdiction, any initial
financing statements, amendments thereto, and continuation statements with or
without signature of such Obligated Party as authorized by applicable law, as
applicable to the Collateral. Except to the extent expressly prohibited by
applicable law, a carbon, photographic, facsimile, or other reproduction of
this Agreement or any financing statement shall be sufficient as a financing
statement. For purposes of such filings, each Obligated Party agrees to furnish
any information requested by Bank promptly upon request by Bank. Each Obligated
Party also ratifies its authorization for Bank to have filed any like initial
financing statements, amendments thereto, or continuation statements if filed
prior to the date of this Agreement.

2.3          Attorney-in-Fact;
Exercise of Rights. Each
Obligated Party hereby irrevocably constitutes and appoints Bank, including any
officer or agent of Bank, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Obligated Party, or in such Obligated Party’s own name, to
execute any such documents and to otherwise carry out the purposes of this
Agreement, to the extent that such Obligated Party’s authorization above is not
sufficient. To the extent not expressly prohibited by law, each Obligated Party
hereby ratifies and affirms all acts said attorneys-in-fact shall lawfully do,
have done in the past or cause to be done in the future by virtue hereof. This
power of attorney is a power coupled with an interest and shall be irrevocable.
Additionally, effective upon the occurrence of a Event of Default under this
Agreement, each Obligated Party hereby irrevocably appoints Bank as its
attorney-in-fact, to demand, receive, and enforce such Obligated Party’s rights
with respect to the Collateral, including the protection thereof, and to give appropriate
receipts, releases, and satisfactions for and on behalf of, and in the name of,
such Obligated Party. Such powers are deemed to be coupled with an interest,
and are therefore irrevocable. Any third party may rely on representations of
Bank that an Event of Default exists hereunder or that the power of attorney
hereby granted by each Obligated Party to Bank is effective, without further
inquiry. In addition 

 5
 

to
the foregoing facilitate Bank’s exercise of the rights and remedies set forth
herein, each Obligated Party authorizes Bank to (a) enter any premises where
any Books or Records relating to the Collateral may be located, at reasonable
times and following reasonable notice, for the purpose of inspecting, and/or
copying any documents, files, and records relating to the Collateral, and to
use such supplies and space of such Obligated Party at its places of business
as may be reasonably necessary to administer and control the Collateral or the
handling of collections and realizations thereon, (b) give notices to and to
communicate with any party in possession or control of any of the Collateral
with respect to such Collateral, and (c) take all steps and to institute (in
Bank’s name or such Obligated Party’s name) all actions and proceedings deemed
necessary or advisable by Bank to effect the collection or realization upon any
of the Collateral.

3.           Obligated Party’s
Representations and Warranties. Each
Obligated Party promises that each representation and warranty set forth below
is and will be true, accurate, and correct:

3.1           Authority; Enforceability. Each Obligated Party’s exact legal name
and correct organizational identification number is correctly set forth in the
introductory paragraph of this Agreement. Each Obligated Party has complied
with any and all laws and regulations concerning its organization, existence,
and the transaction of its business. Each Obligated Party has the right, power,
and authority to make this Agreement and to grant the security interests
granted hereunder. When fully executed, this Agreement will create a valid and
enforceable first-priority security
interest in the Collateral, excepting the Approved Existing Lien Assets, which
are subject only to the Approved Existing Liens, and except to the extent
previously disclosed in writing to Bank.

3.2           No Violation; Compliance With Law. The execution and delivery of this
Agreement and performance by each Obligated Party of its obligations hereunder
will not result in a default under any other material agreement to which such
Obligated Party is a party. To the best of each Obligated Party’s knowledge and
belief, such Obligated Party is in full compliance with all applicable federal,
state, and local statutes, rules, and regulations pertaining to the Collateral.

3.3           No Consent of Action Required. To the best of each Obligated Party’s
knowledge and belief, no authorization, consent, approval, other action by,
notice to, or filing with, any governmental authority, regulatory body, or any
other person or entity is required for the execution of this Agreement or the
grant or perfection of the security interests granted herein, except any
written consent attached hereto or otherwise previously provided by such
Obligated Party to Bank. There exist no restrictions on each Obligated Party’s
ability to pledge and assign such Collateral to Bank by virtue of any
arrangement or agreement with any other third party.

3.4           No Other Pledge. Except as previously disclosed in writing
to Bank, and specifically excepting the Approved Existing Liens on the Approved
Existing Lien Assets, the Obligated Parties are collectively the sole legal and
equitable owners and holders of all right, title, and interest in and to all of
the Collateral, free and clear of any liens, encumbrances, or interests of
third parties, other than those in favor of Bank, specifically allowed pursuant
to the terms of the Loan Documents, or otherwise agreed to in writing by Bank.
The Obligated Parties have not pledged or assigned any of its right, title, or
interest in or to all or any portion of the Collateral to any other person or
entity, except for the Approved Existing Liens on the Approved Existing Lien
Assets.

3.5           Use of Secured Obligations. The Obligations, including all loans secured
hereby, are solely for business and/or investment purposes, and are not
intended for personal, family, household, or agricultural purposes. All loans
secured hereby are considered and construed for all purposes as commercial
loans. The proceeds of the Obligations shall be used for commercial purposes.

 6
 

3.6           Collateral Attributes. Except as previously disclosed in writing
to Bank, (i) none of the account debtors or other persons obligated on any of
the Collateral is a governmental authority subject to the Federal Assignment of
Claims Act or any similar federal, state, or local law, rule, or regulation
with respect to such Collateral, and (ii) to the best of each Obligated Group
Party’s knowledge and belief, each Obligated Group Party holds no commercial
tort claims. To the best of each Obligated Group Party’s knowledge and belief,
except as otherwise disclosed to Bank in writing prior to the execution of this
Agreement, each of the presently existing Collateral Documents (as such term is
defined below) is genuine, valid, in full force and effect, and enforceable
against all applicable parties in accordance with its terms (except to the
extent that enforceability is limited by bankruptcy, insolvency, or other laws
affecting the enforcement of creditors’ rights generally).

3.7           Obligated Party’s Location and Information. Each Obligated Group Party is an
organization of the type and (if not an unregistered entity) is incorporated in
or organized under the laws of the state specified in the introductory
paragraph of this Agreement. Each Obligated Group Party’s principal place of
business and chief executive office, and the place where such Obligated Group
Party keeps its books and records, has for the preceding four (4) months (or,
if less, the entire period of the existence of such Obligated Group Party) been
and will continue to be (unless such Obligated Group Party notifies Bank of any
change in writing at least thirty (30) days prior to the date of such change)
at the address or addresses specified on the signature page of this Agreement,
and (d) if such Obligated Group Party is an unregistered entity (including,
without limitation, a general partnership) it is organized under the laws of
the state specified in the introductory paragraph of this Agreement.

4.           Obligated Party’s Covenants. Each Obligated Group Party covenants and
warrants that unless compliance is waived by Bank in writing:

4.1           Collateral Preservation. Each Obligated Group Party will properly
preserve the Collateral, keep the Collateral in good order and repair, keep
accurate Books and Records, protect and defend the Collateral against all
claims and demands of all persons at any time claiming the same or any interest
therein, and preserve and protect Bank’s security interest in the Collateral.

4.2           No Liens. Each Obligated Group Party has not granted
and will not grant any security interest in any of the Collateral except to
Bank and except for any other security interests specifically allowed pursuant
to the terms of Loan Documents or otherwise agreed to in writing by Bank, and
will keep the Collateral free of all liens, claims, security interests, and
encumbrances of any kind or nature, except the security interest of Bank and
other security interests specifically allowed pursuant to the terms of Loan
Documents or otherwise agreed to in writing by Bank.

4.3           Restriction on Assignment or Transfer. Each Obligated Group Party will not sell,
convey, lease, assign, encumber, pledge, or otherwise transfer or dispose of
all or any portion of the Collateral, or any interest therein, whether such
transfer is voluntary, involuntary, by operation of law, or otherwise, except
for (a) those transfers of Collateral, if any, specifically allowed pursuant to
the terms of Loan Documents or otherwise agreed to in writing by Bank, and (b)
so long as no Event of Default has occurred and is continuing hereunder,
inventory sold or supplies used in the ordinary course of such Obligated Group
Party’s business. The foregoing restriction on transfer specifically includes
transfers to any trust. Any attempted transfer of any Collateral, or any
interest therein, which is not specifically authorized pursuant to the terms of
this Agreement or otherwise consented to by Bank in writing shall be null and
void and of no force or effect for any purpose whatsoever.

4.4           Collateral Documents; Actions Without Consent. Each Obligated Group Party will not (i)
amend, supplement, terminate, or otherwise modify any contract or other
document or instrument now or hereafter included in the Collateral (each, a
“Collateral Document” and collectively, the “Collateral Documents”); (ii)
release, relinquish, or waive any right, or grant any approval or consent, with
respect to

 7
 

any Collateral Document; (iii) enter into any new agreement with respect
to any Collateral; or (iv) take any other action with respect to any Collateral
which is inconsistent with this Agreement or which could impair Bank’s
interests hereunder, except as may be specifically allowed pursuant to the
terms of Loan Documents or otherwise agreed to in writing by Bank. Any such
termination, modification, waiver, approval, or other action taken which is not
specifically authorized pursuant to the terms of this Agreement shall, at
Bank’s option, be null and void and of no force or effect for any purpose
whatsoever.

4.5        Defense of Proceedings;
Payments of Taxes, Assessments, and Charges. Each Obligated Group Party shall, at such
Obligated Group Party’s sole expense, defend all actions, proceedings and other
claims affecting the Collateral owned by it, including without limitation
actions, proceedings, and claims challenging such Obligated Group Party’s title
to the Collateral or the validity or priority of Bank’s rights hereunder. Each
Obligated Group Party shall promptly pay all taxes and other governmental
charges, and all license fees, and other public and private charges, levied or
assessed upon or against any of the Collateral owned by it (if any) or upon or
against the creation, perfection or continuance of the Bank’s security interest
created hereunder, as well as all other claims of any kind against or with
respect to the Collateral, except to the extent (a) such taxes, charges or
claims are being contested in good faith by appropriate proceedings, (b) such
proceedings do not involve any material danger of the sale, forfeiture or loss
of any of the Collateral or any interest therein, and (c) such taxes, charges
or claims are adequately reserved against on such Obligated Group Party’s books
in accordance with generally accepted accounting principles.

4.6        Location and
Identification. Each
Obligated Group Party will not cause or permit any change to be made in (a) its
name, identity, or corporate, partnership, limited liability company, or other
entity structure, (b) its jurisdiction on organization (c) its organizational
identification number, (d) its place of business or, if more than one, its
chief executive office, or (e) its mailing address, or (f) any change in the
location of any Collateral, including the Books and Records, unless such
Obligated Group Party shall have notified Bank in writing of such change at
least thirty (30) days prior to the effective date of such change, and shall
have first taken all action required by Bank for the purpose of further
perfecting or protecting the lien and security interest of Bank in the
Collateral. If such Obligated Group Party does not have an organizational
identification number and later obtains one, such Obligated Group Party shall
promptly notify Bank of such organizational identification number.

4.7         Books and Records;
Collateral. Each
Obligated Group Party will keep accurate and complete Books and Records with
respect to the Collateral owned by it, and shall, if required by Bank from time
to time, promptly deliver reports to Bank with respect to the Collateral in
form and substance satisfactory to Bank in its sole and absolute discretion.
Each Obligated Group Party will permit Bank’s representatives to inspect the
Collateral owned by it and/or make copies of, and /or extracts from, all Books
and Records, wherever such Books and Records are located, and to conduct an
audit relating to the Collateral owned by it at any reasonable time or times.
Upon the request of Bank, each Obligated Group Party will deliver to Bank (a)
copies of or extracts from the Books and Records, and (b) information on any matters
affecting the Collateral owned by it.

4.8        Compliance With Law;
Notice of Material Events. Each Obligated Group Party will not use
any of the Collateral in violation of any applicable law or regulation, or in
violation of any policy of insurance thereon. Each Obligated Group Party will
promptly notify Bank in writing of any event which affects the value of the
Collateral, the ability of such Obligated Group Party or Bank to dispose of the
Collateral, or the rights and remedies of Bank in relation thereto, including
but not limited to, the levy of any legal process against any Collateral and
the adoption of any marketing order, arrangement, or procedure affecting the
Collateral, whether governmental or otherwise.

4.9        Attachment. Each Obligated Group Party will not attach
any Collateral to any real property or fixture in a manner which might cause
such Collateral to become a part thereof unless such Obligated

 8
 

Group Party first obtains the written
consent of any owner, holder of any lien on the real property or fixture, or
other person having an interest in such property to the removal by Bank of the
Collateral from such real property or fixture. Such written consent shall be in
form and substance acceptable to Bank and shall provide that Bank has no liability
to such owner, holder of any lien, or any other person.

4.10         Insurance. Each Obligated Group Party will maintain and
keep in force insurance covering Collateral owned by it designated by Bank
against fire and extended coverages. Such insurance shall require losses to be
paid on a replacement cost basis, be issued by insurance companies acceptable
to Bank and include Bank’s standard form Certification and Material Change
Endorsement and Commodity Loss Payable Endorsement, or such other material
change and/or loss payable endorsements in favor of Bank requested by Bank, all
in a form and substance acceptable to Bank in its sole and absolute discretion.

4.11         Delivery of Documents;
Collection. If any Collateral is
or becomes the subject of any registration certificate or negotiable document
of title including any warehouse receipt or bill of lading, the applicable
Obligated Group Party shall immediately deliver such document to Bank. If
requested by Bank, each Obligated Group Party will deliver to Bank any instruments,
certificates of deposit, or chattel paper. If requested by Bank, each Obligated
Group Party will segregate all collections and proceeds of the Collateral so
that they are capable of identification and deliver daily such collections and
proceeds to Bank in kind, and/or direct all account debtors to forward all
payments and proceeds of the Collateral to a post office box under Bank’s
exclusive control. To the extent that any of the Collateral consists of
accounts, promissory notes, instruments, or other items for which payments are
due or coming due, unless otherwise agreed in writing by Bank, until Bank
exercises its rights to make collection, the applicable Obligated Group Party
will diligently collect such Collateral.

5.           Obligations of Bank with Respect
to Collateral. Neither
Bank’s acceptance of the assignment and security interests granted hereunder
nor any exercise by Bank of its rights and remedies hereunder shall be deemed
to be an assumption by Bank of any obligation or liability of any Obligated
Group Party with respect to any Collateral or under the terms of any Collateral
Document, and each Obligated Group Party shall indemnify, defend, and hold Bank
harmless for, from, and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations, and costs or expenses, including
litigation costs and reasonable attorneys’ fees, arising from or in any way
connected with any such obligation or liability. Bank’s obligations with
respect to Collateral in its possession shall be limited to the duty to
exercise reasonable care in the custody and preservation of such Collateral; provided,
however,  that Bank shall have no duty to take any steps to
preserve the rights of any Obligated Group Party against other persons, or to
initiate any action to protect any Collateral. Upon any transfer by Bank of any
or all of the Obligations, Bank may transfer any or all of the Collateral and
shall thereupon be fully discharged of liability and responsibility with
respect to the Obligations and/or Collateral so transferred; but Bank shall
retain all applicable rights and interest hereunder with respect to any
Obligations and/or Collateral not then transferred.

6.           Defaults and Remedies.

6.1           Events of Default. Each Obligated Group Party will be in default
under this Agreement upon the occurrence of any one or more of the following
events (each an “Event of Default”):

(a)           A default or Event of Default occurs under any of the Loan Documents (as
defined in the applicable document, subject to applicable notice and cure
periods).

(b)           Any Obligated Group Party fails to comply with any of the terms and
conditions of this Agreement within ten (10) days after Bank’s written demand.

 9
 

(c)           Any
representation or warranty made or given by any Obligated Group Party in this
Agreement proves to be false or misleading in any material respect.

(d)           Any
involuntary lien of any kind or character attaches to any Collateral.

(e)           Any
Obligated Group Party becomes insolvent or the subject of any bankruptcy or
other voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships (an “Insolvency Proceeding”), or
any Obligated Group Party consents to the appointment or taking of possession
by a receiver (or similar official) of any Obligated Group Party, or its
property, or any Obligated Group Party makes an assignment for the benefit of
creditors; provided, however, that an involuntary Insolvency
Proceeding shall not be considered an Event of Default hereunder if it is
either (i) consented to in writing by Bank, or (ii) has been dismissed within
ninety (90) days of the filing thereof.

6.2          Remedies. If an Event of Default occurs under this
Agreement, Bank may exercise any right or remedy available at law or in equity
or by statute, including but not limited to all rights, powers and remedies of
an owner and as a secured party under the UCC, and all of Bank’s rights and
remedies shall be cumulative. Bank’s rights and remedies, each of which may be
exercised with or without further notice to any Obligated Group Party, shall
specifically include, without limitation, the right to: (a) exercise all rights
and remedies available upon the occurrence of an Event of Default under any
Loan Document, including without limitation the right to declare any and/or all
Obligations immediately due and payable and to foreclose Bank’s security
interests in any and/or all Collateral by any means allowed by law, with or
without judicial process; (b) notify any person obligated with respect to any
Collateral that the same has been assigned to Bank and that all payments
thereon are to be made to Bank, and (c) renew, extend, amend, or otherwise
modify any Collateral Document (subject to any required consents of third
parties required pursuant to the terms thereof) and to otherwise exercise
rights and remedies and act with respect to any Collateral as if it were the
owner thereof.

Without limiting the foregoing, Bank’s rights after
an Event of Default hereunder specifically include it’s right, at its option
to: (i) declare any Obligations, including any Credit Facility, immediately due
and payable, without notice or demand, (ii) enforce the security interest given
hereunder pursuant to the UCC and/or any other applicable law, (iii) enforce
the security interest of Bank, or exercise any right of setoff, in any deposit
account of any Obligated Group Party by applying such account to the
Obligations in such order and manner as Bank shall determine, (iv) grant
extensions and compromise or settle claims with respect to the Collateral for
less than face value, all without prior notice to any Obligated Group Party,
(v) have a receiver appointed by any court of competent jurisdiction to take
possession of all or any portion of the Collateral, and/or (vi) take such
measures as Bank may deem necessary or advisable to take possession of, hold,
preserve, process, assemble, insure, prepare for sale or lease, market for sale
or lease, sell or lease, or otherwise dispose of any Collateral (each a
“Collateral Disposition”).

6.3          Other Rights of Bank.

(a)          The
remedies provided herein in favor of Bank are not exclusive, but are cumulative
and in addition to all other remedies in favor of Bank existing under the Loan
Documents, and at law or in equity. Without limiting the foregoing, Bank may
exercise its rights with respect to a portion of the Collateral without
exercising its rights with respect to any other portion of the Collateral, and
may exercise any of its rights under this Agreement without any obligation to
enforce any of its rights to any other security for the Obligations.

(b)         Bank may comply with any applicable federal, state, or local law or
regulatory requirements in connection with a disposition of the Collateral, and
such compliance will not be considered to affect adversely the commercial
reasonableness of any sale of the Collateral. Bank may sell the Collateral
without giving any warranties as to the Collateral, and specifically disclaim
any

 10
 

warranties
of title, merchantability, fitness for a specific purpose or the like, and this
procedure will not be considered to affect adversely the commercial
reasonableness of any sale of the. Each Obligated Group Party acknowledges that
a private sale of the Collateral may result in less proceeds than a public
sale. Each Obligated Group Party acknowledges that the Collateral may be sold
at a loss to such Obligated Group Party, and that, in such event, Bank shall
have no liability or responsibility to such Obligated Group Party or any other
Obligated Group Party for such loss.

(c)             Upon
any public or private sale of all or any portion of the Collateral, (i) Bank
may bid for and purchase the Collateral being sold, and, upon compliance with
the terms of sale, may hold, retain, possess, and dispose of such Collateral in
its own absolute right without further accountability, and (i) all rights,
title, interests, claims, and demands whatsoever, either at law or in equity,
of any Obligated Group Party of, in, and to the property so sold will be
divested; such sale will be a perpetual bar both at law and in equity against
each Obligated Group Party and its respective successors and assigns. Each
Obligated Group Party shall make and deliver to the purchaser or purchasers a
good and sufficient deed, certificate, bill of sale, and instrument of assignment
and transfer of the Collateral sold. To the extent it may do so lawfully, Each
Obligated Group Party agrees not to insist upon, plead, claim, or take the
benefit or advantage of, at any time, or in any manner whatsoever, any
appraisement, valuation, stay, extension, or redemption laws, or any law
permitting them to direct the order in which the Collateral or any portion
thereof will be sold, now or at any time hereafter in force, which may delay,
prevent, or otherwise affect the performance or enforcement of the this
Agreement, and each Obligated Group Party hereby expressly waives all benefit
or advantage of any such laws, and covenant that it will not hinder, delay, or
impede the execution of any power granted or delegated to Bank in this
Agreement, but will suffer and permit the execution of every such power as
though no such laws were in force.

(d)           Following
an Event of Default, Bank is expressly granted the right, at its option, to
transfer the Collateral, or any part thereof, to itself, or its nominee, and to
receive the payments, collections, monies, income, proceeds, attributable or
accruing thereto, and to hold same as security for the Obligations, or to apply
same to the Obligations secured by this Agreement in such order and manner as
Bank shall determine in its sole and absolute discretion. Except to the extent
expressly prohibited by law, the right of Bank to take possession of the
Collateral following an Event of Default hereunder may be exercised without
resort to any court proceeding or judicial process, and without any hearing,
whatsoever. Each Obligated Group Party expressly waives any and all rights (i)
with regard to judicial process or hearing prior to the exercise of Bank’s
right to take possession and control of the Collateral after an Event of
Default, and (ii) to marshalling of assets, including such right with respect
to the Collateral.

(e)           Each
Obligated Group Party agrees that Bank may at its option at any time, whether
or not any Obligated Group Party is in default, notify any account debtors, any
buyers of the Collateral, or any other persons of Bank’s interest in the
Collateral. Bank is expressly granted the right, at its option, following an
Event of Default, to demand and collect any payments and proceeds of the
Collateral. In connection with the foregoing, each Obligated Group Party
irrevocably authorizes Bank, and irrevocably appoints Bank as such Obligated
Group Party’s attorney-in-fact, with full power of substitution, to endorse or
sign such Obligated Group Party’s name on all checks, drafts, collections,
receipts, and other documents, and to take possession of and open the mail
addressed to such Obligated Group Party and remove therefrom any payments and
proceeds of the Collateral, such appointment being a power coupled with an
interest.

(f)            In
connection with any Collateral Disposition, Bank may (A) require the applicable
Obligated Group Party to assemble all of any portion of the Collateral and make
it available to Bank at a place designated by Bank, and/or enter upon the
property where any such Collateral is located and take possession of such
Collateral, and use such property (including any buildings and facilities) and
any of such Obligated Group Party ‘s equipment, if Bank deems such use
necessary or advisable for or in connection with such Collateral Disposition,
and/or (B) use or transfer, without any additional consideration to any

 11
 

Obligated
Group Party, any of such Obligated Group Party’s rights and interests in any
Intellectual Property now owned or hereafter acquired by such Obligated Group
Party, including, but not limited to, all trade secrets, computer software,
service marks, trademarks, trade names, trade styles, copyrights, patents,
applications for any of the foregoing, customer lists, working drawings, instructional
manuals, and rights in processes for technical manufacturing, packaging and
labeling in which such Obligated Group Party has any right or interest, whether
by ownership, license, contract or otherwise, if Bank deems such use or
transfer necessary or advisable for or in connection with such Collateral
Disposition. Each Obligated Group Party hereby irrevocably constitutes and
appoints Bank as such Obligated Group Party’s attorney-in-fact, with full power
of substitution, to perform all acts and execute all documents in connection
with any Collateral Disposition, such appointment being a power coupled with an
interest.

(g)           Each Obligated Group Party agrees to take all steps necessary to avoid
the violation of any current and future securities laws, and consents to any
steps Bank takes to avoid violation of the same. Each Obligated Group Party
further agrees to enter into any amendments hereto that Bank may reasonably
request to avoid the violation of such laws. Each Obligated Group Party
recognizes that, due to certain prohibitions contained in the Securities Act of
1933, as amended, or other applicable securities laws, Bank may, with respect
to any securities, consider it advisable to resort to one or more private sales
to a restricted group of purchasers who will agree to acquire any securities
for their own accounts for investment and not to engage in a distribution of
resale thereof, and that private sales so made may be at prices and on other
terms less favorable to the seller than if such securities were sold at public
sale. Each Obligated Group Party acknowledges that the price received for the
purchase of such Collateral may be substantially lower than such Obligated
Group Party might have negotiated under other circumstances, and each Obligated
Group Party agrees that such procedures are commercially reasonable. If a
deficiency remains due, the Borrower or applicable Obligated Group Party, as
the case may be, must pay the same promptly to Bank.

6.4           Setoff. As additional security for the Obligations,
including the payment and performance of all obligations of Borrower under the
Loan Documents, each Obligated Group Party hereby grants Bank a security
interest in, a lien on, and an express contractual right to set off against
each account (including all deposit accounts), including all depository account
balances, cash, and any other property of such Obligated Group Party, now or
hereafter in the possession of Bank and the right to refuse to allow
withdrawals from any account. Bank may, at any time upon the occurrence of any
default or Event of Default, or an event that, with notice or the passage of
time, or both, could become an Event of Default, under this Agreement or any
other Loan Document, setoff against any amounts outstanding under the Obligations,
whether or not any of the Obligations are then due or have been accelerated,
all without any advance or contemporaneous notice of demand of any kind to any
Obligated Group Party, such notice and demand being expressly waived.

6.5           Surrendered Payments. In the event that Bank makes any Surrendered
Payment, including pursuant to a negotiated settlement, the Surrendered
Payments, the Surrendered Payments shall immediately and automatically without
any further action required on behalf of Bank or any other party, be reinstated
as Obligations, regardless of whether this Agreement has been terminated,
cancelled, or released pursuant to its terms or otherwise and regardless of
whether Bank has surrendered, terminated, cancelled, or released this Agreement
prior to returning any Surrendered Payments

7.           Miscellaneous Provisions.

7.1            No Waiver; Consents. Each waiver by
Bank shall be in writing, and no waiver may be construed as a continuing
waiver. No waiver will be implied from Bank’s delay in exercising or failure to
exercise any right or remedy against any party or any security. Bank’s consent
to any act or omission by any Obligated Group Party may not be construed as a
consent to any other or subsequent act or omission or as a waiver of the
requirement for Bank’s consent to be obtained in any future or other instance.

 12
 

7.2          Purpose and Effect of
Bank Approval. Bank’s
approval of any matter in connection with this Agreement is for the sole
purpose of protecting Bank’s security and rights. No such approval will result
in a waiver of any default of any Obligated Group Party. In no event may Bank’s
approval be a representation of any kind with regard to the matter being
approved.

7.3          Notices. All notices given under this Agreement
shall be in writing and be given by personal delivery, overnight receipted
courier (such as Airborne or Federal Express) or by registered or certified
United States mail, postage prepaid, sent to the party at its address appearing
below its signature. Notices shall be effective upon the first to occur of
receipt, when proper delivery is refused, or the expiration of forty-eight (48)
hours after deposit in registered or certified United States mail as described
above. Addresses for notice may be changed by any party by notice to any other
party in accordance with this Section.

7.4          Actions. If any Obligated Group Party fails to
perform any agreement contained herein, Bank may itself perform, or cause the
performance of, such agreement, and the reasonable expenses of Bank incurred in
connection therewith shall be payable by the applicable non-performing party.
Bank also shall have the right, but not the obligation, to commence, appear in,
and defend any action or proceeding that might affect its security hereunder.
The applicable Obligated Group Party shall pay promptly on demand all of Bank’s
reasonable out-of-pocket costs, expenses and legal fees and expenses of Bank’s
counsel incurred in those actions or proceedings.

7.5          Dispute Resolution. Disputes under this Agreement shall be
resolved in the manner specified in the Loan Agreement.

7.6          Attorneys’ Fees. In any lawsuit or arbitration arising out
of or relating to this Agreement, the Loan Documents, or the Loans, 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 and each other applicable
Obligated Party 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 any Obligated Group
Party is obligated to pay or reimburse Bank for any attorneys’ fees, those fees
include the allocated costs for services of in-house counsel, to the extent not
prohibited by applicable law.

7.7          Governing Law. This Agreement shall be governed by and
construed according to the laws of the State of Arizona, without regards to the
choice of law rules of that state, except (a) to the extent that any of such
laws may now or hereafter be preempted by Federal law, and (a) as otherwise
required by mandatory provisions of law, and (c) to the extent that remedies
provided by the laws of any jurisdiction other than the such state are governed
by the laws of such other jurisdiction. Each Obligated Group Party consents to
the jurisdiction of any Federal or State court within such state, submits to
venue in such state, and 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, each Obligated Group Party hereby waives and
agrees not to assert by way of motion, defense, or otherwise in such suit,
action, or proceeding, any claim that (i) such Obligated Group Party 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.

7.8          Heirs, Successors and
Assigns. The
terms of this Agreement will bind and benefit the heirs, legal representatives,
successors and assigns of the parties; provided, however, that no
Obligated Group Party may assign this Agreement, or assign or delegate any of
their rights or obligations, without the prior written consent of Bank in each
instance.

 13
 

7.9           Severability. The invalidity or unenforceability of any one
or more provisions of this Agreement in no way affects any other provision.

7.10         Interpretation. Whenever the context requires, all words
used in the singular will be construed to have been used in the plural, and
vice versa, and each gender will include any other gender. The captions of the
sections of this Agreement are for convenience only and do not define or limit
any terms or provisions. The word “include(s)” means “include(s), without
limitation,” and the word “including” means “including, but not limited to.” No
listing of specific instances, items or matters in any way limits the scope or
generality of any language of this Agreement.

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

7.12         Counterparts. This Agreement and any attached consents or
exhibits requiring signatures may be executed in counterparts, and all
counterparts constitute but one and the same document.

7.13          Language of Agreement. The
language of this Agreement will be construed as a whole according to its fair
meaning and not strictly for or against any party.

7.14         Exchange of Information. Each Obligated Group Party agrees that the
Bank may exchange or disclose financial information and other information about
Borrower and any other Obligated Party with or to any of Bank’s affiliates or
other related entities and with any party that acquires a participation or
other interest in all or part of any Credit Facility..

7.15         Survival. The representations, warranties,
acknowledgments, and agreements set forth herein shall survive the date of this
Agreement.

7.16         Time is of the Essence. Time is of the essence in the performance
of this Agreement, and each and every term thereof, by each Obligated Group
Party.

7.17         Relationship of Parties. This Agreement is intended to be and is
deemed for all purposes to constitute additional security granted to Bank for
the repayment of the Loan. The execution and delivery of this Agreement and the
enforcement of this Agreement by Bank does not alter or expand upon the debtor
and creditor relationship between any Obligated Group Party and Bank, and
nothing contained herein is to be construed to constitute Bank a partner of or
a joint venturer with any party.

7.18         Continuing Agreement. This is a continuing agreement and all the
rights, powers and remedies hereunder shall apply to all past, present, and
future Obligations of Borrower and the other Obligated Group Parties, including
those arising under successive transactions which shall either continue some or
all the Obligations, increase or decrease any of them, or from time to time
create new Obligations after all or any prior Obligations have been satisfied,
and notwithstanding the bankruptcy of any Obligated Group Party, or any other
event or proceeding affecting any Obligated Group Party.

7.19         Recitals; Exhibits. The Recitals to this Agreement set forth above
are true, complete, accurate, and correct, and such recitals are incorporated
hereby by reference. The exhibits to this Agreement are incorporated hereby by
reference.

7.20         Integration. This Agreement integrates all the terms and
conditions mentioned in or incidental to the subject matter contained herein,
supersede all oral negotiations and prior writings with

 14
 

respect
to such subject matter, and is intended by the parties as the final expression
of their agreement with respect to the terms and conditions set forth in
herein.

7.21          Patriot
Act Provisions. The
following notification is provided to each Obligated Group Party pursuant to
Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318 (as such
maybe amended or recodified from time to time, the “Patriot Act”):

(a)           Important Information About Procedures for
Opening a New Account. To
help the government 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 or entity that opens an
account, including any deposit account, treasury management account, loan,
other extension of credit, or other financial services product. Each Obligated
Group Party is hereby notified that when such party opens an account, including
but not limited to any deposit account or other account that may be required
pursuant to the terms of this Agreement, (i) if such party is not an
individual, Bank will ask for such party’s name, taxpayer identification
number, business address, and other information that will allow Bank to
identify such party, and may also ask to see such party’s legal organizational
documents or other identifying documents, and (ii) if such party is an
individual, Bank will ask for such party’s name, taxpayer identification
number, residential address, date of birth, and other information that will
allow Bank to identify Borrower, and may also ask to see such party’s driver’s
license or other identifying documents.

(b)           Government Regulation. Each Obligated Group Party shall not (a) be
or become subject at any time to any law, regulation, or list of any government
agency (including, without limitation, the U.S. Office of Foreign Asset Control
list) that prohibits or limits Bank from making any advance or extension of
credit to such party or from otherwise conducting business with such party, or
(b) fail to provide documentary and other evidence of such party’s identity as
may be requested by Bank at any time to enable Bank to verify such party’s
identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the Patriot Act.

IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

“BORROWER”

	
  THE INVENTURE GROUP, INC.,

  	
   

  	
  Address for notices to Borrower: 

  
	
  a Delaware
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
  The Inventure Group, Inc.

  
	
  By:

  	
     /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ 85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention: Steve Weinberger

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “OBLIGATED
  GROUP”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BN FOODS, INC., a Colorado corporation

  	
   

  	
  Address for notices to PBC:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BN Foods, Inc.

  
	
  By:

  	
     /s/
  Steve Weinberger

  	
   

  	
  c/o The Inventure Group, Inc.

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300

  
	
  Title:

  	
  CFO

  	
   

  	
  Phoenix, AZ 85018 

  
	
   

  	
   

  	
  Attention: Steve Weinberger

  
						

 

 15
 

(Remainder of page intentionally left blank.

See the following page for additional Obligated Group signatories.)

 16
 

 

	
  BOULDER NATURAL FOODS, INC., 

  	
   

  	
   

  
	
  an Arizona corporation

  	
   

  	
  Address
  for notices to Boulder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Boulder Natural
  Foods, Inc. 

  
	
   

  	
   

  	
  c/o The Inventure Group, Inc. 

  
	
  By:

  	
      /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300 

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ 85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention: Steve Weinberger

  
	
   

  	
   

  	
   

  
	
  LA
  COMETA PROPERTIES, INC., an Arizona

  corporation

  	
   

  	
  Address
  for notices to La Cometa:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Poore Brothers -
  Bluffton, LLC 

  
	
   

  	
   

  	
  c/o The
  Inventure Group, Inc. 

  
	
  By:

  	
      /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300 

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ
  85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention:
  Steve Weinberger

  
	
   

  	
   

  	
   

  
	
  POORE
  BROTHERS - BLUFFTON, LLC, 

  	
   

  	
  Address
  for notices to PBC:

  
	
  a Delaware
  limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
  Poore Brothers -
  Bluffton, LLC 

  
	
   

  	
   

  	
  c/o The Inventure
  Group, Inc. 

  
	
  By:

  	
      /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300 

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ
  85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention:
  Steve Weinberger

  
	
   

  	
   

  	
   

  
	
  RADER
  FARMS ACQUISITION CORP., 

  	
   

  	
  Address
  for notices to Rader:

  
	
  a Delaware
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
  Poore Brothers -
  Bluffton, LLC 

  
	
   

  	
   

  	
  c/o The
  Inventure Group, Inc. 

  
	
  By:

  	
      /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300 

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ
  85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention:
  Steve Weinberger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TEJAS
  PB DISTRIBUTING, INC., 

  	
   

  	
  Address
  for notices to Tejas:

  
	
  an Arizona
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
  Tejas PB
  Distributing, Inc. 

  
	
   

  	
   

  	
  c/o The
  Inventure Group, Inc. 

  
	
  By:

  	
      /s/
  Steve Weinberger

  	
   

  	
  5050 N. 40TH Street, Suite 300 

  
	
  Name:

  	
  Steve
  Weinberger

  	
   

  	
  Phoenix, AZ
  85018

  
	
  Title:

  	
  CFO

  	
   

  	
  Attention:
  Steve Weinberger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  for notices to Bank:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S.
  Bank National Association

  
	
   

  	
   

  	
  101
  North First Avenue, Suite 1600 

  
	
   

  	
   

  	
  Phoenix,
  AZ 85003

  
	
   

  	
   

  	
  Attention:
  Commercial Banking

  
					

 

 17

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