Exhibit 10(i).5
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No Call/Coll Account Officer Initials
$500,000.00 08-30-2007 08-28-2009 1089921655 410 / 4 703
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
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Borrower: MorAmerica Capital Corporation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lender: Cedar Rapids Bank and Trust Company
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇, P.O. Box 789
Cedar Rapids, IA 52406-0789
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Principal Amount: $500,000.00 Initial Rate: 8.750% Date of Note: August 30, 2007
PROMISE TO PAY. MorAmerica Capital Corporation ("Borrower") promises to pay to
Cedar Rapids Bank and Trust Company ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Five Hundred Thousand & 00/100
Dollars ($500,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on August 28, 2009. In addition, Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning September 30, 2007, with all subsequent interest
payments to be due on the last day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to any
accrued unpaid interest; then to principal; and then to any late charges. The
annual interest rate for this Note is computed on a 365/360 basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
▇▇▇▇▇▇'s address shown above or at such other place as Lender may designate in
writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Wall Street
Journal Prime as published in The Wall Street Journal (the "Index"). The Index
is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the current
Index rate upon ▇▇▇▇▇▇▇▇'s request. The interest rate change will not occur more
often than each day. Borrower understands that Lender may make loans based on
other rates as well. The Index currently is 8.250% per annum. The interest rate
to be applied to the unpaid principal balance during this Note will be at a rate
of 0.500 percentage points over the Index, adjusted if necessary for any minimum
and maximum rate limitations described below, resulting in an initial rate of
8.750% per annum. NOTICE: Under no circumstances will the interest rate on this
Note be less than 6.000% per annum or more than the maximum rate allowed by
applicable law. Notwithstanding the above provisions, the maximum increase or
decrease in the interest rate at any one time on this loan will not exceed 1.000
percentage points.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by ▇▇▇▇▇▇ in
writing, relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation to continue to make payments
of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. ▇▇▇▇▇▇▇▇ agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
▇▇▇▇▇▇ may accept it without losing any of ▇▇▇▇▇▇'s rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: Cedar
Rapids Bank and Trust Company, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇, ▇.▇. Box 789 Cedar
Rapids, IA 52406-0789.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the interest rate on this Note shall be increased by adding a 3.000
percentage point margin ("Default Rate Margin"). The Default Rate Margin shall
also apply to each
PROMISSORY NOTE
Loan No.: 1089921655 (Continued) Page 2
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succeeding interest rate change that would have applied had there been no
default. However, in no event will the interest rate exceed the maximum interest
rate limitations under applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under
this Note.
Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower's property or
Borrower's ability to repay this Note or perform Borrower's obligations
under this Note or any of the related documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Insolvency. The dissolution or termination of ▇▇▇▇▇▇▇▇'s existence as a
going business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a
receiver for any part of ▇▇▇▇▇▇▇▇'s property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This
includes a garnishment of any of ▇▇▇▇▇▇▇▇'s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ written notice of
the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of
any of the indebtedness or any guarantor, endorser, surety, or
accommodation party dies or becomes incompetent, or revokes or disputes
the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note. In the event of a death, Lender, at its option,
may, but shall not be required to, permit the guarantor's estate to
assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of
Default.
Change In Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it
may be cured if Borrower, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within thirty
(30) days; or (2) if the cure requires more than thirty (30) days,
immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and
then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note, if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, ▇▇▇▇▇▇'s attorney's
reasonable fees
PROMISSORY NOTE
Loan No.: 1089921655 (Continued) Page 3
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and ▇▇▇▇▇▇'s reasonable legal expenses, whether or not there is a lawsuit,
including without limitation all attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), and appeals. If not prohibited by applicable law, ▇▇▇▇▇▇▇▇ also
will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either ▇▇▇▇▇▇ or Borrower against
the other.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender
and, to the extent not preempted by federal law, the laws of the State of Iowa
without regard to its conflicts of law provisions. This Note has been accepted
by ▇▇▇▇▇▇ in the State of Iowa.
CHOICE OF VENUE. If there is a lawsuit, ▇▇▇▇▇▇▇▇ agrees upon ▇▇▇▇▇▇'s request to
submit to the jurisdiction of the courts of Linn County, State of Iowa.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes ▇▇▇▇▇▇, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by Security Agreement,
Commercial Pledge Agreement, and Master Business Loan Agreement dated 8/30/07.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing by Borrower or by an
authorized person. All oral requests shall be confirmed in writing on the day of
the request, on forms acceptable to Lender. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to ▇▇▇▇▇▇'s
office shown above. ▇▇▇▇▇▇▇▇ agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by ▇▇▇▇▇▇'s internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (A) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (B) Borrower or any guarantor ceases
doing business or is insolvent; (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender; or (D) Borrower has applied funds provided pursuant
to this Note for purposes other than those authorized by Lender.
PURPOSE OF LOAN. The purpose of this loan is for: Working Capital.
MANDATORY PRINCIPAL REDUCTION. Borrower will be required to apply 80% of cash
proceeds realized from the sale or liquidation of any investments owned by the
Borrower to either of the Promissory Notes dated 8/30/07 as directed by the
Borrower.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon ▇▇▇▇▇▇▇▇, and
upon ▇▇▇▇▇▇▇▇'s heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please notify us if we report any inaccurate information about your account(s)
to a consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: Cedar Rapids Bank
and Trust Company ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇. ▇▇▇, ▇.▇. Box 789 Cedar Rapids, IA
52406-0789.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect ▇▇▇▇▇▇'s security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
PROMISSORY NOTE
Loan No.: 1089921655 (Continued) Page 4
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notice to anyone. All such parties also agree that ▇▇▇▇▇▇ may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. ▇▇▇▇▇▇▇▇ AGREES TO
THE TERMS OF THE NOTE.
▇▇▇▇▇▇▇▇ ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND
ALL OTHER DOCUMENTS RELATING TO THIS DEBT.
BORROWER:
MORAMERICA CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President of MorAmerica Capital Corporation
LENDER:
CEDAR RAPIDS BANK AND TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President