EXHIBIT 4.2
(Real Property Supplemental Loans)
$700,000 As of July 15, 1999
Los Angeles, California
FOR VALUE RECEIVED, the undersigned, RESEARCH, INCORPORATED (the "Borrower"),
hereby promises to pay to Coast Business Credit, a division of Southern Pacific
Bank ("Lender"), or order, at 00000 Xxxxxxxx Xxxx., Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx, or at such other address as the holder may specify in writing, the
principal sum of Seven Hundred Thousand Dollars ($700,000) or so much as shall
have been drawn by the undersigned pursuant to the terms of the Agreement (as
defined below), plus interest in the manner and upon the terms and conditions
set forth in the Loan and Security Agreement (as referenced below). This Secured
Promissory Note -- Real Property Supplemental Loans ("Note") is made pursuant to
that certain Loan and Security Agreement dated as of December 17, 1998 between
the undersigned and Lender, as amended by that certain amendment thereto dated
as of even date herewith (collectively, the "Agreement"), the provisions of
which are incorporated herein by this reference. Capitalized terms herein,
unless otherwise noted, shall have the meaning set forth in the Agreement.
1.0 Rate and Payment of Interest
This Note shall bear interest on the unpaid principal balance hereof from time
to time outstanding at a rate equal to the "Prime Rate" (as hereinafter defined)
plus 2.75%, subject to reduction to the Prime Rate plus 2.25% pursuant to the
terms and conditions of the Agreement, but in no event shall the interest rate
in any month be less than 9% per annum. Interest shall be calculated on the
basis of a 360-day year for the actual number of days elapsed. As used herein,
the term "Prime Rate" shall mean the actual "Reference Rate" or the substitute
therefor of Bank of America NT & SA whether or not that rate is the lowest
interest rate charged by said bank. The interest rate applicable to this Note
shall be adjusted monthly, as of the first day of each month, and the interest
rate charged during each month shall be based on the highest Prime Rate in
effect during said month. If the Prime Rate is unavailable, "Prime Rate" shall
mean the highest of the prime rates published in the Wall Street Journal on the
first business day of the month, as the base rate of corporate loans at large
U.S. money center banks. Accrued interest shall be payable monthly, commencing
on the last day of the month during which
Xxxxxx first advances any sums to Borrower under this Note and continuing on the
last day of each succeeding month. Principal of, and interest on, this Note
shall be payable in lawful money of the United States of America. If a payment
hereunder becomes due and payable on a Saturday, Sunday or legal holiday, the
due date thereof shall be extended to the next succeeding business day, and
interest shall be payable thereon during such extension.
2.0 Schedule of Principal Payments
Subject to the provisions of Section 4.0 below, all unpaid principal plus
accrued and unpaid interest and charges under this Note shall be due and payable
on the earlier to occur of the following: (x) the date of the Real Estate
Closing or (y) August 31, 1999.
3.0 Intentionally Deleted.
4.0 Xxxxxx's Right of Acceleration
If the Agreement is terminated for any reason whatsoever, the entire remaining
principal balance and all accrued and unpaid interest and other fees and charges
with respect to this Note shall become due and payable on the effective date of
termination.
5.0 Xxxxxx's Rights upon Default
In the event any payment of principal or interest on this Note is not paid in
full when due, or if any other default or event of default occurs under the Loan
Agreement or any other present or future instrument, document, or agreement
between Borrower and Coast, Coast may, at its option, at any time thereafter,
declare the entire unpaid principal balance of this Note plus all accrued
interest to be immediately due and payable, without notice or demand. Without
limiting the foregoing, and without limiting Coast's other rights and remedies,
in the event any installment of principal or interest is not paid in full on or
before the date due, Borrower agrees that it would be impracticable or extremely
difficult to fix the actual damages resulting therefrom to Coast, and therefore
the Borrower agrees immediately to pay to Coast an amount equal to 5% of the
installment (or portion thereof) not paid, as liquidated damages, to compensate
Coast for the internal administrative expenses in administering the default,
provided that said liquidated damages shall not be payable on an acceleration of
indebtedness under this Note arising out of a default or event of default under
the Loan Agreement. Without limiting the foregoing, and without limiting Coast's
other rights and remedies, in the event any installment of interest is not paid
on or before the date due, it shall thereafter bear like interest
as the principal of this Note. The acceptance of any installment of principal or
interest by Coast after the time when it becomes due, as herein specified, shall
not be held to establish a custom, or to waive any rights of Coast to enforce
payment when due of any further installments or any other rights, nor shall any
failure or delay to exercise any rights be held to waive the same. All payments
hereunder are to be applied first to costs and fees referred to hereunder,
second to the payment of accrued interest and the remaining balance to the
payment of principal. Any principal prepayment hereunder, to the extent
permitted under the Agreement, shall be applied against principal payments in
the inverse order of maturity. Coast shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments hereunder in its sole
discretion.
6.0 Additional Rights of Holder
If any installment of principal or interest hereunder is not paid when due, the
holder shall have, in addition to the rights set forth herein, in the Agreement
and under law, the right to compound interest by adding the unpaid interest to
principal, with such amount thereafter bearing interest at the rate provided in
this Note.
7.0 General Provisions
7.1 If this Note is not paid when due or upon the occurrence of an
Event of Default, the undersigned further promises to pay all costs of
collection, foreclosure fees, and reasonable attorneys' fees incurred by the
holder, whether or not suit is filed hereon, and the fees, costs and expenses as
provided in the Agreement.
7.2 The undersigned hereby consents to any and all renewals,
replacements and/or extensions of time for payment of this Note before, at or
after maturity.
7.3 The undersigned hereby consents to the acceptance, release or
substitution of security for this Note.
7.4 Presentment for payment, notice of dishonor, protest and notice
of protest are hereby expressly waived.
7.5 In no event whatsoever shall the interest rate and other charges
charged hereunder exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that the payee hereunder has
received interest in excess of the highest rate applicable hereto, the payee
shall promptly refund such excess amount to the undersigned and the provisions
hereof shall be deemed amended to provide for such permissible rate.
7.6 No delay or omission on the part of the holder of this Note in
exercising any right shall operate as a waiver thereof or of any other right.
7.7 A waiver by the holder of this Note upon any one occasion shall
not be construed as a bar or waiver of any right or remedy on any future
occasion.
7.8 Should any one or more of the provisions of this Note be
determined illegal or unenforceable, all other provisions shall nevertheless
remain effective.
7.9 This Note cannot be changed, modified, amended or terminated
orally.
7.10 This Note shall be governed by the laws of the State of
California, without reference to the principles of conflicts of laws thereof.
8.0 Security for the Note
This Note is secured by the Collateral described in the Agreement and is subject
to all of the terms and conditions thereof, including, but not limited to, the
remedies specified therein.
IN WITNESS WHEREOF, this Note has been executed and delivered as of the date
first set forth above.
RESEARCH, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx
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Its: Treasurer
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