EXHIBIT 4.1
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as of
this 15 day of July 1999, between Coast Business Credit(R), a division of
Southern Pacific Bank ("Coast") and Research, Incorporated ("Borrower"), is made
in reference to the following facts:
Borrower previously entered into a Loan and Security Agreement
with Coast dated December 17, 1998 (as the same may be amended,
supplemented or modified from time to time, the "Loan Agreement").
As security for Borrower's obligations to Coast under the Loan
Agreement, Borrower delivered to Coast a Mortgage and Security
Agreement and Fixture Filing dated as of January 20, 1999 (the
"Mortgage") with respect to certain improved real property with an
address of 0000 Xxxxxx Xxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxx 00000
situated in Hennepin County (the "Property").
Borrower and Continental Property Group, Inc., a Minnesota
corporation ("Buyer") are parties to that certain Purchase Agreement
(the "Purchase Agreement") dated as of June 25, 1999 wherein Borrower
agrees to sell to Buyer and Buyer agrees to purchase from Borrower the
Property. As more fully set forth therein, the Purchase Agreement
provides, among other things, as follows: (i) the purchase price for
the Property shall be equal to Three Million Six Hundred Fifty Thousand
Dollars ($3,650,000), subject to adjustment for taxes and assessments
pertaining to the Property; (ii) the transfer of title to the Property
from Borrower to Buyer (the "Real Estate Closing") shall occur no later
than August 24, 1999; and (iii) concurrent with the Real Estate
Closing, Borrower and Buyer shall enter into a lease (the "Lease") with
respect to the Property wherein Buyer leases the Property to Borrower
for a term of no less than five (5) years from the date of the Real
Estate Closing.
NOW THEREFORE, in consideration of the foregoing recitals and the terms and
conditions hereof, the parties do hereby agree as follows, effective as of the
date set forth above:
1. Definitions. Terms used herein, unless otherwise defined herein,
shall have the meanings set forth in the Loan Agreement.
2. Real Estate Supplemental Loans. The Section of the Schedule entitled
"SECTION 2. CREDIT FACILITIES," is hereby amended by adding a subsection (g)
thereto as follows:
(g) Real Estate Supplemental Loans in minimum advances of One
Thousand Dollars ($1,000) in an aggregate
outstanding principal amount not to exceed Seven Hundred Thousand
Dollars ($700,000).
(1) Advances under the Real Estate Supplemental Loans
facility may be reborrowed once repaid.
(2) All outstanding principal and interest on the
Real Estate Supplemental Loans shall be due and payable on the
earlier to occur of the following: (x) the date of the Real
Estate Closing and (y) August 31, 1999.
(3) The Real Estate Supplemental Loans shall be
subject to the terms and conditions of a Secured Promissory
Note in form and substance satisfactory to Coast in its sole
discretion.
3. Sale of the Property; Application of Proceeds. Coast hereby consents
to the sale of the Property pursuant to the Purchase Agreement. The proceeds of
such sale shall be paid directly to Coast and shall be applied as follows:
first, to the expenses and costs chargeable under the Loan Documents to Borrower
or any guarantor of the Obligations; second, to outstanding principal and
interest under the Real Estate Supplemental Loans facility; third, to
outstanding principal and interest for the Real Estate Term Loan; and fourth, to
outstanding principal and interest under the Inventory Loans facility and the
Receivable Loans facility.
4. Minimum Monthly Interest. Concurrently with the Real Estate Closing,
the subsection entitled "Section 3.1 - Minimum Monthly Interest" of the section
of the Schedule entitled "SECTION 3 - INTEREST AND FEES" shall be automatically
amended by striking the phrase "fifty percent (50%)" therein and replacing it
with "thirty-five percent (35%)."
5. Conditions Precedent. The effectiveness of this Amendment is subject
to Borrower's satisfaction of the following conditions:
(a) Borrower shall have provided Coast with copies of the final,
executed Purchase Agreement, the lease agreement between Buyer and
Borrower, and any and all other documents and instruments executed or
delivered in connection therewith, all of which shall be satisfactory
to Coast in its sole discretion. Without limiting the generality of the
foregoing, the term of the Lease shall extend beyond the last Business
Day of the month three (3) years from the Closing Date.
(b) Borrower shall execute and cause any applicable third parties and
affiliates to execute any and all additional documents as requested by
Coast in connection with this Amendment and to otherwise ensure the
satisfaction of the Obligations, all in form and substance satisfactory
to Coast in its sole discretion. Without limiting the generality of the
foregoing, Borrower shall provide Coast with a landlord waiver executed
by Buyer suitable for recordation in the real property records of
Hennepin County, Minnesota and otherwise in form and substance
satisfactory to Coast in its sole discretion.
(c) Coast shall have received an endorsement to the title insurance for
the Mortgage, which endorsement shall insure that the Mortgage secures
Coast's advances to Borrower under the Real Estate Supplemental Loans
facility and shall otherwise be in form and substance satisfactory to
Coast in its sole discretion.
(d) No Event of Default shall have occurred and be continuing and
Borrower shall be in full compliance with the terms and conditions of
the Loan Agreement.
6. Reconveyance. Coast hereby agrees to release the Mortgage
concurrently with the indefeasible payment in full of all outstanding
Obligations in connection with the Real Property Term Loan and the Real Property
Supplemental Loans and payment of the Modification Fee as set forth below.
7. Modification Fee. In consideration of this Amendment and the Real
Estate Supplemental Loans made available by Coast to Borrower hereunder, and in
addition to all other fees and charges, Borrower shall pay to Coast a
modification fee of One Hundred Thirty Thousand Dollars ($130,000), which fee is
fully earned as of the date hereof and shall be payable on the earlier to occur
of the following: (a) the sale of the Property and (b) August 31, 1999.
8. Reaffirmation. Except as modified by the terms herein, the Loan
Agreement and the other Loan Documents remain in full force and effect. If there
is any conflict between the terms and provisions of this Amendment and the terms
and provisions of the Loan Agreement or documents related thereto, the terms and
provisions of this Amendment shall govern.
9. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. This Amendment may be
executed by facsimile signatures.
10. Governing Law. This Amendment shall be governed by and construed
according to the laws of the State of California.
11. Attorneys' Fees; Costs; Jury Trial Waiver. Borrower agrees to pay,
on demand, all attorneys' fees and costs incurred in connection with the
negotiation, documentation and execution of this Amendment. If any legal action
or proceeding shall be commenced at any time by any party to this Amendment in
connection with its interpretation or enforcement, the prevailing party or
parties in such action or proceeding shall be entitled to reimbursement of its
reasonable attorneys' fees and costs in connection therewith, in addition to all
other relief to which the prevailing party or parties may be entitled. Each of
Coast and Borrower hereby waives its right to a jury trial in any such action or
proceeding.
RESEARCH, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx
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Title: Treasurer
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COAST BUSINESS CREDIT, a division
of Southern Pacific Bank
By: /s/ Xxxxx Xxxxxxx
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Title: Vice President
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The undersigned Guarantor hereby acknowledges and consents to the
foregoing Amendment and confirms and agrees that the Guarantee executed by it in
favor of Coast shall remain in full force and effect in accordance with its
terms.
Signed and delivered as of this 15 day of July, 1999.
RESEARCH INCORPORATION LIMITED
acting by:
/s/ Xxxxxxx Xxxxx /s/ Xxxxxx Xxxxxxx
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Xxxxxxx Xxxxx, Director Xxxxxx Xxxxxxx, Secretary
