EXHIBIT 4.32
AMENDED AND RESTATED LOAN AGREEMENT
[Mortgage Loan]
THIS AMENDED AND RESTATED LOAN AGREEMENT executed on this ____ day of
January, 2002, and effective December 1, 2001, by and among NORTHERN TRUST BANK
OF FLORIDA, N.A. ("Lender"), SUN HYDRAULICS CORPORATION, a Florida corporation
("Borrower").
WITNESSETH:
WHEREAS, Lender has made a loan to Borrower ("Loan"), which loan is
evidenced by a modification note of even date herewith in the principal amount
of $4,425,219.37 ("Note"), and
WHEREAS, the Loan is secured by a certain real estate mortgage recorded
in Official Records Book 1494, page 6860, Public Records of Manatee County,
Florida, as modified ("Mortgage"), and
WHEREAS, in connection with making the Loan, Borrower and Lender
entered into a loan agreement dated June 14, 1996 ( "Original Loan Agreement"),
and
WHEREAS, Borrower has requested Lender to modify certain terms of the
Original Loan Agreement and other loan documents, and Lender has agreed to do so
provided that Borrower modify the terms of the Original Loan Agreement by
entering into this Amended and Restated Loan Agreement ("Loan Agreement"),
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein contained, the parties hereto agree that the Original Loan
Agreement is amended and restated in its entirety as follows:
1. LOAN TO BORROWER; EXECUTION OF LOAN DOCUMENTS. Lender agrees,
in accordance with the terms of this Agreement, to make the Loan to Borrower.
Concurrently herewith, Borrower has executed the Note, and a Modification
Agreement ("Modification Agreement"), and other documents related to the Loan.
The Note, The Mortgage (as amended), this Loan Agreement and other documents
executed in connection with the Loan are collectively referred to herein as the
"Loan Documents."
2. COSTS AND EXPENSES. Borrower shall pay all costs and expenses
incurred in connection with preparation for, closing, and servicing the Loan
including, without limitation, any legal fees, including the fees of Lender's
counsel, intangible taxes, documentary taxes, recording costs, and document
preparation fees.
3. REPRESENTATIONS AND WARRANTIES. To induce Lender to make the
Loan, Borrower makes the following representations and warranties:
A. The financial information for Borrower and each
guarantor or other obligor furnished to Lender in connection with Borrower's
application for the Loan is complete
and accurate. There has been no material nor adverse change in the financial
condition of either Borrower or any guarantor or other obligor of the Loan from
that reflected on such financial information.
B. Borrower is a duly organized corporation, existing
and in good standing under the laws of the State of Florida, has corporate power
to carry on the business in which it is engaged, and the obtaining and
performing of the Loan has been duly authorized by all necessary actions of the
board of directors and shareholders of the corporation under applicable law, and
do not and will not violate any provisions of law or any of its organizational
documents.
C. The obtaining and performing of the Loan does not and
will not result in a breach of, constitute a default under, require any consent
under, or result in the creation of any lien, charge, or encumbrance upon any
property of Borrower pursuant to any instrument, order, or other agreement to
which Borrower is a party or by which Borrower, any of its officers as such, or
any of its property is bound.
D. There are no judgments, liens, encumbrances, or other
security interests outstanding against Borrower or any of its subsidiaries, or
any of their properties other than those disclosed to Lender in connection with
Borrower's request for the Loan, nor is there any pending or threatened
litigation that could or will give rise to any such judgment, lien or
encumbrance.
E. Neither Borrower nor any of its subsidiaries have
incurred any debts, liabilities, or obligations (whether direct or contingent)
nor committed themselves to incur any debts, liabilities, or obligations other
than those disclosed to Lender in connection with Borrower's request for the
Loan or shown on the financial statements submitted to Lender.
F. Neither Borrower nor any of its subsidiaries have
made any assignment for the benefit of their creditors, admitted in writing
their inability to pay their debts as they become due, filed a petition of
bankruptcy or been adjudicated bankrupt or insolvent, or filed a petition
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, receivership or similar relief under any statute, law or
regulation.
G. There are no actions, suits or proceedings pending
or, threatened against or affecting Borrower or any of its subsidiaries, the
Collateral or any guarantor or obligor on the Loan, or involving the validity or
enforceability of the Mortgage or the priority of the lien thereof, at law or in
equity, or before or by any governmental authorities, and neither Borrower nor
any of its subsidiaries is in default with respect to any order, writ,
injunction, decree or demand of any court or any governmental authority.
H. The obtaining of the Loan and the consummation of all
other transactions contemplated by the Loan Documents, and performance under the
Loan Documents, will not result in any breach of, or constitute a default under,
any mortgage, indenture, security agreement, lease, loan, credit agreement or
any other contract or instrument to which the Borrower or any of its
subsidiaries is a party or by which their properties may be bound or affected.
2
4. AFFIRMATIVE COVENANTS. Borrower will:
A. Preserve and keep in force all licenses, permits, and
franchises necessary for the proper conduct of its business and duly pay and
discharge all taxes, assessments, and governmental charges upon Borrower or
against Borrower's property before the date on which penalties attach thereto,
unless and to the extent only that the same shall be contested in good faith and
by appropriate proceedings.
B. Furnish to Lender (i) within 90 days after the close
of each fiscal year a consolidated annual profit and loss statement and balance
sheet on Borrower and its subsidiaries reviewed by an independent certified
public accountant who is satisfactory to Lender; (ii) within 30 days after
filing each year, an executed copy of Borrower's Federal income tax return, and
if any extensions have been filed, copies of each Extension Notice shall be
furnished to Lender within 30 days of filing; and (iii) such other information
reflecting the financial condition of Borrower and/or its subsidiaries as Lender
may request from time to time.
C. Permit any representative or agent of Lender to
examine and audit any or all of Borrower's books and records when requested by
Lender.
D. Inform Lender immediately of any material adverse
change in the financial condition of Borrower or any of its subsidiaries.
Borrower will also promptly inform Lender of any litigation or threatened
litigation which might substantially affect Borrower's financial condition.
E. Maintain Borrower's property and equipment in a state
of good repair.
F. Maintain Borrower's net working capital, on a
consolidated basis ("Net Working Capital") in an amount not less than
$2,000,000.00 and a current ratio ("Current Ratio") of not less than 1.2:1.0 at
all times during the term of this Agreement. For the purposes of this Agreement,
Net Working Capital shall mean the excess of Borrower's current assets over
current liabilities, on a consolidated basis with its subsidiaries, which shall
be determined in accordance with generally accepted accounting principles as
consistently applied in the preparation of Borrower's previous financial
statements, and Current Ratio shall mean the quotient of current assets divided
by current liabilities, on a consolidated basis with its subsidiaries.
G. Maintain Borrower's Tangible Net Worth at a minimum
of $35,000,000.00 ("Minimum Tangible Net Worth") for the fiscal year 2001.
Borrower's Minimum Tangible Net Worth as of each fiscal year-end thereafter
shall increase by at least 50% of Borrower's reported net income for the
immediately preceding fiscal year. For the purposes of this Agreement, Tangible
Net Worth shall mean (i) the aggregate amount of assets shown on the balance
sheet of Borrower at any particular date (but excluding from such assets
capitalized organization and development costs, capitalized interest, debt
discount and expense, goodwill, patents, trademarks, copyrights, franchises,
licenses, amounts due from officers, directors, stockholders and affiliates, and
such other assets as are properly classified "intangible assets" under generally
3
accepted accounting principles) less (ii) liabilities at such date, all computed
in accordance with generally accepted accounting principles applied on a
consistent basis.
H. Maintain Borrower's Total Liabilities to Tangible Net
Worth ratio, on a consolidated basis with its subsidiaries throughout the term
of the Loan at a minimum of 1.5:1.0 at all times during the term of this
Agreement. For purposes of this Agreement, the term "Liabilities" shall mean
Borrower's liabilities as computed in accordance with generally accepted
accounting principles.
I. Maintain Borrower's debt service coverage ratio, on a
consolidated basis with its subsidiaries ("Debt Service Coverage Ratio")
throughout the term of the Loan at a minimum of 1.25:1.0 on a calendar year
basis for all operations of the Borrower and its subsidiaries, computed as
follows: net profits plus interest, plus depreciation, all divided by interest
plus current maturities of long term debt and capitalized leases, plus unfunded
capital expenditures and advances/withdrawals made to shareholders of Borrower
and/or its subsidiaries.
5. NEGATIVE COVENANTS. Neither Borrower nor any of its
subsidiaries will, without prior written consent of Lender:
A. Collaterally assign, mortgage, pledge, encumber or
grant any security interest in any of its assets, whether now owned or hereafter
acquired.
B. Enter into any merger or consolidation, or sell,
lease, transfer, or otherwise dispose of all or any substantial part of its
assets, whether now owned or hereafter acquired.
C. Change the name in which it does business.
D. Move its principal place of business without giving
written notice thereof to Lender at least 30 days prior thereto.
E. Incur any new debt whether secured or unsecured,
except trade debt for the purchase of equipment which does not exceed
$100,000.00 for any item of equipment, and trade debt for the purchase of
inventory.
F. Execute any guarantees or assumptions of any debt, or
endorse any obligations, except that Borrower may guaranty any trade debt for
the purchase of equipment which does not exceed $100,000.00 for any item of
equipment, and trade debt for the purchase of inventory which is incurred by a
subsidiary of Borrower.
G. Enter into any asset sale/leaseback arrangement.
6. EVENTS OF DEFAULT. The Lender shall have the option to declare
the entire unpaid balance due on the Loan without notice of any kind, if any of
the following events occur:
4
A. Failure or omission to pay, within fifteen (15) days
after payment is due, the Note (or any installment of principal or interest
thereunder).
B. Default in the payment (other than payment of
principal and interest) or performance of any obligation, covenant, agreement or
liability contained or referred to in the Mortgage, Note, this Loan Agreement,
or any other Loan Document, or upon the existence or occurrence of any
circumstance or event deemed a default under the Note or any other Loan
Document.
C. Any warranty, representation or statement made or
furnished by Borrower for the purpose of inducing Lender to make the Loan proves
to have been false in any material respect when made or furnished.
D. A default under any other mortgage on the Collateral
(whether such other mortgage be held by Lender or by a third party).
E. The institution of foreclosure proceedings of another
mortgage or lien of any kind on the Collateral (whether such other mortgage or
lien be held by Lender or by a third party).
F. The default by Borrower or any party obligated under
the Note or any guaranty thereof in the payment or performance of any
obligation, covenant, agreement, or liability contained in any other mortgage,
note, obligation or agreement held by Lender, including but not limited to that
certain revolving line of credit loan in the amount of $7,500,000.00 made by
Lender to Borrower, evidenced by a modification note of even date hereof, and
that certain loan in the current principal amount of $3,871,754.35, evidenced by
a modification note of even date herewith.
G. The death, dissolution, termination of existence,
insolvency, or business failure of Borrower or any party obligated under the
Note or any guaranty thereof.
H. The appointment of a receiver of any part of the
Collateral.
I. The assignment for the benefit of creditors or the
commencement of any proceedings in bankruptcy or insolvency by or against
Borrower or by or against any person obligated under the Note or any guaranty
thereof.
J. The determination by Lender that a material adverse
change has occurred in the financial condition of Borrower or any person
obligated under the Note or any guaranty thereof, from the conditions set forth
in the most recent financial statement of such person heretofore furnished to
Lender or from the condition of such person as heretofore most recently
disclosed to Lender in any manner.
K. The failure by Borrower or any party obligated under
the Note or any guaranty thereof to make any payment of principal or interest
when due under any obligation to any other creditor, if such failure continues
beyond any applicable grace period.
5
L. Any substantial part of the inventory, equipment, or
other property of Borrower, real or personal, is damaged or destroyed and the
damage or destruction is not covered by collectible insurance.
M. Borrower suffers or permits any lien, encumbrance, or
security interest to arise or attach to any of Borrower's property, which is not
satisfied within 30 days.
N. Any judgment is entered against Borrower that is not
satisfied or appealed within 30 days.
O. Falsity in any material respect of, or any material
omission in, any representation or statement made to Lender by or on behalf of
Borrower or any person obligated under the Note or any guaranty thereof, in
connection with the Loan.
7. REMEDIES UPON DEFAULT. Upon the occurrence, or the discovery
by Lender of the occurrence, of any of the foregoing events, circumstances, or
conditions of default, Lender shall have, in addition to its option to
accelerate to maturity the full unpaid balance of the Loan, all of the rights
and remedies under applicable law, and in addition shall have the following
specific rights and remedies:
A. To exercise Lender's right of set-off against any
account, fund, or property of any kind, tangible or intangible, belonging to
Borrower which shall be in Lender's possession or under its control.
B. To cure such defaults, with the result that all costs
and expenses incurred or paid by Lender in effecting such cure shall be
additional charges on the Loan, shall bear interest at the highest rate
permitted by law, and shall be payable upon demand, and shall be secured by the
Mortgage and other Loan Documents.
8. ATTORNEYS' FEES AND COSTS. Borrower promises and agrees to pay
all costs of collection and attorneys' fees, including fees for appellate
proceedings, bankruptcy proceedings or otherwise, incurred or paid by Lender in
enforcing this Agreement or preserving any right or interest of Lender
hereunder.
9. WAIVER. No failure or delay on the part of Lender in
exercising any power or right hereunder, and no failure of Lender to give
Borrower notice of a default hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power
hereunder. No modification or waiver of any provision of this Agreement or any
instrument executed pursuant hereto or consent to any departure by Borrower from
this Agreement or such instrument shall in any event be effective unless the
same shall be in writing, and such waiver or consent shall be effective only in
the specific instance and for the particular purpose for which given.
6
10. BENEFIT. This Agreement shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns.
Lender may assign this Agreement in whole or in part. Borrower may not assign
this Agreement or its obligations hereunder without Lender's written consent.
11. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida, and any litigation arising
out of or relating to this Agreement or the Loan shall be commenced and
conducted in the courts of the State of Florida or in the federal courts of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Loan
Agreement on the day and year first above written.
SUN HYDRAULICS CORPORATION,
a Florida corporation
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
As its President
BORROWER
NORTHERN TRUST BANK OF FLORIDA, N.A.
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------------------------
Xxxxxxx X. XxXxxxxx
As its Vice President
LENDER
7
