EXHIBIT 4.31
MODIFICATION NOTE
[Revolving Line of Credit]
$7,500,000.00 Effective Date: December 1, 2001
Execution Date: January 18, 2002
FOR VALUE RECEIVED, SUN HYDRAULICS CORPORATION ("Maker"), hereby
promises, jointly and severally, to pay to the order of NORTHERN TRUST BANK OF
FLORIDA, N.A. ("Lender") at 1515 Ringling Blvd., Sarasota, FL 34236 or at such
other place as the holder hereof may from time to time designate in writing, the
principal sum of Seven Million Five Hundred Thousand Dollars ($7,500,000.00), or
so much thereof as may be disbursed by Lender to Maker or for Maker's account
from time to time, together with interest at the rate hereinafter specified on
such indebtedness as shall from time to time remain unpaid, until paid in full,
such principal and interest being payable in lawful money of the United States
which shall be legal tender in payment of all debts at the time of payment.
Interest will be calculated on the basis of a 365/360 method, which computes a
daily amount of interest for a hypothetical year of 360 days, then multiplies
such amount by the actual number of days elapsed in an interest calculating
period.
Interest on the unpaid principal sum outstanding from time to time
shall accrue at one of the following rates, as selected from time to time by
Maker in accordance with this Note:
A. A variable rate of one percent (1.00%) per annum
below the prime rate announced by Lender from time to time ("Prime Rate"). The
interest rate will be adjusted accordingly on each date of change in the Prime
Rate. The Prime Rate is not necessarily the lowest interest rate charged by
Lender for monies loaned, and is intended solely as an index reference. If Maker
does not affirmatively select an interest rate pursuant to subparagraph B below,
the interest under this Note shall accrue pursuant to this subparagraph A.
B. A variable rate of two percent (2.00%) per annum
above the Adjusted LIBOR Rate for either one month, two months, or three months
(each an "Interest Period), as selected by Maker, from time to time. The
Adjusted LIBOR Rate means, with respect to any Interest Period, (i) the rate of
interest per annum (rounded upward, if necessary, to the next higher 1/16th of
one percent) determined by the Lender, in accordance with its customary general
practice from time to time, to be the rate equal to the London InterBank Offered
Rate (expressed as a percentage) for dollar deposits as would be quoted by the
Lender for 11:00 a.m. London time, or as soon thereafter as practicable, on the
second business day immediately preceding the first day of such Interest Period,
for a term comparable to such Interest Period and (ii) as adjusted from time to
time in the Lender's sole discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs. In the event the
London InterBank Offered Rate ceases to be available, Lender shall have the
right to substitute another comparable index selected in Lender's discretion.
Maker shall give to Lender five business days notice, in writing, if Maker
desires to select the interest rate option based on the Adjusted LIBOR Rate
pursuant to this subparagraph B, and such notice shall specify the Interest
Period selected by Maker. The interest rate shall adjust five business days
after Lender's receipt of such notice (which date shall be deemed the first day
of the Interest Period) to equal a fixed rate computed in accordance with this
subparagraph B, which fixed interest rate shall remain in effect for the
Interest Period. At the end of
the Interest Period, and at the end of each successive Interest Period
thereafter, the interest rate shall be adjusted and computed in accordance with
this subparagraph B for the same Interest Period unless, at least five business
days prior to the end of any Interest Period, Maker gives Lender written notice
that Maker has selected a different interest rate in accordance with the terms
of either subparagraph A above or this subparagraph B.
Interest shall be due and payable in arrears on the first day of each
calendar month. The entire unpaid principal balance, together with accrued
interest shall be due and payable August 15, 2004.
All payments made hereunder shall be applied first to accrued interest
then due and owing; next to amounts expended by Lender to cure any default under
this Note, (as hereinafter defined), or any other loan documents executed in
connection herewith; next to charges, costs, expenses, or attorneys' fees then
due and payable to Lender under this Note, or any other loan documents; and the
balance, if any, to principal.
This Note may be prepaid, in whole or in part, at any time without
penalty. All prepayments made hereunder shall be applied in the same manner as
other payments made hereunder, as set forth above. The making of any prepayment
shall not relieve Maker from the obligation to make the payments next due
hereunder on a timely basis.
If any payment is more than fifteen (15) days late, Maker agrees to pay
to Lender a late charge equal to five percent (5%) of the payment.
Notwithstanding the foregoing, however, all payments shall be due and payable as
of the dates set forth above, and the failure to make all payments when due
shall constitute a default under this Note. The terms of this paragraph are not
intended and shall not be deemed to create a grace period for payment.
This Note evidences a loan in the original principal amount of
$7,500,000.00; however, the actual indebtedness from time to time evidenced
hereby shall be the sum of all advances made by Lender to Maker, less the
aggregate amount of all principal repayments made under this Note by Maker to
Lender. It is the intention hereof and the purpose of this Note to evidence a
revolving line of credit against which Maker may draw and from which Lender will
advance from time to time. Maker may repay the principal amount outstanding, in
whole or in part, from time to time, and again draw against the line of credit,
so that the principal amount outstanding hereunder may fluctuate in accordance
with such advances and repayments, but the aggregate principal amount
outstanding under this Note shall not at any time exceed the principal sum of
$7,500,000.00. Maker's right to draw principal amounts under this Note is
conditioned upon Maker not being in default under this Note, or any other loan
document executed in connection herewith.
Each and every party to this Note, whether as Maker, endorser, surety,
guarantor, or otherwise ("Obligor"), hereby waives all rights of homestead and
other exemptions granted by the constitution or laws of Florida, and further
waives presentment, demand, protest, notice of dishonor, notice of nonpayment,
notice of protest, and diligence in collection, and assents to the terms hereof
and to any extension or postponement of the time for payment or any other
indulgence. It is further specifically agreed that this Note or any part of the
principal or interest due hereon may be renewed, modified or extended, in whole
or in part, such modification to include but not be limited to changes
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in payment schedules and interest rates, from time to time by the holder of this
Note, at the request of the then owners of all or part of any collateral for
this Note, or at the request of any party bound hereon or who has assumed or may
hereafter assume payment hereof, without the consent of or notice to other
parties bound hereon and without releasing them from any liabilities then
existing.
Each and every Obligor hereby consents that any real or personal
property now or hereafter securing this Note, or any part of such security, may
be released, exchanged, added to or substituted for by Lender, without in any
way modifying, altering, releasing, affecting or limiting their respective
liabilities or the lien of any mortgage or security agreement, and further
agrees that Lender shall not be required first to institute any suit, or to
exhaust any of its remedies against Maker or any other person or party liable or
to become liable hereunder, in order to enforce payment of this Note, and
further agrees that Maker or any other party liable hereunder may be released by
Lender from any or all liability under this Note and such release shall in no
way affect or modify the liability of the remaining parties hereto.
Each and every Obligor hereby consents and agrees that he is bound,
jointly and severally, under the terms hereof and is subject to all of the
provisions set forth herein as fully as though each was an undersigned hereof,
and further consents and agrees that any Obligor may be sued by Lender without
joining any other Obligor, whether primarily or secondarily liable.
Notwithstanding anything contained herein to the contrary or in other
loan documents executed in connection herewith, no payee or holder of this Note
shall ever be entitled to receive, collect or apply as interest on the
obligation evidenced hereby any amount in excess of the maximum rate of interest
permitted to be charged by applicable law and, in the event Lender or any holder
hereof ever receives, collects or applies as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction of
the principal sum; and, if the principal sum is paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not the
interest paid or payable under any specific contingency exceeds the highest
lawful rate, Maker and Lender shall, to the maximum extent permitted under
applicable law: (a) characterize any non-principal payment as an expense, fee or
premium rather than as interest; (b) exclude voluntary prepayments and the
effects thereof; and (c) spread the total amount of interest, or charges in the
nature of interest, pursuant to applicable law.
As used herein, "Event of Default" shall mean the occurrence of any of
the following events or conditions: (a) failure or omission to pay when due this
Note (or any installment of principal or interest hereunder); (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 this
Note, or any other loan document executed in connection herewith, or upon the
existence or occurrence of any circumstance or event deemed a default under this
Note or any other loan document executed in connection herewith; (c) any
warranty, representation or statement made or furnished by any Obligor to Lender
for the purpose of inducing Lender to make the loan evidenced by this Note,
proves to have been false in any material respect when made or furnished;
(d) the default by Maker or any party obligated under this Note or any guaranty
hereof or any affiliate of any of the foregoing ("Affiliated Companies") 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 those certain loans in the current principal
amounts of
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$3,871,754.35 and $4,425,219.37 evidenced by notes executed by Maker on even
date herewith; (e) the death, dissolution, termination of existence, insolvency,
or business failure of any Obligor; (f) the appointment of a receiver of any
property of an obligor; (g) the assignment for the benefit of creditors or the
commencement of any proceedings in bankruptcy or insolvency by or against any
Obligor; (h) the determination by Lender that a material adverse change has
occurred in the financial condition of any Obligor from the conditions set forth
in the most recent financial statement of such Obligor heretofore furnished to
Lender or from the condition of such Obligor as heretofore most recently
disclosed to Lender in any manner; (i) the failure by Maker or any party
obligated under this Note or any guaranty hereof to make any payment of
principal or interest when due under any obligation to any other creditor;
(j) any substantial part of the inventory, equipment, or other property of
Maker, real or personal, is damaged or destroyed and the damage or destruction
is not covered by collectible insurance; (k) Maker suffers or permits any lien,
encumbrance, or security interest to arise or attach to any of Maker's property,
which is not satisfied within 30 days; (l) any judgment is entered against Maker
that is not satisfied or appealed within 30 days; or (m) falsity in any material
respect of, or any material omission in, any representation or statement made to
Lender by or on behalf of any Obligor in connection with the loan evidenced by
this Note. Upon the occurrence of any such default or at any time thereafter,
subject to the grace period, if any, provided in this Note, Lender may, at its
option, declare the whole amount of principal and interest provided for in and
by this Note, and any and all other secured indebtedness, immediately due and
payable without demand or notice of any kind to any person, and the same
thereupon shall become immediately due, payable and collectible (by foreclosure
or otherwise) at once and without notice to Maker. Any default hereunder shall
constitute a default under any other mortgage, note, obligation or agreement of
Maker or any Affiliated Company held by Lender. The agreements contained in this
paragraph to create cross-defaults under all mortgages, notes, obligations and
agreements between Maker, and any Affiliated Company, and Lender, whether
currently existing or hereafter created, in the event of default under one or
more of such mortgages, notes, obligations or agreements are a material and
specific inducement and consideration for the making by Lender of the loan
evidenced by this Note.
Notwithstanding the provisions of the foregoing paragraph to the
contrary, in the event of a non-monetary default of the type set forth in
subsections (b), (d), (h) or (j) of the foregoing paragraph, then prior to
Lender precipitating to maturity the full unpaid balance of this Note or
otherwise exercising any rights available to Lender under the terms of this Note
or any other loan document executed in connection herewith, Lender shall give
written notice to Maker and Maker shall have a period of thirty (30) days from
the date such notice is given in which to cure such default; provided, however,
if such default cannot, with due diligence, be cured within said 30 day period,
and such default does not threaten to impair Lender's security for this Note,
then the 30 day period shall be extended for such period as may be reasonably
necessary to complete the curing of same, provided that Maker proceeds with all
due diligence and continuity to cure the default. Notice required hereunder may,
at the option of Lender, be given by either certified mail, registered mail,
regular mail, facsimile transmission, Federal Express or other express courier,
or by personal delivery, and shall be deemed given when mailed, transmitted,
placed with the courier or delivered to Maker, whichever is first. In the event
the default is not cured within the time provided, then Lender shall have the
right to accelerate this Note and proceed to enforce this Note and the loan
documents, without further notice to Maker.
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It is expressly agreed that upon the occurrence of an Event of Default,
or if Lender shall deem itself insecure (because the prospect of timely payments
is impaired, because the value of Lender's security is impaired, because the
prospect of performance of any covenant or agreement under this Note, or any
other loan document is impaired, because of any change of circumstance which
adversely affects any matters originally considered by Lender in making the
loan, or otherwise), then or at any time thereafter at the option of Lender, the
whole of the principal sum remaining unpaid hereunder, together with all accrued
and unpaid interest thereon, shall become due and payable immediately without
notice, anything contained herein to the contrary in any way notwithstanding,
and in any such event Lender shall have the right to set-off against this Note
all money owed by Lender in any capacity to any Obligor, whether or not due, and
Lender shall be deemed to have exercised such right of set-off and to have made
a charge against any such money immediately upon the occurrence of an Event of
Default although made or entered on the books subsequent thereto. From and after
an Event of Default, the interest rate on the entire outstanding principal
balance hereunder shall accrue at the highest rate permitted to be charged by
applicable law ("Default Rate"). In the event the Default Rate shall be
applicable and Lender has not accelerated this Note, the amount of each payment
otherwise due hereunder shall be increased to an amount equal to the regular
amount of the principal installment due hereunder, plus accrued interest at the
Default Rate. Any judgment rendered on this Note shall bear interest at the
Default Rate.
Each Obligor shall be obligated to pay as part of the indebtedness
evidenced by this Note all costs of collection, whether or not a suit is
brought, including any reasonable attorneys' fees that may be incurred in the
collection or enforcement hereof. The term "attorneys' fees" shall include but
not be limited to any such fees incurred in any appellate or related ancillary
or supplementary proceedings, whether before or after final judgment related to
the enforcement or defense of this Note.
If at any time any federal, state, county or municipal government or
agency thereof shall impose any documentary stamp tax, intangible tax, or any
other type of tax upon this Note, or upon the indebtedness evidenced hereby
(other than any federal, state or local income tax imposed upon Lender), then
Maker shall pay same within fifteen (15) days after demand by Lender, together
with any interest and penalties thereon.
Time is of the essence of this Note. The remedies of Lender as provided
herein, or any other loan document executed in connection herewith, shall be
cumulative and concurrent, and may be pursued singularly, successively or
together, at the sole discretion of Lender, and may be exercised as often as
occasion therefor shall arise. No act or omission of Lender, including
specifically any failure to exercise any right, remedy or recourse, shall be
deemed to be a waiver or release of such right, remedy or recourse, and any
waiver or release may be effected only through a written document executed by
Lender and then only to the extent specifically recited therein. A waiver or
release with respect to any one event shall not be construed as continuing as a
bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to any subsequent event.
The term "Lender" where used herein shall include Lender's successors
and assigns. The term "Maker" shall include each person signing this Note,
jointly and severally, and their respective heirs, successors and assigns. The
term "Obligor" shall include Maker and every person who is an endorser,
guarantor, or surety of this Note, or who is otherwise a party hereto, and their
respective
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heirs, successors and assigns. The terms "person" and "party" shall include
individuals, firms, associations, joint ventures, partnerships, estates, trusts,
business trusts, syndicates, fiduciaries, corporations, and all other groups or
combinations. Whenever used herein, the singular number shall include the
plural, the plural the singular, and the use of any gender shall include all
genders. This Note shall be construed under Florida law.
This note amends and replaces that certain promissory note dated July
23, 2000 ("Original Note").
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed and
delivered as of the date first above written.
Maker's Address:
1500 University Parkway SUN HYDRAULICS CORPORATION
Sarasota, FL 34243 a Florida Corporation
By: /s/ Tricia Fulton
-------------------------------------
Tricia Fulton
As its Corporate Controller
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