1
EXHIBIT 4.2
MODIFICATION AGREEMENT
THIS AGREEMENT MADE this 25th day of March, 1993, by and between
NORTHERN TRUST BANK OF FLORIDA, N.A., formerly known as Northern Trust Bank of
Florida/Sarasota, N.A. ("Lender"), whose address is 0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxx 00000 and SUN HYDRAULICS CORPORATION, a Florida corporation
("Borrower") whose address is 0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxxxxx, XX.
RECITALS:
WHEREAS, Borrower executed a certain Renewal and Replacement Revolving
Line of Credit Note in the original principals sum of $1,700,000 ("Note"),
dated March 9, 1992, and a certain Revolving Credit Agreement ("Credit
Agreement") of like date.
WHEREAS, by this Agreement, Lender and Borrower intend to modify
certain provisions of the Credit Agreement.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and in
consideration of the premises and of the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged among the parties, it is agreed as follows:
1. RECITALS. The above recitals are true and correct and are
incorporated herein by reference.
2. SECTION 5.2(a) and (b) of the Credit Agreement are hereby
deleted in their entirety and the following is substituted in their place:
(a) Interim Reports.
(i) Within 60 days after the end of each quarter of each
fiscal year of the Borrower, a copy of a financial statement
of the Borrower and any subsidiary prepared on a combined
basis consistent with the combined financial statements of the
Borrower and any subsidiary referred to above, signed by an
authorized officer of the Borrower and consisting of at least
(a) a balance sheet as of the close of each quarter and (b) a
statement of earnings and source of application of funds for
each quarter and for the period for the beginning of such
fiscal year to the close of such quarter.
(ii) Within 60 days after the end of each quarter of each
fiscal year of the Borrower, a copy of a financial statement
of any affiliate of Borrower ("Affiliate") prepared on a
consolidated basis with proper intercompany eliminations of
Borrower, any subsidiary and any affiliate signed by an
authorized officer of the Affiliate and consisting of at least
(a) a balance sheet as of the close of each quarter and (b) a
statement of
2
earnings and source and application of funds for each quarter
and for the period of the beginning of such fiscal year to the
close of such quarter.
(b) Reviewed Report.
(i) Within 120 days after the end of each fiscal year of the
Borrower, a copy of an annual reviewed report of the Borrower
and any subsidiary on a combined basis and in conformity with
generally accepted accounting principals, applied on a basis
consistent with the reviewed combined financial statements of
the Borrower and any subsidiary referred to above, reviewed by
independent certified public accounts of recognized standing
satisfactory to the Lender.
(ii) Within 120 days after the end of each fiscal year of the
Borrower, a copy of an annual reviewed report of any affiliate
of the Borrower in conformity with generally accepted
accounting principals and reviewed by independent certified
public accounts of recognized standing satisfactory to the
Lender.
3. SECTION 5.4 of the Credit Agreement is hereby deleted in its
entirety and the following is substituted in its place:
FINANCIAL REQUIREMENTS. The Borrower and any subsidiary on a combined
basis shall:
(a) Working Capital. Maintain at all times combined net working
capital in an amount equal to at least $1,100,000 through
December 31, 1993 and at least $1,250,000 thereafter. Working
Capital shall mean the sum of all current assets less all
current liabilities and less all intercompany eliminations.
(b) Current Ratio. Maintain at all times a combined current ratio
of current assets to current liabilities, less intercompany
eliminations, of not less than 1.20:1 through December 31,
1993 and 1.35:1 thereafter.
(c) Net Worth to Debt. Maintain at all times a combined tangible
net worth of at least $2,800,000 and a ratio of consolidated
debt to tangible net worth of not more than 2.75:1 through
December 31, 1993 and 2.50:1 thereafter.
(d) Fixed Charge Coverage Ratio. Maintain at all times a fixed
charge coverage ratio of at least 2.25:1. This ratio is
determined by earnings before interest expense and taxes, plus
depreciation, divided by all interest expense, current
maturities of all long term debt and current capital lease
obligations.
-2-
3
(e) Fixed Asset Expenditures. Not make combined expenditures for
fixed assets in any fiscal year in an amount greater than
$1,750,000.
4. RATIFICATION. Except as herein modified and amended, the
terms and conditions of the Note and Credit Agreement are hereby ratified and
confirmed and shall remain in full force and effect.
5. COSTS. Borrower shall pay all costs of this Modification, to
include without limitation attorneys' fees. In the event it is determined
after the execution of this Agreement that additional costs relating to this
transaction are due, Borrower agrees to pay such costs immediately upon demand.
IN WITNESS WHEREOF, the parties hereto have executed this
Modification Agreement.
WITNESSES: SUN HYDRAULICS CORPORATION
/s/ Xxxxxxxxx Xxxxxxxx By /s/ Xxxxx X. Xxxxx
----------------------------- ----------------------------------
(Name Xxxxxxxxx Xxxxxxxx ) Name Xxxxx X. Xxxxx
----------------------- -------------------------------
As President
----------------------
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
(Name Xxxxxxx X. Xxxxxxx )
-----------------------
NORTHERN TRUST BANK OF
FLORIDA, N.A.
/s/ Xxxxxxxxx Xxxxxxxx By /s/ Xxxxx X. XxXxxxxx
----------------------------- -----------------------------
(Name Xxxxxxxxx Xxxxxxxx ) Name Xxxxx X. XxXxxxxx
----------------------- ----------------------------
As Vice President
--------------
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
(Name Xxxxxxx X. Xxxxxxx )
-----------------------
STATE OF FLORIDA
COUNTY OF SARASOTA
The foregoing instrument was acknowledged before me on 25th, 1993, by
Xxxxx X. Xxxxx, as President of SUN HYDRAULICS CORPORATION, a Florida
corporation, on behalf of the corporation, who is personally known to me or who
has produced______________ as identification and who did (did not) take an oath.
Notary Public /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
State of Florida (Name )
-----------------------------
My Commission Exp. 12-10-96 Serial Number (if any)
-------
Commission Expiration Date
---
-3-
4
STATE OF FLORIDA
COUNTY OF SARASOTA
The foregoing instrument was acknowledged before me on 25th,
1993, by Xxxxx X. XxXxxxxx, as Vice President of NORTHERN TRUST BANK OF
FLORIDA, N.A., formerly known as NORTHERN TRUST BANK OF FLORIDA/SARASOTA, N.A.,
a national association, on behalf of the association, who is personally known
to me or who has produced drivers license as identification and who did (did
not) take an oath.
Notary Public /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
State of Florida (Name )
-----------------------------
My Commission Exp. 12-10-96 Serial Number (if any)
-------
Commission Expiration Date
---
-4-
