EXHIBIT 4.18
LLOYDS BANK
COMMERCIAL
SERVICE
STRICTLY PRIVATE & CONFIDENTIAL
R. Glasspole Esq.,
Financial Controller
Sun Hydraulics Ltd.
Wheler Road
Seven Stars Industrial Estate
Whitley
Coventry
CV3 4LA
6 June, 1996
Dear Mr. Glasspole,
OVERDRAFT & OTHER FACILITIES
We Lloyds Bank Plc (the "Bank") are pleased to offer to Sun Hydraulics Limited
an overdraft facility on account number 0069308 on the following terms and
conditions.
AMOUNT The maximum aggregate amount outstanding
- ------ under the facility at any one time shall not
exceed L.250,000.
AVAILABILITY Any amounts from time to time owing under the
- ------------ facility are repayable on demand but it is
the Bank's present intention to make the
facility available until 30th June 1997 or
such later date as may from time to time be
advised in writing by the Bank. The amounts
owing at any time may include interest, costs
and charges debited to the account in
accordance with the terms of this letter.
INTEREST Interest will be payable on amounts owing up
- -------- to the aforesaid limit at 2% per annum over
the Bank's Base Rate from time to time
(currently 7.75% per annum in total).
Interest will be payable on amounts owing in
excess of the agreed limit at Lloyds Bank
Unauthorised Overdraft Rate (presently 2% per
Annual Rate 24%).
Interest will be debited to the account
monthly in arrears (normally on the 20th of
each month or on the next working day) and
additionally on the date upon which the
facility ceases to be available.
LLOYDS BANK - 2 -
COMMERCIAL
SERVICE
The facility is provided on overdraft in the
expectation that the account will continue to
show a full swing during the period of the
facilities. If the account remains
continually overdrawn, the minimum cleared
debit balance will be treated as hardcore
borrowing and will be charged at 0.5% over
the interest rate specified above.
The interest rates may be varied (either up
or down) by the Bank at any time. Notices of
changes will be displayed in all UK Branches
of the Bank and in the press.
COSTS AND CHARGES Charges will be payable on the account as
- ----------------- follows:
1. L.190 per month fixed for a period of one
year from the date of this letter.
2. Special services will continue to be
charged by way of a separate charge as used.
These charges will be debited to the account
and may be varied by the Bank at any time and
notice of changes will be advised to you.
A management fee of L.625 is payable. This
will be debited to the account in the next
few days.
All costs and expenses incurred by the Bank
in preserving or enforcing the security
referred to below shall be debited to the
account under advice to you.
OTHER FACILITIES In addition to the overdraft facility we are
- ---------------- pleased to offer to the Company the
facilities on the attached schedule.
These additional facilities will be available
upon such terms and conditions as shall from
time to time be required by the Bank and may
be cancelled by the Bank at any time but is
the Bank's present intention to keep these
facilities in place for the period of
availability of the overdraft facility. The
Company liability in respect of any
utilisation of these facilities may, however,
extend beyond such period of availability.
SECURITY It is a condition of the facilities that
- -------- amounts owing shall be secured by the
following. Any security which is not already
in place is to be provided to the Bank in a
form acceptable to the Bank.
1. A Debenture in the Bank's standard
form on the Company's undertaking
property and assets.
Lloyds Bank - 3 -
Commercial
Service
2. A first legal charge in the Bank's
standard form over the property at
Wheler Road, Seven Stars Industrial
Estate, Coventry.
FINANCIAL INFORMATION Whilst the facilities remain available you
- --------------------- should provide to the Bank copies of:
a) your Audited Annual Accounts
encompassing a Cashflow Statement,
b) your quarterly Management Accounts,
and
c) a copy of the Sun Group of Companies
Financial Statements. These figures
will be provided by Cindy Loadman
direct to the Bank.
as soon as possible after the end of the
period to which they relate which shall not
be later than 150 days in respect of your
annual accounts or 30 days in respect of your
management accounts from the end of each
relevant period.
The figures so provided should demonstrate
that the aggregate value of the Company's
good book debts, cash in hand, quoted
investments and stock in trade (unaffected by
retention of title claims) equals or exceeds
100% of the Company's overdraft liability to
the Bank.
OTHER REQUIREMENTS The Bank will be looking to the Company to
- ------------------ meet the 1996 profit projection, progress
being monitored against quarterly Management
Accounts.
PERIOD OF OFFER Please confirm your acceptance of the
- --------------- facilities offered by returning the attached
duplicate of this letter with the
acknowledgement signed in accordance with the
bank mandate currently held by the Bank. If
such confirmation is not received by this
office by 21st June 1996 the offer will lapse.
Yours faithfully,
For and on behalf of Lloyds Bank Plc
Manager
LLOYDS BANK - 4 -
COMMERCIAL
SERVICE
We hereby acknowledge and accept the terms of your offer dated 6 June, 1996 of
which this is a duplicate and agree all the terms and conditions therein
contained.
For and on behalf of SUN HYDRAULICS LIMITED.
Signed By R. Glasspole (name)
-------------------------------------
/s/ R. Glasspole (signature) [ ]
-------------------------------------
_____7 June_________________________1996____(date)
[ ]to be signed in accordance with the account mandate held by the Bank.
LLOYDS BANK - 5 -
COMMERCIAL
SERVICE
SCHEDULE OF OTHER FACILITIES
The following additional facilities are available:
1. an indemnity line of L.120,000 to cover bonds
and guarantees issued by the Bank or its
correspondents on the Company's behalf. The
total value of all such bonds and guarantees
that may be outstanding at any one time may
not exceed the limit detailed above. You
should note that the total liability of the
Bank under certain custom and excise
guarantees is twice the amount quoted on the
guarantee. Charge to continue at 1.5% per
annum.
2. an open credit facility of L.1,000 to cover
arrangements to cash the Company's cheques at
other banks or at branches of the Bank other
than Coventry branch. The limit detailed
above is the maximum value of cheques that
may at any one time have been cashed but not
yet forwarded to the Bank's Coventry branch
for payment.
3. an Negotiation facility of L.20,000 to cover
the negotiation by the Bank of cheques and
bills of exchange payable abroad with
recourse to the Company. the limit detailed
above is the maximum total amount of proceeds
paid to the Company in respect of cheques and
bills of exchange which the Bank anticipates
at any point in time be unpaid by the drawer
thereof. For this purpose the Bank will
assume payment after [30] days if not
actually advised of payment or non-payment,
but this shall not prejudice the Bank's right
of recourse to the Company if advice of
non-payment is received at any time
thereafter.
4. a new Revolving Loan facility of L.800,000
subject to the terms and conditions set out
in a Loan Facility Letter to follow.