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EXHIBIT 10.3
[DVI FINANCIAL SERVICES INC. LETTERHEAD]
Kevin O'Boyle, CFO
ChromaVision Medical Systems, Inc.
33171 Paseo Cerveza
San Juan Capistrano, CA 92675
Dear Mr. O'Boyle:
DVI Financial Services Inc. is pleased to inform you of our commitment to
provide financing subject to the terms and conditions outlined in this letter:
Lessee: ChromaVision Medical Systems, Inc.
Lessor: DVI Financial Services Inc.
Equipment/
Collateral: Various New Automated Intelligent Microscope
Systems
Amount of Facility: Not to exceed $1,000,000.00, however,
Lessor's initial financing arrangements under this
non-revolving facility shall not exceed $750,000.00.
Fundings in excess of the $750,000.00 referenced herein
shall not occur until at least 12 months from the date of
the first funding under this facility and after all the
conditions referenced under "Additional Requirements" are
fulfilled.
Term: Each of the first three (3) transactions under the initial
$750,000.00 facility shall not exceed 18 months.
Transactions subsequent to the first three shall not
exceed 36 months. Payments under each schedule are to be
made in advance.
Yield: 12.6 %
The yield is based on lending conditions prevalent as
of,the date set forth above. In the event of an increase
in 30 month Treasury Notes prior to Lessee s acceptance of
the each item of equipment, Lessor reserves the right to
adjust the payments accordingly to reflect such an
increase in Lessor's cost of funds.
Interim Financing: Depending upon the Closing Date of each
transaction, the first payment shall be due on either the
lst or the 15th of each month. Interim Financing charges
will, therefore be assessed for the time between the
Closing Date and the date of the first payment. These
charges will be assessed on a pro-rata basis, based on the
number of days between the Closing Date and the date of
the first payment.
Expiration of
Facility: All fundings under this $750,000.00 facility shall occur
on or before the close of business on May 12, 1999.
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End of Lease: At the end of each lease Lessee will have the
option to purchase all but not less than all of the
equipment for $1.00.
Additional Fees: Lessee will be required to reimburse Lessor for any
out-of-pocket expenses including, but not limited to lien
searches, filing fees and documentation fees. Additional
fees shall not exceed $1,000.00 per transaction.
Maintenance, Maintenance, insurance, taxes and all items of a
Insurance & Taxes: similar nature will be the responsibility of the Lessee.
Documentation: The following documents shall be satisfactorily executed
by the Lessee. The Lessor reserves the right to require
additional documentation, if necessary, to perfect
Lessor's interest in the collateral.
Master Equipment Lease
Equipment Schedule
Secretary's Certificate
UCC Financing Statement
Pay Proceeds Letter
Delivery and Acceptance Certificate
Assignment of Sub-leases
Additional
Requirements: 1. In the event that Lessee is notified that a separate
510(k) approval for the Triple Plus screen for Down
Syndrome is required, and such approval is not received by
10/1/98, advances under this facility will cease until
such approval is received.
2. Each individual financing under the facility will be
contingent upon review by Lessor of the underlying
contract with the identified end user and any other
financial information deemed necessary by the Lessor to
complete such review.
3. Lessor reserves the right to request additional
information through the Lessee from the individual end
users through out the term of the relationship to evaluate
the effectiveness, value and market acceptance of the
collateral.
4. Initial fundings under the facility shall be limited to
$750,000.00 up to the close of business on May 12, 1999.
Further fundings under the requested $1,000,000.00
facility will be dependent upon Lessee realizing no
material negative variance from its published projections,
to be determined at the sole discretion of Lessor.
5. Lessee agrees to maintain and make available quarterly
end user reports detailing monthly usage and rental
streams for each end user.
Disbursement Lessor will advance funds upon completion and receipt of
of Funds: the following:
1. This approval letter has been executed and returned and
Lessor is in receipt of reimbursement for any
out-of-pocket expenses.
2. All documentation as required by Lessor has been properly
executed and returned to Lessor.
3. All terms and conditions expressed herein have been met
to the satisfaction of Lessor.
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Material Adverse
Change: If, in the sole discretion of the Lessor, there has
occurred a material adverse change in the financial
condition of the Lessee, then this commitment shall be
considered canceled.
If you wish to proceed, please return an executed copy of this letter, along
with a $10,000.00 (1%) commitment fee to be applied to the first rental on each
lease schedule until exhausted, to the attention of the undersigned by May 25,
1998, after which time this approval will expire. Any changes to the terms and
conditions expressed herein, without the written consent of DVI, will void this
approval. This letter replaces and supersedes any previous proposals or
offerings.
Very truly yours,
Mark J. Gallagher
Acknowledged & Accepted:
BY: [SIG]
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TITLE:
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VP & CFO
DATE: 05/15/98
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