The CIT Group/ EXHIBIT 10.15
Industrial Financing
650 CIT Drive
P.O. Box 490
Livingston, NJ 07039-0490
201-740-5200
May 4, 1995
Ms. Christina D'Erasmo
Survival Technology, Inc.
2275 Research Boulevard, Ste. 100
Rockville, MD 20850
Dear Chris:
It is our pleasure to confirm the commitment of The CIT Group/Equipment
Financing, Inc. (CIT) to make loans to Survival Technology, Inc. (Borrower)
up to an aggregate principal sum of Three Million Dollars ($3,000,000.00),
for the purpose of enabling Borrower to acquire the Equipment described
below. This commitment letter replaces and supersedes the commitment letter,
dated March 21, 1995, addressed to William Rich, and accepted on April 8,
1995, on behalf of Borrower by Jeffrey W. Church. Our commitment is subject
to the following terms and conditions.
1. AMOUNT
The maximum aggregate amount of the loans will be the sum of $3,000,000.00
representing one hundred percent (100%) of the Borrower's invoice cost
including freight and taxes for the Equipment described in Paragraph 2.
2. EQUIPMENT/COLLATERAL
The Equipment to be purchased will consist of the following items:
Production Molds, Equipment and Facility renovations.
Our loan will be collateralized by a valid and perfected first security
interest in the above-mentioned Equipment, and such Equipment shall not
to be subject to any junior security interests, except for the security
interest granted pursuant to the Merrill Lynch agreement referred to in
Paragraph 3 hereof, which security interest shall be subordinated to
ours in a manner satisfactory to us.
3. OTHER TERMS AND CONDITIONS
Our commitment herein to make any loans that exceed $1,500,000 in the
aggregate is contingent upon our receipt from a participant/assignee of
funds to purchase a participation interest in our loans or an assignment
of such loans, in the amount of such excess.
Our loan documents will contain as an event of default the existence of
an uncured or unwaived default under the WCMA Note, Loan and Security
Agreement, dated November 4, 1993, between Merrill Lynch Business
Financial Services Inc. and Borrower, as supplemented by a Letter
Agreement, dated October 7, 1994.
4. RATE OF INTEREST
Each loan, prior to maturity, shall bear interest at a rate equal to the
Treasury Yield (as defined below) plus 247 Basis Points. Interest shall
be computed on the basis of a year of 360 days. The Treasury Yield shall
mean the yield, as published in The Wall Street Journal on the day prior
to the business day immediately prior to the closing date of each loan
(or if such day is not a day on which The Wall Street Journal is
published, then on the previous day), of the United States Treasury
fixed rate security (i.e., a Treasury bond, note or bill, but excluding
any such security (a) which can be surrendered at the option of the
holder at face value in payment of any federal estate tax or (b) which
provides tax benefits to the holder, other than withholding tax benefits
for non-resident aliens or (c) which was issued at a discount) maturing
in the same month and year as the loan. In the event that more than one
such security is listed, then the Treasury Yield shall equal the highest
of such yields. In the event that no such security is listed for such
month, then the Treasury Yield shall equal the highest of the yields of
such securities maturing in the month or months closest to such month.
5. REPAYMENT
Each loan shall be repayable in sixty (60) consecutive equal monthly
installments of principal and interest, the first of said monthly
installments being due and payable thirty (30) days following the
closing date of such loan, and one on the same day of each and every
month thereafter until all are fully paid. Payments shall be applied
first to interest upon the unpaid principal balance of the loan, and any
amount remaining after payment of interest shall be applied in reduction
of the principal.
6. ADVANCES
Borrower shall provide to CIT all invoices and checks for any Equipment
that it has paid in full for and would like to have reimbursed. Any
Equipment that is being funded must be fully installed and accepted.
There is a minimum loan amount of $250,000.00.
7. DOCUMENTATION
(a) The loans will be evidenced and secured by a note and security
agreement on the standard forms generally used by CIT.
(b) Borrower shall furnish to CIT UCC-1's and manufacturer's original
invoices for each unit of Equipment.
(c) All loan documentation must be reviewed and approved (as to form
and substance) by CIT and its counsel prior to closing.
8. INSURANCE
Borrower shall furnish to CIT a certified copy of an insurance policy
in a minimum amount at least equal to the purchase price of all of the
Equipment, insuring, against any loss to the Equipment by reason of
collision, fire, theft and the other coverages usually afforded by an
ACV endorsement, such policy of insurance to be in form and issued by
a company reasonably satisfactory to CIT, containing such other
endorsements as CIT may reasonably require (including, without
limitation, an endorsement to the effect that the liability of the
insurance company to CIT, as mortgagee, will not be diminished or
impaired by any act or neglect of the Borrower), and with a long
form loss payable endorsement in favor of CIT.
All required policies of insurance (and any endorsements, renewals, or
replacements thereof) shall contain the written obligation on the part
of the insurance company to notify CIT at least thirty (30) days prior
to any termination, cancellation, or material amendment of its policy,
with opportunity by CIT to cure any nonpayment.
9. PREPAYMENT
Prepayment is allowed per Early Termination Table.
10. COMMITMENT FEE AND APPLICATION OF CERTAIN PAYMENTS
In consideration of CIT's commitment, the Borrower agrees to pay a
Commitment Fee to CIT of Five Thousand Dollars ($5,000.00). Said
Commitment Fee is non-refundable whether or not the loan is closed for
any reason whatsoever, except as provided in Paragraph 15 hereof.
Borrower further expressly acknowledges that such Commitment Fee is fair
and reasonable compensation for this commitment, considering the
condition of the money market, the prevailing interest rates, the credit
worthiness of the Borrower, the likelihood of the loan being made, the
interest rate, and the other terms contained herein.
CIT acknowledges receipt from Borrower of two payments, $5,000.00 (in
connection with the superseded commitment letter) and $15,000.00. Of
the total of these amounts, $5,000 will be applied as the above
referenced Commitment Fee, and the remaining $15,000 will be held
without interest and applied to the initial installments due in
repayment of the loans.
11. ADDITIONAL FEES (IF ANY)
None.
12. ADDITIONAL DOCUMENTATION
In addition to the above-mentioned documentation, CIT shall be furnished,
at or prior to closing (a) a current certificate of good standing, issued
by the Secretary of State of Delaware, reflecting the good standing of
Borrower in that state, (b) certified resolutions of Borrower authorizing
the obtaining of the loan and designating the officer or officers to
execute documents on behalf of the Borrower, and (c) such other
information and documentation as CIT or its Counsel may reasonably
require.
13. CLOSING/EXPIRATION OF COMMITMENT
All loans must close prior to the close of business on 12/31/95, when our
commitment to make the loans shall expire and be of no further force and
effect.
14. CLOSING COSTS AND FEES
None.
15. CHANGE IN FINANCIAL CONDITION, CORPORATE STRUCTURE, BUSINESS PROSPECTS,
ETC.
If, in the reasonable judgment of CIT, there should occur, before the
closing of the loan, any material adverse change in the financial
condition or business prospects of the Borrower or any guarantor or any
other party to whom CIT may have recourse, then, at the option of CIT,
this commitment will become null and void. We specifically call your
attention to the fact that, in issuing this commitment, CIT is relying
upon the financial statements delivered to us by the Borrower and any
other party to whom CIT may have recourse, and the continuing maintenance
of their respective present corporate structures and stock ownership.
The Borrower shall be obligated to notify CIT of any material adverse
changes in the financial condition, corporate structure, ownership or
business prospects of any of the foregoing which occur between the date
hereof and the date of closing of any of the loans.
If we exercise our right to terminate this commitment because of our
determination of material adverse change, we will refund the Commitment
Fee and any of the $12,500 being held by CIT that has not already been
applied to payments owing, less any and all expenses incurred or accrued
in our processing of the contemplated loans.
16. ASSIGNMENT
This commitment may not be assigned without the prior written consent
of CIT.
This commitment will only remain binding upon us if accepted by you and
returned so as to be received by us no later than May 12, 1995.
Should you have any questions regarding this commitment, please do not
hesitate to contact us.
Very truly yours,
THE CIT GROUP/EQUIPMENT FINANCING, INC.
Mark J. Mitchell District Manager
ACCEPTED: /s/ Mark J. Mitchell
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BORROWER:
Survival Technology, Inc.
By: /s/ Jeffrey W. Church
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Jeffrey W. Church
Title: SR. VICE PRESIDENT - FINANCE AND CFO
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