EXHIBIT 10.18
November 14, 1994
[Logo of PNCBANK]
Respironics, Inc.
1001 Murry Ridge Drive
Murrysville, Pennsylvania 15668
Attention: James Woll, Treasurer
Re: $1,250,000.00 Committed Line of Credit
Dear Mr. Woll:
We are pleased to inform you that PNC Bank, National Association (the
"Bank"), has approved your request for a committed line of credit to
RESPIRONICS, INC. (the "Borrower"). We look forward to this opportunity
to help you meet the financing needs of your business. As your primary bank,
we want to supply all your banking needs.
All the details regarding your loan are outlined in the following sections
of this letter. If these terms are satisfactory, please follow the instructions
for proceeding with your loan provided at the end of this letter.
1. Type of Facility and Use of Proceeds. This is a committed revolving
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line of credit under which the Borrower may request and the Bank, subject
to the terms and conditions of this letter, will make advances to the Borrower
from time to time until the Expiration Date, in an amount in the aggregate
at any time outstanding not to exceed $1,250,000.00 (the "Line of Credit").
The "Expiration Date" means October 30, 1995, or such later date as may
be designated by the Bank by written notice to the Borrower. Advances may
be used for working capital or other general business purposes of the Borrower.
2. Interest Rate. Interest on the unpaid balance of the Line of Credit
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advances will be charged at a rate per annum which is at all times equal
to the rate of interest publicly announced by the Bank from time to time
as its prime rate (the "Prime Rate").
3. Repayment. Subject to the terms and conditions of this letter, the
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Borrower may borrow, repay and reborrow until the Expiration Date, on which
date the outstanding principal balance and any accrued but unpaid interest
shall be due and payable. Interest will be due and payable on a monthly
basis, and will be computed on the basis of a year of 360 days and paid
on the actual number of days elapsed.
4. Note. The obligation of the Borrower to repay loans under the Line
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of Credit shall be evidenced by a committed line of credit note (the "Note") in
form and content satisfactory to the Bank.
5. Fee. The Borrower will pay to the Bank a fee in the amount of $2,500.00.
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6. Depository. The Borrower will establish and maintain at the Bank the
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Borrower's primary depository accounts.
7. Covenants. Unless compliance is waived in writing by the Bank or until
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payment in full and termination of the Line of Credit:
(a) The Borrower will promptly submit to the Bank such information relating
to the Borrower's affairs (including but not limited to annual financial
statements for the Borrower and any guarantor) or any security for the Line
of Credit as the Bank may reasonably request.
(b) The Borrower will not make or permit any change in the nature of its
business as carried on as the date of this letter or in its senior management
or equity ownership.
(c) The Borrower will maintain at all times a minimum Tangible Net Worth
of $37,000,000.00 plus (ii) an amount equal to 50% of the Borrower's net income
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for each fiscal year ending after December 31, 1994. "Tangible Net Worth" means
stockholders' equity in the Borrower less any advances to third parties and all
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items properly classified as intangibles, in accordance with GAAP.
(d) The Borrower will maintain at all times a ratio of current assets to current
liabilities of at least 2.0 to 1.
(e) The Borrower will maintain at all times a ratio of total liabilities to
Tangible Net Worth of less than 1.0 of 1.
8. Additional Provisions. Before the first advance under the Line of Credit, the
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Borrower agrees to sign and deliver to the Bank the Note and Other required
documents and such other instruments and documents as the Bank may reasonably
request, such as certified resolutions, incumbency certificates or other
evidence of authority. The Bank will not be obligated to make any advance under
the Line of Credit if any Event of Default (as defined in the Note) or event
which with the passage of time, provision of notice or both would constitute an
Event of Default under the Note shall have occurred and be continuing.
Prior to execution of the final documents, the Bank may terminate this letter if
a material adverse change occurs with respect to the Borrower, any guarantor,
any collateral for the Line of Credit or any other person or entity connected in
any way with the Line of Credit, or if the Borrower fails to comply with any of
the terms and conditions of this letter, or if the Bank reasonably determines
that any of the conditions cannot be met.
To accept these terms, please sign the enclosed copy of this letter as set forth
below and return it to the Bank within 30 days from the date of this letter. If
accepted, the final
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documents must be executed within 60 days from the date of this letter, or this
letter may be terminated at the Bank's option without liability or further
obligation of the Bank.
Thank you for giving PNC Bank this opportunity to work with your business. We
look forward to other ways in which we may be of service to your business or to
you personally.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
Kurtis W. Huffman
Assistant Vice President
ACCEPTANCE
With the intent to be legally bound hereby, the above terms and conditions are
hereby agreed to and accepted this 14th day of November, 1994.
BORROWER:
RESPIRONICS, INC.
By: James C. Woll
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Print Name: James C. Woll
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Title: Treasurer
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