Frost National Bank
Member: Cullen/Frost Bankers. A Family of Texas Banks
October 25, 1995
Xxxxx Xxxxxxx
Scientific Measurement Systems, Inc.
0000 Xxxxxx Xx.
Xxxxxx, XX 00000
Dear Xx. Xxxxxxx:
This letter will evidence the agreement between The Frost National Bank ("Frost"
or "Bank"), and Scientific Measurement Systems, Inc. ("Company" or "Borrower")
for a loan in the principal amount of Eighty Thousand Dollars ($80,000)
representing a term renewal of the Company's revolving line of credit.
Such term loan to be structured as follows:
Amount $80,000 Term Loan ("the Loan")
Term: 120 days, maturing February 22, 1996
Interest Rate: 11% fixed calculated on the basis of a year of 360 days
Advances: None.
Repayment: Interest only due monthly; outstanding principal and accrued,
unpaid interest due in full at maturity
Collateral: First priority lien on all Accounts Receivable
Collateral Maintenance Agreement: The "Loan" will be subject to the eligible
accounts receivable being equal to or in excess of $100,000.00. Eligible
accounts receivable are defined as contract and/or scanning receivables as those
billed in domestic trade of Borrower and remaining unpaid 60 days or less from
their respective invoice dated (30 Days Past Due). Eligible receivables do not
include receivables due from affiliated or related entities. In addition, the
entire amount of an account receivable with 10% (or greater) of the balance
outstanding 90 days from original invoice will be excluded.
Frost National Bank, Post Office Box 1727 Austin, Texas 78787-1787
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Conditions to the Commitment:
For the term of the loan (and any renewals or other extensions), the following
conditions shall apply:
1. Company will pay 100% of all fees for present and future lien filings,
title searches or other expenses of the Bank.
2. company will provide monthly unaudited financial statements (including
balance sheets, income statements and other financial statements as may be
required by the Bank), within 30 days of each month end.
3. Company will provide quarterly 10Q reports and annual 10K reports when
filed by Xxxxxxxxx.
4. Company will deliver to the Bank all additional documents and instruments
requested by the Bank from time to time in connection with the loan
including without limitation appropriate corporate resolutions, security
agreements, and financing statements as may be reasonably requested by the
Bank.
5. Company will deliver to the Bank all additional documents and instruments
requested by the Bank from time to time in connection with the loan
including without limitation appropriate corporate resolutions, security
agreements, and financing statements as may be reasonably requested by the
Bank.
6. Bank will not initially require but shall retain the right to require that
Borrower establish a lock box cash collateral account for the collection of
accounts receivable.
NOTICE TO BORROWER
For the purpose of this notice, the term "Written Agreement" shall include the
document set forth above, together with each and every other document relating
to and/or securing the same loan transaction, regardless of the date of
execution.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Please acknowledge your acceptance to this agreement by affixing your signing in
the space provided below. Should you have any questions regarding this matter,
please contact me at (000) 000-0000.
Sincerely,
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Senior vice President
ACCEPTANCE:
Scientific Measurement Systems, Inc.
By: /s/ Xxxxx Xxxxxxx
------------------------
Xxxxx Xxxxxxx, President
Date: October 27, 1995
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