UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
__X__ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
or
_____ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number 0-13111
ANALYTICAL SURVEYS, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0846389
(State of incorporation) (IRS Employer Identification No.)
1935 Jamboree Drive
Colorado Springs, Colorado 80920
(Address of principal executive offices) (Zip Code)
(719) 593-0093
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past (12) months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past ninety (90)
days.
Yes __X__ No_____
The number of shares of common stock outstanding as of
April 30, 1995 was 2,729,249.
<PAGE>
Part I Item 1.
<TABLE>
ANALYTICAL SURVEYS, INC.
BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, Sept. 30,
1995 1994
_________ _________
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 522,891 $ 552,232
Accounts receivable, net of $20,000
allowance for doubtful accounts 2,198,719 1,699,372
Unbilled revenues 4,426,214 3,988,270
Prepaid expenses 212,031 142,556
Deferred tax assets 52,304 60,137
_________ _________
Total current assets 7,412,159 6,442,567
_________ _________
PROPERTY AND EQUIPMENT, at cost
Equipment 6,162,734 5,766,095
Furniture and fixtures 683,228 637,155
Leasehold improvements 122,640 121,918
_________ _________
6,968,602 6,525,168
_________ _________
Less Accumulated depreciation and amortization (5,353,922) (4,967,046)
_________ _________
1,614,680 1,558,122
Goodwill, less accumulated amortization 14,558 15,367
_________ _________
TOTAL ASSETS $ 9,041,396 $ 8,016,056
========= =========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANALYTICAL SURVEYS, INC.
BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, Sept. 30,
1995 1994
_________ _________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to bank (Note 2) $ - $ -
Current maturities of long-term debt 593,110 647,800
Billings in excess of costs 428,332 420,139
Accounts payable and accrued expenses 1,442,709 758,032
Accrued payroll and benefits 456,654 578,929
Accrued income taxes - 341,824
Accrued interest payable 3,983 2,654
_________ _________
Total current liabilities 2,924,788 2,749,378
Deferred income tax 165,364 232,065
Long-term debt, less current maturities 498,151 391,032
Deferred compensation 51,225 47,043
_________ _________
Total liabilities 3,639,528 3,419,518
_________ _________
STOCKHOLDERS' EQUITY
Preferred stock-authorized 2,500,000 shares
of no par value; none issued and outstanding
Common stock-authorized 100,000,000 shares
of no par value; issued and outstanding
2,690,249 shares at March 31, 1995 and
2,557,099 shares at September 30, 1994 2,880,441 2,462,283
Retained earnings 2,521,427 2,134,255
_________ _________
Total stockholders' equity 5,401,868 4,596,538
_________ _________
TOTAL LIABILITIES AND EQUITY $ 9,041,396 $ 8,016,056
========= =========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANALYTICAL SURVEYS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Six Months Ended Three Months Ended
March 31, March 31,
1995 1994 1995 1994
_________ _________ _________ _________
<S> <C> <C> <C> <C>
SALES OF SERVICES $6,192,588 $5,047,927 $3,275,927 $2,706,756
_________ _________ _________ _________
COSTS AND EXPENSES
Salaries, wages and benefits 2,449,860 2,206,285 1,279,980 1,116,739
Subcontractor costs 1,554,310 968,507 798,081 552,249
General and administrative 1,101,380 960,722 554,682 506,183
Depreciation and amortization 387,685 376,542 199,486 190,108
_________ _________ _________ _________
5,493,235 4,512,056 2,832,229 2,365,279
_________ _________ _________ _________
EARNINGS FROM OPERATIONS 699,353 535,871 443,698 341,477
_________ _________ _________ _________
OTHER INCOME (EXPENSE)
Interest (74,225) (102,442) (40,182) (53,098)
Miscellaneous Income 47 1,827 26 1,402
_________ _________ _________ _________
(74,179) (100,615) (40,156) (51,696)
_________ _________ _________ _________
EARNINGS BEFORE INCOME TAXES 625,175 435,256 403,541 289,781
INCOME TAX EXPENSE 238,000 164,796 152,000 109,796
_________ _________ _________ _________
NET EARNINGS $ 387,175 $ 270,460 $ 251,541 $ 179,985
========= ========= ========= =========
EARNINGS PER SHARE $ 0.13 $ 0.10 $ 0.09 $ 0.07
==== ==== ==== ====
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANALYTICAL SURVEYS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended Six Months Ended
March 31, March 31,
1995 1994
_________ _________
<S> <C> <C>
CASH FLOWS PROVIDED (USED)
BY OPERATING ACTIVITIES $ (56,493) $ 13,101
_________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (443,434) (103,725)
_________ _________
Net cash used in investing activities (443,434) (103,725)
_________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) under notes payable -- 245,000
Proceeds from issuance of long-term debt 394,108 85,481
Principal payments of long-term debt (341,679) (270,953)
Proceeds from issuance of common stock 418,158 24,792
_________ _________
Net cash provided (used)
by financing activities 470,587 84,320
_________ _________
Net increase (decrease) in cash (29,341) (6,304)
Cash at beginning of period 552,232 238,610
_________ _________
Cash at end of period $ 522,891 $ 232,306
========= =========
Supplemental cash flow disclosures:
Interest paid $ 72,896 $ 101,935
========= =========
Income taxes paid $ 554,200 $ 287,875
========= =========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
The accompanying interim financial statements have been prepared
by management in accordance with the accounting policies
described in the Company's annual report for the year ended
September 30, 1994. They have not been audited by independent
auditors.
The financial statements reflect all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position of Analytical Surveys, Inc., at March 31, 1995
and its results of operations for the six and three months ended
March 31, 1995 and 1994, and its cash flows for the six months
ended March 31, 1995 and 1994. All such adjustments are of a
normal recurring nature.
The computation of earnings per common share is based on the
weighted average number of shares outstanding plus common stock
equivalents as follows:
Six months ended March 31, 1995 2,888,000
Six months ended March 31, 1994 2,689,304
Three months ended March 31, 1995 2,897,000
Three months ended March 31, 1994 2,673,526
2. Notes Payable to Bank
Effective February 28, 1995, the Company renewed its line of
credit loan agreement with its existing bank for one year at the
existing maximum loan amount of $1,250,000. The interest rate was
reduced to one-half percent over the bank's published prime
lending rate.
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
3. Stock Options
The following table summarizes stock option transactions under the
Company's four non-qualified stock option plans:
<TABLE>
<CAPTION>
Shares Average
under Option Price
option per share
_________ ________
<S> <C> <C>
Outstanding at September 30, 1994 744,525 $ 2.26
Issued 0
Exercised (133,150) 2.13
Canceled (2,000) 3.03
_________
Outstanding March 31, 1995 609,375 $ 2.28
=========
At March 31, 1995:
Options Exercisable 372,900
Available for Grant 208,975
=========
</TABLE>
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
Part I Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations:
Three Months Ended March 31, 1995
Net income (all from continuing operations) for the three months
ended March 31, 1995 of $251,541 was 40% higher than the same
period of the previous year. Increased production caused sales to
increase 21% and earnings from operations to increase 30% for the
second quarter of fiscal year 1995 over the same period of the
previous year. Salaries, wages and benefits increased 15% over
last year as the result of the production volume increases (more
employees) and increased wage and salary rates. Increased
subcontractor costs reflect increased production by
subcontractors. The 10% increase in general and administrative
expenses was primarily the result of increased selling and
marketing activity. Interest expense was 24% less than the same
quarter of the previous year due to reduction of debt, including
capitalized leases, through scheduled repayments.
The effect of common stock equivalents on the average number of
shares outstanding during the period increased due to the
increase in the average market price of the Company's common
stock over the previous year.
Three Months Ended March 31, 1994
Net income (all from continuing operations) for the three months
ended March 31, 1994 of $179,985 was 38% higher than the same
period of 1993. Increased internal production volume and
increased production by subcontractors caused sales to increase
22% and earnings from operations to increase 36% for the second
quarter of fiscal year 1994 over the previous year. Salaries and
general and administrative costs increased over the previous year
as the result of the production volume increases. Increased
subcontractor costs reflect increased production by
subcontractors. Interest expense was 7% more than the same
quarter of the previous year due to greater utilization of the
line of credit.
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
Six Months Ended March 31, 1995
Net income (all from continuing operations) for the six months
ended March 31, 1995 increased 43% over the first half of 1994.
Increased production caused sales to increase 23% and earnings
from operations to increase 31%. Salaries expense increased 11%
due in part to annual wage increases and increased production.
Subcontractor costs increased due to greater production by
subcontractors. The 15% increase in general and administrative
expenses was primarily the result of increased selling and
marketing activity and increased production. Interest expense was
27% less than the same period of the previous year due to
reduction of debt, including capitalized leases, through
scheduled repayments.
Cash flow used by operations in the six months ended March 31,
1995 was $56,493 compared to net cash provided by operations of
$13,101 in the same six months of the previous year as increased
production led to an expected increased investment in unbilled
revenues and accounts receivable. The trend to increased unbilled
revenue is believed to be a normal fluctuation. The Company
maintains an open line of credit to finance the investment in
unbilled revenue and accounts receivable. The increase in
accounts payable from September 30, 1994 is attributable to
normal fluctuations in progress billings from subcontractors.
Cash flow from investing activities consists primarily of
equipment acquisitions required by increased production. Cash
flow from financing activities consists of the financing of
equipment using capital leases, the scheduled repayment of debt
and capitalized leases and proceeds from the exercise of stock
options by employees.
The Company's backlog of contracted work increased to $13,665,000
at March 31, 1995 up 24% from 1994 due to increased volume of new
contracts from both new and existing customers. In April 1995,
the Company announced that backlog exceeded $14,000,000 for the
first time in the Company's history.
In January, 1995 the Company announced that it was a member of
the team selected to negotiate with the State of Connecticut for
a potentially significant contract for GIS services. On April 25,
1995, the Company announced that the team had received contracts
from the state of Connecticut and entities within the state for a
variety of GIS-related services. These contracts, which represent
ASI's initial phase of the negotiations in the state were valued
at $693,000. Since the January announcement, the state has
inaugurated new state officials, which has extended the
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
negotiation process and reduced state budgets. The resulting
master contract commits direct state funding but also allows
other GIS users to participate in both the cost and benefits of
the project. Several cities have already joined the project.
Six Months Ended March 31, 1994
Net income for the six months ended March 31, 1994 increased 42%
over the first half of 1993. Increased production caused sales to
increase 16% and earnings from operations to increase 34%.
Salaries expense increased 10% due in part to annual wage
increases and increased production. Subcontractor costs increased
due to greater production by subcontractors.
The Company's backlog of contracted work increased to $10,975,000
at March 31, 1994 up 15% from 1993 due to increased volume of new
contracts from both new and existing customers.
Cash generated by operations increased from a net use of $230,000
in the first six months of 1993 to net cash provided of $13,000
in 1994. Cash generated by operations was reduced in 1993 by a
27% increase in the combination of net unbilled revenue plus
accounts receivable less billings in excess of costs. The rate of
increased investment in these contract related accounts slowed to
16% in 1994. Cash flow from investing activities consists of
routine property and equipment acquisitions. Cash flow from
financing activities consists of the proceeds of borrowing on the
line of credit, the financing of equipment using capital leases,
the scheduled repayment of debt and capitalized leases and the
proceeds from the exercise of stock options by employees.
Liquidity and Capital Resources:
Current liabilities include a final payment of $180,000 due in
April 1995 on a capitalized lease obligation. This debt,
originally in the amount of $1,200,000 at an effective interest
rate of 17.5% and undertaken in October 1991 to refinance term
debt, required monthly payments of $35,280 and the final balloon
payment of $180,000. This final payment was paid after the end of
the quarterly reporting period using cash on hand.
Management expects to meet long-term liquidity requirements
through cash flows generated by operations supplemented from time
to time by short term borrowings on a bank line of credit.
Routine capital expenditures will usually be financed with term
debt and/or capital leases. The Company is dependent, however,
upon its ability to successfully deliver acceptable products in
order to maintain adequate operating cash flows.
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
The Company has not committed to significant capital expenditures
at March 31, 1995.
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders
Two matters were voted upon at the Annual Meeting of Shareholders
on February 22, 1995:
(a) All nominees for director listed in the Company's proxy
statement were elected; there was no solicitation in opposition
to management's nominees. The following directors were re-elected
to serve for one year or until the next election of directors:
For Withheld
John A. Thorpe 2,029,038 13,660
Richard P. MacLeod 2,028,404 14,294
Sidney V. Corder 2,030,038 12,660
James T. Rothe 2,030,038 12,660
William H. Hudson 2,030,038 12,660
Robert H. Keeley 2,030,038 12,660
(b) The proposal to ratify the selection of KPMG Peat Marwick LLP
as the Company's independent accountants for the fiscal year
ending September 30, 1995 was passed:
For 2,102,849
Against 9,338
Abstain 2,471
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10 Material Contracts
Bank Loan Agreement dated February 28, 1995.
27 Financial Data Schedule
(b) Reports on Form 8-K
One report on Form 8-K was filed January 6, 1995: Item
5. Other events. On January 5, 1995 the registrant
announced that it was a member of the team selected to
negotiate with the State of Connecticut for a
potentially significant contract for GIS services.
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Analytical Surveys, Inc.
________________________
(Registrant)
Date May 9, 1995 /s/ Sidney V. Corder
________________________
Sidney V, Corder, President
and Chief Executive Officer
Date May 9, 1995 /s/ Scott C. Benger
________________________
Scott C. Benger, Secretary/Treasurer
(principal financial officer and
principal accounting officer)
BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No Call
Collateral
$1,250.000.00 02/28/96 4a A,E,L
Account Officer Initials
176857108 TDY
References in the shaded area are for Lender's use only
and do not limit the applicability of this document to any
particular loan or item.
Borrower: ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
1935 JAMBOREE DRIVE
COLORADO SPRINGS, CO 80920
Lender: BANK ONE, COLORADO, N.A.
30 E. PIKES PEAK AVE.
P.O. BOX 1699
COLORADO SPRINGS, CO 80942
THIS BUSINESS LOAN AGREEMENT between ANALYTICAL SURVEYS,
INC., A COLORADO CORPORATION ("Borrower") and BANK ONE,
COLORADO, N.A. ("Lender") is made and executed on the
following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a
commercial loan or loans and other financial accommodations,
including those which may be described on any exhibit or
schedule attached to this Agreement. All such loans and
financial accommodations together with all future loans and
financial accommodations from Lender to Borrower, are
referred to in this Agreement individually as the "Loan" and
collectively as the "Loans". Borrower understands and
agrees that: (a) in granting, renewing, or extending any
Loan, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in this Agreement;
(b) the granting, renewing, or extending of any Loan by
Lender at all times shall be subject to Lender's sole
judgment and discretion; and (c) all such Loans shall be and
shall remain subject to the following terms and conditions
of this Agreement.
TERM. This Agreement shall be effective as of February 28,
1995, and shall continue thereafter until all Indebtedness
of Borrower to Lender has been performed in full and the
parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following
meanings when used in this Agreement. Terms not otherwise
defined in this Agreement shall have the meanings attributed
to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful
money of the United States of America.
Agreement. The word "Agreement" means this Business Loan
Agreement, as this Business Loan Agreement may be amended or
modified from time to time, together with all exhibits and
schedules attached to this Business Loan Agreement from time
to time.
Borrower. The word "Borrower" means ANALYTICAL SURVEYS,
INC., A COLORADO CORPORATION. The word "Borrower" also
includes, as applicable, all subsidiaries and affiliates of
Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980, as amended.
Cash Flow. The words "Cash Flow" mean net income after
taxes, and exclusive of extraordinary gains and Income, plus
depreciation and amortization.
Collateral. The word "Collateral" means and includes
without limitation all property and assets granted as
collateral security for a Loan, whether real or personal
property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the
form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any
other security or lien interest whatsoever, whether created
by law, contract, or otherwise.
Debt. The word "Debt" means all of Borrower's liabilities
excluding Subordinated Debt.
ERISA. The word "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended.
Event of Default. The words "Event of Default" mean and
include any of the Events of Default set forth below in the
section titled "EVENTS OF DEFAULT."
Grantor. The word "Grantor" means and includes each and all
of the persons or entitles granting a Security interest in
any Collateral for the Indebtedness, including without
limitation all Borrowers granting such a Security Interest.
Guarantor. The word "Guarantor" means and includes without
limitation each and all of the guarantors, sureties, and
accommodation parties in connection with any Indebtedness.
Indebtedness. The word "Indebtedness" means and includes
without limitation all Loans, together with all other
obligations, debts and liabilities of Borrower to Lender, or
any one or more of them, as well as all claims by Lender
against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary , due or not
due, absolute or contingent, liquidated or unliquidated;
whether Borrower may be liable individually or jointly with
others; whether Borrower may be obligated as a guarantor,
surety, or otherwise; whether recovery upon such
indebtedness may be or hereafter may become barred by any
statute of limitations; and whether such indebtedness may be
or hereafter may become otherwise unenforceable.
Lender. The word "Lender" means BANK ONE, COLORADO, N.A.,
its successors and assigns.
Liquid Assets. The words "Liquid Assets" mean Borrower's
cash on hand plus Borrower's receivables.
Loan. The word "Loan" or "Loans" means and includes without
limitation any and all commercial loans and financial
accommodations from Lender to Borrower, whether now or
hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations
described herein or described on any exhibit or schedule
attached to this Agreement from time to time.
Note. The word "Note" means and includes without limitation
Borrower's promissory note or notes, if any, evidencing
Borrower's Loan obligations in favor of Lender, as well as
any substitute, replacement or refinancing note or notes
therefor.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust,
and all other instruments, agreements and documents, whether
now or hereafter existing, executed in connection with the
Indebtedness.
Security Agreement. The words "Security Agreement" mean and
include without limitation any agreements, promises,
covenants, arrangements, understandings or other agreements,
whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean and
include without limitation any type of collateral security,
whether in the form of a lien, charge, mortgage, deed of
trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by
law, contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
Subordinated Debt. The words "Subordinated Debt" mean
indebtedness and liabilities of Borrower which have been
subordinated by written agreement to indebtedness owed by
Borrower to Lender in form and substance acceptable to
Lender.
Tangible Net Worth. The words "Tangible Net Worth" mean
Borrower's total assets excluding all intangible assets
(i.e., goodwill, trademarks, patents, copyrights,
organizational expenses, and similar intangible items, but
including leaseholds and leasehold improvements) less total
debt.
Working Capital. The words "Working Capital" mean
Borrower's current assets, excluding prepaid expenses, less
Borrower's current liabilities.
REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender as of the date of this Agreement and as
of the date of each disbursement of Loan proceeds:
Organization. Borrower is a corporation which is duly
organized, validly existing, and in good standing under the
laws of the State of Colorado. Borrower has the full power
and authority to own its properties and to transact the
businesses in which it is presently engaged or presently
proposes to engage. Borrower also is duly qualified as a
foreign corporation and is in good standing in all states in
which the failure to so qualify would have a material
adverse effect on its businesses or financial condition.
Authorization. The execution, delivery, and performance of
this Agreement and all Related Documents by Borrower, to the
extent to be executed, delivered or performed by Borrower,
have been duly authorized by all necessary action by
Borrower; do not require the consent or approval of any
other person, regulatory authority or governmental body; and
do not conflict with, result in a violation of, or
constitute a default under (a) any provision of its articles
of incorporation or organization, or bylaws, or any
agreement or other instrument binding upon Borrower or (b)
any law, governmental regulation, court decree, or order
applicable to Borrower.
Financial Information. Each financial statement of Borrower
supplied to Lender truly and completely disclosed Borrower's
financial condition as of the date of the statement, and
there has been no material adverse change in Borrower's
financial condition subsequent to the date of the most
recent financial statement supplied to Lender. Borrower has
no material contingent obligations except as disclosed in
such financial statements.
Legal Effect. This Agreement constitutes, and any
instrument or agreement required hereunder to be given by
Borrower when delivered will constitute, legal, valid and
binding obligations or Borrower enforceable against Borrower
in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as
previously disclosed in Borrower's financial statements or
in writing to Lender and as accepted by Lender, and except
for property tax liens for taxes not presently due and
payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security
interests, and has not executed any security documents or
financing statements relating to such properties. All of
Borrower's properties are titled in Borrower's legal name,
and Borrower has not used, or filed a financing statement
under, any other name for at least the last five (5) years.
Hazardous Substances. The terms "hazardous waste,"
"hazardous substance," "disposal," "release," and
"threatened release," as used in this Agreement, shall have
the same meanings as set forth in the "CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act,
49 U.S.C. Section 6901, et seq., or other applicable state
or Federal laws, rules, or regulations adopted pursuant to
any of the foregoing. Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and
warrants that: (a) During the period of Borrower's
ownership, of the properties, there has been no use,
generation, manufacture, storage, treatment, disposal,
release or threatened release of any hazardous waste or
substance by any person on, under, or about any of the
properties. (b) Borrower has no knowledge of, or reason to
believe that there has been (I) any use, generation,
manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance by
any prior owners or occupants of any of the properties, or
(ii) any actual or threatened litigation or claims of any
kind by any person relating to such matters. (c) Neither
Borrower nor any tenant, contractor, agent or other
authorized user of any of the properties shall use,
generate, manufacture, store, treat, dispose of, or release
any hazardous waste or substance on, under, or about any of
the properties; and any such activity shall be conducted in
compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without
limitation those laws, regulations and ordinances described
above. Borrower authorizes Lender and its agents to enter
upon the properties to make such inspections and tests as
Lender may deem appropriate to determine compliance of the
properties with this section of the Agreement. Any
inspections or tests made by Lender shall be for Lender's
purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to
Borrower or to any other person. The representations and
warranties contained herein are based on Borrower's due
diligence in investigation the properties of hazardous
waste. Borrower hereby (a) releases and waives any future
claims against Lender for indemnity or contribution in the
event Borrower becomes liable for cleanup or other costs
under any such laws, and (b) agrees to indemnify and hold
harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from
a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to
Borrower's ownership or interest in the properties, whether
or not the same was or should have been known to Borrower.
The provisions of this section of the Agreement, including
the obligation to indemnify, shall survive the payment of
the Indebtedness and the termination or expiration of this
Agreement and shall not be affected by Lender's acquisition
of any interest in any of the properties, whether by
foreclosure or otherwise.
Litigation and claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those
for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially
adversely affect Borrower's financial condition or
properties, other than litigation, claims, or other events,
if any, that have been disclosed to and acknowledged by
Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns
and reports of Borrower that are or were required to be
filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate
reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to
Lender in writing, Borrower has not entered into or granted
any Security Agreements, or permitted the filing or
attachment of any Security interests on or affecting any of
the Collateral directly or indirectly securing repayment of
Borrower's Loan and Note, that would be prior or that may in
any way be superior to Lender's Security Interests and
rights in and to such Collateral.
Binding Effect. This Agreement, the Note and all Security
Agreements directly or indirectly securing repayment of
Borrower's Loan and Note are binding upon Borrower as well
as upon Borrower's successors, representatives and assigns,
and are legally enforceable in accordance with their
respective terms.
Commercial Purposes. Borrower intends to use the Loan
proceeds solely for business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to
which Borrower may have any liability complies in all
material respects with all applicable requirements of law
and regulations, and (I) no Reportable Event nor Prohibited
Transaction (as defined in ERISA) has occurred with respect
to any such plan, (ii) Borrower has not withdrawn from any
such plan or initiated steps to do so, and (iii) no steps
have been taken to terminate any such plan.
Location of Borrower's Offices and Records. The chief place
of business of Borrower and the office or offices where
Borrower keeps its records concerning the Collateral is
located at 1935 JAMBOREE DRIVE, COLORADO SPRINGS, CO 80920.
Information. All information heretofore or
contemporaneously herewith furnished by Borrower to Lender
for the purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the
date as of which such information is dated or certified; and
none of such information is or will be incomplete by
omitting to state any material fact necessary to make such
information not misleading.
Survival of Representation and Warranties. Borrower
understands and agrees that Lender is relying upon the above
representations and warranties in extending Loan Advances to
Borrower. Borrower further agrees that the foregoing
representations and warranties shall be continuing in nature
and shall remain in full force and effect until such time as
Borrower's Loan and Note shall be paid in full, or until
this Agreement shall be terminated in the manner provided
above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with
Lender that, while this Agreement is in effect, Borrower
will:
Litigation. Promptly inform Lender in writing of (a) all
material adverse changes in Borrower's financial condition,
and (b) all litigation and claims and all threatened
litigation and claims affecting Borrower or any Guarantor
which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its boos and records in
accordance with generally accepted accounting principles,
applied on a consistent basis, and permit Lender to examine
and audit Borrower's books and records at all reasonable
times.
Financial Statements. Furnish Lender with, as soon as
available, but in no event later than ninety (90) days after
the end of each fiscal year, Borrower's balance sheet and
income statement for the year ended, audited by a certified
public accountant satisfactory to Lender. All financial
reports required to be provided under this Agreement shall
be prepared in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by
Borrower as being true and correct.
Additional Information. Furnish such additional information
and statements, lists of assets and liabilities, agings of
receivables and payables inventory schedules, budgets,
forecasts, tax returns, and other reports with respect to
Borrower's financial condition and business operations as
Lender may request from time to time.
Financial Covenants and Ratios. Comply with the following
covenants and ratios:
Net Worth Ratio. Maintain a ratio of Total Liabilities to
Tangible Net Worth of less than 1.00 to 1.00.
Current Ratio. Maintain a ratio of Current Assets to
Current Liabilities in excess of 1.75 to 1.00.
For purposes of this Agreement and to the extent the
following terms are utilized in this Agreement, the term
"Tangible Net Worth" shall mean Borrower's total assets
excluding all intangible assets (i.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar
intangible items, but including leaseholds and leasehold
improvements) less total Debt. The term "Debt" shall mean
all of Borrower's liabilities excluding Subordinated Debt.
The term "Subordinated Debt" shall mean indebtedness and
liabilities of Borrower which have been subordinated by
written agreement to indebtedness owed by Borrower to Lender
in form and substance acceptable to Lender. The term
"Working Capital" shall mean Borrower's current assets,
excluding prepaid expenses, less Borrower's current
liabilities. The term "Liquid Assets" shall mean Borrower's
cash on hand plus Borrower's receivables. The term "Cash
Flow" shall mean net income after taxes, and exclusive of
extraordinary gains and income, plus depreciation and
amortization. Except as provided above, all computations
made to determine compliance with the requirements contained
in this paragraph shall be made in accordance with generally
accepted accounting principles, applied on a consistent
basis, and certified by Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as Lender may
require with respect to Borrower's properties and
operations, in form, amounts, coverages and with insurance
companies reasonably acceptable to Lender. Borrower, upon
request of Lender, will deliver to Lender from time to time
the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that
coverages will not be canceled or diminished without at
least ten (10) days' prior written notice to Lender. In
connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans,
Borrower will provide Lender with such loss payable or other
endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of
Lender, reports on each existing insurance policy showing
such information as Lender may reasonably request, including
without limitation the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current
property values on the basis of which insurance has been
obtained, and the manner of determining those values; and
(f) the expiration date of the policy.
Life Insurance. As soon as practical, obtain and maintain
life insurance in form and with insurance companies
reasonable acceptable to Lender on the following individual
in the amount indicated below and, at Lender's option, cause
such insurance coverage to be pledged, made payable to, or
assigned to Lender on Lender's forms. Lender, at its
discretion, may apply the proceeds of any insurance policy
to the unpaid balances of any indebtedness:
Name of Insured Amount
JOHN A. THORPE $500,000.00
Other Agreements. Comply with all terms and conditions of
all other agreements, whether now or hereafter existing,
between Borrower and any other party and notify Lender
immediately in writing of any default in connection with any
other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's
business operations, unless specifically consented to the
contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of
its indebtedness and obligations, including without
limitation all assessments, taxes, governmental charges,
levies and liens, of every kind and nature, imposed upon
Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims
that, if unpaid, might become a lien or charge upon any of
Borrower's properties, income, or profits. Provided however,
Borrower will not be recruited to pay and discharge any such
assessment, tax, charge, levy, lien or claim so long as (a)
the legality of the same shall be contested in good faith by
appropriate proceedings, and (b) Borrower shall have
established on its books adequate reserves with respect to
such contested assessment tax, charge, levy, lien, or claim
in accordance with generally accepted accounting practices.
Borrower, upon demand of Lender, will furnish to Lender
evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate
governmental offiial to deliver to Lender at any time a
written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower's properties,
income, or profits.
Performance. Perform and comply with all terms, conditions,
and provisions set forth in this Agreement and in all other
instruments and agreements between Borrower and Lender in a
timely manner, and promptly notify Lender if Borrower learns
of the occurrence of any event which constitutes an Event of
Default under this Agreement.
Operations. Substantially maintain its present executive
and management personnel; conduct its business affairs in a
reasonable and prudent manner and in compliance with all
applicable federal, state, and municipal laws, ordinances,
rules and regulations respecting its properties, charters,
businesses and operations, including without limitation,
compliance with the Americans With Disabilities Act and with
all minimum funding standards and other requirements of
ERISA and other laws applicable to Borrower's employee
benefit plans.
Inspection. Permit employees or agents of Lender at any
reasonable time during normal business hours to inspect any
and all Collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books,
accounts, and records and to make copies and memoranda of
Borrower's books, accounts, and records. If Borrower now or
at any time hereafter maintains any records (including
without limitation computer generated records and computer
software programs for the generation of such records) in the
possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access
to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at
Borrower's expense, subject to confidentiality requirements.
Compliance Certificate. Unless waived in writing by Lender,
provide Lender at least annually and at the time of each
disbursement of Loan proceeds with a certificate executed by
Borrower's chief financial officer, or other officer or
person acceptable to Lender, certifying that the
representations and warranties set forth in this Agreement
are true and correct as of the date of the certificate and
further certifying that, as of the date of the certificate,
no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply
in all respects with all environmental protection federal,
state and local laws, statutes, regulations and ordinances;
not cause or permit to exist, as a result of an intentional
or unintentional action or omission on its part or on the
part of any third party, on property owned and/or occupied
by Borrower, any environmental activity where damage may
result to the environment, unless such environmental
activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal,
state or local government authorities; shall furnish to
Lender promptly and in any event within thirty (30) days
after receipt thereof a copy of any notice, summons, lien,
citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any
intentional or unintentional action or omission on
Borrower's part in connection with any environmental
activity whether or not there is damage to the environment
and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender
such promissory notes, mortgages, deeds of trust, security
agreements, financing statements, instruments, documents and
other agreements as Lender or its attorneys may reasonably
request to evidence and secure the Loans and to perfect all
Security interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with
Lender that while this Agreement is in effect, Borrower
shall not, without the prior written consent of Lender:
Which shall not be unreasonable withheld and shall be deemed
given it not denied within ten business days after receipt
of written request from borrower for lenders consent.
Indebtedness and Liens. (a) Except for trade debt incurred
in the normal course of business and indebtedness to Lender
contemplated by this Agreement, create, incur or assume
indebtedness for borrowed money, including capital leases,
(b) sell, transfer, mortgage, assign, pledge, lease, grant a
security interest in, or encumber any of Borrower's assets,
or which are collateral for the loan, or (c) sell with
recourse any of Borrower's accounts, except to Lender.
Continuity of Operations. (a) Engage in any business
activities substantially different than those in which
Borrower is presently engaged, (b) cease operations,
liquidate, merge, transfer, acquire or consolidate with any
other entity, change ownership, dissolve or transfer or sell
Collateral out of the ordinary course of business, (c) N/A.
(d) Purchase or retire any of Borrower's outstanding shares
or alter or amend Borrower's capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or
advance money or assets, (b) purchase, create or acquire any
interest in any other enterprise or entity, or (c) incur any
obligation as surety or guarantor other than in the ordinary
course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to
make any Loan to Borrower, whether under this Agreement or
under any other agreement, Lender shall have no obligation
to make Loan Advances or to disburse Loan proceeds if: (a)
Borrower or any Guarantor is in default under the terms of
this Agreement or any of the Related Documents or any other
agreement that Borrower or any Guarantor has with Lender;
(b) Borrower becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in
Borrower's financial condition, in the financial condition
of any Guarantor, or in the value of any Collateral securing
any Loan; or (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's
guaranty of the Loan or any other loan with Lender.
ADDITIONAL LOAN PROVISIONS. 1
1. BORROWER WILL PROVIDE THE FOLLOWING WITHIN THIRTY (30)
DAYS OF QUARTER END BEGINNING MARCH 31, 1995:
(A) A LISTING AND AGING OF ACCOUNTS RECEIVABLE.
(B) A STATUS OF CONTRACTS.
2. BORROWER WILL PROVIDE A 10-Q STATEMENT WITHIN SIXTY (60)
DAYS OF QUARTER END BEGINNING MARCH 31, 1995.
3. BORROWER WILL PROVIDE A 10-K STATEMENT WITH A FYE AUDIT
WITHIN 120 DAYS OF THEIR FISCAL YEAR END.
4. BORROWER AGREES WITH LENDER THAT THE OUTSTANDING
PRINCIPAL BALANCE OF THE LOAN SHALL BE LIMITED TO THE LESSER
OF $ 1,250,000.00 OR
(A) 80% OF ALL NON-BONDED RECEIVABLES LESS THAN NINETY (90)
DAYS EXCLUDING ALL RETAINAGE PLUS
(B) 50% OF BONDED RECEIVABLES LESS THAN NINETY (90) DAYS
EXCLUDING ALL RETAINAGE NOT TO EXCEED $300,000.00, PROVIDED
THAT THE BONDED RECEIVBLES INCLUDE TWO OR MORE CONTRACTS IN
PROCESS.
SUCH CALCULATION WILL BE SUBMITTED TO LENDER WITH ABOVE
MENTIONED REPORTS QUARTERLY BEGINNING MARCH 31, 1995, AND
SHALL BE CALLED A BORROWING BASE CERTIFICATE AS INDICATED IN
THE ATTACHED EXHIBIT "A".
4. BORROWER WILL NOT:
(A) ALLOW ITS CURRENT MATURITIES COVERAGE RATIO TO BE LESS
THAN 1.5 TO 1.00. THIS RATIO WILL BE COMPUTED BY PRE-TAX
NET INCOME PLUS DEPRECIATION DIVIDED BY THE SUM OF THE
CURRENT PRINCIPAL PAYMENTS OF ALL TERM DEBT AND OR CAPITAL
LEASES. NET INCOME WILL COMPRISE AT LEAST $ 150,000.00 OF
THE SUM OF PRE-TAX NET INCOME PLUS DEPRECIATION. THE PRE-
TAX NET INCOME AND DEPRECIATION COMPONENTS WILL BE THE SUM
OF THE FOUR MOST RECENT QUARTERS ENDING SEPTEMBER, DECEMBER,
MARCH AND JUNE.
(B) ALLOW FIXED ASSET ACQUISITIONS UP TO $ 425,000.00 FOR
THE FISCAL YEAR ENDING SEPTEMBER 30, 1995.
(C) INCUR DEBT WITH THE EXCEPTION OF TERM DEBT OR CAPITAL
LEASE FINANCING ASSOCIATED WITH FIXED ASSET ACQUISITIONS.
EXHIBIT "A". An exhibit, titled "EXHIBIT "A"," is attached
to this Agreement and by this reference is made a part of
this Agreement just as if all the provisions, terms and
conditions of the Exhibit had been fully set forth in this
Agreement.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns,
conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's
accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts
held jointly with someone else and all accounts Borrower may
open in the future, excluding however all IRA, Keogh, and
trust accounts. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default under this Agreement:
Default on indebtedness. Failure of Borrower to make any
payment when due on the Loans if not cured within three (3)
business days after notice from Lender.
Other Defaults. Failure of Borrower or any Grantor to
comply with or to perform when due any other term,
obligation, covenant or condition contained in this
Agreement or in any of the Related Documents, or failure of
Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
Default In Favor of Third Parties. Should Borrower or any
Grantor default under any loan, extension of credit,
security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or
Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or
any of the Related Documents.
False Statements. Any warranty, representation or statement
made or furnished to Lender by or on behalf of Borrower or
any Grantor under this Agreement or the Related Documents is
false or misleading in any material respect, either now or
at the time made or furnished.
Defective Collateralization. This Agreement or any of the
Related Documents ceases to be in full force and effect
(including failure of any Security Agreement to create a
valid and perfected Security interest) at any time and for
any reason.
Insolvency. The dissolution or termination of Borrower's
existence as a going business, the insolvency of Borrower,
the appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or
against Borrower.
Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by
any creditor of Borrower, any creditor of any Grantor
against any collateral securing the indebtedness, or by any
governmental agency. This includes a garnishment,
attachment, or levy on or of any of Borrower's deposit
accounts with Lender.
Events Affecting Guarantor. Any of the preceding events
occurs with respect to any Guarantor of any of the
Indebtedness or such Guarantor dies or becomes incompetent
or any Guarantor revokes any guaranty of the Indebtedness.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default
shall occur, all commitments and obligations of Lender under
this Agreement or the Related Documents or any other
agreement immediately will terminate (including any
obligation to make Loan Advances or disbursements), and, at
Lender's option, all Loans immediately will become due and
payable, all without notice of any kind to Borrower, except
that in the case of and Event of Default of the type
described in the "Insolvency" subsection above, such
acceleration shall be automatic and not optional.
MISCELLANEOUS PROVISIONS. The following miscellaneous
provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related
Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
alteration or amendment.
Applicable Law. This Agreement has been delivered to Lender
and accepted by Lender in the State of Colorado: If there
is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of El Paso county,
the State of Colorado. Lender and Borrower hereby waive the
right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against
the other. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Colorado.
Caption Headings. Caption headings in this Agreement are
for convenience purposes only and are not to be used to
interpret or define the provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of
Borrower under this Agreement shall be joint and several,
and all references to Borrower shall mean each and every
Borrower. This means that each of the persons signing below
is responsible for all obligations in this Agreement.
Consent to Loan Participation. Borrower agrees and consents
to Lender's sale or transfer, whether now or later, of one
or more participation interests in the Loans to one or more
purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to any one
or more purchasers, or potential purchasers, any information
or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby
waives any rights to privacy it may have with respect to
such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all
notices of any repurchase of such participation interests.
Borrower also agrees that the purchasers of any such
participation interests will be considered as the absolute
owners of such interests in the Loans and will have all the
rights granted under the participation agreement or
agreements governing the sale of such participation
interests.
Costs and Expenses. Borrower agrees to pay upon demand all
of Lender's out-of-pocket expenses, including reasonable
attorneys' fees, incurred in connection with the
preparation, execution, enforcement and collection of this
Agreement or in connection with the Loans made pursuant to
this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will
pay that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal
expenses, whether or not there is a lawsuit, including
attorneys' fees for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment
collection services. Borrower also will pay any court
costs, in addition to all other sums provided by law.
Notices. All notices required to be given under this
Agreement shall be given in writing and shall be effective
when actually delivered or when deposited with a nationally
recognized overnight courier or deposited in the United
States mail, first class, postage prepaid, addressed to the
party to whom the notice is to be given at the address shown
above. Any party may change its address for notices under
this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to
change the party's address. To the extent permitted by
applicable law, if there is more than one Borrower, notice
to any Borrower will constitute notice to all Borrowers.
For notice purposes, Borrower agrees to keep Lender informed
at all times of Borrower's current address(es).
Severability. If a court of competent jurisdiction finds
any provision of this Agreement to be invalid or
unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as
to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to
be within the limits of enforceability or validity; however,
if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the
context of any provisions of this Agreement makes it
appropriate, including without limitation any
representation, warranty or covenant, the word "Borrower" as
used herein shall include all subsidiaries and affiliates of
Borrower. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require
Lender to make any Loan or other financial accommodation to
any subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements
contained by or on behalf of Borrower shall bind its
successors and assigns and shall inure to the benefit of
Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written
consent of Lender.
Survival. All warranties, representations, and covenants
made by Borrower in this Agreement or in any certificate or
other instrument delivered by Borrower to Lender under this
Agreement shall be considered to have been relied upon by
Lender and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any
investigation made by Lender or on Lender's behalf.
Time Is of the Essence. Time is of the essence in the
performance of this Agreement.
Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand
strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between
Lender and any Grantor, shall constitute a waiver of any of
Lender's rights or of any obligation of Borrower or of any
Grantor as to any future transactions. Whenever the consent
of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute
continuing consent in subsequent instances where such
consent is required, and in all cases such consent may be
granted or withheld in the sole discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
BUSINESS LOAN AGREEMENT, AND BORROWER AGREES TO ITS TERMS.
THIS AGREEMENT IS DATED AS OF FEBRUARY 28, 1995.
BORROWER:
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
BY:________________________________
JOHN A. THORPE, Chairman
BY:__\s\ S. V. Corder_________
SIDNEY V. CORDER, President
LENDER:
BANK ONE, COLORADO, N.A.
BY:___\s\_Thomas J. Young. Jr.__
Authorized Officer
___________________________________________________________
LASER PRO, REG.U.S. PAT.& T.M. OFF., VER.3(c)1995 CFI
ProServices, Inc. All rights reserved. [CO-C40 ANALYTIC.LN
C3.OVL]
Additionally, this Business Loan Agreement includes the
following:
Pg 4
Creditor of Forfeiture Proceedings. However, this Event of
Default shall not apply if there is a good faith dispute by
Borrower or Grantor, as the case may be, as to the validity
or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding, and if Borrower or
Grantor gives Lender written notice of the creditor or
forfeiture proceeding and furnished reserves or a surety
bond for the creditor or forfeiture proceeding satisfactory
to Lender.
Right to Cure. If any default, other than a Default on
Indebtedness, is curable and if Borrower or Grantor, as the
case may be, has not been given a notice of a similar
default within the preceding twelve (12) months, it may be
cured (and no Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default:
(a) cures the default within thirty (30) days; or (b) if the
cure requires more than thirty (30) days, immediately
initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as
reasonably practical.
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
BY:________________________________
JOHN A. THORPE, Chairman
BY:__\s\ S. V. Corder_________
SIDNEY V. CORDER, President
Lender:
Bank One, Colorado N.A.
By:____\s\ Thomas J. Young, Jr.
<PAGE>
CHANGE IN TERMS AGREEMENT
Principal Loan Date Maturity Loan No Call
Collateral
$1,250.000.00 02/28/96 4a A,E,L
Account Officer Initials
176857108 TDY
References in the shaded area are for Lender's use only
and do not limit the applicability of this document to any
particular loan or item.
Borrower: ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
1935 JAMBOREE DRIVE
COLORADO SPRINGS, CO 80920
Lender: BANK ONE, COLORADO, N.A.
30 E. PIKES PEAK AVE.
P.O. BOX 1699
COLORADO SPRINGS, CO 80942
___________________________________________________________
Principal Amount: $1,250,000.00
Date of Agreement: February 28,1995
DESCRIPTION OF EXISTING INDEBTEDNESS. PROMISSORY NOTE DATED
FEBRUARY 14,1994 WITH AN ORIGINAL PRINCIPAL AMOUNT OF
$1,250.000.00.
DESCRIPTION OF COLLATERAL. ALL OF DEBTOR'S ACCOUNTS,
CONTRACT RIGHTS, GENERAL INTANGIBLES, CASH, INSTRUMENTS,
CHATTEL PAPER, EQUIPMENT AND ACCESSIONS NOW OWNED OR
HEREAFTER ACQUIRED AND WHEREVER LOCATED.
DESCRIPTION OF CHANGE IN TERMS. PAYMENTS DUE AS INDICATED
BELOW. MATURITY DATE EXTENDED TO FEBRUARY 28, 1996.
INTERESTS RATE AS INDICATED BELOW.
PROMISE TO PAY. ANALYTICAL SURVEYS, INC., A COLORADO
CORPORATION ("Borrower") promises to pay to BANK ONE,
COLORADO, N.A. ("Lender"), or order, in lawful money of the
United States of America, the principal amount of One
Million Two Hundred Fifty Thousand & 00/100 Dollars
($1,250,000.00) or so much as may be outstanding, together
with interest on the unpaid outstanding principal balance of
each advance. Interest shall be calculated from the date of
each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on
February 28,1996. In addition, Borrower will pay regular
monthly payments of accrued unpaid interest beginning March
28,1995, and all subsequent interest payments are due on the
same day of each month after that. Interest on this
Agreement is computed on a 365/360 simple interest basis;
that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other
place as Lender may designate in writing. Unless otherwise
agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and
late charges.
VARIABLE INTEREST RATE. The interest rate on this Agreement
is subject to change from time to time based on changes in
an index which is the Lender's Prime Rate Daily (the
"Index"). Prime rate is the lender's base lending rate as
announced by the lender from time to time at its sole
discretion. At any given time, the lender may make loans
at, above, or below its prime rate. Lender will tell
Borrower the current index rate upon Borrower's request.
Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not
occur more often than each day. The Index currently is
9.000% per annum. The interest rate to be applied to the
unpaid principal balance of this Agreement will be at a rate
of 0.500 percentage points over the Index, resulting in an
initial rate of 9.500% per annum. NOTICE: Under no
circumstances will the interest rate on this Agreement be
more than the maximum rate allowed by applicable law.
PREPAYMENT;MINIMUM INTEREST CHARGE. Borrower agrees that all
loan fees and other prepaid finance charges are earned fully
as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. In any
event, even upon full prepayment of this Agreement, Borrower
understands that Lender is entitled to a minimum interest
charge of $25.00. Other than Borrower's obligation to pay
any minimum interest charge, Borrower may pay without penlty
all or a portion of the amount owed earlier than it is due.
DEFAULT. Borrower will be in default if any of the
following happens and fails to cure such default within
three (3) business days, after notice from Lender: (a)
Borrower fails to make any payment when due. (b) Borrower
breaks any promise Borrower has made to Lender, or Borrower
fails to perform promptly at the time and strictly in the
manner provided in this Agreement or any agreement related
to this Agreement, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any
loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note
or perform Borrower's obligations under this Note or any of
the Related Documents. (d) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's
behalf is false or misleading in any material respect. (e)
Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment
for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy
or insolvency laws. (f) Any creditor tries to take any of
Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of
Borrower's accounts with Lender. Provided, however, that
this event of default shall not apply if there is a good
faith dispute by the Borrower or Grantor, as the case may be
as to the validity or reasonableness of the claim which is
basis of the creditor proceeding and if Borrower or Grantor
gives Lender written notice of the creditor proceedings and
furnishes reserves for a surety for the creditor proceedings
satisfactory to Lender. (g) Any of the events described in
this default section occurs with respect to any guarantor of
this Agreement.
LENDER'S RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on this Agreement and all accrued
unpaid interest immediately due, without notice, and then
Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option,
may also, if permitted under applicable law, do one or both
of the following: (a) increase the variable interest rate on
this Agreement to 25.000% per annum, and (b) add any unpaid
accrued interest to principal and such sum will bear
interest therefrom until paid at the rate provided in this
Agreement (including any increased rate). The interest rate
will not exceed the maximum rate permitted by applicable
law. Lender may hire or pay someone else to help collect
this Agreement if Borrower does not pay. Borrower also will
pay Lender that amount. This includes, subject to any
limits under applicable law, Lender's reasonable attorneys
fees and Lender's legal expenses whether or not there is a
lawsuit, including reasonable attorney fees and legal
expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals,
and any anticipated post-judgement collection services. If
not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law.
This Agreement has been delivered to Lender and accepted by
Lender in the State of Colorado. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of El Paso County, the State of
Colorado. Lender and Borrower hereby waive the right to any
jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns,
conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's
accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts
held jointly with someone else and all accounts Borrower may
open in the future, excluding however all IRA, Keogh, and
trust accounts. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums
owing on this Agreement against any and all such accounts.
LINE OF CREDIT. This Agreement evidences a revolving line
of credit. Advances under this Agreement, as well as
directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an
authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. Borrower agrees
to be liable for all sums either: (a) advanced in accordance
with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The
unpaid principal balance owing on this Agreement at any time
may be evidenced by endorsements on this Agreement or by
Lender's internal records, including daily computer print-
outs. Lender will have no obligation to advance funds under
this Agreement if: (a) Borrower or any guarantor is in
default under the terms of this Agreement or any agreement
that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this
Agreement; (b) Borrower or any guarantor ceases doing
business or is insolvent; (c) any guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this agreement or any other loan
with Lender; or (d) Borrower has applied funds provided
pursuant to this Agreement for purposes other than those
authorized by Lender.
CONTINUING VALIDITY. Except as expressly changed by this
Agreement, the terms of the original obligation or
obligations, including all agreements evidenced or securing
the obligation(s), remain unchanged and in full force and
effect. Consent by Lender to this Agreement does not waive
Lender's right to strict performance of the obligation(s),
as changed, nor obligate Lender to make any future change in
terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of
Lender to retain as liable parties all makers and endorsers
of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in
writing. Any maker or endorser, including accommodation
makers, will not be released by virtue of this Agreement.
If any person who signed the original obligation does not
sign this Agreement below, then all persons signing below
acknowledge that this Agreement is given conditionally,
based on the representation to Lender that the non-signing
party consents to the changes and provisions of this
Agreement or otherwise will not be released by it. This
waiver applies not only to any initial extension,
modification or release, but also to all such subsequent
actions.
ADDITIONAL LOAN INFORMATION. AT THE TIME THE LOAN WAS MADE
BANK ONE, COLORADO, N.A. WAS KNOWN AT BANK ONE, COLORADO
SPRINGS, N.A.
MISCELLANEOUS PROVISIONS. Lender may delay or forgo
enforcing any of its rights or remedies under this Agreement
without losing them. Borrower and any other person who
signs, guarantees or endorses this Agreement, to the extent
allowed by law, waive presentment, demand for payment,
protest and notice of dishonor. Upon any change in the
terms of this Agreement, and unless otherwise expressly
stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party
or guarantor or collateral; or impair, fail to realize upon
or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the
modificaion is made.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND
UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING
THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE AGREEMENT.
BORROWER:
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
BY:________________________________
JOHN A. THORPE, Chairman
BY:_____\s\ S. V. Corder________
SIDNEY V. CORDER, President
Lender:
Bank One, Colorado N.A.
By:____\s\ Thomas J. Young, Jr.
__________________________________________________________
Variable Rate.Line of Credit. LASER
PRO,REG.U.S.PAT.&T.M.OFF.,VER.3.19(c)1995 CFI
ProServices,Inc. All rights reserved. [CO-
D20ANALYTIC.LNC3.OVL]
Additionally, this change in Terms Agreement includes the
following:
Right to Cure. If any default, other than a Default on
indebtedness, is curable and if Borrower or Grantor, as the
case may be, has not been given a notice of a similar
default within the preceding twelve (12) months, it may be
cured (and no Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default;
(a) cures the default within thirty (30) days; or (b) if the
cure requires more than thirty (30) days, immediately
initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as
reasonably practical.
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
BY:________________________________
JOHN A. THORPE, Chairman
BY:__\s\ S. V. Corder_________
SIDNEY V. CORDER, President
LENDER:
BANK ONE, COLORADO SPRINGS, N.A.
BY:__\s\ Thomas J. Young, Jr.____
Authorized Officer
<PAGE>
EXHIBIT "A"
Principal Loan Date Maturity Loan No Call
Collateral
$1,250.000.00 02/28/96 4a A,E,L
Account Officer Initials
176857108 TDY
References in the shaded area are for Lender's use only
and do not limit the applicability of this document to any
particular loan or item.
Borrower: ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
1935 JAMBOREE DRIVE
COLORADO SPRINGS, CO 80920
Lender: BANK ONE, COLORADO, N.A.
30 E. PIKES PEAK AVE.
P.O. BOX 1699
COLORADO SPRINGS, CO 80942
___________________________________________________________
This EXHIBIT "A" is attached to and by this reference is
made a part of each Business Loan Agreement or Negative
Pledge Agreement, dated February 14,1994, and executed in
connection with a loan or other financial accommodations
between BANK ONE, COLORADO SPRINGS, N.A. and
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION.
DATE:________________
BORROWING BASE CERTIFICATE
ACCOUNTS RECEIVABLE
Total Non-Bonded Receivables _____________
Less 90 Day or Over Amount (____________)
Less at Retainages (____________)
EQUALS ELIGIBLE NON-BONDED RECEIVABLES: ____________
Multiply 80% advance rate ____________(A)
Total Bonded Receivables ____________
Less 90 Day or Over amount (____________)
Less all Retainages (____________)
EQUALS ELIGIBLE BONDED RECEIVABLES: ____________
Multiply 50% advance rate* ____________(B)
____________ (A+B)
CURRENT BALANCE OUTSTANDING ON LINE ____________
* NOT TO EXCEED $300,000.00
NOTE: THE PRINCIPAL BALANCE OUTSTANDING ON THE
REVOLVING CREDIT LINE IS TO BE THE LESSER OF $1,250,000.00
OR THE SUM OF A + B ABOVE.
THIS EXHIBIT "A" IS EXECUTED ON FEBRUARY 14, 1994.
BORROWER:
ANALYTICAL SURVEYS, INC., A COLORADO CORPORATION
BY:________________________________
JOHN A. THORPE, Chairman
BY:___________________________
SIDNEY V. CORDER, President
By:________________________________
SCOTT C. BENGER, Vice President
LENDER:
BANK ONE, COLORADO SPRINGS, N.A.
BY:________________________________
Authorized Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from SEC Form 10-QSB and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000753048
<NAME> ANALYTICAL SURVEYS INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 522891
<SECURITIES> 0
<RECEIVABLES> 6644933
<ALLOWANCES> 20000
<INVENTORY> 0
<CURRENT-ASSETS> 7412159
<PP&E> 6968602
<DEPRECIATION> 5353922
<TOTAL-ASSETS> 9041396
<CURRENT-LIABILITIES> 2924788
<BONDS> 0
<COMMON> 2880441
0
0
<OTHER-SE> 2521427
<TOTAL-LIABILITY-AND-EQUITY> 9041396
<SALES> 0
<TOTAL-REVENUES> 6192588
<CGS> 0
<TOTAL-COSTS> 5493235
<OTHER-EXPENSES> (47)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74225
<INCOME-PRETAX> 625175
<INCOME-TAX> 238000
<INCOME-CONTINUING> 387175
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 387175
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
