-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DckunXZ0+zc8ImW+DSfgfMDqIzBNbO2BEP0H1T8wRNreLuXY2MDYuyWJ6W8ny0tK p569CKFWWjEANQO/pf/s/w== 0000927797-97-000056.txt : 19970714 0000927797-97-000056.hdr.sgml : 19970714 ACCESSION NUMBER: 0000927797-97-000056 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19970711 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ANALYTICAL SURVEYS INC CENTRAL INDEX KEY: 0000753048 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 840846389 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-40392 FILM NUMBER: 97639684 BUSINESS ADDRESS: STREET 1: 1935 JAMBOREE DR STREET 2: SUITE 100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80920 BUSINESS PHONE: 7195930093 MAIL ADDRESS: STREET 1: 1935 JAMBOREE DRIVE STREET 2: SUITE 100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80920 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MILLER SOL C CENTRAL INDEX KEY: 0001042004 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1025 LAURELWOOD CITY: CARMEL STATE: IN ZIP: 46032 BUSINESS PHONE: 3178465192 MAIL ADDRESS: STREET 1: 1025 LAURELWOOD CITY: CAMEL STATE: IN ZIP: 46032 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ___)* Analytical Surveys, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Shares, no par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 032683302 - -------------------------------------------------------------------------------- (CUSIP Number) Michael J. Schneider Locke, Reynolds, Boyd & Weisell 1000 Capital Center South 201 N. Illinois Street Indianapolis, Indiana 46204 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 2, 1997 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. * The remainder of this cover page shall be filled out for a reporting person s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 ( Act ) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 032683302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Name of Reporting Person Sol C. Miller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [ ] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. SEC Use Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Source of Funds 00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Citizenship or Place of Organization State of Indiana, U.S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of 7. Sole Voting Power 925,000 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beneficially 8. Shared Voting Power 0 Owned by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Each 9. Sole Dispositive Power 925,000 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Person With 10. Shared Dispositive Power 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. Aggregate Amount Beneficially Owned by Reporting Person 925,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. Percent of Class Represented by Amount in Row (11) 15.4% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. Type of Reporting Person IN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Item 1. Security and Issuer The class of equity securities to which this Schedule 13D relates is the common shares, no par value, of Analytical Surveys, Inc., a Colorado corporation, (the "Company" ). The principal executive offices of the Company are located at 1935 Jamboree Drive, Colorado Springs, Colorado 80920. Item 2. Identity and Background The name of the individual making this filing is Sol C. Miller (the "Reporting Person" ) whose residence address is 1025 Laurelwood, Carmel, Indiana 46032. The Reporting Person's present principal occupation is real estate developer. During the last five years, the Reporting Person has not been convicted in a criminal proceeding and, during the last five years, has not been a party to any civil proceeding which resulted in a judgment, decree or final order adjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The Reporting Person is a resident of the State of Indiana, United States of America. Item 3. Source and Amount of Funds or Other Consideration The 925,000 common shares (the "Shares") of the Company being reported in this Schedule 13D were acquired in connection with the sale of all of the outstanding common shares of MSE Corporation, an Indiana corporation, by the Reporting Person to the Company on July 2, 1997. Item 4. Purpose of Transaction Pursuant to the Purchase Agreement entered into by the Reporting Person and the Company on July 2, 1997 (the "Purchase Agreement" ), the Reporting Person sold all of the outstanding common shares of MSE Corporation to the Company for the issuance of the Shares and the payment of certain cash consideration. Pursuant to the Purchase Agreement, the Company agreed to use its best efforts, consistent with applicable laws, to increase the size of the Board of Directors of the Company by one member and to cause the Reporting Person to be elected as a member of the Board of Directors until the next annual meeting of the shareholders of the Company. The Company also agreed, subject to the fiduciary duties of the Company and its Board of Directors under applicable laws, to nominate the Reporting Person, as part of the Company's management slate of nominees, as a member of the Board of Directors of the Company at each annual meeting of the shareholders of the Company in 1998, 1999 and 2000. The Reporting Person currently has no other plans or proposals of the type enumerated in (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Person reserves the right to purchase or sell common shares of the Company at any time or from time to time. At the present time, the Reporting Person is uncertain as to the timing or extent of any additional purchases of common shares of the Company, if any. Further, the Reporting Person may reconsider his present intention based on numerous factors including, but not limited to, business prospects of the Company, other developments concerning the Company, other business opportunities available to the Reporting Person, developments with respect to the Reporting Person or the Company, general economic conditions, and monetary and securities market conditions, as well as numerous other factors. Item 5. Interest in Securities of the Issuer (a) The Reporting Person owns 925,000 common shares of the Company, which represents 15.4 percent of the issued and outstanding common shares of the Company (based on the representations of the Company contained in the Purchase Agreement). (b) The Reporting Person has sole voting and disposition power over the Shares. (c) Other than the acquisition of the Shares pursuant to the Purchase Agreement reported elsewhere in this Schedule 13D, there have been no other transactions by the Reporting Person in the common shares of the Company in the past sixty (60) days. (d) No other person has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from, the sale of the Shares, except the escrow agent under the Escrow Agreement under certain circumstances described in Item 6 of this Schedule 13D. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Pursuant to an Escrow Agreement dated July 2, 1997, among Bank One, Colorado, N.A. (the "Escrow Agent" ), the Company and the Reporting Person (the "Escrow Agreement" ), 92,500 of the Shares (the "Escrowed Shares" ) and certain cash consideration were deposited with the Escrow Agent. Pursuant to the Escrow Agreement, the Escrow Agent has agreed to hold and distribute the Escrowed Shares and related cash consideration in accordance with certain escrow instructions which are attached to the Escrow Agreement as Schedule B. The escrow instructions require the Escrow Agent to distribute fifty percent (50%) of the Escrowed Shares to the Reporting Person on July 2, 1998, less any Escrowed Shares reserved by the Escrow Agent to satisfy indemnity claims asserted by the Company under the Purchase Agreement which are unresolved prior to that time, if any. The Escrow Agent is also required to distribute the remaining fifty percent (50%) of the Escrowed Shares to the Reporting Person on November 30, 1999, less any Escrowed Shares reserved by the Escrow Agent to satisfy indemnity claims asserted by the Company under the Purchase Agreement which are unresolved prior to that time, if any. Pursuant to the Registration Rights Agreement, dated July 2, 1997, by and between the Company and the Reporting Person (the "Registration Rights Agreement"), the Reporting Person may not sell, exchange, assign, pledge or otherwise dispose of any of the Shares prior to July 2, 1999, except to a Permitted Transferee (as defined in the Registration Rights Agreement) or pursuant to the exercise of certain Incidental Registration Rights discussed below. The Registration Rights Agreement provides that, between July 2, 1997, and July 2, 2003, the Reporting Person shall have the right to include any or all of the Shares in a registration statement filed by the Company with the following limitations(the "Incidental Registration Rights"): (i) before July 2, 1999, the Reporting Person may only include the number of Shares in such registration statement equal to ten percent (10%) or less of the total shares being offered by the Company in the offering, and (ii) between July 2, 1999, and July 2, 2000, the Reporting Person may only include 462,500 of the Shares in such offering, less any Shares previously disposed of by the Reporting Person. The Reporting Person's right to have the Shares included in an underwritten offering may be restricted if the managing underwriter, if any, of such offering determines reasonably and in good faith that the inclusion of the Shares in the offering would adversely effect the offering. The Registration Rights Agreement also provides that the Reporting Person has the right to demand the registration of his Shares by the Company: (i) once, with respect to up to 462,500 of the Shares after July 2, 1999, but prior to July 2, 2000, and (ii) once, with respect to up to all of the remaining Shares between July 2, 2000, and July 2, 2003. However, at no time, may the Reporting Person request registration of fewer than 100,000 of the Shares. The Company has the right to suspend the Reporting Person's demand registration rights for a period not to exceed ninety (90) days if the Company determines in good faith that the filing of registration statement by the Company could reasonably be expected to have a material adverse effect on the Company and its shareholders. Such suspension right may be exercised only once in any twelve (12) month period. The Company is required to pay all registration expenses in connection with the first registration statement filed pursuant to the Reporting Person's exercise of its demand registration rights described in this paragraph, and the Reporting Person is required to pay all registration expenses in connection with the second registration statement filed pursuant to his exercise of such demand registration rights. If the Reporting Person exercises his demand registration rights or Incidental Registration Rights pursuant to the Registration Rights Agreement, the Company shall have the option to purchase any or all of the Shares in lieu of registering them, at the then current market price, determined in accordance with the Registration Rights Agreement. The Company shall have fifteen (15) days after receiving a notice of registration from the Reporting Person to exercise its option to purchase any or all of the Shares. If the Company elects to purchase less than all of the Shares requested by the Reporting Person to be included in the registration statement, the Company will be obligated to register the balance of the Shares subject to the other provisions of the Registration Rights Agreement. Pursuant to the Registration Rights Agreement and an investment intent letter executed by the Reporting Person in connection with his acquisition of the Shares (the "Investment Letter" ), the Reporting Person acknowledged that the Shares were acquired pursuant to certain exemptions from registration requirements under applicable federal and state securities laws, and therefore, are restricted securities. Further, the Reporting Person acknowledged that the Shares are subject to certain restrictions on transfer set forth in the Registration Rights Agreement and Investment Letter and that the certificates representing the Shares may contain certain restrictive legends set forth in the Registration Rights Agreement and Investment Letter. Item 7. Material to be Filed as Exhibits (1) Not applicable. (2) Purchase Agreement dated July 2, 1997. Letter agreement, dated July 2, 1997, whereby the Reporting Person agrees to serve as a Director of the Company (3) Escrow Agreement dated July 2, 1997. Registration Rights Agreement dated July 2, 1997. Investment Letter dated July 2, 1997. Signature: After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: 7/10/97 /s/ Sol C. Miller ----------- ------------------ Sol C. Miller EX-2 2 PURCHASE AGREEMENT PURCHASE AGREEMENT This Purchase Agreement (this "Agreement") is entered into as of July 2, 1997, by and between Analytical Surveys, Inc., a Colorado corporation (the "Buyer") and Sol C. Miller (the "Shareholder"). RECITALS The Shareholder owns all of the issued and outstanding capital stock of MSE Corporation, an Indiana corporation (the "Company"). The Shareholder desires to sell, and the Buyer desires to purchase, all of the issued and outstanding capital stock of the Company as provided in this Agreement. AGREEMENT The parties agree as follows: ARTICLE I. DEFINITIONS 1.1. For purposes of this Agreement: Adjusted Net Worth means the assets minus the liabilities as shown on the Latest Balance Sheet and the Closing Date Balance Sheet, as applicable. Adjustment Date means the date that is agreed to by the Company and the Shareholder, but if no agreement is reached then such date is the first business day that falls 75 days after the Closing. Adverse Consequences means all actions, suits, proceedings, investigations, complaints, claims, demands, Orders, liabilities, liens, losses, damages, penalties, fines, settlements, costs (including removal and remediation costs), expenses and fees (including court costs and reasonable fees and expenses of counsel and other experts). Affiliate means any Person controlled by, controlling, or under common control with another Person. Affiliated Group means any affiliated group within the meaning of Code Section 1504 or any similar group defined under a similar provision of state, local or foreign law. Benefit Arrangement has the meaning given to such term in Section 3.1(n)(iii). Buyer Indemnitee has the meaning given to such term in Section 6.2. Change in Control means that the Buyer or the Company, directly or indirectly, sells all or substantially all of the engineering services business conducted by the Company's engineering division to a Person who is not an Affiliate of the Company, or that all of the capital stock of the Company is acquired by a Person who is not an Affiliate of the Company, whether by merger or sale. Closing and Closing Date have the meanings given to such terms in Section 5.1. Closing Date Balance Sheet has the meaning given to such term in Section 2.3. Code means the Internal Revenue Code of 1986, as amended. Common Stock means the common stock of the Buyer, no par value. Company Employee Benefit Plans have the meaning given in Section 3.1(n)(i). Contract Value means the sum of revenues paid to the Company, amounts owed to the Company, and amounts to become payable to the Company upon performance of the services required under a contract, in progress as of the Closing Date, signed by the Company and the customer but not yet commenced, or awarded to the Company but not yet signed by both the Company and the customer. Customer Negligence Claim means any Adverse Consequence suffered by any Buyer Indemnitee that constitutes an insured claim under the errors and omissions policy of the Company in place on the Closing Date (or would have constituted an issued claim if such policy had remained in effect), to the extent such Adverse Consequence arises from an act or omission that occurred prior to the Closing. Employee Benefit Plan means any (a) nonqualified deferred compensation or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan) or (d) Employee Welfare Benefit Plan. Employee Pension Benefit Plan has the meaning given to such term in ERISA Section 3(2). Employee Welfare Benefit Plan has the meaning given to such term in ERISA Section 3(1). Encumbrance means any mortgage, pledge, conditional sale agreement, charge, claim, interest of another Person, lien, security interest, title defect or other encumbrance. Engineering Contract means any contract for the performance of engineering services (or the sale, lease or licensing of goods that is incidental to the performance of engineering services) by the Company or any Subsidiary. Environmental Obligations means all present Legal Requirements and Permits concerning land use, public health, safety, welfare or the environment, including, without limitation, the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), as amended, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. 9601 et seq.), as amended, and the Occupational Safety and Health Act, as amended, and any civil liability (under any Legal Requirement or under common law) to any Person. ERISA means the Employee Retirement Income Security Act of 1974, as amended, and any regulations, rules or orders promulgated under the Employee Retirement Income Security Act of 1974, as amended. Escrow Agent will be BankOne Colorado. Escrow Agreement means the Escrow Agreement among the Buyer, the Shareholder, and the Escrow Agent in the form of Exhibit A with respect to the period commencing on the Closing Date and ending on the first anniversary of the execution of this Agreement (the "Escrow Period"). GAAP means generally accepted accounting principles as in effect from time to time in the United States, as consistently applied, and in accordance with all pronouncements of the Financial Accounting Standards Board. Governmental Authority means the United States of America, any state, commonwealth, territory or possession of the United States of America, any political subdivision of any of them (including counties, municipalities, home-rule cities and the like), and any agency, authority or instrumentality of any of the foregoing, including, without limitation, any court, tribunal, department, bureau, commission or board. Income Tax means any federal, state or local Tax based on income, gross receipts, or profits, including any interest, penalty, or similar payment obligation arising in connection with such Tax. Intellectual Property means all trade, corporate, business and product names, trademarks, trademark rights, service marks, copyrights, patents, patent rights, trade secrets, and computer software (other than software not used or useful in the business of the Company or any Subsidiary, and other than readily available software purchased at a cost of less than $5,000 in the aggregate for all sites and seats using such software), and all registrations, licenses and applications pertaining to any of them. Latest Balance Sheet has the meaning given to such term in Section 3.1(e). Legal Requirement means any constitution, statute, ordinance, code, or other law (including common law), rule, regulation, Order, notice, standard, procedure or other requirement enacted, adopted, applied or issued by any Governmental Authority. Multiemployer Plan has the meaning given to such term in ERISA Section 3(37). Orders means all judgments, injunctions, orders, rulings, decrees, directives, notices of violation or other requirements of any Governmental Authority or arbitrator having jurisdiction in the matter, including a bankruptcy court or trustee. Other Buyer Agreements means any documents and instruments executed and delivered by the Buyer at Closing, excluding this Agreement. Other Seller Agreements means any documents and instruments executed and delivered by the Shareholder at Closing, excluding this Agreement. Permits means all permits, licenses, consents, franchises, authorizations, approvals, privileges, waivers, exemptions, variances, exclusionary or inclusionary Orders and other concessions, whether governmental or private, including, without limitation, those relating to environmental, public health, welfare or safety matters. Permitted Encumbrances means: (i) liens for Taxes and other governmental charges not yet due or delinquent; (ii) mechanics', carriers', workmen's, repairmen's or other like Encumbrances arising or incurred in the ordinary course of business with respect to liabilities that are not yet due or delinquent; (iii) those Encumbrances listed on Schedule 1.1; and (iv) other Encumbrances, if any, which, individually or in the aggregate, would not materially detract from the value of the asset to which it relates or materially impair the ability of the Company to use the asset to which it relates in substantially the same manner as it was used prior to the Closing; provided, in the case of each Encumbrance described in (i), (ii) and (iv), that the liability secured by such Encumbrance is fully reflected on the face of the Closing Date Balance Sheet and that such liability does not otherwise constitute a breach of any representation, warranty or covenant of the Shareholder in this Agreement. Person means an individual, partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, unincorporated organization or Governmental Authority. Premises means the real property, buildings and improvements on such real property constituting the business premises of the Company and each Subsidiary located at 941 and 930 North Meridian Street, Indianapolis, Indiana. Prime Rate is the prime rate as published, from time to time, in The Wall Street Journal. Principal Customer has the meaning given to such term in Section 3.1(p). Right means any right, property interest, concession, patent, trademark, trade name, copyright, know-how or other proprietary right of another Person. Section 338(h)(10) Election has the meaning given to such term in Section 4.8(a). Seller Indemnitee has the meaning given to such term in Section 6.1. Shareholder has the meaning given to such term in the preamble to this Agreement. Shares means all of the issued and outstanding capital stock of the Company. Subsidiary has the meaning given to such term in Section 3.1(b). Survival Period means, with respect to a representation or warranty, the applicable period after the Closing Date during which such representation or warranty survives pursuant to Section 8.13. Tax means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, documentary, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition. Tax Return means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment to any of them, and including any amendment of any of them. Terminable Contracts has the meaning given to such term in Section 4.9. ARTICLE II. PURCHASE AND SALE 2.1. Basic Transaction. Subject to the terms and conditions set forth in this Agreement, the Buyer agrees to purchase from the Shareholder, and the Shareholder agrees to sell to the Buyer, all of the Shares, free and clear of any Encumbrance, for the consideration specified in Section 2.2. The Buyer will have no obligation under this Agreement to purchase less than all of the Shares. 2.2. Purchase Price; Payment. The purchase price for the Shares is $11,000,000 plus 925,000 shares of Common Stock. At Closing, the Buyer will (i) pay to the Shareholder $10,700,000 and deliver to the Shareholder 832,500 shares of Common Stock; and (ii) deposit $300,000 into an Escrow Account (as defined in the Escrow Agreement) and deposit 92,500 shares of Common Stock with the Escrow Agent. The cash payment at Closing will be made by wire transfer of federal or immediately available funds to an account or accounts designated by the Shareholder and the share payment at Closing will be made by delivery of certificates representing such shares of Common Stock. Notwithstanding the existence of an Escrow Account, nothing will prevent the Shareholder from paying cash in satisfaction of its indemnification obligations under Article VI. The Buyer Indemnitees shall be required to first seek recourse against the shares of Common Stock deposited in the Escrow Agreement before seeking recourse directly against the Shareholder for any indemnification obligation of the Shareholder under Article VI, but only to the extent that the credited value of the Common Stock held in Escrow exceeds the amount claimed by all Buyer Indemnitees. 2.3. Closing Balance Sheet. Within 45 days after the Closing, the Shareholder will deliver to the Buyer at the Shareholder's expense a consolidated balance sheet for the Company and any Subsidiary as of the close of business on the Closing Date (the "Closing Date Balance Sheet"). The Closing Date Balance Sheet will be prepared in accordance with GAAP on a basis consistent with the accounting policies applied by the Company for the December 31, 1996 audited Financial Statements of the Company, subject to Schedule 2.3. Notwithstanding the foregoing, the reserve for bad debts on the Closing Date Balance Sheet will include a reserve equal to 100% of the unpaid balance of the accounts receivable due from Estridge and Sagamore as of the Closing Date. 2.4. Adjustment to the Purchase Price; Procedure. Following delivery of the Closing Date Balance Sheet in accordance with Section 2.3, the Purchase Price will be adjusted as follows: (a) The Buyer will examine the Closing Date Balance Sheet to determine whether it believes the Closing Date Balance Sheet was prepared in accordance with the provisions of this Agreement. In connection with that examination, the Shareholder will provide, and will cause his accountant to provide, the Buyer and the Buyer's accountants with access to such information as the Buyer may reasonably request to make that determination, including access to all work papers and calculations of the Shareholder's accountants related to the preparation of the Closing Date Balance Sheet. (b) Within 15 days after receipt of the Closing Date Balance Sheet, the Buyer will, in a written notice to the Shareholder, either accept the Closing Date Balance Sheet or object to it by describing in reasonable detail any proposed adjustments to the Closing Date Balance Sheet and the reasons for such proposals. If the Shareholder has not received such notice of proposed adjustments within such 15-day period, the Buyer will be deemed to have accepted the Closing Date Balance Sheet; provided, however, that if the Buyer's failure to give such notice results from the Shareholder's failure to timely provide information requested by Buyer under Section 2.4(a), the time within which Buyer must give such notice will be extended until a reasonable time after Shareholder provides the information requested by Buyer. (c) If any adjustments to the Closing Date Balance Sheet are proposed, the Buyer and the Shareholder will negotiate in good faith to resolve any dispute, provided that if the dispute is not resolved within 10 days following the Shareholder's receipt of the proposed adjustments, the Buyer and the Shareholder will retain a mutually acceptable nationally recognized independent public accounting firm to resolve such dispute, which resolution will be final and binding. The fees and expenses of any such accounting firm will be shared equally by the Buyer and the Shareholder, and such accounting firm will be retained by a retention letter executed by the parties that specifies that the determination by said firm of any such disputes concerning the Closing Date Balance Sheet will be resolved in accordance with GAAP on a basis consistent with the accounting policies applied by the Company in its December 31, 1996 audited Financial Statements. If the Buyer and the Shareholder are unable to agree on a mutually acceptable independent public accounting firm to resolve such dispute, the dispute will be resolved by arbitration in accordance with Section 7.2 of this Agreement. (d) On the Adjustment Date (if a dispute occurs), or within 10 business days after the resolution of a dispute (if a dispute occurs and is to be resolved in accordance with Section 2.4(c)), as the case may be, then to the extent that the Adjusted Net Worth of the Company as set forth on the Closing Date Balance Sheet is less than $10,075,000, the Shareholder will pay to the Buyer the difference between such two amounts. Such payment will include interest accrued from the Closing Date to the date of such payment at the Prime Rate. 2.5. Sales Taxes, Etc. The Shareholder will pay all sales, use, transfer, licensing, recording, stamp and other Taxes, fees and charges payable in respect of or as a result of the sale and transfer of the Shares to the Buyer pursuant to this Agreement. The Buyer will pay all Taxes, fees and charges payable in respect of or as a result of the sale and issuance of the shares of Common Stock to the Shareholder pursuant to this Agreement. ARTICLE III. REPRESENTATIONS AND WARRANTIES 3.1. Representations and Warranties of the Shareholder. The Shareholder represents and warrants to the Buyer as follows, as of the date of this Agreement: (a) Organization, Good Standing, Etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Indiana, and is qualified to do business as a foreign corporation and is in good standing in California and Florida, which are the only jurisdictions in which such qualification is necessary and in which the failure to be so qualified would have a material adverse effect on the business or properties of the Company. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. True and complete copies of (i) the articles of incorporation (certified by the Secretary of State of Indiana) and (ii) the bylaws of the Company, both as currently in effect, have been delivered to the Buyer by the Company and the Shareholder, and the Company is not in violation of any provision of its articles of incorporation or bylaws. True copies of the minute books, the stock certificate books, and stock record books of the Company have been delivered to the Buyer by the Shareholder. (b) Subsidiaries. Schedule 3.1(b) sets forth a correct and complete description of (i) the name and jurisdiction of each entity of which the Company owns, directly or indirectly, more than 50% of the capital stock, profits, interest or interest in capital (individually a "Subsidiary" and collectively the "Subsidiaries"), (ii) the number of shares of capital stock of each Subsidiary authorized and outstanding and the number of shares of capital stock of each Subsidiary owned by the Company or any other Subsidiary and (iii) the jurisdictions, if any, in which each Subsidiary is qualified or licensed to do business as a foreign entity. Each Subsidiary (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) is duly qualified do business as a foreign entity in each jurisdiction in which such qualification is necessary and in which the failure to be so qualified would have a material adverse effect on the business or properties of the Company, and (iii) has all requisite power to own, lease and operate its properties and to conduct its business as it is now conducted. True and complete copies of (i) the articles of organization (certified by the Secretary of State of Indiana) and (ii) the operating agreement of each Subsidiary, both as currently in effect, which have been delivered to the Buyer by the Company, and no Subsidiary is in violation of any provision of its articles of organization or operating agreement. Except for the Subsidiaries or as otherwise disclosed in Schedule 3.1(b), the Company does not own, directly or indirectly, any equity interest in any corporation, partnership, joint venture or other business entity. The Company no longer owns any interest in MSE Realty LLC. (c) Ownership and Capitalization. The authorized capital stock of the Company consists of 1,000,000 shares of common stock, no par value. The Shareholder owns, beneficially and of record, free and clear of any Encumbrance, all of the issued and outstanding capital stock of the Company. All of the issued and outstanding shares of the Company's capital stock have been duly authorized and validly issued and are fully paid and nonassessable. There is no authorized or outstanding stock or security convertible into or exchangeable for, or any authorized or outstanding option, warrant or other right to subscribe for or to purchase, or convert any obligation into, any unissued shares of the Company's capital stock or any treasury stock, and the Company has not agreed to issue any security so convertible or exchangeable or any such option, warrant or other right. There are no authorized or outstanding stock appreciation, phantom stock, profit participation or similar rights with respect to the Company, except pursuant to the Company's Equity Participation Plan. There are no voting trusts, voting agreements, proxies or other agreements or understanding with respect to any capital stock of the Company. There are no existing rights of first refusal, buy-sell arrangements, options, warrants, rights, calls, or other commitments or restrictions of any character relating to any of the Shares, except those restrictions on transfer imposed by the Securities Act of 1933, as amended, and applicable state securities laws. (d) Authority; No Violation. The Shareholder has full and absolute right, power, authority and legal capacity to execute, deliver and perform this Agreement and all Other Seller Agreements to which the Shareholder, is a party, and, assuming the due authorization, execution and delivery of this Agreement and the Other Seller Agreements by the other parties to such agreements, this Agreement constitutes, and the Other Seller Agreements constitute, the legal, valid and binding obligations of, and will be enforceable in accordance with their respective terms against, the Shareholder, except as such enforcement is subject to the effect of (i) any applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors' rights generally and (ii) general principles of equity, including, without limitation, concepts of reasonableness, good faith and fair dealing, and other similar doctrines affecting the enforceability of agreements generally (regardless of whether considered in a proceeding in equity or at law). The execution, delivery and performance of this Agreement and the Other Seller Agreements and the consummation of the transactions contemplated by each such agreement will not (A) violate (x) any Legal Requirement to which the Company or the Shareholder is subject or (y) any provision of the articles of incorporation or bylaws of the Company, or (B) except as set forth in Schedule 3.1(d), violate, with or without the giving of notice or the lapse of time or both, or result in the breach of any provision of, or constitute a default under, or result in the creation of any Encumbrance upon any properties, assets or business of the Company or of the Shareholder, pursuant to, any indenture, mortgage, deed of trust, lien, lease, license, Permit, agreement, instrument or other arrangement to which the Company, any Subsidiary, or the Shareholder is a party or by which the Company, any Subsidiary, or the Shareholder, or any of their respective assets and properties is bound or subject, but for purposes of this representation and warranty, any right on the part of the other party to such agreement to terminate any such agreement upon the execution, delivery and performance of this Agreement and the Other Seller Agreements or the consummation of the transactions contemplated by each such agreement will not constitute a breach of this representation and warranty (whether or not the agreement is listed on Schedule 3.1(d)). Except for notices that have been given and consents that have been obtained by the Shareholder prior to the execution of this Agreement (which are set forth in Schedule 3.1(d)), neither the Company, the Shareholder or any Subsidiary, need give any notice to, make any filing with or obtain any authorization, consent or approval of any Governmental Authority in order for the parties to consummate the transactions contemplated by this Agreement and the Other Seller Agreements. Neither the Shareholder nor the Company or any Subsidiary is a party to any litigation or proceeding (and, to the knowledge of the Shareholders, no such litigation or proceeding has been threatened), that seeks to prohibit or delay, or that seeks damages as a result of, the execution and delivery of this Agreement by the Shareholder or the consummation of the transactions contemplated by this Agreement. (e) Financial Statements. The Shareholder has delivered to the Buyer complete and correct copies of (i) audited balance sheets and related statements of income, stockholders' equity and cash flow of the Company as of and for the years ended December 31, 1996, and 1995 and all notes and schedules thereto and (ii) the unaudited internally prepared balance sheets of the Company and the related unaudited statements of income as of March 31, 1997 (collectively, the "Financial Statements"). The Financial Statements are in accordance with the books and records of the Company and of any Subsidiary and were prepared in accordance with GAAP and present fairly the Company's and Subsidiary's financial position, results of operations and changes in financial position as of the dates and for the periods indicated, subject in the case of the unaudited Financial Statements only to standard year-end adjustments (none of which will be material in amount) and the omission of footnotes. The unaudited balance sheet as of March 31, 1997, is called the Latest Balance Sheet. At the date of the Latest Balance Sheet, neither the Company nor any Subsidiary had any liability or obligation, whether accrued, absolute, fixed or contingent (including liabilities for taxes or unusual forward or long-term commitments), required by GAAP to be reflected or reserved against in that balance sheet that were not fully reflected or reserved against on the Latest Balance Sheet. The balance sheets included in the Financial Statements reflect capitalized computer software costs and capitalized mapping inventory at net realizable value as required by SFAS No. 86. The amount of start-up revenue recognized by the Company during the period from January 1, 1997 to the date of the Closing Date Balance Sheet did not exceed $300,000. Copies of the financial statements described in clause (i) are attached as Schedule 3.1(e)(i), and copies of the financial statements described in clause (ii) of this Section are attached as Schedule 3.(e)(ii). (f) Absence of Certain Changes or Events. Since March 31, 1997, except as disclosed in Schedule 3.1(f), the Company and each Subsidiary have not (i) incurred any debt, indebtedness or other liability, except current liabilities incurred in the ordinary course of business; (ii) delayed or postponed the payment of accounts payable or other liabilities or accelerated the collection of any receivable beyond stated, normal terms except in the ordinary course of business; (iii) sold or otherwise transferred any of their equipment or other assets or properties, except in the ordinary course of business and except for equipment no longer needed in the Company's business that was sold for fair market value; (iv) cancelled, compromised, settled, released, waived, written-off or expensed any account or note receivable, right, debt or claim involving more than $10,000 in the aggregate, except to the extent that such amount is reserved in the Closing Date Balance Sheet; (v) changed in any significant manner the way in which they conduct business; (vi) made or granted any individual wage or salary increase in excess of 10% or $2.00 per hour, any general wage or salary increase, or increased employee benefits of any kind or nature; (vii) entered into any contract or agreement, or made any commitment, involving more than $50,000; (viii) accelerated, terminated, delayed, modified or cancelled any agreement, contract, lease or license (or series of related agreements, contracts, leases and licenses) involving more than $50,000; (ix) suffered any material adverse change to or in their business, assets, financial condition, or existing or prospective relationships with customers or suppliers; (x) made any payment or transfer to or for the benefit of the Shareholder or permitted any Person, including, without limitation, the Shareholder, to withdraw assets from the Company or from any Subsidiary (other than the payment to the Shareholder of the proportionate monthly amount of his normal annualized salary due and payable during such period, distributions to the Shareholder to pay Taxes on earnings of the Company attributable to him by reason of the Company's election to be taxed as an S corporation (or to pay off previous loans by the Company to the Shareholder to pay such Taxes), declarations of dividend distributions to the Shareholder if and to the extent that the Adjusted Net Worth of the Company as set forth on the Closing Date Balance Sheet exceeds $10,075,000 (but not more than $664,000) and the transfer to the Shareholder or an Affiliate of the Shareholder of a 1% interest in MSE Realty, LLC); (xi) suffered any other significant occurrence, event, incident, action, failure to act or transaction outside the ordinary course of business; or (xii) agreed to incur, take, enter into, make or permit any of the matters described in clauses (i) through (xi). (g) Tax Matters. i) The Company and each Subsidiary have filed all Income Tax Returns and, to the knowledge of the Shareholder, all other Tax Returns that they were required to file. All such Income Tax Returns and, to the knowledge of the Shareholder, all other Tax Returns were correct and complete in all respects. All Income Taxes and, to the knowledge of the Shareholder, all other Taxes owed by the Company and by each Subsidiary (whether or not shown on any Tax Return) have been paid. The Company and each Subsidiary are not currently the beneficiaries of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where the Company and each Subsidiary do not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the assets of the Company or on those of any Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax. ii) The Company and each Subsidiary withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, the Shareholder or other third party. iii) There is no pending or threatened dispute or claim concerning any Tax liability of the Company or of any Subsidiary. Schedule 3.1(g)(iii) lists all federal, state, local and foreign income Tax Returns filed with respect to the Company and any Subsidiary for taxable periods ended on or after December 31, 1993, identifies those Tax Returns that have been audited and identifies those Tax Returns that currently are the subject of audit. The Shareholder has delivered to the Buyer correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies filed or assessed against or agreed to by the Company and each Subsidiary since December 31, 1993. iv) The Company and each Subsidiary have not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. v) Neither the Company, the Shareholder nor any Subsidiary has ever filed a consent pursuant to Section 341(f) of the Code relating to collapsible corporations. The Company and each Subsidiary have not made any payments, are not obligated to make any payments and are not parties to any agreement that under certain circumstances could obligate them to make any payments that will not be deductible under Code Section 280G. The Company and each Subsidiary have not been United States real property holding corporations within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). The Company and each Subsidiary disclosed on their federal income Tax Returns all positions taken that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662. The Company and each Subsidiary are not parties to any Tax allocation or sharing agreement. The Company and each Subsidiary have not been members of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and have no liability for the Taxes of any Person (other than the Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract or otherwise. vi) Since January 1, 1987, and for all taxable periods of the Company thereafter, the Company has duly filed a valid S Corporation election, which election was effective as of such date and has been continuously in effect from such date. vii) All Taxes payable by all present and former shareholders of the Company and present and former shareholders or owners of any Subsidiary in respect of the Company's and any Subsidiary's taxable income have been paid. viii) [Intentionally omitted.] ix) At all times since January 1, 1987, the Company (and any predecessor of the Company) has been a validly electing S corporation within the meaning of Code 1361 and 1362, and the Company will be an S corporation up to and including the Closing Date. x) Schedule 3.1(g)(x) identifies each Subsidiary that is a "qualified subchapter S subsidiary" within the meaning of Code 1361(b)(3)(B). Each Subsidiary so identified has been a qualified subchapter S subsidiary at all time since the date shown on such schedule up to and including the Closing Date. xi) The Company will not be liable for any Tax under Code 1374 in connection with the deemed sale of the Company's assets (including the assets of any qualified subchapter S subsidiary) caused by the Section 338(h)(10) Election. Neither the Company nor any qualified subchapter S subsidiary of the Company has, in the past 10 years, (A) acquired assets from another corporation in a transaction in which the Company's Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor or (B) acquired the stock of any corporation which is a qualified subchapter S subsidiary. (h) Assets and Properties. i) The Company has good title to (or, in the case of the assets that are leased, valid leasehold interests in) all the assets that are used by the Company in its business, free and clear of all Encumbrances (except for Permitted Encumbrances). Such assets consist of the tangible and intangible assets of the Company in existence as of the Closing Date. Such assets are all of the tangible and intangible assets used by the Company in, or necessary for the conduct of, its business as conducted by the Company since January 1, 1997. Such assets and any equipment leased by the Company from third parties encompass all equipment used by the Company to generate the income reflected in the financial statements attached as Schedule 3.1(e)(i). Schedule 3.1(h)(i) lists all the third party equipment leased by the Company as of the date of this Agreement. The Company does not lease any equipment from the Shareholder, except for fixtures attached to the Premises and leased to the Company by MSE Realty LLC. All of the Company's tangible assets are located on the Premises, except for field equipment used on job sites in the ordinary course of business. Each Subsidiary has good title to (or, in the case of assets that are leased, valid leasehold interests in) all of its respective assets, free and clear of all Encumbrances (except for Permitted Encumbrances). These assets consist of the tangible and intangible assets of each Subsidiary in existence as of the Closing Date. These assets are all of the tangible and intangible assets used by each Subsidiary in, or necessary for the conduct of, its business as conducted by the Subsidiary since January 1, 1997. These assets and any equipment leased by each Subsidiary from third parties encompass all equipment used by each Subsidiary to generate the income reflected in the financial statements attached as Schedule 3.1(e)(i). Schedule 3.1(h)(i) lists all the third party equipment leased by each Subsidiary as of the date of this Agreement. No Subsidiary leases any equipment from the Shareholder. All of the tangible assets are located at each Subsidiary's principal place of business. ii) The Premises constitute all of the real property, buildings and improvements used by the Company and each Subsidiary in their business. The Premises are supplied with utilities and other services necessary for the operation of the Premises. Except as set forth on Schedule 3.1(h)(ii), the Premises have been maintained in accordance with normal industry practice, are in good operating condition and repair and are suitable for the purposes for which they presently are used. To the knowledge of the Shareholder, the Premises have received all approvals of Governmental Authorities (including Permits) required in connection with the occupation and operation of the Premises and have been occupied, operated and maintained in accordance with applicable Legal Requirements. Neither the Shareholder, the Company nor any Subsidiary has received notice of violation of any Legal Requirement or Permit relating to the condition or their operation of the Premises which has an adverse effect on the ability of the Company or any Subsidiary to utilize the Premises or requires the Company or any Subsidiary to incur expense in order to utilize the Premises. iii) No party to any lease with respect to any Premises has repudiated any provision of such lease, and there are no disputes, oral agreements or continuing waivers in effect as to any such lease. (i) Attached as Schedule 3.1(i) is a list of the following contracts and agreements not yet substantially performed to which the Company or any Subsidiary is a party: (i) Any agreement (or group of related agreements) for the sale of goods or the furnishing of services involving reasonably anticipated total revenues in excess of $300,000; (ii) Any agreement (or group of related agreements) for the purchase of goods or services involving reasonably anticipated total payments in excess of $300,000; (iii) Any agreement (or group of related agreements) for the lease of personal property or real property to or from any Person providing for lease payments in excess of $5,000 per annum, other than agreements that may be terminated without cause and without penalty by the Company or the Subsidiary on 30 days or less notice to such Person; (iv) All confidentiality and non-competition agreements, mortgages, deeds of trust, indentures, loan agreements, credit agreements, promissory notes and guaranties; (v) Each note or account receivable from, loan or advance to, and agreement for the purchase, sale or lease of goods or services to or from, the Shareholder, or any Affiliate of the Shareholder, or any officer, director or employee of the Company or any Subsidiary; and (vi) All guaranty, warranty and indemnity agreements provided or delivered by the Company or any Subsidiary to any of its customers of business (but excluding such agreements included as provisions in the service agreements with customers). The contracts and agreements described in clauses (i) through (vi) of this Section 3.1(i) are referred to in this Agreement as the "Material Contracts." With respect to each such Material Contract: (A) the Material Contract is valid, in full force and effect, and enforceable in accordance with its terms, except as such enforcement is subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors' rights generally and general principles of equity, including, without limitation, concepts of reasonableness, good faith and fair dealing, and other similar doctrines affecting the enforceability of agreements generally (regardless of whether considered in a proceeding in equity or at law); (B) no action or claim is pending or, to the knowledge of the Shareholder, threatened to revoke, modify, terminate or render invalid any such Material Contract; and (C) except for financing agreements with The Fifth Third Bank of Central Indiana and Terminable Contracts, to the knowledge of the Shareholder, neither the Company, any Subsidiary nor any other party is in breach or default in the performance of any of its respective obligations under, and, no event exists which, with the giving of notice of the lapse of time or both, would constitute a breach or default on the part of a party to, such Material Contract that is continued unremedied, except for breaches or defaults which will not have a material adverse effect on the business or properties of the Company. Copies of the Material Contracts delivered to the Buyer are true and complete. The prepayment of the Company's indebtedness to The Fifth Third Bank of Central Indiana is not prohibited and will not result in the imposition of any prepayment penalty or similar obligation. With respect to contracts and agreements for the sale of goods or the furnishing of services by the Company or any Subsidiary that is not a Material Contract, to the knowledge of the Shareholder, neither the Company nor any Subsidiary is in breach or default in the performance of its obligations under any such contracts or agreements. Also set forth on Schedule 3.1(i) is a list setting forth the following items: (vii) All items of equipment, machinery and other tangible personal property of the Company and of each Subsidiary (including that which, as of the date of this Agreement, has no book value), and the original cost, depreciation and current book value of all such items which are included in the Latest Balance Sheet; (viii) All Permits, licenses, Orders, registrations, certificates and similar rights of the Company and each Subsidiary; (ix) The names and current rates of compensation as of June 20, 1997 of all employees of the Company and any Subsidiary whose annual rate of compensation is $40,000 or more; (x) All items of Intellectual Property owned by the Company or any Subsidiary, or which is used by the Company in its business, and in each case where the Company or any Subsidiary is not the owner, the name of the owner of the Intellectual Property; and (xi) The name of each bank or other financial institution or entity in which the Company or any Subsidiary has an account or safe deposit box (with the identifying account number or symbol) and the names of all persons authorized to draw on such account or to have access to such safe deposit box. (j) Litigation; Compliance with Applicable Laws and Rights. i) There is no outstanding Order against, or, except as set forth on Schedule 3.1(j)(i), is there any litigation, proceeding, arbitration or investigation by any Governmental Authority or other Person pending or, to the knowledge of the Shareholder, threatened against, the Company or any Subsidiary, their properties or their business. ii) Except as set forth on Schedule 3.1(j)(ii), to the knowledge of the Shareholder, the Company and each Subsidiary and each of their assets (including their Premises, facilities, machinery and equipment) are not in violation of any applicable Legal Requirement. Except as set forth in Schedule 3.1(j)(ii), neither the Shareholder, the Company nor any Subsidiary has received notice from any Governmental Authority or other Person of any violation or alleged violation of any Legal Requirement which has not been finally resolved on a basis that involves no continuing obligation or liability to the Company. (k) Accounts Receivable. The accounts receivable of the Company and of each Subsidiary reflected on the Latest Balance Sheet and on the Closing Date Balance Sheet have arisen in the ordinary course of business and reflect bona fide business arrangements; no payor has given the Shareholder, the Company or any Subsidiary written notice of any inability to pay such account receivable in due course or of any claim or defense against payment of such account receivable; to the Shareholder's knowledge, no oral statements to such effect have been made to the Shareholder, the Company or any Subsidiary; to the Shareholder's knowledge, no basis exists for any payor to raise any claim or defense against payment with respect to any such account receivable; and Schedule 3.1(k) sets forth a true and correct statement regarding the aging of such accounts receivable as of a date within 10 days of the date of this Agreement. (l) Product Quality, Warranty and Liability. No product or service provided or delivered by the Company or any Subsidiary to customers on or prior to the date of this Agreement is subject to any guaranty, warranty or other indemnity beyond the terms set forth in the written agreement with such customer. All product or service liability claims that have been asserted against the Company or any Subsidiary since March 31, 1997, whether covered by insurance or not and whether litigation has resulted or not, other than those listed and summarized on Schedule 3.1(j)(i), are listed and summarized on Schedule 3.1(l). (m) Insurance. The Company and each Subsidiary have policies of insurance (i) covering risk of loss on the Company's and each Subsidiary's assets, respectively, (ii) covering products and services liability and liability for fire, property damage, personal injury and workers' compensation coverage and (iii) for business interruption, all, to the knowledge of the Shareholder, with responsible and financially sound insurance carriers in adequate amounts and in compliance with governmental requirements and in accordance with good industry practice. All such insurance policies are valid, in full force and effect and enforceable in accordance with their respective terms and no party has repudiated any provision of such policies. Neither the Company nor any other party to any such policy is in breach or default (including with respect to the payment of premiums or the giving of notices) in the performance of any of their respective obligations under any such policy; no insurer under any such insurance policy has denied coverage or reserved against coverage concerning any claim made by the Company or any Subsidiary; and, to the knowledge of the Shareholder, no event exists which, with the giving of notice or the lapse of time or both, would constitute a breach, default or event of default, or permit termination, modification or acceleration under any such policy. All premiums have been paid on such policies as of the date of this Agreement. The Company and each Subsidiary have been covered during the five years prior to the date of this Agreement by insurance in scope and amount customary and reasonable for the businesses in which it has engaged during such five-year period. All claims made during such five-year period with respect to any insurance coverage of the Company or any Subsidiary, other than claims made by or on behalf of employees of the Company or any Subsidiary under the Company's health insurance policy and other than those described on Schedule 3.1(l), are set forth on Schedule 3.1(m). (n) Pension and Employee Benefit Matters. i) Schedule 3.1(n) lists each Employee Benefit Plan of the Company and each entity which is a member of the controlled group with the Company (as defined under ERISA Section 4001(a)(14)) (the "Company Employee Benefit Plans") that: (A) is subject to any provision of ERISA; (B) is maintained, administered or contributed to by the Company or any controlled group member; (C) covers any employee or former employee of the Company or any controlled group entity; or (D) under which the Company or any controlled group entity has any liability to make contributions or pay benefits. Copies of the current versions of all such plans, summary plan descriptions, and, if applicable, related trust agreements, and all amendments of such plans have been delivered by the Shareholder to the Buyer and attached to this Agreement as part of Schedule 3.1(n), and has delivered to the Buyer the three most recent annual reports (Form 5500 including Schedule B if applicable) and summary annual reports prepared in connection with each such plan required to file an annual report. ii) The only Company Employee Benefit Plans that individually or collectively would constitute Employee Pension Benefit Plans are identified in Schedule 3.1(n). No Company Employee Benefit Plan is subject to the Plan Termination Insurance provisions of Title IV of ERISA. The Company and each controlled group member have not incurred any liability under Title IV of ERISA arising in connection with the termination of any plan covered or previously covered by Title IV of ERISA. iii) The Shareholder has delivered to the Buyer a current, complete and correct copy of the Company's Employee Benefit Workbook (the "Workbook") and the Company's Personnel and Administrative Policy Guide (the "Guide"). The Workbook and the Guide list each employment, severance or other similar contract, arrangement or policy and each plan or arrangement (written or oral) providing for insurance coverage (including any self-insured arrangements), disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation, reduced interest or interest free loans, mortgages, relocation assistance or post-retirement insurance, compensation or other benefits that: (A) is not an Employee Benefit Plan; (B) is entered into, maintained or contributed to, by the Company and each controlled group member and (C) covers any employee or former employee of the Company or any controlled group member. Such contracts, plans and arrangements as are described in this Section are referred to collectively as the "Benefit Arrangements." Copies of each of these Benefit Arrangements either are set forth in full in the Workbook or the Guide or have been made available to the Buyer or are listed as "Other Benefit Arrangements" on Schedule 3.1(n). Neither the Company nor any Subsidiary has any liability under any other Benefit Arrangements that no longer are in effect. iv) Except as set forth in any Company Employee Benefit Plan or Benefit Arrangement identified in Schedule 3.1(n) and except as provided by a Legal Requirement or any collective bargaining agreement or any employment contract identified on Schedule 3.1(n), the employment of all persons presently employed or retained by the Company or any Subsidiary is terminable at will. v) Except as expressly so identified in Schedule 3.1(n), no Company Employee Benefit Plan is a "Multiemployer Plan." vi) No Company Employee Benefit Plan is maintained in connection with any trust described in Section 501(c)(9) of the Code. Any assets of any Company Employee Benefit Plan that are subject to the trust requirement of ERISA Section 403 are held in trust in compliance with ERISA Section 403. vii) Each Company Employee Benefit Plan that is an Employer Pension Benefit Plan is intended to be qualified within the meaning of Section 401(a) of the Code ("Qualified") is so Qualified, has been so Qualified during the period from its adoption to date, has been administered in a manner that would not adversely affect its Qualified status and has received a currently effective determination letter (or a determination letter has been timely requested) from the Internal Revenue Service that the Plan is (or continues to be) currently Qualified for federal income tax purposes. The Shareholder has delivered to the Buyer copies of such determination letters and any pending applications, and copies of such letters and applications have been attached to this Agreement as part of Schedule 3.1(n). Each trust in which the assets of any such Employee Pension Benefit Plan are held is exempt from tax pursuant to Section 501(a) of the Code. viii) There have been no prohibited transactions with respect to any Company Employee Benefit Plan. No "Fiduciary" (as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Company Employee Benefit Plan. No action, suit, proceeding, hearing or investigation with respect to the administration or the investment of the assets of any Company Employee Benefit Plan (other than routine claims for benefits) is pending or, to the knowledge of the Shareholder is threatened. The Shareholder has no knowledge of any basis for any such action, suit, proceeding, hearing or investigation. ix) The Company and each controlled group member do not maintain and have never maintained nor contribute, or ever have contributed, or ever have been required to contribute, to any Company Employee Benefit Plan providing health or medical benefits for current or future retired or terminated employees, their spouses or their dependents (other than in accordance with Code Section 4980B). No condition exists that would prevent the Company or any controlled group member from amending or terminating any Company Employee Benefit Plan or Benefit Arrangement providing health or medical benefits in respect of any active or retired employees of the Company or any controlled group member (other than in accordance with Code Section 4980B). x) Each Company Employee Benefit Plan and Benefit Arrangement has been maintained and administered in compliance with its terms and with the requirements prescribed by any and all Legal Requirements, including but not limited to ERISA and the Code, that are applicable to such Plans. Nothing done or omitted to be done and no transaction or holding of any asset under or in connection with any Company Employee Benefit Plan or Benefit Arrangement has made or will make the Company, any controlled group member, any officer or director of the Company or of any controlled group member subject to any liability under Title I of ERISA or any liability for any Tax under Section 4972 or Section 4975 through 4980B, inclusive, of the Code. xi) Any Company Employee Benefit Plan that is a "group health plan" (as defined in Code Section 5000(b)(l)) has been administered in accordance with the requirements of Part 6 of Subtitle B of Title I of ERISA and Code Section 4980B and nothing done or omitted to be done in connection with maintenance or administration of any Company Employee Benefit Plan that is a "group health plan" has made or will make the Company or any controlled group member subject to any liability under Title I of ERISA, excise Tax liability under Code Section 4980B or has resulted or will result in any loss of income exclusion for a participant under Code Sections 105(h) or 106. xii) There is no contract, agreement, plan or arrangement covering any employee or former employee of the Company or any Subsidiary that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to the terms of Section 280G or 162(a)(l) of the Code. xiii) The Company and each controlled group member have made, before the date of this Agreement, all required contributions and premium payments under each Company Employee Benefit Plan and Benefit Arrangement for all completed fiscal years including contributions that may not by law have otherwise been required to be made until the due date for filing the Tax Return for any completed fiscal year. xiv) Except as disclosed in Schedule 3.1(n), there has not been with respect to the Company's or any controlled group member's active or retired employees, any amendment to, written interpretation or announcement (whether or not written) by the Company or any Subsidiary relating to, or change in employee participation or coverage under, any Company Employee Benefit Plan or Benefit Arrangement that would increase the expense of maintaining or funding benefits under such Company Employee Benefit Plan or Benefit Arrangement above the level of the expense incurred in respect of such for the fiscal year ended on December 31, 1996, except as set forth in Schedule 3.1(n). xv) No condition (other than pursuant to a Legal Requirement) exists that would have prevented the Company or any Subsidiary from terminating any Company Employee Benefit Plan, prior to the date of this Agreement. Seller acknowledges that the Buyer will have no obligation to the Shareholder (other than pursuant to a Legal Requirement) to employ any employee of the Company or to continue any Company Employee Benefit Plan, and will have no liability to the Shareholder under any plan or arrangement maintained by the Company and Subsidiary for the benefit of any employee. xvi) There are no retired employees of the Company or any controlled group member who are receiving or are entitled to receive any payments from the Company or any controlled group member which are not fully funded by an Employee Pension Benefit Plan of the Company or a controlled group member, except those former employees who are receiving or are entitled to receive any payments from the Company pursuant to the Amended and Restated Equity Participation Plan of the Company. (o) Employees and Labor. Since March 31, 1997, the Company and each Subsidiary have not received any notice, and to the knowledge of the Shareholder, there is no reason to believe that any executive or key employee of the Company or any Subsidiary, or any group of employees of the Company or any Subsidiary, has any plans to terminate his, her or its employment with the Company or any Subsidiary, except as set forth in Schedule 3.1(o). No executive or key employee is subject to any agreement, obligation, Order or other legal hindrance that impedes or might impede such executive or key employee from devoting his or her full business time to the affairs of the Company or any Subsidiary, and, if such person becomes an employee of the Buyer, to the affairs of the Buyer after the date of this Agreement. The Company and each Subsidiary will not be required to give any notice under the Worker Adjustment and Retraining Notification Act, as amended, or any similar Legal Requirement as a result of this Agreement, the Other Seller Agreements or the transactions contemplated by them. Except as set forth on Schedule 3.1(o), the Company and each Subsidiary do not have any labor relations problems or disputes, and neither the Company nor any Subsidiary has experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. Neither the Company nor any Subsidiary is a party to or is bound by any collective bargaining agreement, there is no union or collective bargaining unit at the Company's or any Subsidiary's facilities, and no union organization effort has been threatened, initiated or is in progress with respect to any employees of the Company or of any Subsidiary. (p) Customer Relationships. Schedule 3.1(p) lists each customer (the "Principal Customers") that individually or with its affiliates accounted for a Contract Value of $300,000 or more. To the knowledge of the Shareholder, the Company and each Subsidiary have good commercial working relationships with the Principal Customers. Since December 31, 1996, no Principal Customer has cancelled or otherwise terminated its relationship with the Company or any Subsidiary, materially decreased or limited its contribution of revenue to the Company or any Subsidiary, or indicated an intention to take any such action. The Shareholder has received no written or oral communication from a Principal Customer that the execution and delivery of this Agreement by either party or the consummation of the transactions contemplated by this Agreement will cause such Principal Customer to terminate or materially reduce the service provided by the Company under its agreements with such Principal Customer after the date of this Agreement (other than in connection with normal rundowns in services provided as a result of the completion of services contemplated in such Agreements). (q) Environmental Matters. Except as set forth on Schedule 3.1(q), neither the Company nor any Subsidiary has ever owned any real property. (r) Intellectual Property. The Company and each Subsidiary owns or has the legal right to use each item of Intellectual Property required to be identified on Schedule 3.1(i). Except as set forth on Schedule 3.1(r), the sale of the Shares to the Buyer will not affect the Company's or any Subsidiary's right to use any such Intellectual Property. To the knowledge of the Shareholder, the continued operation of the business of the Company and any Subsidiary as currently conducted will not interfere with, infringe upon, misappropriate or conflict with any Intellectual Property rights of another Person. To the knowledge of the Shareholder, no other Person has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of the Company or any Subsidiary. Except as set forth on Schedule 3.1(i), neither the Company nor any Subsidiary has granted any license, sublicense or permission with respect to any Intellectual Property owned or used in the Company's or the Subsidiary's business. (s) Disclosure. In connection with the sale of the Shares under this Agreement, the Shareholder has complied with the requirements of Rule 10b-5 of the Securities and Exchange Commission. 3.1. Representations and Warranties of the Buyer. The Buyer represents and warrants to the Shareholder as follows, as of the date of this Agreement: (a) Organization and Qualification, etc. The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado and has corporate power and authority to own, lease and operate its properties and assets and to carry on its business as it is now being conducted. The Buyer is duly qualified to do business and is in good standing in each jurisdiction where the failure to be so qualified would have a material adverse effect on the business or properties of the Company. (b) Authority Relative to Agreement. The Buyer has full and absolute right, power and authority to execute, deliver and perform this Agreement and the Other Buyer Agreements, and to consummate the transactions contemplated on its part by this Agreement and the Other Buyer Agreements. The execution and delivery of this Agreement by Buyer, and the consummation by the Buyer of the transactions contemplated on its part by this Agreement and the Other Buyer Agreements have been duly authorized by the Buyer's board of directors. No other corporate approvals on the part of the board of directors or shareholders of the Buyer are necessary to authorize the execution and delivery of this Agreement, and the Other Buyer Agreements. This Agreement and the Other Buyer Agreements have been duly executed and delivered by the Buyer and, assuming the due authorization, execution and delivery of this Agreement and the Other Buyer Agreements by the other parties to such agreements, are valid and binding agreements, enforceable against the Buyer in accordance with their respective terms, except as such enforcement is subject to the effect of (i) any applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors' rights generally and (ii) general principles of equity, including, without limitation, concepts of reasonableness, good faith and fair dealing, and other similar doctrines affecting the enforceability of agreements generally (regardless of whether considered in a proceeding in equity or at law). (c) Non-Contravention. The execution, delivery and performance of this Agreement and the Other Buyer Agreements and the consummation by the Buyer of the transactions contemplated by this Agreement and by the Other Buyer Agreements will not, (i) violate any provision of the Articles of Incorporation or By-laws of the Buyer, or (ii) violate, or result, with the giving of notice or the lapse of time or both, in a violation of, any provision of, or result in the acceleration of or entitle any party to accelerate (whether after the giving of notice or lapse of time or both) any obligation under, or result in the creation or imposition of any encumbrance upon any of the property of the Buyer pursuant to any provision of any mortgage or lien or lease, agreement, license or instrument or any order, arbitration award, judgment or decree to which the Buyer is a party or by which any of its assets are bound and do not and will not violate or conflict with any other material restriction of any kind or character to which the Buyer is subject or by which any of its assets may be bound, and the same does not and will not constitute an event permitting termination of any such mortgage or lien or lease, agreement, license or instrument to which the Buyer is a party or (iii) violate any Legal Requirement to which the Buyer is subject. The Company is not party to any litigation or proceeding (and, to the knowledge of the Company, no such litigation or proceeding has been threatened), that seeks to prohibit or delay, or that seeks damages as a result of, the execution and delivery of this Agreement by the Company or the consummation of the transactions contemplated by this Agreement. (d) Government Approvals. No consent, authorization, order or approval of, or filing or registration with, any governmental commission, board or other regulatory body is required for or in connection with the execution and delivery of this Agreement and the Other Buyer Agreement by the Buyer, the execution and delivery of this Agreement by the Buyer, and the consummation by the Buyer of the transactions contemplated by this Agreement and the Other Buyer Agreements. (e) SEC Reports. The Buyer has filed (and has provided the Company with copies of all required forms, reports and documents which it has been required to file with the Securities and Exchange Commission (the "Commission") since September 30, 1996 (collectively, the "SEC Reports"), each of which has complied in all material respects with all applicable requirements of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. As of their respective dates, the SEC Reports, including, without limitation, any financial statements or schedules included in such financial statements, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated in such financial statements or necessary in order to make the statements in such financial statements, in light of the circumstances under which they were made, not misleading, except, in the case of any SEC Report, any statement or omission in such SEC Report that has been corrected or otherwise disclosed in a subsequent SEC Report. The audited financial statements of the Buyer in its Annual Report on Form 10-K for the fiscal year ended September 30, 1996, and the unaudited interim financial statements of the Buyer in its Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 1996 and March 31, 1997, have been prepared in accordance with GAAP, fairly present the consolidated financial position of the Buyer and the Subsidiaries as of the dates of such statements and their consolidated results of operations and changes in financial position for the periods then ended (subject to normal year-end adjustments and the absence of certain footnote disclosures in the case of any unaudited interim financial statements). (f) Capitalization of the Buyer. As of the date of this Agreement, the authorized capital stock of the Buyer consists of 100,000,000 shares of common stock, of which approximately 5,092,510 shares are validly issued and outstanding, fully paid and nonassessable, and 2,500,000 shares of preferred stock, no par value, none of which is outstanding. Except pursuant to the Buyer's employee stock option and restricted stock purchase plans, as of the date of this Agreement, the Buyer has no commitments to issue or sell any shares of its capital stock or any securities or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire from the Buyer, any shares of its capital stock and no securities or obligations evidencing such rights are outstanding. Schedule 3.2(f) sets forth, as of the date of this Agreement, the total number of options not yet granted under any stock option plan of the Buyer, the total number of shares of Common Stock subject to unexercised options outstanding under all such plans and the weighted average exercise price of such outstanding options. (g) Investment Intent. The Buyer is acquiring the Shares for its own account and not with any present intention of distributing or selling the Shares in violation of any federal, state or other applicable securities laws. (h) NASDAQ. The shares of Common Stock to be issued to the Shareholder at the Closing will be issued in compliance with all requirements necessary for the shares of Common Stock to be quoted on the NASDAQ national market. (i) Common Stock Issued to the Shareholders. The shares of the Buyer's Common Stock to be issued to the Shareholder as consideration in accordance with Article II have been duly and validly authorized for issuance by the Buyer and, when the shares of Common Stock of the Buyer are issued and delivered to the Shareholder as provided by this Agreement, the shares of the Common Stock of the Buyer issued to the Shareholder hereunder will have been validly issued, fully paid and nonassessable, and the issuance of such shares will not be subject to any preemptive or similar rights. (j) Absence of Material Adverse Change. Since March 31, 1997, to the date of this Agreement, the Buyer has not experienced any material adverse change to its assets, its business, or its business prospects. As of the date of this Agreement, there is no existing event or condition as to which the Company is required to file a Current Report on Form 8-K, and no pending transactions (other than the transaction contemplated by this Agreement) on anticipated events or conditions that would require the filing of a Current Report on Form 8-K, which has not previously been disclosed in the SEC Reports. (k) Brokers. All negotiations relative to this Agreement and the transactions contemplated by this Agreement have been carried out by the Buyer directly with the Shareholder and the Company, without the intervention of any person on behalf of the Buyer in such manner as to give rise to any valid claim by any person against the Buyer for a finder's fee, brokerage commission, or similar payment, except for the retention of Dain Bosworth Incorporated, whose fees and expenses are to be borne by the Buyer and except for the payment due to Utility Graphic Consultants Corporation under the agreement dated January 13, 1997, which is to be borne by the Company. 3.3. Representations as to Knowledge. Any representation and warranty made in Article III to the "knowledge" or "best knowledge" of a party means matters actually known by such party and matters which would come to such party's attention in the course of due diligence to verify the accuracy of such representation and warranty, including (i) in the case of the Shareholder, inquiry of William M. Howell, Randal J. Sage, Robert J. Montgomery, John J. Dillon III, and Jeffrey A. Meyerrose, and (ii) in the case of the Buyer, inquiry of Sidney V. Corder and Scott C. Benger. ARTICLE IV. POST-CLOSING COVENANTS The parties agree as follows with respect to the period following Closing. 4.1. Further Assurances. If after Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the parties will take such further action (including the execution and delivery of such further instruments and documents) as any other party reasonably may request, all at the sole cost and expense of the requesting party (unless the requesting party is entitled to indemnification for such action under Article VI). 4.2. Cooperation. If and for so long as any party actively is contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with (a) any transaction contemplated by this Agreement or (b) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction on or prior to the Closing Date involving any of the Company's or any Subsidiary's assets or business, each of the other parties will cooperate with such party and its counsel in the contest or defense, make available their personnel, and provide such testimony and access to their books and records as will be reasonably necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending party (unless the contesting or defending party is entitled to indemnification under Article VI). 4.3. Post-Closing Announcements. Following Closing, neither the Shareholder nor the Buyer will issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other party; provided, however, that the Buyer will not be prohibited from issuing any press release or making any public announcements or filings required by applicable federal and state securities laws. 4.4. Financial Statements. The Shareholder will, upon request of the Buyer, cooperate with the Buyer to produce such historical and on-going financial statements and audits concerning the Company as the Buyer may request, all at the sole cost and expense of the Buyer. 4.5. Release of Shareholder. Within 10 days after the Closing, the Buyer will deliver to the Shareholder a written release duly executed by The Fifth Third Bank of Central Indiana, releasing the Shareholder from any and all guaranties of the liabilities and obligations of the Company to The Fifth Third Bank of Central Indiana, and pending delivery of such release, the Buyer will indemnify the Shareholder and hold him harmless against any loss, liability, cost or expense under such guaranties. 4.6. Shareholder's Election to Buyer's Board of Directors. At the Closing, the Buyer will use its best efforts and will exercise all authority under applicable laws to: (i) if necessary, increase the size of its Board of Directors by one member, and (ii) cause the Shareholder to be elected as a member of the Board of Directors of the Buyer until the next annual meeting of the shareholders of the Buyer. Subject to the fiduciary duties of the Buyer and its Board of Directors under applicable laws, the Buyer will nominate the Shareholder as part of management's slate of nominees for election as a member of the Board of Directors of the Buyer at each annual meeting of the shareholders of the Buyer held in 1998, 1999 and 2000. 4.7. Access to Books and Records. Following the Closing, the Buyer will permit the Shareholder and his authorized representatives, during normal business hours and upon reasonable notice, to have access to, and examine and make copies of, all books and records of the Company which relate to transactions or events occurring on or prior to the Closing Date and transactions or events occurring subsequent to the Closing Date which are related to or arise out of transactions or events occurring prior to the Closing Date, to the extent reasonably necessary for Shareholder to defend any claim for indemnification under this Agreement, or to prepare any tax return or effectively defend any tax audit or claim relating to periods prior to the Closing. 4.8. Certain Tax Matters. (a) Section 338(h)(10) Election. The Shareholder and the Company will join with the Buyer in making an election under 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the Treasury Regulations, and any corresponding election under state, local and foreign tax laws, with respect to the purchase and sale of the stock of the Company hereunder (a "Section 338(h)(10) Election"). The Shareholder will include any income, gain, loss, deduction or other tax item resulting from the Section 338(h)(10) Election on his Tax Returns to the extent permitted by applicable laws. The Shareholder will also pay any Tax imposed on the Company or its Subsidiaries attributable to the making of the Section 338(h)(10) Election, including, but not limited to, (i) any Tax imposed under Code 1374, (ii) any tax imposed under Reg. 1.338(h)(10)-1(e)(5), or (iii) any state, local or foreign Tax imposed on the Company's or its Subsidiaries' gain, and the Shareholder will indemnify the Buyer, the Company and its Subsidiaries against any Adverse Consequences arising out of any failure to pay any such Taxes. The Company and the Shareholder will not revoke the Company's election to be taxed as an S corporation within the meaning of Code 1361 and 1362. The Company and the Shareholder will not take or allow any action that would result in the termination of the Company's status as a validly electing S corporation within the meaning of Code 1361 and 1362. (b) Allocation of Purchase Price. The Buyer and the Shareholder agree that the purchase price paid to the Shareholder hereunder and the liabilities of the Company (plus other relevant items) will be allocated to the assets of the Company for all purposes (including Tax and financial accounting purposes) as mutually determined by the Buyer and the Shareholder in accordance with applicable income tax laws and regulations, which allocation is set forth on Schedule 4.9(b) to be attached to this Agreement following the final determination of any adjustment to the purchase price pursuant to Section 2.4. The Buyer and the Shareholder will file, and will cause the Company to file, all Tax Returns and information reports in a manner consistent with such allocations. (c) Tax Periods Ending on or Before the Closing Date. The Shareholder will prepare or cause to be prepared and filed or caused to be filed all Tax Returns for the Company for all periods ending on or prior to the Closing Date which are filed after the Closing Date. The Shareholder will permit the Buyer to review and comment on each such Tax Return described in the preceding sentence prior to filing, and all such Tax Returns will be subject to the approval of the Buyer, such approval not to be unreasonably withheld. To the extent permitted by applicable law, the Shareholder will include any income, gain, loss, deduction or other tax items for such periods on his Tax Returns in a manner consistent with the Schedule K-1's prepared by the Shareholder for such periods. The Shareholder will reimburse Buyer for any Taxes of the Company and its Subsidiaries with respect to such periods within fifteen (15) days after payment by Buyer or the Company and its Subsidiaries of such Taxes to the extent such Taxes are not reflected in the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) shown on the face of the Closing Balance Sheet. (d) Cooperation on Tax Matters. The Buyer and the Shareholder will, and will cause the Company to, cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with respect to Taxes. Such cooperation will include the retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Buyer and the Shareholder agree: (i) to retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the Closing date until the expiration of the statute of limitations (and, to the extent notified by the Buyer or the Shareholder, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give the other party reasonable written notice prior to the transferring, destroying or discarding any such books and records, and, if the other party so requests, to allow the other party to take possession of such books and records. The Buyer and the Shareholder further agree, upon request, to use their best efforts to obtain any certificate or other document form any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed, including without limitation, with respect to the transactions contemplated by this Agreement. 4.9. Terminable Contracts. The Buyer acknowledges that certain contracts pursuant to which the Company provides services or goods to a third Person are terminable at will by such Person or are subject to termination by such Person (or may otherwise give rise to remedies to such Person) if the execution of this Agreement or the sale of the Shares by the Shareholder pursuant to this Agreement is not consented to by such Person (the "Terminable Contracts"). The Buyer agrees and acknowledges that the Shareholder will not be liable to the Buyer in any manner whatsoever because of the failure to obtain any such consent required by a Terminable Contract, except for a breach of the representation and warranties of the Shareholder in Section 3.1(p). However, following the Closing, if requested by the Buyer, the Shareholder will, at the expense of the Buyer, use his reasonable best efforts to obtain such consents and will cooperate with the Buyer in any lawful arrangement designed to provide to the Buyer with the benefits under such Terminable Contracts. 4.10. Asset Transfer by Shareholder. Until November 30, 1999, the Shareholder will not make any transfers of assets owned by him if the effect of such transfer would be to reduce or further reduce the Shareholder's net worth below $8,500,000. ARTICLE V. CLOSING 5.1. Simultaneous Closing. The consummation of the transactions contemplated by this Agreement ("Closing") will occur simultaneously with the execution of this Agreement. Closing will take place at the offices of Locke, Reynolds, Boyd & Weisell, in Indianapolis, Indiana, on the effective date of this Agreement, which is July 2, 1997 (the "Closing Date"). 5.2. Deliveries. The Shareholder and the Buyer have made deliveries to each other at Closing and have acknowledged receipt of such deliveries by separate documents. ARTICLE VI. REMEDIES FOR BREACHES OF THIS AGREEMENT 6.1. Indemnification by the Buyer. From and after Closing, the Buyer will indemnify, defend and hold harmless the Shareholder and his heirs, personal representatives, successors and permitted assigns (the "Seller Indemnitees") from and against any and all Adverse Consequences resulting or arising from, relating to or incurred in connection with: (a) any breach of any representation or warranty of the Buyer contained in this Agreement or in any of the Other Buyer Agreements, (b) any breach of any covenant of the Buyer contained in this Agreement or in any of the Other Buyer Agreements, (c) any and all guaranties by the Shareholder of any and all liabilities or obligations of the Company, except to the extent that the existence of such liabilities or obligations constitute a breach of the representations, warranties or covenants of the Shareholder in this Agreement, and (d) any broker's or finder's fee or other commission resulting from any services alleged to have been rendered to or at the request of the Buyer with respect to this Agreement or any of the transactions contemplated hereby. 6.2. Indemnification by the Shareholder. From and after Closing, the Shareholder will indemnify, defend and hold harmless the Buyer, the Company and their respective officers, directors and controlling persons (the "Buyer Indemnitees") from and against any and all Adverse Consequences resulting or arising from, relating to or incurred in connection with: (a) any breach of any representation or warranty of the Shareholder contained in this Agreement or in any of the Other Seller Agreements, (b) any breach of any covenant of the Shareholder contained in this Agreement or in any of the Other Seller Agreements, (c) any broker's or finder's fee or other commission resulting from any services alleged to have been rendered to or at the request of the Shareholder or the Company with respect to this Agreement or any of the transactions contemplated thereby; (d) any Environmental Obligation incurred by any Buyer Indemnitee, resulting or arising from, relating to or incurred in connection with (i) any event, fact, circumstance or condition (to the extent any such event, fact, circumstance or condition occurred or existed at or prior to the Closing and even if the Adverse Consequence manifests itself after the Closing) and (ii) any act or omission (to the extent such act or omission occurred prior to the Closing Date and even if the Adverse Consequence manifests itself after the Closing); and (e) any Contract Negligence Claims, subject to the provisions of Section 6.6. 6.3. Notice of Claim; Right to Participate in and Defend Third Party Claim. (a) If any indemnified party receives notice of the assertion of any claim, the commencement of any suit, action or proceeding, or the imposition of any penalty or assessment by a third party in respect of which indemnity may be sought under this Agreement (a "Third Party Claim"), and the indemnified party intends to seek indemnity under this Agreement, then the indemnified party will promptly provide the indemnifying party with prompt written notice of such Third Party Claim, but in any event not later than 30 calendar days after receipt of such notice of Third Party Claim. The failure by an indemnified party to notify an indemnifying party of a Third Party Claim will not relieve the indemnifying party of any indemnification responsibility under this Article, except to the extent, if any, that such failure prejudices the ability of the indemnifying party to defend such Third Party Claim. (b) The indemnifying party will have the right to control the defense, compromise or settlement of a Third Party Claim with its own counsel (reasonably satisfactory to the indemnified party) if the indemnifying party delivers written notice to the indemnified party within seven days following the indemnifying party's receipt of notice of a Third Party Claim from the indemnified party which acknowledges its obligations to indemnify the indemnified party with respect to such Third Party Claim in accordance with this Article; provided, however, that the indemnifying party will not enter into any settlement of any Third Party Claim which would impose or create any obligation or any financial or other liability on the part of the indemnified party if such liability or obligation (i) requires more than the payment of a liquidated sum or (ii) is not covered by the indemnification provided to the indemnified party under this Agreement. In its defense, compromise or settlement of any Third Party Claim, the indemnifying party will timely provide the indemnified party with such information with respect to such defense, compromise or settlement as the indemnified party may request, and will not assume any position or take any action that would impose an obligation of any kind on, or restrict the actions of, the indemnified party. The indemnified party will be entitled (at the indemnified party's expense) to participate in, but not control, the defense by the indemnifying party of any Third Party Claim with its own counsel. (c) If the indemnifying party does not undertake the defense, compromise or settlement of a Third Party Claim in accordance with subsection (b) of this Section, the indemnified party will have the right to control the defense or settlement of such Third Party Claim with counsel of its choosing; provided, however, that the indemnified party will not settle or compromise any Third Party Claim without the indemnifying party's prior written consent (which consent will not be unreasonably withheld), unless the terms of such settlement or compromise release the indemnified party or the indemnifying party from any and all liability with respect to the Third Party Claim. The indemnifying party will be entitled (at the indemnifying party's expense) to participate in the defense of any Third Party Claim with its own counsel. (d) The indemnified party will assert any indemnifiable claim under this Agreement that is not a Third Party Claim by promptly delivering notice of such claim to the indemnifying party. If the indemnifying party does not respond to such notice within 60 days after its receipt, it will have no further right to contest the validity of such claim. 6.4. Basket and Deductible. No indemnified party will be entitled to indemnification from an indemnifying party under Sections 6.1(a) or 6.2(a) unless and until the aggregate amount of Adverse Consequences with respect to which all Buyer Indemnitees or all Seller Indemnitees, as the case may be, would otherwise be entitled to assert under Section 6.1(a) or 6.2(a), whichever is applicable, exceeds $200,000, and then only for the amount by which such Adverse Consequences exceed $200,000. 6.5. Limitations. (a) The maximum aggregate amount that the Buyer Indemnitees, on the one hand, or the Shareholder Indemnitees, on the other hand, may recover on account of all Adverse Consequences under this Article VI will be limited to $8,500,000. (b) To the extent that any breach of a representation, warranty or covenant of the Shareholder results in an adjustment of the purchase price of the Shares under Section 2.4, the amount of such adjustment will be offset against the amount coverable under this Article VI. (c) The indemnification provisions of this Article will constitute the exclusive remedy by either party against the other arising by virtue of a breach of any representation, warranty, or covenant under this Agreement, absent fraud. The foregoing provision is not intended to limit any party from seeking recourse against the other party under any law that provides a cause of action that is independent of the rights granted by this Agreement. (d) Notwithstanding the provisions of this Article VI, neither the Company nor any Subsidiary will have any duty to indemnify the Shareholder or contribute funds for the benefit of the Shareholder, under the articles of incorporation or bylaws of the Company, under the articles of organization or operating agreement of any Subsidiary, under any resolution, contract, insurance policy, arrangement or understanding, or under the provisions of any statute governing the Company or any Subsidiary, or otherwise, to the extent that the facts, circumstances, or events that otherwise would give rise to a claim of indemnification or contribution constitute a breach of a representation, warranty or covenant under this Agreement. The Shareholder waives any right to indemnification or contribution to the extent that the immediately preceding sentence applies. The Buyer agrees that it will not amend the articles of incorporation or bylaws of the Company in such a manner as to adversely affect the rights of the Shareholder to indemnification as such rights existed immediately prior to the Closing. (e) The amounts for which the indemnifying party is liable to the indemnified party under this Article VI will be (i) reduced by the amount of any insurance proceeds received by the indemnified party in connection with the event giving rise to the claim for indemnification, taking into account any effect thereon of the indemnified party's receipt of any payment under this Article 6 and (ii) increased by interest on the amount of Adverse Consequences, at a rate equal to one-half of a percentage point above the Prime Rate, accrued from the later of (x) the date that any Adverse Consequence becomes a liability of the party suffering the Adverse Consequence as determined in accordance with GAAP, and (y) the date that the party suffering the Adverse Consequence gives the other party notice under Section 6.3(a). (f) No Buyer Indemnitee will be entitled to indemnification for a breach by the Shareholder of a representation and warranty in Section 3.1 to the extent that Sidney V. Corder or Scott C. Berger at or prior to the Closing had actual knowledge of the fact or circumstance constituting such breach and at or prior to the Closing had actual knowledge that such fact or circumstance constituted a breach, and neither the Shareholder nor any of William M. Howell, Randal J. Sage, Robert J. Montgomery, John J. Dillon III, or Jeffrey A. Meyerrose had actual knowledge of such fact or circumstance. 6.6. Indemnification for Customer Contract Losses. (a) With respect to any Customer Negligence Claim under an Engineering Contract, if the Adverse Consequences exceed $50,000, the Shareholder will indemnify all Buyer Indemnitees for one-half of such Adverse Consequences (but not in excess of a payment by the Shareholder of $150,000 for any such Customer Negligence Claim). (b) Solely for purposes of this Section 6.6, Adverse Consequences does not include attorneys' fees and costs incurred in connection with such Customer Negligence Claim. (c) This Section 6.6 will apply only with respect to Customer Negligence Claims as to which the Company receives a claim on or prior to November 30, 1999. (d) This Section 6.6 will cease to apply with respect to any Customer Negligence Claim as to which the Company receives a claim after a Change in Control has occurred. (e) The amount of any Customer Negligence Claim will be reduced to the extent that the Buyer or the Company receives insurance proceeds with respect to the Customer Negligence Claim, and the Buyer agrees to use, or to cause the Company to use, reasonable efforts to pursue payment under any available insurance policy with respect to any such Customer Negligence Claim. ARTICLE VII. ALTERNATIVE DISPUTE RESOLUTION 7.1. Mediation. If a dispute arises under or in connection with this Agreement, including, without limitation, those involving claims for specific performance or other equitable relief, notice must be given pursuant to Section 8.6. After such notice has been given by one party to the other, the parties in good faith will attempt to negotiate or mediate a resolution of the dispute with the aid of a mediator who has been mutually agreed upon by the parties. 7.2. Arbitration. If such efforts provided for in Section 7.1 do not within 30 days resolve the dispute, upon demand of any party, whether made before or after the institution of any judicial proceeding, the dispute will be resolved by binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. Institution of a judicial proceeding by a party does not waive the right of that party to demand arbitration under this Agreement, provided that arbitration is commenced within 70 days after such judicial proceedings are commenced. Disputes may include, without limitation, tort claims, counterclaims, claims brought as class actions, claims arising from documents executed in the future, or claims arising out of or connected with the transactions contemplated by this Agreement and the Other Buyer Agreements and Other Seller Agreements. The American Arbitration Association will choose one arbitrator to hear the parties and settle any dispute. All arbitration hearings will be conducted in Kansas City, Missouri. All applicable statutes of limitation will apply to any dispute. The arbitrator will have no power to award punitive or exemplary damages, to ignore or vary the terms of this Agreement or any Other Buyer or Seller Agreement, and will be bound to apply controlling law. The Shareholder and the Buyer each will pay for one-half of the arbitrator's fees and expenses and each such party will bear its own costs and expenses incurred in connection with the arbitration, except that the arbitrator will award either party reimbursement of its share of the costs and expenses of arbitration, such party's costs and expenses (including attorneys' fees and expenses), and any special or extraordinary fees or costs incurred by the Escrow Agent in connection with any such arbitration or dispute, if the other party commences or conducts the arbitration in bad faith. A judgment upon the award may be entered in any court having jurisdiction. Notwithstanding anything to the contrary contained in this Section 7.2, the parties preserve, without diminution, certain remedies that any of them may employ or exercise freely, either alone, in conjunction with, or during a dispute. The parties to this Agreement have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (i) all rights of self-help including peaceful occupation of real property and collection of rents, set off and peaceful possession of personal property; (ii) obtaining provisional or ancillary remedies including injunctive relief, requestration, garnishment, attachment, appointment of a receiver and filing an involuntary bankruptcy proceeding; and (iii) when applicable, a judgment by confession of judgment. Preservation of these remedies does not limit the power of an arbitrator to grant similar remedies that may be requested by a party in a dispute. ARTICLE VIII. MISCELLANEOUS 8.1. No Third-Party Beneficiaries. This Agreement will not confer any rights or remedies upon any Person other than the parties and their respective successors and permitted assigns. 8.2. Entire Agreement. This Agreement (including the Other Seller Agreements and Other Buyer Agreements) constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, to the extent they relate in any way to the subject matter of this Agreement. 8.3. Succession and Assignment. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. At or after the Closing, either party may assign his or its rights under this Agreement as permitted by law, including, without limitation, any assignment of any claim of indemnification to any debt or equity financing source, but no assignment will release the assigning party of his or its obligations under this Agreement. 8.4. Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together will be deemed to be one and the same instrument. The execution of a counterpart of the signature page to this Agreement will be deemed the execution of a counterpart of this Agreement. 8.5. Headings. The section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement. 8.6. Notices. All notices, requests, demands, claims, and other communications under this Agreement will be in writing. Any notice, request, demand, claim, or other communication under this Agreement will be deemed duly given only if it is sent by registered or certified mail, return receipt requested, postage prepaid, or by courier, telecopy or facsimile, and addressed to the intended recipient as set forth below: If to the Shareholder: Copy to: Mr. Sol C. Miller Locke, Reynolds, Boyd & Weisell c/o Mr. Charles E. Thomas 1000 Capital Center South Geo. S. Olive & Co. LLC 201 North Illinois Street 700 Capital Center South Indianapolis, IN 46204 201 North Illinois Street Attn: Michael J. Schneider, Esq. Indianapolis, IN 46204 Telecopy: (317) 237-3900 Telecopy: (317) 383-4200 If to the Buyer: Copy to: Analytical Surveys, Inc. Sherman & Howard L.L.C. 1935 Jamboree Drive, Suite 100 633 Seventeenth Street, Suite 3000 Colorado Springs, Colorado 80920 Denver, Colorado 80202 Attn: Sidney V. Corder Attn: James F. Wood, Esq. Telecopy: (719) 598-9626 Telecopy: (303) 298-0940 Notices will be deemed given three business days after mailing if sent by certified mail, when delivered if sent by courier, and one business day after receipt of confirmation by person or machine if sent by telecopy or facsimile transmission. Any party may change the address to which notices, requests, demands, claims and other communications under this Agreement are to be delivered by giving the other parties notice in the manner set forth in this Agreement. 8.7. Governing Law. This Agreement will be governed by and construed in accordance with the domestic laws of the State of Indiana without giving effect to any choice or conflict of law provision or rule (whether of the State of Indiana or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Indiana. 8.8. Amendments and Waivers. No amendment of any provision of this Agreement will be valid unless the same is in writing and signed by the Buyer and the Shareholder. No waiver by any party of any default, misrepresentation or breach of warranty or covenant under this Agreement, whether intentional or not, will be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant under this Agreement or affect in any way any rights arising by virtue of any prior or subsequent such occurrence, and no waiver will be effective unless set forth in writing and signed by the party against whom such waiver is asserted. 8.9. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 8.10. Expenses. Except as otherwise provided in this Agreement, the Buyer, the Company, and the Shareholder will each pay any and all fees and expenses incurred by it or him in connection with the negotiation, preparation, execution and performance of this Agreement, except that the Company will pay or reimburse the Shareholder for all expenses incurred by the Shareholder prior to the Closing in connection with this Agreement, including all reasonable attorneys' and accountants' fees and expenses, but only if and to the extent that such unpaid Shareholder expenses are reflected as a liability on the Closing Date Balance Sheet. 8.11. Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The word "including" will mean including without limitation. The parties intend that each representation, warranty and covenant contained in this Agreement will have independent significance. If any party breaches any representation, warranty or covenant contained in this Agreement in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached will not detract from or mitigate the fact that the party is in breach of the first representation, warranty or covenant. 8.12. Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated in this Agreement by reference and made a part of this Agreement. 8.13. Survival. The representations and warranties made in this Agreement will survive the Closing Date until November 30, 1999, except that: (a) the representations and warranties of the Shareholder in Sections 3.1(a), (b), (c) and (d) (but only as to the first sentence of, and clause (A)(x) of, Section 3.1(d)) will survive for 15 years after the Closing; (b) the representations and warranties of the Buyer in Sections 3.2(a), (b), (c) (but only as to clauses (i) and (iii) of Section 3.2(c)), (d), (f), and (i) will survive for 15 years after the Closing; and (c) the representations and warranties of Seller in Sections 3.1(g) and (n) will survive until the expiration of the applicable statutes of limitations with respect to any such claims that could be brought regarding such matters (including any extensions of any statutes of limitations), plus a period of 60 days. No party will have any obligation to indemnify any person pursuant to this Agreement with respect to any breach of a representation or warranty unless a specific claim has been validly made under this Agreement on or prior to the applicable period set forth above, except that, if a party has a reasonable basis to believe that an indemnifiable claim will arise and gives notice to the other party concerning such matter within the applicable period set forth above, then all rights of such party to seek indemnification with respect to such matter will survive. The parties to this Agreement have executed this Agreement as of the date first above written. BUYER: ANALYTICAL SURVEYS, INC. By: /s/ Sid V. Corder ------------------------------- Name: Sid V. Corder Title: Chief Executive Officer SHAREHOLDER: /s/ Sol C. Miller ------------------------------- Sol C. Miller EX-99 3 LETTER REGARDING MEMBERSHIP ON THE BOARD OF DIR'S July 2, 1997 Analytical Surveys, Inc. 1635 Jamboree Drive, Suite 100 Colorado Springs, Colorado 80920 Attn: Sidney V. Corder, President Re: Service on Board of Directors of Analytical Surveys, Inc. Gentlemen: I am writing this letter in connection with the Purchase Agreement by and between Analytical Surveys, Inc. ( "ASI" ) and myself, dated as of the date of this letter (the "Purchase Agreement" ). This letter confirms that I have agreed to serve as a member of the board of directors of ASI, as contemplated by Section 4.6 of the Purchase Agreement. Very Truly, /s/ Sol C. Miller --------------------------- EX-99 4 ESCROW AGREEMENT Bank One, Colorado, NA 1125 Seventeenth Street Denver, CO 80202 Escrow Agreement This escrow agreement entered into by and between Bank One, Colorado, NA, as Escrow Agent, Analytical Surveys, Inc. (the "Buyer"), and Sol C. Miller (the "Seller"). These instructions may be supplemented, altered, amended, modified or revoked by writing only, signed by all of the parties hereto, and approved by the Escrow Agent, upon payment of all fees, costs and expenses incident thereto. No assignment, transfer, conveyance or hypothecation of any right, title or interest in and to the property deposited with the Escrow Agent pursuant to this Agreement, as described in the attached Schedule A (collectively referred to as the "Escrowed Property"), shall be binding upon the Escrow Agent unless written notice thereof shall be served upon the Escrow Agent and all fees, costs and expenses incident thereto have been paid and then only upon the Escrow Agent's assent thereto in writing. The Escrow Agent will hold in an account (the "Escrow Account"), invest, if applicable, and disburse the Escrowed Property pursuant to instructions set forth in the attached Schedule B. Any notice required or desired to be given by the Escrow Agent to any party to this Escrow may be given by mailing the same addressed to such party at the address given below the signature of such party or the most recent address of such party shown on the records of the Escrow Agent, and notice so mailed shall for all purposes hereof be as effectual as though served upon such party in person at the time of depositing such notice in the mail. The Escrow Agent may receive any payment called for hereunder after the due date thereof unless subsequent to the due date of such payment and prior to the receipt thereof the Escrow Agent shall have been instructed in writing to refuse any such payment. The Escrow Agent shall not be personally liable for any act it may do or omit to do hereunder as such agent, while acting in good faith and in the exercise of its own best judgment, and any act done or omitted by it pursuant to the advice of its own attorneys shall be conclusive evidence of such good faith. The Escrow Agent is hereby expressly authorized to disregard any and all notices or warnings given by any of the parties hereto, or by any other person, firm or corporation excepting only orders of process of court, and is hereby expressly authorized to comply with and obey any and all process, orders, judgments, or decrees of any court, and in case the Escrow Agent obeys or 1 complies with any such process, order, judgment or decree of any court it shall not be liable to any of the parties hereto or to any other person, firm, or corporation by reason of such compliance, notwithstanding any such process, order, judgement or decree be subsequently reversed, modified, annulled, set aside or vacated, or found to have been issued or entered without jurisdiction. In consideration of the acceptance of the escrow by the Escrow Agent, the undersigned agree, jointly and severally, for themselves, their heirs, legal representatives, successors and assigns, to pay the Escrow Agent its charges hereunder and to indemnify and hold it harmless as to any liability by it incurred to any other person, firm or corporation by reason of its having accepted the same, or its carrying out any of the terms thereof, and to reimburse it for all its expenses, including, among other things, reasonable counsel fees and court costs incurred in connection herewith; and that the Escrow Agent shall have a first and prior lien upon all deposits made hereunder to secure the performance of said agreement of indemnity and the payment of its charges and expenses, hereby expressly authorizing the Escrow Agent, in the event payment is not received promptly from the undersigned, to deduct such charges and expenses, without previous notice, from any funds deposited hereunder, shall be as written above the Escrow Agent's signature at the time of acceptance hereof. The Escrow Agent shall be under no duty or obligation to ascertain the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver these instructions or any documents or papers or payments deposited or called for hereunder, and assumes no responsibility or liability for the validity or sufficiency of these instructions or any documents or papers or payments deposited or called for hereunder. The Escrow Agent shall not be liable for the outlawing of any rights under any Statute of Limitations or by reason of laches in respect to the instructions or any documents or papers deposited. In the event of any dispute between the parties hereto as to the facts of default, the validity or meaning of these instructions or any other fact or matter relating to the transaction between the parties, the Escrow Agent is instructed as follows: (a) That it may in its sole and absolute discretion deposit the property described herein or so much thereof as remains in its hands with the Clerk, or acting Clerk, of the District Court of the City and County of Denver, State of Colorado, and interplead the parties hereto, and upon so depositing such property and filing under the terms hereof as to the property so deposited, and furthermore, the parties hereto for themselves, their heirs, legal representatives, successors and assigns do hereby submit themselves to the jurisdiction of said court and do hereby appoint the then Clerk, or acting Clerk, of said court as their Agent for the service of all process in connection with such proceedings. The institution of any such interpleader action shall not impair the rights of the Escrow Agent under the paragraph beginning "In consideration of the acceptance..." 4 (b) That it shall be under no obligation to act, except under process or order of court, or until it has been adequately indemnified to its full satisfaction, and shall sustain no liability for its failure to act pending such process or court order of indemnification. The provisions of these instructions shall be binding upon the legal representatives, heirs, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures as of this date 7/2/97 . Name: ANALYTICAL SURVEYS, INC. Name: SOL C. MILLER By: /s/ Sidney V. Corder /s/ Sol C. Miller ---------------------------- ----------------------------- Address: 1935 Jamboree Drive #100 Address: Mr. Sol C. Miller Colorado Springs, CO 80920 c/o Mr. Charles E. Thomas Attn: Sidney V. Corder Geo. S. Olive & Co. LLC 100 Capital Center South 201 N. Illinois St. Indianapolis, IN 46204 No of copies signed ____. Accepted Bank One, Colorado, NA, as Escrow Agent By: /s/ T.D. Young, S.V.P. -------------------------- Attached: 1) Addendum to Escrow Agreement 2) Schedule A 3) Schedule B 4) Schedule C 3 Addendum to Escrow Agreement 1. Exculpation and Indemnification of Escrow Agent ----------------------------------------------- (a) The Escrow Agent shall have no duties or responsibilities other than those expressly set forth herein. The Escrow Agent shall have no duty to enforce any obligation of any person to make any payment or delivery or to direct or cause any payment or delivery to be made, or to enforce any obligation of any person to perform any other act. The Escrow Agent shall be under no liability to any party hereto or to anyone else by reason of any failure on the part of any party hereto or any maker, guarantor, endorser or other signatory of any document or any other person to perform such person's obligations under any such document. Except for amendments to this Agreement referred to in Section 5(b) of this Addendum and except for instruction given to the Escrow Agent by the other party hereto relating to the Escrow Account, the Escrow Agent shall not be obligated to recognize any agreement between any or all of the persons referred to herein, notwithstanding that references thereto may be made herein and whether or not it has knowledge thereof. (b) The Escrow Agent shall not be liable to any other party hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, except for fraud, negligence, or willful misconduct. The Escrow Agent may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) that is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written notice delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto. (c) The Escrow Agent shall not be responsible for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of, any document or property received or held by it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein, nor shall the Escrow Agent be responsible or liable to the other parties hereto or to anyone else in any respect on delivering or purporting to execute or deliver any document or property or this Agreement, other than on behalf of or in the name of the Escrow Agent. The Escrow Agent shall have no responsibility with respect to the use or application of any funds or other property paid or delivered by the Escrow Agent pursuant to the provision hereof. Except as provided in Section 1(b) above, the Escrow Agent shall not be liable to any other party hereto or to anyone else for any loss that may be incurred by reason of any investment of any monies that it holds hereunder. (d) The Escrow Agent shall have the right to assume, in the absence of written notice to the contrary from the proper person or persons, that a fact or an event by reason of which an action would or might be taken by the Escrow Agent does not exist or has not occurred, without incurring liability to the other parties hereto or to anyone else for any action taken or omitted, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, in reliance upon such assumption; provided, however, that the Escrow Agent shall be liable for any such liability resulting from its own fraud, negligence or willful misconduct. (e) To the extent that the Escrow Agent becomes liable for the payment of taxes, including withholding taxes, in respect of income derived from the investment of funds held hereunder or any payment made hereunder, and held harmless against any liability for taxes and for any penalties or interest in respect of taxes, on such investment income or payments in the manner provided in Section 1(f). (f) The Escrow Agent shall be indemnified and held harmless from and against any and all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim, or in connection with any claim or demand, that in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, the monies or other property held by it hereunder or any income earned from investment of such monies; provided, however, that if the Escrow Agent has been determined to be guilty of fraud, negligence or willful misconduct, the Escrow Agent shall not be entitled to indemnification hereunder. Promptly after the receipt by the Escrow Agent of notice of any such action, suit or other proceeding, the Escrow Agent shall, if a claim in respect thereof is to be made against any of the other parties hereto, notify such other parties thereof in writing; the failure by the Escrow Agent to give such notices shall relieve such other parties from any liability that such parties may have to the Escrow Agent under this Section 1(f) as the particular item for which indemnification is being sought, but not from any other liability that any of them may have to the Escrow Agent. Each of the other parties hereto will be entitled to participate in the defense of any action, suit or proceeding for which indemnification is sought hereunder and, to the extent any of them so desires, jointly with any of the other parties hereto, to assume such defense, with counsel who shall be reasonably satisfactory to the Escrow Agent, and after notice from any of the other parties hereto to the Escrow Agent of such parties' election so to assume such defense, none of the other parties hereto will be liable to the Escrow Agent under this Section 1(f) for any legal or other expense subsequently incurred by the Escrow Agent in connection with such defense other than reasonable costs of investigation. 2. Compensation of Escrow Agent ---------------------------- The Escrow Agent shall be entitled to reasonable compensation for the services rendered by it hereunder, as set forth on Schedule C. The Escrow Agent shall also be entitled to reimbursement for all expenses (pre-approved) paid or incurred by it in the administration of its duties hereunder, including, but not limited to, all counsel advisors' and agents' fees and disbursements and all taxes or other governmental charges. 3. Termination of Agreement and Resignation of Escrow Agent ------------------------------------------------------------- (a) This Agreement shall terminate on the final disposition of the monies and property held in escrow hereunder, provided that the rights of the Escrow Agent and the obligations of the other parties hereto under Sections 1 and 2 shall survive the termination hereof. (b) The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by giving the other parties hereto at least 60 days' notice thereof. The Escrow Agent may be removed at any time by giving to the other parties hereto at least 30 days' notice hereof. As soon as practicable after its resignation or removal, the Escrow Agent shall turn over to a successor escrow agent appointed by the other parties hereto all monies and property held hereunder (less such amount as the Escrow Agent is entitled to retain pursuant to Section 1(e)) upon presentation of the document appointing the new escrow agent and its acceptance thereof. If no new escrow agent is so appointed within the 60-day period following such notice of resignation or the 30-day period following such notice of removal, the Escrow Agent may deposit the aforesaid monies and property with any court in the State of Colorado, it deems appropriate. If the Escrow Agent is removed, it shall be entitled to (i) the full payment of its flat fee, (ii) compensation for services rendered prior to such removal and (iii) pre-approved out-of-pocket expenses incurred prior to such removal, all as set forth on Schedule C. 4. Notices ------- All notices, request, demands and other communications provided for herein shall be in writing, shall be delivered by hand, first-class mail or overnight express, shall be deemed given when received and shall be addressed to the parties hereto at their respective addresses listed below or to such other persons or addresses as the relevant party shall designate as to itself from time to time in writing delivered in like manner. 5. Miscellaneous ------------- (a) All amounts referred to herein are expressed in United States dollars and all payments by the Escrow Agent shall be made in such dollars. (b) This Agreement shall be binding upon and inure to the benefit of each party's respective successors, heirs, and permitted assigns. No other person shall acquire or have any rights under of by virtue of this Agreement. This Agreement may not be changed orally or modified, amended or supplemented without an express written agreement executed by the Escrow Agent and the other parties hereto. (c) This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. The representations and warranties contained in this Agreement shall survive the execution and delivery hereof and any investigation made by any party. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof. SCHEDULE A Deposits The Escrowed Property will consist of cash in the amount of $200,000 (the "Escrowed Cash") and 92,500 shares of common stock of the Buyer (the "Escrowed Shares") deposited with the Escrow Agent. SCHEDULE B Instructions 1. Payments from the Escrow Account. The Escrow Agent will make distributions from the Escrow Account as follows: (a) As directed in a written notice executed by ASI and the Seller. (b) As directed by a written arbitral award or court order. (c) On the first Business Day following the Escrow Agent's receipt of a joint notice from ASI and the Seller to the effect that the Closing Date Balance Sheet has been completed and agreed upon, the Escrow Agent will pay the Escrowed Cash to the Seller and/or ASI in the respective amounts specified in that notice. Any interest accrued on the Escrowed Cash will be paid to the Seller. (d) On November 30, 1998, the Escrow Agent will deliver to the Seller 46,250 of the Escrowed Shares, less the sum of: (i) all Escrowed Shares delivered to ASI pursuant to Section 2 of this Schedule prior to November 30, 1998, plus (ii) all Escrowed Shares then being reserved by the Escrow Agent in respect of Claim Certificates received prior to November 30, 1998. (e) On November 30, 1999, the Escrow Agent will deliver to the Seller the remaining Escrowed Shares, less all Escrowed Shares then being reserved by the Escrow Agent in respect of Claim Certificates received prior to such date. (f) If less than all of the remaining Escrowed Property is transferred to the Seller on November 30, 1999, at such time as the Escrow Agent is no longer reserving any amounts in the Escrow Account in respect of Claim Certificates and has made all payments to ASI due under Sections 2(c) and 2(d) of this Schedule, the Escrow Agent will promptly transfer to the Seller all Escrowed Shares then remaining in the Escrow Account. 2. Claims by ASI. (a) At any time prior to November 30, 1999, ASI may deliver to the Escrow Agent a certificate executed by ASI (a "Claim Certificate") which Claim Certificate will: (i) state that ASI has paid or incurred or reasonably expects to pay or incur an amount against which it is or will be entitled to indemnification under Article VI of the Purchase Agreement (an "Indemnification Amount"); (ii) state the Indemnification Amount to the extent that it has actually been paid or incurred and is definite in amount or give a reasonable estimate of the maximum Indemnification Amount to the extent that it has not actually been paid or incurred or is not definite in amount, identifying separately the amounts in each category; (iii) specify in reasonable detail the facts and circumstances giving rise to each Indemnification Amount, including, if applicable, a reference to the section or sections of the Purchase Agreement containing the representation or warranty of the Seller alleged to have been breached; and (iv) request immediate payment from the Escrowed Property of the portion of the Indemnification Amount that has actually been paid or incurred by ASI and is definite in amount (a "Payment Request") or instruct the Escrow Agent to reserve from the Escrowed Property an estimated amount for the portion of the Indemnification Amount that is expected to be incurred by ASI or is not definite in amount (a "Reservation Instruction"). If the Escrow Agent receives a Claim Certificate prior to November 30, 1999, the Escrow Agent will promptly deliver a copy of such Claim Certificate to the Seller. (b) If the Seller objects to any Payment Request in any Claim Certificate, the Seller will, within 10 days after delivery by the Escrow Agent to the Seller of such Claim Certificate, deliver to the Escrow Agent a certificate of the Seller, executed by the Seller (an "Objection Certificate") which Objection Certificate will (i) identify the Claim Certificate to which it relates and the particular Payment Request (or portion of such Payment Request) to which the Seller objects; and (ii) describe in reasonable detail the basis for the objection to the Payment Request or state that the Seller lacks sufficient information to determine whether ASI is or will be entitled to indemnification against the Indemnification Amount described in the Payment Request or the amount of such Payment Request. Promptly upon receipt of an Objection Certificate, the Escrow Agent will deliver a copy of such Objection Certificate to ASI. (c) If the Escrow Agent does not receive an Objection Certificate objecting to a Payment Request within the time specified in Section 2(b) of this Schedule, the Escrow Agent will promptly transfer to ASI out of the Escrow Account the amount of such Payment Request. If, within the time specified in Section 2(b), the Escrow Agent receives an Objection Certificate objecting to only a portion of a Payment Request, the Escrow Agent will so transfer to ASI the amount of the Payment Request to which the Seller did not object. (d) If the Escrow Agent receives, within the time specified in Section 2(b) of this Schedule, an Objection Certificate objecting to all or any portion of the Payment Request, the amount so objected to will be reserved by the Escrow Agent in the Escrow Account until receipt by the Escrow Agent of either (i) joint written instructions from ASI and the Seller or (ii) a written arbitral award or court order. Promptly after its receipt of such instructions or such an award or order, the Escrow Agent will transfer to ASI out of the Escrow Account, the amount to which ASI is entitled under such instructions, award, or order, except that if the payment to ASI is made after November 30, 1999, the amount paid to ASI will not exceed the amount previously reserved in respect of the Payment Request. The balance, if any, of the amount reserved in respect of the Payment Request will be held in the Escrow Account until disbursed in accordance with the provisions of this Agreement, but will no longer be reserved except that if the payment to ASI under this Section 2(d) is made after any date on which a payment or delivery is required to be made to the Seller under Section 1(c)(i) or 1(c)(ii) (each, a "Distribution Date") in respect of a Claim Certificate received before that Distribution Date, such balance will be paid to the Seller to the extent that it would have been so paid on that Distribution Date had it not then been reserved in respect of the Payment Request. (e) If the Escrow Agent receives a Reservation Instruction within the time specified in Section 2(a), the amount specified in the Reservation Instruction will be reserved by the Escrow Agent in the Escrow Account until receipt by the Escrow Agent of (i) joint written instructions from ASI and the Seller directing the disposition of such amount, (ii) a Claim Certificate containing a Payment Request with respect to the Indemnification Amount to which the Reservation Instruction relates, or (iii) a written arbitral award or court order determining the disposition of such amount. If the Escrow Agent receives joint written instructions, an arbitral award, or a court order, it will hold or dispose of the amount specified in the Reservation Instruction in accordance with such instructions, award, or order. If the Escrow Agent receives a Payment Request with respect to the Indemnification Amount to which the Reservation Instruction relates, it will proceed as provided in Section 2(a) through (d) of this Schedule, even though the Payment Request is received on or after November 30, 1999, but no such Payment Request received on or after November 30, 1999 may request payment of more than the amount reserved in respect of the Reservation Instruction. If the Payment Request specifies an amount that is less than the amount specified in the Reservation Instruction, the excess will be held in the Escrow Account until disbursed in accordance with the provisions of this Agreement, but will no longer be reserved, except that if such Payment Request is received after a Distribution Date and the Reservation Instruction was given before that Distribution Date, such excess will be paid to the Seller to the extent that it would have been so paid on that Distribution Date had it not then been reserved in respect of the Reservation Instruction. The Seller need not object to any Reservation Instruction and the failure to object will not imply any agreement by the Seller that ASI is entitled to indemnification against any or all of the Indemnification Amount described in such Reservation Instruction. If the Seller does not believe that all or any portion of the Indemnification Amount described in a Reservation Instruction is indemnifiable under the Purchase Agreement, or believes that the amount specified in a Reservation Instruction is unreasonable, its remedy will be to submit the matter to arbitration as provided in the Purchase Agreement. 3. Average Closing Price. All Reservation Instructions and payments will be calculated on the basis of the Escrowed Shares being valued at 90% of the Average Closing Price (as defined below) of the common stock of ASI (the "Stock"). The Average Closing Price of the Stock on any date will be the average of the closing price of the Stock on the 10 trading days ending one trading day prior to that date as reported by the principal exchange on which it is traded on each such day or, if it is not traded on an exchange on any such day, as reported by Nasdaq. If the closing price of the Stock is not reported for any such day, the closing price of the Stock will be the average of the bid and asked prices for that day as reported by Nasdaq, or, if bid and asked prices are not reported by Nasdaq on any such day, as reported by the National Quotation Bureau, Inc. If the Average Closing Price cannot be determined in any of the ways described above, the Average Closing Price will mean the fair market value of the Stock as determined by ASI in any reasonable manner. 4. Notice of Average Closing Price. In determining how many Escrowed Shares are to be distributed under Section 2(a)(iv) of this Schedule, the Escrow Agent may rely on a notice from ASI that sets forth the calculation of the Average Closing Price, together with copies of the pertinent pages of The Wall Street Journal containing the information utilized in determining the Average Closing Price. For the purposes of a distribution pursuant to a Payment Request, the Escrowed Shares will be valued as of the date of such distribution. For the purposes of reserving any Escrowed Shares pursuant to a Reservation Instruction, any such Reservation Instruction must contain a notice from ASI, as described above in this Section, setting forth the Average Closing Price as of the date of such notice. If Escrowed Shares are initially reserved and subsequently some or all of the reserved shares are required to be distributed, the value of the shares will be redetermined as of the date of each such distribution and the number of shares actually distributed will be based on that redetermined value. If the application of the Average Closing Price does not result in a whole number of Escrowed Shares to be reserved or distributed, the Escrow Agent will round the number of shares to be reserved or distributed up to the next highest whole share. EX-2 5 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (Including Restrictions on Transfer) July 2, 1997 Mr. Sol C. Miller MSE Corporation 941 North Meridian Street Indianapolis, IN 46204-1061 Dear Mr. Miller: In connection with the Purchase Agreement dated July 2, 1997 (the "Purchase Agreement"), between Analytical Surveys, Inc., a Colorado corporation ("ASI"), and you (the "Shareholder"), ASI hereby covenants and agrees with the Shareholder, and with any Permitted Transferee of the Restricted Stock (as defined below), as follows: 1. Certain Definitions. The following terms have the following respective meanings: "Agreement" means this Registration Rights Agreement. "Closing Date" means the date of this Registration Rights Agreement. "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act. "Common Stock" means the shares of common stock, no par value, of ASI, as constituted as of the date of this Agreement. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same are in effect at the time. "Permitted Transferees" means the Shareholder's spouse, lineal descendants (by blood or adoption) or estate, the Shareholder's spouse's lineal descendants, or trusts or other entities created for the exclusive benefit of, or beneficially owned exclusively by, the Shareholder and such persons or entities. "Registration Expenses" means the expenses so described in Section 9. "Restricted Stock" means the shares of Common Stock issued to the Shareholder pursuant to the Purchase Agreement and any additional shares of Common Stock or other securities issued in respect of such shares in connection with a stock dividend, stock split, recapitalization, reclassification or other transaction affecting ASI's outstanding Common Stock. "Securities Act" means the Securities Act of 1933 or any similar federal statute, and the rules and regulations of the Commission under the Securities Act of 1933, all as the same are in effect at the time. "Selling Expenses" means the expenses so described in Section 9. "Transfer" means a sale, exchange, assignment, pledge or other disposition of Restricted Stock or any interest therein, whether voluntary or by operation of law, excluding a Transfer to a Permitted Transferee. 2. Restrictive Legend. Each certificate representing Restricted Stock until such legend is removed or such shares are sold in accordance with the other provisions of this Agreement, will be stamped or otherwise imprinted with a legend substantially in the following form: "THE SHARES EVIDENCED BY THIS CERTIFICATE (A) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS THEREOF AVAILABLE, AS ESTABLISHED TO THE SATISFACTION OF THE COMPANY, BY OPINION OF COUNSEL OR OTHERWISE, AND (B) ARE SUBJECT TO CONTRACTUAL RESTRICTIONS ON RESALE UNDER AN AGREEMENT BETWEEN THE HOLDER AND THE COMPANY, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY. 3. Restriction on Sale. The Shareholder will not Transfer any shares of the Restricted Stock prior to the second anniversary of the Closing Date, except pursuant to the exercise of Incidental Rights (as defined below) provided for in Section 6(a)(i)) or to a Permitted Transferee as provided in Section 12. 4. Notice of Proposed Transfer. Prior to any proposed Transfer of any Restricted Stock after the second anniversary of the Closing Date (other than under the circumstances described in Sections 5 and 6 or to a Permitted Transferee under Section 12), the Shareholder will give written notice to ASI of his intention to effect such Transfer. Each such notice will describe the manner of the proposed Transfer and, if requested by ASI, will be accompanied by an opinion of counsel reasonably satisfactory to ASI to the effect that the proposed Transfer of the Restricted Stock may be effected without registration under the Securities Act and any state securities laws, at which point the Shareholder will be entitled to Transfer such Restricted Stock in accordance with the terms of its notice. Each certificate of Re- stricted Stock Transferred as above provided will bear the legend set forth in Section 2, unless (i) such Transfer is in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act) or (ii) the opinion of counsel referred to above is to the further effect that the transferee and any subsequent transferee would be entitled to Transfer such securities in a public sale without registration under the Securities Act. The foregoing restrictions on transferability of Restricted Stock will terminate as to any particular shares of Restricted Stock when such shares have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition by the Shareholder set forth in the registration statement concerning such shares, or when the legend set forth in Section 2 is removed from the certificates representing such shares in accordance with the immediately preceding sentence of this Section 4. Whenever the Shareholder is able to demonstrate to the reasonable satisfaction of ASI (and its counsel) that the provisions of Rule 144(k) of the Securities Act are available to him without limitation, the Shareholder will be entitled to receive from ASI, without expense, a new certificate not bearing the restrictive legend set forth in Section 2. 5. Demand Registration Rights. (a) The Shareholder has the right to request registration of Restricted Stock under the Securities Act (the "Demand Rights") with the following restrictions: the Demand Rights may be exercised (i) once, with respect to up to 462,500 shares of Restricted Stock (less the number of shares of Restricted Stock sold by the Shareholder after the second anniversary of the Closing Date under Rule 144 or privately), between the second and third anniversaries of the Closing Date, and (ii) once, with respect to up to all of the remaining shares of Restricted Stock, between the third and sixth anniversaries of the Closing Date. The Shareholder may not make a request to register fewer than 100,000 shares. (b) ASI will use its best efforts to register under the Securities Act for public sale in accordance with the method of disposition specified in the initial written request from the Shareholder for registration of the shares of Restricted Stock, subject to the limitations set forth below. If such method of disposition is to be an underwritten public offering, ASI may designate the managing underwriter of such offering, provided that such managing underwriter is reasonably satisfactory to the Shareholder. Notwithstanding anything to the contrary contained in this Agreement, the obligation of ASI under this Section 5 will be deemed satisfied only when a registration statement covering all shares of Restricted Stock specified in the Shareholder's written request (subject to limitations set forth in clause (a) of this Section), for sale in accordance with the method of disposition specified by the Shareholder, has become effective and has remained effective for the lesser of (i) 90 days or (ii) the period within which all shares so registered have been sold; provided, however, that if the Shareholder requests registration of Restricted Stock under this Section 5 and later withdraws such request, whether or not a registration statement had been filed at the time of such withdrawal, ASI will be deemed to have satisfied its obligation hereunder with respect to that request, as fully as if the shares of Restricted Stock specified therein had been registered and sold, unless, within 30 days after receiving ASI's statement therefor, the Shareholder reimburses ASI for all expenses incurred by ASI in connection with such registration. (c) Notwithstanding the grant of the Demand Rights, the Shareholder will not have the right to require registration at any time that the provisions of Rule 144(k) are available to the Shareholder with respect to the sale of the Restricted Stock. (d) Notwithstanding the grant of the Demand Rights, ASI, upon notice to the Shareholder, may suspend the right of the Shareholder to exercise the Demand Rights, for a period not to exceed 90 days (the Suspension Period ), if and to the extent that ASI determines, in good faith, that the filing of a registration statement by ASI reasonably could be expected to have a material adverse effect on ASI and its shareholders and delivers a certificate signed by the President of ASI to such effect. Such right may be exercised only once in any 12-month period, and, if either period described in clauses (i) or (ii) of Section 5(a) would otherwise end during a Suspension Period, then the period described in clause (i) or (ii) of Section 5(a) will be extended for a period equal to the Suspension Period plus 30 days. 6. Incidental Registration Rights. (a) The Shareholder has incidental registration rights as described in Section 6(b) (the "Incidental Rights") with respect to all of the shares of the Restricted Stock, beginning on the Closing Date and ending on the sixth anniversary of the Closing Date, with the following limitations: (i) before the second anniversary of the Closing Date the Incidental Rights are limited to 10% of the primary shares of Common Stock offered and sold by ASI in the offering as to which the Incidental Rights are being exercised, and (ii) between the second and third anniversaries of the Closing Date, the Incidental Rights are limited to 462,500 shares of the Restricted Stock, less shares of the Restricted Stock previously sold by the Shareholder by any method. (b) Each time ASI proposes to register any of its equity securities under the Securities Act (other than a registration effected solely to implement an employee benefit or stock option plan or to sell shares obtained under any employee benefit or stock option plan or a transaction to which Rule 145 or any other similar rule of the Commission under the Securities Act is applicable or a registration on any form which is not available for the registration of Restricted Stock) ASI will give written notice to the Shareholder of its intention to do so. The Shareholder may give ASI a written request to register all or some of the Restricted Stock in the registration described in the written notice from ASI, provided that such written request is given within 20 days after receipt of any such notice from ASI, with such request stating the number of shares of Restricted Stock to be disposed of and the intended method of disposition of such Restricted Stock. Upon receipt of such request, ASI will use its best efforts to cause promptly all such shares of Restricted Stock intended to be disposed of to be registered under the Securities Act so as to permit their sale or other disposition in accordance with the intended methods set forth in the request for registration; provided, however, that if the registration relates to an underwritten offering, (i) the Shareholders right to have shares of Restricted Stock included in the registration will be contingent upon the Shareholder agreeing to include such Restricted Stock in the offering and entering into an underwriting agreement as provided in Section 8 and (ii) if the managing underwriter of such offering determines reasonably and in good faith in writing that the inclusion of all of the shares of Restricted Stock as to which the Shareholder has requested registration would adversely affect the offering, the number of shares to be registered for the account of the Shareholder will be reduced to the extent necessary to reduce the total number of shares to be included in such offering to the amount recommended by such managing underwriter. Any reduction under clause (ii) will affect all persons including shares in the registration pursuant to the exercise of incidental registration rights like those granted to the Shareholders in this Section 6 proportionately in accordance with the number of shares that each had requested the Company to include in the registration. ASI's obligations under this section apply to a registration to be effected for securities to be sold for the account of ASI as well as a registration statement which includes securities to be offered for the account of other holders of ASI equity securities. 7. Purchase in Lieu of Registration. If the Shareholder exercises Demand Rights or Incidental Rights as to any shares of the Restricted Stock (a Registration Notice ), then ASI will have the option (the Option ), which Option may be exercised only to the extent not prohibited by Section 7-106-401, of the Colorado Business Corporation Act, to purchase any or all of such shares, in lieu of registering them, at the current market price determined as follows: as to each share of Common Stock, the average of the daily closing prices for the Common Stock for the 20 consecutive trading days before the day the Registration Notice was received by ASI. The closing price for each day will be the last reported sale price regular way, or, in case no such reported sale takes place on such day, the reported closing price regular way, in either case on the composite tape, or if the Common Stock is not quoted on the composite tape, on the principal United States securities exchange registered under the Securities Exchange Act of 1934, on which the Common Stock is listed or admitted to trading, or if it is not listed or admitted to trading on any such exchange, the closing sale price (or the average of the quoted closing bid and asked prices if no sale is reported) as reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any comparable system, or if the Common Stock is not quoted on the NASDAQ, or any comparable system, the average of the closing bid and asked prices quoted to the public by a person then making a market in the Common Stock, and if no person is a market maker in the Common Stock, then the average of the closing bid and asked prices furnished by any member of the National Association of Securities Dealers, Inc. ASI may exercise the Option at any time within 15 days after receiving the Registration Notice by giving the Shareholder written notice of its election to exercise. Such notice must specify the number of shares of the Restricted Stock that ASI elects to purchase, the current market price as determined according to the formula set forth above, and the date of payment for such shares, which will be within 60 days after ASI's receipt of the Registration Notice. On the date fixed for payment in ASI's notice of exercise, the Shareholder will deliver certificates representing the shares of Restricted Stock that ASI has elected to purchase, duly endorsed for transfer to ASI, free and clear of liens, claims and encumbrances, to ASI at its principal executive offices against payment by ASI of the purchase price for such shares. If ASI elects to purchase less than all of the shares covered by a registration notice, it will be obligated to register the balance of such shares, subject to the provisions of Section 5. 8. Registration Procedures and Expenses. As to any shares of the Restricted Stock that are subject to a Registration Notice under the Demand Rights and as to which ASI does not exercise the Option provided for in Section 7, ASI will: (a) as expeditiously as is reasonably practicable after the expiration of the period within which ASI may exercise the Option, prepare and file with the Commission, a registration statement with respect to such securities and use its best efforts to cause such registration statement to become effective and to remain effective for 90 days; (b) as expeditiously as is reasonably practicable, prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to keep such registration statement effective for the period specified in paragraph (a) above and to comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the Shareholder's intended method of disposition set forth in such registration statement for such period; (c) as expeditiously as is reasonably practicable, furnish to the Shareholder and to each underwriter such number of copies of the registration statement and the prospectus included in the registration statement (including each preliminary prospectus) as such persons may reasonably request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement; (d) use its best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or blue sky laws of such jurisdictions as the Shareholder or, in the case of an underwritten public offering, the managing underwriter, reasonably request, if such registrations are required by law; (e) immediately notify the Shareholder and each underwriter, at any time when a prospectus relating to such registration statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated in such prospectus or necessary to make the statements in such prospectus not misleading in the light of the circumstances then existing; (f) use its best efforts (if the offering is underwritten) to furnish, at the request of the Shareholder on the date that the Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing ASI for the purposes of such registration, addressed to the underwriters and to the Shareholder stating that such registration statement has become effective under the Securities Act and that (A) to the best knowledge of such counsel, no stop order suspending the effectiveness of such registration statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act, (B) the registration statement, the related prospectus, and each amendment or supplement of each of them, comply as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission under the Securities Act (except that such counsel need express no opinion as to financial statements and other financial and statistical data contained in each of them) and (C) to such other effects as may reasonably be requested by counsel for the underwriters or by the Shareholder or its counsel, and (ii) a letter dated such date from the independent public accountants retained by ASI, addressed to the under- writers and to the Shareholder, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of ASI included in the registration statement or the prospectus, or any amendment or supplement of such statement or prospectus, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter will additionally cover such other financial matters with respect to the registration in respect of which such letter is being given as such underwriters may reasonably request; (g) as expeditiously as is reasonably practicable, make available for inspection by the Shareholder, and any attorney, accountant or other agent retained by the Shareholder, all financial and other records, pertinent corporate documents and properties of ASI, and cause ASI's officers, directors and employees to supply all information reasonably requested by the Shareholder or any such attorney, accountant or agent in connection with such registration statement; (h) as expeditiously as is reasonably practicable, cause all the Restricted Stock covered by the registration statement to be listed on each securities exchange on which similar securities of ASI are then listed; and (i) provide a transfer agent and registrar for all the Restricted Stock covered by the registration statement not later than the effective date of such registration statement. The provisions of Section 8(a) through (i) will also apply to all shares of the Restricted Stock that are subject to a Registration Notice under the Incidental Rights and as to which ASI does not exercise the Option provided for in Section 7, except that ASI will be entitled to control the timing of the registration process in all respects and may withdraw or terminate any such registration at any time. In connection with each registration under this Agreement, the Shareholder will furnish to ASI in writing such information with respect to himself and the proposed distribution by him as will be reasonably necessary in order to assure compliance with federal and applicable state securities laws. In connection with each registration pursuant to Sections 5 or 6 covering an underwritten public offering, ASI and the Shareholder will enter into a written agreement with the managing underwriter selected in the manner provided above in such form and containing such provisions as are customary in the securities business for such an arrangement between major underwriters and companies of ASI's size and investment stature; provided, however, that such agreement will not contain any such provision applicable to ASI or the Shareholder which is inconsistent with the provisions of this Agreement and provided, further, that the time and place of the closing under said agreement will be as mutually agreed upon among ASI, such managing underwriter and the Shareholder. 9. Expenses. (a) All expenses incurred in complying with Sections 5 and 6, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for ASI, fees of the Commission and National Association of Securities Dealers, Inc., transfer taxes and fees of transfer agents and registrars, but excluding any Selling Expenses and fees and expenses of counsel for the Shareholder or any other expenses of the Shareholder, are referred to as "Registration Expenses". All underwriting discounts, selling commissions applicable to the sale of the Restricted Stock, and any customary and reasonable underwriter's expense allowances expressed on a percentage of the proceeds of the offering, are referred to as "Selling Expenses". (b) ASI will pay all Registration Expenses in connection with each registration statement filed pursuant to Section 6, and in connection with the first registration statement filed pursuant to the Shareholder's exercise of Demand Rights. The Shareholder will pay all customary and reasonable Registration Expenses in connection with the second registration statement filed pursuant to its exercise of Demand Rights, except that: (i) the Shareholder will not be required to pay or reimburse ASI for the costs of any audit of ASI's financial statements that would have been performed in any event; (ii) the Shareholder will not have to pay or reimburse ASI for the time of any ASI executives or other personnel involved in preparing the registration statement; and (iii) if any other shareholders of ASI participate in such registration, the Shareholder will be required to pay only his pro rata portion of the Registration Expenses. All Selling Expenses in connection with any registration statement filed pursuant to Sections 5 and 6 will be borne by the Shareholder. 10. Indemnification. In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 5 or 6, ASI will indemnify and hold harmless the Shareholder and each underwriter of Restricted Stock under the Securities Act and each other person, if any, who controls the Shareholder or any underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Shareholder or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect of such losses, claims, damages or liabilities) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered, any preliminary prospectus or final prospectus contained in such registration statement, or any amendment or supplement of such registration statement, or arise out of or are based upon the omission or alleged omission to state in such registration statement or prospectus a material fact required to be therein or necessary to make the statements therein not misleading, and will reimburse the Shareholder, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that ASI will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by the Shareholder, any underwriter or any controlling person in writing specifically for use in such registration statement or prospectus. In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 5 or 6, the Shareholder will indemnify and hold harmless ASI and each person, if any, who controls ASI within the meaning of the Securities Act, each officer of ASI who signs the registration statement, each director of ASI, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which ASI or such officer or director or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect of such losses, claims, damages or liabilities) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered, any preliminary prospectus or final prospectus contained in such registration statement or any amendment or supplement of such registration statement, or arise out of or are based upon the omission or alleged omission to state in such registration statement or prospectus a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse ASI and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Shareholder will be liable under this Agreement in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information furnished in writing to ASI by the Shareholder specifically for use in such registration statement or prospectus; provided, further, however, that the liability of the Shareholder under this Agreement will be limited to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the public offering price of shares sold by the Shareholder under such registration statement bears to the total public offering price of all securities sold under such registration statement, but not to exceed the proceeds received by the Shareholder from the sale of the Restricted Stock covered by such registration statement. Promptly after receipt by an indemnified party under this Agreement of notice of the commencement of any action, such indemnified party will, if a claim in respect of such action is to be made against the indemnifying party under this Agreement, promptly notify the indemnifying party in writing of such claim, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party except to the extent that the indemnifying party is prejudiced by such omission or delay. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement of such action, the indemnifying party will be entitled to participate in and, to the extent it wishes, to assume and undertake the defense of such action with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense of such action, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal expenses subsequently incurred by such indemnified party in connection with the defense of such action other than reasonable costs of investigation and of liaison with counsel so selected (unless such indemnified party reasonably objects to such assumption on the grounds that there are likely to be defenses available to it which are different from or in addition to, and are in conflict with, the defenses available to such indemnifying party, in which event the indemnified party will be reimbursed by the indemnifying party for the reasonable expenses incurred in connection with retaining its separate legal counsel, but only to the extent of such conflict). The indemnifying party will lose its right to defend, contest, litigate and settle a matter if it fails to contest such matter diligently. No matter will be settled by an indemnifying party without the prior written consent of the indemnified party, unless such settlement contains a full and unconditional release of the indemnified party. Notwithstanding the foregoing, any indemnified party has the right to retain its own counsel in any such action, but the fees and disbursements of such counsel will be at the expense of such indemnified party unless (i) the indemnifying party fails to retain counsel for the indemnified person as aforesaid or (ii) the indemnifying party and such indemnified party mutually agree to the retention of such counsel. The indemnifying party will not, in connection with any action or related actions in the same jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for the indemnified party. The indemnifying party will not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there is a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. If the indemnification provided for in the first two paragraphs of this Section 10 is unavailable or insufficient to hold harmless an indemnified party under such paragraphs in respect of any losses, claims, damages or liabilities or actions in respect of such losses, claims, damages or liabilities, then each indemnifying party will in lieu of indemnifying such indemnified party contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or actions in such proportion as appropriate to reflect the relative fault of ASI, on the one hand, and the underwriters and the Shareholder, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or actions, as well as any other relevant equitable considerations. ASI and the Shareholder agree that it would not be just and equitable if contributions pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which did not take account of the equitable considerations referred to above in this paragraph. Notwithstanding the provisions of this paragraph, the Shareholder will not be required to contribute any amount in excess of the lesser of (i) the proportion that the public offering price of shares sold by the Shareholder under such registration statement bears to the total public offering price of all securities sold under such registration statement, but not to exceed the proceeds received by the Shareholder for the sale of the Restricted Stock covered by such registration statement and (ii) the amount of any damages which it would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No person guilty of fraudulent misrepresentations (within the meaning of Section 11(f) of the Securities Act), will be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. The indemnification of underwriters provided for in this Section 10 will be on such other terms and conditions as are at the time customary and reasonably required by such under- writers. The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party and will survive the transfer of the shares of Restricted Stock. 11. Changes in Common Stock. If the Company should take any action to change its outstanding shares of Common Stock into a greater or lesser number of shares, whether by stock split, stock dividend or otherwise, all numbers of shares given in this Agreement will automatically be proportionately adjusted. 12. Permitted Transferees. (a) In order to Transfer Restricted Stock to a Permitted Transferee, the Shareholder will submit the certificates representing the shares to the Company together with (i) a written agreement satisfactory in form and substance to ASI signed by the Permitted Transferee agreeing to be bound by all of the terms and provisions of this Agreement applicable to the Shareholder; (ii) such evidence as ASI may reasonably request that the proposed transferee in a Permitted Transferee; (iii) an opinion of counsel reasonably satisfactory to ASI that the proposed Transfer may be effective without registration under the Securities Act and any state securities laws. The certificate issued in the name of the Permitted Transferee will bear the legend referred to in Section 2. (b) Following any Transfer of Restricted Stock to a Permitted Transferee, the Shareholder and all Permitted Transferees will be jointly and severally liable for the performance of the obligations of the Shareholder hereunder, and the rights of the Shareholder hereunder will be exercised by a single representative of all holders of Restricted Stock. As long as the Shareholder is alive and legally competent and continues to own any share of Restricted Stock, the Shareholder shall be that representative. Upon the death or incompetency of the Shareholder, his execution or conservation will appoint a Permitted Transferee as successor representative. Upon the Transfer by the Shareholder of all of his Restricted Stock, if any Permitted Transferee will own Restricted Stock after the Transfer, the Shareholder will appoint a Permitted Transferee as successor representative. If any successor representative appointed by the Shareholder or his executor or conservator resigns or ceases to own Restricted Stock, the Permitted Transferees will appoint a successor representative by majority vote of the shares of Restricted Stock then owned by all Permitted Transferees. The Shareholder or other person or persons appointing or electing a successor representative will give written notice of such election or appointment to the Company, identifying the successor representative. The Company will be entitled to rely without inquiry on the instructions of the representative last identified to it as provided above and may disregard any contrary claims or demands by any other holder of Restricted Stock. (c) After any Transfer to a Permitted Transferee, all provisions of this Agreement will apply to all shares, transactions or actions of the Shareholders and all Permitted Transferees in the aggregate. Without limiting the generality of the foregoing, the number of shares as to which the shares of the Restricted Stock Transferred by any Permitted Transferee will be aggregated with the shares of the Restricted Stock Transferred by the Shareholder for the purpose of determining the number of shares of the Restricted Stock that may be sold by the Shareholder or any Permitted Transferee pursuant to a Demand Right or an Incidental Right. 13. Miscellaneous. (a) In order to make available to the Shareholder the benefits of certain rules and regulations of the Commission which may permit the sale of the shares of Restricted Stock to the public without registration, ASI agrees that, when required by law, it will use its best efforts to: (i) make and keep public information available, as those terms are understood and defined in Rule 144 of the Commission, at all times; (ii) file with the Commission in a timely manner all reports and other documents required of ASI under the Securities Act and the Exchange Act; and (iii) so long as the Shareholder owns any shares of Restricted Stock, furnish the Shareholder, promptly after the Shareholder's request a written statement by ASI as to its compliance with the reporting requirements of Rule 144. (b) Subject to the restrictions on Transfer set forth herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties to this Agreement will bind and inure to the benefit of the respective successors and assigns of the parties to this Agreement whether so expressed or not. (c) All notices, requests, demands, claims, and other communications under this Agreement will be in writing. Any notice, request, demand, claim, or other communication under this Agreement will be deemed duly given only if it is sent by registered or certified mail, return receipt requested, postage prepaid, or by courier, telecopy or facsimile, and addressed to the intended recipient as set forth below: (i) if to ASI, to it at: Analytical Surveys, Inc., 1935 Jamboree Drive, Suite 100, Colorado Springs, Colorado 80920, Attention: Sidney V. Corder; (ii) if to the Shareholder, to him at: Geo. S. Olive & Co. LLC, 700 Capital Center South, 201 North Illinois Street, Indianapolis, Indiana 46204, Attention: Mr. Charles E. Thomas, Telecopy: (317) 383-4200; and (iii) if to any Permitted Transferee, to it at such address as may have been furnished to ASI in writing by such holder; Notices will be deemed given three days after mailing if sent by certified mail, when delivered if sent by courier, and one business day after receipt of confirmation by person or machine if sent by telecopy or facsimile transmission. Any party may change the address to which notices, requests, demands, claims and other communications under this Agreement are to be delivered by giving the other parties notice in the manner set forth in this Agreement. (d) This Agreement will be governed by and construed in accordance with the laws of the State of Indiana. (e) This Agreement constitutes the entire agreement of the parties with respect to the subject matter of this Agreement and may not be modified or amen- ded except in writing. (f) This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. (g) All references in this Agreement to Sections refer to the pertinent provision of this Agreement unless provided otherwise. Please indicate your acceptance of the foregoing by signing and returning the enclosed counterpart of this Agreement, whereupon this Agreement will be a binding agreement between ASI and you. Very truly yours, Analytical Surveys, Inc. By: /s/ Sid V. Corder ---------------------------- Title: Chief Executive Officer ---------------------------- AGREED TO AND ACCEPTED as of the date first above written. /s/ Sol C. Miller - ----------------- Sol C. Miller EX-2 6 INVESTMENT LETTER July 2, 1997 Analytical Surveys, Inc. 1935 Jamboree Drive, Suite 100 Colorado Springs, Colorado 80920 Ladies and Gentlemen: I am acquiring 925,000 shares (the "Shares") of Common Stock (the "Common Stock" ) of Analytical Surveys, Inc. (the "Company") from the Company pursuant to the Purchase Agreement dated as of the date of this letter. I understand that the Company is transferring the Common Stock to me in reliance upon certain exemptions from the registration requirements of the Securities Act of 1933 and in reliance upon exemptions from registration in the Colorado Securities Act, the securities laws of Indiana and the securities laws of any other applicable state. I represent to and agree with the Company that: 1) I am acquiring the Shares for investment for my own account and with no view to distribute the Shares, in whole or in part and of record or beneficially, to any other person. 2) I understand and agree that the Shares will constitute "restricted securities" under the Securities Act of 1933 and thus may not be sold, assigned, or otherwise disposed of, beneficially or on the records of the Company, unless there has been delivered to the Company an opinion of counsel, satisfactory to the Company, to the effect that the proposed transaction will neither constitute nor result in any violation of the registration requirements under any applicable federal securities law or any applicable state securities law. I agree that the Company may place on the certificates representing the Common Stock that I purchase a restrictive legend in substantially the following form: THE SHARES EVIDENCED BY THIS CERTIFICATE (A) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS THEREOF AVAILABLE, AS ESTABLISHED TO THE SATISFACTION OF THE COMPANY, BY OPINION OF COUNSEL OR OTHERWISE, AND (B) ARE SUBJECT TO CONTRACTUAL RESTRICTIONS ON RESALE UNDER AN AGREEMENT BETWEEN THE HOLDER AND THE COMPANY, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY. I acknowledge that the requirements stated in this paragraph with respect to any proposed sale, assignment, or other disposition of the Shares are in addition to any restrictions upon such transactions imposed, now or in the future, under the Articles of Incorporation or Bylaws of the Company, or under any other agreement with respect to the Shares. 3) I acknowledge that I have had full opportunity to ask questions of, and receive answers from, the Company's officers and directors concerning (a) the terms of the transactions contemplated by the Purchase Agreement and (b) any aspect of the Company's assets, financial condition, business and business prospects, and to obtain any additional information about the Company's assets, financial condition, business and business prospects. Without limiting the foregoing, I have had access to, and have reviewed, (a) the Company's annual report on Form 10-K for the period ended September 30, 1996; (b) the Company's quarterly reports on Form 10-Q for the periods ended December 31, 1996 and March 31, 1997; (c) the Company's reports on Form 8-K dated February 13, 1997, February 24, 1997, and March 20, 1997; and (d) the Company's annual report to shareholders for the year ended September 30, 1996. 4) I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of an investment in the Shares. 5) I acknowledge that no general solicitation or general advertising (including communications published in any newspaper, magazine, or other broadcast) has been received by me and that no public solicitation or advertisement with respect to the offering of the Shares has been made to me. 6) I have adequate means of providing for my current needs and possible current contingencies, and I have no need and anticipate no need in the foreseeable future, for liquidity in my investment in the Shares. I am able to bear the economic risks of my investment in the Shares and, consequently, without limiting the generality of the foregoing, I am able to hold the investment for an indefinite period and have sufficient net worth to sustain a loss of the entire investment in the event such loss should occur. 7) I am a bona fide resident of the State of Indiana, and my correct mailing address and social security number are set forth below next to my signature. I have no present intention of becoming a resident of any other state or jurisdiction. 8) I understand that no securities administrator of any state has made any finding or determination relating to the advisability or fairness of the terms under which I am purchasing the Shares. 9) I represent and warrant to the Company that either (a) my individual net worth, or my joint net worth with that of my spouse, presently exceeds $1,000,000, or (b) my individual income was in excess of $200,000 during 1995 and 1996, or the joint income of myself and my spouse was in excess of $300,000 in 1995 and 1996, and in either event I have a reasonable expectation of reaching such income levels in the current year. 10) The information set forth in this letter is true, complete and correct, and I am aware that the Company and its counsel will rely on the information, representations, and warranties set forth in this letter in connection with the Company's transfer of the Shares to me. The representations that I have made in this letter will survive the execution and delivery of this letter and the sale of the Shares to me. Very truly, /s/ Sol C. Miller ----------------------------- Sol C. Miller Address: Mr. Sol C. Miller c/o Mr. Charles E. Thomas Geo. S. Olive & Co. LLC 700 Capitol Center South 201 North Illinois Street Indianapolis, IN 46204 Telecopy: (317) 383-4200 -----END PRIVACY-ENHANCED MESSAGE-----