CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT (this
"Agreement") is entered into as of July 2, 1997, between
Analytical Surveys, Inc., a Colorado corporation ("ASI"), and Xxx
X. Xxxxxx (the "Consultant").
Recitals
Pursuant to the Purchase Agreement (the "Purchase
Agreement") dated as of July 2, 1997 among ASI and the
Consultant, ASI has agreed to purchase all of the stock of MSE
Corporation (the "Company").
The execution and delivery of this Agreement is a condition
precedent to the obligations of the parties to the Purchase
Agreement to consummate the transactions contemplated by the
Purchase Agreement.
Agreement
The parties agree as follows:
I. DEFINITIONS
In addition to the terms defined elsewhere in this
Agreement, the following terms will have the meanings set forth
below:
I.1. "Affiliate" means, with respect to any Person, (i)
any Person in which such Person directly or indirectly holds an
equity or profits interest, (ii) any Person controlling,
controlled by or under common control with such Person, (iii) any
director, executive officer, partner or trustee of such Person,
(iv) any member of the immediate family of such Person, (v) any
trust in which a substantial portion of the beneficial interest
is held by one or a combination of the foregoing Persons or (vi)
any Person to whom such Person provides or has provided financial
assistance. As used in this definition, "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or voting
interests, by contract or otherwise.
I.2. "Business" means (i) the businesses conducted or
planned to be conducted by the Company as of the day prior to the
date of this Agreement or by ASI at any time during the
Consultant's consulting arrangement with ASI, (ii) any business
conducted by the Company at any time within the one-year period
prior to the day prior to the date of this Agreement and (iii)
any business reasonably related or incident to, or constituting a
reasonable extension of, such businesses, whether or not (a) the
Company has been engaged in such business prior to, or is engaged
in such business as of, the day prior to the date of this
Agreement or (b) ASI has been engaged in such business prior to,
or is engaged in such business as of, the date on which the
Consultant's consulting arrangement with ASI terminates.
I.3. "Competing Business" means any Person, other than
ASI, engaged in any substantial respect in the Business or in the
Industry.
I.4. "Industry" means the business of providing data
conversion services and products for municipal utility,
government and commercial customers, and converting paper based
maps, aerial photography and other information formats into
digital form using technologies such as photogrammetry and
digital orthophotography [Discuss engineering business and ids].
I.5. "Person" means any natural person, corporation,
trust, partnership, limited liability company, joint venture,
unincorporated organization, government or governmental agency,
or other entity.
I.6. "Termination Date" means the date on which the
Consultant's consulting arrangement with ASI terminates.
I.7. "Territory" means the world.
II. CONSULTING TERMS AND CONDITIONS
II.1. Consulting. ASI agrees to utilize the consulting
services of the Consultant, and the Consultant agrees to provide
consulting services to ASI, in the capacities, and subject to the
terms and conditions, set forth in this Agreement. Consultant
agrees to provide consulting services exclusively to ASI during
the term of this Agreement, but nothing in this Agreement will
prevent Consultant from engaging, directly or indirectly, in the
real estate development business as long as such activities do
not unreasonably interfere with the Consultant's duties under
this Agreement.
II.2. Compensation. For the Consultant's performance of
the services described in this Agreement, the Consultant will be
compensated by ASI, as follows:
(i) the Consultant will receive an annual
consulting fee of $150,000, payable monthly on or about the 15th
day of each month;
(ii) the Consultant will be provided with medical
benefits substantially similar to the Consultant's medical
benefits provided by the Company on the day prior to the date of
this Agreement, including continuing coverage under the policy
with Time Insurance Policy, Policy No. 04197219, or substantially
similar benefits; and
(iii) ASI will pay the premiums due during the term
of this Agreement for life insurance policy #__________ with
____________________ as the insurer.
II.3. Expense Reimbursement. Upon submission to ASI of
documentation reasonably satisfactory to it, ASI will reimburse
the Consultant for all reasonable transportation, hotel, meal and
other travel expenses reasonably incurred by the Consultant on
business travel away from the Consultant's usual location and for
other reasonable business expenses reasonably incurred by the
Consultant during the term of the Consultant's consulting
arrangement with ASI, all in accordance with any policies of ASI
established from time to time, and subject to termination or
modification by ASI's Board of Directors, in its sole and
exclusive discretion, but the Consultant will be excused from
performance under this Agreement to the extent that ASI decides
not to reimburse the Consultant for reasonable expenses incurred
in connection with the Consultant's performance of any task,
project or activity under this Agreement.
II.4. Services. The Consultant will act as a consultant
to ASI and its subsidiaries, including the Company, and will be
actively engaged in efforts intended to result in the completion
of any third party contracts, under which ASI and its
subsidiaries, including the Company, are providing services to
such third party, existing and in progress as of the date of this
Agreement, and the acquisition of new contracts for ASI's and its
subsidiaries', including the Company's, services. The Consultant
will report to and be subject to the direction of the Chief
Executive Officer of ASI. The Consultant will devote the
Consultant's best efforts and skills to the business of ASI. The
parties do not intend for the Consultant to be required to
provide services on a full-time basis, or to be required to
consult on a regular and extensive basis concerning any major
projects of ASI, but intend that the Consultant make himself
reasonably available to ASI to provide services, with the
limitation that the Consultant will not be expected to provide
services for more than 40 hours per month, on the average, in the
absence of extraordinary circumstances.
II.5. Term and Termination of Consulting Arrangement.
(a) The Consultant's consulting arrangement under
this Agreement will begin on the date of this Agreement and
continue until July 2, 1998.
(b) ASI may terminate this Agreement prior to July
2, 1998 with Cause, and this Agreement will terminate immediately
if the Consultant dies; in either event, the Consultant will not
be entitled to any compensation or other amounts or benefits
under this Agreement (other than compensation accrued but unpaid
in respect of the period prior to the termination date) or
otherwise, and ASI will have no other liability or obligation to
the Consultant or his estate. For purposes of this Agreement,
"Cause" for termination by ASI exists if Consultant has committed
a felony; has committed a theft or other act of dishonesty
affecting ASI or any of its subsidiaries; has engaged in
threatening, harassing, abusive or otherwise unlawful behavior
toward an employee or customer of ASI, or any agent of employee
or customer; has engaged in other illegal or unlawful conduct;
was grossly negligent in the exercise of the Consultant's
authority or the performance of the Consultant's duties; has
otherwise materially breached this Agreement and has failed to
cure such breach within 30 days after receipt of notice of such
breach.
(c) The Consultant may terminate this Agreement
prior to July 2, 1998 with Cause, in which event the Consultant
will not be obligated to perform any additional services under
this Agreement. For purposes of this Agreement, "Cause" for
termination by the Consultant exists if (I) ASI has materially
breached this Agreement and has failed to cure such breach within
30 days after receipt of notice of such breach or (ii) ASI ceases
to own or control, directly or indirectly, substantially all of
the assets of the Company (but any event described in (ii) will
not be considered a breach of this Agreement by ASI and will not
entitle the Consultant to any damages).
III. CONFIDENTIALITY; NONCOMPETITION
III.1. Confidentiality.
The Consultant agrees that the Consultant and his
Affiliates will not, at any time during the term of this
Agreement and for three years thereafter: (a) disclose any trade
secret or confidential information of ASI or any of its
Affiliates (the "Confidential Information"), to any person other
than an employee of ASI or any of its Affiliates, or (b) use or
permit the use of any of the Confidential Information in any way
to compete (directly or indirectly) with ASI or its Affiliates or
in any manner adverse to ASI or its Affiliates; provided,
however, that the Confidential Information referenced in the
foregoing provision will not include any information or knowledge
which: (a) is already generally publicly known or which
subsequently becomes generally publicly known other than as a
direct or indirect result of a breach of this Agreement or (b) is
lawfully required to be disclosed by a governmental agency or
applicable law. In the case of any disclosure under (b), the
Consultant will provide notice to ASI prior to any such
disclosure in order to provide an opportunity to ASI to contest
such disclosure and, in any event, will redact the disclosed
information to the maximum extent permitted. The Confidential
Information relates to the conduct of ASI's business, is of
independent economic value to ASI because it is not generally
publicly known and is the subject of efforts by ASI to maintain
its secrecy. ASI acknowledges that the right to maintain the
secrecy of the Confidential Information constitutes a proprietary
right which is a trade secret and which ASI is entitled to
protect.
III.2. Employee Agreement Not to Compete.
The Consultant agrees that during the period commencing on
the date of this Agreement and ending three years after the later
of (a) the date that the Consultant ceases to be a member of the
Board of Directors of ASI, or (b) the date on which the
Consultant ceases to have a written consulting arrangement with
ASI (the "Noncompetition Period"), the Consultant will not, and
will cause each of his Affiliates not to, directly or indirectly,
take any of the following actions:
(a) serve as an officer, director, partner, joint
venturer or coventurer, agent or employee of, or a consultant to,
a Competing Business;
(b) own or acquire an ownership interest in or a
right to acquire an ownership interest in a Competing Business,
except that the Consultant may own up to 5% of the outstanding
shares of any class of capital stock of any entity whose capital
stock is registered under Section 15 of the Securities Exchange
Act of 1934; or
(c) solicit for employment any employee or officer
of ASI or any subsidiary of ASI (except for solicitation
occurring after an employee's employment by ASI or a subsidiary
of ASI has terminated).
III.3. Acknowledgment.
The Consultant acknowledges and recognizes that:
(a) this Agreement is necessary for the protection
of the legitimate business interests of ASI;
(b) the restrictions set forth in this Agreement,
including their duration, their geographic scope and the types of
activities covered, are reasonable; and
(c) the Consultant has no intention of competing
with ASI within the Territory during the Non-Competition Period.
IV. MISCELLANEOUS
IV.1. Specific Performance. ASI and the Consultant
acknowledge and agree that any breach of the Consultant's
covenants set forth in Sections II or III of this Agreement will
result in irreparable damage to ASI for which there will be no
adequate remedy at law. Therefore, ASI and the Consultant agree
that ASI may in its sole discretion seek temporary and permanent
court orders enjoining any breach of such covenants, without
prejudice to any other right or remedy to which ASI may be
entitled at law, in equity or under this Agreement.
IV.2. Mediation. Except as set forth in Section 4.1, if a
dispute arises in connection with the Consultant's performance of
consulting services or under this Agreement (including, without
limitation, those involving claims for specific performance or
other equitable relief), notice must be given pursuant to Section
4.14. After such notice has been given by one party to another,
the parties will in good faith 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.
IV.3. Arbitration. If such efforts provided for in Section
4.2 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 this Agreement. 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, and will
be bound to apply controlling law. The Consultant and ASI 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 and such party's costs and expenses
(including attorneys' fees and expenses) if the other party
commences or conducts the arbitration in bad faith. The party
who prevails on entry of the award of judgment will be entitled
to his or its costs and expenses, including reasonable attorney's
fees incurred in connection with the arbitration. A judgment
upon the award may be entered in any court having jurisdiction.
Notwithstanding anything to the contrary contained in this
Section, 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 provisional
and ancillary remedies, including injunctive relief, pending
resolution of any dispute by arbitration. 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.
IV.4. Attorneys' Fees and Costs. The prevailing party or
parties in any arbitration or in any other action to enforce this
Agreement will be entitled to all reasonable costs and expenses,
including attorneys' fees and fees and expenses of the
arbitrators, incurred in connection with such action.
IV.5. Binding Contract. The mutual reliance by ASI and
the Consultant upon the existence of this Agreement as a
condition precedent to their obligations to consummate the
transactions contemplated by the Purchase Agreement will
constitute sufficient consideration for the validity and
enforceability of each of its provisions.
IV.6. Severability. ASI and the Consultant agree that the
terms of this Agreement, and in particular the restrictions on
the Consultant set forth in Sections II and III, are reasonable
and fair in light of the transactions contemplated by this
Agreement and by the Purchase Agreement. Whenever possible each
provision of this Agreement will be interpreted so as to be fully
effective and valid under applicable law. If any provision of
this Agreement is determined to be invalid, illegal or
unenforceable in any respect as written, such provision will be
automatically modified only to the minimum extent necessary to
make it enforceable and the provision as so modified will be
enforced, without invalidating any other provision of this
Agreement. If any provision contained in this Agreement is
determined to be void or unenforceable against the Consultant in
whole or in part, it will not be deemed to affect or impair the
validity of any other provision of this Agreement or the validity
of such provision with respect to any other party. This
Agreement constitutes a fully negotiated agreement between the
parties, each with the aid and assistance of legal counsel. The
language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and will be
construed and interpreted as though drafted by all the parties to
this Agreement.
IV.7. Extension of Periods. The periods of time set forth
in Section III of this Agreement will be extended by any period
of time during which the Consultant or any of the Consultant's
Affiliates is in breach of any term of this Agreement.
IV.8. Waiver. Any failure by ASI to insist upon strict
compliance with any term, covenant or condition of this Agreement
will not be deemed to be a waiver of such term, covenant or
condition, nor will the relinquishment of any right or power
under this Agreement by ASI at any one or more times be deemed a
waiver or relinquishment of such right or power by ASI at any
other time or times.
IV.9. Assignment. This Agreement will inure to the
benefit of and be enforceable by the parties and their successors
and assigns, but will not be assignable or delegable in whole or
in part by the Consultant.
IV.10. Headings. The headings contained in this Agreement
are inserted for convenience only and do not constitute a part of
this Agreement.
IV.11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an
original but all of which together will constitute but one
agreement.
IV.12. Complete Agreement. This Agreement embodies the
complete agreement and understanding between the parties and
supersedes and preempts any prior understandings, agreements or
representations by the parties, written or oral, which may relate
to the subject matter of this Agreement.
IV.13. Choice of Law. The construction, validity and
interpretation of this Agreement will be governed by the internal
law of the State of Colorado without reference to any conflict of
law principles.
IV.14. 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:
Xx. Xxx X. Xxxxxx Locke, Reynolds, Xxxx &
c/o Xx. Xxxxxxx X. Xxxxxx Xxxxxxx & Co. LLC
Geo. S. Olive & Co. LLC 1000 Capital Center South
000 Xxxxxxx Xxxxxx Xxxxx 000 Xxxxx Xxxxxxxx Street
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxxxxxxxxx, XX 00000
Xxxxxxxxxxxx, XX 00000 Attn: Xxxxxxx X. Xxxxxxxxx,
Esq.
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
If to the Buyer: Copy to:
Analytical Surveys, Inc. Xxxxxxx & Xxxxxx L.L.C.
0000 Xxxxxxxx Xxxxx, Xxxxx 000 633 Seventeenth Street,
Colorado Springs, Colorado 80920 Suite 3000
Attn: Xxxxxx X. Xxxxxx Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
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.
The parties to this Agreement have executed this Agreement as of
the date first above written.
ANALYTICAL SURVEYS, INC.
By: /s/ X. X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title:Chairman and Chief Executive Officer
XXX X. XXXXXX
/s/ Xxx X. Xxxxxx
