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EXHIBIT 10.6
_______________________________________________________________________________
NDE ENVIRONMENTAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
_______________________________________________________________________________
DATED AS OF OCTOBER 25, 1996
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . 3
2.1. Demand Registration. . . . . . . . . . . . . . . . . . . 3
2.2. "Piggyback" Registration. . . . . . . . . . . . . . . . . 5
2.3. Registration Procedures. . . . . . . . . . . . . . . . 6
2.4. Demand Offerings. . . . . . . . . . . . . . . . . . . . . 9
2.5. Indemnification. . . . . . . . . . . . . . . . . . . . .10
2.6. Adjustments Affecting Registrable Securities. . . . . . 11
2.7. Limitation on Registration Rights . . . . . . . . . . . 11
SECTION 3. RULE 144. . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4. INFORMATION REQUIRED BY RULE 144A. . . . . . . . . . 12
SECTION 5. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . 12
SECTION 6. ADDITIONAL HOLDERS. . . . . . . . . . . . . . . . . . . 12
SECTION 7. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . 12
SECTION 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 12
8.1. Amendments, Modifications and Waivers. . . . . . . . 12
8.2. Governing Law. . . . . . . . . . . . . . . . . . . . . 13
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8.3. Rules of Construction. . . . . . . . . . . . . . . . . 13
8.4. Notices. . . . . . . . . . . . . . . . . . . . . . . 13
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REGISTRATION RIGHTS AGREEMENT
This is the REGISTRATION RIGHTS AGREEMENT dated as of October 25, 1996
("Agreement") by and between NDE ENVIRONMENTAL CORPORATION ("NDE"), a Delaware
corporation, and BANC ONE CAPITAL PARTNERS, L.P. ("BOCP"), an Ohio limited
partnership, provided for and entered into pursuant to the Note and Warrant
Purchase Agreement dated as of October 25, 1996, as amended, restated,
supplemented or otherwise modified from time-to-time, ("Purchase Agreement") by
and among BOCP, as purchaser, and NDE, TANKNOLOGY/NDE CORPORATION, USTMAN
INDUSTRIES, INC., PROECO, INC., and TANKNOLOGY CANADA (1988), INC., as sellers.
BOCP and each other Person added to this Agreement as provided for in
Section 6 hereof, together with their respective successors and assigns, are
referred to collectively as the "Holders" and individually as a "Holder." NDE,
together with its successors and assigns is referred to as the "Company." The
Holder and the Company are referred to collectively as the "Parties," and
individually as a "Party."
THIS AGREEMENT IS ONE OF THE "RELATED DOCUMENTS" REFERRED TO IN THE
PURCHASE AGREEMENT
In consideration of their mutual promises set forth in this Agreement
and the Purchase Agreement, the Parties hereby agree as follows:
Section 1. DEFINITIONS.
(a) Purchase Agreement Definitions. All capitalized
terms not otherwise defined in this Agreement shall have the definitions set
forth in the Purchase Agreement. The terms defined in the Purchase Agreement
that are used with such definitions in this Agreement include:
"Notice"
"Person"
(b) Other Definitions. As used in this Agreement, the
following terms shall have the specified definitions:
Commission: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities
Act.
Exchange Act: The Securities Exchange Act of 1934, or any
similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities
Exchange Act
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of 1934 shall include a reference to the comparable section,
if any, of any such similar federal statute.
Preemptive Shares. The Common Shares or Common Shares issued
upon conversion or exercise of Convertible Securities
purchased pursuant to the provisions of the Preemptive Rights
Agreement dated as of October 25, 1996, provided for and
entered into by NDE and BOCP pursuant to the Purchase
Agreement.
Registrable Securities: (a) Any Warrant Shares or Preemptive
Shares, and (b) any securities issued or issuable with
respect to any such Warrant Shares or Preemptive Shares by way
of dividend or distribution or in connection with a
recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable
Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with
respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall
have been sold in accordance with such registration statement,
(ii) such securities shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) promulgated
under the Securities Act, (iii) such securities shall have
been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of them
shall not require registration or qualification under the
Securities Act or any similar state law then in force, or (iv)
such securities shall have ceased to be outstanding.
Registration Expenses: All expenses incident to The Company's
performance of or compliance with Section 3, including,
without limitation, all registration, filing and National
Association of Securities Dealers fees, all fees and expenses
of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants,
including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and
compliance, premiums and other costs of policies of insurance
against liabilities arising out of the public offering of the
Registrable Securities and any fees and disbursements of
underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and
commissions and transfer taxes, if any.
Securities Act: The Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the
Commission thereunder, all as of the same shall be in effect
at the time. References to a particular section of the
Securities Act of 1933 shall include a reference to the
comparable section, if any, of any such similar federal
statute.
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Warrant Share(s). The Common Shares issued upon the exercise
of the Warrants evidenced by the Warrant Certificate dated as
of October 25, 1996 (or any replacement certificates therefor)
issued and provided for in the Purchase Agreement.
Section 2. REGISTRATION RIGHTS.
2.1. Demand Registration.
(a) By notice to the Company, any Holder owning of record
more than 25% of the then outstanding Registrable Securities may request that
the Company effect the registration under the Securities Act of all or any part
of such Holders' Registrable Securities. Such Notice shall specify (i) the
intended method of disposition thereof, and (ii) whether or not such requested
registration is to be an underwritten offering. Upon receipt of such notice,
the Company will promptly give Notice of such requested registration to all
other Holders and thereupon the Company will use all reasonable efforts to
effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been
so requested to register by the requesting Holder;
and
(ii) all other Registrable Securities which the Company
has been requested to register by any other Holder by
Notice to the Company within thirty (30) days after
the date of such Notice by the Company (which request
shall specify the intended method of disposition of
such Registrable Securities), all to the extent
necessary to permit the disposition (in accordance
with the intended methods thereof) of the Registrable
Securities to be so registered.
The Company shall not be required to effect more than two
registrations for any or all Holders pursuant to requests made pursuant to this
section.
(b) Registration of Other Securities. Whenever the
Company shall effect a registration pursuant to this section in connection with
an underwritten offering, no securities other than Registrable Securities shall
be included among the securities covered by such registration unless (i) the
managing underwriter of such offering shall have advised each holder of
Registrable Securities to be covered by such registration in writing that the
inclusion of such other securities would not adversely affect such offering or
(ii) the Holders of all Registrable Securities to be covered by such
registration shall have consented in writing to the inclusion of such other
securities.
(c) Postponement of Registration. The Company shall be
entitled to postpone, for a reasonable period of time not in excess of 90 days
after its receipt of a Notice, the filing of any registration statement, if
(i) at any time prior to the filing of such registration statement the Company
determines, in its reasonable business judgment, that such registration and
offering could interfere with or otherwise adversely affect any financing,
acquisition, corporate reorganization, or
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other material transaction or development involving the Company or any of its
affiliates or require the Company to disclose matters that otherwise would not
be required to be disclosed at such time and (ii) the Company gives the Holders
written notice of such postponement. Any such notice need not specify the
reasons for such postponement if the Company determines, in its reasonable
business judgment, that doing so would interfere with or adverseley affect such
transaction or development or would result in the disclosure of material
non-public information. In the event of such postponement, the Company shall
file such registration statement as soon as practicable after it shall
determine, in its reasonable business judgment, that such registration and
offering will not interfere with the matters described in the first sentence of
this Section 2.1(c). If the Company shall postpone the filing of any
registration, Holders holding in the aggregate 25% or more of the Registrable
Shares requested to be included in such registration statement shall have the
right to withdraw their request for such registration by giving notice to the
Company within 15 days of the notice of postponement. Such withdrawal request
shall be deemed to apply to all Holders who hold Registrable Shares that had
been requested to be included in such registration statement. In the event
that the Holders withdraw their request in the foregoing manner, such request
shall not be counted for purposes of determining the number of registrations to
which Sellers are entitled pursuant to Section 2.1(a) hereof.
(d) Expenses. The Company will pay all Registration
Expenses in connection with any registration requested pursuant to this
section. If a registration begun pursuant to a request made under Section
3.1(a) is withdrawn by the holders of the Registrable Securities making such
request because information concerning the Company is disclosed that is
materially and adversely different from the information known to such holders
at the time such request was made, the Company will pay all Registration
Expenses in connection with such request without reducing the number of
registrations which the Holders have a right to cause the Company to effect
under section hereof; provided, however, that if the Holders withdraw or,
provided, however, that, if such a registration is withdrawn for any other
reason, the Holders will reimburse the Company for such Registration Expenses
(e) Effective Registration Statement. A registration
requested pursuant to this section shall not be deemed to have been effected
(i) unless a registration statement with respect thereto has become effective,
(ii) if after it has become effective, such registration becomes the subject of
any stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason, or (iii) if the conditions
to closing specified in the purchase agreement or underwriting agreement
entered into in connection with such registration are not satisfied.
(f) Selection of Underwriters. If a requested
registration pursuant to this section involves an underwritten offering, the
underwriter or underwriters thereof shall be selected by the Company.
(g) Priority in Requested Registrations. If a requested
registration pursuant to this section involves an underwritten offering, and
the managing underwriter shall advise the Company
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in writing (with a copy to each Holder) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the
Holders, the Company will include in such registration the number of
Registrable Securities that the Company is so advised can be sold in such
offering, pro rata among the holders thereof requesting such registration on
the basis of the number of such Registrable Securities requested to be included
by such holders. In connection with any registration as to which the
provisions of this clause (g) apply, no securities other that Registrable
Securities shall be covered by such registration.
2.2. "Piggyback" Registration.
(a) Right to Include Registrable Securities. If the
Company at any time proposes to register any of its securities under the
Securities Act (other than by a registration on Forms S-8 or S-4 or any
successor or similar form and other than pursuant to Section 2.1), whether or
not for sale for its own account, it will each such time give prompt Notice to
the Holders. Upon request of any such Holder to the Company made within 30
days after the receipt of any such Notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), the Company will use all reasonable
efforts to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Holders,
to the extent necessary to permit the disposition (in accordance with the
intended methods thereof) of the Registrable Securities to be registered. If,
at any time after giving written Notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, as its election, give written notice of such determination to each holder
of Registrable Securities and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligations to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), without
prejudice, however, to the rights of any Holder entitled to request that such
registration be effected as a registration under Section 2.1, and (ii) in the
case of a determination to delay registration, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities. No registration effected under this section
shall relieve the Company of its obligation to effect any registration under
Section 2.1. the Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this section.
(b) Priority in Registrations. If (i) a registration
pursuant to this section involves an underwritten offering of the securities,
and (ii) the managing underwriter shall inform the Company and the holders of
the Registrable Securities requesting such registration of its belief that the
number of securities requested to be included in such registration exceeds the
number that can be sold in such offering, then the Company will include in such
registration, to the extent to which the Company is advised can be sold in
such offering, securities as follows:
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(i) If such registration is for an offering of securities
for the account of the Company, first, all securities
proposed by the Company to be sold for its own
account, second, such Registrable Securities
requested by the Holders to be included in such
registration, and third, all other securities of the
Company requested to be included in such registration
pro rata on the basis of the number of shares of such
securities so requested to be included;
(ii) if such registration is for other than an offering
described in (i) above, such Registrable Securities
requested to be included in such registration and all
other securities proposed by the Company to be sold
for its own account shall be included in such
registration on a pro rata on the basis of the number
of shares of such Registrable Securities and such
other securities so proposed to be sold.
2.3. Registration Procedures. If the Company is required to use
all reasonable efforts to effect the registration of any Registrable Securities
as provided in Sections 2.1 and 2.2, the Company will expeditiously as
possible:
(i) prepare and as soon thereafter as possible file with
the Commission the registration statement to effect
such registration and thereafter use all reasonable
efforts to cause such registration statement to
become effective, provided that the Company may
discontinue any registration of its securities which
are not Registrable Securities (and, under the
circumstances specified in Section 2.2(a), its
securities which are Registrable Securities) at any
time prior to the effective date of the registration
statement relating thereto;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement
effective and to comply with the provisions of the
Securities Act in all material respects with respect
to the disposition of all securities covered by such
registration statement until such time as all of such
securities have been disposed of in accordance with
the intended methods of disposition by the Holders
set forth in such registration statement;
(iii) furnish to each Holder such number of prospectuses
and copies of each such amendment and supplement
thereto and such other documents as such Holder may
reasonably request;
(iv) use all reasonable efforts to register or qualify all
Registrable Securities and other securities covered
by such registration statement under such other
securities or blue sky laws of such jurisdictions as
the Holders shall reasonably request, to keep such
registration or qualification in effect for so
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long as such registration statement remains in
effect, and take any other action which may be
reasonably necessary or advisable to enable the
Holders to consummate the disposition in such
jurisdictions of the securities owned by the Holders,
except that the Company shall in no event be required
to qualify to do business as a foreign corporation or
as a dealer in any jurisdiction where it is not so
qualified, to conform its capitalization or the
composition of its assets at the time to the
securities or blue sky laws of such jurisdiction, to
execute or file any general consent to service of
process under the laws of such jurisdiction, to
execute or file any general consent to service of
process under the laws of any jurisdiction, to take
any action that would subject it to service of
process in suits other than those arising out of the
offer and sale of the Registrable Shares covered by
such registration statement, or to subject itself to
taxation in any jurisdiction where it has not
theretofore done so; and
(v) use all reasonable efforts to cause all Registrable
Securities covered by such registration statement to
be registered with or approved by such other
governmental agencies or authorities as may be
necessary to enable the Holders to consummate the
disposition of such Registrable Securities;
(vi) furnish to the Holders a signed counterpart,
addressed to the Holders (and underwriters, if any)
of
(x) an opinion of counsel for the Company, dated
the effective date of such registration statement
(and, if such registration includes an underwritten
public offering, dated the date of the closing under
the underwriting agreement), reasonably satisfactory
in form and substance to the Holders, and
(y) a "comfort" letter, dated the effective date
of such registration statement (and, if such
registration includes an underwritten public
offering, dated the date of the closing under the
underwriting agreement), signed by the independent
public accountants who have certified The Company's
financial statements included in such registration
statement,
covering substantially the same matters as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings;
(vii) notify each Holder upon discovery that, or upon the
happening of any event as a result of which, the
prospectus included in such registration statement
includes an untrue statement of a material facts or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading in the light of the
circumstances under which they were made,
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and at the reasonable request of any such Holder use
its diligent efforts to promptly prepare and furnish
to such Holder a reasonable number of copies of a
supplement to or an amendment to such prospectus as
may be necessary;
(viii) otherwise use all reasonable efforts to comply with
all applicable rules and regulations of the
Commission, and furnish to each Holder at least two
business days prior to the filing thereof a copy of
any amendment or supplement to such registration
statement or prospectus ;
(ix) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered
by such registration statement from and after a date
not later than the effective date of such
registration statement;
(x) use all reasonable efforts to list all Registrable
Securities covered by such registration statement on
any securities exchange on which any of the
Registrable Securities is then listed; and
(xi) enter into such agreements and take such other
actions as the Holders shall reasonably request in
order to expedite or facilitate the disposition of
such Registrable Securities.
The Company may require each Holder to furnish the Company such information
regarding such Holder and the distribution of such securities as the Company
may from time to time reasonably request in writing.
The Company's obligations under this Agreement to a Holder shall be
conditioned upon such Holder's compliance with the following:
(a) such Holder shall enter into such agreements with the
Company and any underwriter, broker- dealer or similar securities industry
professional containing representations, warranties, indemnities and agreements
as are in each case customarily entered into and made by selling stockholders,
and will cause its counsel to give any legal opinions customarily given, in
secondary distributions under similar circumstances;
(b) during such time as such Holder may be engaged in a
distribution of the Registrable Securities, such Holder will comply with all
applicable laws including but not limited to Rules 10b-6 and 10b-7 promulgated
under the Exchange Act and pursuant thereto will, among other things: (i) not
engage in any stabilization activity in connection with the securities of the
Company in contravention of such rules; (ii) distribute the Registrable
Securities owned by such Holder solely in the manner described in the
registration statement; (iii) cause to be furnished to each underwriter, agent
or broker-dealer to or through whom the Registrable Securities owned by such
Holder may be offered, or to the offeree if an offer is made directly by the
Holder, such copies of the prospectus (as amended and supplemented to such
date) and documents incorporated by reference
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therein as may be required by such underwriter, agent, broker-dealer or
offeree; and (iv) not bid for or purchase any securities of the Company or
attempt to induce any person to purchase any securities of the Company other
than as permitted under the Exchange Act;
(c) other than in the case of an underwritten public
offering, at least ten (10) days prior to any distribution of Registrable
Securities, such Holders will advise The Company in writing of the dates on
which the distribution will commence and terminate, the number of the
Registrable Securities to be sold, the terms and the manner of sale (including,
to the extent applicable, the purchase price, the name of any underwriter,
agent or broker-dealer to or through whom such distribution is being made, and
the amount of any selling commissions or other items constituting compensation
to such underwriter, agent or broker-dealer) and the number of Registrable
Securities that will be owned beneficially by such Holder after giving effect
to such sale; and
(d) that upon receipt of any notice from the Company of
the happening of any event of the kind described in the subdivision (vii) of
this section, such Holder will forthwith discontinue the disposition of
Registrable Securities pursuant to the registration statement until such
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (vii) of this section and, if so directed by the
Company, will destroy all copies, other than permanent file copies, then in
such Holder's possession of the prospectus relating to such Registrable
Securities.
2.4. Demand Offerings.
(a) Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering, the Company will enter into an
underwriting agreement with such underwriters, such agreement to be
satisfactory is substance and form to the Company and the underwriters and to
contain such terms as are generally prevailing in agreements of this type. No
Holder shall be required to make any representations and warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of distribution and any other
representation required by law.
(b) Piggyback Underwritten Offerings. If the Company at
any time proposes to register any of its securities as contemplated by Section
2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by the Holders, arrange for such
underwriters to include all the Registrable Securities to be offered and sold
by the Holders among the securities to be distributed to such underwriters.
No Holder shall be required to make any representations or warranties to or
agreement with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of distribution and any other
representation required by law.
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2.5. Indemnification.
(a) Indemnification by the Company. In the event of any
registration pursuant to Section 2.1 or 2.2, the Company will, and hereby does,
indemnify and hold harmless the Holders, their directors, partners, members and
officers, each other Person who participates as an underwriter in the offering
on behalf of the Holders and each other Person, if any, who controls such
seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which any one of
them may become subject under the Securities Act or otherwise, and the Company
will reimburse the Holders and each other Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or the prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and, subject to Section 2.5(c), the
Company will reimburse such indemnified parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such losses; provided, however, that the Company will not indemnify or hold
harmless any indemnified party from or against any such losses (i) that arise
out of or are based upon any violation of any federal or state securities laws,
rules or regulations committed by any of the indemnified parties (or any person
who controls any of them or any agent, broker-dealer or underwriter engaged by
them) or in the case of a non-underwritten offering, any failure by such Holder
to give any purchaser of Registrable Securities at or prior to the written
confirmation of such sale, a copy of the most recent prospectus or (ii) if the
untrue statement, omission or allegation thereof upon which such losses or
expenses are based (x) was made in reliance upon and in conformity with the
information provided by or on behalf of any indemnified party specifically for
use or inclusion in the registration statement or any prospectus, or (y) was
made in any prospectus used after such time as the Company advised such Holder
that the filing of a post-effective amendment or supplement thereto was
required, except that prospectus as so amended or supplemented, or (z) was made
in any prospectus used after such time as the obligation of the Company
hereunder to keep the registration statement effective and current has expired
or been suspended hereunder.
(b) Indemnification by the Holders. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to Section 2.1, or 2.2, that the Company
shall have received an undertaking satisfactory to it from the Holders to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this section) the Company, each director and
officer of the Company and each other Person, if any, who controls the Company
within the meaning of the Securities Act, with respect to any statement, or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged
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omission was made in reliance upon and in conformity with written information
furnished to the Company by the Holders specifically stating that it is for use
in preparation of such registration statement. Such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling Person and shall
survive the transfer of such securities by the Holders. Notwithstanding the
foregoing, the aggregate liability of any Holder for any indemnification under
this section shall be limited to the aggregate net proceeds received by such
Holder from the sale of securities pursuant to such registration statement.
Holders agree to contribution and indemnity in the agreement to the extent
customarily requested by the underwriter.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this section,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligation under the preceding subdivisions of this section, except to the
extent that the indemnifying party is actually prejudiced by such failure.
Unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying party may exist in respect of such
claim, the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party, with counsel
reasonably satisfactory to such indemnified party. After notice from the
indemnifying party of its election to assume the defense, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
2.6. Adjustments Affecting Registrable Securities. The Company
will not effect or permit to occur any combination or subdivision of
Registrable Securities which would adversely affect the ability of the Holders
to include such Registrable Securities in any registration contemplated by
this Section or the marketability of such Registrable Securities under any such
registration.
2.7. Limitations on Registration Rights. Notwithstanding the
provisions of Section 2 hereof, the Company shall not be required to effect or
maintain any registration if the Company, in order to comply with such request,
would be required to undergo a special interim audit or prepare and file with
the Commission sooner than would otherwise be required, pro forma or other
financial statements relating to any proposed or probable transaction.
SECTION 3. RULE 144.
If the Company shall have filed a registration statement, the Company will file
the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations
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adopted by the Commission thereunder (or, if the Company is not required to
file such reports, will, upon the request of any Holder, make publicly
available other information) and will take such further action as such Holder
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time or (b)
any similar rule or regulation hereafter adopted by the Commission.
SECTION 4. INFORMATION REQUIRED BY RULE 144A.
The Company covenants that it will, upon the request of any Holder, provide
such Holder, and any institutional investor designated by such Holder, such
financial and other information as such Holder may reasonably determine to be
necessary in order to permit such Holder's compliance with the informational
requirements of Rule 144A under the Securities Act in connection with the
resale of any Registrable Securities, except at such time as the Company is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act.
SECTION 5. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 6. ADDITIONAL HOLDERS.
NDE and BOCP may by written agreement add additional record owners of
Common Shares as "Holders" under this Agreement; provided that each such
additional Holder agrees in writing to be bound by the terms of this Agreement.
SECTION 7. ASSIGNMENT.
BOCP may assign its rights hereunder only (a) in connection with the
sale or other disposition of (i) all of its Registrable Securities, or (ii) all
of its Warrants, or (b) with the express written consent of the Company, which
consent may be withheld by the Company in the exercise of its sole discretion.
SECTION 8. MISCELLANEOUS.
8.1. Amendments, Modifications and Waivers. This Agreement may not
be amended, modified, supplemented or otherwise modified except by an express
written agreement executed and delivered by the Company and the Holder.
Compliance by the Company with the covenants set forth in this Agreement may be
waived only by an express writing executed and delivered by the Holder.
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8.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
8.3. Rules of Construction. The rules of construction set forth in
Section 12(i) of the Purchase Agreement are applicable to this Agreement.
8.4. Notices. The notice provisions set forth in this Section
12(j) of the Purchase Agreement are applicable to this Agreement
The parties have executed and delivered this Agreement effective as of
the day and year first above written.
NDE ENVIRONMENTAL
CORPORATION
By: /s/ XXX XXXXX XXXXXXX
-----------------------------
Its:
-----------------------------
BANC ONE CAPITAL PARTNERS,
L.P.
By: BOCP Corporation,
General Partner
By: /s/ XXXXX X. XXXXX
-----------------------------------
Its: Xxxxx X. Xxxxx, Authorized Signer
-----------------------------------
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