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EXHIBIT 10.8
_______________________________________________________________________________
NDE ENVIRONMENTAL CORPORATION
CO-SALE AGREEMENT
_______________________________________________________________________________
DATED AS OF OCTOBER 25, 1996
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SALES BY SHAREHOLDER . . . . . . . . . . . . . . . . . . . . 2
2.1 NOTICE OF PURCHASER OFFERS . . . . . . . . . . . . . 2
2.2 RIGHT TO PARTICIPATE . . . . . . . . . . . . . . . . 2
2.3 CONSUMMATION OF SALE . . . . . . . . . . . . . . . . 3
2.4 ONGOING RIGHTS . . . . . . . . . . . . . . . . . . . 3
2.5 PERMITTED EXEMPTIONS . . . . . . . . . . . . . . . . 3
SECTION 3. PROHIBITED TRANSFERS . . . . . . . . . . . . . . . . . . . . 3
3.1 TREATMENT OF PROHIBITED TRANSFERS . . . . . . . . . . 3
3.2 PUT OPTION . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4. LEGENDED CERTIFICATE . . . . . . . . . . . . . . . . . . . . 4
4.1 LEGEND . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 LEGEND REMOVAL . . . . . . . . . . . . . . . . . . . 4
SECTION 5. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . 4
5.1 TERMINATION OF CO-SALE RIGHTS . . . . . . . . . . . . 4
5.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . 5
5.3 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . 7
5.4 SEVERABILITY . . . . . . . . . . . . . . . . . . . . 7
5.5 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . 7
5.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 7
5.7 OTHER OBLIGATIONS OF COMPANY . . . . . . . . . . . . 7
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CO-SALE AGREEMENT
This is a CO-SALE AGREEMENT dated as of October 25, 1996 ("Agreement")
by and among NDE ENVIRONMENTAL CORPORATION ("NDE"), a Delaware corporation,
PROACTIVE PARTNERS, L.P., a California limited partnership ("Proactive"),
LAGUNITAS PARTNERS, L.P., a California limited partnership ("Lagunitas"), XXX
XXXXX XXXXXXX, A. XXXXXX XXXXXXXX and BANC ONE CAPITAL PARTNERS, L.P. ("BOCP"),
an Ohio limited partnership, provided for in and entered into pursuant to the
NOTE AND WARRANT PURCHASE AGREEMENT , 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.
NDE, together with its successors and assigns, is referred to as the
"Company," Proactive, Lagunitas, and Messrs. Xxxxxxx and Shamplin together with
their respective successors and assigns, are referred to collectively as the
"Shareholders" and individually as a "Shareholder," and BOCP, together with its
successors and assigns, is referred to as the "Holder." The Company, the
Shareholders and the Holder 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
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:
"Affiliate"
"Business Days"
"Capital Stock"
"Closing Date"
"Common Shares"
"Convertible Securities"
"Event of Default"
"Notice"
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"Purchase Shares"
"Qualified Public Offering"
"Warrants"
"Warrant Certificate"
"Warrant Shares"
SECTION 2. SALES BY SHAREHOLDER.
2.1 NOTICE OF PURCHASER OFFERS. Should any Shareholder
("Selling Shareholder") propose to accept one or more bona fide offers from any
persons to purchase Common Shares or Convertible Securities from such Selling
Shareholder, other than an offer from the Company to purchase such Common
Shares or Convertible Securities pursuant to an existing agreement, plan or
policy by reason of such Selling Shareholder's death, disability, retirement or
termination of employment (the "Purchase Offer"), then such Selling Shareholder
shall promptly notify the Holder of the terms and conditions of such Purchase
Offer.
2.2 RIGHT TO PARTICIPATE. The Holder shall have the
right, exercisable upon written notice to such Selling Shareholder within
fifteen (15) Business Days after receipt of the notice of the Purchase Offer,
to participate in such Selling Shareholder's sale of Common Shares on the same
(or, in the case of Convertible Securities, equivalent terms) terms and
conditions. To the extent that the Holder exercises such right of
participation, the number of Common Shares or Convertible Securities which such
Selling Shareholder may sell pursuant to such Purchase Offer shall be
correspondingly reduced. The right of participation of the Holder shall be
subject to the following terms and conditions:
(a) The Holder may sell all or any part of that number of
Warrant Shares equal to the product obtained by multiplying (i) the aggregate
number of Common Shares (including the Common Share equivalent of any
Convertible Securities) covered by the Purchase Offer by (ii) a fraction (A)
the numerator of which is the number of Warrant Shares at the time owned by
the Holder, and (B) the denominator of which is the sum of (x) the combined
number of such Common Shares (including the Common Share equivalent of
Convertible Securities) at the time owned by all of the Shareholders, and (y)
the number of Warrant Shares at that time owned by the Holder. For purposes of
making such computation, the Holder shall be deemed to own the number of Common
Shares as if its Warrant had been exercised and any Convertible Securities have
been converted into Common Shares.
(b) The Holder may participate in the sale by delivering
to the Selling Shareholder for transfer to the purchase offeror one or more
certificates, properly endorsed for transfer, free and clear of all adverse
claims, which represent that number of Warrant Shares which the Holder elects
to sell pursuant to this Section 2.2. Notwithstanding any provision of the
Warrant Certificate to the contrary (including the fact that the Warrant is not
yet exercisable), the Holder may exercise such Warrant for the number of
Warrant Shares to be purchased and deliver such Warrant Shares as
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provided in this Section 2.2, and such exercise shall not constitute the single
exercise of the Warrant or otherwise affect any future exercise of the Warrant.
2.3 CONSUMMATION OF SALE. The stock certificate or
certificates which a Holder delivers to the Selling Shareholder pursuant to
Section 2.2 shall be transferred by the Selling Shareholder to the purchase
offeror in consummation of the sale pursuant to the terms and conditions
specified in the Section 2.1 notice to the Holder, and such Selling Shareholder
shall promptly thereafter remit to the Holder that portion of the sale proceeds
to which the Holder is entitled by reason of its participation in such sale;
provided, however, that if the Holder has delivered a Warrant to be transferred
to the purchase offeror, the Holder shall receive for such Warrant only the
difference between the purchase price set forth in the Purchase Offer and the
exercise price set forth in the Warrant.
2.4 ONGOING RIGHTS. The exercise or non-exercise of the
rights of the Holder hereunder to participate in one or more sales made by the
Selling Shareholder shall not adversely affect the Holder's right to
participate in subsequent sales by the Selling Shareholder pursuant to Section
2.1 hereof.
2.5 PERMITTED EXEMPTIONS. The participation rights of
the Holder shall not apply to any bona fide gift; provided that a Shareholder
shall inform the Holder of such gift prior to effecting it and the donee shall
furnish the Holder with a written agreement to be bound by, and comply with,
all provisions of this Agreement applicable to such Shareholder.
SECTION 3. PROHIBITED TRANSFERS.
3.1 TREATMENT OF PROHIBITED TRANSFERS. In the event a
Shareholder should sell any Common Shares or Convertible Securities in
contravention of the participation rights of the Holder under this Agreement (a
"Prohibited Transfer"), the Holder, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the put option provided
in Section 3.2 and such Shareholder shall be bound by the applicable provisions
of such put option.
3.2 PUT OPTION. In the event of a Prohibited Transfer,
the Holder shall have the right to sell to the Shareholder that number of
shares of Warrant Shares (either directly or through delivery of a Warrant)
equal to the number of shares the Holder would have been entitled to transfer
to the purchaser in the Prohibited Transfer pursuant to the terms hereof. Such
sale shall be made on the following terms and conditions:
(a) The price per share at which such shares are to be
sold to the Shareholder shall be equal or equivalent to the price per share
paid by the purchaser to the Shareholder in the Prohibited Transfer. The
Shareholder shall also reimburse the Holder for any and all reasonable fees and
expenses, including legal fees and expenses, incurred pursuant to the exercise
or the attempted exercise of the Holder's rights under this Article 3.
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(b) Within thirty (30) days after the earlier of the date
on which the Holder (i) receives notice from a Shareholder of the Prohibited
Transfer, or (ii) otherwise becomes aware of the Prohibited Transfer, the
Holder shall, if exercising the put option created hereby, deliver to such
Shareholder the certificate or certificates representing shares to be sold,
each certificate to be properly endorsed for transfer.
(c) A Shareholder shall, upon receipt of the certificate
or certificates for the shares to be sold by a Holder, pursuant to Section
3.2(b), free and clear of all adverse claims, pay the aggregate purchase price
therefor and the amount of reimbursable fees and expenses, as specified in
Section 3.2(a), by certified or cashier's check made payable to the order of
the Holder.
(d) Notwithstanding the foregoing, any attempt to
transfer shares of the Company in violation of the terms of this Agreement
shall be void and the Company agrees it will not effect such a transfer nor
will it treat any alleged transferee as the holder of such shares without the
written consent of the Holder.
SECTION 4. LEGENDED CERTIFICATE.
4.1 LEGEND. Each certificate representing Common Shares
now or hereafter owned by any Shareholder shall be endorsed with the following
legend:
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN CO-SALE AGREEMENT
BY AND AMONG CERTAIN SHAREHOLDERS, THE COMPANY AND BANC ONE CAPITAL
PARTNERS, L.P. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE COMPANY.
4.2 LEGEND REMOVAL. The Section 4.1 legend shall be
removed upon the earlier of termination of this Agreement or the date upon
which the provisions of this Agreement are no longer applicable to such shares
in accordance with the provisions of Section 5.1.
SECTION 5. MISCELLANEOUS PROVISIONS.
5.1 TERMINATION OF CO-SALE RIGHTS. The rights of the
Holder under this Agreement and the obligations of the Shareholder with respect
to the Holder shall terminate at such time as the Warrants have expired in
accordance with their terms and the Holder does not own any Warrant Shares.
Unless sooner terminated in accordance with the preceding sentence, this
Agreement shall terminate upon the occurrence of any one of the following
events:
(a) The liquidation, dissolution or indefinite cessation
of the business operations of the Company;
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(b) The execution by the Company of a general assignment
for the benefit of creditors or the appointment of a receiver or trustee to
take possession of the property and assets of the Company;
(c) The consummation of an Qualified Public Offering; or
(d) The sixth anniversary of the Closing Date.
5.2 NOTICES. Any notice or other communication required
or permitted to be made or given under this Agreement, shall be in writing and
shall be deemed to have been received by the Party to whom it is addressed:
(i) on the date indicated on the certified mail return receipt if sent by
certified mail return receipt requested; (ii) on the date actually received if
hand delivered or if transmitted by telefax (receipt of which is confirmed to
sender); or (iii) one business day after such notice was delivered to an
overnight delivery service, addressed, delivered or transmitted in each case as
follows:
IF TO THE HOLDER:
Banc One Capital Partners, L.P.
000 Xxxx Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
ATTENTION: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
WITH A COPY TO:
Banc One Capital Corporation
000 Xxxx Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
ATTENTION: Legal Department
Telephone: (000) 000-0000
Telefax: (000) 000-0000
IF TO THE COMPANY:
NDE Environmental Corporation
0000 Xxxxx Xxxxx Xxxx.
Xxxxxxxx 000
Xxxxxx, XX 00000
ATTENTION: President
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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WITH COPY TO:
NDE Environmental Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
ATTENTION: Xxx Xxxxx Xxxxxxx
Telephone:
Telefax:
IF TO PROACTIVE:
Proactive Partners, L.P.
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
ATTENTION: Xxxxxxx XxXxxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
IF TO LAGUNITAS:
Lagunitas Partners, L.P.
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
ATTENTION: Xxxxxxx XxXxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
IF TO XX. XXXXXXX:
Xxx Xxxxx Xxxxxxx
NDE Environmental Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
IF TO XX. XXXXXXXX:
A. Xxxxxx Xxxxxxxx
NDE Environmental Corporation
0000 Xxxxx Xxxxx Xxxx.
Xxxxxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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A Party's address for notice may be changed from time-to-time only by
written notice given to each of the other Parties in accordance with this
Section.
5.3 SUCCESSORS AND ASSIGNS. This Agreement and the
rights and obligations of the parties hereunder shall inure to the benefit of,
and be binding upon, their respective successors, assigns and legal
representatives. The participation rights of the Holder hereunder may not be
assigned or otherwise transferred without the express written consent of the
Company and the Shareholders, which shall not be unreasonably withheld.
5.4 SEVERABILITY. In the event one or more of the
provisions of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
5.5 AMENDMENTS. Any amendment or modification of this
Agreement shall be effective only if evidenced by a written instrument executed
by duly authorized representatives of the Parties hereto. Any waiver by a
Party of its rights hereunder shall be effective only if evidenced by a written
instrument executed by a duly authorized representative of such Party. In no
event shall such waiver of any rights hereunder constitute the waiver of such
rights in any future instance unless the waiver so specifies in writing.
5.6 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Ohio.
5.7 OTHER OBLIGATIONS OF COMPANY. The Company agrees to
use all reasonable efforts to enforce the terms of this Agreement, to inform
the Holder of any breach hereof and to assist the Holder in the exercise of its
rights and performance of its obligations under Section 3 hereof.
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The parties have executed and delivered this Agreement effective as
of the day and year first above written.
SHAREHOLDERS: HOLDER:
PROACTIVE PARTNERS, L.P.
BANC ONE CAPITAL PARTNERS, L.P.
By: /s/ XXXXXXX XXXXXXXXXX
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LAGUNITAS PARTNERS, L.P. By: /s/ XXXXX X. XXXXX
-----------------------------------
By: /s/ XXX XXXXXX Its: Xxxxx X. Xxxxx, Authorized Signer
----------------------- -----------------------------------
XXX XXXXX XXXXXXX
/s/ XXX XXXXX XXXXXXX
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A. XXXXXX XXXXXXXX
/s/ A. XXXXXX XXXXXXXX
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COMPANY:
NDE ENVIRONMENTAL
CORPORATION
By: /s/ XXX XXXXX XXXXXXX
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Xxx Xxxxx Xxxxxxx,
Chairman of the Board
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