Exhibit 5
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CO-SALE AGREEMENT
THIS CO-SALE AGREEMENT dated as of May 10, 2000 by and between Roy
Israel ("Israel") with an office at NAM Corporation (the "Company"), 0000
Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxx Xxxx 00000 and ISO Investment Holdings,
Inc., a Delaware corporation ("ISO") with offices at 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxxx 00000.
PREAMBLE
WHEREAS, Israel holds 1,143,236 shares of the common stock, par value
$.001 per share (the "Common Stock"), of the Company;
WHEREAS, the Investors are purchasing shares of Common Stock, pursuant
to that certain Stock Purchase Agreement of even date herewith among the Company
and the Investor (the "Purchase Agreement");
WHEREAS, one of the conditions to the Closing (as defined in the
Purchase Agreement) is the execution of this Agreement by ISO and Israel;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Sales of Shares by Israel. Expressly excluding any Permitted
Transfers contemplated by Section 2.4:
1.1 If during the three-year period from the Closing, Israel
proposes to accept one or more bona fide offers from any person or entity to
purchase from him shares of Common Stock (the "Offered Shares"), he shall
promptly deliver a notice (the "Purchase Offer Notice") to ISO stating the terms
and conditions of such proposed sale, including without limitation the number of
Offered Shares to be sold or transferred, the nature of such sale or transfer,
the consideration to be paid and the name and address of each prospective
purchaser or transferee.
1.2 ISO shall have the right (the "Co-Sale Right"), but not the
obligation, exercisable during the ten (10)-day period (the "Co-Sale Exercise
Period") following its receipt of a Purchase Offer Notice, to participate in the
sale of Offered Shares by offering up to that number of shares of Common Stock
which is equal to the Offered Shares multiplied by a fraction, the numerator of
which shall be the total number of shares of Common Stock owned by ISO as of the
date hereof and the denominator of which shall be the total number of shares of
Common Stock owned by Israel and ISO as of the date hereof. Such right shall be
exercised by ISO by its written notice, delivered to Israel during the Co-Sale
Exercise Period (the "Co-Sale Exercise Notice"), setting forth the number of
shares to be sold or transferred by ISO pursuant to its Co-Sale Right. ISO's
failure to deliver a Co-Sale Exercise Notice to Israel within the Co-Sale
Exercise Period shall be deemed a declination by ISO of its right to participate
in the sale of Offered Shares.
1.3 Exercise of Co-Sale Right. The Co-Sale Right of ISO shall be
subject to the following terms and conditions:
(a) To effect its participation in the sale or transfer of
its Co-Sale Shares to the prospective purchaser or transferee following timely
delivery of the Co-Sale Exercise Notice, ISO shall, to the extent ISO proposes
to sell shares of Common Stock, deliver to Israel, for transfer to the
prospective purchaser or transferee, one or more certificates, properly endorsed
for transfer, which represent the number of shares of Common Stock that ISO
elects to sell pursuant to the Co-Sale Exercise Notice.
(b) The stock certificate or certificates which ISO delivers
to Israel shall be delivered by ISO to the purchaser upon consummation of the
sale pursuant to the terms and conditions specified in the Purchase Offer
Notice, and Israel shall promptly thereafter (and in any event, within fifteen
(15) days after such sale) remit to ISO that portion of the sale proceeds to
which ISO is entitled by reason of its participation in such sale.
(c) Israel shall use all reasonable efforts to cause the
prospective purchaser or transferee to agree to acquire, upon the same terms and
conditions as those set forth in the Purchase Offer, all of the Co-Sale Shares
of ISO. To the extent that any prospective purchaser prohibits the assignment of
Co-Sale Shares or otherwise refuses to purchase Co-Sale Shares from ISO, Israel
shall not sell to such prospective purchaser any Offered Shares unless and
until, simultaneously with such sale, Israel shall purchase such Co-Sale Shares
from ISO for the same consideration, and on the same terms and conditions, as
the proposed sale or transfer described in the Purchase Offer Notice (which
terms and conditions shall be no less favorable than those governing the sale to
the purchaser by Israel).
2. Miscellaneous
2.1 Termination of Rights. The Co-Sale Right under this Agreement
shall immediately terminate upon (i) the acquisition of all or substantially all
the assets of the Company, (ii) an acquisition of the Company by another
corporation or entity by consolidation, merger or other reorganization in which
the holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing
less than fifty percent (50%) or more of the voting power of the corporation or
other entity surviving such transaction, or (iii) one year from the date hereof.
2.2 Reversion of Rights. Any Shares of Israel not sold or
transferred by him to the prospective purchaser or transferee (pursuant to the
Purchase Offer) shall continue to be subject to this Agreement.
2.3 No Adverse Effect. The exercise or non-exercise of the rights
of ISO pursuant to this Agreement to participate in one or more sales of Shares
made by Israel shall not adversely affect ISO's right to participate in
subsequent sales of Shares by Israel.
2.4 Permitted Transfers. The provisions of this Agreement shall
not pertain or apply to any transfer of Common Stock owned by Israel: (i) to the
personal trust of Israel; (ii) to
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members of Israel's immediate family; (iii) to trusts for the benefit of any
such person; (iv) to the estate of any of the foregoing by gift, will or
intestate succession; provided, in the circumstances set forth in (i) through
(iv) above, any such transferee becomes subject to ISO's Co-Sale Rights
hereunder; or (v) by will or the laws of descent and distribution; (vi) to
non-profit institutions, by gift of will; or (vii) any transfer of up to fifty
percent (50%) (in the aggregate or individually) of Israel's holdings of Common
Stock as of the date hereof (collectively, "Permitted Transfers").
2.5 Prohibited Transfers. Any attempt by Israel to sell, assign or
transfer shares of Common Stock in violation of this Agreement shall be void,
and the Company shall not effect such a transfer nor will it treat any alleged
purchaser, assignee or transferee as the holder of such shares.
2.6 Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal or unenforceable by any court of
law, then the remaining provisions shall be severable and enforceable in
accordance with their terms. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
New York, without giving effect to principles of conflicts of law.
2.7 Judicial Proceedings. EACH OF THE PARTIES HERETO AGREES THAT
ANY ACTION, SUIT OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO ARISING UNDER
OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
MAY BE BROUGHT OR ENFORCED IN THE NEW YORK STATE COURTS OR FEDERAL COURTS
LOCATED IN NEW YORK COUNTY, AND EACH OF THE PARTIES HERETO CONSENTS TO THE
JURISDICTION AND VENUE OF EACH SUCH COURT IN RESPECT OF ANY SUCH ACTION, SUIT OR
PROCEEDING.
2.8 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement. All references to the term "as of the date
hereof" shall mean the date of this Agreement.
2.9 Injunctive Relief. It is acknowledged that it will be
impossible to measure the damages that would be suffered by the non-breaching
party if any party fails to comply with the provisions of this Agreement, and
that, in the event of any such failure, the non-breaching parties will not have
an adequate remedy at law. The non-breaching parties shall, therefore, be
entitled to obtain specific performance of the breaching party's obligations
hereunder and to obtain immediate injunctive relief. The breaching party shall
not urge, as a defense to any proceeding for such specific performance or
injunctive relief, that the non-breaching parties have an adequate remedy at
law.
2.10 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assignees, legal representatives and heirs. Nothing in this
Agreement, either express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
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rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. The administrator,
executor or legal representative of any deceased, juvenile or incapacitated
Stockholder shall have the right to execute and deliver all documents and
perform all acts necessary to exercise and perform the rights and obligations of
such Stockholder under the terms of this Agreement.
2.11 Counterparts. This Agreement may be executed concurrently in
two (2) or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
2.12 Notices. All notices to be given or otherwise made to any
party to this Agreement shall be in writing and shall be personally delivered,
or shall be sent by delivery service or mailed (in either such case with three
(3)-day delivery guaranteed), to such party at the address set forth in the
signature pages hereto or at such other address as may hereafter be designated
in writing by the addressee to the addressor listing all parties.
All such notices shall be effective and deemed duly given when received
or when attempted delivery is refused.
2.13 Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and do not constitute a part of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this agreement in
counterparts as of the date first above specified.
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ROY ISRAEL
ISO INVESTMENT HOLDINGS, INC.
By:
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Name:
Title:
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