EXHIBIT 10.45



                   ------------------------------------------

                            Note, Preferred Stock and
                           Warrant Purchase Agreement

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                          Dated as of December 23, 1997



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                                TABLE OF CONTENTS
                                                                            Page

Section 1.   Defined Terms.....................................................1
Section 2.   Purchase and Sale of the Note....................................12
Section 3.   Purchase and Sale of Preferred Stock.............................12
Section 4.   Issuance of Warrants.............................................12
Section 5.   Conditions to Closings...........................................13
Section 6.   Representations and Warranties of Sell...........................14
Section 7.   Representations and Warranties of Purchaser......................20
Section 8.   Financial Reporting..............................................22
             8.1      Financial Reports.......................................22
             8.2      Other Information.......................................23
             8.3      Preparation of Annual and Quarterly Financial
                      Statements in Accordance with GAAP......................23
             8.4      Changes in GAAP and in Practices, Policies and 
                      Procedures..............................................23
             8.5      Notice of Certain Events................................24
             8.6      Inspections.............................................25
Section 9.   Affirmative Covenants............................................25
Section 10.  Negative Covenants...............................................27
Section 11.  Financial Tests..................................................31
Section 12.  Events of Default................................................32
Section 13.  Miscellaneous....................................................32

                                    EXHIBITS

Exhibit A - Senior Subordinated Note  
Exhibit B - Certificate of Designation   
Exhibit C - Warrant Certificate  
Exhibit D - Certificate of Responsible Party 
Exhibit E - Opinion of TNDE Counsel 
Exhibit F - Preemption Agreement  
Exhibit G - Certificate of Incorporation

                                    SCHEDULES

Schedule 1 - Liens  
Schedule 2 - Trade Names  
Schedule 3 - Indebtedness  
Schedule 4 - Leases  
Schedule 5 - Financial Statements   
Schedule 6 - Shareholder Information 
Schedule 7 - TNDE Obligations


<PAGE>



              NOTE, PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

     This  Note,   Preferred   Stock  and  Warrant   Purchase   Agreement   (the
"Agreement"),  dated as of December 23, 1997 (the "Effective  Date"), is entered
into by and between  Tanknology- NDE International,  Inc.  ("TNDE"),  a Delaware
corporation,  ProEco, Inc. ("ProEco"),  a Delaware  corporation,  Tanknology/NDE
Corporation ("NDE"), a Delaware corporation,  2368692 Canada, Inc. ("Canada"), a
Canadian Federal  corporation and  Tanknology-NDE  Construction  Services,  Inc.
("Construction"),  a Delaware  corporation  (collectively  referred to herein as
"Sellers"),   as  sellers,   and  DH  Holdings  Corp.,  a  Delaware  corporation
("Purchaser"), as purchaser.

     WHEREAS,  Sellers  desire to obtain,  and  Purchaser is willing to provide,
financing  of  approximately  $8 million  through  (i) the sale and  issuance by
Sellers to Purchaser of a Senior Subordinated Note (the "Note") in the aggregate
principal  amount of $6.5  million and (ii) the sale and issuance by TNDE of 150
shares  (the  "Preferred  Shares")  of TNDE's  Series A  Convertible  Redeemable
Preferred Stock (the "Preferred Stock") at a price of $10,000.00 per share; and

     WHEREAS,  TNDE has agreed,  in partial  consideration  of the terms of this
Agreement,  to issue and sell to Purchaser warrants (the "Warrants") to purchase
4,500,000  shares  (the  "Warrant  Shares") of common  stock of TNDE,  par value
$.0001 per share.

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and agreements
herein  contained  and other good and  valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

     Section 1. Defined Terms.

     As used herein,  the  following  terms shall have the  following  meanings,
unless the context  otherwise  requires,  as modified,  amended or restated from
time to time as provided for herein.

     1.1 "Accountant" means TNDE's current independent public accountant or such
other independent public accountant as may be selected by TNDE.

     1.2  "Accountant's  Statement" means, with respect to each Annual Financial
Statement,  a written statement of such Accountant stating in effect that in the
course of its Audit with respect to such Financial Statement no Default has come
to its attention, or, if a Default has come to its attention, stating the nature
and period of existence of such Default.

     1.3  "Accounting  Period"  means the  Fiscal  Year,  Quarter  or Month,  as
applicable.

     1.4  "Accounting  Statements"  mean  collectively,   with  respect  to  any
Accounting Period,  the consolidated  balance sheet,  consolidated  statement of
operations,  consolidated  statement of cash flows and consolidated statement of
stockholders  equity  of  TNDE  and  the  Subsidiaries  as of the  end  of  such
Accounting Period.

                                       -1-

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     1.5 "Adjusted EBITDA" means with respect to any Accounting  Period,  EBITDA
for that  Accounting  Period less the sum of (i) taxes paid in cash with respect
to such Accounting Period,  and (ii) the lesser of (A) $750,000.00  (annualized)
and (B) actual  Capital  Expenditures  incurred with respect to that  Accounting
Period.

     1.6  "Affiliate"  means any  Person  directly  or  indirectly  controlling,
controlled  by, or under direct or indirect  common  control with the  specified
Person.  A Person  shall be  deemed to  control  another  Person if such  Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such  corporation,  whether through the ownership
of voting securities, by contract or otherwise.

     1.7  "Affirmative  Covenants"  means  the  covenants  of TNDE set  forth in
Section 9.

     1.8  "Agreement"  means this Note,  Preferred  Stock and  Warrant  Purchase
Agreement dated as of December 23, 1997 by and among TNDE, ProEco, NDE, Canada,
Construction and Purchaser.

     1.9 "Annual Financial  Statements" means, with respect to each Fiscal Year,
the consolidated and consolidating Accounting Statements of TNDE with respect to
such Fiscal Year,  presented with  corresponding  Accounting  Statements for the
preceding Fiscal Year, which Accounting Statements shall be Audited, prepared in
accordance with GAAP and presented in reasonable detail  (including  appropriate
footnotes). Accounting Statements prepared for and contained in TNDE's Form 10-K
filed with the SEC shall be deemed to constitute the Annual Financial Statement.

     1.10  "Audit" or  "Audited"  means,  with  respect to the Annual  Financial
Statements,  an examination  without limitation as to scope by the Accountant in
accordance  with  generally  accepted  auditing  standards  for the  purpose  of
expressing an opinion on such Accounting Statements.

     1.11 "Audit Report" means,  with respect to the  consolidated  (but not the
consolidating)  Annual  Financial  Statements,  the  report  of  the  Accountant
indicating  the  scope  of the  Audit  with  respect  to such  Annual  Financial
Statements and setting forth the opinion of such Accountant with respect to such
Annual  Financial  Statements as a whole,  or an assertion to the effect that an
overall  opinion  cannot  be  expressed.  The Audit  Report  shall set forth any
qualification  to such  opinion  and,  when such an  overall  opinion  cannot be
expressed, set forth the reasons therefor.

     1.12  "Board of  Directors"  means the board of  directors  of TNDE and, as
applicable  and to the extent  permitted by law, any  committee of such board of
directors authorized to exercise the powers of the board of directors.

     1.13  "BOCP"  means Bank One  Capital  Partners,  LLC,  a Delaware  limited
liability company.


                                       -2-

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     1.14 "BOCP Agreement" means the Note and Warrant Purchase Agreement,  dated
as of October 25, 1996, by and among TNDE, certain other parties and BOCP.

     1.15 "Business Day" means any day other than a Saturday, Sunday or day upon
which banking  institutions are authorized or required by law or executive order
to be closed in the City of Houston, Texas.

     1.16 "Capital  Stock" of any Person means,  any and all shares,  interests,
participations  or other  equivalents  (however  designated) of corporate stock,
including  each  class of common  stock and  preferred  stock of such  Person or
partnership interests and any warrants,  options or other rights to acquire such
stock or interests.

     1.17 "Cash  Equivalents"  means (i) securities issued or directly and fully
guaranteed  or  insured  by  the  United  States  Government  or any  agency  or
instrumentality thereof which mature within 90 days from the date of acquisition
and (ii) time deposits and certificates of deposit,  which mature within 90 days
from the date of acquisition, of any domestic commercial bank having capital and
surplus in excess of $200,000,000.00, which has, or the holding company of which
has, a  commercial  paper  rating of at least A-1 or the  equivalent  thereof by
Standard  & Poors  Corporation  or P- I or the  equivalent  thereof  by  Moody's
Investor Service.

     1.18 "CFO  Certificate"  means,  with  respect to the  Quarterly  Financial
Statements and the  consolidating  Annual  Financial  Statements,  a certificate
signed  by the Chief  Financial  Officer  of TNDE  stating  in effect  that such
Financial Statements,  when delivered, (i) were prepared in accordance with GAAP
and (ii) fairly present the results of operations for the applicable  Accounting
Period and the financial  condition as of the end of such Accounting Period. The
CFO Certificate shall be presented in a standard form reasonably satisfactory to
Purchaser.

     1.19  "Closing  Date"  means  December  23,  1997 or such later date as the
Parties shall mutually agree in writing.

     1.20 "Code" means the Internal  Revenue Code of 1986,  as amended from time
to time.

     1.21 "Collateral"  means the collateral defined in the Pledge Agreement and
in the Subordinated Security Agreement.

     1.22 "Common  Shares" or "Common  Stock" means the shares of common  stock,
$0.0001 par value, of TNDE, at any time outstanding.

     1.23 "Co-Sale  Agreement" means the Co-Sale  Agreement dated as of December
23, 1997 by and among TNDE,  Proactive  Partners,  L.P.,  a  California  limited
partnership,  Lagunitas Partners,  L.P., a California limited  partnership,  Jay
Allen Chaffee, A. Daniel Sharplin and Purchaser.


                                       -3-

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     1.24 "Compliance  Certificate"  means, with respect to each Fiscal Year and
each Quarter,  a certificate  signed by the Chief Financial  Officer of TNDE (i)
stating that no Default has occurred and is  continuing,  (ii) stating  that, to
the  best  of  his  knowledge,  Sellers  are  in  compliance  with  each  of the
Affirmative Covenants and each of the Negative Covenants and (iii) setting forth
in reasonable  detail a computation of each of the Financial Tests as of the end
of the applicable  Fiscal Year or Quarter.  The Compliance  Certificate shall be
presented in a standard form reasonably satisfactory to Purchaser.

     1.25 "Debt  Service  Coverage  Ratio" means with respect to any  Accounting
Period, the ratio of (i) Adjusted EBITDA for such Accounting Period, to (ii) the
sum of the following for such  Accounting  Period:  (a) all interest  (including
interest on the Note); (b) preferred  dividends;  (c) actual scheduled principal
amortization  of the Senior  Indebtedness  for the  applicable  period;  and (d)
actual scheduled principal amortization of the Note for the applicable period.

     1.26 "Default" is defined in the Note attached hereto as Exhibit A.

     1.27  "Disposition"  means (i) a merger,  consolidation  or other  business
combination  in which  TNDE is not the  surviving  entity  and in  which  TNDE's
stockholders  receive  cash or  non-cash  consideration  in  exchange  for or in
respect  of their  shares  of  Capital  Stock of TNDE or (ii) the  sale,  lease,
conveyance,  transfer or other  disposition  (other than the grant of a security
interest) in any single transaction or series of related  transactions of all or
substantially all of the assets of TNDE.

     1.28 "Dividends" in respect of any corporation means:

          (i)  Cash  distributions or any other  distributions on, or in respect
               of, any class of equity security of such corporation,  except for
               distributions  made  solely in shares of  securities  of the same
               class; and

          (ii) Any and all funds,  cash or other payments made in respect of the
               redemption,  repurchase or  acquisition of such  securities;  but
               shall  exclude the exercise of the Warrants or the  conversion or
               redemption of the Preferred Shares.

     1.29 "EBITDA" means, as determined as of any date, earnings of TNDE and the
Subsidiaries  (as  reflected on the most recent  Financial  Statements)  for the
applicable  period  ended  immediately  prior to any such date of  determination
determined  by excluding  all amounts  expensed as  reflected on such  Financial
Statements  during such applicable  period with respect to (i) interest  expense
with  respect to  Permitted  Indebtedness,  (ii)  federal  and state  income tax
expense, (iii) depreciation expense, (iv) accretion expense and (v) amortization
expense.

     1.30  "Environmental  Law"  means any and all laws,  statutes,  judgements,
ordinances,  rules,  regulations,  orders,  determinations,  interpretations  or
guidance  of any  governmental  authority,  whether now  existing  or  hereafter
effected, pertaining to health or the

                                       -4-

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environment  in  effect  in any  and  all  jurisdictions  in  which  TNDE or the
Subsidiaries are conducting or at any time have conducted business, or where any
property of TNDE or the  Subsidiaries,  whether leased or owned, is located,  or
where  any  hazardous  substances  generated  or  disposed  of by  TNDE  or  the
Subsidiaries are located.

     1.31 "ERISA" means the Employee Retirement Security Act of 1974, as amended
from time to time.

     1.32 "ERISA  Affiliate"  means all members of the group of corporations and
trades or businesses  (whether or not incorporated)  which,  together with TNDE,
are treated as a single employer under Section 414 of the Code.

     1.33 "ERISA  Plan" means any pension  benefit  plan  subject to Title IV of
ERISA or Section 412 of the Code  maintained  or  contributed  to by TNDE or any
ERISA Affiliate with respect to which TNDE has a fixed or contingent liability.

     1.34 "Event of Default" is defined in the Note  attached  hereto as Exhibit
A.
     1.35 "Exchange  Act" means the Securities  Exchange Act of 1934, as amended
from time to time.

     1.36 "Financial Statements" means the Annual Financial Statements,  Monthly
Financial Statements and Quarterly Financial Statements.

     1.37  "Financial  Tests" means the financial tests with respect to TNDE and
the  Subsidiaries set forth in Section 11, which tests are based upon the Annual
Financial  Statements  and  Quarterly  Financial  Statements  and  determined as
provided for therein.

     1.38 "Fiscal  Quarter"  means the  three-month  periods ending on March 31,
June 30, September 30 and December 31 of the applicable Fiscal Year.

     1.39  "Fiscal  Year" means each year ended on December  31, or other fiscal
year of TNDE adopted in the manner provided for in this  Agreement.  Each Fiscal
Year consists of four Quarters.

     1.40 "GAAP"  means  those  generally  accepted  accounting  principles  and
practices  as in effect  from time to time which are  recognized  as such by the
Financial Accounting Standards Board (or any generally recognized successor).

     1.41  "Indebtedness"  means  with  respect  to  TNDE,  as of  any  date  of
determination,  (i) all  indebtedness of TNDE and the  Subsidiaries for borrowed
money or for the  deferred  purchase  price of  property or services or which is
evidenced by a note, bond,  debenture,  or similar instrument,  reflected on the
most  recent  Financial  Statements,  (ii)  all  obligations  of  TNDE  and  the
Subsidiaries

                                       -5-

<PAGE>



under any financing lease, (iii) all obligations of TNDE and the Subsidiaries in
respect  of letters of credit,  acceptances,  or similar  obligations  issued or
created  for  the  account  of TNDE  and the  Subsidiaries,  (iv)  all  guaranty
obligations of TNDE and the Subsidiaries, and (v) all liabilities secured by any
lien on any property owned by TNDE or the  Subsidiaries,  whether or not TNDE or
the  Subsidiaries  have  assumed or  otherwise  become  liable  for the  payment
thereof;   provided  that,  the  term  "Indebtedness"   shall  not  include  any
obligations incurred with regard to performance bonds and payment bonds relating
to the business of Construction.

     1.42 "Interest Rate"is defined in the Note attached hereto as Exhibit A.

     1.43  "Intercreditor  Agreement" means the  Intercreditor and Subordination
Agreement dated as of December 23, 1997, by and between Purchaser and the Senior
Lender, as modified, amended or restated from time to time.

     1.44 "Investment" is defined in Section 10(e) hereof.

     1.45  "Lender   Reports"   means,   without   duplication   of  statements,
certificates,  notices or reports furnished to Purchaser pursuant to Section 8.1
of this Agreement,  copies of all financial statements,  certificates,  notices,
reports or other  information  furnished to any bank,  financial  institution or
note  purchaser  pursuant to the  requirements  of any loan or note  purchase or
similar  agreement with respect to any material  Indebtedness  of TNDE or any of
the Subsidiaries.

     1.46 "Lien" means any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance, lien (whether statutory or otherwise), or preference,
priority or other security agreement or similar preferential  arrangement of any
kind or nature whatsoever (including,  without limitation,  any conditional sale
or other title retention agreement, any financing lease having substantially the
same economic  effect as any of the  foregoing,  and the filing of any financing
statement   under  the  uniform   commercial  code  or  comparable  law  of  any
jurisdiction in respect of any of the foregoing).

     1.47 "Litigation" is defined in the Note attached hereto as Exhibit A.

     1.48  "Management  Letters"  means any  letter or report  furnished  by the
Accountants to management of TNDE or any Subsidiary in connection with any Audit
or  otherwise  describing  findings  or  recommendations  with  respect  to  the
accounting  or management  practices or procedures of TNDE and the  Subsidiaries
and,  including,  all  reports  submitted  to  TNDE or the  Subsidiaries  by the
Accountant  in  connection  with  any  interim  or  special  audit  made  by the
Accountant.

     1.49  "Material  Adverse  Effect"  means a material  adverse  effect on the
respective Person's business, property, assets, prospects,  condition (financial
or  otherwise)  or  results  of  operations,  or on the  rights  of such  Person
hereunder.

     1.50 "Maturity Date" is defined in the Note attached hereto as Exhibit A.

                                       -6-

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     1.51  "Minutes"  means all  minutes,  minutes of written  action or reports
(including schedules and exhibits thereto) of a shareholder's meeting or actions
and all meetings or actions of the Board of Directors or any  committee  thereof
or appointed thereby of TNDE.

     1.52 "Month" means a calendar month, and "Monthly" means each Month.

     1.53 "Monthly  Financial  Statements" means, with respect to each Month the
consolidated  Accounting Statements of TNDE and the Subsidiaries with respect to
such Month,  which Accounting  Statements shall be prepared and presented in the
manner  customary for purposes of  dissemination  for management of TNDE and the
Subsidiaries.

     1.54  "Net  Worth"  means at a  particular  date,  the sum of any  warrants
(including  the  Warrant  Shares),  preferred  stock  (including  the  Preferred
Shares),  par value of common  stock,  capital  in excess of par value of common
stock,  and retained  earnings  less  treasury  stock (if any)  determined  on a
consolidated basis in accordance with GAAP.

     1.55 "Negative  Covenants" means the covenants of TNDE set forth in Section
10.

     1.56 "Net  Income"  means for any period,  the net income (or loss) of TNDE
and the  Subsidiaries  after allowance for taxes for such period,  determined in
accordance with GAAP; provided that there shall be excluded from the calculation
of such net income (to the extent otherwise included therein) the following: (i)
the net income of any Person in which TNDE or the  Subsidiaries  has an interest
(which  interest  does not  cause  the net  income  of such  other  Person to be
consolidated  with the net income of TNDE or the Subsidiaries in accordance with
GAAP), except to the extent of the amount of dividends or distributions actually
paid in such period by such other Person to TNDE or the  Subsidiaries;  (ii) the
net income (or loss) of any Person acquired in a pooling-of-interest transaction
for any period prior to the date of such  transaction and any expenses  incurred
by  TNDE  or the  Subsidiaries  with  respect  to such  transaction;  (iii)  any
extraordinary  gains or  losses,  including  gains  or  losses  attributable  to
property  sales not in the  ordinary  course of  business;  (iv) the  cumulative
effect  of  a  change  in  accounting  principles;   (v)  any  gains  or  losses
attributable  to  writeups  or write  downs  of  assets,  and (vi) any  expenses
relating  to  accretions   associated  with  any  warrants,   preferred   stock,
subordinated debt or other convertible securities.

     1.57 "Note"  means the  $6,500,000.00  aggregate  principal  amount  Senior
Subordinated  Note  issued  and sold by Sellers to  Purchaser  pursuant  to this
Agreement, due December 31, 2002. The Note is in the form of Exhibit A.

     1.58  "Notice"means any notice required to be given to any Party under this
Agreement in accordance with Section 13(h).

     1.59 "Parties" means TNDE, ProEco, NDE, Canada,  Construction and Purchaser
collectively, and "Party" means any one of the Parties.


                                       -7-

<PAGE>



     1.60 "Permitted  Indebtedness"  means, as of any date of determination  the
aggregate amount of all Indebtedness of TNDE and the Subsidiaries outstanding as
of such date of  determination  but only to the  extent  that the amount of such
Indebtedness does not exceed the amounts permitted under this Agreement.

     1.61 "Permitted Liens" means:

          (i)  Liens  incurred  pursuant  to  this  Agreement  and  the  Related
               Documents;

          (ii) Liens securing the Senior  Indebtedness  as  contemplated  in the
               Intercreditor Agreement;

          (iii)Liens  securing  taxes,  assessments or  governmental  charges or
               levies  or the  claims  or  demands  of  materialmen,  mechanics,
               carriers, warehousemen, landlords and other like Persons;

          (iv) Liens  incurred  or  deposits  made  in the  ordinary  course  of
               business   (a)  in   connection   with   workers'   compensation,
               unemployment  insurance,  social security and other like laws, or
               (b) to  secure  the  performance  of  letters  of  credit,  bids,
               tenders, sales contracts, leases, statutory obligations,  surety,
               appeal and  performance  bonds and other similar  obligations not
               incurred in connection with the borrowing of money, the obtaining
               of  advances  or the payment of the  deferred  purchase  price of
               property;

          (v)  attachment,   judgment  and  other   similar   Liens  arising  in
               connection  with court  proceedings,  provided  the  execution or
               other  enforcement  of such Liens is  effectively  stayed and the
               claims secured thereby are being actively contested in good faith
               and by appropriate proceedings;

          (vi) purchase money security interests granted to secure not more than
               75% of the purchase  price of assets,  the purchase of which does
               not violate this Agreement or any Related Document;

          (vii)Liens securing  indebtedness to BOCP which is  extinguished  upon
               the Closing Date;

          (viii)Liens specifically identified in Schedule 1; and

          (ix) Liens  securing  performance  bonds and payment bonds relating to
               the business of Construction.


                                       -8-

<PAGE>



     1.62 "Person" means any individual, corporation, limited liability company,
partnership,   joint  venture,   association,   joint  stock   company,   trust,
unincorporated organization, governmental authority or any other form of entity.

     1.63 "Pledge  Agreement" means the Security  Interest-Pledge  of Subsidiary
Stock Agreement dated as of December 23, 1997 by and between TNDE and Purchaser.

     1.64 "Preemptive  Rights  Agreement" means the Preemptive  Rights Agreement
dated as of December 23, 1997 by and between TNDE and Purchaser.

     1.65  "Preferred  Shares"  or  "Preferred  Stock"  means  TNDE's  Series  A
Redeemable  Convertible  Preferred Stock, par value $.01 per share, carrying the
rights,  characteristics  and  obligations  set  forth  in  the  Certificate  of
Designation attached hereto as Exhibit B.

     1.66  "Proceeds"  means  proceeds  as such  term  is  used  in the  Uniform
Commercial Code of the State of Delaware, as amended from time to time, together
with any successor law and as  contemplated  in the Pledge  Agreement and in the
Subordinated Security Agreement.

     1.67 "Purchaser" means DH Holdings Corp., a Delaware corporation,  together
with its successors and assigns.

     1.68  "Quarter"  means each quarter  annual period of the Fiscal Year,  and
"Quarterly" means each Quarter. Each Quarter consists of three Months.

     1.69 "Quarterly Financial  Statements" means, with respect to each Quarter,
the consolidated Accounting Statements of TNDE and the Subsidiaries with respect
to  such  Quarter  and  the  current   Fiscal  Year  to  date,   presented  with
corresponding Accounting Statements for the same Quarter and Fiscal Year to date
period for the  preceding  Fiscal Year,  which  Accounting  Statements  shall be
prepared in accordance  with GAAP (subject to applicable  year end  adjustments)
and  presented  in  reasonable   detail  (but  omitting   footnotes  that  would
substantially  duplicate footnotes contained in the most recent Annual Financial
Statements).  Accounting  Statements  prepared for and  contained in TNDE's Form
10-Q filed with the SEC shall be deemed to constitute  the  Quarterly  Financial
Statement.

     1.70  "Registration   Rights  Agreement"  means  the  Registration   Rights
Agreement dated as of December 23, 1997 by and between TNDE and Purchaser.

     1.71  "Related  Documents"  means  the  Note,  the  Subordinated   Security
Agreement,   the  Pledge  Agreement,   the  Preemptive  Rights  Agreement,   the
Registration  Rights  Agreement,  the Warrant  Certificate,  the  Certificate of
Designation and the Co-Sale Agreement.


                                       -9-

<PAGE>



     1.72  "Representation(s)  and Warranty(ies)"  means the representations and
warranties  of Sellers set forth in Section 6 and in any  certificate  of any of
the Sellers delivered pursuant to Section 5.

     1.73 "Responsible Officer" means the chairman of the board, chief executive
officer,  chief operating  officer,  chief financial officer or chief accounting
officer  of TNDE  or any  other  officer  of TNDE  involved  principally  in its
financial administration of its controllership function.

     1.74 "Restricted Payments" means any of the following:

          (i)  any  dividend on any class of TNDE's  Capital  Stock  (other than
               with respect to Purchaser's Preferred Stock);

          (ii) any other  distribution on account of any class of TNDE's Capital
               Stock;

          (iii)any  redemption,   purchase  or  other  acquisition,   direct  or
               indirect,  of any shares of TNDE's Capital Stock (other than with
               respect to Purchaser's Preferred Stock); and

          (iv) any  management,  consulting  and other  fees  paid to  Proactive
               Partners,   L.P.,  Lagunitas  Partners,  L.P.,  their  respective
               partners and employees and their  successors  and assigns  (other
               than as provided for in this Agreement).

Notwithstanding  the  foregoing,  Restricted  Payments  shall  not  include  (A)
dividends  paid,  or  distributions  made,  in  Capital  Stock of  TNDE;  or (B)
exchanges of Capital  Stock of TNDE for another  class of Capital Stock of TNDE,
except to the extent  that cash or other  non-stock  value is  involved  in such
exchange.

     1.75 "SEC" means the United States  Securities and Exchange  Commission (or
any governmental body or agency succeeding to its functions).

     1.76  "Securities  Act" means the  Securities  Act of 1933, as amended from
time to time.

     1.77  "Security   Agreements"  mean   collectively,   the  Senior  Security
Agreement, the Subordinated Security Agreement and the Pledge Agreement.

     1.78 "Sellers" means TNDE, ProEco, Canada and Construction.

     1.79 "Senior Indebtedness" means the Senior Loans and Indebtedness incurred
pursuant to the terms of any agreement between TNDE, any of the Subsidiaries and
any bank or

                                      -10-

<PAGE>



financial  institution  providing  for  revolving  credit  loans  secured by the
Collateral;  provided that, any other agreement shall be consented to in writing
by DH, which consent  shall not be  unreasonably  withheld,  and the lender with
respect thereto shall have been granted a first perfected  security  interest in
the  Collateral  on terms  substantially  equivalent  to those  set forth in the
Senior Security Agreement; further provided that, the term "Senior Indebtedness"
may  include  up to  $11  million  of  Indebtedness  incurred  by  TNDE  or  the
Subsidiaries  to replace the  indebtedness  incurred  with respect to the Senior
Loan  Agreement  and  such  debt  replacement  need not be  consented  to by DH;
provided further that,  notwithstanding  the foregoing,  any such replacement of
Indebtedness  by the  Company  on terms  materially  adverse  to DH shall not be
undertaken without the prior written consent of DH.

     1.80  "Senior  Lender"  means Bank One,  Texas,  N.A.,  as lender under the
Senior Loan Agreement, together with its successors and assigns in such capacity
or any  substitutes  or  Persons  acting in the same or  similar  capacity  with
respect to Senior Indebtedness.

     1.81 "Senior Loan Agreement" means the Loan Agreement,  dated as of October
25, 1996, by TNDE,  certain other parties and the Senior  Lender,  including all
extensions, renewals and refinancings thereof.

     1.82  "Senior  Loans"  means  the term  loan and  revolving  line of credit
granted by the Senior Lender to TNDE and certain  other parties  pursuant to the
Senior Loan  Agreement,  including  all  extensions,  renewals and  refinancings
thereof.

     1.83 "Senior Security  Agreement" means the Security  Agreement dated as of
October 25, 1996, by and among TNDE and the Senior Lender, as modified,  amended
or restated from time to time,  together with any other agreements  securing the
payment of the  obligations  evidenced  by the Senior  Loans or under the Senior
Loan Agreement.

     1.84  "Subordinated  Debt" means  Indebtedness of TNDE and the Subsidiaries
which is  subordinated,  in a manner  satisfactory to and approved in writing by
Purchaser, to the Indebtedness of Sellers evidenced by the Note.

     1.85    "Subordinated    Security    Agreement"    means    the    Security
Agreement-Personal Property dated as of December 23, 1997 by and between Sellers
and Purchaser, as modified, amended or restated from time to time, together with
any other  agreements  securing the payment of the obligations  evidenced by the
Note or under this Agreement.

     1.86  "Subsidiary" or  "Subsidiaries"  means any corporation 50% or more of
the Capital Stock of which,  except directors'  qualifying shares,  shall at the
time as of which  any  determination  is  being  made,  be owned by TNDE  either
directly or through Subsidiaries.

     1.87 "Subsidiary Stock" is defined in the Pledge Agreement.


                                      -11-

<PAGE>



     1.88  "Total  Liabilities"of  any Person  shall mean,  as of any date,  all
amounts which would be included as liabilities on a balance sheet of such Person
as of such date prepared in accordance with GAAP.

     1.89  "Transfer"  means,  with  respect  to any item,  the sale,  exchange,
conveyance, lease, transfer or other disposition of such item.

     1.90 "UCC" means the Uniform  Commercial  Code as in effect in the State of
Delaware.

     1.91  "Warrant  Certificate"  means  the  Warrant  Certificate  dated as of
December  23, 1997 issued by TNDE to Purchaser  evidencing  Warrants to purchase
4,500,000 Common Shares.

     1.92  "Warrant  Shares" shall have the meaning set forth in the recitals to
this Agreement.

     1.93  "Warrants"  shall have the meaning set forth in the  recitals to this
Agreement.

     Section 2. Purchase and Sale of the Note.

     Upon the terms and subject to the conditions  set forth in this  Agreement,
Sellers shall issue and sell to Purchaser,  and  Purchaser  shall  purchase from
Sellers for a purchase price of  $6,500,000.00,  the Note, due December 31, 2002
and dated as of the Closing Date,  made by Sellers to Purchaser in the principal
amount of  $6,500,000.00.  Such  purchase and sale shall be  consummated  on the
Closing Date as provided for in this Agreement, and on such date Purchaser shall
make payment of the purchase  price of the Note by wire transfer of  immediately
available funds to an account  designated by TNDE. The Note shall be in the form
attached hereto as Exhibit A.

     Section 3. Purchase and Sale of Preferred Stock.

     Upon the terms and subject to the conditions  set forth in this  Agreement,
TNDE shall issue and sell to Purchaser,  and Purchaser shall purchase from TNDE,
the Preferred  Shares for an aggregate  purchase  price of  $1,500,000.00.  Such
purchase  and sale shall be  consummated  on the Closing Date as provided for in
this  Agreement,  and on such date Purchaser  shall make payment of the purchase
price of the Preferred Shares by wire transfer of immediately available funds to
an account  designated by TNDE.  The Preferred  Shares shall have the rights and
characteristics  set forth in the Certificate of Designation  attached hereto as
Exhibit B.

     Section 4. Issuance of Warrants.

     Upon the terms and subject to the conditions  set forth in this  Agreement,
TNDE shall issue and sell to Purchaser and Purchaser  shall  purchase from TNDE,
the Warrants evidenced by the

                                      -12-

<PAGE>



Warrant  Certificate dated as of the Closing Date in the form attached hereto as
Exhibit C. Such sale and purchase  shall be  consummated  on the Closing Date as
provided for in this Agreement.

     Section 5. Conditions to Closings.

     The obligations of Purchaser to purchase the Note, the Preferred Shares and
the  Warrants  on the  Closing  Date is subject to the  fulfillment  in a manner
reasonably  satisfactory  to Purchaser  and its counsel of each of the following
conditions precedent.

     (a) Senior Loan Agreement.  No event of default or event which with notice,
lapse of time or both would constitute an event of default under the Senior Loan
Agreement  shall have  occurred  and be  continuing  and the  Senior  Lender and
Purchaser  shall  have  executed  and  delivered  the  Intercreditor  Agreement,
Amendment  No. 3 to the Senior Loan,  the  Termination  Agreement (as defined in
ss.9(j)) and the Post-Closing Agreement (as defined in ss.9(j)).

     (b)  Execution  and  Delivery  of Related  Documents.  Each of the  Related
Documents  shall have been duly executed and  delivered by all parties  thereto,
each dated and effective as of the Closing Date.

     (c)   Certificates,   Opinions,   and  Other   Documents.   The   following
certificates, opinions and other documents shall be delivered by or on behalf of
Sellers:

          (i)  a certificate  of TNDE executed by a Responsible  Officer of TNDE
               in the form of Exhibit D certifying  compliance  with the closing
               conditions  set forth in this  section  and any  covenants  to be
               performed by Sellers at or prior to the Closing Date;

          (ii) certified   copies  of  the  corporate   resolutions  of  Sellers
               authorizing  the execution,  delivery and  performance of each of
               Sellers  obligations  under this Agreement and all of the Related
               Documents  and any other  documents to be  delivered  pursuant to
               this Agreement or any of the Related Documents;

          (iii)certified   copies  of  TNDE's   Certificate  of   Incorporation,
               including any and all amendments thereto, and a certified copy of
               the bylaws of TNDE as in effect on the Closing Date;

          (iv) a certificate  of the Secretary of TNDE  certifying  the names of
               the officers of Sellers  authorized to sign this  Agreement,  the
               Related  Documents and any other  documents or certificates to be
               delivered  pursuant  to  this  Agreement  or any  of the  Related
               Documents  by TNDE,  together  with the true  signatures  of such
               officers;


                                      -13-

<PAGE>



          (v)  an opinion of counsel for TNDE,  addressed to  Purchaser,  in the
               form of Exhibit E;

          (vi) UCC-ls  with  respect to the  Collateral  under the  Subordinated
               Security  Agreement  and  Pledge  Agreement  in the  forms and as
               provided for herein;

          (vii)UCC-3s  with  respect  to  any  financing   statements  filed  in
               connection with TNDE's and the Subsidiaries indebtedness to BOCP;

          (viii) the Warrant Certificate;

          (ix) certificates  evidencing 150 shares of Preferred  Stock issued to
               Purchaser pursuant to this Agreement; and

          (x)  such other  opinions,  certificates,  affidavits,  documents  and
               filings, including any and all UCC filings, as Purchaser may deem
               reasonably necessary or appropriate.

     (d) Disbursements and Deliveries.  The following disbursement shall be made
out of the proceeds of the sale of the Note and the Preferred Shares:

               $8,000,000 to BOCP to extinguish any and all indebtedness of TNDE
               and the Subsidiaries to BOCP.

     Section 6. Representations and Warranties of Sellers.

     The  representations  and warranties of Sellers set forth in this Section 6
shall survive the purchase and sale of the Note,  Preferred Shares and Warrants,
and any  investigation  made by  Purchaser  shall  not  diminish  the  right  of
Purchaser to rely upon such representations and warranties.  Each of the Sellers
jointly and severally represents and warrants to Purchaser as follows:

     (a)  Organization.  TNDE is a  corporation  duly  incorporated  and validly
existing under the laws of the State of Delaware.  The  execution,  delivery and
performance of this Agreement,  each of the Related Documents and any instrument
or  agreement  required by this  Agreement or any of the Related  Documents  are
within Sellers'  powers,  have been duly authorized and are not in conflict with
the terms of the charter, bylaws or other organizational documents of Sellers.

     (b)  Subsidiaries.  Each Subsidiary is a corporation duly  incorporated and
validly  existing  under  the  laws  of  its   jurisdiction  of   incorporation.
Immediately after the date of Closing,  neither TNDE nor any of the Subsidiaries
will own any Capital Stock,  membership  interest or other equity interest in or
of any other Person, other than Subsidiary Stock. As of the date hereof, none

                                      -14-

<PAGE>



of the Subsidiaries other than ProEco,  NDE, Canada and Construction own or hold
any assets or conduct any business.

     (c) Good Standing.  TNDE and the Subsidiaries are properly  licensed and in
good standing in each state in which they are doing  business,  and TNDE and the
Subsidiaries  have  qualified  under  and,  where  required,  complied  with the
fictitious  name statute of each state in which TNDE or any of the  Subsidiaries
are doing business.

     (d)  Information  Submitted.  The  audited  consolidated  Annual  Financial
Statements  and unaudited  Quarterly  Financial  Statements of TNDE set forth on
Schedule 5 have been prepared in accordance with GAAP  consistently  applied and
fairly present the financial  condition of TNDE and the  Subsidiaries  as of the
dates thereof and the results of its operations for the periods then ended.

     (e) No Material  Adverse Change.  There has been no material adverse change
in the consolidated financial condition of TNDE since the later of (i) September
30, 1997 and (ii) the date of the most recent Financial Statements.

     (f)  Disclosure.  Neither this Agreement nor any other  document,  opinion,
Accounting  Statement,  certificate  or  statement  by an  officer of any of the
Sellers  furnished  or made by or on behalf of any of the Sellers in  connection
with the  transactions  contemplated  in this  Agreement,  contains  any  untrue
statement of a material  fact or omits to a state a material  fact  necessary in
order to make the  statements  contained  therein  not  misleading.  To the best
knowledge  of Sellers,  there is no fact  peculiar  to TNDE or the  Subsidiaries
which  materially and adversely  affects or in the future may (so far as Sellers
can reasonably foresee) materially and adversely affect the business,  property,
assets or  financial  condition of TNDE or the  Subsidiaries  which has not been
disclosed  to  Purchaser  in this  Agreement  or in other  documents,  opinions,
Accounting Statements,  certificates or statements furnished to or made by or on
behalf of Sellers to Purchaser in connection with the transactions  contemplated
by this Agreement.

     (g)  No  Conflicts.  The  execution,   delivery  and  performance  of  this
Agreement,  the Related Documents and any other instrument or agreement required
by this  Agreement or any of the Related  Documents are not in conflict with any
law or any indenture, agreement or undertaking to which any of the Sellers are a
party or by which any of the Sellers are bound or affected.

     (h)  Authorization  and  Consents.   No  approval,   consent,   compliance,
exemption,  authorization  or other action by, or notice to, or filing with, any
governmental  authority or any other Person  pursuant to applicable  law, and no
lapse of the waiting period under the  applicable  law, is necessary or required
in connection with the execution, delivery and performance by any of the Sellers
or  enforcement  against  any of the  Sellers of this  Agreement  or the Related
Documents or the transactions contemplated hereby and thereby.

     (i) Enforceability.  This Agreement is a legal, valid and binding agreement
of each of the Sellers,  enforceable  against each of the Sellers in  accordance
with its terms, and each Related

                                      -15-

<PAGE>



Document,  and any instrument or agreement  required under this Agreement or any
of the Related Documents,  when executed and delivered, will be similarly legal,
valid,  binding and  enforceable  in  accordance  with their  respective  terms,
except,  in either case, as  enforcement  thereof may be affected by bankruptcy,
moratorium,  insolvency or similar laws affecting creditors' rights generally or
by the application by a court of equitable principles.

     (j) Ownership of Collateral.  All  Collateral is owned,  and all Collateral
acquired hereafter will be owned, legally and beneficially, by Sellers, free and
clear of all security interests, liens, encumbrances,  adverse claims and rights
of others  except for Permitted  Liens and those  consented to in writing by the
Senior Lender and Purchaser.

     (k) Financing  Statements.  No financing  statement,  security agreement or
other Lien  instrument  covering all or any part of the Collateral is on file in
any public  office,  except as may have been filed in favor of the Senior Lender
or  Purchaser  pursuant  to this  Agreement  and except as related to  Permitted
Liens.  Neither TNDE nor any of the  Subsidiaries do business and none have done
business  within the past five  years  under a trade name or any name other than
its respective  legal name set forth at the beginning of this Agreement,  except
as specified in Schedule 2.

     (l) Perfected  Security Interest in Collateral.  Except for (i) the payment
of all outstanding  indebtedness of TNDE and the  Subsidiaries to BOCP under the
BOCP Agreement and the termination of all financing statements and the return of
all  Collateral,  if any, in the possession of BOCP in connection  therewith and
(ii) the filing of financing  statements  (and  continuation  statements,  where
appropriate) with respect to the Collateral and the delivery to Purchaser of any
Collateral  as to which  possession  is the only method of perfecting a security
interest  therein,  no further  action is necessary  in order to  establish  and
perfect  Purchaser's lien on or perfected  security  interest in the Collateral,
which  lien  shall be  second  only to the  lien of the  Senior  Lender  and any
Permitted Liens.

     (m)  Compliance  with Laws. To the best  knowledge of Sellers,  each of the
Sellers  has  complied  with all  federal,  state  and  local  laws,  rules  and
regulations  affecting  the  business,   property  or  assets  of  TNDE  or  the
Subsidiaries.

     (n)  Environmental  Compliance.  TNDE and the Subsidiaries and all of their
respective  properties  and  facilities  have, at all times and in all respects,
complied with all  Environmental  Laws, except where the failure to comply would
not  have  a  Material   Adverse   Effect,   assuming  all  such   instances  of
non-compliance  were  brought  to  the  attention  of  appropriate  governmental
authorities.

     (o) Labor and Employee Relations Matters.

          (i)  Neither TNDE nor any of the  Subsidiaries is or expects to be the
               subject of any union  organizing  activity or labor dispute,  nor
               has there been any strike of any kind called or, to the knowledge
               of  Sellers,   threatened  to  be  called  against  TNDE  or  the
               Subsidiaries and neither

                                      -16-

<PAGE>



               TNDE nor any of the  Subsidiaries  have  violated any  applicable
               federal  or state law or  regulation  relating  to labor or labor
               practices.

          (ii) No present or former  employee  of TNDE or the  Subsidiaries  has
               advanced  claims  in  writing  against  TNDE or the  Subsidiaries
               (whether under any foreign, federal, state or common law, through
               a government agency,  under an employment  agreement,  collective
               bargaining agreement,  personal service or independent contractor
               agreement  or  otherwise)  that  are  currently  pending  for (a)
               overtime  pay,  other than  overtime pay for the current  payroll
               period;  (b) wages,  salaries or profit sharing (excluding wages,
               salaries or profit sharing for the current payroll  period);  (c)
               vacations,  time off (including,  without  limitation,  potential
               sick leave) or pay in lieu of  vacation  or time off,  other than
               vacation or time off (or pay in lieu  thereof)  earned in respect
               of the current  Fiscal  Year;  (d) any  violation of any statute,
               ordinance  or  regulation  relating  to minimum  wages or maximum
               hours of work; (e) discrimination against employees on any basis;
               (f) unlawful  employment  or  termination  practices;  (g) unfair
               labor  practices or alleged  violations of collective  bargaining
               agreements;  (h) any  violation  of  occupational  safety  and/or
               health  standards;  (i)  benefits  under  any  employee  plans or
               compensation  arrangement;  and  (j)  breach  of any  employment,
               personal service or independent contractor agreement,  except for
               any such claims referred to in this Paragraph (a) thru (j) which,
               in the aggregate, do not exceed $100,000.00.

          (iii)There is not pending against TNDE or any of the  Subsidiaries or,
               to the knowledge of the Sellers  threatened,  any labor  dispute,
               strike or work  stoppage  that does or may  materially  affect or
               materially   interfere   with  the  operations  of  TNDE  or  the
               Subsidiaries.

          (iv) There is not pending or, to the knowledge of Sellers,  threatened
               any charge or complaint  against TNDE or any of the  Subsidiaries
               by  or  before  the   National   Labor   Relations   Board,   any
               representative thereof, or any comparable foreign or state agency
               or authority.

          (v)  All  collective  bargaining  agreements  to  which  TNDE  or  the
               Subsidiaries is a party have been furnished to Purchaser.

     (p) No Event of Default.  No event has occurred and is  continuing or would
result from the  transactions  described in this Agreement  which  constitutes a
Default or an Event of Default or which, upon a lapse of time or notice or both,
would become an Event of Default.


                                      -17-

<PAGE>



     (q) Litigation.  There is no litigation,  tax claim,  proceeding or dispute
pending,  or, to the knowledge of Sellers threatened,  against or affecting TNDE
or any of the  Subsidiaries or their property,  or any officer,  key employee or
principal  shareholder  of  TNDE  or  any  of  the  Subsidiaries,   the  adverse
determination   of  which  would  impair  Sellers'   ability  to  perform  their
obligations hereunder or under any instrument or agreement required hereunder.

     (r)  Taxes.  All  tax  returns  required  to  be  filed  by  TNDE  and  the
Subsidiaries  in any  jurisdiction  have been filed or  extended  and all taxes,
assessments,  fees and other governmental  charges upon TNDE or the Subsidiaries
or upon any of their  properties,  income or franchises  have been paid prior to
the time that such taxes could give rise to a lien thereon,  unless protested in
good faith by  appropriate  proceedings  and with  respect to which  reserves in
conformity  with  GAAP  have  been  established  on the  books  of  TNDE  or the
Subsidiaries,  as  applicable.  Sellers  have no  knowledge  of any proposed tax
assessment against TNDE or the Subsidiaries.

     (s)  Securities  Act.  Neither  TNDE nor the  Subsidiaries  have issued any
unregistered  securities in violation of the  registration  requirements  of the
Securities Act, any applicable state securities law or of any other  requirement
of law, and none are violating any rule,  regulation  or  requirement  under the
Securities Act or the Exchange Act. TNDE and the  Subsidiaries  are not required
to qualify an indenture  under the Trust  Indenture Act of 1939, as amended,  in
connection with their execution and delivery of the Note.

     (t)  Indebtedness.  Immediately  after  the  Closing  Date,  TNDE  and  the
Subsidiaries  will not have any  outstanding  Indebtedness  other than under the
Note,  Related  Documents,   the  Senior  Loans,   accounts  payable  and  other
indebtedness incurred in the ordinary course of business, except as set forth in
Schedule 3.

     (u)  ERISA  Plan.  TNDE has no  ERISA  Affiliates  and  does not  currently
maintain,  contribute  to, have any  requirements  to  contribute to or have any
liability, whether absolute or contingent, with respect to any ERISA Plan.

     (v) Reservation of Conversion  Shares.  The Common Shares to be issued upon
the  conversion  of the  Preferred  Shares and the exercise of the Warrants (the
"Conversion Shares") have been duly reserved for issuance upon conversion of the
Preferred  Shares and/or the exercise of the Warrants and, when so issued,  will
be duly authorized,  validly issued, fully paid and non-assessable Common Shares
with no personal liability attaching to the ownership thereof,  and will be free
and clear of all liens, charges,  restrictions,  claims and encumbrances imposed
by or through TNDE. Neither the issuance and delivery of the Preferred Shares or
the Conversion  Shares is subject to any  pre-emptive  right of  stockholders of
TNDE or to any right of first refusal or other right in favor of any person.

     (w) Authorized Capital Stock. Immediately after the Closing, the authorized
Capital  Stock of TNDE will consist of  50,000,000  shares of Common  Stock,  of
which 15,977,636  shares will be validly issued and outstanding,  fully paid and
nonassessable with no personal liability

                                      -18-

<PAGE>



attaching to the  ownership  thereof and 10,000  shares of preferred  stock,  of
which  150  shares  will be  validly  issued  and  outstanding,  fully  paid and
nonassessable with no personal liability attaching to the ownership thereof. The
holders  of  record  of  Capital  Stock of TNDE and  holders  of  subscriptions,
warrants, options, convertible securities and other rights (contingent or other)
to purchase or otherwise acquire Capital Stock of TNDE, and the number of shares
of Capital Stock, subscriptions,  warrants, options,  convertible securities and
other such rights held by each, are as set forth in the attached Schedule 6. The
designations,  powers,  preferences,  rights,  qualifications,  limitations  and
restrictions in respect of each class and series of authorized  Capital Stock of
TNDE are as set forth in the  Certificate of  Incorporation  ("Certificate"),  a
copy of which is attached as Exhibit G, and the Certificate of Designation,  and
all such designations, powers, preferences, rights, qualifications,  limitations
and restrictions  are valid,  binding and enforceable and in accordance with all
applicable laws.  Except as set forth in the attached  Schedule 6, (i) no person
owns of record  or is known to TNDE to own  beneficially  any  share of  Capital
Stock of TNDE, (ii) no subscription,  warrant, option,  convertible security, or
other right (contingent or other) to purchase or otherwise acquire Capital Stock
of TNDE is authorized or outstanding and (iii) there is no commitment by TNDE to
issue shares, subscriptions, warrants, options, convertible securities, or other
such rights or to distribute to holders of any of its Capital Stock any evidence
of  indebtedness  or  asset.  Except as  provided  for in the  Certificate,  the
Certificate of Designation, or as set forth in the attached Schedule 7, TNDE has
no obligation (contingent or other) to purchase, redeem or otherwise acquire any
of its equity  securities or any interest therein or to pay any dividend or make
any other distribution in respect thereof. Other than pursuant to this Agreement
and  the  Related   Documents,   there  are  no  voting  trusts  or  agreements,
stockholders'  agreements,  pledge agreements,  buy-sell  agreements,  rights of
first refusal, preemptive rights or proxies relating to any of the Capital Stock
of TNDE.  All of the  outstanding  securities  of TNDE were issued in compliance
with all applicable Federal and state securities laws.

     (x) SEC Reports.  Since January 1, 1994, TNDE has filed all forms, reports,
statements,  and other  documents  required to be filed with the SEC,  including
without  limitation  (i) all Annual  Reports on Form  10-K,  (ii) all  Quarterly
Reports  on Form  10-Q,  (iii) all proxy  statements  relating  to  meetings  of
shareholders (whether annual or special), (iv) all Current Reports on Form 8- K,
and  (v)  all  other  reports,  schedules,  registration  statements,  or  other
documents  required  to be  filed  with the SEC  (collectively,  the  "TNDE  SEC
Reports"), except where the failure to file any such forms, reports, statements,
or other documents is not likely to have,  individually  or in the aggregate,  a
Material Adverse Effect.  The TNDE SEC Reports (a) were prepared in all material
respects in accordance  with the  requirements of the Securities Act or Exchange
Act, as the case may be, and (b) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

     (y)  Financial  Statements;   No  Undisclosed   Liabilities.   The  audited
consolidated  financial statements and unaudited  consolidated interim financial
statements  (including  the related  notes and  schedules)  of TNDE  included or
incorporated  by  reference  in the TNDE SEC  Reports  (the  "Company  Financial
Statements") were prepared in accordance with generally accepted accounting

                                      -19-

<PAGE>



principles  applied on a  consistent  basis  (except as may be  indicated in the
notes  thereto) and fairly  present the  consolidated  results of operations and
cash flows for the periods  then ended,  subject,  in the case of any  unaudited
interim financial statements,  to normal year-end adjustments,  none of which is
likely to have,  individually  or in the  aggregate,  a Material  Adverse Effect
other than  liabilities  disclosed  in the  Schedules  hereto or in the TNDE SEC
Reports or for which TNDE has made  adequate  reserves  as  reflected  in TNDE's
Financial Statements.

     (z) Securities Act. Neither Sellers,  nor anyone acting on their behalf has
offered  any of the Note,  the  Preferred  Shares  or the  Warrants  or  similar
securities,  or  solicited  any  offers  to  purchase,  or made any  attempt  by
preliminary  conversation or negotiations to dispose of, the Note, the Preferred
Shares  or the  Warrants  or  similar  securities,  to  any  person  other  than
Purchaser. Neither Sellers nor anyone acting on their behalf has offered or will
offer  to sell the  Note,  the  Preferred  Shares  or the  Warrants  or  similar
securities  to, or solicit  offers with respect  thereto from, or enter into any
preliminary  conversations or negotiations  relating hereto with, any Person, so
as to bring the offer, sale or issuance of the Note, the Preferred Shares or the
Warrants to Purchaser within the  registration  provisions of the Securities Act
of 1933, as amended (the "Securities Act").

     (aa) Registration Rights. Except as granted to Purchaser in connection with
the  transactions  contemplated  by this  Agreement,  no Person has any right to
cause TNDE to file any registration  statement under the Securities Act relating
to any  securities  of TNDE or any right to have any  securities  of TNDE in any
such registration statement.

     Section 7. Representations and Warranties of Purchaser.

     The representations and warranties of Purchaser set forth in this Section 7
shall survive the purchase and sale of the Note,  Preferred Shares and Warrants,
and any investigation made by Sellers shall not diminish the right of Sellers to
rely  upon  such   representations   and   warranties;   provided   that,   such
representations  and  warranties  are made only with respect to items and events
which may have a Material  Adverse  Effect on the  rights of Sellers  hereunder.
Purchaser represents and warrants to Sellers as follows:

     (a) Organization.  Purchaser is a corporation duly incorporated and validly
existing under the laws of the state of its formation.  The execution,  delivery
and  performance  of this  Agreement,  each  of the  Related  Documents  and any
instrument  or  agreement  required  by  this  Agreement  or any of the  Related
Documents are within Purchaser's  powers,  have been duly authorized and are not
in  conflict  with the  terms of the  charter,  bylaws  or other  organizational
documents of Purchaser.

     (b)  No  Conflicts.  The  execution,   delivery  and  performance  of  this
Agreement,  the Related Documents and any other instrument or agreement required
by this  Agreement or any of the Related  Documents are not in conflict with any
law or any material indenture,  agreement or undertaking to which Purchaser is a
party or by which Purchaser is bound or affected.


                                      -20-

<PAGE>



     (c) Enforceability.  This Agreement is a legal, valid and binding agreement
of Purchaser,  enforceable  against  Purchaser in accordance with its terms, and
each Related  Document,  and any  instrument  or agreement  required  under this
Agreement or any of the Related Documents,  when executed and delivered, will be
similarly  legal,  valid,  binding  and  enforceable  in  accordance  with their
respective terms, except, in either case, as enforcement thereof may be affected
by  bankruptcy,  moratorium,  insolvency  or similar laws  affecting  creditors'
rights generally or by the application by a court of equitable principles.

     (d)  Authorization  and  Consents.   No  approval,   consent,   compliance,
exemption,  authorization  or other action by, or notice to, or filing with, any
governmental  authority or any other Person  pursuant to applicable  law, and no
lapse of the waiting period under the  applicable  law, is necessary or required
in  connection  with the  execution,  delivery and  performance  by Purchaser or
enforcement  against Purchaser of this Agreement or the Related Documents or the
transactions contemplated hereby and thereby.

     (e) Experience.  Purchaser is an accredited  investor within the meaning of
Rule  501(a)  of  Regulation  D  promulgated  under the  Securities  Act and has
substantial  experience in  evaluating  and investing in securities of companies
similar to TNDE and the  Subsidiaries  and has made  investments  in  securities
other than those of TNDE and the  Subsidiaries.  Purchaser  acknowledges that by
reason of its business or financial experience and financial  condition,  it has
the ability to analyze and bear the entire  risk of its  investment  pursuant to
this Agreement.

     (f) Investment  Intent.  Purchaser is acquiring the Note,  Preferred Shares
and the Warrants for investment  for its own account,  not as a nominee or agent
of any other  Person and not with a view to, or for resale in  connection  with,
any distribution  thereof.  Purchaser  understands that the issuance and sale of
such  securities  purchased  by it  hereunder  (and the issuance to Purchaser of
Warrant Shares upon the conversion of the Warrants and the issuance of shares of
Common Stock upon the conversion of Purchaser's  Preferred Shares) have not been
and will not be subject to a registration  statement  filed under the Securities
Act or any applicable  state  securities  law by reason of a specific  exemption
from the registration provisions of the Securities Act and such state securities
laws  which  depend  upon,  among  other  things,  the bona  fide  nature of the
investment  intent and the accuracy of Purchaser's  representation  as expressed
herein.

     (g) Rule 144. Purchaser acknowledges that the securities acquired and which
could be acquired hereunder are restricted securities within the meaning of Rule
144 promulgated under the Securities Act and may not be sold unless subsequently
registered  under the  Securities Act and applicable  state  securities  laws or
unless an exemption from such  registration is available.  Purchaser is aware of
the  provisions of Rule 144  promulgated  under the Securities Act which permits
the limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions including,  without limitation, the existence
of a public  market for the  securities,  the  availability  of certain  current
public  information  about TNDE and the  Subsidiaries,  the resale occurring not
less than one year after a party has  purchased  and paid for any security to be
sold, the sale being effected through a "broker's  transaction" or a transaction
directly with a "market maker"

                                      -21-

<PAGE>



as provided by Rule  144(f) and the number of  securities  being sold during any
three-month period not exceeding specified limitations.

     (h) Knowledge of Purchaser.  Purchaser is aware of and has investigated the
business,  management and financial condition of TNDE and the Subsidiaries,  has
had the opportunity to inspect their respective facilities and has had access to
such other  information  about TNDE and the Subsidiaries as Purchaser has deemed
necessary  and  desirable  to reach an informed  and  knowledgeable  decision to
acquire the  securities  to be purchased by it  hereunder.  The purchase of such
securities is not a result of an advertisement or an offering in connection with
the sale of such securities.

     Section 8. Financial Reporting.

         The  obligations  and  covenants of Sellers set forth in this Section 8
shall  terminate upon the later of (i) the date on which  Purchaser is no longer
the holder of the Note and (ii) the date upon which the  Purchaser  is no longer
the  holder of at least 50% of the  Preferred  Shares  issued  pursuant  to this
Agreement.

     8.1 Financial Reports.

     Sellers shall  deliver,  or shall cause to be  delivered,  to Purchaser the
following financial reports within the applicable time periods.

     (a) Annual Financial  Statements.  The Annual Financial Statements shall be
delivered  within 90 days (or 120 days if the filing deadline is extended by the
SEC)  after  the end of  each  Fiscal  Year  and  shall  be  accompanied  by the
applicable Audit Report,  Accountant's Statement, CFO Certificate and Compliance
Certificate.

     (b) Quarterly  Financial  Statements.  The Quarterly  Financial  Statements
shall be delivered within 45 days (or 60 days if the filing deadline is extended
by the SEC) after the end of each  Quarter  (other  than the fourth  Quarter) of
each Fiscal Year and shall be accompanied by the applicable CFO  Certificate and
Compliance Certificate.

     (c) Monthly Financial Statements. The Monthly Financial Statements shall be
delivered promptly upon their dissemination to management of TNDE.

     (d) Projected Financial Statements. The projected Financial Statements with
respect to each succeeding  Fiscal Year shall be delivered  within 60 days after
the end of the preceding Fiscal Year.

     (e) Securities Reports. Any reports required by the Securities and Exchange
Commission  shall be delivered  promptly  upon their  delivery to  shareholders,
securities holders or the SEC.

                                      -22-

<PAGE>



     (f)  Lender  Reports  and  Management  Letters.   Any  Lender  Reports  and
Management Letters shall be delivered promptly upon their delivery to any lender
or note holder.

     (g) Notice of Default. As soon as possible and in any event within five (5)
days after the occurrence of each Event of Default or each event which, with the
giving of notice or lapse of time or both, would constitute an Event of Default,
the  statement of the chief  financial  officer of TNDE setting forth details of
such Event of Default or event and the action  which TNDE  proposes to take with
respect thereto.

     8.2 Other Information.

     Promptly upon reasonable  written request  therefor,  Sellers shall furnish
(or cause to be furnished) to Purchaser other financial information with respect
to TNDE and the Subsidiaries  available in the books,  records and files of TNDE
and the  Subsidiaries;  provided,  however,  that if such information  cannot be
furnished  without undue expense,  Sellers may require Purchaser to reimburse it
for all reasonable out-of-pocket expenses incurred in connection with furnishing
such information.

     8.3 Preparation of Annual and Quarterly Financial  Statements in Accordance
with GAAP.

     TNDE and the  Subsidiaries  shall  maintain  adequate  books,  accounts and
records and shall prepare all Annual Financial  Statements,  Quarterly Financial
Statements  and  Monthly  Financial  Statements  required  to  be  delivered  to
Purchaser  pursuant to this Section in accordance  with GAAP applied in a manner
consistent  with the practices,  policies and  procedures  applied in connection
with the preparation of the Financial  Statements of TNDE initially delivered to
Purchaser,  except for any changes in such  practices,  policies and  procedures
permitted or approved in the manner provided for in this Section.

     8.4 Changes in GAAP and in Practices, Policies and Procedures.

     (a) Notice of Proposed  Change.  In the event that TNDE or the Subsidiaries
proposes  to make any  material  change  in any of the  practices,  policies  or
procedures  applied in connection with the  preparation of its Annual  Financial
Statements or Quarterly Financial Statements, Sellers shall:

          (i)  notify  Purchaser in writing of such proposed  change at least 45
               days  prior to the  required  delivery  date of the first  Annual
               Financial  Statements or Quarterly Financial Statements that will
               be effected by such proposed change;


                                      -23-

<PAGE>



          (ii) state in  reasonable  detail in such  notice  the reason for such
               change,  including, if applicable, a description of any change in
               GAAP that occasions such change;

          (iii)submit  with  such  notice  a  written  statement  by  the  Chief
               Financial  Officer  of TNDE and the  Accountants  describing  the
               anticipated  effect,  if  any,  of  the  proposed  change  to the
               computation  of the  Financial  Tests,  or stating  that in their
               opinion such proposed  change will have no material effect on the
               computation of such Financial Tests; and

          (iv) in the event such proposed  change will have a material effect on
               the  computation  of  such  Financial  Tests,  submit  with  each
               Compliance  Certificate  a written  reconciliation  in reasonable
               detail demonstrating the computation of the Financial Tests as if
               such change had not been made.

     (b)  Consent  to Change.  Unless  such  change in  practices,  policies  or
procedures is required by a change in GAAP, TNDE or the  Subsidiaries  shall not
adopt any such proposed change without the written  consent of Purchaser,  which
consent shall not be unreasonably withheld by Purchaser.

     (c) Effect of Change on Financial  Tests. In the event that any such change
in policies,  practices or procedures would materially affect the computation of
any Financial  Test,  and unless this  Agreement is amended to make  appropriate
modifications  to such Financial Test,  compliance with all such Financial Tests
shall be  determined  on a pro forma  basis  without  giving  effect to any such
change.

     8.5 Notice of Certain Events.

     Sellers shall give prompt  written notice to Purchaser of the occurrence of
any of the following events:

     (a)  a Default;

     (b)  the occurrence of any event which, with notice, lapse of time or both,
          would constitute an event of default under any Senior Indebtedness;

     (c)  all  litigation  affecting TNDE or any of the  Subsidiaries  where the
          amount or equivalent value claimed is equal to $250,000.00 or more;


                                      -24-

<PAGE>



     (d)  any  substantial  dispute  which may exist  between TNDE or any of the
          Subsidiaries and any  governmental  regulatory body or law enforcement
          authority;

     (e)  the loss or destruction of any asset of TNDE or the Subsidiaries which
          loss or destruction would result in a Material Adverse Effect; and

     (f)  any  other  matter  which  has  resulted  or is  likely to result in a
          Material Adverse Effect.

     8.6 Inspections.

     (a) Books, Records, Audits and Inspections. TNDE and the Subsidiaries shall
(i) maintain  adequate  books,  accounts  and records and prepare all  Financial
Statements required hereunder in accordance with GAAP consistently  applied, and
in compliance  with the regulations of any  governmental  regulatory body having
jurisdiction  over  TNDE or the  Subsidiaries  or  TNDE's  or the  Subsidiaries'
business and (ii) permit employees or agents of Purchaser at any reasonable time
upon reasonable notice to inspect TNDE's and the Subsidiaries' properties and to
examine or audit TNDE's and the  Subsidiaries'  books,  accounts and records and
make copies and memoranda thereof. In the event any properties,  books, accounts
or records are in the possession of or under the control of a third party,  TNDE
shall  direct  and  hereby  authorizes  such  third  party to  permit  access to
Purchaser's  employees or agents for the purpose of performing the  inspections,
appraisals,  examinations or audits permitted under this Section, and to respond
to any reasonable requests from Purchaser for information concerning the amount,
status or condition of any assets in a third party's possession or control.

     Section 9. Affirmative Covenants.

     Until  payment in full of the Note,  TNDE shall and shall cause each of the
Subsidiaries to, unless Purchaser waives compliance therewith in writing:

     (a)  Insurance.  Insure and maintain  insurance  upon all of its assets and
properties with responsible and reputable insurers of such character and in such
amounts as are usually maintained by companies engaged in like businesses in the
same general area in which TNDE or the Subsidiaries operate.

     (b) Payment of Taxes and Claims.  Pay (i) all taxes,  assessments and other
governmental  charges imposed upon any of its properties or assets or in respect
of any of its  franchises,  business,  income or profits  before any  penalty or
interest accrues thereon, (ii) all claims (including, without limitation, claims
for labor, services,  materials and supplies) for sums which have become due and
payable  and which by law have or might  become due and payable or become a lien
or  charge  upon  any of  their  properties  or  assets,  and  (iii)  all  lease
obligations,  all  trade  debt,  and  all  other  indebtedness  incident  to the
operations of TNDE or the Subsidiaries, provided that (unless any

                                      -25-

<PAGE>



material item of property  would be lost,  forfeited or materially  damaged as a
result  thereof) no such charge,  tax,  assessment  or claim need be paid if the
amount,  applicability  or validity thereof is currently being contested in good
faith and if a  reserve  or other  appropriate  provision,  if any,  as shall be
required by GAAP shall have been made therefor.

     (c)  Compliance  with  Laws.  Comply  in all  material  respects  with  all
applicable statutes,  laws,  ordinances and governmental rules,  regulations and
orders  including,  but not limited to, all  Environmental  Laws, to which it is
subject  or which  are  applicable  to its  business,  properties  or  assets if
noncompliance therewith could have a Material Adverse Effect.

     (d)  Preservation  of Existence.  Except as expressly  permitted in Section
10(f), (g) or (h),  preserve and maintain its corporate  existence,  as the case
may be, and its rights,  franchises  and privileges in the  jurisdiction  of its
incorporation and qualify and remain qualified as a foreign  corporation in each
jurisdiction in which the failure to do so would have a Material Adverse Effect.
TNDE and the  Subsidiaries  shall  preserve  and maintain all licenses and other
rights to use patents, processes, licenses, trademarks, trade names, inventions,
intellectual property rights or copyrights owned or used by and necessary to the
conduct of its business.

     (e)  Maintenance  of Tangible  Assets.  Maintain  its  tangible  assets and
properties in good condition and repair in accordance  with the  requirements of
its business and not permit any action or omission which might materially impair
the value thereof, normal wear and tear excepted.

     (f)  Performance of Contracts.  Perform and comply with, in accordance with
its terms,  all material  provisions  of each and every  contract,  agreement or
instrument now or hereafter binding upon it, except to the extent it may contest
the provisions thereof in good faith and by proper proceedings.

     (g) Punctual  Payment.  Sellers  shall pay the  dividends on the  Preferred
Stock and the  principal  of and interest on the Note at the times and place and
in the manner provided in the Note and herein.

     (h) Access to  Information.  At any reasonable  time and from time to time,
TNDE and the Subsidiaries shall permit Purchaser or any representatives  thereof
to examine and make copies of and extracts from the records and books of account
of, and visit and inspect the properties of, TNDE and the  Subsidiaries,  and to
discuss the affairs, finances and accounts of TNDE and the Subsidiaries with any
of their officers or directors and independent accountants.

     (i)  Compliance.  TNDE shall comply,  and cause each  Subsidiary to comply,
with all  applicable  laws of the United  States  and of each  other  applicable
jurisdiction  relating to employee  safety and workplace  practices  under OSHA,
Environmental Laws and equal employment opportunity, and any rules, regulations,
administrative  orders and Executive  Orders relating thereto and the applicable
terms, of any government  contract relating thereto;  and keep, maintain or file
all necessary permits,  filings,  reports,  plans and forms required to be kept,
maintained or filed, pursuant

                                      -26-

<PAGE>



to any such applicable law or the terms of any such  government  contract if the
failure to comply would have a Material Adverse Effect; provided,  however, TNDE
shall not be considered  to have failed to comply with the foregoing  during any
period that any matter relating to TNDE or the Subsidiaries'  practices is being
contested by TNDE or the Subsidiaries in appropriate  proceedings in good faith,
or thereafter if TNDE and the Subsidiaries  comply with any final  determination
issued in such proceedings.

     (j) Termination and Post-Closing  Agreement.  Deliver to Purchaser,  within
five (5) days of  TNDE's  receipt  thereof,  notice  and a copy of any  proposed
modification,  amendment,  waiver,  consent or other change of the rights of any
party under, as well as a copy of any modification,  amendment,  waiver, consent
or other  change of the rights of any party  granted  under (i) the  Termination
Agreement  dated December __, 1997, by and among TNDE,  ProEco,  NDE, Canada and
BOCP (the  "Termination  Agreement"),  or (ii) the Post-Closing  Agreement dated
December __, 1997, by and between TNDE and BOCP (the "Post-Closing Agreement").

     Section 10. Negative Covenants.

     Until payment in full of the Note,  TNDE shall not and shall not permit any
of the  Subsidiaries  to,  unless  the prior  written  consent of  Purchaser  is
obtained:

     (a)  Other   Indebtedness.   Create  or  incur,   contract,   assume,  have
outstanding,  guarantee or otherwise be or become directly or indirectly  liable
in respect of any Indebtedness; provided however, that this Section shall not be
deemed to prohibit:

          (i)  The Senior Indebtedness;

          (ii) Up to  $750,000.00  of  Indebtedness  (exclusive of  Indebtedness
               referred to in this Section 10(a)(i),  (iii), (iv), (v), (vi) and
               (vii) hereof);

          (iii)Capitalized  lease  financing  or  purchase  money for  equipment
               which is secured by the equipment so leased or purchased;

          (iv) Indebtedness of any Subsidiary to TNDE or another Subsidiary;

          (v)  Existing indebtedness identified in Schedule 3;

          (vi) Indebtedness  incurred  with respect to BOCP pursuant to the BOCP
               Agreement which is extinguished at Closing;

          (vii)Operating  leases  entered into by TNDE or the  Subsidiaries  (to
               the extent that such leases  would  otherwise  be included in the
               definition of "Indebtedness").

                                      -27-

<PAGE>




     (b) Prepayments.  Pay any Indebtedness  prior to its scheduled  maturity or
scheduled  payment date other than the Note or the Senior Loans or  indebtedness
incurred under the BOCP Agreement which will be extinguished at Closing.

     (c) Liens.  Grant,  create,  incur,  assume,  permit or suffer to exist any
Lien,  upon any of its  properties  or assets,  whether  now owned or  hereafter
acquired; provided however, that this section shall not be deemed to prohibit:

          (i)  other  Liens  incidental  to the  conduct of its  business or the
               ownership  of  its  property  and  assets  which  do  not  secure
               Indebtedness and which do not in the aggregate materially detract
               from the value of its property or assets or materially impair the
               use thereof in the operation of its business;

          (ii) Liens on property or assets of a Subsidiary to secure obligations
               of such Subsidiary to TNDE or another Subsidiary; and

          (iii) Permitted Liens.

     (d) Leases. Enter into or permit to remain in effect any operating lease as
lessee,  other than operating leases entered into in the ordinary course of TNDE
or the Subsidiaries' business; provided that this section shall not be deemed to
prohibit leases described on Schedule 4 hereof.

     (e) Loans,  Advances and  Investments.  Make or have  outstanding any loan,
advance or capital  contribution  to, or investment in (including any investment
in any  Person),  or purchase  or  otherwise  acquire any of the Capital  Stock,
securities   or  evidences   of   indebtedness   of  any  Person   (collectively
"Investment"),  or otherwise  acquire any  interest  in, or control of,  another
Person, except for the following:

          (i)  Cash Equivalents;

          (ii) Any  acquisition  of securities or evidences of  indebtedness  of
               others when acquired by TNDE or the Subsidiaries in settlement of
               accounts receivable or other debts arising in the ordinary course
               of its  business,  so long as the  aggregate  amount  of any such
               securities  or evidences of  indebtedness  is not material to the
               business or condition  (financial  or  otherwise) of TNDE and the
               Subsidiaries;

          (iii)Travel and other  advances to officers and employees of TNDE or a
               Subsidiary in the ordinary course of business;


                                      -28-

<PAGE>



          (iv) Other  loans,   advances  and  investments,   provided  that  the
               aggregate   principal  and  interest   amount  thereof  which  is
               outstanding at no time exceeds $250,000.00; and

          (v)  TNDE or Construction may operate a general contracting service to
               provide   outsourcing   and   project   management   related   to
               construction  projects for customers of TNDE or the Subsidiaries;
               provided that, the equity investment in, or loans to Construction
               may not exceed $250,000.00.

     (f) No  Acquisition  or Merger.  Acquire by  purchase or  otherwise  all or
substantially  all of the  assets  or  Capital  Stock of any  Person or merge or
consolidate with or into any Person, except that:

          (i)  Any  Subsidiary  may  merge  or  consolidate  with or into  TNDE,
               provided that TNDE is the continuing or surviving corporation;

          (ii) Any  Subsidiary  may merge or  consolidate  with or into  another
               Subsidiary; and

          (iii)Subject to the  provisions  of ss.3 of the  Warrant  Certificate,
               TNDE may merge with any other solvent corporation,  provided that
               (a) TNDE shall be the continuing or surviving corporation and (b)
               no Event of Default then exists or would exist  immediately after
               giving effect to such merger.

     (g)  Sale of Stock  or  Indebtedness  of  Subsidiaries.  Sell or  otherwise
dispose of, or part with control of, any shares of Capital Stock or Indebtedness
of any  Subsidiary,  except to TNDE or another  Subsidiary,  and except that all
shares of Capital Stock and  Indebtedness of any Subsidiary at the time owned by
or owed  to TNDE  and all  Subsidiaries  may be sold as an  entirety  for a cash
consideration  which  represents  the fair value (as determined in good faith by
the Board of  Directors  of TNDE) at the time of sale of the  shares of  Capital
Stock and Indebtedness  sold;  provided that (A) such sale or other disposition,
if treated as a transfer of assets of such  Subsidiary,  would be  permitted  by
Section 10(j) and (B) at the time of such sale, such  Subsidiary  shall not own,
directly or indirectly, any shares of Capital Stock or Indebtedness of any other
Subsidiary  (unless  all of the shares of stock and  Indebtedness  of such other
Subsidiary  owned  directly  or  indirectly,  by TNDE and all  Subsidiaries  are
simultaneously being sold as permitted by this Section 10(g)).

     (h) Sales and Lease  Backs.  Dispose of any of its assets  except for full,
fair  and  reasonable  consideration,  or enter  into  any  sale  and  leaseback
agreement covering any of its fixed or capital assets.


                                      -29-

<PAGE>



     (i)  Restrictions on Dividends.  Directly or indirectly  declare or make or
incur any liability to make any Dividend  other than  Dividends  with respect to
securities owned by Purchaser.

     (j)  Transfers,   Liquidations  and  Dispositions  of  Substantial  Assets.
Dissolve or  liquidate  or sell,  transfer,  lease or  otherwise  dispose of any
material  portion  of its  property  or assets or  business,  other  than in the
ordinary course of business, except that:

          (i)  any Subsidiary may Transfer assets to TNDE or another Subsidiary;

          (ii) TNDE or any Subsidiary may sell inventory in the ordinary  course
               of business; and

          (iii)TNDE or any Subsidiary may otherwise  Transfer  assets,  provided
               that  the   aggregate   assets   Transferred   by  TNDE  and  the
               Subsidiaries   combined  shall  not  exceed  $250,000.00  in  any
               twelve-Month period.

     (k) Restricted  Payments.  Make, pay or declare,  or commit to make, pay or
declare,  any  Restricted  Payment,  other than  payments  made with  respect to
dividends or securities owned by Purchaser, without the prior written consent of
Purchaser  except that so long as no Event of Default shall have occurred and be
continuing,  or would result  therefrom,  TNDE may repurchase Common Shares from
employees of TNDE or the Subsidiaries upon termination of employment pursuant to
arrangements approved by the Board of Directors.

     (l) Business  Activities.  Engage in any business  activities or operations
substantially different from or unrelated to its present business; provided that
TNDE or the Subsidiaries may engage in the operation of a construction  business
pursuant to Paragraph 10(e)(v) hereof.

     (m)  Transactions  with Affiliates.  Enter into any transaction,  including
without limitation,  the purchase, sale or exchange of property or the rendering
of any services, with any Affiliate or any partner, officer or director thereof,
enter into, assume or suffer to exist any employment or consulting contract with
any  Affiliate  or any  partner,  officer or  director  thereof or any former or
current officer or director of TNDE, except any transaction or contract which is
in the  ordinary  course  of TNDE's or the  Subsidiaries'  business  or which is
permitted  pursuant to  Paragraph  10(e)(v)  hereof,  and which is upon fair and
reasonable terms no less favorable to TNDE or the  Subsidiaries  than they would
obtain in a comparable arms-length transaction with a person not an Affiliate.

     (n) ERISA Plans. Adopt or agree to maintain or contribute to any ERISA Plan
without the prior  written  consent of  Purchaser,  which  consent  shall not be
unreasonably  withheld.  TNDE shall promptly notify  Purchaser in writing in the
event an ERISA Affiliate adopts an ERISA Plan.


                                      -30-

<PAGE>



     (o) Change in Principal Office. Move its principal office, executive office
or principal place of business without prior written notice to Purchaser.

     (p) Termination  Agreement and  Post-Closing  Agreement.  Without the prior
written  consent of  Purchaser,  modify,  amend,  grant any consent or waiver or
otherwise agree to change any party's rights under the Termination  Agreement or
the  Post-Closing  Agreement,  which would or may adversely affect the rights or
interests of Purchaser.

     Section 11. Financial Tests.

     Until payment in full of the Note, TNDE and the Subsidiaries  shall, unless
Purchaser waives compliance  therewith in writing,  meet the following Financial
Tests.

     (a) Total Liabilities to Net Worth Ratio.  TNDE and the Subsidiaries  shall
maintain,  at all times, a ratio of Total  Liabilities  less  Subordinated  Debt
(including  any preferred  stock,  warrants or other  subordinated  debt) to Net
Worth plus Subordinated  Debt (including any preferred stock,  warrants or other
subordinated  debt) of not  greater  than  the  ratio  set  forth  opposite  the
applicable period below:

          Period Ending                                                   Ratio

          Closing Date through December 31, 1997                        2.50:1.0
          Thereafter through June 30, 1998                              2:25:1.0
          Thereafter through December 31, 1998                          2.00:1.0
          Thereafter through December 31, 1999                          1.75:1.0
          Thereafter through December 31, 2000                          1.75:1.0
          Thereafter through December 31, 2001                          1.75:1.0
          Thereafter through the Maturity Date                          1.75:1.0

     (b) Net Worth.  TNDE and the Subsidiaries  shall maintain a total Net Worth
of not less than the Net Worth of TNDE and the  Subsidiaries  as of December 31,
1997  less $1  Million,  calculated  cumulatively  as of the  end of  each  year
beginning  with the year ending  December  31, 1998.  In addition,  TNDE and the
Subsidiaries shall maintain, as of the end of each Fiscal Quarter other than the
Fiscal  Quarter  ending on December 31 of any fiscal  year, a total Net Worth of
not less than the Net Worth of TNDE and the Subsidiaries as of December 31, 1997
less $1.8 Million.

     (c) Debt Service Coverage Ratio. TNDE and the Subsidiaries shall maintain a
Debt Service Coverage Ratio of 0.30 to 1.0 for the three (3) months ending March
31, 1998;  0.60 to 1.0 for the six (6) months ending June 30, 1998;  1.10 to 1.0
for the nine (9) months ending  September  30, 1998;  1.35 to 1.0 for the twelve
(12) months ending December 31, 1998; and 1.50 to 1.0 thereafter,  calculated on
a rolling four quarter basis.


                                      -31-

<PAGE>



     Section 12. Events of Default.

     The Events of Default are as stated in the Note a form of which is attached
as Exhibit A.

     Section 13. Miscellaneous.

     (a) No Implied  Rights or Waivers.  No notice to or demand on Sellers shall
entitle Sellers to any other or further notice or demand in the same, similar or
other  circumstances  except as required by this Agreement.  Neither any failure
nor any  delay  on the part of  Purchaser  in  exercising  any  right,  power or
privilege  hereunder  or under the Note,  the  Preferred  Shares or the  Warrant
Certificate  shall  operate as a waiver  thereof,  nor shall a single or partial
exercise  thereof  preclude  any other or  further  exercise  of the same or the
exercise of any other right, power or privilege.

     (b) Modifications,  Amendments or Waivers. TNDE and Purchaser may from time
to time enter into written agreements amending or changing any provision of this
Agreement  or the rights  hereunder  or give  waivers or consents to a departure
from the due performance of their  obligations  hereunder,  with such waivers or
consents  not to be  unreasonably  withheld,  provided  that no  departure  from
Sellers' due performance of its obligations  hereunder shall be effective unless
agreed to in writing by  Purchaser;  provided  further  that,  the terms of this
Agreement  may not be modified or changed  except by a writing  executed by both
TNDE and the Purchaser.

     (c) Accounting Terms. All accounting terms not specifically  defined herein
shall be construed in accordance with GAAP.

     (d)  Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the laws of the State of Delaware.

     (e) Severability. If any provision of this Agreement is held to be invalid,
void  or  unenforceable,  the  remaining  provisions  of  this  Agreement  shall
nevertheless continue in full force and effect.

     (f) Third Party  Beneficiaries.  The  obligations  of each Party under this
Agreement  shall inure solely to the benefit of the other Parties,  and no other
person or entity shall be a third party beneficiary of this Agreement.

     (g) Rules of Construction.  Unless otherwise specified, the following rules
shall be applied in construing  the provisions of this Agreement and the Related
Documents:

          (i)  Terms  that  imply  gender  shall  be  construed  to apply to all
               genders.

          (ii) References to Paragraphs,  Sections, Schedules and Exhibits refer
               to the numbered  Paragraphs of, Sections of, the Schedules of and
               the

                                      -32-

<PAGE>



               Exhibits  attached to this Agreement or any Related Documents (as
               applicable).

          (iii)Headings  to  the  various  Sections  of  this  Agreement  or any
               Related   Documents  (as  applicable)  are  included  solely  for
               purposes  of  reference  and shall be ignored in  construing  the
               provisions  of  this  Agreement  or  any  Related  Documents  (as
               applicable).

          (iv) The Exhibits and  Schedules  attached to this  Agreement  and the
               attached Related Documents are incorporated herein by reference.

          (v)  "Herein", "hereto", "hereof" and words of similar import refer to
               this Agreement.

          (vi) The word  "and"  connotes  "each  and  every",  and the word "or"
               connotes "any one or more".

          (vii)The word "including" connotes "including without limitation".

          (viii) Any  reference to any law or  regulation  refers to that law or
               regulation  as amended from  time-to-time  after the date of this
               Agreement or any Related  Documents  (as  applicable)  and to the
               corresponding provision of any successor law or regulation.

          (ix) Any  reference  to  any  agreement  or  other  document  in  this
               Agreement or any Related Documents (as applicable) refers to that
               agreement or other  document as amended from  time-to-time  after
               the  date  of  this  Agreement  or  any  Related   Documents  (as
               applicable).

          (x)  The recitals  included in this Agreement or any Related Documents
               (as applicable) are the mutual representations of the Parties and
               are a part  of  this  Agreement  or  any  Related  Documents  (as
               applicable).

     (h) 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 given to 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 business day actually  received if hand  delivered or if
transmitted  by telefax or if  delivered or  transmitted  on a day that is not a
business  day,  then the next business day; or (iii) one business day after such
notice was delivered to an overnight delivery service,  addressed,  delivered or
transmitted in each case as follows:


                                      -33-

<PAGE>



                  Purchaser:

                  DH Holdings Corp.
                  1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION: Vice President
                  Telephone:         (202) 828-0850
                  Telefax:           (202) 828-0860

                  With a Courtesy Copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut 06070
                  ATTENTION:  Steven H. Sigmon, President
                  Telephone:         (860) 651-2735
                  Telefax:           (860) 651-2727

                  If to any Seller, a single notice to:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

     (i)  Assignment.  Except as otherwise  provided in this  Agreement  and the
Related  Documents,  neither  this  Agreement  nor any of the  rights  or duties
hereunder may be assigned by any

                                      -34-

<PAGE>



Party without the prior written  consent of each of the other  Parties,  and any
assignment attempted without such prior consent shall be null and void; provided
that the rights and  obligations of DH Holdings  Corp.  under this Agreement and
the Related  Documents may be transferred or assigned to Danaher  Corporation or
to any Affiliate of Danaher Corporation.

     (j)  Further  Acts and  Documents.  Each of the  parties  hereby  agrees to
execute and deliver  such  further  instruments  and to do such further acts and
things  as may be  necessary  or  desirable  to carry out the  purposes  of this
Agreement.

     (k) Counterparts.  This Agreement may be executed in multiple counterparts,
each  of  which  shall  be  deemed  to be an  original  and all of  which  shall
constitute one and the same agreement.

     (l)  Payments.  All payments by Seller to Purchaser  hereunder or under the
Note should be made to an account in Delaware designated by the Purchaser.

     The Parties  have  caused  this  Agreement  to be  executed  and  delivered
effective as of the date first written above.

                            Sellers:
                                             TANKNOLOGY-NDE INTERNATIONAL, INC.

                                                  //s//  JAY ALLEN CHAFFEE
                                             By:  Jay Allen Chaffee

                                             Its: Chairman of the Board

                                             PROECO, INC.

                                                  //s//  JAY ALLEN CHAFFEE
                                             By:  Jay Allen Chaffee

                                             Its: Chairman



                                      -35-

<PAGE>



                                             TANKNOLOGY/NDE CORPORATION


                                                  //s//  JAY ALLEN CHAFFEE
                                             By:  Jay Allen Chaffee

                                             Its: Chairman 


                                             236862 CANADA, INC.


                                                  //s//  JAY ALLEN CHAFFEE
                                             By:  Jay Allen Chaffee

                                             Its:  President




                                             TANKNOLOGY-NDE CONSTRUCTION 
                                                  SERVICES, INC.


                                                  //s//  JAY ALLEN CHAFFEE
                                             By:  Jay Allen Chaffee

                                             Its: Chairman 


                           Purchaser:
                                             DH HOLDINGS CORP.

                                             By:  //s//  DANIEL L. COMAS
                                             
                                             Its: Vice President





                                      -36-

<PAGE>
                      Exhibit A - Senior Subordinated Note
<PAGE>
                     Exhibit B - Certificate of Designation
<PAGE>
                         Exhibit C - Warrant Certificate
<PAGE>
                  Exhibit D - Certificate of Responsible Party
<PAGE>
                       Exhibit E - Opinion of TNDE Counsel
<PAGE>
                        Exhibit F - Preemption Agreement
<PAGE>
                    Exhibit G - Certificate of Incorporation
<PAGE>
                        Exhibit H - Opinion of DH Counsel
<PAGE>
                               Schedule 1 - Liens
<PAGE>
                            Schedule 2 - Trade Names
<PAGE>
                            Schedule 3 - Indebtedness
<PAGE>
                               Schedule 4 - Leases
<PAGE>
                        Schedule 5 - Financial Statements
<PAGE>
                      Schedule 6 - Shareholder Information
<PAGE>
                          Schedule 7 - TNDE Obligations
<PAGE>

                                 EXHIBIT 10.46





 -------------------------------------------------------------------------------


                            SENIOR SUBORDINATED NOTE


 -------------------------------------------------------------------------------





<PAGE>



                                TABLE OF CONTENTS
                                                                            Page

1.   Definitions, Rules of Construction and Notice.............................2
     1.1    Accelerated.......................................................2
     1.2    Affiliate.........................................................2
     1.3    Affirmative Covenants.............................................2
     1.4    Applicable Law....................................................2
     1.5    Business Day......................................................2
     1.6    Collateral........................................................2
     1.7    Company...........................................................2
     1.8    Financial Tests...................................................2
     1.9    Indebtedness......................................................2
     1.10   Insolvency Proceeding.............................................3
     1.11   Insolvency Law....................................................3
     1.12   Insolvency Relief.................................................3
     1.13   Insolvency Order..................................................3
     1.14   Intercreditor Agreement...........................................3
     1.15   Interest..........................................................3
     1.16   Lien..............................................................3
     1.17   Litigation.......................................................3
     1.18   Negative Covenants................................................3
     1.19   Notice............................................................4
     1.20   Quarter...........................................................4
     1.21   Related Documents.................................................4
     1.22   Reporting Covenants...............................................4
     1.23   Representation(s) and Warranty(ies)...............................4
     1.24   Security Documents................................................4
     1.25   Senior Indebtedness...............................................4
     1.26   Senior Loans......................................................4
     1.27   Senior Loan Agreement.............................................4
     1.28   UCC...............................................................4

2.   Maturity and Pay Off......................................................5

3.   Interest..................................................................5

4.   Principal Amount..........................................................6

5.   Prepayments...............................................................6

6.   Late Payments.............................................................6



                                        i

<PAGE>



7.   Payments and Wiring Instructions..........................................6

8.   Events of Default.........................................................7
     (a)    Enumeration of Defaults............................................7
     (b)    Payment Default....................................................7
     (c)    Affirmative Covenant Default.......................................7
     (d)    Reporting Covenant Default.........................................7
     (e)    Negative Covenant Default..........................................7
     (f)    Warranty Default...................................................7
     (g)    Financial Test Default.............................................7
     (h)    Cross Default......................................................8
     (i)    Subordination Default..............................................8
     (j)    Security Default...................................................8
     (k)    Voluntary Insolvency Default.......................................8
     (l)    Insolvency Order...................................................8
     (m)    Fraudulent Conveyance Default......................................9

9.   Remedies and Acceleration.................................................9
     (a)    Remedies...........................................................9
     (b)    Acceleration of Payment............................................9
     (c)    Waiver of Default..................................................9

10.  Waivers by Maker.........................................................10

11.  Security for Payment.....................................................10

12.  Intercreditor Agreement..................................................10

13.  Collection for Costs.....................................................10

14.  Amendment................................................................10

15.  Governing Law............................................................11

16.  Waiver of Jury Trial.....................................................11

17.  Consent to Jurisdiction, Venue and Service of Process....................11

18.  Non Negotiability; Non Assignability; Non-Transferability................11



                                       ii

<PAGE>



                            SENIOR SUBORDINATED NOTE

Date                         December 23, 1997

Maker                        Tanknology-NDE International, Inc., a Delaware
                             corporation, ProEco, Inc., a Delaware corporation,
                             Tanknology/NDE Corporation, a Delaware
                             corporation, 2368692 Canada, Inc., a Canadian
                             Federal corporation and Tanknology-NDE
                             Construction Services, Inc., a Delaware
                             corporation.

Payee                        DH Holdings Corp., a Delaware corporation.

Principal Amount             $6,500,000

Stated Interest Rate         10% per annum

Default Interest Rate        14% per annum

Payment                      Date   Payments   to  be  made   in  12   quarterly
                             installments  commencing on March 31, 2000 with the
                             final installment due on December 31, 2002.

Maturity Date                December 31, 2002


     This is the Senior  Subordinated  Note due  December  31, 2002 (the Note)
provided  for in  that  certain  Note,  Preferred  Stock  and  Warrant  Purchase
Agreement, dated as of December 23, 1997, as amended, restated,  supplemented or
otherwise modified from time to time (the Purchase  Agreement) by and among DH
Holdings Corp., a Delaware corporation (DH), as Purchaser,  and Tanknology-NDE
International, Inc. (TNDE), a Delaware corporation, ProEco, Inc. (ProEco), a
Delaware   corporation,   Tanknology/NDE   Corporation   (NDE),   a   Delaware
corporation,  2368692 Canada, Inc.  (Canada),  a Canadian Federal corporation,
and Tanknology-NDE  Construction  Services,  Inc.  (Construction),  a Delaware
corporation,  as Sellers.  DH,  together  with its  successors  and assigns,  is
referred to herein as  Payee.  TNDE,  ProEco,  NDE,  Canada and  Construction,
together with their respective successors and assigns, are each individually and
collectively referred to herein as Maker.

     FOR VALUE RECEIVED, each Maker hereby jointly and severally PROMISES TO PAY
TO THE ORDER of Payee the principal  amount of SIX MILLION FIVE HUNDRED THOUSAND
DOLLARS ($6,500,000), together with Interest (as defined herein), upon the terms
and subject to the conditions set forth in this Note.


                                        1

<PAGE>



     1. Definitions, Rules of Construction and Notice

     As used herein, the following terms have the following meaning,  unless the
context otherwise requires:

     1.1   Accelerated   (and  correlative   terms  such  as   Acceleration,
Accelerating  and  Accelerated)  means  with  respect  to this Note that the
entire unpaid Principal  Amount,  together with all accrued but unpaid Interest,
becomes immediately due and payable prior to the Maturity Date, without,  except
as expressly  provided for in this Note, notice of intent to accelerate,  notice
of acceleration of maturity, presentment,  demand, protest, notice of protest or
other  notice of default or  dishonor of any type  whatsoever,  all of which are
expressly waived by Maker.

     1.2  Affiliate   means  any  person  or  entity  directly  or  indirectly
controlling,  controlled  by or under  direct or indirect  common  control  with
respect to the specified person or entity.

     1.3  Affirmative  Covenants  means  the  covenants  of TNDE set  forth in
Section 9 of the Purchase Agreement.

     1.4  Applicable  Law  means,  with  respect  to any  person,  any and all
federal,  national, state, regional, local, municipal or foreign laws, statutes,
rules,  regulations,  guidelines,  ordinances,  licenses,  permits,  judicial or
administrative  decisions of any country, or any political subdivision,  agency,
commission, official or court thereof having jurisdiction over such person.

     1.5 Business Day means any day other than a Saturday,  Sunday or day upon
which banking  institutions are authorized or required by law or executive order
to be closed in the City of Wilmington, Delaware.

     1.6  Collateral is the collateral  defined in the Pledge Agreement by and
between TNDE and DH and the Subordinated  Security  Agreement by and among TNDE,
ProEco, NDE, Canada, Construction and DH both dated as of December 23, 1997.

     1.7  Company  means  Tanknology-NDE   International,   Inc.,  a  Delaware
corporation,  together  with  its  Subsidiaries  (as  defined  in  the  Purchase
Agreement).

     1.8 Financial Tests means the financial tests with respect to the Company
set forth in Section 11 of the Purchase Agreement.

     1.9  Indebtedness  means with respect to the  Company,  as of any date of
determination, (i) all indebtedness of the Company for borrowed money or for the
deferred purchase price of property or services or which is evidenced by a note,
bond, debenture,  or similar instrument,  reflected on the most recent financial
statements, (ii) all obligations of the Company under any financing lease, (iii)
all obligations of the Company in respect of letters of credit,  acceptances, or
similar  obligations issued or created for the account of the Company,  (iv) all
guaranty obligations of the Company, and (v) all liabilities secured by any lien



                                        2

<PAGE>



on any property owned by the Company,  whether or not the Company has assumed or
otherwise  become  liable  for the  payment  thereof;  provided  that,  the term
Indebtedness  shall  not  include  any  obligations  incurred  with  regard to
obtaining  performance  bonds and  payment  bonds  relating  to the  business of
Construction.

     1.10 Insolvency Proceeding means a proceeding before a court of competent
jurisdiction or other duly authorized authority under any Insolvency Law seeking
Insolvency Relief.

     1.11  Insolvency  Law means  Title 11 of the United  States  Code (or any
successor  law)  or  any  similar   Applicable  Law  providing  for  bankruptcy,
insolvency, conservatorship, receivership or other similar debtor's relief.

     1.12  Insolvency  Relief means  discharge of  indebtedness,  liquidation,
reorganization or arrangement,  appointment of a receiver, trustee, conservator,
custodian or liquidator or the granting of any stay or restraining order against
creditors  under any Insolvency Law or other similar  debtor's  relief under any
Insolvency Law.

     1.13 Insolvency Order means any order,  judgment or decree entered in any
Insolvency Proceeding granting any Insolvency Relief.

     1.14  Intercreditor  Agreement means the  Intercreditor and Subordination
Agreement  dated as of December 23, 1997, by and between DH and Bank One, Texas,
N.A., as modified, amended or restated from time to time.

     1.15 Interest has the meaning set forth in ss. 3 hereof.

     1.16 Lien means any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance, lien (whether statutory or otherwise), or preference,
priority or other security agreement or similar preferential  arrangement of any
kind or nature whatsoever (including,  without limitation,  any conditional sale
or other title retention agreement, any financing lease having substantially the
same economic  effect as any of the  foregoing,  and the filing of any financing
statement   under  the  uniform   commercial  code  or  comparable  law  of  any
jurisdiction in respect of any of the foregoing).

     1.17  Litigation  means any litigation  based upon or arising out of this
Note or any Related  Documents or any related  instrument or agreement or any of
the transactions contemplated by the Purchase Agreement, this Note or any course
of conduct,  dealing,  statements (whether oral or written) or actions of any of
the parties.

     1.18 Negative  Covenants  mean the covenants of TNDE set forth in Section
10 of the Purchase Agreement.



                                        3

<PAGE>



     1.19 Notice  means notice given in  accordance  with Section 13(h) of the
Purchase Agreement.

     1.20  Quarter  means each quarter  annual period of the Fiscal Year,  and
Quarterly means each Quarter. Each Quarter consists of three Months.

     1.21  Related   Documents  means  the  Purchase   Agreement,   Note,  the
Subordinated  Security  Agreement,  the Pledge Agreement,  the Preemptive Rights
Agreement,  the  Registration  Rights  Agreement,  the  Co-Sale  Agreement,  the
Certificate of Designation and the Warrant  Certificate entered into pursuant to
the Purchase Agreement.

     1.22 Reporting Covenants mean the covenants of Maker set forth in Section
8 of the Purchase Agreement.

     1.23  Representation(s)  and Warranty(ies)  means the representations and
warranties of each Maker set forth in Section 6 of the Purchase Agreement and in
any  certificate  of Maker  delivered  pursuant  to  Section  5 of the  Purchase
Agreement.

     1.24 Security Documents means the Subordinated Security Agreement between
TNDE, ProEco, NDE, Canada,  Construction and DH and the Pledge Agreement between
TNDE and DH both dated as of December 23, 1997.

     1.25 Senior Indebtedness means the Senior Loans and Indebtedness incurred
pursuant  to the terms of any  agreement  between  the  Company  and any bank or
financial  institution  providing  for  revolving  credit  loans  secured by the
Collateral;  provided that, any other agreement shall be consented to in writing
by DH, which consent  shall not be  unreasonably  withheld,  and the lender with
respect thereto shall have been granted a first perfected  security  interest in
the  Collateral  on terms  substantially  equivalent  to those  set forth in the
Senior  Security  Agreement  (as  defined in the  Purchase  Agreement);  further
provided that, the term Senior  Indebtedness  may include up to $11 million of
Indebtedness  incurred by the Company to replace the indebtedness  incurred with
respect to the  Senior  Loan  Agreement  and such debt  replacement  need not be
consented to by DH; provided further that,  notwithstanding  the foregoing,  any
such replacement of Indebtedness by the Company on terms  materially  adverse to
DH shall not be undertaken without the prior written consent of DH.

     1.26  Senior  Loans  means  the term  loan and  revolving  line of credit
granted  by Bank  One,  Texas,  N.A.  to TNDE and  certain  of its  subsidiaries
pursuant to the Senior Loan Agreement,  including all  extensions,  renewals and
refinancings thereof.

     1.27 Senior Loan Agreement means the Loan Agreement,  dated as of October
25,  1996,  by TNDE,  certain of its  subsidiaries  and Bank One,  Texas,  N.A.,
including all amendments, extensions, renewals and refinancings thereof.

     1.28 UCC means the Uniform  Commercial  Code as in effect in the State of
Delaware.


                                        4

<PAGE>



     The rules of construction  set forth in ss.13(g) of the Purchase  Agreement
and the notice provisions set forth in ss.13(h) of the Purchase  Agreement shall
be applicable to this Note.

     2. Maturity and Pay Off

     The unpaid principal amount of this Note (the Principal Amount), together
with all  accrued  but unpaid  Interest  shall be due and payable in full on the
Maturity Date (specified above). Payment of the Principal Amount and all accrued
but  unpaid  Interest  may be  Accelerated  upon the  occurrence  of an Event of
Default as provided for in ss.9 of this Note.

     The date  upon  which the  Principal  Amount  and all  accrued  but  unpaid
Interest  is paid or  discharged  in full is  referred to as the Pay Off Date.
Upon  written  Notice by Maker to Payee,  Payee will  furnish to Maker a pay off
letter setting forth the amount of the payment of Principal  Amount and Interest
required to pay this Note in full as of a specified Pay Off Date.

     3. Interest

     Interest  shall accrue from the date of this Note through and including the
Pay Off Date on the unpaid  Principal  Amount at the Interest  Rate  (defined in
this  Section)  (Interest).  All  accrued  but unpaid  Interest  shall be paid
Quarterly in arrears on each Payment Date (specified above), commencing with the
first Payment Date after the date of this Note.

     The  Interest  Rate  shall be a fixed rate per annum  equal to the Stated
Interest  Rate  (specified  above) unless the Default  Interest Rate  (specified
above) is in effect. Upon the occurrence of an Event of Default and the election
by Payee, in the sole exercise of its discretion, to impose the Default Interest
Rate by giving Notice of that  election to Maker (the Default Rate  Election),
the  Interest  Rate  shall be a fixed  rate  per  annum  equal to the  Default
Interest Rate, and the Default  Interest Rate shall continue to be the Interest
Rate until the first Payment Date after the Default Rate Election at which such
Event of Default  has been  remedied  or waived by  Purchaser  in writing and no
other Default or Event of Default is continuing unremedied or unwaived, provided
that the Note has not been Accelerated.

     Notwithstanding any provision of this Note to the contrary: (i) in no event
shall the  Interest  Rate be a rate per annum in excess of the maximum  interest
rate  permissible  under  Applicable Law and (ii) to the extent that Interest or
other  amounts  paid with  respect to this Note which are deemed to be  interest
under  Applicable Law result in interest  payments in excess of those  permitted
under  Applicable  Law, such excess  payments shall be applied to the payment of
the unpaid  Principal  Amount or, if the Principal Amount has been paid in full,
shall be refunded to Maker.

     Interest  shall be  calculated  based upon:  (i) the actual  number of days
elapsed over each Quarter,  including any  additional  days elapsed  because the
scheduled Payment Date fell on a non- Business Day; (ii) Quarters  consisting of
three months; and (iii) Quarterly compounding of any Interest accrued but unpaid
as of each Payment Date.


                                        5

<PAGE>



     4. Principal Amount

     The Principal  Amount shall be paid in 12  installments  of  $541,666.67 of
Principal  Amount each,  payable  Quarterly on each Payment Date,  commencing on
March 31,  2000,  and  continuing  until the  earlier of the Pay Off Date or the
Maturity Date. In the event of any partial prepayment of Principal Amount,  each
such partial  prepayment  shall be applied to pay the scheduled  installments of
Principal   Amount  in  inverse  order  of  the  Payment  Dates  on  which  such
installments are due and payable.

     5. Prepayments

     Maker may prepay the Principal  Amount in whole at any time or in part from
time to time; provided,  that (i) each partial payment of Principal Amount shall
be in an amount equal to $250,000 or an integral  multiple thereof and (ii) each
partial  prepayment  of Principal  Amount shall be applied to pay the  scheduled
installments of Principal  Amount in inverse order of the Payment Dates on which
such installments are due and payable.

     All prepayments of Principal  Amount shall be accompanied by the payment of
all Interest  accrued but unpaid through the date of prepayment  with respect to
the Principal Amount prepaid.

     6. Late Payments

     A payment of Principal  Amount or Interest shall be deemed to be in default
if such  payment  is not made in the  manner  provided  for in ss.7 of this Note
prior to 2:00 p.m. on the fifth calendar day following  Notice by Payee to Maker
of such default.

     7. Payments and Wiring Instructions

     All  payments  of  Principal  Amount  and  Interest  shall  be made by wire
transfer  of  immediately  available  funds to the account of Payee at or before
2:00 p.m.  Wilmington,  Delaware  time on the  Business Day that such payment is
due. Any wire transfer  received by Payee after 2:00 p.m.  Wilmington,  Deleware
time on any Business Day shall be deemed to have been received by Payee prior to
such time on the next Business Day.

     Unless  payment is otherwise  specified in a Notice by Payee to Maker to be
made to another  account in the State of Delaware,  all such  payments  shall be
wired in accordance with the following instructions:

         Wilmington Trust Company
         ABA# 
         Account No. 
         Account Name: Danaher Corporation



                                        6

<PAGE>



     In the event that any scheduled  Payment Date falls on a non-Business  Day,
such Payment Date shall be deemed to be the next  Business  Day  following  such
scheduled Payment Date, and such additional days shall be deemed to have elapsed
for purposes of computing the accrued Interest payable on such Payment Date.

     8. Events of Default

          (a)  Enumeration of Defaults. Each of the following events shall be an
               Event of Default  for the  purposes  of this Note.  An Event of
               Default shall be deemed to continue  until such default is waived
               by  written  Notice  by Payee to Maker or  remedied  by action of
               Maker,  and, in the case of any Event of Default requiring Notice
               by Payee to Maker,  if the Default is not cured  within the grace
               period   provided  for  herein   following  such  Notice,   until
               rescission of such Notice by the further  written Notice of Payee
               to Maker.  The term  Default  means  any event  which is not an
               Event of Default as of a specified date, but which with the lapse
               of time, notice or both would constitute an Event of Default.

          (b)  Payment  Default.  Maker  defaults in the payment when due of any
               installment of Principal Amount or Interest,  and such default is
               not remedied in the manner and within the grace  period  provided
               for in ss.6 of this Note (a Payment Default). A Payment Default
               shall be deemed to have  occurred  notwithstanding  the fact that
               the  default  in  payment   resulted  from   compliance  with  or
               enforcement of the Intercreditor Agreement.

          (c)  Affirmative  Covenant Default.  Maker fails to observe or perform
               any Affirmative  Covenant and such default is not remedied within
               30 calendar  days after Notice is given by Payee to Maker of such
               default.

          (d)  Reporting Covenant Default. Maker fails to observe or perform any
               Reporting  Covenant and such  default is not  remedied  within 30
               calendar  days  after  Notice  is given by Payee to Maker of such
               default.

          (e)  Negative Covenant Default.  Maker fails to observe or perform any
               Negative  Covenant  and such  default is not  remedied  within 30
               calendar  days  after  Notice  is given by Payee to Maker of such
               default.

          (f)  Warranty Default.  Any  Representation or Warranty proves to have
               been untrue,  incomplete or  misleading  in any material  respect
               when made or when deemed to have been made and such breach is not
               completely remedied within 30 calendar days after Notice is given
               by Payee to Maker of such default.

          (g)  Financial   Test   Default.   As  of  any   applicable   date  of
               determination,  Maker fails to satisfy any of the Financial Tests
               and such failure  remains  uncured for a period of 30 consecutive


                                        7

<PAGE>



               calendar  days  after  Notice  is given by Payee to Maker of such
               default;  provided  that,  the 30 day cure period of this Section
               8(g) shall not apply to Section 11(c) of the Purchase Agreement.

          (h)  Cross Default.  Maker defaults in the payment of any Indebtedness
               with an  unpaid  principal  amount  in  excess  of  $25,000,  but
               specifically excluding (A) the $300,000 principal amount Gilbarco
               Patent Note  identified  in the Purchase  Agreement,  and (B) any
               purchase money obligation, the payment of which is being actively
               contested  in good  faith  by  Maker  (as  guarantor,  surety  or
               principal)  regardless of whether  (i) such  default is waived by
               the obligee unless such waiver  constitutes full  satisfaction of
               all  amounts   then  due  and   payable,   (ii)  payment  of  any
               Indebtedness of Maker is accelerated, (iii) the contractual right
               of Maker to  borrow  money  under any  loan,  credit  or  similar
               agreement or  arrangement is suspended as a result of any default
               by Maker with respect to such  agreement or  arrangement  or (iv)
               any action to enforce  payment  of any  Indebtedness  of Maker is
               commenced  against  Maker  or  with  respect  to  any  collateral
               securing such Indebtedness,  unless such default, acceleration or
               action is remedied or rescinded  within a period of 10 days after
               Notice is given by Payee to Maker of such default.

          (i)  Subordination  Default.  Any agreement with respect to the Senior
               Indebtedness   is  amended  or  modified  in   violation  of  the
               Intercreditor  Agreement, the blocking period provided for in the
               Intercreditor  Agreement is commenced,  payment of any amount due
               under  this  Note  is  prevented  due to  compliance  with or the
               enforcement  of  the   Intercreditor   Agreement  or  any  amount
               previously  paid with  respect to this Note are repaid or held in
               constructive  trust  by  Payee  due  to  compliance  with  or the
               enforcement  of  the  Intercreditor   Agreement  or  Maker  seeks
               forbearance  with respect to the payment of any amounts due under
               the Senior Indebtedness.

          (j)  Security Default. Maker defaults in the observance or performance
               of  any  covenant  or  agreement   required  under  the  Security
               Documents and such default  continues for a period of 30 calendar
               days after Notice is given by Payee to Maker of such default.

          (k)  Voluntary Insolvency Default. Maker: (i) discontinues the conduct
               of its business;  (ii) applies for or consents to the  imposition
               of any Insolvency Relief; (iii) voluntarily commences or consents
               to the  commencement of an Insolvency  Proceeding;  (iv) files an
               answer  admitting  the material  allegations  of any  involuntary
               commencement  of an  Insolvency  Proceeding;  (v) makes a general
               assignment for the benefit of its creditors; or (vi) is unable or
               admits in writing its  inability  to pay its debts as they become
               due (a Voluntary Insolvency Default).

          (l)  Insolvency  Order.  Any Insolvency Order is entered against Maker
               and such  Insolvency  Order is not  dismissed  within 30 calendar
               days of its entry (an Involuntary Insolvency Default).


                                        8

<PAGE>



          (m)  Fraudulent  Conveyance Default.  Maker: (i) conceals,  removes or
               permits  to be  concealed  or  removed  all  or any  part  of its
               property  with the intent to hinder,  delay or defraud any of its
               creditors;  (ii) makes or permits any  conveyance of its material
               properties that would be deemed fraudulent to creditors under any
               Insolvency Law or fraudulent  conveyance  provision of Applicable
               Law;  (iii)  engages in a bulk  transfer  of any of its  property
               without complying with the bulk transfer provisions of Applicable
               Law; (iv) has, while it is insolvent,  caused or permitted any of
               its  creditors  to obtain a Lien on any of its  property by legal
               proceedings or otherwise  which is not vacated within 30 calendar
               days.

     9. Remedies and Acceleration

     (a) Remedies.  After payment of this Note is Accelerated,  Payee shall have
(i) all  rights  and  remedies  granted  to it under  this  Note,  the  Purchase
Agreement  and the  Security  Documents  and  continue  to have the  rights  and
remedies granted to it under the other Related  Documents and (ii) all rights of
a  creditor  under  Applicable  Law  (including  the UCC).  All such  rights and
remedies and the exercise  thereof shall be cumulative.  No exercise of any such
rights and remedies shall be deemed to be exclusive or constitute an election of
remedies.

          (b)  Acceleration  of  Payment.  Upon the  occurrence  of a  Voluntary
               Insolvency Default or an Involuntary Insolvency Default,  payment
               of this Note shall be Accelerated. Upon the occurrence and during
               the continuation of any other Event of Default, Payee may, in the
               sole exercise of its  discretion,  elect to cause payment of this
               Note to be  Accelerated by giving written Notice of such election
               to Maker (the Acceleration  Notice).  Once payment of this Note
               has been  properly  Accelerated  as provided for in this section,
               such  Acceleration  may be  revoked  only by  Payee,  in the sole
               exercise of its  discretion,  giving written Notice of revocation
               to Maker,  regardless of whether the Event of Default giving rise
               to such Acceleration has been remedied by action of Maker.

          (c)  Waiver of  Default.  No Default or Event of Default may be waived
               nor  shall be deemed to have  been  waived  except by an  express
               written  Notice by Payee to Maker,  and any such  grant of waiver
               shall be  applicable  only to the specific  Defaults or Events of
               Default  expressly  identified  in such  Notice  and shall not be
               deemed to apply to any other or  subsequent  Default  or Event of
               Default.  Payee may grant or withhold any such waiver in the sole
               exercise of its  discretion,  which may be  conditioned  upon the
               payment by Maker of a premium, the grant of additional collateral
               to secure  the  payment of this Note or the  acceptance  of other
               terms and conditions  under this Note or the Purchase  Agreement.
               No  course  of  dealing  by Payee or its  agents  and  employees,
               failure,  forbearance  or delay by Payee in exercising any of its
               rights or remedies under this Note, the Purchase  Agreement,  the


                                        9

<PAGE>



               Security  Documents or any other Related  Documents shall operate
               as a waiver of any Default or Event of Default or of any right of
               Payee under this Note.

     10. Waivers by Maker

     To the fullest  extent  permitted  by  Applicable  Law,  Maker  waives with
respect to this Note: presentment, protest and demand, notice of protest, demand
and dishonor, and diligence in collection.  Maker agrees that: Payee may release
(i) all or any part of the collateral  securing the payment of this Note or (ii)
any guarantor or surety with respect to this Note,  all without  notice to Maker
and without affecting in any way the obligation of Maker under this Note.

     11. Security for Payment

     Payment  of this  Note is  secured  under  the  terms  and  subject  to the
conditions  of the Security  Documents.  Nothing in this Note shall be deemed to
preclude  Payee from obtaining  other or additional  security for the payment of
this  Note or to  require  Payee  to  elect  remedies  or  proceed  against  any
collateral or guarantee before  Accelerating  payment of this Note or taking any
legal or other action to collect payment of this Note.

     12. Intercreditor Agreement

     Payee and Bank One, Texas,  N.A.  (BOT) are parties to the  Intercreditor
Agreement,  pursuant to which certain of Payee's  rights under this Note and the
Security  Documents are  subordinated to BOT. Nothing in this Note, the Purchase
Agreement or such  Intercreditor  Agreement shall grant to Maker any rights as a
beneficiary under such Intercreditor  Agreement nor any right to enforce against
Payee any provision of such Intercreditor Agreement.

     13. Collection for Costs

     Maker  shall  reimburse  Payee  for  all  reasonable   costs  and  expenses
(including  legal fees and  disbursements)  incurred by Payee in connection with
the collection or attempted collection of the payment of this Note through legal
proceedings or otherwise.

     14. Amendment

     This Note may not be amended, restated,  supplemented or otherwise modified
except by an express  written  agreement  executed  and  delivered  by Maker and
Payee.  Compliance with the covenants and other  provisions of this Note may not
be waived except by an express written waiver signed and delivered by Payee.



                                       10

<PAGE>



     15. Governing Law

     This Note and the rights and obligations of Payee and Maker under this Note
shall be governed by and construed under the laws of the State of Delaware.

     16. Waiver of Jury Trial

     Payee and Maker,  after consulting or having had the opportunity to consult
with legal counsel, knowingly, voluntarily and intentionally waive any right any
of them may have to a trial by jury in any  Litigation.  Neither Payee nor Maker
shall seek to consolidate,  by counterclaim or otherwise,  any action in which a
jury trial has been waived with any other action in which a jury trial cannot be
or has not been  waived.  These  provisions  shall  not be  deemed  to have been
modified  in any  respect or  relinquished  by either  Payee or Maker  except by
written instrument executed by both of them.

     17. Consent to Jurisdiction, Venue and Service of Process

     Payee and Maker,  each after having consulted or having had the opportunity
to consult with legal counsel, hereby knowingly,  voluntarily and intentionally:
(i)  consents to the  jurisdiction  of the Delaware  State Court  sitting in New
Castle County,  Delaware and the United States District Court with  jurisdiction
over New Castle County, Delaware with respect to any Litigation; (ii) waives any
objections to the venue of any Litigation in either such court; (iii) agrees not
to commence any Litigation  except in one or the other of such courts and agrees
not to contest the removal of any Litigation commenced in any other court to one
or the other of such courts; (iv) agrees not to seek to remove, by consolidation
or  otherwise,  any  Litigation  commenced in either of such courts to any other
court;  and (v)  waives  personal  service of  process  in  connection  with any
Litigation and consents to service of process by registered or certified mail in
accordance  with Applicable  Law. These  provisions  shall not be deemed to have
been modified in any respect or  relinquished by either Payee or Maker except by
written instrument executed by all of them.

     18. Non Negotiability; Non Assignability; Non-Transferability

     This Note shall be non-negotiable,  non-assignable and non-transferable and
any  attempted  negotiation,  assignment,  or  transfer  shall be void and of no
effect,  without  the express  written  consent of the Maker;  provided  that DH
Holdings Corp. may negotiate,  assign, or transfer this Note without the consent
of the Maker to Danaher Corporation or to any Affiliate of Danaher Corporation.


     IN WITNESS  WHEREOF,  this Note has been  executed and  delivered by and on
behalf of Maker by its duly authorized officer, effective as of the Date of Note
(set forth above).



                                       11

<PAGE>


TANKNOLOGY-NDE INTERNATIONAL, INC.


By:  //s//  JAY ALLEN CHAFFEE
Name:     Jay Allen Chaffee
Title:    Chairman


PROECO, INC.


By:  //s//  JAY ALLEN CHAFFEE
Name:     Jay Allen Chaffee
Title:    Chairman


TANKNOLOGY/NDE CORPORATION


By:  //s//  JAY ALLEN CHAFFEE
Name:     Jay Allen Chaffee
Title:    Chairman


2368692 CANADA, INC.


By:  //s//  JAY ALLEN CHAFFEE
Name:     Jay Allen Chaffee
Title:    President


TANKNOLOGY-NDE CONSTRUCTION SERVICES, INC.


By:  //s//  JAY ALLEN CHAFFEE
Name:     Jay Allen Chaffee
Title:    Chairman



                                       12
<PAGE>
                                 EXHIBIT 10.47




--------------------------------------------------------------------------------



                 DISTRIBUTION, SERVICES AND MARKETING AGREEMENT


--------------------------------------------------------------------------------



                          Dated as of December 23, 1997





<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

ARTICLE 1
     SPIRIT OF AGREEMENT; COOPERATION..........................................1
          1.1      Spirit of Agreement.........................................1
          1.2      Cooperation.................................................1
          1.3      Type of Agreement...........................................1
          1.4      Transaction.................................................1

ARTICLE 2
     DEFINITIONS...............................................................1
          2.1      "Agreement".................................................1
          2.2      "Agreement Term"............................................1
          2.3      [reserved]..................................................2
          2.4      [reserved]..................................................2
          2.5      "Authorized Distributor"....................................2
          2.6      "Authorized Service Company"................................2
          2.7      "Auxiliary Leak Detection Retrofit System"..................2
          2.8      "Claim".....................................................2
          2.9      "CMS".......................................................2
          2.10     "Compliance Management Services"............................2
          2.11     "Confidential Information"..................................2
          2.12     "Demand"....................................................2
          2.13     "Dispute"...................................................2
          2.14     "Distribution Territory"....................................2
          2.15     "Effective Date"............................................2
          2.16     "Indemnitee"................................................2
          2.17     "Indemnitor"................................................2
          2.18     "Installation Services".....................................3
          2.19     "JAMS"......................................................3
          2.20     "Level III Certification"...................................3
          2.21     "Litigation"................................................3
          2.22     "Losses"....................................................3
          2.23     "National Account Pricing"..................................3
          2.24     [reserved]..................................................3
          2.25     "Parties"...................................................3
          2.26     "Party".....................................................3



                                        i

<PAGE>



          2.27     "Remote Monitoring".........................................3
          2.28     "Simplicity Petroleum Data Services"........................3
          2.29     "Third Party"...............................................3
          2.30     "TNDE"......................................................4
          2.31     "TNDE Standard Price(s)"....................................4
          2.32     "Value Added Reseller"......................................4
          2.33     "VR"........................................................4
          2.34     "VR Products"...............................................4

ARTICLE 3
     TERM; RENEWAL.............................................................4
          3.1      Term........................................................4
          3.2      Renewal.....................................................4
          3.3      Termination for Cause ......................................4
          3.4      Survival....................................................5

ARTICLE 4
     DISTRIBUTION AGREEMENT....................................................5
          4.1      Appointment.................................................5
          4.2      Authorized Service Company..................................5
          4.3      Non-Compete.................................................5
          4.4      VR Products.................................................6
          4.5      Distribution Territory......................................6
          4.6      Purchases of VR Products by TNDE............................6
          4.7      Orders and Delivery.........................................6
          4.8      Shipment Obligations........................................6
          4.9      Designation of TNDE as a "Value Added Reseller".............7
          4.10     Prices for VR Products......................................7

ARTICLE 5
     INSTALLATION SERVICES.....................................................7
          5.1      Purchases of Installation Services..........................7
          5.2      Price of Installation Services..............................7
          5.3      Installation Preferences and Obligations....................7

ARTICLE 6
     COMPLIANCE MANAGEMENT SERVICES............................................8



                                       ii

<PAGE>



          6.1      VR's Grant of Exclusive Right to Perform 
                   Compliance Management Services to TNDE......................8
          6.2      Non-Compete.................................................8
          6.3      Consents....................................................8
          6.4      Listing of Customers........................................8
          6.5      Purchase of CMS by VR.......................................8

ARTICLE 7
     SIMPLICITY PETROLEUM DATA SERVICES........................................9
          7.1      Grant of  Non-Exclusive Right to Sell Simplicity 
                   Petroleum Data Services.....................................9
          7.2      Purchase of Simplicity Petroleum Data Services..............9
          7.3      Allocation of Revenues......................................9

ARTICLE 8
     REMOTE MONITORING SERVICES AND RELATIONSHIPS..............................9
          8.1      Transfer of Remote Monitoring Relationships to VR...........9
          8.2      Acknowledgment..............................................9
          8.3      Non-Compete.................................................9
          8.4      Access to Facilities.......................................10
          8.5      Allocation of Revenues.....................................10

ARTICLE 9
     AUXILIARY LEAK DETECTION RETROFIT........................................10
          9.1      Auxiliary Leak Detection Retrofit License Agreement........10

ARTICLE 10
     MARKETING AND SALES......................................................10
          10.1     Commercially Reasonable Efforts of TNDE....................10
          10.2     Commercially Reasonable Efforts of VR......................10
          10.3     Facilities and Staff-TNDE..................................11
          10.4     Facilities and Staff-VR....................................11
          10.5     Promotional Literature-TNDE................................11
          10.6     Promotional Literature-VR..................................11
          10.7     Technical Sales Support-TNDE...............................11
          10.8     Technical Sales Support-VR.................................12
          10.9     Marketing and Sales Coordination; Standards of Performance.12
          10.10    Performance Target Reports.................................12



                                       iii

<PAGE>




ARTICLE 11
     ACCESS TO INFORMATION....................................................13
          11.1     Technical Support-TNDE.....................................13
          11.2     Technical Support-VR.......................................13

ARTICLE 12
     CONFIDENTIALITY OF INFORMATION...........................................13
          12.1     Confidentiality Provisions.................................13
          12.2     Return of Information......................................14
          12.3     Remedies...................................................14

ARTICLE 13
     DISPUTE RESOLUTION.......................................................14
          13.1     Informal Dispute Resolution................................14
          13.2     Institution of Formal Resolution Proceedings...............15
          13.3     Arbitration................................................15
          13.4     Immediate Injunctive Relief................................16
          13.5     Continued Performance......................................16

ARTICLE 14
     AUDITS...................................................................16
          14.1     Audit Rights...............................................16

ARTICLE 15
     LIMITATIONS ON RECRUITING................................................17
          15.1     Limitations on Recruiting..................................17

ARTICLE 16
     INDEMNIFICATION..........................................................17
          16.1     Indemnification of TNDE....................................17
          16.2     Indemnification of VR......................................17
          16.3     Infringement Indemnity of TNDE.............................18
          16.4     Infringement Indemnity of VR...............................18
          16.5     Exclusive Remedy for Infringement Claims...................18
          16.6     Indemnification for Third Party Claims.....................18
          16.7     Contractual Statute of Limitations.........................19
          16.8     Allocation of Risks........................................20




                                       iv

<PAGE>



ARTICLE 17
     MUTUAL REPRESENTATIONS AND WARRANTIES....................................20
          17.1     Mutual Representations and Warranties......................20
          17.2     Warranties.................................................20

ARTICLE 18
     TAXES....................................................................21
          18.1     Resale Certificates........................................21

ARTICLE 19
     ASSIGNMENTS..............................................................21
          19.1     No Assignment Without Consent..............................21
          19.2     Procedures for Assignment..................................21

ARTICLE 20
     MISCELLANEOUS............................................................21
          20.1     No Implied Rights or Waivers...............................21
          20.2     Modifications, Amendments or Waivers.......................21
          20.3     Accounting Terms...........................................21
          20.4     Entire Agreement...........................................22
          20.5     Severability...............................................22
          20.6     Third Party Beneficiaries..................................22
          20.7     Rules of Construction......................................22
          20.8     Notices....................................................23
          20.9     Further Acts and Documents.................................24
          20.10    Counterparts...............................................24
          20.11    Force Majeure..............................................24
          20.12    Governing Law..............................................24
          20.13    Waiver of Jury Trial.......................................24
          20.14    [reserved].................................................25
          20.15    Joint Customers............................................25





                                        v

<PAGE>



                 DISTRIBUTION, SERVICES AND MARKETING AGREEMENT

     This  Distribution,  Services and Marketing  Agreement  (the  "Agreement"),
dated  as of  December  __,  1997  (the  "Effective  Date"),  is by and  between
Tanknology-NDE  International,   Inc.,  a  Delaware  corporation  ("TNDE"),  and
Veeder-Root Company, a Delaware corporation ("VR").


                                    ARTICLE 1
                        SPIRIT OF AGREEMENT; COOPERATION

     1.1 Spirit of Agreement.  TNDE and VR recognize that optimum performance of
this Agreement requires a cooperative working environment  established upon good
communications and a good faith working relationship between both Parties. It is
within  this  cooperative  spirit  that  TNDE and VR agree  to  interact  in the
performance of this Agreement.

     1.2  Cooperation.  The Parties will cooperate with each other in good faith
in the  performance of the activities  contemplated  by this Agreement  through,
among other things, making available,  as reasonably requested,  such management
decisions, information,  approvals,  authorizations and acceptances so that each
Party may fulfill its obligations hereunder in a timely and efficient manner.

     1.3 Type of Agreement.  This  Agreement is not a partnership  agreement and
shall not be construed as creating any duties,  obligations  or rights which are
independent of this Agreement and which would  otherwise arise in the context of
a partnership.

     1.4  Transaction.  This Agreement is being entered into in consideration of
and as a condition to DH Holdings Corp.'s execution, delivery and performance of
that certain Note,  Preferred Stock and Warrant Purchase Agreement between TNDE,
certain of its subsidiaries, and DH Holdings Corp. (the "Purchase Agreement").


                                    ARTICLE 2
                                   DEFINITIONS

     For the purposes of this Agreement,  the following  definitions shall apply
to the respective capitalized terms:




                                        1

<PAGE>



     2.1  "Agreement" means this Distribution,  Services and Marketing Agreement
          dated as of the Effective Date by and between TNDE and VR.

     2.2  "Agreement Term" is defined in Section 3.2.

     2.3  [reserved]

     2.4  [reserved]

     2.5  "Authorized   Distributor"   means   a   non-exclusive,    independent
          organization selling to the retail and wholesale petroleum industry of
          which the customers  would  include  independent  gas station  owners,
          major oil  companies  and certain  direct  consumers  of gasoline  and
          related fuel oil products in accordance with a marketing plan mutually
          acceptable to such distributor and VR.

     2.6  "Authorized   Service   Company"  means  a  independent   organization
          servicing   petroleum   equipment   owned  or  operated  by  petroleum
          marketers, such as major and independent oil companies, retail service
          stations,   oil  equipment   jobbers,   tank  builders  and  fuel  oil
          distributors.

     2.7  "Auxiliary  Leak  Detection  Retrofit  System"  means  a  device  that
          enhances  the  capabilities  of  existing  tank  gauges by adding data
          logging,  data storage,  and communications  capabilities that TNDE is
          developing in conjunction with a data logger  manufacturer and outside
          contractors.

     2.8  "Claim" is defined in Section 16.6.

     2.9  "CMS" means Compliance Management Services.

     2.10 "Compliance  Management Services" means those services that facilitate
          regulatory  compliance  for storage  tank  owners,  including  but not
          limited to, the services described on Exhibit A.

     2.11 "Confidential Information" is defined in Section 12.1.

     2.12 "Demand" is defined in Section 13.3.

     2.13 "Dispute" is defined in Section 13.1.




                                        2

<PAGE>



     2.14 "Distribution Territory" is defined in Section 4.5.

     2.15 "Effective Date" means the date first written above.

     2.16 "Indemnitee" is defined in Section 16.6.

     2.17 "Indemnitor" is defined in Section 16.6.

     2.18 "Installation  Services"  means the common  activities  conducted on a
          customer's site to install gauge systems and their components.

     2.19 "JAMS" is defined in Section 13.3.

     2.20 "Level  III  Certification"  means  installation   checkout,   startup
          training and line leak detection, programming and operations training,
          system  troubleshooting,  service  techniques  and  warranty  dispatch
          program  training in connection  with all VR underground  storage tank
          monitoring systems.

     2.21 "Litigation" is defined in Section 20.13.

     2.22 "Losses" means losses,  liabilities,  damages,  actions, claims, costs
          and expenses (including reasonable attorneys' fees and disbursements).

     2.23 "National  Account  Pricing" means,  as to each Party,  the prices and
          pricing terms  customarily  charged by such Party to its  significant,
          national  customers for products  and/or  services of the nature to be
          provided hereunder.

     2.24 [reserved]

     2.25 "Parties" means TNDE and VR collectively.

     2.26 "Party" means any one of the Parties.

     2.27 "Remote Monitoring" means the monitoring via modem of gauge systems 24
          hours per day/ 365 days per year by technically  trained and competent
          personnel  to ensure  that the gauges  are  functioning  properly,  to
          ensure compliance with the leak detection requirements as set forth in
          40 CFR 280, and to minimize  environmental  liability  associated with
          storage tanks.




                                        3

<PAGE>



     2.28 "Simplicity  Petroleum  Data Services"  means a remote  monitoring and
          data collection service that connects trained  technicians to line and
          tank  monitoring  equipment  installed  at  customer  sites,  as  more
          particularly described on Exhibit B.

     2.29 "Third  Party"  means a person  other  than  TNDE,  VR,  any  officer,
          director or employee  of TNDE or VR, any  Affiliate  of TNDE or VR and
          any  officer,  director or employee  of any  Affiliate  of TNDE or VR,
          where the term  "Affiliate"  means any person  directly or  indirectly
          controlling, controlled by, or under direct or indirect common control
          with the specified  person,  where a person shall be deemed to control
          another person if such person possesses,  directly or indirectly,  the
          power to direct or cause the direction of the  management and policies
          of such person, whether through the ownership of voting securities, by
          contract or otherwise.

     2.30 "TNDE" means Tanknology-NDE International, a Delaware corporation.

     2.31 "TNDE Standard  Price(s)"  means the then current list pricing of TNDE
          gauge installation  services and Compliance Management Services for US
          customers or any other pricing the Parties mutually agree to.

     2.32 "Value  Added  Reseller"  means a person  who is limited to selling VR
          products  or  services  only  in  conjunction  with  the  sale of such
          person's own products or services.

     2.33 "VR" means Veeder-Root Company, a Delaware corporation.

     2.34 "VR Products" is defined in Section 4.4.


                                    ARTICLE 3
                                  TERM; RENEWAL

     3.1 Term. The initial term of this Agreement will commence on the Effective
Date and will continue until December 31, 2000, unless earlier terminated by the
mutual consent of the Parties or in accordance with Section 3.3 or 3.5 below.

     3.2 Renewal.  Upon  expiration of the initial term of this  Agreement,  the
term of this Agreement  will  automatically  be renewed for successive  one-year
periods  unless either Party gives written  notice to the other Party,  at least




                                        4

<PAGE>



thirty days before the  scheduled  date of expiration of the initial term or any
renewal  term,  that the term of this  Agreement  will not be so  extended.  The
initial  term of this  Agreement,  together  with any  such  renewal  terms,  is
referred to herein as the "Agreement Term."

     3.3 Termination  for Cause.  Subject to the provisions of this Section 3.3,
either  Party  may  terminate  this  Agreement  at  any  time  after  the  first
anniversary  of the Effective  Date for cause. A Party shall only have the right
to  terminate  this  Agreement  for cause upon the  determination  of a panel of
arbitrators,  pursuant  to the  procedures  set forth in Article 13 that are not
initiated  until after the first  anniversary  of the Effective  Date,  that the
other Party failed to use  "commercially  reasonable  efforts" in performing its
obligations  hereunder  where such Party was  required  to do so pursuant to the
terms of this  Agreement.  In the  event  one Party  (the  "Terminating  Party")
terminates  this Agreement for cause,  all of the rights and obligations of each
Party set forth  herein  shall  terminate  except (i) as provided in Section 3.4
below and (ii) that if the  Terminating  Party is VR all of the  non-competition
provisions  applicable to TNDE shall continue in full force and effect until the
expiration  of  the  Agreement  Term.  Such   termination   shall  be  effective
immediately upon notice by the Terminating  Party to the  non-Terminating  Party
following completion of the procedures set forth in Article 13.

     3.4 Survival. Following the expiration or termination of all or any portion
of this  Agreement,  whether for cause or otherwise,  the rights and obligations
relating to Confidential  Information pursuant to Article 12 shall survive for a
period of five years from the date of  termination  or expiration and the rights
and  obligations  relating  to  indemnification  pursuant  to Article 13 for any
Losses  incurred  prior  to the date of such  termination  or  expiration  shall
survive as provided in Section 16.7.

     3.5 Failure to Make Payment  Under  Purchase  Agreement.  In the event that
TNDE is in default under the Note or Preferred Stock (as defined in the Purchase
Agreement)  for failure to make payments of principal or interest on the Note or
dividends on the Preferred Stock, and all applicable notice and cure periods, if
any,  have lapsed,  (a) VR may give notice to  terminate  this  Agreement  which
termination  shall be  effective  as set out in such notice and (b) TNDE may not
terminate the Agreement for cause under Section 3.3 until such default is cured.

                                    ARTICLE 4
                             DISTRIBUTION AGREEMENT




                                        5

<PAGE>



     4.1 Appointment.  Subject to the terms and conditions of this Agreement, VR
hereby grants to TNDE, and TNDE hereby accepts from VR, the non-exclusive  right
to market,  sell,  install,  maintain  and support  the  products  and  services
referred to in Section 4.4 (the "VR Products") within the territory  referred to
in Section 4.5 (the "Distribution  Territory").  Except upon the prior,  written
consent of VR, TNDE shall be prohibited from appointing or otherwise authorizing
any subdistributors,  dealers, agents or other resellers under this Article 4 or
otherwise assigning any of its duties or obligations hereunder. If TNDE appoints
or otherwise authorizes any subdistributors,  dealers, agents or other resellers
with the  consent  of VR under  this  Agreement,  a copy of the  appointment  or
authorization  shall  be  delivered  to  VR.  In the  event  of  termination  or
expiration of this  Agreement,  VR shall have the right,  without any obligation
whatsoever to TNDE, directly or indirectly,  to enter into an agreement with any
such  Third  Party  appointed  by  TNDE or to  cause  TNDE to  assign  any  such
agreement, at VR's option, to VR or its designee.

     4.2 Authorized Service Company. Subject to the terms and conditions of this
Agreement,  VR hereby  appoints  TNDE as an  Authorized  Service  Company for VR
Products,  on the most favorable  terms and  conditions as any other  Authorized
Service Company for VR Products has been or in the future is appointed. A sample
of such terms and conditions as of the date hereof is attached hereto as Exhibit
C. VR further agrees to provide  advertising and sales  incentives,  credits and
rebates which are  consistent  with the most favorable  incentives,  credits and
rebates which are offered to any other Authorized  Service  Company,  Authorized
Distributor,  or Value  Added  Reseller.  TNDE  agrees  to use its  commercially
reasonable  efforts to enable its service  technicians  to achieve and  maintain
Level III Certification.

     4.3  Non-Compete.  TNDE covenants and agrees that it shall not,  during the
Agreement  Term,  without the express prior written consent of VR (which consent
may be withheld in the sole discretion of VR), manufacture,  distribute, market,
promote or sell,  directly or indirectly,  any products or services that compete
directly with VR Products and  Simplicity  Petroleum  Data  Services  within the
Distribution  Territory;  provided that nothing set forth herein shall be deemed
to limit or restrict TNDE from installing products that compete directly with VR
Products or providing any of its currently  existing  services,  field services,
construction  services or  compliance  management  services and its  maintenance
management  services  (as  currently  planned  by TNDE) to  customers  utilizing
products  or  services  that  compete  directly  with VR. In no event shall TNDE
provide Remote Monitoring.

     4.4 VR Products. The term "VR Products" means gauging systems consisting of
in-tank level and various sensors operating in conjunction with a dedicated site
computer and line leak equipment that are manufactured and/or marketed by VR and




                                        6

<PAGE>



installed  permanently at a site in order to meet the leak detection regulations
as set forth in 40 CFR 280 and Simplicity  Petroleum  Data  Services,  which are
described on Exhibits B and D. Upon  reasonable  notice to TNDE,  VR may add new
products to or delete existing  products from Exhibit D, with such additions and
deletions becoming effective under this Agreement upon such notice. Upon consent
of TNDE (which consent may be withheld in the sole  discretion of TNDE),  VR may
add new  services  to Exhibit B. Any  changes to exhibits B and D shall apply to
the Non-Compete provided in section 4.3 above.

     4.5 Distribution  Territory.  The term  "Distribution  Territory" means the
United States of America and its Territories.

     4.6 Purchases of VR Products by TNDE. In  consideration  of the  foregoing,
TNDE agrees to use commercially reasonable efforts to purchase,  either directly
or  indirectly  through the sale of TNDE  services  which include the sale of VR
Products to  customers  of TNDE,  from VR, VR  Products in each of the  calendar
years 1998, 1999 and 2000.

     4.7 Orders and  Delivery.  Orders for VR Products by TNDE  pursuant to this
Agreement  will be placed  through VR's  regular  distribution  channel,  unless
otherwise  agreed in writing on a case-by-case  basis. All orders will be placed
in writing in accordance with the then current  standard VR order form terms and
conditions,  an example (as of the date hereof) of the terms and  conditions are
attached hereto as Exhibit E ("Terms and Conditions").  The terms and conditions
of all orders for VR Products  by TNDE  pursuant  to this  Agreement,  including
without limitation all shipment,  delivery,  inspection and cancellation  terms,
shall be governed by the then current, standard VR Terms and Conditions.

     4.8 Shipment  Obligations.  VR shall supply VR Products to TNDE in a timely
fashion which is consistent with the then current industry lead times. If at any
time, VR is unable to supply such VR Products to TNDE in a timely  fashion which
is consistent with the then current industry lead times, then VR shall so notify
TNDE and TNDE may purchase  substitute  products of similar like and kind from a
vendor of its  choosing,  until such time as VR notifies TNDE in writing that it
is capable of supplying  such products in a timely fashion  consistent  with the
then current  industry lead times.  Notwithstanding  any provision herein to the
contrary,  the  provisions of Section 4.3 shall not apply to purchases and sales
of products  that  compete  directly  with VR Products in  accordance  with this
Section 4.8.

     4.9 Designation of TNDE as a "Value Added  Reseller".  Subject to the terms
and  conditions  of this  Agreement,  VR hereby  appoints  TNDE as a Value Added
Reseller.  TNDE agrees that it will sell VR Products  and  Simplicity  Petroleum



                                        7

<PAGE>



Data Services only in  conjunction  with TNDE  Compliance  Management  Services,
field services and construction services.

     4.10 Prices for VR  Products.  For purposes of this  Agreement,  the amount
payable by TNDE for any VR Product sold,  either directly or indirectly  through
the sale of such  products to customers of TNDE,  to TNDE will conform to the VR
National Account Pricing; provided that, such National Account Pricing schedules
may be adjusted  from time to time in  accordance  with the then current  market
conditions.


                                    ARTICLE 5
                              INSTALLATION SERVICES

     5.1 Purchases of  Installation  Services.  In  consideration  of the mutual
promises and terms of this Agreement,  VR agrees to use commercially  reasonable
efforts to purchase from TNDE, either directly or indirectly through the sale of
Installation  Services  to VR  customers,  Installation  Services in each of the
calendar years 1998, 1999 and 2000.

     5.2 Price of Installation  Services.  For purposes of this  Agreement,  the
amount  payable for any  Installation  Services sold to VR by TNDE,  directly or
indirectly,  will conform to the TNDE National Account  Pricing.  TNDE agrees to
establish  and  maintain  current   National   Account  Pricing   schedules  for
Installation  Services based on common site configurations;  provided that, such
current National Account Pricing  schedules may be adjusted from time to time in
accordance with the then current market conditions.

     5.3 Installation Preferences and Obligations.  TNDE agrees that it will use
commercially  reasonable  efforts  to  accommodate  a request  for  Installation
Services  from VR in a timely  fashion.  In this regard,  TNDE will not give any
other customer's request for Installation Services priority over a prior request
for  Installation  Services by VR;  provided that, TNDE shall not be required to
grant priority to VR's request for Installation Services over another customer's
prior request for Installation Services.  TNDE and VR may mutually agree to give
certain requests for Installation Services by VR priority over certain of TNDE's
customers on a case by case basis. If at any time, TNDE is unable to supply such
Installation  Services in a timely  fashion  which is  consistent  with the then
current industry lead times, then VR may purchase substitute services of similar
like and  kind  from an  installer  of its  choosing,  until  such  time as TNDE
notifies  VR in  writing  that it is  capable  of  supplying  such  Installation
Services in a timely fashion consistent with then current industry lead times.




                                        8

<PAGE>




                                    ARTICLE 6
                         COMPLIANCE MANAGEMENT SERVICES

     6.1 VR's Grant of Exclusive Right to Perform Compliance Management Services
to TNDE. Subject to the terms and conditions of this Agreement, VR hereby grants
to TNDE,  and TNDE  hereby  accepts  from VR,  the  exclusive  right to  perform
Compliance   Management   Services  for  direct   customers  of  VR  within  the
Distribution  Territory  (provided that this exclusive  right shall not apply to
customers  of VR for whom  Compliance  Management  Services  are  provided  by a
distributor  of VR  which  is not an  Affiliate  of VR) who  consent  to  TNDE's
performance  of  Compliance  Management  Services  or from whom  consent  is not
required under any applicable  contract or law. In the event that TNDE is unable
to provide Compliance  Management  Services directly to customers of VR pursuant
to the  above  grant,  VR  agrees  to use  commercially  reasonable  efforts  to
subcontract  to TNDE as necessary to enable TNDE to perform and be paid for such
services.  TNDE shall not be prohibited from appointing or otherwise authorizing
any subcontractors,  agents or other resellers under this Article 6 or otherwise
assigning any of its rights, duties or obligations hereunder.

     6.2  Non-Compete.  VR  covenants  and agrees that it shall not,  during the
Agreement Term without the express prior written  consent of TNDE (which consent
may be withheld  in the sole  discretion  of TNDE),  perform,  either  directly,
indirectly or in  conjunction  with any other person or entity,  any  Compliance
Management  Services for any person or entity within the Distribution  Territory
(provided that this  non-compete  shall not apply to distributors of VR that are
no Affiliates of VR). The non-competition covenant set forth in this Section 6.2
shall  terminate  upon the first to occur of VR's  termination of this Agreement
pursuant to Section 3.3 or 3.5 or upon the expiration of the Term hereof.

     6.3 Consents. VR will use commercially reasonable efforts to (i) obtain all
consents  necessary  to  enable  TNDE  to  perform  and be paid  for  Compliance
Management  Services for both current customers of VR and future customers of VR
and (ii)  market and sell  Compliance  Management  Services  of TNDE to both its
existing and future customers.


     6.4 Listing of  Customers.  Periodically  as agreed to by the  Parties,  VR
shall provide TNDE with a current  version of a complete list of VR's  customers
for purposes of determining compliance with Section 6.1 hereof.




                                        9

<PAGE>



     6.5 Purchase of CMS by VR. VR agrees to use commercially reasonable efforts
to purchase from TNDE,  either  directly or indirectly  through the sale of such
services  to  customers  of VR,  Compliance  Management  Services in each of the
calendar years, 1998, 1999 and 2000.

     6.6 Fees for Compliance  Management Services.  Fees payable to TNDE for its
performance of Compliance  Management  Services shall be determined by reference
to the TNDE National  Account  Pricing for such services;  provided  that,  such
National  Account  Pricing  schedules  may be  adjusted  from  time  to  time in
accordance with the then current market conditions.

                                    ARTICLE 7
                       SIMPLICITY PETROLEUM DATA SERVICES

     7.1  Grant  of  Non-Exclusive  Right  to  Sell  Simplicity  Petroleum  Data
Services.  Subject  to the terms and  conditions  of this  Agreement,  VR hereby
grants to TNDE, and TNDE hereby accepts from VR, the non-exclusive right to sell
Simplicity  Petroleum Data Services within the  Distribution  Territory.  Except
upon the prior,  written consent of VR, TNDE shall be prohibited from appointing
or otherwise authorizing any subdistributors, dealers, agents or other resellers
under this Article 7 or  otherwise  assigning  any of its duties or  obligations
hereunder.

     7.2 Purchase of  Simplicity  Petroleum  Data  Services.  TNDE agrees to use
commercially  reasonable  efforts  to  purchase  from  VR,  either  directly  or
indirectly  through  the sale of such  services  to TNDE  customers,  Simplicity
Petroleum Data Services in each of the calendar years 1998, 1999 and 2000.

     7.3 Allocation of Revenues. Allocation of revenues with respect to the sale
of Simplicity  Petroleum Data Services will be determined by mutual agreement of
the Parties.


                                    ARTICLE 8
                  REMOTE MONITORING SERVICES AND RELATIONSHIPS

     8.1 Transfer of Remote  Monitoring  Relationships  to VR. Within 30 days of
the Effective Date of this Agreement, TNDE agrees to use commercially reasonable
efforts to  facilitate  the transfer of all Remote  Monitoring  obligations  and
Remote  Monitoring  rights with regard to all existing  and future  customers of
TNDE during the  Agreement  Term to VR,  provided  that,  TNDE shall  retain all
rights and obligations with regard to such customers other than Remote



                                       10

<PAGE>



Monitoring obligations and Remote Monitoring rights. VR agrees to assume any and
all  obligations  arising  after the  transfer  thereof  with  respect to Remote
Monitoring  obligations and Remote Monitoring rights  transferred by TNDE to VR.
In this regard,  VR's obligations will include  providing  customers with remote
monitoring,  maintenance and service which is available 24 hours a day, 365 days
per year.  In the event that VR is unable to provide  such  services and for the
duration of such inability,  TNDE may assume such obligations and any associated
rights.

     8.2  Acknowledgment.  VR  acknowledges  that some of the Remote  Monitoring
obligations and Remote Monitoring  rights  transferred may require VR to monitor
non-VR  gauge  systems  unless or until  such  gauge  systems  are  replaced  in
conformity with the terms of the applicable contracts.

     8.3  Non-Compete.  TNDE covenants and agrees that it shall not, without the
express prior written  consent of VR (which  consent may be withheld in the sole
discretion  of VR),  perform any Remote  Monitoring  services  for any person or
entity within the Distribution  Territory;  provided that, to the extent and for
the time period that VR is unable to perform its obligations pursuant to Section
8.1 hereof, TNDE may perform such Remote Monitoring services.

     8.4 Access to Facilities.  VR shall provide TNDE with reasonable  access to
its Remote Monitoring  facilities for purposes of fulfilling TNDE's  obligations
pursuant to the terms and provision of this Agreement.

     8.5 Allocation of Revenues. Allocation of revenues with respect to the sale
of Remote  Monitoring  services will be  determined  by mutual  agreement of the
Parties.


                                    ARTICLE 9
                        AUXILIARY LEAK DETECTION RETROFIT

     9.1 Auxiliary  Leak Detection  Retrofit  License  Agreement.  Following the
execution  and  delivery of this  Agreement,  the Parties  shall enter into good
faith  negotiations in an effort to enter into a License  Agreement  relating to
TNDE's  Auxiliary Leak Detection  Retrofit  System,  a form of which is attached
hereto as Exhibit F. TNDE  covenants  and  agrees  that  during the Term of this
Agreement, it shall not make, have made, use, sell, reproduce,  modify, license,
sublicense or otherwise  exploit in any manner,  in any country in the world, in
any  media,  whether  now  known or  hereafter  developed,  that  relate  to the
Auxiliary  Center Detection  Retrofit system and the technology  underlying such
system.



                                       11

<PAGE>





                                   ARTICLE 10
                               MARKETING AND SALES

     10.1  Commercially  Reasonable  Efforts of TNDE. During the Agreement Term,
TNDE  will use  commercially  reasonable  efforts  throughout  the  Distribution
Territory to diligently (i) promote,  solicit and obtain orders for VR Products,
(ii) promote,  solicit and obtain orders for Simplicity  Petroleum Data Services
and Remote Monitoring services, (iii) perform its installation,  maintenance and
support  services  in a timely  and  professional  manner and (iv)  develop  the
goodwill and reputation of VR. TNDE further agrees to give strong  preference in
the use of,  and to  promote  the sale  and use of VR  Products  and  Simplicity
Petroleum Data Services and Remote Monitoring services.  TNDE represents that it
possesses  the  experience,  skills and  resources  required  to carry out these
marketing and service activities.

     10.2 Commercially  Reasonable  Efforts of VR. During the Agreement Term, VR
will use commercially  reasonable efforts throughout the Distribution  Territory
to diligently (i) promote,  solicit and obtain orders for Installation Services,
Compliance  Management  Services and such other products and services offered by
TNDE,  as may be mutually  agreed upon by the  Parties,  (ii) perform its Remote
Monitoring  obligations  and Simplicity  Petroleum Data Services in a timely and
professional  manner and (iii) develop the goodwill and reputation of TNDE. With
consideration  given to the preferences of VR  distributors  and customers of VR
distributors,  VR further agrees to give strong preference in the use of, and to
promote the sale and use of TNDE's Compliance Management Services,  Installation
Services and other services and products of TNDE as may be mutually  agreed upon
by the Parties.  VR  represents  that it possesses  the  experience,  skills and
resources required to carry out these marketing and service activities.

     10.3 Facilities and Staff-TNDE. TNDE represents that it has or will possess
and maintain facilities and staff sufficiently trained to market the VR Products
and Simplicity Petroleum Data Services  effectively  throughout the Distribution
Territory during the Agreement Term. TNDE agrees that, without limitation,  such
sufficient  training  will  include the  attendance  of at least one  reasonably
appropriate  member of staff of TNDE at a three day training  conference that VR
shall  organize  and that shall be relevant  to any VR  Products  or  Simplicity
Petroleum Data Services being sold pursuant to this Agreement.  TNDE also agrees
to send such staff to  participate  in such  additional  training  programs  and
distributor meetings as VR may hold from time to time.




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<PAGE>



     10.4 Facilities and Staff-VR. VR represents that it has or will possess and
maintain  facilities  and staff  sufficiently  trained to market the  Compliance
Management  Services,  Installation  Services  and other  products  and services
offered  by TNDE as may be  mutually  agreed  upon  by the  Parties  effectively
throughout the Distribution Territory during the Agreement Term. VR agrees that,
without  limitation,  such sufficient training will include the attendance of at
least one reasonably  appropriate  member of staff of VR at a three day training
conference  that TNDE shall  organize  and that shall be  relevant to any of the
Compliance  Management  Services,  Installation  Services or other  products and
services of TNDE as may be mutually  agreed upon by the Parties being offered or
sold  pursuant  to  this  Agreement.  VR  also  agrees  to send  such  staff  to
participate in such additional  training  programs as TNDE may hold from time to
time.  All persons that VR uses to market the  Compliance  Management  Services,
Installation  Services or other products and services of TNDE as may be mutually
agreed upon by the Parties will be employees or  authorized  distributors  of VR
unless otherwise agreed on a case-by-case basis in writing.

     10.5  Promotional  Literature-TNDE.  TNDE may use the  brochures  and other
promotional  literature  describing VR Products and  Simplicity  Petroleum  Data
Services  in the  English  language  that  VR  may  provide  to  TNDE  (the  "VR
Promotional  Literature").   TNDE  will  affix  VR's  copyright  notice  to  all
reproductions  thereof. VR will bear all reproduction costs with respect to such
material.

     10.6  Promotional  Literature-VR.  VR  may  use  the  brochures  and  other
promotional  literature  describing the Compliance Management Services and other
products and services of TNDE in the English  language  that TNDE may provide to
VR (the "TNDE Promotional Literature"). VR will affix TNDE's copyright notice to
all reproductions thereof. TNDE will bear all reproduction costs with respect to
such material.

     10.7  Technical  Sales  Support-TNDE.  TNDE  agrees to  provide  sufficient
technical sales support to aid VR in the sale of Compliance Management Services,
Installation  Services,  and such other  services and products of TNDE as may be
mutually  agreed upon by the Parties for the  purposes of (i)  facilitating  the
terms  and  conditions  of  this   Agreement,   (ii)   developing  the  business
contemplated by this Agreement and (iii) enhancing the business  relationship of
the Parties.  Such support will include making  available at least one qualified
employee of TNDE to assist VR by  providing  technical  sales  support  upon the
reasonable request of VR.

     10.8 Technical Sales Support-VR.  VR agrees to provide sufficient technical
sales  support to aid TNDE in the sale of VR Products and  Simplicity  Petroleum
Data Services for the purposes of (i)  facilitating  the terms and conditions of
this Agreement, (ii) developing the business contemplated by this Agreement and





                                       13

<PAGE>



(iii)  enhancing  the business  relationship  of the Parties.  Such support will
include making available at least one qualified employee of VR to assist TNDE by
providing  technical  sales  support  upon the  reasonable  request of TNDE.  VR
further  agrees to provide TNDE with all of VR's standard list prices,  standard
pricing   reports,   product   specifications,   service   protocols,   warranty
descriptions,  and any applicable technical manuals related to VR Products to be
distributed  or  services to be rendered  pursuant  to this  Agreement  upon the
reasonable request of TNDE.

     10.9  Marketing  and Sales  Coordination;  Standards  of  Performance.  The
Parties agree to have periodic sales coordination and planning sessions. Each of
the parties hereto agrees and covenants to perform the services and/or to supply
products as required under this  Agreement in accordance  with the standards and
levels of quality adhered to by the leading industry  providers of such services
and/or products.  The parties hereto expressly agree that a party's  performance
of services and/or supply of products pursuant to this Agreement below standards
and  levels of quality  adhered to by the  leading  industry  providers  of such
services  and/or  products  shall  constitute  cause  for  termination  of  this
Agreement by the other party pursuant to Section 3.3 hereof.

     10.10  Performance  Target Reports.  Each Party hereby agrees to provide to
the other, on a quarterly and annual basis commencing with the second quarter of
calendar 1998,  confidential reports setting forth targeted performance goals of
products and services to be  purchased  or provided  pursuant to this  Agreement
based on such Party's reasonable good faith belief of the performance level such
Party will obtain within the specified period. Such reports will be prepared and
delivered by the senior executives of each of the Parties as provided in Section
13.1(a)  (initially  Daniel  Sharplin for TNDE and Steven  Sigmon for VR).  Such
reports shall be non-binding indications of performance  expectations hereunder,
and the Parties  hereby  agree that in the event that one Party should claim the
other is not utilizing its  commercially  reasonable  efforts in accordance with
the terms of this  Agreement,  such reports may be submitted in any  arbitration
proceedings relating to such claim.  Notwithstanding the foregoing,  the Parties
expressly recognize and agree that any reports prepared pursuant to this Section
10.10 shall be forward-looking  statements and information based upon beliefs of
the Parties as well as  assumptions  made by and  information  available to each
Party.  Such reports and targets are subject to numerous risks and uncertainties
and the attainment of such targets are beyond the control of the Parties. Should
the underlying  risks  materialize or should the  underlying  assumptions  prove
incorrect,  actual  results  may vary  materially  from those  described  in the
reports.  Accordingly,  such  reports  shall  be only  one  factor  in any  such
arbitration,  and the  failure  by a Party to  perform  in  accordance  with the
expectations set forth in such reports will not be exclusively  determinative as
to whether such Party's performance was consistent with commercially  reasonable
efforts.



                                       14

<PAGE>




                                   ARTICLE 11
                              ACCESS TO INFORMATION

     11.1 Technical  Support-TNDE.  TNDE agrees to provide sufficient  technical
support to aid VR in accessing  TNDE's  information  systems for the purposes of
facilitating  the terms and  conditions  of this  Agreement.  Such  support will
include making available at least one qualified employee of TNDE to assist VR in
accessing TNDE's information systems upon the reasonable request of VR.

     11.2  Technical  Support-VR.  VR agrees  to  provide  sufficient  technical
support to aid TNDE in accessing  VR's  information  systems for the purposes of
facilitating  the terms and  conditions  of this  Agreement.  Such  support will
include making available at least one qualified employee of VR to assist TNDE in
accessing VR information systems upon the reasonable request of TNDE.


                                   ARTICLE 12
                         CONFIDENTIALITY OF INFORMATION

     12.1  Confidentiality  Provisions.  Each of TNDE  and VR  acknowledges  and
agrees that,  in order to perform this  Agreement,  it may disclose to the other
Party  information  that it considers  proprietary and  confidential,  which (i)
relates to its business operations, services or technical knowledge and (ii) has
been  designated  as such,  either in writing or orally and confirmed in writing
(the "Confidential  Information").  All Confidential Information communicated to
the receiving party by the disclosing  party in connection with the negotiation,
preparation  and  performance  of this  Agreement  was and shall be  received in
confidence,  and was and shall be used only for purposes of this  Agreement  and
protected  in  the  same  manner  as  the  receiving   party  protects  its  own
Confidential  Information,  but in any event not less than a reasonable  manner.
The receiving party shall not disclose any  Confidential  Information to a Third
Party  except  (a) as  may  be  necessary  by  reason  of  legal  or  regulatory
requirements  applicable to the  receiving  party or  disclosing  party,  (b) in
respect of a validly  initiated  judicial or administrative  process,  including
pursuant to a subpoena or request for  documents,  provided that if either party
receives a subpoena,  request for documents, or other judicial or administrative
process  requiring the disclosure of Confidential  Information of the disclosing
party,  then the receiving party shall promptly  notify the disclosing  party of
the receipt of process, and, except to the extent that the receiving party deems
necessary to avoid suffering civil or criminal sanctions,  permit the disclosing
party  an  opportunity  to  respond  to such  process,  (c) to the  extent  such
Confidential Information is or becomes generally available to the public other




                                       15

<PAGE>



than as a result of improper  disclosure by or through the receiving  party, (d)
to the extent such Confidential  Information  becomes available to the receiving
party from a Third Party who received  such  information  on a  non-confidential
basis,  (e) to  the  extent  such  Confidential  Information  was  known  by the
receiving  party  at the  time of its  receipt  and was  not  the  subject  of a
pre-existing  confidentiality  obligation, (f) is independently developed by the
receiving  party  without  the  use  of  the  disclosing  party's   Confidential
Information, or (g) as TNDE and VR may agree from time to time.

     12.2 Return of Information. The Parties hereby covenant and agree that upon
the termination of this Agreement,  each Party will return promptly to the other
all copies of  Confidential  Information of the other Party then in such Party's
possession or in the possession of any of their  representatives  or affiliates,
and any copies,  notes or extracts thereof,  without retaining any copy thereof,
except that the Parties may destroy  promptly (in lieu of returning)  all copies
of any  analyses,  compilations,  studies  or other  documents,  records or data
prepared  by such Party or their  representatives  which  contain  or  otherwise
reflect or are generated from the Confidential Information,  and each Party will
certify to the other that such  destruction has been  accomplished.  The Parties
further  covenant  and agree that,  for a period of five years after the date of
the termination of this Agreement,  they shall not in any way use or communicate
the  Confidential  Information  of  the  other  Party  unless  and  except  such
Confidential  Information would be permitted to be disclosed pursuant to clauses
(a) through (g) of Section 12.1.

     12.3 Remedies. The Parties recognize and agree that money damages would not
be a sufficient  remedy for any breach of the  provisions of this Article 12 and
that a non-  breaching  Party shall be entitled to equitable  relief,  including
injunction  and  specific  performance,  in  the  event  of  any  breach  of the
provisions of this  agreement,  in addition to all other  remedies  available to
such Party at law or in equity.  Each Party also agrees to  reimburse  the other
for all reasonable  costs and expenses,  including  reasonable  attorneys' fees,
incurred by a Party to enforce its rights under this Article 12.


                                   ARTICLE 13
                               DISPUTE RESOLUTION

     13.1 Informal Dispute Resolution. Prior to the initiation of formal dispute
resolution  procedures,  the parties will first  attempt to resolve any dispute,
interpretation,  accounting,  controversy  or claim arising under this Agreement
("Dispute") informally, as follows:




                                       16

<PAGE>



     (a)  Upon the request of either party, the Dispute will be referred to
          a senior executive of each party.  Initially,  such senior  executives
          shall be Daniel  Sharplin  for TNDE and Steven H. Sigmon for VR. Other
          senior executives may be substituted for the initial senior executives
          upon written notice by the party  replacing its  representative.  Such
          senior executives shall use reasonable efforts to resolve such Dispute
          or, if  appropriate,  to negotiate a modification or amendment to this
          Agreement.

     (b)  Such senior  executives  shall meet as often,  for a duration,  and as
          promptly  as the  parties  reasonably  deem  necessary  to discuss the
          Dispute  and  negotiate  in good  faith in an  effort to  resolve  the
          Dispute without the necessity of any formal proceeding.

     (c)  During the course of these discussions,  all reasonable  requests made
          by one  party  to  another  for  non-privileged  and  non-confidential
          information,  reasonably  related to the  Dispute,  will be honored in
          order that each of the  parties  may be fully  advised of the  other's
          position.

     (d)  The specific format for the discussions will be left to the discretion
          of  the  senior  executives,   but  may  include  the  preparation  of
          agreed-upon statements of fact or written statements of position.

     (e)  If, after the  expiration of 15 days from the referral of such Dispute
          to the senior  executives,  such  dispute has not been  resolved,  the
          Dispute will be referred to the top  management  officials of TNDE and
          VR.  Initially,  such top  management  officials  shall  be Jay  Allen
          Chaffee for TNDE and Lawrence  Culp,  Jr. for VR. Other top management
          officials may be substituted for the initial top management  officials
          upon written notice by the party  replacing its  representative.  Such
          parties  shall  negotiate in the manner  previously  specified in this
          Section 13.1.

     13.2 Institution of Formal Resolution  Proceedings.  Formal proceedings for
the resolution of a Dispute may not be commenced until the earlier of:

     (a)  The good faith  determination  by the top  management  officials  that
          amicable  resolution through continued  negotiation of the matter does
          not appear likely; or




                                       17

<PAGE>



     (b)  30 days  following the date that the Dispute was first referred to the
          senior executives.

     13.3 Arbitration. A Dispute which cannot be resolved as provided in Section
13.1,   shall  be   settled   by  binding   arbitration   administered   by  the
JAMS/Endispute,  Inc.  ("JAMS")  under the Commercial  Arbitration  Rules of the
American Arbitration Association. The arbitration proceedings shall be conducted
in  Washington,  D.C. and the laws of the State of Delaware  shall apply to such
proceedings.  Any Dispute submitted for arbitration shall be referred to a panel
of three arbitrators. The party or parties submitting the intention to arbitrate
(the "Demand")  shall nominate one  arbitrator,  who shall be independent of the
party or parties  nominating  him.  The party or parties  required to answer the
Demand shall nominate one  arbitrator,  who shall be independent of the party or
parties  nominating  him.  If the  arbitrator  chosen  by the  party or  parties
submitting  the  Demand  and the  arbitrator  chosen  by the  party  or  parties
answering  the Demand can agree upon a neutral  arbitrator  within seven days of
submission to the JAMS of the answer to the Demand,  then such individual  shall
serve as the third  arbitrator.  If no such agreement is reached or if the Party
required to answer the Demand fails to nominate an arbitrator, the arbitrator or
arbitrators shall be appointed by the JAMS. The arbitration shall consist of one
hearing,  which shall last for only one day and which shall take place within 45
days after the  submission  of the  Dispute to  arbitration.  Each Party will be
permitted  to submit a maximum of two  pre-hearing  briefs and one  post-hearing
brief.  The  arbitration  award  shall be made within 15 days of the date of the
hearing,  shall be final and  binding on the  parties  and shall be  enforced in
accordance  with its terms.  The  arbitration  award shall be enforceable by any
court  having  jurisdiction  over the  party  against  which  the award has been
rendered.  Unless  otherwise  set  forth  in  the  final  determination  of  the
arbitrators,  all costs and  expenses  of any  arbitration  proceeding  shall be
shared  equally by the  Parties,  and each Party  shall be  responsible  for the
payment of all  attorneys'  fees incurred by such Party.  In Disputes  regarding
whether a party is entitled to  terminate  this  Agreement  for cause due to the
other Party's failure to use commercially  reasonable  efforts in performing its
obligations under this Agreement, the decision of the panel of arbitrators shall
be limited to a determination  of whether a Party has failed to use commercially
reasonable  efforts  and that the other  party is  entitled  to  terminate  this
Agreement as a result thereof.  The panel of arbitrators  shall have no right to
award any damages or other awards in connection with such a Dispute.

     13.4 Immediate  Injunctive Relief. The only circumstances in which Disputes
between the parties will not be subject to the provisions of this Article 13 are
(i)  breaches  of the terms of Article  12 and (ii)  where a party  makes a good
faith  determination  that a breach of this Agreement by the other party is such
that the damages  resulting  from the breach will be so  immediate,  so large or
severe, and so incapable of adequate redress after the fact that a temporary



                                       18

<PAGE>



restraining  order or other  immediate  injunctive  relief is the only  adequate
remedy.

     13.5  Continued  Performance.  Subject  to  any  right  to  terminate  this
Agreement in  accordance  with the terms  hereof,  each party agrees to continue
performing  its  obligations  under this  Agreement  while any  dispute is being
resolved  unless and until such  obligations are concluded by the termination or
expiration of this Agreement.


                                   ARTICLE 14
                                     AUDITS

     14.1 Audit  Rights.  No more than once during any  calendar  year and on at
least five days' prior  written  notice,  either Party may audit and inspect the
other Party's records maintained in connection with this Agreement including all
transactions  and procedures  related thereto to the extent necessary to perform
audits  (including  any  audits  necessary  to enable  either  Party to meet any
applicable regulatory requirements) and inspections to confirm the other Party's
compliance with this  Agreement.  Such audits and inspections may be carried out
by such Party or its authorized  representatives (which representatives shall be
reasonably  acceptable to the other Party) and may be undertaken at such time as
such Party reasonably  requests (after a reasonable period following the date of
this Agreement).  Each Party agrees not to use any competitor of the other Party
to conduct  such audits or  inspections.  The Parties  shall use all  reasonable
endeavors  to conduct  any such  audits and  inspections  in a manner  that will
result in a minimum of inconvenience and that will maintain the  confidentiality
of the other  Party's  records.  Any  auditors or  inspectors  will  execute and
deliver such  confidentiality  and non-disclosure  agreements and adhere to such
other customary  confidentiality and security  requirements as may reasonably be
requested in  connection  with such audits and  inspections.  The Parties  shall
provide such auditors and inspectors with routine  assistance in connection with
such audits and inspections. Within 30 days after a Party's receipt of any audit
findings  or  exceptions,  such Party shall  respond and address any  identified
issues.  Any amounts found to have been incorrectly billed by either Party shall
be corrected in the next regular  payment  submitted by such Party with interest
at 8% per annum.


                                   ARTICLE 15
                            LIMITATIONS ON RECRUITING




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<PAGE>



     15.1 Limitations on Recruiting. During the Agreement Term and for two years
thereafter,  neither  Party shall  solicit for  employment  or otherwise  retain
(whether as an employee, officer, agent, consultant,  advisor or in any capacity
whatsoever)  any employee of the other Party,  without the prior written consent
of such Party.


                                   ARTICLE 16
                                 INDEMNIFICATION

     16.1 Indemnification of TNDE. VR shall release,  indemnify, defend and hold
harmless  TNDE  and  its  respective  officers,  directors,  employees,  agents,
successors  and  assigns,  from and  against  any and all  Losses of TNDE or its
respective  officers,  directors,  employees,  agents,  successors  or  assigns,
whether  based in whole or in part in  contract,  tort,  negligence,  statute or
otherwise, arising from any of the following:

     (a)  Any claim arising from the death of or personal injury to any employee
          of VR, excluding any such claim based upon an indemnitee's negligence,
          recklessness or intentional misconduct;

     (b)  Any claim  arising  from the loss of or damage to the real or personal
          tangible  property  (whether  owned  or  leased)  of VR or  any of its
          respective   employees,   excluding  any  such  claim  based  upon  an
          indemnitee's negligence, recklessness or intentional misconduct; and

     (c)  The failure of VR to perform any  obligations  under this Agreement or
          any license, lease or other agreement between VR and a Third Party.

         16.2 Indemnification of VR. TNDE shall release,  indemnify,  defend and
hold harmless VR and its  respective  officers,  directors,  employees,  agents,
successors  and  assigns,  from  and  against  any and all  Losses  of VR or its
respective  officers,  directors,  employees,  agents,  successors  or  assigns,
whether  based in whole or in part in  contract,  tort,  negligence,  statute or
otherwise, arising from any of the following:

     (a)  Any claim arising from the death of or personal injury to any employee
          of  TNDE,   excluding  any  such  claim  based  upon  an  indemnitee's
          negligence, recklessness or intentional misconduct;

     (b)  Any claim  arising  from the loss of or damage to the real or personal
          tangible  property  (whether  owned or  leased)  of TNDE or any of its
          respective   employees,   excluding  any  such  claim  based  upon  an



                                       20

<PAGE>



          indemnitee's negligence, recklessness or intentional misconduct; and

     (c)  The failure of TNDE to perform any obligations under this Agreement or
          any license, lease or other agreement between TNDE and a Third Party.

     16.3  Infringement  Indemnity of TNDE. VR will defend any action brought or
threatened  against TNDE to the extent that such action is based on a claim that
any portion of the products and services  provided by VR and  delivered to or on
behalf of TNDE pursuant to this Agreement (i) infringes a copyright  enforceable
in the United States, (ii) infringes a United States patent or (iii) constitutes
misappropriation or unlawful disclosure or use of a Third Party's trade secrets.
VR will bear the expense of such defense and pay all damages and attorneys' fees
finally awarded by a court of competent  jurisdiction  which are attributable to
such claim, provided that TNDE has complied with Section 16.6.

     16.4  Infringement  Indemnity of VR. TNDE will defend any action brought or
threatened  against VR to the extent  that such  action is based on a claim that
any  products or services  provided by TNDE and  delivered to or on behalf of VR
pursuant to this  Agreement (i) infringes a copyright  enforceable in the United
States,   (ii)   infringes  a  United   States   patent  or  (iii)   constitutes
misappropriation or unlawful disclosure or use of a Third Party's trade secrets.
TNDE will bear the expenses of such  defense and pay all damages and  attorneys'
fees finally awarded by a court of competent jurisdiction which are attributable
to such claim, provided that VR has complied with Section 16.6.

     16.5  Exclusive  Remedy  for  Infringement   Claims.   NOTWITHSTANDING  ANY
PROVISIONS OF THIS AGREEMENT TO THE CONTRARY,  THE FOREGOING  REMEDIES CONTAINED
IN SECTIONS  16.3 AND 16.4 HEREOF  CONSTITUTE  THE PARTIES'  SOLE AND  EXCLUSIVE
REMEDIES AND EACH PARTY'S ENTIRE LIABILITY,  WITH RESPECT TO INFRINGEMENT CLAIMS
DESCRIBED IN SUCH SECTIONS.

     16.6 Indemnification for Third Party Claims. The following procedures shall
apply  with  respect  to  indemnification  for Third  Party  claims  arising  in
connection with this Agreement:

     (a)  Promptly  after  receipt  by  a  Party  entitled  to   indemnification
          hereunder (an  "Indemnitee") of written notice of the assertion or the
          commencement of any claim,  demand,  action,  cause of action or other
          proceeding by a Third Party,  whether by legal process or otherwise (a
          "Claim"), with respect to any matter within the scope of Section 16.1,



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<PAGE>



          16.2,  16.3 or 16.4 the  Indemnitee  shall give written notice thereof
          (the  "Notice")  to the  Party  from  whom  indemnification  is sought
          pursuant  hereto  (the  "Indemnitor")  and shall  thereafter  keep the
          Indemnitor   reasonably  informed  with  respect  thereto;   provided,
          however,  that the failure of the  Indemnitee  to give the  Indemnitor
          prompt  written  notice  as  provided  herein  shall not  relieve  the
          Indemnitor of its obligations hereunder unless such failure results in
          a default  judgment,  the expiration of the time to answer a complaint
          or material  prejudice to Indemnitor's  defense of such Claim. In case
          any such Claim is brought against any Indemnitee,  the Indemnitor will
          be entitled to assume the defense  thereof,  by written  notice of its
          intention  to the  Indemnitee  within  30 days  after  receipt  of the
          Notice, with counsel reasonably  satisfactory to the Indemnitee at the
          Indemnitor's  own expense.  If the  Indemnitor  assumes the defense of
          such Claim,  it shall not settle such Claim  without the prior written
          consent of the  Indemnitee  which  consent  shall not be  unreasonably
          withheld or delayed.  Notwithstanding the assumption by the Indemnitor
          of the  defense of any Claim as  provided in this  Section  16.6,  the
          Indemnitee shall be permitted to join in the defense of such Claim and
          to employ counsel at its own expense.

     (b)  If the  Indemnitor  fails to notify  the  Indemnitee  of its desire to
          assume the defense of any such Claim within the  prescribed  period of
          time, or notifies the Indemnitee  that  Indemnitor will not assume the
          defense  of any such  Claim,  then the  Indemnitee  shall  assume  the
          defense of any such Claim,  in which event it may do so in such manner
          as it may deem  appropriate,  provided  that it shall not  settle  any
          Claim that would give rise to the Indemnitor's liability under Section
          16.1, 16.2, 16.3 or 16.4, as the case may be, without the Indemnitor's
          prior written consent which consent shall not be unreasonably withheld
          or delayed.  The Indemnitor  shall be permitted to join in the defense
          of such Claim and to employ counsel at its own expense.

     (c)  The Indemnitee shall provide  reasonable  assistance to the Indemnitor
          (at the Indemnitor's  expense),  including reasonable  assistance from
          the  Indemnitee's  employees,   agents,  independent  contractors  and
          Affiliates, as applicable.

     16.7 Contractual Statute of Limitations.  With respect to any claim brought
pursuant to this Article 16, the  indemnity  provisions of this Article 16 shall
survive for a period of two years  following the  expiration or  termination  of
this Agreement, provided, however, that, any Claim that is pending on the



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<PAGE>



expiration of such two-year  period shall continue to be  indemnified  hereunder
until such Claim is finally resolved.

     16.8  Allocation  of Risks.  The  parties  expressly  acknowledge  that the
limitations  contained in this Article 16 represent the express agreement of the
parties with respect to the  allocation  of risks between the parties under this
Agreement.   Each  Party  fully   understands  and   irrevocably   accepts  such
limitations.

                                   ARTICLE 17
                      MUTUAL REPRESENTATIONS AND WARRANTIES

     17.1 Mutual  Representations  and Warranties.  Each Party hereby represents
and warrants to the other Party as follows:

     (a)  Organization; Power. Such Party is a corporation duly organized,
          validly  existing and in good standing  under the laws of the state of
          its  incorporation.  Such Party has all requisite  corporate power and
          authority  to execute and deliver  this  Agreement  and to perform its
          obligations hereunder.

     (b)  Authority;   Enforceability.   The  execution  and  delivery  of  this
          Agreement and the consummation of the transactions contemplated hereby
          have been duly authorized by all requisite  action on the part of such
          Party.  This  Agreement  constitutes  the  legal,  valid  and  binding
          agreement of such Party,  enforceable against such Party in accordance
          with its terms (except insofar as such  enforceability  may be limited
          by applicable bankruptcy,  insolvency,  reorganization,  moratorium or
          similar laws affecting  creditors' rights generally,  or by principles
          governing the availability of equitable remedies).

     (c)  Noncontravention. The execution and delivery of this Agreement and the
          consummation  of the  transactions  contemplated  hereby  will not (i)
          conflict  with or  result in any  violation  of any  provision  of the
          charter  or  bylaws  of such  Party,  each as  amended  to date;  (ii)
          conflict  with,  result in any  violation  or breach of,  constitute a
          default under,  give rise to any right of termination or  acceleration
          (with or without  notice or the lapse of time or both) pursuant to, or
          result in being  declared  void or voidable,  any term or provision of
          any note, bond, mortgage, indenture, lease, license, contract or other
          instrument  to which  such  Party  is a party  or by which  any of its
          properties or assets are or may be bound; or (iii) violate any order,



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<PAGE>



          writ,  injunction,  decree,  statue, rule or regulation  applicable to
          such Party.

     17.2  Warranties.  The Parties  hereby agree that all products and services
provided by a Party  pursuant to this  Agreement will be subject to and governed
by all  warranties  customarily  provided by such Party in connection  with such
product or  service,  subject to such  instructions  and  information  as may be
provided by the other  Party.  In the event of any breach of any such  warranty,
the breaching Party shall take any and all actions customarily performed by such
Party following the breach of the applicable warranty.

                                   ARTICLE 18
                                      TAXES

     18.1 Resale  Certificates.  Items  purchased by TNDE from VR hereunder  are
meant ultimately and primarily for resale to TNDE's customers.  TNDE will supply
VR with a resale  certificate  for such items  purchased as VR shall  reasonably
request.


                                   ARTICLE 19
                                   ASSIGNMENTS

     19.1 No Assignment Without Consent.  Except as otherwise expressly provided
in this  Agreement,  neither Party may assign this Agreement or any part thereof
without the express written consent of the other Party.

     19.2  Procedures  for  Assignment.  In the event of any  assignment of this
Agreement by either Party, the designated  assignee shall assume, in writing (in
form and substance  reasonably  satisfactory to the other Party), the rights and
obligations  of  the  assigning  Party  under  this  Agreement.  Subject  to the
foregoing,  this Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns.


                                   ARTICLE 20
                                  MISCELLANEOUS

     20.1 No Implied Rights or Waivers.  No notice to or demand on a Party shall
entitle  the other  Party to any other or further  notice or demand in the same,
similar or other circumstances. Neither any failure nor any delay on the part of
a Party in exercising any right, power or privilege hereunder shall operate as a
waiver  thereof,  nor shall a single or partial  exercise  thereof  preclude any



                                       24

<PAGE>



other or further exercise of the same or the exercise of any other right,  power
or privilege.

     20.2  Modifications,  Amendments  or Waivers.  The Parties may from time to
time enter into written  agreements  amending or changing any  provision of this
Agreement  or the rights  hereunder  or give  waivers or consents to a departure
from the due performance of their  obligations  hereunder,  with such waivers or
consents not to be  unreasonably  withheld,  provided  that no departure  from a
Party's due performance of its obligations  hereunder shall be effective  unless
agreed to in writing by the other Party.

     20.3 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting  principles,
as previously and consistently applied by the relevant person.

     20.4 Entire Agreement. This Agreement,  including the License Agreement and
the other Exhibits  hereto,  constitutes  the entire  agreement  relating to the
subject matter hereof among the Parties hereto.  Each Party acknowledges that no
representation,  inducement,  promise  or  agreement  has been  made,  orally or
otherwise,  by any other Party,  or anyone  acting on behalf of any other Party,
unless such representation, inducement, promise or agreement is embodied in this
Agreement,  including  the  License  Agreement  and the other  Exhibits  hereto,
expressly or by incorporation.

     20.5  Severability.  If any  provision  of  this  Agreement  is  held to be
invalid, void or unenforceable, the remaining provisions of this Agreement shall
nevertheless continue in full force and effect.

     20.6 Third Party  Beneficiaries.  Except as provided  for in Article 16 the
obligations of each Party under this Agreement shall inure solely to the benefit
of the other  Parties,  and no other  person or  entity  shall be a Third  Party
beneficiary of this Agreement.

     20.7 Rules of Construction. Unless otherwise specified, the following rules
shall be applied in construing the provisions of this Agreement:

          (a)  Terms  that  imply  gender  shall  be  construed  to apply to all
               genders.

          (b)  References  to Exhibits  refer to the  Exhibits  attached to this
               Agreement.




                                                        25

<PAGE>



          (c)  Headings to the various  Articles and Sections of this  Agreement
               are  included  solely  for  purposes  of  reference  and shall be
               ignored in construing the provisions of this Agreement.

          (d)  The Exhibits  attached to this Agreement are incorporated  herein
               by reference.

          (e)  "Herein", "hereto", "hereof" and words of similar import refer to
               this Agreement.

          (f)  The word "including" connotes "including without limitation".

          (g)  Any  reference  to any law or  regulation  refers  to that law or
               regulation  as amended from  time-to-time  after the date of this
               Agreement and to the corresponding provision of any successor law
               or regulation.

          (h)  In determining whether a Party has used "commercially  reasonable
               efforts" in performing its  obligations  hereunder,  such Party's
               performance  will be measured by weighing the  economic  costs of
               such performance to it versus the economic  benefits to be gained
               as a result of such performance by it.

     20.8 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 given to 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 business day actually  received if hand  delivered or if
transmitted  by telefax or if  transmitted  or  delivered on a day that is not a
business day, the next business day; or (iii) one business day after such notice
was  delivered  to  an  overnight  delivery  service,  addressed,  delivered  or
transmitted in each case as follows:

                  VR:
                  Veeder-Root Company
                  125 Power Forest Drive
                  Simsbury, Connecticut 06070
                  ATTENTION:  Steven H. Sigmon, President
                  Telephone:        (860) 651-2735
                  Telefax:          (860) 651-2727

                  With a Courtesy Copy (not required for effective Notice) to:



                                       26

<PAGE>



                  Danaher Corporation 1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION: Daniel Comas, Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860

                  Company:
                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:
                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

     20.9  Further  Acts and  Documents.  Each of the parties  hereby  agrees to
execute and deliver  such  further  instruments  and to do such further acts and
things  as may be  necessary  or  desirable  to carry out the  purposes  of this
Agreement.

     20.10   Counterparts.   This   Agreement   may  be   executed  in  multiple
counterparts,  each of which shall be deemed to be an original  and all of which
shall constitute one in the same agreement.

     20.11 Force Majeure.  "Force Majeure"  occurrence  shall mean an occurrence
beyond the control and without the fault or  negligence  of the Party  affected.
"Force Majeure"  occurrences shall include,  for example and without limitation,
(i) acts of God, (ii) acts of war (declared or  undeclared),  acts of terrorism,



                                       27

<PAGE>



(insurrection,  rebellion  or sabotage  (iii) acts of federal,  state,  local or
foreign  governmental  authorities or courts,  (iv) labor  disputes,  strikes or
other  industrial  action,  whether  direct or indirect  and  whether  lawful or
unlawful,  (v)  explosion,  fires,  flood,  earthquakes,   catastrophic  weather
conditions, or other natural physical disaster, (vi) failures or fluctuations in
electrical power, heat, light, air conditioning or telecommunications service or
equipment and (vii) delays caused by the other Party, Third Party nonperformance
or other such causes beyond a Party's control.

     (a)  If either Party is prevented from, or delayed in performing any of its
          obligations  under this Agreement by Force Majeure,  it shall promptly
          notify the other  Party of the  circumstances  constituting  the Force
          Majeure and of the  obligations,  the performance of which are thereby
          delayed or prevented.

     (b)  Each Party  will be  excused  from  performance  under this  Agreement
          (other  than  obligations  to make  payments  that have become due and
          payable  pursuant to this Agreement) for any period to the extent that
          it is  prevented  from  performing  any  obligations  pursuant to this
          Agreement, in whole or in part, as a result of Force Majeure.

     20.12  Governing Law. This Agreement  shall be governed by and construed in
accordance with the internal laws of the State of Delaware.

     20.13 Waiver of Jury Trial. The Parties, after consulting or having had the
opportunity  to  consult  with  legal  counsel,   knowingly,   voluntarily   and
intentionally  waive any right either of them may have to a trial by jury in any
litigation  based  upon  or  arising  out  of  this  Agreement,  or  any  of the
transactions  contemplated by this Agreement, or any course of conduct, dealing,
statements  (whether oral or written) or actions of any of them  ("Litigation").
Neither Party shall seek to  consolidate,  by  counterclaim  or  otherwise,  any
action in which a jury trial has been  waived  with any other  action in which a
jury  trial  cannot be or has not been  waived.  These  provisions  shall not be
deemed to have been  modified in any  respect or  relinquished  by either  Party
except by written  instrument  executed by either of them.  This provision shall
only be applicable to the extent that Article 13 hereof is inapplicable.

     20.14 [reserved]

     20.15  Joint  Customers.  The  Parties  recognize  that it is in their best
interest to  cooperate  and to  coordinate  their  efforts  with  respect to the
solicitation  and sale of products  and  services  covered by this  Agreement to
those  persons  and  entities  who are  currently  both  customers  of TNDE  and



                                       28

<PAGE>



customers of VR. In  recognition of the inherent  difficulties  in attempting to
delineate the rights and obligations with respect to such customers, the Parties
have agreed to separately  negotiate the Parties'  rights and  obligations  with
respect to such  customers  on a case by case  basis.  Accordingly,  the Parties
agree  that this  Agreement  shall be  inapplicable  with  regard to the sale of
services and products to such customers  unless  otherwise  agreed in writing by
the  Parties.  In this  regard,  the  Parties  agree to use  their  commercially
reasonable efforts to agree upon the terms and conditions governing the sales of
the products and services  otherwise covered by this Agreement and to coordinate
their efforts with respect to developing and  implementing a mutually  desirable
sales plan and  customer  service plan with regard to such  customers  within 60
days of the Effective Date of this Agreement.  In the event that the Parties are
unable to agree upon the mutual terms and conditions  governing the sales of the
products and services  otherwise  covered by this  Agreement  and to  coordinate
their efforts with respect to developing and  implementing a mutually  desirable
sales plan and customer service plan with regard to such customers,  the Parties
agree that this Agreement shall be wholly  inapplicable  with regard to any such
customers.  For purposes of this Section 20.15, a customer shall be considered a
current customer of a Party if such Party has either performed  services or sold
products to such customer within the one year prior to this Agreement.

     The parties  acknowledge that it may be in the respective best interests of
both parties to jointly provide or apply (i) invoicing and other  administrative
services,  and/or (ii) pricing  provisions and other sales terms and conditions,
with  respect to certain  customers  for whom the parties  both supply  products
and/or services. The parties therefore agree to exercise commercially reasonable
efforts to  mutually  indemnify  customers  for whom  application  of such joint
efforts would benefit both parties,  and to enter into  agreements to provide or
apply certain joint services  and/or joint sales terms for such  customers.  The
parties  further  agree that,  in the event they enter into any joint  invoicing
arrangements with respect to such customers,  such arrangements  shall expressly
provide that each party shall have the sole and exclusive  right to that portion
of the invoiced  payment  reasonably  allocable to the services  and/or products
supplied by such party, and that upon the insolvency, bankruptcy, reorganization
under  bankruptcy or similar laws or assignment for the benefit of the creditors
of either party, or the termination of this Agreement, each party shall have the
express right to receive from the customer such party's allocable portion of the
invoiced payment.

     20.16 Public Announcements. Except as may be required by applicable laws or
regulatory  requirements,  neither  Party  shall  issue  any  press  release  or
information to the public or the industry relating to the subject matter of this
Agreement unless such press release or information disclosure has been mutually



                                       29

<PAGE>



release or information  disclosure has been mutually  agreed to, in advance,  by
the parties as to form, content and timing.





                                       30

<PAGE>



     The Parties  have  caused  this  Agreement  to be  executed  and  delivered
effective as of the date first written above.

                                      TNDE:


                                      TANKNOLOGY-NDE INTERNATIONAL, INC.



                                      By:    By:  //s// A. DANIEL SHARPLIN
                                      Name:  A. Daniel Sharplin
                                      Title: President / CEO


                                      VR:

                                      VEEDER-ROOT COMPANY



                                      By:    //s// STEVEN H. SIGMON
                                      Name:  Steven H. Sigmon
                                      Title: President North America




                                       31

<PAGE>



                                    EXHIBIT A

                         Compliance Management Services

A.    WORK TO BE PERFORMED

1. Storage Tank Permitting - Agency notification,  permit modification,  invoice
processing,  and the interaction with other Client departments and the governing
agencies.

The Service  Provider is to apply for,  maintain,  renew and pay applicable fees
for all storage tank, environmental-related approvals,  certificates and permits
required to be secured to operate  subject  client sites.  These permits come in
the form of notifications,  registrations,  invoices,  and renewals.  All permit
activity should be tracked on a database by location.  This includes, but is not
limited to

Regulated underground storage tank systems
-     Stage I
-     Stage II
-     Emissions
-     Air Toxics
-     Operating
-     Hazardous Material/Flammable Liquid

2. SARA Title III Reporting for storage tanks - Tier Two Emergency and Hazardous
Chemical Inventory Reporting

The Service Provider is to complete all SARA Title III, Tier II annual reporting
on Hazardous  Chemical Inventory and pay appropriate fees. Client will reimburse
fees.  Some states which  include:  ME, NJ, RI, VT and WI, (and any other states
now or in the future)  require the applicant to complete a  state-specific  form
and/or  submit  fees  (reimbursable  by  Client)  based  typically  on weight of
petroleum or chemical stored.

3. Financial Responsibility Certification/Reporting:  complete the annual report
required to  demonstrate  financial  responsibility  for  underground  petroleum
storage tanks as specified in 40 CFR 280.96 (b).

The  Service  Provider is to submit  Financial  Responsibility  Certificates  in
conjunction  with a  state-specific  service  station summary to the appropriate
agencies.




                                       A-1

<PAGE>



4. Compliance Assessment  Reporting:  The annual compliance assessment report is
furnished  to  Client's  Engineering  department  and used as a  capital  budget
forecasting   tool.  The  report  is  formatted  to  provide   location-specific
information as well as a summary of the required equipment upgrades remaining to
be installed for each state/market.

The Service Provider is to prepare and submit to Client's Engineering Department
an annual compliance  assessment summary. All corrections made to the report are
to be updated in the Service Provider's database.

This report is internal to the Client  organization  and is not  provided to any
government agencies or authorities. To maintain data integrity/security however,
the Service Provider is expected to incorporate all changes/corrections into the
central database.

5. Environmental Incident Hotline/Reporting/Investigation: Service Provider will
manage  a  24-hour  telephone  hot-line  for  environmental  incident  reporting
(spills:  suspected/confirmed leak detection equipment alarms, inventory losses,
etc.),  make all agency and Client  contacts within the allowable time frame and
include incident documentation, reporting and tracking.

The Service  Provider is to  establish  an 800 Hotline  manned 24  hours/day  to
receive  reports  of  environmental  incidents  in support  of  Client's  sites.
Operator should be able to determine whether the incident is reportable and make
all required contacts and report filings with the governing agencies.

Environmental incidents should be categorized by nature of problem (such as):

-     Operator Responsibility (Negligence)
-     Contractor Responsibility (Negligence)
-     Aboveground Equipment Leaks
-     Vapor Detected and confirmed to be Client source
-     Inventory Variation
-     Leak Detection Alarm
-     Customer Responsibility
-     Contamination Discovered
-     Delivery Overfill/Spill
-     Underground Leaks
-     Free Product/Contamination in Wells




                                       A-2

<PAGE>



Make all agency and Client contacts  within the allowable time frame,  this also
includes incident documentation, reporting and tracking.

6. Hazardous  Waste  Management  Reporting:  track all hazardous waste manifests
from the  marketing  facility to the waste  disposal  destination.  Follow-up to
ensure that all paperwork is complete within the allowable time frames, detailed
quarterly/annual state reporting and payment of required fees.

The Service  Provider is to track and close-out all  hazardous  waste  manifests
from generator site to TSD (cradle to grave) for Client sites.  Also included in
this work activity is the maintenance of EPA ID#'s for all marketing  facilities
if required,  and the periodic state- specific activity reporting and payment of
fees. All marketing  hazardous  waste  manifest  activity is to be monitored and
reported by the Service Provider.

7. Notice of Violation "NOV" Resolution:  resolve notices of violation  received
from regulatory agencies for  environmental-related  matters.  Work closely with
other Client personnel and the government agencies to reach resolution.

The Service Provider is to receive,  document,  and track through resolution all
NOV's  received  from  Client's  sites.   This  work  activity   involves  close
coordination  with several  Client  internal  and external  resources as well as
governmental  agencies.  Service Provider is to pay for all  fines/penalties and
administrative  fees to resolve NOV's on behalf of Client and will be reimbursed
for  those  fines  except  where  the  NOV/penalty  was the  result  of  Service
Provider's  failure to perform its duties under the terms of the  contract.  All
steps toward NOV resolution are to be well-documented.

8. Monitoring Plan Reporting (CA,NJ): Complete the required monitoring plans for
California  and New  Jersey,  and any  other  states  in the  future.  Plans are
required to be  submitted  for new sites or any changes in the  monitoring  plan
(CA/NJ) and annually in NJ.

The Service Provider is to complete all monitoring plans which detail the method
of release  detection as required by the NJ and CA state,  county and  municipal
regulations.  Any change to the  monitoring  plan requires  that the  regulatory
authorities be notified.  The NJ plan is required to be completed annually.  The
CA  regulations  require  that the plan be reviewed  and signed by the  operator
before submission to the governing agencies.

9. Business Plans (CA): In CA a Chemical Inventory  Disclosure is required under
this plan.




                                       A-3

<PAGE>



The  Service  Provider  is to  complete  all  business  plans  which  includes a
hazardous inventory disclosure, emergency response plan and site map as required
by all CA state, county and municipal regulations, and for all states now and in
the future that require it.

10.  Tank/Equipment   Testing/Certification.   Test  and/or  certify  UST,  Leak
Detection, Electronic Monitoring, and Stage II equipment.

The Service Provider is to provide oversight and management to the UST/equipment
testing and  certification  program.  Provide the  testing  contractor  with the
required  tests to be  performed  in  accordance  with the UST  system/equipment
requirements  and all  applicable  state/local  regulation.  Record all  testing
results into the central  computer  database and maintain the testing records on
file.



                                       A-4

<PAGE>



                                    EXHIBIT B

                       Simplicity Petroleum Data Services





                                       B-1

<PAGE>



                                    EXHIBIT C

                           Authorized Service Company
                              Terms and Conditions





                                       C-1

<PAGE>



                                    EXHIBIT D

                                   VR Products


See attached list.



                                       D-1

<PAGE>



                                    EXHIBIT E

                          Standard Terms and Conditions






                                       E-1

<PAGE>


                                    EXHIBIT F

               Auxiliary Leak Detection Retrofit License Agreement






                                       F-1

<PAGE>


<PAGE>
                                 EXHIBIT 10.48




       ------------------------------------------------------------------

                          CERTIFICATE OF DESIGNATION OF
                       PREFERENCES AND RIGHTS OF SERIES A
                    REDEEMABLE CONVERTIBLE PREFERRED STOCK OF
                       TANKNOLOGY-NDE INTERNATIONAL, INC.
             ------------------------------------------------------



<PAGE>



                                TABLE OF CONTENTS


1.   Designation and Amount....................................................1

2.   Dividends.................................................................1

3.   Preference on Liquidation or Sale.........................................1

4.   Redemption................................................................2

5.   Conversion Rights.........................................................3
     a.   Conversion Right.....................................................3
     b.   Conversion Price.....................................................3
     c.   Mechanics of Conversion..............................................3
     d.   Fractional Shares....................................................4
     e.   Adjustment For Change in Capital Stock...............................4
     f.   Adjustment for Other Distributions...................................5
     g.   Preservation of Conversion Rights Upon Reclassification,
          Consolidation, etc...................................................5
     h.   When Adjustment May Be Deferred......................................6
     i.   When Adjustment Is Not Required......................................6
     j.   Notice of Adjustments and Certain Transactions.......................6
     k.   Reservation of Stock Issuable Upon Conversion........................7
     l.   Payment of Taxes.....................................................8
     m.   No Reissuance of Preferred Stock.....................................8

6.   Authorization of Additional Classes of Shares.............................8

7.   Reissuance of Shares......................................................8

8.   Preemptive Rights.........................................................8

9.   Voting Rights.............................................................8
     (a)  General..............................................................8
     (b)  Class Voting.........................................................9
     (c)  Removal and Vacancy..................................................9

10.  Sale, Transfer and Assignment.............................................9




                                       -i-

<PAGE>





                          CERTIFICATE OF DESIGNATION OF
                       PREFERENCES AND RIGHTS OF SERIES A
                    REDEEMABLE CONVERTIBLE PREFERRED STOCK OF
                       TANKNOLOGY-NDE INTERNATIONAL, INC.

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware


     We, the undersigned, Jay Allen Chaffee, Chairman of the Board, and David G.
Osowski,  Secretary,  respectively,  of  Tanknology-NDE  International,  Inc., a
Delaware corporation (the "Corporation"),  pursuant to the provisions of Section
151 of the General Corporation Law of the State of Delaware, do hereby make this
Certificate of Designation and do hereby state and certify that, pursuant to the
authority  expressly  vested in the Board of Directors of the Corporation by the
Certificate of  Incorporation  of the  Corporation,  the Board of Directors at a
meeting held on December 22, 1997, unanimously adopted the following resolutions
providing  for the issuance of a series of  Preferred  Stock  designated  as the
Series A Redeemable Convertible Preferred Stock:

     RESOLVED,  that the Board of Directors of the Corporation,  pursuant to the
authority  expressly  vested in it by the  Certificate  of  Incorporation,  does
hereby provide for the issue of a series of the  Corporation's  Preferred Stock,
par  value of  $.0001  per  share,  and does  hereby  fix and  herein  state the
preferences  and  relative  and other  special  rights  and the  qualifications,
limitations and restrictions thereof, as follows (all terms used herein that are
defined  in the  Certificate  of  Incorporation  to have the  meanings  provided
therein):

     1.  Designation  and  Amount.  There shall be a series of  Preferred  Stock
designated  as "Series A  Redeemable  Convertible  Preferred  Stock"  ("Series A
Preferred"),  and the number of shares  constituting such series shall initially
be 150.

     2. Dividends. The holders of shares of Series A Preferred shall be entitled
to receive annual dividends of $1000.00 per share payable  beginning on June 30,
1998, semi-annually in arrears on June 30 and December 31.

     3.  Preference on  Liquidation  or Sale.  In the event of any  liquidation,
dissolution or winding up of the affairs of the Corporation,  whether  voluntary
or  involuntary,  after  payment or provision for payment of the debts and other
liabilities  of the  Corporation,  the  holders of Series A  Preferred  shall be
entitled to receive,  in preference to all shares of any class,  series or issue
of capital stock of the Corporation  ranking junior to the Series A Preferred in
payments upon liquidation (the "Common Stock"), an amount in cash for each share
of Series A Preferred equal to $10,000.00 (the "Liquidation Preference),  before
any  distribution  shall be made to the  holders  of the  Common  Stock upon the
liquidation,  dissolution  or  winding  up of  the  Corporation.  The  currently
outstanding  capital  stock  of  the  Corporation  is  junior  to the  Series  A



                                       -1-

<PAGE>




Preferred.   If  upon  any  liquidation,   dissolution  or  winding  up  of  the
Corporation,  the assets  distributable  among the holders of Series A Preferred
shall  be  insufficient  to  permit  the  payment  in  full  of the  Liquidation
Preference  to all the  holders  of the  then  outstanding  shares  of  Series A
Preferred, then the entire assets of the Corporation thus distributable shall be
distributed ratably among the holders of the Series A Preferred in proportion to
the respective  aggregate  amounts  otherwise  payable with respect  thereto.  A
consolidation or merger of the Corporation with or into one or more corporations
or the  sale  or  transfer  of all or  substantially  all of the  assets  of the
Corporation  shall not be deemed to be a liquidation,  dissolution or winding up
of the  Corporation,  if, as a result  of such  consolidation,  merger,  sale or
transfer,  the holders of Series A Preferred  retain the liquidation  preference
set forth in this Section 3.

     4.  Redemption.  At any time after the later of (i) June 30,  2001 and (ii)
the date upon which all principal and interest on the $6,500,000.00 note payable
to DH  Holdings  Corp.  and  dated  December  23,  1997,  is paid in  full,  the
Corporation  may redeem  either (i) all,  or (ii) in any  single  redemption  or
series of redemptions, an aggregate not exceeding 49% of, the outstanding shares
of Series A Preferred at the  redemption  price per share,  payable in cash,  of
$10,000.00 (the "Redemption  Price"). Any shares of Series A Preferred which are
outstanding  at December 31, 2004,  shall be redeemed by the  Corporation at the
Redemption Price.

     Notice of any proposed  redemption of shares of Series A Preferred shall be
made by means of  certified  mail return  receipt  requested,  addressed  to the
holders identified in the records of the Corporation (the "Registered  Holders")
of the Series A Preferred to be redeemed,  at their  respective  addresses  then
appearing  on the books of the  Corporation,  not less than thirty (30) nor more
than  sixty  (60)  days  prior to the date  fixed  for such  redemption  (herein
referred to as the  "Redemption  Date").  Each such notice shall specify (i) the
Redemption Date, (ii) the Redemption Price,  (iii) the place for payment and for
delivering  the stock  certificate(s)  and transfer  instruments(s)  in order to
collect  the  Redemption  Price,  (iv) the  shares of Series A  Preferred  to be
redeemed  and (v) the then  effective  Conversion  Price  (as  defined  below in
Section 5(b)) and that the right of holders of Series A Preferred being redeemed
to exercise  their  conversion  right shall  terminate  as to such shares at the
close of  business on the fifth  business  day prior to (and  exclusive  of) the
Redemption Date.

     The Registered Holder of any shares of Series A Preferred redeemed upon any
exercise of the Corporation's  redemption right shall not be entitled to receive
payment of the Redemption Price until such holder shall cause to be delivered to
the place  specified in the notice given with respect to such redemption (i) the
certificate(s)   representing   such  Series  A  Preferred   and  (ii)  transfer
instrument(s)  satisfactory  to the  Corporation and sufficient to transfer such
Series A Preferred to the Corporation free of any adverse interest.  No interest
shall  accrue  on the  Redemption  Price of any  Series A  Preferred  after  its
Redemption Date. Any redemption of less than all outstanding  shares of Series A
Preferred shall be pro rata in proportion to each Registered  Holder's ownership
percentage of all outstanding Series A Preferred.



                                       -2-

<PAGE>



     At the close of business on the Redemption Date for any Series A Preferred,
such  stock  shall be deemed to cease to be  outstanding  and all  rights of any
person other than the  Corporation  in such stock shall be  extinguished  on the
Redemption  Date for such stock  except for the right to receive the  Redemption
Price,  without  interest,  for such stock in accordance  with the provisions of
this Section 4, subject to applicable escheat laws.

     In the event that any Series A Preferred  shall,  pursuant to Section 5, be
converted  into Common Stock,  (i) the  Corporation  shall not have the right to
redeem  such stock and (ii) any funds which  shall have been  deposited  for the
payment  of the  Redemption  Price  for  such  stock  shall be  returned  to the
Corporation immediately after such conversion.

     5. Conversion Rights. Each share of Series A Preferred shall be convertible
into Common Stock as follows:

          a.   Conversion  Right.  Subject  to, and upon  compliance  with,  the
               provisions  of this  Section 5, at the  option of the  registered
               holder,  the shares of Series A Preferred  may be converted  into
               the number of fully paid and nonassessable shares of Common Stock
               set forth in  paragraph  (b) of this  Section 5 at any time after
               December 31, 1997.

          b.   Conversion  Price.  Each  share  of  Series  A  Preferred  may be
               converted  into such  number  of  shares  of  Common  Stock as is
               determined by dividing the sum of  $10,000.00  by the  Conversion
               Price in effect on the Conversion Date, with the resulting amount
               rounded to the nearest  whole share.  The  Conversion  Price (the
               "Conversion  Price")  at which  shares of Common  Stock  shall be
               issuable  upon  conversion  of shares of the  Series A  Preferred
               initially shall be $0.50.  The Conversion  Price shall be subject
               to adjustment as set forth in paragraphs  (e) through (g) of this
               Section 5.

          c.   Mechanics  of  Conversion.  The  holder of any shares of Series A
               Preferred  may  exercise  the  conversion   right   specified  in
               paragraph (a) of this  Section 5 as to all or any part thereof by
               surrendering  to the  Corporation  or to such other person as the
               Board  of  Directors  may have  designated,  the  certificate  or
               certificates  for the shares to be  converted,  duly endorsed and
               assigned to the  Corporation or in blank,  accompanied by written
               notice  stating  that  the  holder  elects  to  convert  all or a
               specified portion of the shares represented  thereby.  Conversion
               shall  be  considered  to have  been  effected  at the  close  of
               business  on the date when  delivery  of notice of an election to
               convert and  certificates  for the shares to be converted is made
               in accordance with this  Section 5(c),  and such date is referred
               to herein as the "Conversion  Date." Subject to the provisions of
               paragraphs  (e)  through  (g) of this  Section 5,  as promptly as
               practicable thereafter (and after surrender of the certificate or
               certificates  representing  shares  of Series A  Preferred),  the
               Corporation  shall issue and deliver to a  converting  holder or,
               upon the  written  order of such  holder,  to  another  person so
               designated,   subject  to  any  applicable   securities  laws,  a
               certificate  or  certificates  for the number of whole  shares of
               Common  Stock to which  such  holder is  entitled.  The person in


                                       -3-

<PAGE>



               whose name the certificate or  certificates  for Common Stock are
               to be  issued  shall be  considered  to have  become a holder  of
               record of such  Common  Stock as of the close of  business on the
               applicable  Conversion Date. Upon conversion of only a portion of
               the number of shares covered by a certificate representing shares
               of Series A Preferred surrendered for conversion, the Corporation
               shall issue and deliver to the holder, or, upon the written order
               of the holder of the  certificate so surrendered  for conversion,
               to  another  person  at the  expense  of the  Corporation,  a new
               certificate  covering  the number of shares of Series A Preferred
               representing  the  unconverted  portion  of  the  certificate  so
               surrendered.

          d.   Fractional Shares. The Corporation shall not be required to issue
               fractional shares of Common Stock on the conversion of the Series
               A  Preferred.  The  record  holder and any  subsequent  holder of
               Series A Preferred by the acceptance thereof expressly waives his
               right to receive any  fractional  shares upon  conversion  of any
               shares of Series A Preferred.

          e.   Adjustment  For Change in Capital  Stock.  The  Conversion  Price
               shall be  subject  to  adjustment  from  time to time in case the
               Corporation  shall (i) declare a dividend or make a  distribution
               payable in Common  Stock on any class or series of capital  stock
               of the  Corporation  other  than  the  Series A  Preferred,  (ii)
               subdivide or reclassify  its  outstanding  shares of Common Stock
               into a greater  number of shares,  (iii) combine its  outstanding
               shares of Common Stock into a smaller number of shares, (iv) make
               a distribution on its Common Stock in shares of its capital stock
               other than Common Stock or (v) issue by  reclassification  of its
               Common  Stock any shares of its  capital  stock.  The  Conversion
               Price in effect at the time of the record date for such  dividend
               or  distribution  or the  effective  date  of  such  subdivision,
               combination or reclassification shall be proportionately  reduced
               in the case of any  increase  in the  number  of shares of Common
               Stock outstanding,  and increased in the case of any reduction in
               the  number of shares of Common  Stock  outstanding,  so that the
               holder of any Series A Preferred surrendered for conversion after
               such time shall be  entitled  to  receive  the kind and number of
               shares of Common  Stock  that he or she would  have owned or have
               been  entitled  to  receive  had  such  Series A  Preferred  been
               converted  into Common Stock  immediately  prior to such time and
               had  such  Common   Stock   received   such   dividend  or  other
               distribution or participated in such subdivision,  combination or
               reclassification.  Such  adjustment  shall be effective as of the
               record date for such  dividend or  distribution  or the effective
               date of such  combination,  subdivision or  reclassification  and
               shall be made successively  whenever any event listed above shall
               occur.

               If after an  adjustment  a holder of Series A Preferred  upon its
               conversion  may receive  shares of two or more classes of capital
               stock of the Corporation,  the Board of Directors shall determine
               the allocation of the adjusted  Conversion Price between or among
               the  classes  of  capital  stock.  After  such  allocation,   the
               Conversion   Prices  of  the  classes  of  capital   stock  shall
               thereafter be subject to adjustment on terms  comparable to those
               applicable to Common Stock herein in this Section 5.



                                       -4-

<PAGE>



          f.   Adjustment   for   Other   Distributions.   If  the   Corporation
               distributes  to all holders of its Common Stock any of its assets
               or debt securities or any rights or warrants to purchase  assets,
               debt   securities  or  other   securities   of  the   Corporation
               (including,  without limitation,  by way of dividend or spin-off,
               reclassification, recapitalization or similar rearrangement), the
               Conversion  Price  shall  be  adjusted  in  accordance  with  the
               following formula:

                                         M - F
                           C' = C x    --------
                                           M

         where

          C' = the adjusted Conversion Price.

          C = the then current Conversion Price.

          M    = the fair market value (as reasonably determined by the Board of
               Directors   in  good  faith)  of  each  share  of  Common   Stock
               outstanding on a fully diluted basis on the record date mentioned
               below.

          F    = the  fair  market  value  on the  record  date  of the  assets,
               securities,  rights or warrants  distributed which are applicable
               to one share of Common  Stock (as  reasonably  determined  by the
               Board of Directors in good faith).

          The  adjustment   shall  be  made   successively   whenever  any  such
          distribution is made and shall become effective  immediately after the
          record date for the determination of stockholders  entitled to receive
          the  distribution.  This  paragraph does not apply to (a) dividends or
          distributions in cash or in property paid out of consolidated  current
          or  retained  earnings  as shown on the books of the  Corporation  and
          determined in accordance with generally accepted accounting principles
          or (b) any  distributions  requiring  an  adjustment  under  any other
          provision of this Section 5.

          g.   Preservation   of   Conversion   Rights  Upon   Reclassification,
               Consolidation, etc. In case of (i) any reclassification or change
               of  outstanding  Common Stock or other  securities  issuable upon
               conversion of the Series A Preferred  (other than a change in par
               value or as a result of a subdivision or combination of shares of
               Common  Stock),   (ii)  any   consolidation   or  merger  of  the
               Corporation with another  corporation (other than a consolidation
               or merger in which the  Corporation is the surviving  corporation
               and which does not result in any reclassification of or change in
               the  outstanding  shares  of  Common  Stock) or (iii) any sale or
               conveyance  to  another   corporation  of  the  property  of  the
               Corporation, then the Corporation or such successor or purchasing
               corporation,  as the case may be,  shall be  required  to provide
               that subject to the  obligations and rights of the Corporation in


                                       -5-

<PAGE>




               Sections 3 and 4, (a) a holder of Series A  Preferred  shall have
               the right  thereafter to receive upon  conversion of the Series A
               Preferred the kind and amount of shares and other  securities and
               property  that such holder would have owned or have been entitled
               to  receive  after  the   happening  of  such   reclassification,
               consolidation,  merger,  sale or  conveyance  had  such  Series A
               Preferred been converted immediately prior to such action and (b)
               such right  shall be subject to  adjustments,  which  shall be as
               nearly  equivalent  as may  be  practicable  to  the  adjustments
               provided  for in this Section 5. The  provisions  of this Section
               5(g)  shall  similarly  apply  to  successive  reclassifications,
               consolidations, mergers, sales or conveyances.

          h.   When Adjustment May Be Deferred.  No adjustment in the Conversion
               Price  need  be made  unless  the  adjustment  would  require  an
               increase or decrease  of at least $.02 in the  Conversion  Price.
               Any  adjustments  which are not made shall be carried forward and
               taken into account in any subsequent adjustment. All calculations
               of the Conversion Price shall be made to the nearest cent.

          i.   When Adjustment Is Not Required.  Unless this Section 5  provides
               otherwise,  no adjustment in the  Conversion  Price shall be made
               because the Corporation issues, in exchange for cash, property or
               services,  Common Stock,  or any securities  convertible  into or
               exchangeable  for Common Stock, or securities  carrying the right
               to purchase  Common  Stock or such  convertible  or  exchangeable
               securities.  Furthermore,  no adjustment in the Conversion  Price
               need be made under this  Section 5  in the event the par value of
               the Common Stock is changed; provided,  however, that in no event
               shall the Corporation  increase the par value of the Common Stock
               to an amount greater than the  Conversion  Price that would be in
               effect subsequent to the transaction in which the par value would
               be increased.

          j.   Notice of Adjustments and Certain Transactions.

               1.   Whenever  the number of shares of Common  Stock  purchasable
                    upon  the  conversion  of  the  Series  A  Preferred  or the
                    Conversion  Price of such  shares  is  adjusted,  as  herein
                    provided,  the  Corporation  shall  within 15 days after the
                    effective date of such adjustment, notify each record holder
                    of Series A  Preferred  of such  adjustment  or  adjustments
                    setting   forth  the  number  of  shares  of  Common   Stock
                    purchasable  upon the  conversion  of the Series A Preferred
                    and the Conversion  Price after such  adjustment and setting
                    forth the computation by which such adjustment was made.

               2.   In  case  at  any  time  (i) there   shall  be  any  capital
                    reorganization or  reclassification  of the capital stock of
                    the Corporation,  or a sale of all or  substantially  all of
                    the assets of the Corporation,  or a consolidation or merger
                    of the Corporation  with another  corporation  (other than a
                    merger  in  which   the   Corporation   is  the   continuing
                    corporation,    and   which   does   not   result   in   any
                    reclassification or change of the then outstanding shares of


                                       -6-

<PAGE>



                    Common Stock or other capital stock issuable upon conversion
                    of the Series A  Preferred  other than a change in par value
                    or a subdivision or combination of such shares);  (ii) there
                    shall be a distribution  of Corporation  non-cash  assets to
                    all of the holders of Common  Stock;  (iii) there shall be a
                    subscription  offer made to all holders of Common Stock;  or
                    (iv) there shall be a voluntary or involuntary  dissolution,
                    liquidation or winding up of the  Corporation;  then, in any
                    one or more of said cases, the Corporation shall cause to be
                    sent by certified mail return receipt  requested,  facsimile
                    or telex to each of the Registered  Holders, at the earliest
                    practicable  time  (and in any  event  not less than 15 days
                    before  any  record  date or other  date set for  definitive
                    action),  written  notice  of the date on which the books of
                    the  Corporation  shall close or a record  shall be taken or
                    such distribution,  reorganization,  reclassification, sale,
                    consolidation,  merger, dissolution,  liquidation or winding
                    up shall take place,  as the case may be. Such notice  shall
                    also set forth  such facts as shall  indicate  the effect of
                    such  action (to the extent  such effect may be known at the
                    date of such notice) on the kind and amount of the shares of
                    stock and other  securities  and property  deliverable  upon
                    conversion of the Series A Preferred. Such notice shall also
                    specify  the  date as of which  the  record  holders  of the
                    shares of Common  Stock shall be entitled to exchange  their
                    shares of  Common  Stock for  securities  or other  property
                    deliverable  upon  such  reorganization,   reclassification,
                    sale,  consolidation,  merger,  dissolution,  liquidation or
                    winding up, as the case may be (on which date,  in the event
                    of  voluntary or  involuntary  dissolution,  liquidation  or
                    winding  up of the  Corporation,  the right to  convert  the
                    Series A Preferred shall terminate).

               3.   Without  limiting  the  obligation  of  the  Corporation  to
                    provide  notice  to  the  Registered  Holders  of  corporate
                    actions  hereunder,   it  is  agreed  that  failure  of  the
                    Corporation  to  give  notice  shall  not  invalidate   such
                    corporate action of the Corporation.

          k.   Reservation of Stock Issuable Upon  Conversion.  The  Corporation
               shall  at  all  times  reserve  and  keep  available,  free  from
               preemptive  rights,  out of its  authorized  but unissued  Common
               Stock,  solely for the purpose of effecting the conversion of the
               shares  of  Series A  Preferred,  the  number of shares of Common
               Stock then issuable upon the conversion of all outstanding shares
               of Series A Preferred. For the purpose of this Section 5(k),  the
               number of shares of Common Stock  issuable upon the conversion of
               all outstanding shares of Series A Preferred shall be computed as
               if at the time of  computation of such number of shares of Common
               Stock all outstanding shares of Series A Preferred were held by a
               single  holder.  The  Corporation  shall  from  time to time,  in
               accordance with applicable law, increase the authorized amount of
               its  Common  Stock if at any time the  authorized  amount  of its
               Common Stock remaining unissued shall not be sufficient to permit
               the  conversion  of all shares of Series A Preferred  at the time
               outstanding.  If  any  shares  of  Common  Stock  required  to be
               reserved  for  issuance  upon  conversion  of  shares of Series A
               Preferred hereunder require  registration with or approval of any
               governmental authority under any Federal or State law before such


                                       -7-

<PAGE>



               shares may be issued upon such  conversion,  the Corporation will
               in good faith and as promptly as  practicable  use all reasonable
               efforts to cause such shares to be so registered or approved.

          l.   Payment of Taxes. The Corporation will pay any and all taxes that
               may be payable in respect of the  issuance  or delivery of shares
               of Common  Stock on  conversion  of shares of Series A  Preferred
               pursuant hereto. The Corporation shall not, however,  be required
               to pay any tax which may be payable  in  respect of any  transfer
               involved  in the  issue or  transfer  and  delivery  of shares of
               Common  Stock in a name  other  than that in which the  shares of
               Series A Preferred  so  converted  were  registered,  and no such
               issuance  or  delivery  shall be made unless and until the person
               requesting  such issue has paid to the  Corporation the amount of
               any  such  tax or has  established  to  the  satisfaction  of the
               Corporation  that such tax has been paid.  In no event  shall the
               Corporation  be required to pay or reimburse a Registered  Holder
               for any  income tax  payable  by such  holder as a result of such
               issuance.

          m.   No  Reissuance of Preferred  Stock.  Shares of Series A Preferred
               converted as provided herein will be cancelled.

     6.  Authorization of Additional Classes of Shares. So long as any shares of
Series A  Preferred  remain  outstanding,  the  Board  of  Directors  shall  not
authorize the creation of a new class or series of shares having dividend rights
or  liquidation  preferences  or other  rights  equal,  prior or superior to the
Series A Preferred,  or increase the dividend rights or liquidation  preferences
of any class or series in such a manner as to make such  class or series  become
equal, prior or superior to the Series A Preferred,  without first obtaining the
written consent of holders holding a majority of the then outstanding  shares of
Series A Preferred.

     7.  Reissuance  of Shares.  Any shares of the Series A Preferred  which are
redeemed or otherwise  reacquired by the Corporation  shall assume the status of
authorized but unissued  Preferred Stock  undesignated as to series,  subject to
later issuance, and shall not be reissued as shares of Series A Preferred.

     8. Preemptive  Rights.  No holder of shares of Series A Preferred by reason
of holding  such  shares  shall have any  preemptive  or  preferential  right to
purchase or subscribe to any securities of the Corporation,  now or hereafter to
be authorized.

     9. Voting Rights.

          (a)  General.  The  holders  of the Series A  Preferred  Stock will be
               entitled to 20,000 votes per share of Series A Preferred, subject
               to adjustment in accordance with Article 5 hereof, on all matters
               subject to a vote of stockholders  of the Corporation  (except as
               provided in  subsection  9(b)  below),  such that  holders of the
               Series A  Preferred  shall  have the same  voting  rights as they


                                       -8-

<PAGE>




               would have if the shares of Series A  Preferred  held by them had
               been converted into Common Stock.

          (b)  Class  Voting.  Except as  specified  herein,  the holders of the
               Common  Stock and the holders of the Series A Preferred  shall be
               entitled  to vote as  separate  classes  only  when  required  by
               applicable  law to do so.  So  long as any  shares  of  Series  A
               Preferred remain outstanding,  the Corporation shall not, without
               the  affirmative  vote or  consent  of the  holders  of at  least
               66-2/3% of all outstanding  Series A Preferred voting  separately
               as a class,  (i) amend,  alter or repeal (by merger or otherwise)
               any provision of the Certificate of  Incorporation  or the Bylaws
               of  the   Corporation,   as  amended,   or  this  Certificate  of
               Designation,  so as to  adversely  affect  the  relative  rights,
               preferences,  qualification,  limitations or  restrictions of the
               Series A  Preferred;  (ii)  increase the number of members of the
               Board of  Directors  to more than seven (7); or (iii)  effect any
               reclassification  of the Series A Preferred.  As long as at least
               one-half  (1/2)  of the  originally  issued  shares  of  Series A
               Preferred are outstanding,  the holders of the Series A Preferred
               shall  have  the  right  to  elect  one  member  of the  Board of
               Directors by the  affirmative  vote of a majority of the Series A
               Preferred shares that are then voting.

          (c)  Removal and Vacancy.  Only Holders of the Series A Preferred  (to
               the extent they are entitled to vote  thereon)  shall be entitled
               to vote on the removal,  with cause,  of any director  elected by
               the  holders  of  Series  A  Preferred  (to the  extent  they are
               entitled  to  vote  thereon).  Any  vacancy  in the  office  of a
               director  created  by the  death,  resignation  or  removal  of a
               director elected by the holders of the Series A Preferred (to the
               extent they are entitled to vote thereon) may be filled only by a
               vote of holders of the Series A Preferred.  Any director  elected
               by the  stockholders  to fill a  vacancy  shall  serve  until the
               annual  meeting at which time such  director's  term  expires and
               until his or her  successor  has been elected and has  qualified,
               unless removed and replaced pursuant to this subsection 9(c).

     10. Sale,  Transfer and  Assignment.  Except as otherwise  provided in this
Section 10, the Series A Preferred  may not be sold,  transferred  or  assigned,
without the express  written  consent of the  Corporation.  Any attempted  sale,
transfer  or  assignment  shall be null and void  without  the  express  written
consent of the Corporation;  provided that, the sale,  transfer or assignment of
any Common Stock  received  pursuant to the conversion of the Series A Preferred
shall not be prohibited by this Section 10; further  provided that, the Series A
Preferred  may be assigned to Danaher  Corporation  or any  affiliate of Danaher
Corporation.  For  purposes of this Section 10, the term  "affiliate"  means any
person or entity  directly or  indirectly  controlling,  controlled  by or under
direct or indirect common control with respect to Danaher Corporation.

     RESOLVED  FURTHER,  that,  before the Corporation shall issue any shares of
the Series A  Preferred,  a  certificate  pursuant to Section 151 of the General
Corporation Law of the State of Delaware shall be made, executed,  acknowledged,
filed and recorded in  accordance  with the  provisions of said Section 151; and
that the proper officers of the  Corporation are hereby  authorized and directed
to do all acts and things which may be  necessary or proper in their  opinion to
carry into effect the purposes and intent of this and the foregoing resolutions.


                                       -9-

<PAGE>


     IN WITNESS WHEREOF, this Certificate of Designation has been made under the
seal of the  Corporation  and the  hands  of the  undersigned,  said  Jay  Allen
Chaffee,  Chairman  of the  Board,  and  Carol  Rogerson,  Assistant  Secretary,
respectively, of the Corporation, this 23 day of December, 1997.

                                    TANKNOLOGY-NDE INTERNATIONAL, INC.


                                        //s//  JAY ALLEN CHAFFEE

                                       By:   
                                         Jay Allen Chaffee
                                         Chairman of the Board

ATTEST:

//s//  CAROL ROGERSON

Carol Rogerson
Assistant Secretary


                                      -10-

<PAGE>

                                 EXHIBIT 10.49




-------------------------------------------------------------------------------


                           Preemptive Rights Agreement

-------------------------------------------------------------------------------


                          Dated as of December 23, 1997



<PAGE>




                                TABLE OF CONTENTS

Section 1.   Definitions.......................................................1

Section 2.   Preemptive Rights.................................................2
             2.1   Right of First Refusal......................................2
             2.2   Notice of Preemption Offering...............................2
             2.3   Manner of Exercise..........................................2
             2.4   Participation by Holder.....................................2
             2.5   Unsold Securities...........................................4
             2.6   Termination of Preemptive Rights............................4

Section 3.   Miscellaneous.....................................................4
             3.1   Rules of Construction.......................................4
             3.2   Notices.....................................................4
             3.3   Further Acts and Documents..................................6
             3.4   Counterparts................................................6
             3.5   Assignment..................................................6
             3.6   Amendments.  ...............................................6
             3.7   Governing Law...............................................6




<PAGE>



                           Preemptive Rights Agreement


     This is the  PREEMPTIVE  RIGHTS  AGREEMENT  dated as of  December  23, 1997
("Agreement") by and between  Tanknology-NDE  International,  Inc.  ("TNDE"),  a
Delaware  corporation,  and DH Holdings Corp.  ("DH"),  a Delaware  corporation,
entered  into  pursuant  to the  Note,  Preferred  Stock  and  Warrant  Purchase
Agreement,  dated  December  23, 1997,  as amended,  restated,  supplemented  or
otherwise  modified from time to time ("Purchase  Agreement") by and between DH,
as  purchaser,  and TNDE,  ProEco,  Inc.  ("ProEco"),  a  Delaware  corporation,
Tanknology/NDE Corporation ("NDE"), a Delaware corporation, 2368692 Canada, Inc.
("Canada"),  a Canadian Federal  corporation,  and  Tanknology-NDE  Construction
Services, Inc. ("Construction"), a Delaware corporation, as sellers.

     TNDE,  together  with its  successors  and  assigns,  is referred to as the
"Company" and DH, is referred to as the "Holder." The Company 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.
     As used in this  Agreement,  the  following  terms shall have the following
meanings:

          (a) "Common Stock" means the shares of the Company's Common Stock, par
          value $.0001, at any time outstanding.

          (b) "GAAP" means generally accepted accounting principles.

          (c) "Person" or "Persons" means any individual,  corporation,  limited
          liability  company,  partnership,  joint venture,  association,  joint
          stock  company,  trust,  unincorporated   organization,   governmental
          authority or any other form of entity.

          (d)  "Preemption  Offering"  means (i) any Rights  Offering,  (ii) the
          Company's  issuance of any warrants,  options or rights  entitling any
          person to purchase Common Stock (or securities convertible into Common
          Stock) for cash consideration or non-cash consideration; and (iii) the
          Company's issuance of shares of Common Stock for cash consideration or
          non-cash  consideration,  other  than (A)  issuances  of Common  Stock
          pursuant to the  conversion  of any  preferred  stock issued under the
          Purchase  Agreement,  or outstanding as of the date hereof, or (B) the
          exercise of any  warrants or options  issued  pursuant to the Purchase
          Agreement or as  reflected  on Schedule 6 of the  Purchase  Agreement.


                                        1

<PAGE>



          Notwithstanding  the foregoing,  the term "Preemption  Offering" shall
          not  include  (i) the  issuance  or sale of any  options,  warrants or
          similar  instruments  which are issued with respect to any employee or
          director  stock  option  plan or other  employee  benefit  plan of the
          Company which is in effect on the date of this Agreement,  or (ii) the
          issuance  or  sale  of  Common  Stock  pursuant  to  the  exercise  or
          conversion of any options,  warrants or similar  instruments which are
          issued with respect to any  employee or director  stock option plan or
          other  employee  benefit plan of the Company which is in effect on the
          date of this  Agreement;  provided that the maximum number of options,
          warrants,  similar  instruments  or shares of  Common  Stock  which is
          subject  to such  plans is not  greater  than the  number of  options,
          warrants, similar instruments or shares of Common Stock, respectively,
          subject to such plans on the date of this Agreement.

          (e) "Rights Offering" means any offering of Common Stock,  Convertible
          Securities  or other  shares of  capital  stock of the  Company or any
          distribution  of  rights  to  purchase  Common  Stock  or  Convertible
          Securities  by or on behalf of the Company that is made  substantially
          on a prorata basis among the holders of Common Stock.

Section 2. Preemptive Rights.

2.1  Right of First Refusal. During the term of this Agreement, the Holder shall
     have a right of first refusal in any Preemption Offering upon the terms and
     subject to the conditions set forth in this Section to purchase  either all
     or a portion of the securities to be offered in such Preemption Offering as
     defined below.

2.2  Notice of Preemption  Offering.  The Company shall give the Holder at least
     30 days' prior Notice of each  Preemption  Offering.  Such Notice shall set
     forth:  (i) the proposed  commencement  date for such Preemption  Offering;
     (ii) the number and description of the securities to be offered pursuant to
     the Preemption  Offering;  and (iii) the purchase price for such securities
     and other material terms of the Preemption Offering.

2.3  Manner of Exercise. The Holder may, in the sole exercise of its discretion,
     elect to  participate in any such  Preemption  Offering by giving Notice of
     its election to  participate  to the Company  within 5 business  days after
     being given Notice of such Preemption Offering. Such Notice shall set forth
     the number and  description of the  securities to be purchased  pursuant to
     Holder's  right of  first  refusal.  If the  consideration  payable  in the
     Preemption  Offering is not cash,  the Board of  Directors  shall,  in good
     faith  determine the cash  equivalent of such  non-cash  consideration  and
     Holder may participate in the Preemption Offering on a cash basis.

2.4  Participation  by Holder.  If Holder  elects to exercise its right of first
     refusal in such  Preemption  Offering,  the Holder  shall have the right to
     purchase for cash, upon the same terms and conditions as those provided for
     in such Preemption Offering,  up to a pro rata portion ("Pro Rata Portion")


                                        2

<PAGE>



     
     equal to that  percentage  of the  securities  of each type  issued in such
     Preemption  Offering not exceeding the Holder's percentage record ownership
     of the Company's Common Stock immediately before the Preemption Offering on
     a fully  diluted  basis  adjusted to include in both the  numerator and the
     denominator  any  shares  of the  Company's  Common  Stock  which  would be
     issuable  upon the  conversion  of  preferred  stock or warrants  issued to
     Holder  pursuant  to the  Purchase  Agreement  and  which  have not been so
     converted;  provided that, Holder shall purchase an equal percentage of the
     securities of each type to be issued in such Preemption Offering;  provided
     further  that,  in the event of a  Preemption  Offering  that  involves the
     issuance of any Common Stock or securities convertible into Common Stock or
     warrants,  options or rights  ("Options")  entitling any person to purchase
     Common Stock (or securities convertible into Common Stock) for cash or cash
     equivalent  consideration  which is less than $0.425 (the "Weighted Average
     Conversion  Price") per share of Common  Stock or per share of Common Stock
     issuable  upon  excercise  of  such  Options  and/or   conversion  of  such
     Convertible  Securities,  Holder  shall have the right of first  refusal to
     purchase for cash, upon the same terms and conditions as those provided for
     in such  Preemption  Offering,  either  up to the Pro Rata  Portion  or the
     entire  amount of the  securities  of each type  issued in such  Preemption
     Offering;  provided  further that, the Weighted  Average  Conversion  Price
     shall be subject to  appropriate  adjustment  from time to time in case the
     Corporation shall (i) declare a dividend or make a distribution  payable in
     Common  Stock on any class or series of  capital  stock of the  Corporation
     other  than the  Series A  Preferred,  (ii)  subdivide  or  reclassify  its
     outstanding  shares of Common Stock into a greater number of shares,  (iii)
     combine its  outstanding  shares of Common  Stock into a smaller  number of
     shares,  (iv)  make a  distribution  on its  Common  Stock in shares of its
     capital stock other than Common Stock or (v) issue by  reclassification  of
     its  Common  Stock  any  shares of its  capital  stock in which  case,  the
     Weighted Average  Conversion Price in effect at the time of the record date
     for  such  dividend  or   distribution   or  the  effective  date  of  such
     subdivision,  combination  or  reclassification  shall  be  proportionately
     reduced in the case of any increase in the number of shares of Common Stock
     outstanding,  and proportionately increased in the case of any reduction in
     the number of shares of Common Stock outstanding.

     For purposes of  calculating  the Weighted  Average  Conversion  Price with
     respect to any  Options  offered in a  Preemption  Offering,  the price per
     share of the Common  Stock  issuable  upon the  exercise of such Options or
     upon the conversion or exchange of the Convertible Securities issuable upon
     the exercise of such Option shall be  determined  by dividing (i) the total
     amount, if any, receivable by the Company as consideration for the granting
     of  such  Options,   plus  the  minimum   aggregate  amount  of  additional
     consideration payable to the Company upon the exercise of all such Options,
     plus, in the case of such Options which relate to  Convertible  Securities,
     the minimum aggregate amount of additional  consideration,  if any, payable
     upon  the  issue  or sale of  such  Convertible  Securities  and  upon  the


                                        3

<PAGE>



     
     conversion or exchange thereof,  by (ii) the total maximum number of shares
     of Common Stock  issuable upon the exercise of all such Options or upon the
     conversion or exchange of all such Convertible Securities issuable upon the
     exercise of such Options.

     For purposes of  calculating  the Weighted  Average  Conversion  Price with
     respect to any Convertible Securities offered in a Preemption Offering, the
     price per share for which Common Stock is issuable  upon the  conversion or
     exchange of such Convertible Securities shall be determined by dividing (i)
     the total amount received or receivable by the Corporation as consideration
     for the  issue or sale of such  Convertible  Securities,  plus the  minimum
     aggregate  amount  of  additional  consideration,  if any,  payable  to the
     Corporation  upon the  conversion  or exchange  thereof,  by (ii) the total
     maximum  number of shares of Common Stock  issuable upon the  conversion or
     exchange of all such Convertible Securities.

2.5  Unsold  Securities.  The  Company may for a period of not more than 90 days
     after the commencement date for any Preemption  Offering offer and sell the
     securities  subject to such Preemption  Offering which were not sold to the
     Holder  pursuant to this  Agreement to any Person or Persons upon the terms
     and subject to the conditions of such Preemption Offering.

2.6  Termination  of  Preemptive  Rights.  The rights of the  Holder  under this
     Agreement and the  obligations of the Company  hereunder shall terminate on
     the earlier of (i) the  repayment of the note dated  December 23, 1997,  in
     the  principal  amount of  $6,500,000,  by and between TNDE,  ProEco,  NDE,
     Canada and  Construction,  as sellers and DH, as  purchaser  including  all
     principal and interest due thereunder and (ii) December 31, 2004.

Section 3. Miscellaneous.

3.1  Rules of  Construction.  Unless  otherwise  specified,  the following rules
     shall be applied in construing the provisions of this Agreement:

     (a) Headings to the various  Sections of this Agreement are included solely
     for purposes of reference and shall be ignored in construing the provisions
     of this Agreement.

     (b) The word "including" connotes "including without limitation".

     (c) Any  reference  to any  agreement or other  document in this  Agreement
     refers to that  agreement  or other  document as amended  from time to time
     after the date of this Agreement.



                                        4

<PAGE>



3.2  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  given  to 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 business day actually  received if
     hand  delivered or if transmitted by telefax or if delivered or transmitted
     on a day that is not a business  day,  the next  business  day or (iii) one
     business  day after such  notice was  delivered  to an  overnight  delivery
     service, addressed, delivered or transmitted in each case as follows:

                  Purchaser:

                  DH Holdings Corporation 1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION: Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860


                  With a Courtesy Copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut  06070
                     ATTENTION: Steven H. Sigmon, President
                            Telephone: (860) 651-2735
                             Telefax: (860) 651-2727


                  Company:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: Daniel Sharplin, President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459



                                        5

<PAGE>



                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

     3.3  Further  Acts and  Documents.  Each of the  parties  hereby  agrees to
          execute and deliver  such further  instruments  and to do such further
          acts and  things as may be  necessary  or  desirable  to carry out the
          purposes of this Agreement.

     3.4  Counterparts. This Agreement may be executed in multiple counterparts,
          each of which shall be deemed to be an original and all of which shall
          constitute one in the same agreement.

     3.5  Assignment.  The  rights  of the  Holder  hereunder  may not be  sold,
          assigned or  otherwise  transferred,  except with the express  written
          consent of the  Company;  provided  that,  this  Section 3.5 shall not
          prohibit  the  assignment  or  transfer  of  such  rights  to  Danaher
          Corporation or to any affiliate of Danaher  Corporation.  For purposes
          of this  Section 3.5,  the term  "affiliate"  shall mean any person or
          entity  directly or indirectly  controlling,  controlled  by, or under
          direct or indirect common control with, the Danaher Corporation.

     3.6  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.

     3.7  Governing  Law. This  Agreement  shall be governed by and construed in
          accordance with the internal laws of the State of Delaware.



                                        6

<PAGE>


     The parties have executed and delivered this Agreement  effective as of the
day and year first above written.

                                 Company:

                                 TANKNOLOGY-NDE INTERNATIONAL, INC.

                                   //s//  JAY ALLEN CHAFFEE

                                 By:    Jay Allen Chaffee

                                 Its:   Chairman

                                 Holder:

                                 DH HOLDINGS CORPORATION


                                 By:    //s// DANIEL L. COMAS

                                 Its:  Vice President



                                        7
<PAGE>

                                 EXHIBIT 10.50



--------------------------------------------------------------------------------


                          REGISTRATION RIGHTS AGREEMENT

--------------------------------------------------------------------------------





<PAGE>



                                TABLE OF CONTENTS


         1.  Definitions......................................................1
             1.1      Code....................................................1
             1.2      Commission..............................................1
             1.3      Demand Registration.....................................1
             1.4      Exchange Act............................................1
             1.5      Exempt Offering.........................................1
             1.6      Registrable Common......................................1
             1.7      Registration Notice.....................................2
             1.8      Requesting Holders......................................2
             1.9      Rule 144................................................2
             1.10     Securities Act..........................................2
             1.11     Selling Stockholder.....................................2

         2.  Piggyback Registration Rights....................................2

         3.  Demand Registration Rights.......................................3

         4.  Registration Procedures..........................................4

         5.  Underwriting Agreement...........................................6

         6.  Priority in Registrations........................................6

         7.  Rule 144 Reporting...............................................7

         8.  Adjustments Affecting Registrable Common.........................7

         9.  Registration Expenses............................................7

         10. Participation in Underwritten Registrations......................8

         11. Assignment of Registration Rights................................8

         12. Indemnification and Contribution.................................8
             12.1     Indemnification by the Company..........................8
             12.2     Conduct of Indemnification Proceedings..................9
             12.3     Indemnification by Holders of Registrable Common........9
             12.4     Contribution...........................................10




                                       -i-

<PAGE>



         13. Miscellaneous...................................................11
             13.1     Amendments.............................................11
             13.2     Notices................................................11
             13.3     Successors and Assigns.................................12
             13.4     Counterparts...........................................12
             13.5     Headings...............................................12
             13.6     Governing Law..........................................12
             13.7     Entire Agreement; Termination..........................12





                                      -ii-

<PAGE>



                          REGISTRATION RIGHTS AGREEMENT


     THIS REGISTRATION  RIGHTS AGREEMENT (this  "Agreement") is made and entered
into as of December 23, 1997 by and between Tanknology-NDE International, Inc.,
a Delaware  corporation  ("TNDE" or the  "Company"),  and DH Holdings  Corp.,  a
Delaware corporation ("DH").

     WHEREAS,  pursuant  to the  Note,  Preferred  Stock  and  Warrant  Purchase
Agreement  entered  into between  TNDE,  ProEco,  Inc., a Delaware  corporation,
Tanknology/NDE  Corporation,  a Delaware  corporation,  2368642 Canada,  Inc., a
Canadian  Federal  corporation,  Tanknology-NDE  Construction  Services  Inc., a
Delaware corporation and DH on December 23, 1997 (the "Purchase Agreement"), DH
has purchased preferred stock of TNDE (the "Preferred Stock") which is initially
convertible  into 3,000,000  shares of TNDE's common stock,  par value of $.0001
per share (the "Common  Stock"),  and warrants (the "Warrants") for the purchase
of 4,500,000 shares of Common Stock; and

     WHEREAS, in order to induce DH to enter into the Purchase  Agreement,  TNDE
has  agreed  to  provide  registration  rights  on the  terms  set forth in this
Agreement for the benefit of DH;

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:

     1.  Definitions.  The following  capitalized  terms shall have the meanings
assigned to them in this Section 1 or in the parts of this Agreement referred to
below:

          1.1 Code:  the  Internal  Revenue  Code of 1986,  as amended,  and any
successor thereto.

          1.2  Commission:  the  Securities  and  Exchange  Commission,  and any
successor thereto.

          1.3 Demand Registration: as defined in Section 3.

          1.4 Exchange Act: the Securities Exchange Act of 1934, as amended, and
any successor thereto, and the rules and regulations thereunder.

          1.5 Exempt  Offering:  an offering or issuance of shares in connection
with (i) employee  compensation or benefit plans or (ii) one or more acquisition
transactions under a Registration Statement on either Form S-1 or form S-4 under
the Securities Act (or a successor to either Form S-1 or Form S-4).

     1.6 Registrable Common:  shares of Common Stock that are issuable or issued
to DH pursuant to the  conversion of the Preferred  Stock or the exercise of the
Warrants and any  additional  shares of Common Stock  issued or  distributed  in



                                       -1-

<PAGE>




respect  of any  other  shares  of Common  Stock by way of a stock  dividend  or
distribution  or stock  split or in  connection  with a  combination  of shares,
recapitalization,   reorganization,  merger,  consolidation  or  otherwise.  For
purposes  of this  Agreement,  shares of  Registrable  Common  will  cease to be
Registrable Common when and to the extent that a registration statement covering
such shares has been declared effective under the Securities Act.

          1.7 Registration Notice: as defined in Section 2.

          1.8 Requesting Holders: as defined in Section 3.

          1.9 Rule 144:  Securities  Act Rule 144 (or any  similar or  successor
provision under the Securities Act).

          1.10 Securities  Act: the Securities Act of 1933, as amended,  and any
successor thereto, and the rules and regulations thereunder.

          1.11 Selling Stockholder: as defined in Section 12.

     2.  Piggyback  Registration  Rights.  At any time  during  the term of this
Agreement that shares of Registrable Common remain outstanding, if TNDE proposes
to register any Common Stock under the Securities Act for a public  offering for
cash, other than a registration  relating to an Exempt Offering,  TNDE will give
DH prompt  written  notice of its intent to do so (a  "Registration  Notice") at
least 45 days prior to the filing of the related registration statement with the
Commission.  Such  notice  shall  specify  the  approximate  date on which  TNDE
proposes  to file such  registration  statement  and shall set forth the maximum
number of shares of Common  Stock which TNDE intends to register in the proposed
offering.  Upon  receipt  of a  Registration  Notice,  DH shall be  entitled  to
participate on the same terms and  conditions as TNDE in the public  offering to
which  such  Registration  Notice  relates  and to  offer  and  sell  shares  of
Registrable  Common  therein to the extent  provided in this Section 2. DH shall
notify TNDE of its desire to  participate  in such offering no later than thirty
days following the Registration  Notice,  which notice shall state the aggregate
number of shares  of  Registrable  Common  that DH then  desires  to sell in the
offering. TNDE shall select in its sole discretion,  any managing underwriter or
underwriters  to  administer  such  offering,  and shall  determine  in its sole
discretion the offering  price and  underwriting  discount or commission.  If DH
desires  to  participate  in such  public  offering,  DH may  include  shares of
Registrable Common in the registration statement relating to the offering to the
extent that the  inclusion  of such shares shall not reduce the number of shares
of Common  Stock to be offered and sold by TNDE to be included  therein.  If the
lead  managing  underwriter  selected by TNDE for a public  offering (or, if the
offering is not  underwritten,  a  financial  advisor to TNDE)  determines  that
marketing  factors  require a limitation on the number of shares of  Registrable
Common to be offered  and sold in such  offering  and  notifies DH in writing to
that effect,  there shall be included in the offering only that number of shares
of Registrable Common, if any, that such lead managing  underwriter or financial
advisor,  as the case may be,  believes will not  jeopardize  the success of the
offering.  In this  regard,  priority in  registration  shall be  determined  in



                                       -2-

<PAGE>




accordance with Section 6 hereof. No registration  effected under this Section 2
shall  relieve TNDE of its  obligation to effect any  registration  upon request
under  Section 3, nor shall any  registration  under this section 2 be deemed to
have been effected under Section 3.

     3. Demand  Registration  Rights. At any time during the period beginning on
the second  anniversary of the date of this Agreement and ending on December 31,
2007, DH may request in writing that TNDE file a  registration  statement  under
the Securities Act covering the  registration  of all or a part of the shares of
Registrable Common then held by DH (a "Demand Registration"). TNDE shall use its
commercially  reasonable  best  efforts  to  effect as soon as  practicable  the
registration  under  the  Securities  Act in  accordance  with  Section 4 hereof
(including  without  limitation,   the  execution  of  an  undertaking  to  file
post-effective amendments) of all shares of Registrable Common which DH requests
be  registered  within  30 days  after the  mailing  of such  notice;  provided,
however,  that TNDE shall be obligated  to effect only two Demand  Registrations
pursuant to this Section 3. In connection with a Demand Registration, DH, in its
sole discretion,  shall determine whether (a) to proceed with,  withdraw from or
terminate  such  offering  and (b) to take such  actions as may be  necessary to
close the sale of Registrable Common  contemplated by such offering,  including,
without  limitation,  waiving any  conditions  to closing such sale that may not
have been  fulfilled.  In the  event DH  exercises  its  discretion  under  this
paragraph to terminate a proposed  Demand  Registration,  the terminated  Demand
Registration  shall not  constitute a Demand  Registration  under this Section 3
only if the determination to terminate such Demand  Registration (i) follows the
exercise  by TNDE of any of its rights  provided by the last two  paragraphs  of
this Section 3 or (ii) results from a material  adverse  change in the condition
(financial  or  other),  results  of  operations  or  business  of TNDE  and its
subsidiaries  taken as a whole.  TNDE  expressly  reserves  the right to select,
subject  to the  approval  of DH  (which  approval  shall  not  be  unreasonably
withheld), any managing underwriter or underwriters to administer such offering;
and  DH  shall  determine  the  offering  price  and  underwriting  discount  or
commission.

     Notwithstanding  the  preceding  paragraph,  if TNDE shall  furnish to DH a
certificate  signed by the  President  of TNDE  stating  that in the  reasonable
judgment of the President,  it would be detrimental to TNDE or its  stockholders
if such registration  statement were to be filed and it is therefore  beneficial
to defer the filing of such registration statement, TNDE shall have the right to
defer such  filing  for a period of not more than 120 days after  receipt of the
request of DH.  TNDE shall  promptly  give  notice to DH at the end of any delay
period under this paragraph.

     Notwithstanding the preceding two paragraphs, if at the time of any request
by DH for a Demand  Registration,  TNDE has plans to file  within 90 days  after
such request for the sale of any of its  securities in a public  offering  under
the Securities Act (other than an Exempt Offering), no Demand Registration shall
be initiated under this Section 3 until 90 days after the effective date of such
registration  unless  TNDE is no longer  actively  employing  in good  faith all
reasonable efforts to effect such registration; provided that TNDE shall provide
DH the right to participate in such public offering pursuant to, and subject to,
Section 2 hereof.




                                       -3-

<PAGE>



     4. Registration Procedures. In connection with registrations under Sections
2 and 3 hereof, and subject to the terms and conditions contained therein,  TNDE
shall:

          (a) use its  commercially  reasonable best efforts to prepare and file
          with the Commission as soon as reasonably practicable,  a registration
          statement  with  respect  to  the  Registrable   Common  and  use  its
          commercially  reasonable  best efforts to cause such  registration  to
          become and remain effective for a period of at least 120 days (or such
          shorter period during which DH shall have sold all Registrable  Common
          which it requested to be registered);

          (b) prepare and file with the Commission  such  amendments  (including
          post-  effective  amendments)  to  such  registration   statement  and
          supplements  to the related  prospectus to reflect  appropriately  the
          plan of distribution of the securities registered thereunder until the
          completion  of the  distribution  contemplated  by  such  registration
          statement or for so long  thereafter as a dealer is required by law to
          deliver  a  prospectus  in  connection  with the offer and sale of the
          shares of Registrable  Common covered by such  registration  statement
          and/or  as  shall  be  necessary  so that  neither  such  registration
          statement  nor  the  related   prospectus  shall  contain  any  untrue
          statement of a material fact or omit to state a material fact required
          to be stated therein or necessary to make the  statements  therein not
          misleading  and so that such  registration  statement  and the related
          prospectus will otherwise comply with applicable legal requirements;

          (c)  provide to DH's  counsel  an  opportunity  to review and  provide
          comments  with  respect  to  such  registration   statement  and  each
          prospectus  included  therein  (and any post-  effective  amendment or
          supplements   thereto)  prior  to  such  registration   statement  (or
          post-effective amendment or supplements) becoming effective;

          (d) use its  commercially  reasonable  best  efforts to  register  and
          qualify the Registrable Common covered by such registration  statement
          under applicable  securities or "Blue Sky" laws of such  jurisdictions
          as DH shall reasonably request for the distribution of the Registrable
          Common, and to keep such registrations or qualifications in effect for
          as long as the Securities Act registration of such Registrable  Common
          remains in effect;

          (e) take such other actions as are  reasonable and necessary to comply
          with the requirements of the Securities Act;

          (f)  furnish  such  number  of  prospectuses   (including  preliminary
          prospectuses)  and documents  incident thereto as DH from time to time
          may reasonably request;

          (g) provide to DH and any managing  underwriter  participating  in any
          distribution  thereof, and to any attorney,  accountant or other agent
          retained  by  DH  or  managing   underwriter,   reasonable  access  to
          appropriate  officers and  directors of TNDE to ask  questions  and to
          obtain  information   reasonably  requested  by  DH  or  any  managing
          underwriter,  attorney,accountant  or other agent in  connection  with



                                       -4-

<PAGE>



          
          such  registration  statement or any  amendment  thereto,  as shall be
          necessary to conduct a reasonable  investigation within the meaning of
          the Securities Act of 1933; provided,  however, that (i) in connection
          with any such access or request,  any such  requesting  persons  shall
          cooperate  to  the  extent  reasonably  practicable  to  minimize  any
          disruption  to the  operation  by TNDE of its  business  and  (ii) any
          records,  information or documents shall be kept  confidential by such
          requesting persons, unless (A) such records,  information or documents
          are in the  public  domain  or  otherwise  publicly  available  or (B)
          disclosure  of such records,  information  or documents is required by
          court or administrative order or by applicable law (including, without
          limitation, the Securities Act);

          (h)  notify  DH and the  managing  underwriters  participating  in the
          distribution pursuant to such registration statement promptly (i) when
          TNDE  is   informed   that   such   registration   statement   or  any
          post-effective   amendment  to  such  registration  statement  becomes
          effective,  (ii) of any request by the  Commission for an amendment or
          any  supplement  to  such   registration   statement  or  any  related
          prospectus,  (iii) of the issuance by the Commission of any stop order
          suspending the effectiveness of such registration  statement or of any
          order  preventing or suspending  the use of any related  prospectus or
          the initiation or threat of any  proceeding for that purpose,  (iv) of
          the  suspension  of the  qualification  of any  shares of  Registrable
          Common  included  in  such  registration  statement  for  sale  in any
          jurisdiction  or the  initiation  or threat of a  proceeding  for that
          purpose,  (v) of any determination by TNDE that any event has occurred
          which  makes  untrue any  statement  of a  material  fact made in such
          registration statement or any related prospectus or which requires the
          making  of a change  in such  registration  statement  or any  related
          prospectus  in order  that  the  same  will  not  contain  any  untrue
          statement of a material fact or omit to state a material fact required
          to be stated therein or necessary to make the  statements  therein not
          misleading, (vi) of the completion of the distribution contemplated by
          such  registration  statement if it relates to an offering by TNDE and
          (vii)  when  the  registration   statement,   the  prospectus  or  any
          prospectus supplement related thereto or  post-effective-amendment  to
          the registration statement has been filed;

          (i) in the event of the  issuance  of any stop  order  suspending  the
          effectiveness  of  such   registration   statement  or  of  any  order
          suspending  or  preventing  the  use  of  any  related  prospectus  or
          suspending  the  qualification  of any  shares of  Registrable  Common
          included in such registration  statement for sale in any jurisdiction,
          use its commercially reasonable best efforts to obtain its withdrawal;

          (j) otherwise use its  commercially  reasonable best efforts to comply
          with all applicable rules and regulations of the Commission,  and make
          available to its security holders, as soon as reasonably  practicable,
          but not later than  fifteen  months after the  effective  date of such
          registration  statement,  an earnings statement covering the period of
          at least twelve months  beginning  with the first full fiscal  quarter
          after  the  effective  date  of  such  registration  statement,  which
          earnings  statement  shall satisfy the  provisions of Section 11(a) of
          the Securities Act;



                                       -5-

<PAGE>



          (k) use reasonable diligence to cause all shares of Registrable Common
          included in such registration statement to be listed on any securities
          exchange (including,  for this purpose, the Nasdaq National Market) on
          which the Common Stock is then listed at the initiation of TNDE;

          (l) use  reasonable  diligence to obtain an opinion from legal counsel
          in customary  form and covering  such matters of the type  customarily
          covered  by  opinions  as the  underwriters,  if any,  may  reasonably
          request;

          (m) provide a transfer  agent and registrar  for all such  Registrable
          Common  not  later  than  the  effective  date  of  such  registration
          statement;

          (n) enter into such customary  agreements  (including an  underwriting
          agreement  in  customary  form)  as  the  underwriters,  if  any,  may
          reasonably  request in order to expedite or facilitate the disposition
          of such shares of Registrable Common;

          (o) use reasonable  diligence to obtain a "comfort letter" from TNDE's
          independent  public  accountants  in customary  form and covering such
          matters of the type  customarily  covered  by  comfort  letters as the
          underwriters, if any, may reasonably request; and

          (p) use all reasonable efforts to cause all Registrable Common 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
          Common.

     As used in this Section 4 and  elsewhere  herein,  the term  "underwriters"
does not include DH.

     5. Underwriting Agreement. In connection with each registration pursuant to
Sections 2 and 3 covering an underwritten  registered public offering,  TNDE and
DH agree to enter into a written agreement with the managing underwriter in such
form and containing such provisions as are customary in the securities  business
for such an arrangement  between such  underwriter  and companies of TNDE's size
and investment stature, including provisions for representations, warranties and
indemnification by TNDE and each Selling Stockholder which may be different from
those described in Section 12 hereof.

     6. Priority in Registrations.  If (i) a registration  pursuant to Section 2
hereof  involves an  underwritten  offering of securities  and (ii) the managing
underwriter  shall inform the Company and the holders of the Registrable  Common
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:




                                       -6-

<PAGE>



          (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  Common requested by the Selling
Stockholders  to be included in such  registration  pursuant to Section 2 hereof
and then all other  securities  of the Company  requested to be included in such
registration;

          (ii) if such  registration is for other than an offering  described in
(i) above, such Registrable Common 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  pro rata on the basis of the number of
shares of such  Registrable  Common and such other  securities so proposed to be
sold.


     7. Rule 144  Reporting.  With a view to making  available  the  benefits of
certain rules and regulations of the Commission which may permit the sale of the
shares of Registrable Common held by DH to the public without registration, TNDE
agrees to:

          (a)  make and keep public  information  available  (as those terms are
               understood  and  defined in Rule 144) at all times from and after
               one year  after the date  hereof  until such date as no shares of
               Registrable Common remain outstanding;

          (b)  use its  commercially  reasonable  best  efforts to file with the
               Commission  in a timely  manner all reports  and other  documents
               required of TNDE under the Securities Act and the Exchange Act at
               any time that it is subject to such reporting  requirements until
               such date as no shares of Registrable Common remain  outstanding;
               and

          (c)  if required by the transfer  agent and  registrar  for the Common
               Stock,  use reasonable  diligence to obtain an opinion from legal
               counsel  addressed to such  transfer  agent and  registrar,  with
               respect to any sale of shares of Registerable  Common pursuant to
               Rule 144.

     8. Adjustments Affecting Registrable Common. The Company will not effect or
permit to occur any combination or subdivision of Registrable Common for so long
as DH holds shares of Registrable  Common,  and except as permitted by Section 2
and 3 hereof,  DH will not sell,  transfer or  otherwise  dispose of,  including
without  limitation  through  put or short sale  arrangements,  shares of Common
Stock in the ten days prior to the  effectiveness  of any registration of Common
Stock for sale to the public and for up to 120 days following the  effectiveness
of such registration;  provided,  that such holdback applies to TNDE and holders
of  substantially  all  other  securities  of TNDE  on  terms  equal  to or less
favorable than the terms applicable to the holders of the Registrable Common.

     9.  Registration  Expenses.  All expenses  incurred in connection  with any
registration,  qualification  and  compliance  under Section 2 of this Agreement
(including,   without  limitation,  all  registration,   filing,  qualification,



                                       -7-

<PAGE>




listing,  insurance,  legal,  printing and  accounting  fees, but not including,
without limitation, any underwriting fees, discounts or commissions attributable
to the sale of  Registrable  Common,  fees and expenses of counsel and any other
special experts retained by the holders of Registrable Common in connection with
a registration required hereunder, and transfer taxes, if any) shall be borne by
TNDE. All expenses incurred in connection with any  registration,  qualification
and compliance under Section 3 of this Agreement (including, without limitation,
all registration, filing, qualification,  legal, printing and accounting fees of
TNDE)  shall  be  borne  by  DH.  All  underwriting  commissions  and  discounts
applicable to shares of Registrable  Common included in the registrations  under
this Agreement shall be borne by the holders of the securities so registered pro
rata on the basis of the number of shares so registered.

     10. Participation in Underwritten  Registrations.  No holder of Registrable
Common may participate in any  underwritten  registration  hereunder unless such
holder (a) agrees to sell such holder's securities on the same basis provided in
any  underwriting  arrangements  approved by the persons  entitled  hereunder to
approve such arrangements and (b) completes, executes, and delivers promptly all
questionnaires,   powers   of   attorney,   custody   agreements,   indemnities,
underwriting  agreements and other documents reasonably required under the terms
of such underwriting arrangements.

     11.  Assignment of Registration  Rights. DH may assign its rights hereunder
only (a) in  connection  with the  sale or other  disposition  of (i) all of its
Registrable  Common or (ii) all of its  Warrants,  (b) with the express  written
consent of the  Company,  which  consent  may be  withheld by the Company in the
exercise of its sole discretion,  or (c) to Danaher Corporation or to any person
or entity under direct or indirect control of Danaher  Corporation or controlled
by or under direct or indirect common control with Danaher Corporation.

         12.      Indemnification and Contribution.

          12.1  Indemnification by the Company.  To the extent permitted by law,
TNDE agrees to indemnify and hold harmless any  stockholder  who sells shares of
Registrable  Common in a  registered  offering  pursuant to either  Section 2 or
Section 3 hereof (a "Selling Stockholder"), from and against any and all losses,
claims, damages,  liabilities and expenses (including reasonable legal expenses)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration  statement or prospectus  relating
to the  Registrable  Common or in any amendment or supplement  thereto or in any
related preliminary prospectus,  or arising out of or based upon any omission or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the statements  therein not  misleading,  except insofar as
such losses, claims, damages, liabilities or expenses arise out of, or are based
upon,  any such untrue  statement or omission or  allegation  thereof based upon
information  furnished  in  writing  to TNDE  by or on  behalf  of such  Selling
Stockholder or an underwriter  expressly for use therein.  In connection with an
underwritten  offering of shares of Registrable  Common, TNDE will indemnify any
underwriters  of the Registrable  Common,  their officers and directors and each
person who controls such  underwriters  (within the meaning of either Section 15



                                       -8-

<PAGE>



of the  Securities Act or Section 20 of the Exchange Act) on  substantially  the
same basis as that of the indemnification of the Selling  Stockholders  provided
in this Section 12.1.  Notwithstanding  the  foregoing,  TNDE's  indemnification
obligations  with respect to any preliminary  prospectus  shall not inure to the
benefit of any Selling  Stockholder  or  underwriter  with  respect to any loss,
claim, damage,  liability (or actions in respect thereof) or expense arising out
of or based on any untrue  statement or alleged untrue  statement or omission or
alleged omission to state a material fact in such preliminary prospectus, in any
case  where  (i) a copy of the  prospectus  used to  confirm  sales of shares of
Registrable  Common  was not sent or given to the  person  asserting  such loss,
claim,  damage or liability at or prior to the written  confirmation of the sale
to such person and (ii) such untrue  statement  or alleged  untrue  statement or
omission or alleged omission was corrected in such prospectus.

          12.2 Conduct of Indemnification Proceedings. Promptly after receipt by
a Selling  Stockholder of notice of any claim or the  commencement of any action
or proceeding brought or asserted against such Selling Stockholder in respect of
which indemnity may be sought from TNDE, such Selling  Stockholder  shall notify
TNDE in writing of the claim or the  commencement  of that action or proceeding;
provided,  however,  that the failure to so notify  TNDE shall not relieve  TNDE
from any liability  that it may have to the Selling  Stockholder  otherwise than
pursuant to the indemnification  provisions of this Agreement. If any such claim
or action or proceeding shall be brought against a Selling  Stockholder and such
Selling  Stockholder shall have duly notified TNDE thereof,  TNDE shall have the
right to assume the defense thereof,  including the employment of counsel.  Such
Selling  Stockholder shall have the right to employ separate counsel in any such
action and to participate in the defense  thereof,  but the fees and expenses of
such counsel shall be at the expense of such Selling Stockholder unless (i) TNDE
has agreed to pay such fees and  expenses or (ii) the named  parties to any such
action or proceeding  include both such Selling  Stockholder  and TNDE, and such
Selling  Stockholder  and TNDE shall have been advised by Selling  Stockholder's
counsel in writing  that there may be one or more legal  defenses  available  to
such  Selling  Stockholder  which  are  different  from or  additional  to those
available to TNDE, in which case, if such Selling  Stockholder  notifies TNDE in
writing that it elects to employ separate counsel, TNDE shall not have the right
to assume the defense of such  action or  proceeding  on behalf of such  Selling
Stockholder;  it being understood,  however,  that TNDE shall not, in connection
with any one such action or proceeding or separate but substantially  similar or
related actions or proceedings in the same jurisdiction  arising out of the same
general  allegations  or  circumstances,  be liable for the fees and expenses of
more than one  separate  firm of  attorneys  (together  with  appropriate  local
counsel) at any time for all Selling Stockholders.  TNDE shall not be liable for
any  settlement of any such action or proceeding  effected  without TNDE's prior
written consent.

          12.3  Indemnification by Holders of Registrable  Common. In connection
with any  registration  in which a Selling  Stockholder is  participating,  such
Selling  Stockholder  will  furnish  to TNDE in  writing  such  information  and
affidavits as TNDE  reasonably  requests for use in connection  with any related



                                       -9-

<PAGE>




registration  statement or  prospectus.  To the extent  permitted  by law,  each
Selling  Stockholder  agrees to indemnify and hold harmless  TNDE, its directors
and  officers  who  sign  the  registration  statement  relating  to  shares  of
Registrable Common offered by such Selling  Stockholder and each person, if any,
who controls TNDE within the meaning of either  Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing  indemnity
from TNDE to such  Selling  Stockholder,  but only with  respect to  information
concerning  such  Selling  Stockholder  furnished  in  writing  by such  Selling
Stockholder  or on such Selling  Stockholder's  behalf  expressly for use in any
registration  statement or prospectus  relating to shares of Registrable  Common
offered by such Selling Stockholder,  or any amendment or supplement thereto, or
any related  preliminary  prospectus.  In case any action or proceeding shall be
brought  against  TNDE or its  directors or  officers,  or any such  controlling
person,  in  respect  of which  indemnity  may be sought  against  such  Selling
Stockholder,  such Selling Stockholder shall have the rights and duties given to
TNDE,  and TNDE or its directors or officers or such  controlling  persons shall
have the rights and duties given to such Selling  Stockholder,  by the preceding
paragraph.  Each Selling  Stockholder also agrees to indemnify and hold harmless
any  underwriters  of the  Registrable  Common,  their  partners,  officers  and
directors and each person who controls such underwriters  (within the meaning of
either  Section 15 of the  Securities  Act or Section 20 of the Exchange Act) on
substantially the same basis as that of the  indemnification of TNDE provided in
this Section 12.3. Notwithstanding the foregoing, the aggregate liability of any
Selling Stockholder for any indemnification  under this section shall be limited
to the aggregate net proceeds received by such Selling Stockholder from the sale
of securities pursuant to such registration statement.  The Selling Stockholders
agree to  contribution  and indemnity  provisions in the agreement to the extent
customarily requested by the underwriter.

          12.4 Contribution. If the indemnification provided for in this Section
12 is unavailable  to any  indemnified  party in respect of any losses,  claims,
damages,  liabilities  or expenses  referred to herein,  then each  indemnifying
party, in lieu of indemnifying such indemnified  party,  shall contribute to the
amount  paid or payable by such  indemnified  party as a result of such  losses,
claims,  damages,  liabilities and expenses in such proportion as is appropriate
to reflect the  relative  fault of the  indemnifying  party and the  indemnified
parties in  connection  with the actions that  resulted in such losses,  claims,
damages,  liabilities  or  expenses,  as well as any  other  relevant  equitable
considerations.  The relative fault of such  indemnifying  party and indemnified
parties shall be  determined  by reference  to, among other things,  whether any
action in  question,  including  any untrue or  alleged  untrue  statement  of a
material  fact or omission or alleged  omission to state a material fact relates
to information supplied by such indemnified party or indemnified parties and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent such action. TNDE and the Selling  Stockholders agree that it
would not be just and  equitable if  contribution  pursuant to this Section 12.4
were determined by pro rata allocation or by any other method of allocation that
does  not take  account  of the  equitable  considerations  referred  to in this
Section  12.4.  No person  guilty of  fraudulent  misrepresentation  (within the
meaning  of  Section  11(f)  of  the  Securities   Act)  shall  be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent



                                      -10-

<PAGE>




misrepresentation.  If  indemnification  is available under this Section 12, the
indemnifying  parties shall indemnify each indemnified  party to the full extent
provided in Sections 12.1 and Section 12.3 without  regard to the relative fault
of  said  indemnifying  party  or  indemnified  party  or  any  other  equitable
consideration provided for in this Section 12.4

     13. Miscellaneous.

          13.1 Amendments.  Except as otherwise  provided herein, the provisions
of this Agreement may not be amended, modified or supplemented,  except upon the
written consent of both TNDE and DH.

          13.2 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  given  to 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 business day actually received if hand delivered
or if transmitted by telefax or if transmitted or delivered on a day that is not
a business  day,  the next  business  day or (iii) one  business  day after such
notice was delivered to an overnight delivery service,  addressed,  delivered or
transmitted in each case as follows:

                  Purchaser:

                  DH Holdings Corp.
                  1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION: Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860

                  With a Courtesy Copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut  06070
                     ATTENTION: Steven H. Sigmon, President
                            Telephone: (860) 651-2735
                             Telefax: (860) 651-2727




                                      -11-

<PAGE>



                  Company:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: Daniel Sharplin, President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

          13.3 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding  upon the heirs,  executors,  administrators,  successors  and
assigns of each of the parties.

          13.4  Counterparts.  This  Agreement  may be executed in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

          13.5 Headings.  The headings in this Agreement are for  convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          13.6 Governing Law. This agreement  shall be governed by and construed
in  accordance  with the laws of the state of Delaware  applicable  to contracts
made and to be performed wholly within that state.

          13.7 Entire Agreement;  Termination. This Agreement is intended by the
parties as a final  expression of their  agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject matter. This Agreement, except the provisions of Section 12 (which shall



                                      -12-

<PAGE>



survive until the expiration of the applicable statutes of limitations) and this
Section 13, shall commence on and as of the date hereof and shall  terminate and
be of no further force or effect on December 31, 2007.


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.


                                         TANKNOLOGY-NDE INTERNATIONAL, INC.

                                             //s//  JAY ALLEN CHAFFEE
                                       By:   Jay Allen Chaffee
                                      Its:   Chairman


                                         DH HOLDINGS CORP.

                                       By:   //s// DANIEL L. COMAS
                                      Its:   VP




                                      -13-
<PAGE>

                                 EXHIBIT 10.51




     -----------------------------------------------------------------------




                                Co-Sale Agreement


 -------------------------------------------------------------------------------



                           Dated as of December , 1997



                                       -i-

<PAGE>



                                TABLE OF CONTENTS


                                                                            Page


Section 1.  Definitions........................................................1

Section 2.  Sales by Shareholder...............................................2
             2.1    Notice of Purchase Offers..................................2
             2.2    Right of First Refusal. ...................................3
             2.3    Right to Participate.......................................3
             2.4    Consummation of Sale.......................................4
             2.5    Ongoing Rights.............................................4
             2.6    Permitted Exemptions.......................................4

Section 3.  Prohibited Transfers...............................................4
             3.1    Treatment of Prohibited Transfers..........................4
             3.2    Put Option.................................................4

Section 4.  Legended Certificate...............................................5
             4.1    Legend.....................................................5
             4.2    Legend Removal.............................................5

Section 5.  Miscellaneous Provisions...........................................6
             5.1     Termination of Co-Sale Rights.............................6
             5.2     Notices...................................................6
             5.3     Successors and Assigns....................................8
             5.4     Severability..............................................8
             5.5     Amendments................................................8
             5.6     Governing Law.............................................9
             5.7     Other Obligations of Company..............................9




                                      -ii-

<PAGE>



                                Co-Sale Agreement


     This CO-SALE  AGREEMENT dated as of December 23, 1997  ("Agreement") by and
between  Tanknology-NDE  International,  Inc., a Delaware corporation  ("TNDE"),
Proactive  Partners,  L.P.,  a  California  limited  partnership  ("Proactive"),
Lagunitas Partners,  L.P., a California limited partnership  ("Lagunitas"),  Jay
Allen Chaffee, A. Daniel Sharplin and DH HOLDINGS CORP., a Delaware  corporation
("DH"),  is entered  into  pursuant  to the Note,  Preferred  Stock and  Warrant
Purchase  Agreement,  as amended,  restated,  supplemented or otherwise modified
from time to time  ("Purchase  Agreement") by and between DH, as purchaser,  and
TNDE,  ProEco,  Inc.,  a Delaware  corporation,  Tanknology/NDE  Corporation,  a
Delaware corporation,  2368692 Canada, Inc., a Canadian Federal corporation, and
Tanknology-NDE  Construction Services, Inc., a Delaware corporation, as sellers,
and dated as of December _23, 1997.

     TNDE,  together  with its  successors  and  assigns,  is referred to as the
"Company." Proactive,  Lagunitas, and Messrs. Chaffee and Sharplin together with
their respective,  bound successors and assigns, are referred to collectively as
the  "Shareholders"  and individually as a "Shareholder."  DH, together with its
permitted  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 the mutual promises set forth in this Agreement and the
Purchase Agreement, the Parties hereby agree as follows.

     Section 1. Definitions.

     As used herein, the following terms shall have the following meanings:

     1.1 "Business Days" means any days other than Saturday,  Sunday or any days
upon which banking  institutions  are authorized or required by law or executive
order to be closed in the City of Washington, D.C.

     1.2 "Common Share  Equivalent"  means an equivalent number of Common Shares
which would be issuable upon either the  conversion  or exercise of  Convertible
Securities.

     1.3 "Common Shares" means the shares of common stock, $0.0001 par value, of
the Company, at any time outstanding.

     1.4  "Convertible  Securities"  means any securities  which are convertible
into Common Shares of the Company and  including any options,  warrants or other
rights for which Common Shares of the Company are issuable upon their exercise.

                                       -1-


<PAGE>



     1.5  "Fiscal  Year"  means the fiscal  year  ending on  December  31 of the
applicable year.

     1.6 "Notice" means notice given in accordance with Section 5.2 hereof.

     1.7 "Warrant  Certificate" means the Warrant Certificate dated December 23,
1997 and issued by the Company to DH evidencing  Warrants to purchase  4,500,000
Common Shares.

     1.8 "Warrant  Shares"  means the Common  Shares which are issuable upon the
exercise of the Warrants.

     1.9  "Warrant(s)"  means the right to purchase Common Shares of the Company
pursuant to the Warrant Certificate.

     Section 2. Sales by Shareholders.

     2.1  Notice  of  Purchase   Offers.   Should  any   Shareholder   ("Selling
Shareholder")  propose to accept one or more  binding,  written bona fide offers
from any persons to purchase  Common Shares or Convertible  Securities from such
Selling  Shareholder  other than (i) 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 or (ii) in the event of such an offer to Lagunitas,
any one or more bona fide offers which would not result in the sale by Lagunitas
during any Fiscal Year of Common Shares (including, Common Shares which would be
issuable upon the conversion or exercise of Convertible Securities) in excess of
3% of the total Common Shares (including,  Common Shares which would be issuable
upon the conversion or exercise of Convertible  Securities) held by Lagunitas as
of the  beginning  of such Fiscal Year or (iii) in the event of such an offer to
Proactive,  any one or more bona fide offers  which would not result in the sale
by Proactive during any Fiscal Year of Common Shares  (including,  Common Shares
which  would  be  issuable  upon  the  conversion  or  exercise  of  Convertible
Securities) in excess of 3% of the total Common Shares (including, Common Shares
which  would  be  issuable  upon  the  conversion  or  exercise  of  Convertible
Securities) held by Proactive as of the beginning of such Fiscal Year or (iv) in
the event of such an offer to a Selling  Shareholder  other than  Lagunitas  and
Proactive,  any one or more bona fide offers  which would not result in the sale
by such  other  Selling  Shareholder  during any  Fiscal  Year of Common  Shares
(including,  Common  Shares  which  would be  issuable  upon the  conversion  or
exercise of  Convertible  Securities) in excess of 5% of the total Common Shares
(including,  Common  Shares  which  would be  issuable  upon the  conversion  or
exercise of Convertible Securities) held by such other Selling Shareholder as of
the  beginning  of such Fiscal Year (the  "Purchase  Offer"),  then such Selling
Shareholder shall promptly give Notice to the Holder of the terms and conditions
of,  and a  copy  of,  each  such  Purchase  Offer.  In  addition,  the  Selling
Shareholder  shall  give  Notice to the Holder of any bona fide  purchase  offer
received  which falls within the exceptions  enumerated in this Section  2.1(i),
(ii), (iii) and (iv). Such notice shall include a copy of the purchase offer and
the terms and conditions thereof.


                                       -2-


<PAGE>



     2.2 Right of First  Refusal.  Subject to the terms and  conditions  of this
Agreement,  the Holder shall have a limited  right of first refusal with respect
to any  Purchase  Offer;  provided  that,  if the Holder does not  exercise  its
limited right of first refusal, Holder shall have a limited right to participate
in the Purchase Offer as specified in Paragraph 2.3.  Holder's  limited right of
first refusal shall be subject to the following terms:

     (a)  Holder  must  agree to  purchase  all (but not less  than  all) of the
          Common Shares and  Convertible  Securities  which are offered for sale
          pursuant to the Purchase  Offer upon the same terms and  conditions as
          those  contained  in the Purchase  Offer,  provided  that,  Holder may
          substitute an  equivalent  amount of cash for the fair market value of
          any non-cash consideration offered pursuant to the Purchase Offer; and

     (b)  Holder must give Notice to the  Selling  Shareholder  of its intent to
          exercise its right of first  refusal  within five  Business Days after
          being given Notice of the Purchase Offer by the Selling Shareholder.

     2.3 Right to  Participate.  In the event that the Holder does not  exercise
its right of first refusal with respect to a Purchase Offer, Holder shall have a
limited right to  participation in such Selling  Shareholder's  proposed sale of
Common  Shares  and/or  Convertible  Securities  on the same (or, in the case of
Convertible Securities, equivalent) terms and conditions. To the extent that the
Holder  exercises such right of  participation,  the number of Common Shares and
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)  Holder must give Notice to the  Selling  Shareholder  of its intent to
          exercise its right of participation within fifteen Business Days after
          being given Notice of the Purchase Offer by the Selling Shareholder.

     (b)  The  Holder  may  sell all or any part of its  Warrant  Shares  and/or
          Common  Shares  owned of record by Holder up to a number  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 aggregate number of Common Shares (including
          the Common Share Equivalent of Convertible Securities) owned of record
          by  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  Common  Shares  (including  the
          Common Share Equivalent of Convertible  Securities) at that time owned
          of record by the Holder.

     (c)  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 the number of currently  exercisable

                                       -3-


<PAGE>



          
          Warrant  Shares  and/or  Common Shares which the Holder elects to sell
          pursuant to this Section  2.3.  Notwithstanding  any  provision of the
          Warrant  Certificate  to the  contrary,  the Holder may exercise  such
          Warrant for the number of Warrant  Shares to be purchased  and deliver
          such Warrant Shares as provided in this Section 2.3, and such exercise
          shall not constitute  the single  exercise of the Warrant or otherwise
          affect any future exercise of the Warrant.

     2.4  Consummation of Sale. The stock  certificate or  certificates  which a
Holder  delivers  to the  Selling  Shareholder  pursuant to Section 2.3 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  Notice
delivered  pursuant to Section 2.1, 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  and the  Company  shall  receive  the  balance.
Notwithstanding the foregoing,  the Selling Shareholder shall not be responsible
or liable to the Holder in the event of  non-performance by the purchaser unless
such   non-performance  is  caused  by  the  wrongful  conduct  of  the  Selling
Shareholder.

     2.5  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  with  regard to
subsequent sales by a Selling Shareholder pursuant to Section 2 hereof.

     2.6 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 by any Shareholder,
the  Holder  shall  have the right to sell to such  Shareholder  that  number of
shares of Common Shares  (including  the Common Share  Equivalent of Convertible
Securities)  (either  directly or through delivery of such Common Shares and the
Common Share Equivalent of Convertible Securities) 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:

                                       -4-


<PAGE>



     (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.

     (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 DH HOLDINGS CORP.
          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 the date upon which the  provisions  of this  Agreement are no longer
applicable to such  securities in accordance with the provisions of Section 5.1,
or the date on which the shares  represented by such  certificate  are no longer
owned  of  record  beneficially  by  a  Shareholder,   pursuant  to  a  transfer
consummated in compliance with this Agreement.


                                       -5-


<PAGE>



     Section 5. Miscellaneous Provisions.

     5.1  Termination  of Co-Sale  Rights.  The rights of the Holder  under this
Agreement and the  obligations  of the  Shareholders  with respect to the Holder
shall terminate on the earlier of (i) December 31, 2004,  (ii) the  liquidation,
dissolution or indefinite  cessation of the business  operations of the Company;
or (iii)  the first  date on which  the  Holder  is no  longer  the  record  and
beneficial owner of at least 1,500,000 Common Shares (including the Common Share
Equivalent of Convertible Securities).

     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 given to 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 business day actually  received if hand  delivered or if
transmitted  by telefax or if  delivered or  transmitted  on a day that is not a
business  day,  then the next business day, 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:

                  DH HOLDINGS CORP.
                  1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION: Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860

                  With a courtesy copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut 06070
                  ATTENTION:  Steven H. Sigmon
                  Telephone:        (860) 651-2735
                  Telefax:          (860) 651-2727


                                       -6-


<PAGE>



                  If to the Company:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: Daniel Sharplin, President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

                  If to Proactive:

                  Proactive Partners, L.P.
                  50 Osgood Place, Penthouse
                  San Francisco, CA 94153
                  ATTENTION:  Charles McGettigan
                  Telephone:        (415) 986-4433
                  Telefax:          (415) 986-3617

                  If to Lagunitas:

                  Lagunitas Partners, L.P.
                  50 Osgood Place, Penthouse
                  San Francisco, CA 94153
                  ATTENTION:  Patrick McBane
                  Telephone:        (415) 981-2101
                  Telefax:          (415) 521-1744


                                       -7-


<PAGE>



                  If to Mr. Chaffee:

                  Jay Allen Chaffee
                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, TX 77002
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

                  If to Mr. Sharplin:

                  A. Daniel Sharplin
                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, TX 78758
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

     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,  permitted  assigns  and  legal  representatives;
provided that, the rights of the Holder  hereunder may not be sold,  assigned or
otherwise  transferred without the prior, express written consent of the Company
and all of the  Shareholders;  provided  further  that  DH  Holdings  Corp.  may
negotiate,  assign, or transfer its rights and obligations hereunder without the
consent of the  Company or the  Shareholders  to Danaher  Corporation  or to any
person or entity  under  direct or indirect  control of Danaher  Corporation  or
controlled  by  or  under  direct  or  indirect   common  control  with  Danaher
Corporation.

     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

                                       -8-


<PAGE>



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 Delaware.

     5.7  Other   Obligations  of  Company.   The  Company  agrees  to  use  all
commercially  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 Sections 4 and 5 hereof.

     The parties have executed and delivered this Agreement  effective as of the
day and year first above written.

SHAREHOLDERS:                                 HOLDER:

PROACTIVE PARTNERS, L.P.
                                              DH HOLDINGS CORP.
By:  //s// C.C. McGETTIGAN
Its: General Partner

LAGUNITAS PARTNERS, L.P.
                                              By: //s// DANIEL L. COMAS
By:  //s//  JON D. GRUBER
Its:  General Partner                        Its: VP




//s//  JAY ALLEN CHAFFEE

JAY ALLEN CHAFFEE

//s//  A. DANIEL SHARPLIN

A. DANIEL SHARPLIN



                                      -9-


<PAGE>



COMPANY:

TANKNOLOGY-NDE INTERNATIONAL, INC.


By:  //s//  JAY ALLEN CHAFFEE

Its:   Chairman



                                      -10-

<PAGE>

                                 EXHIBIT 10.52




-------------------------------------------------------------------------------


                       Tanknology-NDE International, Inc.

                     Security Agreement - Personal Property

-------------------------------------------------------------------------------


                          Dated as of December23, 1997



                                       -1-


<PAGE>



                                TABLE OF CONTENTS

1.  Definitions................................................................1
    1.1      Applicable Law....................................................1
    1.3      Collateral........................................................1
    1.4      Event of Default..................................................2
    1.5      Intercreditor Agreement...........................................2
    1.6      Lien..............................................................2
    1.7      Note..............................................................2
    1.8      Permitted Liens...................................................2
    1.9      Person............................................................2
    1.10     Pledge Agreement..................................................2
    1.11     Proceeds..........................................................2
    1.12     Secured Obligations...............................................3
    1.13     Senior Lender.....................................................3
    1.14     Senior Loan Agreement.............................................3

2.  Security Interest..........................................................3
    2.1      Grant of Security Interest........................................3

3.  Enforcement, Remedies and Application of Proceeds..........................3
    3.1      Remedies..........................................................3
    3.2      Discontinuance of Remedies........................................5
    3.3      Cumulative Remedies...............................................5
    3.4      Power of Attorney.................................................6

4.  Covenants, Warranties and Agreements of Debtors............................6
    4.1      Records...........................................................6
    4.2      Accounting........................................................6
    4.3      Cooperation.......................................................7
    4.4      Discharge Taxes, Assessments, Etc.................................7
    4.5      Expenses..........................................................7
    4.6      Limitations on Dispositions of Accounts and Contracts.............7
    4.7      Negative Pledge...................................................7
    4.8      Notices...........................................................7
    4.9      Preservation of Collateral........................................8
    4.10     Chief Executive Office............................................8

5.  Indemnification............................................................8
    5.1      Indemnification of Secured Party..................................8
    5.2      Costs and Expenses................................................9

6.  Termination................................................................9

                                      -ii-


<PAGE>




7.  Recordation and Filing.....................................................9

8.  Waivers...................................................................10

9.  Security Interest Absolute................................................10

10  Release...................................................................10

11  Miscellaneous.............................................................11
    11.1     Rules of Construction............................................11
    11.2     Notices..........................................................11
    11.3     Severability.....................................................12
    11.4     Amendments.......................................................13
    11.5     Successors and Assigns...........................................13
    11.6     Further Acts and Documents.......................................13
    11.7     Counterparts.....................................................13
    11.8     Governing Law....................................................13
    11.9     Waiver of Jury Trial.............................................13
    11.10    Consent to Jurisdiction, Venue and Service of Process............13


                                      -iii-


<PAGE>



                     SECURITY AGREEMENT - PERSONAL PROPERTY


     This SECURITY AGREEMENT,  dated as of December 23, 1997  ("Agreement"),  is
entered  into by and between  Tanknology-NDE  International,  Inc.  ("TNDE"),  a
Delaware   corporation,   ProEco,  Inc.  ("ProEco"),   a  Delaware  corporation,
Tanknology/NDE Corporation ("NDE"), a Delaware corporation, 2368692 Canada, Inc.
("Canada"),   a  Canadian  Federal  corporation,   Tanknology-NDE   Construction
Services,  Inc.  ("Construction"),  a Delaware corporation and DH Holdings Corp.
("DH"), a Delaware corporation, provided for in and entered into pursuant to the
Note,  Preferred Stock and Warrant  Purchase  Agreement,  as amended,  restated,
supplemented or otherwise  modified from time to time ("Purchase  Agreement") by
and among DH, as purchaser,  and TNDE, ProEco, NDE, Canada and Construction,  as
sellers, dated as of December 23, 1997.

     TNDE, ProEco,  NDE, Canada and Construction  together with their respective
successors  and assigns,  are referred to as  "Debtors."  DH,  together with its
successors  and assigns,  is sometimes  referred to as the "Secured  Party." The
Debtors and the Secured Party 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.

1.       Definitions.

     As used herein, the following terms shall have the following meanings:

     1.1  "Applicable  Law"  means,  with  respect  to any  Person,  any and all
federal,  national, state, regional, local, municipal or foreign laws, statutes,
rules,  regulations,  guidelines,  ordinances,  licenses,  permits,  judicial or
administrative  decisions of any country, or any political subdivision,  agency,
commission, official or court thereof having jurisdiction over such Person.

     1.2 "Code" means the Uniform  Commercial Code of the State of Delaware,  as
amended from time to time, together with any successor law.

     1.3 "Collateral" means all tangible and intangible personal property now or
hereafter  owned,  acquired,  arising or existing by or of the Debtors,  whether
acquired by contract or operation of law and wherever located,  including all of
the following types of personal property:

               (i)  all Accounts,  Chattel Paper,  Deposit Accounts,  Documents,
                    Equipment,  Fixtures, Goods, Instruments and Securities (all
                    as defined in the Code);


                                       -1-


<PAGE>



               (ii) all  accessions  to,  substitutions  for,  replacements  and
                    products of the foregoing;

               (iii)all books and  records  (including  customer  lists,  credit
                    files, tapes, ledger cards,  computer software and hardware,
                    electronic  data  processing  software,  computer  programs,
                    print-outs and other computer  materials and records) of the
                    Debtors  evidencing or containing  information  regarding or
                    otherwise pertaining to any of the foregoing; and

               (iv) all Proceeds of or from the foregoing.

     1.4 "Event of  Default"  means any event of default as defined by Section 8
of the Note.

     1.5  "Intercreditor  Agreement" means the  Intercreditor  and Subordination
Agreement  dated as of December 23, 1997,  by and between DH and Bank One Texas,
N.A., as modified, amended or restated from time to time.

     1.6 "Lien" means mean any mortgage, pledge, security interest, encumbrance,
lien, assignment or charge of any kind.

     1.7 "Note" means the Senior  Subordinated Note by and between TNDE, ProEco,
NDE, Canada and Construction as sellers,  and DH as purchaser,  in the principal
amount of $6,500,000 and dated as of December 23, 1997.

     1.8  "Permitted  Liens"  means any and all liens that are  permitted by the
Purchase Agreement.

     1.9 "Person" means any individual,  corporation, limited liability company,
partnership,   joint  venture,   association,   joint  stock   company,   trust,
unincorporated organization, governmental authority or any other form of entity.

     1.10 "Pledge Agreement" means the Security  Interest--Pledge  of Subsidiary
Stock Agreement dated as of December 23, 1997 by and between TNDE and DH.

     1.11  "Proceeds"  means any "proceeds" as such term is defined in the Code,
including the  following,  at any time  whatsoever  arising or  receivable:  (i)
whatever is received upon any collection,  exchange,  sale or other disposition,
of any of the  Collateral,  and any property into which any of the Collateral is
converted,  whether cash or non-cash proceeds,  (ii) any and all proceeds of any
insurance,  indemnity,  warranty or guaranty payable to the Debtors from time to
time with respect to any of the  Collateral,  including  claims paid and premium
refunds,  (iii) any and all  payments (in any form  whatsoever)  made or due and
payable to the Debtors  from time to time in  connection  with any  requisition,
confiscation,  condemnation,  seizure  or  forfeiture  of all or any part of the
Collateral  by any  governmental  authority,  and (iv) any and all other amounts


                                       -2-


<PAGE>



from  time to time  paid or  payable  under  or in  connection  with  any of the
Collateral.

     1.12  "Secured  Obligations"  means  (i)  all  obligations  of the  Debtors
evidenced by the Senior Subordinated Note due December 31, 2002, and dated as of
December 23, made payable by the Debtors to the Secured  Party in the  principal
amount  of  $6,500,000,  which  note was  purchased  by the  Secured  Party  for
$6,500,000  pursuant to the Purchase  Agreement,  together with all  extensions,
renewals,  amendments,   modifications  and  novations  thereof,  and  (ii)  all
obligations  of the Debtors to make  payments or  reimburse  costs and  expenses
under this Agreement or the Purchase Agreement.

     1.13 "Senior Lender" means Bank One Texas, N.A., as lender under the Senior
Loan Agreement, together with its successors and assigns in such capacity or any
substitutes  or Persons  acting in the same or similar  capacity with respect to
any indebtedness incurred to replace amounts borrowed by Debtors pursuant to the
Senior Loan Agreement.

     1.14 "Senior Loan Agreement" means the loan agreement,  dated as of October
25,  1996,  by TNDE,  certain  of its  subsidiaries  and Bank  One  Texas,  N.A.
including all amendments, extensions, renewals and refinancings thereof.

2.       Security Interest.

     2.1 Grant of Security  Interest.  As security for the timely payment of the
Secured  Obligations,  the Debtors  hereby grant to the Secured Party a security
interest in all of the  Collateral  whether now or  hereafter  owned,  acquired,
arising or  existing,  whether  acquired  by contract  or  operation  of law and
wherever located.

3.       Enforcement, Remedies and Application of Proceeds.

     3.1 Remedies.  The Debtors agree that when an Event of Default has occurred
and is continuing,  the Secured Party shall have the rights, options, duties and
remedies of a secured party, and the Debtors shall have the rights and duties of
a debtor,  under the Code  (regardless  of  whether  such Code or a law  similar
thereto has been  enacted in a  jurisdiction  wherein the rights or remedies are
asserted), as applicable,  and the Secured Party shall have the following rights
and remedies.

          (a) The  Secured  Party  shall  have all of the  rights  and  remedies
provided for under the Note and the Purchase Agreement.

          (b) The  Secured  Party  shall have all the rights of a secured  party
under the Code or by other  provisions of applicable law to enforce the security
interests contained herein,  including without limitation,  the right to sell or
otherwise dispose of any or all of the Collateral.


                                       -3-


<PAGE>



          (c) The Secured Party  personally,  or by agents or  attorneys,  shall
have the right  (subject  to  compliance  with any  applicable  mandatory  legal
requirements)  to take immediate  possession of the  Collateral,  or any portion
thereof,  and for that purpose may pursue the same wherever it may be found, and
may enter any of the premises of the Debtors,  with or without  notice,  demand,
process of law or legal  procedure,  if this can be done  without  breach of the
peace,  and  search  for,  take  possession  of,  remove,  keep  and  store  the
Collateral, or use and operate or lease the Collateral until sold.

          (d) Any Collateral  repossessed by the Secured Party under or pursuant
to this Section 3.1 may be sold,  leased or  otherwise  disposed of under one or
more  contracts or as an entirety,  and without the  necessity of a gathering at
the place of sale of the property to be sold, and in general in such manner,  at
such time or times,  at such place or places  and on such  terms as the  Secured
Party may, in compliance  with any  mandatory  requirements  of applicable  law,
determine to be  commercially  reasonable.  Any of the  Collateral  may be sold,
leased or otherwise disposed of, in the condition in which the same existed when
taken by the Secured  Party or after any repair  which the  Secured  Party shall
determine to be commercially  reasonable.  Any such disposition which shall be a
public  or  private  sale  or  other  private  proceedings   permitted  by  such
requirements  shall be made upon not less than ten (10)  business  days' written
notice to the Debtors  specifying  the times at which such  disposition is to be
made and the intended sale price or other consideration  therefor. To the extent
permitted by any such  requirement  of law, the Secured Party may itself bid for
and  become  the  purchaser  of the  Collateral  or  any  part  thereof  without
accountability  to the Debtors.  In the payment of the purchase price  therefor,
the Secured  Party  shall be entitled to have credit on account of the  purchase
price  thereof  of  amounts  owing  to  the  Secured  Party  on  account  of the
indebtedness  hereby  secured and the  Secured  Party may deliver the claims for
interest on or principal  of the Note or other  indebtedness  hereby  secured in
lieu of cash up to the amount which would, upon distribution of the net proceeds
of such sale, be payable thereon. If, under mandatory requirements of applicable
law, the Secured Party shall be required to make  disposition  of the Collateral
within a period  of time  which  does not  permit  the  giving  of notice to the
Debtors as hereinabove  specified,  the Secured Party need give the Debtors only
such notice of  disposition  as shall be reasonably  practicable in view of such
mandatory requirements of applicable law.

          (e) The  Secured  Party  may  proceed  to  protect  and  enforce  this
Agreement by suit or suits or  proceedings  in equity,  at law or in bankruptcy,
and whether for the specific  performance  of any  covenant or agreement  herein
contained or in execution or aid of any power herein granted, or for foreclosure
hereunder,  or for the appointment of a receiver or receivers for the Collateral
or any part thereof,  for the recovery of judgment for the  indebtedness  hereby
secured or for the enforcement of any other legal or equitable  remedy available
under applicable law.

          (f) Any  sale,  whether  under any  power of sale  hereby  given or by
virtue of  judicial  proceedings,  shall  operate to divest  all  right,  title,
interest,  claim  and  demand  whatsoever,  either at law or in  equity,  of the
Debtors in and to the property  sold and shall be a perpetual  bar,  both at law
and in equity,  against the Debtors,  their successors and assigns,  and against
any and all persons claiming  the  property  sold,  or any part  thereof  under,

                                       -4-


<PAGE>



by or through the Debtors, their successors or assigns.

          (g) Nothing hereby contained is intended,  nor should it be construed,
to preclude the Secured Party from pursuing any other remedy provided by law for
the  collection of the Secured  Obligations or any portion  thereof,  or for the
recovery of any other sums to which the Secured Party may be or become  entitled
for the breach of this Agreement by the Debtors.

          (h) Until termination of this Agreement,  the Secured Party shall have
and may exercise any and all of its rights and remedies  given by this Agreement
or under any  applicable  law.  This  Agreement and all such rights and remedies
shall inure to the  benefit of the  Secured  Party's  successors  and  permitted
assigns that derives from the Secured Party title to or an interest in the Note,
the Secured  Obligations or any portion thereof or  participation  therein,  and
shall bind the Debtors and the successors and assigns of the Debtors.

          (i) Upon the  occurrence  and  during the  continuance  of an Event of
Default,  in the  case of any  sale or  disposition  of the  Collateral,  or the
realization of funds therefrom, the Proceeds thereof shall be applied: first, to
the payment of the  reasonable  expenses of such sale,  reasonable  commissions,
reasonable  attorneys'  fees and all reasonable  charges paid or incurred by the
Secured  Party  pertaining  to said sale,  including  any taxes or other charges
imposed by law upon the Collateral  and/or the owning,  holding or  transferring
thereof;  second,  to pay, satisfy and discharge the Secured  Obligations;  and,
third, to pay the surplus,  if any, to the Debtors.  To the extent such Proceeds
do not satisfy the foregoing  items, the Debtors hereby promise and agree to pay
any deficiency.

     3.2  Discontinuance  of  Remedies.  In case the  Secured  Party  shall have
proceeded to enforce any right under this Agreement by foreclosure,  sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any  reason or shall have been  determined  adversely,  then,  and in every such
case,  the  Debtors and the  Secured  Party  shall be  restored to their  former
respective  positions and rights  hereunder with respect to the property subject
to the security interest created under this Agreement.

     3.3  Cumulative  Remedies.  No delay or omission  of the  Secured  Party to
exercise any right or power  arising from an Event of Default  shall  exhaust or
impair any such right or power or prevent its exercise during the continuance of
such  Event of  Default.  No waiver by the  Secured  Party of any such  Event of
Default,  whether such waiver be full or partial, shall extend to or be taken to
affect any  subsequent  Event of  Default,  or to impair  the  rights  resulting
therefrom  except as may be otherwise  provided  herein.  The Secured  Party may
exercise  any one or more or all of the  remedies  hereunder  and no  remedy  is
intended to be  exclusive of any other remedy but each and every remedy shall be
cumulative  and in addition to any and every other  remedy  given  hereunder  or
otherwise  existing now or hereafter at law or in equity;  nor shall the giving,
taking  or  enforcement  of any  other or  additional  security,  collateral  or
guaranty  for the  payment of the  indebtedness  secured  under  this  Agreement
operate to  prejudice,  waive or affect the  security of this  Agreement  or any
rights, powers or remedies hereunder, nor shall the Secured Party be required to

                                       -5-


<PAGE>



first look to, enforce or exhaust such other additional security,  collateral or
guaranties.

         3.4      Power of Attorney.

          (a) The  Debtors do hereby  irrevocably  constitute  and  appoint  the
Secured Party and its successors and assigns and agents, upon the occurrence and
during the  continuance of an Event of Default,  their true and lawful  attorney
with full power of substitution  for them and in their name, place and stead, to
ask, demand, collect, receive, receive for and sue for any and all Proceeds with
full power to settle,  adjust or compromise any claim thereunder as fully as the
Debtors  could  themselves  do,  and to endorse  the name of the  Debtors on all
instruments or commercial paper given in payment or in part payment thereof, and
in its  reasonable  discretion  to file any  claim or take any  other  action or
proceedings,  either in its own name or in the name of the Debtors or otherwise,
which the Secured  Party may deem  necessary  in its  reasonable  discretion  to
perfect, protect and preserve the right, title and interest of the Secured Party
in and to such Proceeds and the security intended to be afforded hereby. Without
limiting the  generality  of the  foregoing,  Secured  Party or its agents shall
specifically  be authorized  to do all acts and things  necessary to fulfill the
Debtors' obligations under the Purchase Agreement.

          (b) The Parties  acknowledge  that the powers conferred on the Secured
Party  hereunder are solely to protect its interest in the  Collateral  and that
anything herein contained to the contrary  notwithstanding,  neither the Secured
Party nor its successors or assigns or agents shall have any duty, obligation or
liability  by reason of or arising out of this  Agreement to make any inquiry as
to the nature or  sufficiency  of, to present or file any claim with respect to,
or to take any action to collect or enforce the payment of, any amounts to which
it may be entitled at any time by virtue of this Agreement.

4.       Covenants, Warranties and Agreements of Debtors.

     The Debtors  covenant,  warrant and agree with Secured Party that until the
Secured Obligations are paid in full:

     4.1 Records. The Debtors shall keep accurate and complete books and records
of the Collateral in a manner consistent with the reasonable requirements of the
Secured  Party and the  requirements  of any  governmental  agency and allow the
Secured  Party,  during  regular  business  hours  and upon  reasonable  notice,
reasonable  access to examine,  inspect and make abstracts  from, or copy any of
such books and records.

     4.2 Accounting.  The Debtors shall at the reasonable request of the Secured
Party,  which request shall be made no more frequently than monthly,  deliver to
it copies of all  accounting  and other records  pertaining to the Collateral or
any portion thereof.


                                       -6-


<PAGE>



     4.3  Cooperation.  The Debtors  will  faithfully  preserve  and protect the
Secured Party's security  interest in the Collateral and will, at their own cost
and expense,  cause such security interest to be perfected and to continue to be
perfected  so  long  as the  Secured  Obligations  or any  portion  thereof  are
outstanding and unpaid,  and for such purpose the Debtors will from time to time
at the  reasonable  request of the Secured Party file or record,  or cause to be
filed or recorded,  such instruments,  documents and notices,  including without
limitation,  financing  statements and continuation  statements,  as the Secured
Party may deem  reasonably  necessary or advisable from time to time in order to
perfect and continue perfected said security interests.  The Debtors will do all
such  other  acts and  things  and  will  execute  and  deliver  all such  other
instruments  and  documents,  including  without  limitation,  further  security
agreements, pledges, endorsements, assignments and notices, as the Secured Party
may deem reasonably necessary or advisable from time to time in order to perfect
and preserve the priority of said security interest.

     4.4 Discharge  Taxes,  Assessments,  Etc. The Debtors will pay promptly and
within the time that they can be paid  without  interest or penalty,  all taxes,
assessments and similar  imposts and charges which are now, or hereafter  during
the effective period of this Agreement may become, a lien, charge or encumbrance
upon any of the  Collateral  except to the  extent  contested  in good faith and
except  for  Permitted  Liens.  If the  Debtors  fail  to pay  any  such  taxes,
assessments  or other  charges as they become due, the Secured  Party shall have
the option to do so and the Debtors agree to repay,  with interest,  at the rate
publicly established by Bank One, Texas, N.A. or any successor thereto from time
to time as its prime rate, all amounts so expended by the Secured Party.

     4.5  Expenses.  The Debtors will  reimburse the Secured Party in accordance
with the  provisions  of the Code for all  reasonable  expenses,  including  the
reasonable attorney's fees and legal expenses,  incurred by the Secured Party in
seeking to collect the Secured  Obligations or any part thereof,  or in pursuing
any of its rights or remedies hereunder.

     4.6 Limitations on Dispositions of Accounts and Contracts. The Debtors will
not sell,  assign,  transfer or otherwise dispose of any material portion of the
Accounts or contracts  which  constitute a part of the  Collateral,  or attempt,
offer or contract to do so except,  so long as no Event of Default has  occurred
and is  continuing,  for the  disposition  of such Accounts and contracts in the
ordinary course of business to third party  purchasers  without  recourse to the
Debtors.

     4.7  Negative  Pledge.  The Debtors will not create or permit to be created
any lien, encumbrance or security interest of any kind (other than the Permitted
Liens  and the  lien in  favor  of the  Senior  Lender  as  provided  for in the
Intercreditor  Agreement) on any of the Collateral other than for the benefit of
the Secured Party unless authorized by the Secured Party in writing.

     4.8 Notices.

     The Debtors will provide the Secured Party promptly,  in reasonable detail,
written notice of:

               (i)  any material change in the composition of the Collateral;

                                       -7-


<PAGE>



               (ii) the  occurrence of any other event which is likely to have a
                    materially  adverse  effect  on the  aggregate  value of the
                    Collateral or on the security  interests created  hereunder;
                    and

               (iii)any  other  notices  specifically  required  to be  given by
                    Debtors under this Agreement.

     4.9 Preservation of Collateral.

          (a) The Debtors  will  warrant and defend the title to the  Collateral
against  all claims and  demands of all  Persons  except  Persons  claiming  by,
through or under the Secured Party.  Except as otherwise  permitted herein,  the
Debtors will not assign,  sell,  lease,  or permit any of the same to occur with
respect to the  Collateral.  The Debtors  will not  create,  assume or suffer to
exist any Lien on the  Collateral  other than  Permitted  Liens and the  Debtors
shall pay or discharge, at their own cost and expense, any and all claims, Liens
or charges other than Permitted Liens.

          (b) Secured Party may, in its sole discretion, discharge or obtain the
release  of any  security  interest,  Lien,  claim or  encumbrance  against  the
Collateral,  other than a Permitted  Lien. All sums so paid by the Secured Party
shall be  payable,  on demand,  by the  Debtors to the  Secured  Party and shall
constitute a part of the Secured Obligations.

          (c) The Debtors shall advise the Secured Party promptly, in reasonable
detail,  of any Lien or claim,  other than  Permitted  Liens,  made or  asserted
against any of the  Collateral  and of any event  affecting the Secured  Party's
security interest in the Collateral.

     4.10 Chief  Executive  Office.  The chief  executive  office of each of the
Debtors is located at the  location  specified  in Exhibit A and all the records
related to each of the Debtors  respective  Collateral are, and will continue to
be, kept in such respective office. The Debtors shall give the Secured Party and
any collateral  agent thirty (30) days' advance  written notice of any change of
such office  address or of any change in the location of the records  concerning
the Collateral,  and, with respect to such change,  shall take all action as may
be necessary to maintain the security  interest  granted  hereunder at all times
fully perfected and in full force and effect.

5.       Indemnification.

     5.1  Indemnification  of Secured  Party.  The Debtors  agree to  indemnify,
protect  and  hold  harmless  the  Secured  Party  and its  assigns,  directors,
officers,  employees,  agents or representatives  (each an "Indemnified  Party")
from and against all losses,  damages,  injuries,  liabilities,  claims,  suits,
obligations,  penalties,  actions, judgments, costs, interest and demands of any
kind or nature  whatsoever  (all the  foregoing  losses,  damages,  etc. are the
"Indemnified  Liabilities"),  and expenses in connection  therewith  (including,
without  limitation,  the reasonable fees and  disbursements of counsel for such
Indemnified  Party in  connection  with  any  investigative,  administrative  or
judicial proceeding, whether or not such Indemnified Party shall be designated a
party thereto) arising outof, in connection  with, or as the result of any claim

                                       -8-


<PAGE>



for injury or damage arising from the  operation,  use,  condition,  possession,
storage or repossession  of any of the Collateral,  or any claim relating to any
laws,  rules  or  regulations,  or the  entering  into  or  performance  of this
Agreement and the Note, the  enforcement of any rights  hereunder or thereunder,
the  retention by the Secured  Party of a security  interest in the  Collateral,
provided, however, that the Debtors shall have no obligation to so indemnify any
Indemnified  Party for any  indemnified  liabilities  arising  from its  willful
misconduct  or gross  negligence.  The  foregoing  indemnity  shall  survive the
termination of this Agreement and payment in full of the Secured Obligations.

     5.2 Costs and Expenses. Any and all reasonable fees, costs and expenses, of
whatever kind or nature,  including  the  reasonable  attorneys'  fees and legal
expenses  incurred by the Secured Party,  in connection  with the preparation of
this Agreement and all other documents  relating hereto and the  consummation of
this  transaction,  the filing or recording of  financing  statements  and other
documents  (including  all taxes in connection  with the filing and recording of
such  documents)  in public  offices,  the  payment  or  discharge  of any taxes
relating to the  Collateral  or imposed  upon the Debtors,  insurance  premiums,
encumbrances or otherwise protecting,  maintaining or preserving the Collateral,
or the enforcing,  foreclosing,  retaking, holding, storing, processing, selling
or otherwise  realizing upon the Collateral and the security  interest  therein,
whether  through  judicial   proceedings  or  otherwise,   or  in  defending  or
prosecuting  any  actions  or  proceedings  arising  out  of or  related  to the
transaction to which this Security Agreement relates, shall be borne and paid by
the Debtors on demand by the  Secured  Party and until so paid shall be added to
the  principal  amount  of the  Secured  Obligations  and  shall  bear  interest
commencing  five days from the date  Debtors  receive  demand  therefor,  at the
default rate prescribed in the Note.

6.       Termination.

     The security interest of Secured Party in the Collateral shall be deemed to
be terminated  when the Secured  Obligations  have been paid in full as provided
for in the Purchase  Agreement,  at which time the Secured  Party shall,  at the
Debtors'  expense,  execute  and  deliver to the Debtors at its expense all Code
termination  statements  and such  similar  documents  or proper  instrument  or
instruments  which  the  Debtors  shall  reasonably  request  to  evidence  such
termination and release of Collateral.

7.       Recordation and Filing.

     The Debtors  agree to  execute,  deliver  and pay the  reasonable  costs of
filing any financing statement or other notices appropriate under applicable law
in respect of the security interest created pursuant to this Security  Agreement
which  may at any time be  required  or be  deemed  by the  Secured  Party to be
necessary or desirable and to execute such other  documents as the Secured Party
shall  reasonably   request  with  respect  to  the  security  interest  created
hereunder.  In the event that any re-  recording  or  refiling  thereof  (or the
filing  of any  statements  of  continuation  or  assignment  of  any  financing
statement) is required to protect and preserve  such Lien or security  interest,
the Debtors shall, at their  reasonable  cost and expense,  cause the same to be

                                       -9-


<PAGE>



re-recorded  and/or  refiled  at the time  and in the  manner  requested  by the
Secured Party.

     A carbon,  photostatic or other  reproduction  of this  Agreement  shall be
sufficient  as a  financing  statement  even  though  only the  original  hereof
contains an original signature.

8.       Waivers.

     The Debtors waives demand, presentment and protest. No delay or omission or
forbearance by the Secured Party in exercising any rights under this  Agreement,
the Note or the Purchase  Agreement  shall  operate as a waiver of the rights of
the Secured Party under this Agreement, the Note or the Purchase Agreement or of
any other  rights  and shall  not  affect,  discharge,  diminish  or impair  the
Debtors'  obligations  hereunder or the Secured  Obligations.  Waiver on any one
occasion  shall not be construed as a bar to or waiver of any rights or remedies
on any future  occasion.  All the Secured  Party's rights and remedies,  whether
evidenced  hereby or by any other agreement or note, shall be cumulative and may
be exercised singularly or concurrently.

9.       Security Interest Absolute.

     All  rights  of the  Secured  Party  and  all  obligations  of the  Debtors
hereunder shall be absolute and unconditional irrespective of:

          (a) any lack of  validity or  enforceability  of the Note or any other
agreement or instrument governing or evidencing any Secured Obligations;

          (b) any exchange, release or nonperfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Secured Obligations; or

          (c) any other circumstance which might otherwise  constitute a defense
available to, or discharge of the Debtors.

10.      Release.

     The Debtors  consent and agree that the Secured  Party may at any time,  or
from time to time, release and/or surrender all or any of the Collateral, or any
part thereof, by whomsoever deposited,  which is now or may hereafter be held by
the  Secured  Party or its agent in  connection  with all or any of the  Secured
Obligations,  all in such  manner and upon such terms as the  Secured  Party may
deem proper, and without notice to or further assent from the Debtors,  it being
hereby  agreed that the Debtors  shall be and remain bound upon this  Agreement,
irrespective of the existence,  value or condition of any of the Collateral, and
notwithstanding  any such  exchange,  surrender or release.  The Debtors  hereby
waive notice of acceptance of this Agreement,  and promptness in commencing suit

                                      -10-


<PAGE>



against  any Party  hereto or liable  hereon,  and in giving any notice to or of
making any claim or demand hereunder upon the Debtors.

11.      Miscellaneous.

     11.1 Rules of Construction. Unless otherwise specified, the following rules
shall be applied in construing the provisions of this Agreement:

          (a)  Terms  that  imply  gender  shall  be  construed  to apply to all
genders.

          (b)  References  to  Paragraphs  and  Sections  refer to the  numbered
Paragraphs of and Sections of this Agreement.

          (c) Headings to the various  Sections of this  Agreement  are included
solely  for  purposes  of  reference  and shall be  ignored  in  construing  the
provisions of this Agreement .

          (d) The Exhibits attached to this Agreement are incorporated herein by
reference.

          (e) "Herein",  "hereto", "hereof" and words of similar import refer to
this Agreement or any Related Documents (as applicable).

          (f) The word  "and"  connotes  "each  and  every",  and the word  "or"
connotes "any one or more".

          (g) The word "including" connotes "including without limitation".

          (h) Any  reference  to any law or  regulation  refers  to that  law or
regulation as amended from time-to-time  after the date of this Agreement and to
the corresponding provision of any successor law or regulation.

          (i) Any reference to any agreement or other document in this Agreement
refers to that  agreement or other document as amended from  time-to-time  after
the date of this Agreement.

          (j)  The  recitals   included  in  this   Agreement   are  the  mutual
representations of the Parties and are a part of this Agreement.

     11.2 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 given to 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 business day actually  received if hand  delivered or if
transmitted  by telefax or if  delivered or  transmitted  on a day that is not a
business  day,  then the next business day, or (iii) one business day after such
notice was delivered to an overnight delivery service,  addressed,  delivered or
transmitted in each case as follows:

                                      -11-


<PAGE>



                  Assignee:

                  DH Holdings Corp.
                  1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION:  Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860

                  With a Courtesy Copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut  06070
                     ATTENTION: Steven H. Sigmon, President
                            Telephone: (860) 651-2735
                             Telefax: (860) 651-2727

                  Assignor:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

     11.3  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

                                      -12-


<PAGE>



 
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.

     11.4  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.

     11.5 Successors and Assigns. Whenever any of the Parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
Party; and all the covenants, promises and agreements in this Security Agreement
contained by or on behalf of the Debtors  shall bind and inure to the benefit of
the successors and assigns of such Parties.

     11.6  Further  Acts and  Documents.  Each of the Parties  hereby  agrees to
execute and deliver  such  further  instruments  and to do such further acts and
things  as may be  necessary  or  desirable  to carry out the  purposes  of this
Agreement.

     11.7  Counterparts.  This  Agreement  may  be  executed,  acknowledged  and
delivered in any number of counterparts,  each of such counterparts constituting
an original but all together constituting only one Agreement.

     11.8 Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the internal laws of the State of Delaware.

     11.9  Waiver  of Jury  Trial.  The  Secured  Party and the  Debtors,  after
consulting  or  having  had the  opportunity  to  consult  with  legal  counsel,
knowingly, voluntarily and intentionally waive any right either of them may have
to a  trial  by  jury  in any  litigation  based  upon  or  arising  out of this
Agreement,  the  Purchase  Agreement  or the Note or any related  instrument  or
agreement,  or any of the  transactions  contemplated  by  this  Agreement,  the
Purchase  Agreement or the Note, or any course of conduct,  dealing,  statements
(whether oral or written) or actions of any of them ("Litigation").  Neither the
Secured  Party nor the Debtors shall seek to  consolidate,  by  counterclaim  or
otherwise,  any  action  in which a jury  trial has been  waived  with any other
action in which a jury trial cannot be or has not been waived.  These provisions
shall not be deemed to have been  modified  in any  respect or  relinquished  by
either the Secured Party or the Debtors except by written instrument executed by
both of them.

     11.10 Consent to  Jurisdiction,  Venue and Service of Process.  The Secured
Party and the Debtors, each after having consulted or having had the opportunity
to consult with legal counsel, hereby knowingly,  voluntarily and intentionally:
(i) consents to the  jurisdiction  of State Court sitting in New Castle  County,
Delaware and the United States District Court with  jurisdiction over New Castle

                                      -13-


<PAGE>



 
County,  Delaware with respect to any Litigation;  (ii) waives any objections to
the venue of any  Litigation in either such court;  (iii) agrees not to commence
any  Litigation  except in one or the other of such  courts  and  agrees  not to
contest the removal of any Litigation commenced in any other court to one or the
other of such courts;  (iv) agrees not to seek to remove,  by  consolidation  or
otherwise, any Litigation commenced in either of such courts to any other court;
and (v) waives personal service of process in connection with any Litigation and
consents to service of process by  registered  or certified  mail in  accordance
with or  relinquished  by either  the  Secured  Party or the  Debtors  except by
written instrument executed by either of them.

     The parties have executed and delivered this Agreement  effective as of the
day and year first above written.

DEBTORS:                                     SECURED PARTY:

TANKNOLOGY-NDE INTERNATIONAL,                DH HOLDINGS CORP.
INC.

By:  //s//  JAY ALLEN CHAFFEE                By:  //s// DANIEL L. COMAS
Its:   Chairman                              Its: VP


PROECO, INC.


By:  //s//  JAY ALLEN CHAFFEE
Its:   Chairman


TANKNOLOGY/NDE CORPORATION


By:  //s//  JAY ALLEN CHAFFEE
Its:   Chairman


2368692 CANADA, INC.


By:  //s//  JAY ALLEN CHAFFEE
Its:   President


                                      -14-


<PAGE>



TANKNOLOGY-NDE CONSTRUCTION
SERVICES, INC.


By:  //s//  JAY ALLEN CHAFFEE
Its:   Chairman


                                      -15-


<PAGE>


                                    EXHIBIT A

                             Chief Executive Offices

8900 Shoal Creek Blvd.
Building 200
Austin, Texas 78758

                                      -16-
<PAGE>

                                 EXHIBIT 10.53





                       Tanknology-NDE International, Inc.
                 Security Agreement - Pledge of Subsidiary Stock


                          Dated as of December 23, 1997



<PAGE>



                                TABLE OF CONTENTS

                                                                            Page


Section 1.        Definitions.................................................1

Section 2.        Grant of Security Interest..................................3

Section 3.        Perfection of Security Interest.............................3

Section 4.        Covenants with Respect to Collateral........................4

Section 5.        Rights with Respect to Collateral...........................4

Section 6.        Defaults and Remedies.......................................5

Section 7.        Waiver......................................................6

Section 8.        Security Interest Absolute..................................6

Section 9.        Release.....................................................6

Section 10.       Indemnification.............................................7

Section 11.       Termination.................................................7

Section 12.       Miscellaneous...............................................7



<PAGE>



                 SECURITY AGREEMENT - PLEDGE OF SUBSIDIARY STOCK


     This SECURITY  AGREEMENT - PLEDGE OF SUBSIDIARY STOCK, dated as of December
23,  1997  ("Agreement"),   is  entered  into  by  and  between   Tanknology-NDE
International,  Inc.  ("TNDE"),  a Delaware  corporation,  and DH Holdings Corp.
("DH"),  a Delaware  corporation,  provided for in and entered into  pursuant to
that certain Note,  Preferred Stock and Warrant Purchase Agreement,  as amended,
restated,  supplemented  or otherwise  modified from time to time (the "Purchase
Agreement") by and among DH, as purchaser,  and TNDE, ProEco, Inc. ("ProEco"), a
Delaware   corporation,   Tanknology/NDE   Corporation   ("NDE"),   a   Delaware
corporation, 2368692 Canada, Inc. ("Canada"), a Canadian Federal corporation and
Tanknology-NDE   Construction  Services,  Inc.   ("Construction"),   a  Delaware
corporation, as sellers, dated as of December 23, 1997.

     TNDE, together with its successors and assigns, is sometimes referred to as
the "Debtor" or as the  "Assignor",  as  applicable,  and DH,  together with its
successors and assigns,  is sometimes  referred to as the "Secured  Party" or as
the  "Assignee",  as  applicable.  The Assignor and the Assignee 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.

     As used herein, the following terms shall have the following meanings:

     1.1  "Applicable  Law"  means,  with  respect  to any  Person,  any and all
federal,  national, state, regional, local, municipal or foreign laws, statutes,
rules,  regulations,  guidelines,  ordinances,  licenses,  permits,  judicial or
administrative  decisions of any country, or any political subdivision,  agency,
commission, official or court thereof having jurisdiction over such Person.

     1.2 "Capital  Stock" of any Person  means,  any and all shares,  interests,
participations  or other  equivalents  (however  designated) of corporate stock,
including  each  class of common  stock and  preferred  stock of such  Person or
partnership interests and any warrants,  options or other rights to acquire such
stock or interests.

     1.3 "Code" means the Uniform  Commercial Code of the State of Delaware,  as
amended from time to time, together with any successor law.

     1.4 "Collateral" is defined in Section 2.1.

     1.5 "Event of  Default"  means any event of default as defined by Section 8
of the Note.


                                        1

<PAGE>




     1.6  "Intercreditor  Agreement" means the  Intercreditor  and Subordination
Agreement  dated as of December 23, 1997,  by and between DH and Bank One Texas,
N.A., as modified, amended or restated from time to time.

     1.7 "Note" means the Senior  Subordinated Note by and between TNDE, ProEco,
NDE, Canada and Construction as sellers,  and DH as purchaser,  in the principal
amount of $6,500,000, and dated as of December 23, 1997.

     1.8 "Person" means any individual,  corporation, limited liability company,
partnership,   joint  venture,   association,   joint  stock   company,   trust,
unincorporated organization, governmental authority or any other form of entity.

     1.9  "Proceeds"  means any  "proceeds" as such term is defined in the Code,
including the  following,  at any time  whatsoever  arising or  receivable:  (i)
whatever is received upon any collection,  exchange,  sale or other disposition,
of any of the  Collateral,  and any property into which any of the Collateral is
converted,  whether cash or non-cash proceeds,  (ii) any and all proceeds of any
insurance,  indemnity,  warranty or guaranty  payable to the Debtor from time to
time with respect to any of the  Collateral,  including  claims paid and premium
refunds,  (iii) any and all  payments (in any form  whatsoever)  made or due and
payable  to any Debtor  from time to time in  connection  with any  requisition,
confiscation,  condemnation,  seizure  or  forfeiture  of all or any part of the
Collateral by any governmental authority and (iv) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.

     1.10  "Secured  Obligations"  means  (i)  all  obligations  of  the  Debtor
evidenced  by the  Note,  which  note was  purchased  by the  Secured  Party for
$6,500,000  pursuant to the Purchase  Agreement,  together with all  extensions,
renewals,  amendments,   modifications  and  notations  thereof,  and  (ii)  all
obligations of the Debtor to make payments or reimburse costs and expenses under
this Agreement or the Purchase Agreement.

     1.11 "Senior Lender" means Bank One Texas, N.A., as lender under the Senior
Loan Agreement, together with its successors and assigns in such capacity or any
substitutes  or Persons  acting in the same or similar  capacity with respect to
any indebtedness  incurred to replace amounts borrowed by Debtor pursuant to the
Senior Loan Agreement.

     1.12 "Senior Loan Agreement" means the loan agreement,  dated as of October
25, 1996, by TNDE, certain of its subsidiaries and Bank One Texas, N.A.

     1.13 "Share Interests" is defined in Section 2.1.

     1.14    "Subordinated    Security    Agreement"    means    the    Security
Agreement-Personal  Property  dated as of December 23, 1997 by and between TNDE,
ProEco, NDE, Canada,  Construction and DH, as modified, amended or restated from
time to



                                        2

<PAGE>



time, together with any other agreements securing the payment of the obligations
evidenced by the Note or under this Agreement.

     1.15  "Subsidiary  Stock"  means all of the Capital  Stock of ProEco,  NDE,
Canada  and  Construction  and any other  Capital  Stock TNDE owns now or in the
future.

     Section 2. Grant of Security Interest.

     2.1 As  security  for the prompt and full  payment and  performance  of the
Secured  Obligations the Assignor hereby pledges (and shall cause to be pledged)
to the  Assignee  and grants (and shall  cause to be granted) to the  Assignee a
security  interest  in  all of  its  right,  title  and  interest  in all of the
Subsidiary  Stock  now or  hereafter  owned  beneficially  or of  record  by it,
including all right, title and interest in and to any distributions,  dividends,
cash,  instruments  and other  property or proceeds from time to time  received,
receivable or otherwise  distributed in respect of or in exchange for any or all
of such Subsidiary Stock, and any certificates now or hereafter  evidencing such
Subsidiary Stock ("Share  Interests");  together in each case with all Proceeds.
Such Share Interests and Proceeds are referred to collectively as "Collateral."

     Section 3. Perfection of Security Interest.

     3.1 The  certificates  evidencing the Share Interests have been pledged and
delivered  by the  Assignor  to the  Senior  Lender  pursuant  to the Pledge and
Security  Agreement dated as of October 25, 1996.  Pursuant to the Intercreditor
Agreement,  the Senior Lender has agreed to hold such  certificates on behalf of
the Secured  Party and upon its release of its pledge  under such  agreement  to
deliver such  certificates  to the Secured Party in pledge under this Agreement.
The  Assignor  hereby  consents  to such  delivery  by the Senior  Lender to the
Assignee. In addition, with respect to the Share Interests, the Assignor has (i)
caused the security  interest created by this Agreement to be noted on the stock
register  of  each  Debtor  subsidiary;  and  (ii)  delivered  to the  Assignee,
financing  statements  (form  UCC-1) in proper form for filing under the Code in
each jurisdiction as may be necessary or, in the reasonable opinion of Assignee,
desirable to perfect the  security  interest  created  herein.  Assignor  hereby
authorizes Assignee to file, and appoints Assignee its  attorney-in-fact for the
purpose of executing and filing,  such  financing  statements or any  additional
financing  statement or any continuation  statement without the signature of the
Assignor to the extent permitted by Applicable Law.

     3.2 Any certificates  now or hereafter issued to the Assignor  representing
or  evidencing  all or any part of the  Collateral,  together with duly executed
instruments  of  transfer  or  assignment  in  blank,   in  a  form   reasonably
satisfactory  to the  Assignee,  shall be delivered to (i) the Senior  Lender so
long as TNDE owes Senior Lender any amount pursuant to the Senior Loan Agreement
or (ii) the Assignee in the event that TNDE is no longer  obligated to repay any
amounts  pursuant  to the  Senior  Loan  Agreement,  in each  case in  pledge as
additional Collateral.




                                        3

<PAGE>



     Section 4. Covenants with Respect to Collateral.

     Assignor covenants to the Assignee as follows.

     4.1 Without the prior written  consent of the  Assignee,  the Assignor will
not sell, assign,  transfer,  pledge, or otherwise encumber any of its rights in
or to the Collateral or any  distributions  or payments with respect  thereto or
grant a lien,  security  interest or encumbrance  thereon,  except to the extent
permitted by the Purchase Agreement.

     4.2 The Assignor will, at its expense,  promptly  execute,  acknowledge and
deliver all such  instruments and take all such action as the Assignee from time
to time may  reasonably  request in order to ensure to the Assignee the benefits
of the liens and  security  interest  in and to the  Collateral  intended  to be
created by this Agreement.

     4.3 The  Assignor has and will defend the title to the  Collateral  and the
liens and  security  interest of the Assignee  thereon  against the claim of any
person and will  maintain and preserve  such liens and security  interest  until
such time as the Secured Obligations have been paid or performed in full.

     4.4 The  Assignor  will not change its name or identity in any manner which
is reasonably  likely to make any financing or  continuation  statement filed in
connection  herewith seriously  misleading within the meaning of the Code unless
it shall have given the Assignee at least 30 days' prior written  notice thereof
and shall  have  taken all  action  (or made  arrangements  to take such  action
substantially  simultaneously  with such change if it is impossible to take such
action in advance)  necessary or  reasonably  requested by the Assignee to amend
such financing  statement or continuation  statement so that it is not seriously
misleading.  The Assignor will not change its principal place of business unless
it shall have given the Assignee prior written notice of its intent to do so.

     Section 5. Rights with Respect to Collateral.

     5.1 As long as no Event of Default  shall have  occurred and be  continuing
and until  written  notice shall be given to the Assignor by the  Assignee,  the
Assignor shall have the right,  from time to time, to receive  distributions and
to vote and give consents with respect to the Collateral or any part thereof for
all purposes not  inconsistent  with the  provisions  of this  Agreement and any
other agreement;  provided,  however, that no vote shall be cast, and no consent
shall be given or action  taken,  which  would  have the  effect  of  materially
impairing the position or interest of the Assignee in respect of the  Collateral
(except  the  declaration  and  payment  of  distributions  to the  Assignor  as
contemplated  in the  Purchase  Agreement)  or which would  authorize  or effect
(except as and to the extent  expressly  consented to in writing by the Assignee
or  as  contemplated   in  the  Purchase   Agreement)  (i)  the  dissolution  or
liquidation,   in  whole  or  in  part,  of  any  Debtor  Subsidiary,  (ii)  the
consolidation  or  merger of any  Debtor  Subsidiary  with any  other  entity or
person,  (iii) the sale,  disposition or encumbrance of all or substantially all


                                        4

<PAGE>




of the assets of any Debtor  Subsidiary  or (iv) the issuance of any  additional
Capital Stock of any Debtor Subsidiary.

     Section 6. Defaults and Remedies.

     6.1 Upon the occurrence of an Event of Default and during the  continuation
of such Event of Default,  and  following ten Business  Days' written  notice to
Assignor, the Assignee may cause the transfer and register in its name or in the
name of its  designee  the  whole or any part of the  Collateral,  exercise  any
voting rights with respect thereto,  collect and receive all distributions  made
thereon,  sell in one or more sales after ten Business  Days' notice of the time
and place of any  public  sale or of the time after  which a private  sale is to
take place (which notice the Assignor  agrees is commercially  reasonable),  but
without  any  previous  notice  or  advertisement,  the whole or any part of the
Collateral  and to otherwise  act with respect to the  Collateral  as though the
Assignee  was the  outright  owner  thereof,  the  Assignor  hereby  irrevocably
constituting and appointing the Assignee,  as the proxy and  attorney-in-fact of
the Assignor, with full power of substitution,  to sign any document or take any
act in order to do so; provided,  however,  that the Assignee shall not have any
duty to exercise  any such right or to preserve the same and shall not be liable
for any failure to do so or for any delay in doing so. Any sale shall be made at
a public or private sale at the Assignee's place of business, or elsewhere to be
named in the  notice  of sale,  either  for cash or upon  credit  or for  future
delivery at such price as the Assignee may deem commercially reasonable, and the
Assignee may be the purchaser of the whole or any part of the Collateral so sold
and hold the same  thereafter in its own right free, to the extent  permitted by
law, from any claim of the Assignors as  applicable.  Each sale shall be made to
the highest  bidder,  but the Assignee  reserves the right to reject any and all
bids at such sale which, in its absolute  discretion,  it shall deem inadequate.
Demands of performance,  except as otherwise herein  specifically  provided for,
notices  of  sale  (except  as  otherwise  herein  specifically  provided  for),
advertisements  and the  presence of property at sale are hereby  waived and any
sale  hereunder may be conducted by an auctioneer or any officer or agent of the
Assignee.

     6.2  Assignor   agrees  that   following  the  occurrence  and  during  the
continuance of an Event of Default,  (i) it will not at any time plead, claim or
take the benefit of any appraisal,  valuation,  stay,  extension,  moratorium or
redemption  law now or  hereafter  in force in order  to  prevent  or delay  the
enforcement of this Agreement,  or the absolute sale of the whole or any part of
the Collateral or the possession thereof by any purchaser at any sale hereunder,
and  Assignor  waives the benefit of all such laws to the extent it lawfully may
do so and (ii) it will not  interfere  with any  right,  power and remedy of the
Assignee  provided for in this Agreement or now or hereafter  existing at law or
in equity or by  statute or  otherwise,  or the  exercise  or  beginning  of the
exercise by the Assignee of any one or more of such rights,  powers or remedies.
No failure or delay on the part of the  Assignee  to  exercise  any such  right,
power or remedy  and no notice or demand  which may be given to or made upon the
Assignor by the Assignee  with respect to any such  remedies  shall operate as a
waiver thereof, or limit or impair the Assignee's right to take any action or to
exercise any power or remedy  hereunder,  without notice or demand, or prejudice
its rights as against the Assignor in any respect.

     6.3 Assignor further agrees that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Assignee, that the Assignee
has no adequate  remedy at law in respect of such breach and, as a  consequence,
agrees  that  each  and  every  covenant  contained  in this  Section  shall  be


                                        5

<PAGE>




specifically  enforceable  against the Assignor and Assignor  hereby  waives and
agrees not to assert any defenses against an action for specific  performance of
such covenants  except for a defense that the Secured  Obligations  are not then
due and payable in accordance with the agreements and instruments  governing and
evidencing such obligations.

         Section 7.        Waiver.

         7.1  Assignor  waives  demand,  presentment  and  protest.  No delay or
omission or  forbearance  by the  Assignee in  exercising  any rights under this
Agreement,  the  Note,  the  Subordinated  Security  Agreement  or the  Purchase
Agreement  or any of the other  Related  Documents  (as defined in the  Purchase
Agreement)  shall  operate as a waiver of the rights of the Assignee  under this
Agreement,  the  Note,  the  Subordinated  Security  Agreement  or the  Purchase
Agreement  or any of the other  Related  Documents  (as defined in the  Purchase
Agreement) or of any other rights and shall not affect,  discharge,  diminish or
impair the Assignor's  obligations hereunder or the Secured Obligations.  Waiver
on any one  occasion  shall not be construed as a bar to or waiver of any rights
or remedy on any  future  occasion.  All the  Assignee's  rights  and  remedies,
whether  evidenced  hereby or by any other  agreement or note or by operation of
law, shall be cumulative and may be exercised singularly or concurrently.

     Section 8. Security Interest Absolute.

     8.1  All  rights  of the  Assignee  and  all  obligations  of the  Assignor
hereunder shall be absolute and unconditional irrespective of:

     (a)  any lack of  validity  or  enforceability  of the Note,  the  Purchase
          Agreement,  the  Subordinated  Security  Agreement,  any of the  other
          Related Documents (as defined in the Purchase  Agreement) or any other
          agreement  or   instrument   governing  or   evidencing   any  Secured
          Obligations;

     (b)  any exchange, release or nonperfection of any other collateral, or any
          release or  amendment  or waiver of or consent to  departure  from any
          guaranty, for all or any of the Secured Obligations; or

     (c)  any other  circumstance  which might  otherwise  constitute  a defense
          available to, or a discharge of, the Assignor or Debtor.

     Section 9. Release.

     9.1 Assignor consents and agrees that the Assignee may at any time, or from
time to time, in its discretion  exchange,  release and/or  surrender all of the
Collateral,  or any part thereof, by whomsoever  deposited,  which is now or may
hereafter be held by the Assignee in  connection  with all or any of the Secured
Obligations,  all in such  manner and upon such terms as the  Assignee  may deem
proper,  and without  notice to or further  assent from the  Assignor,  it being
hereby agreed that the Assignor  shall be and remain bound upon this  Agreement,


                                        6

<PAGE>




irrespective of the existence,  value or condition of any of the Collateral, and
notwithstanding any such exchange,  surrender or release. Assignor hereby waives
notice of  acceptance of this  Agreement,  and  promptness  in  commencing  suit
hereunder,  and in  giving  any  notice  to or of  making  any  claim or  demand
hereunder  upon the Assignor.  No act or omission of any kind on the  Assignee's
part shall in any event affect or impair this Agreement.

     Section 10. Indemnification.

     10.1 The Assignor  agrees to indemnify and hold the Assignee  harmless from
and against any taxes (excluding income taxes), liabilities, claims and damages,
including  reasonable  attorneys'  fees and  disbursements,  and other  expenses
incurred or arising by reason of the taking or the failure to take action by the
Assignee,  in good  faith,  in respect of any  transaction  effected  under this
Agreement or in connection with the lien provided for herein, including, without
limitation, any taxes payable in connection with the delivery or registration of
any of the Collateral as provided herein; provided,  however, the Assignor shall
not be liable for such  indemnification  to the Assignee to the extent that such
indemnified  liability  results from the Assignee's  gross negligence or willful
misconduct.   The  Assignor  agrees  to  pay  to  the  Assignee  all  reasonable
out-of-pocket costs and expenses, including reasonable fees and disbursements of
counsel,  reasonably incurred by the Assignee in connection with the performance
by the Assignee of the  provisions  of this  Agreement  and of any  transactions
effected pursuant to this Agreement.  The obligations of the Assignor under this
Section shall survive the termination of this Agreement.

     Section 11. Termination.

     11.1 This  Agreement  shall be  terminated  upon the payment in full of the
Note in  accordance  with its terms.  Until  terminated,  the security  interest
created  hereby shall  continue in full force and effect and shall secure and be
applicable  to all advances now or  hereafter  made by the Secured  Party to the
Debtors.  Upon  termination,  the Assignee shall  cooperate with the Assignor to
secure the  release of the  security  interest,  assignment  and pledge  created
hereby,  including release and return of all pledged items of Collateral and the
execution of any releases of financing  statements  reasonably  requested by the
Assignor.

     Section 12. Miscellaneous.

     12.1 Rules of Construction. Unless otherwise specified, the following rules
shall be applied in construing the provisions of this Agreement:

     (a)  Terms that imply gender shall be construed to apply to all genders.

     (b)  References to Paragraphs and Sections refer to the numbered Paragraphs
          of  and  Sections  of  this  Agreement  unless  another  agreement  is
          specifically referred to.



                                        7

<PAGE>



     (c)  Headings to the various Sections of this Agreement are included solely
          for  purposes  of  reference  and shall be ignored in  construing  the
          provisions of this Agreement .

     (d)  The  Exhibit  attached to this  Agreement  is  incorporated  herein by
          reference.

     (e)  "Herein", "hereto", "hereof" and words of similar import refer to this
          Agreement or any Related Documents (as applicable).

     (f)  The word "including" connotes "including without limitation".

     (g)  Any  reference  to  any  law  or  regulation  refers  to  that  law or
          regulation  as  amended  from  time-to-time  after  the  date  of this
          Agreement and to the  corresponding  provision of any successor law or
          regulation.

     (h)  Any  reference to any  agreement or other  document in this  Agreement
          refers  to  that   agreement   or  other   document  as  amended  from
          time-to-time after the date of this Agreement.

     12.2 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 given to 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 business day actually  received if hand  delivered or if
transmitted  by telefax or if  delivered or  transmitted  on a day that is not a
business  day,  then the next business day, or (iii) one business day after such
notice was delivered to an overnight delivery service,  addressed,  delivered or
transmitted in each case as follows:

                  Assignee:

                  DH Holdings Corp.
                  1250 24th Street, N.W.
                  Suite 800
                  Washington, D.C.  20037
                  ATTENTION:  Vice President
                  Telephone:        (202) 828-0850
                  Telefax:          (202) 828-0860



                                        8

<PAGE>



                  With a Courtesy Copy (not required for effective Notice) to:

                  Veeder-Root Company
                  125 Powder Forest Drive
                  Simsbury, Connecticut 06070
                  ATTENTION:  Steven H. Sigmon, President
                  Telephone:        (860) 651-2735
                  Telefax:          (860) 651-2727

                  Assignor:

                  Tanknology-NDE International, Inc.
                  8900 Shoal Creek Blvd.
                  Building 200
                  Austin, Texas 78758
                  ATTENTION: Daniel Sharplin, President
                  Telephone:        (512) 451-6334
                  Telefax:          (512) 459-1459

                  With a Courtesy Copy (not required for effective Notice) to:

                  Tanknology-NDE International, Inc.
                  712 Main Street, Suite 1700
                  Houston, Texas 77002
                  ATTENTION:  Jay Allen Chaffee
                  Telephone:        (713) 223-5730
                  Telefax:          (713) 223-5379

     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.

     12.3  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.

     12.4  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.



                                        9

<PAGE>



     12.5 Successors and Assigns. Whenever any of the Parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
Party and all the covenants, promises and agreements in this Agreement contained
by or on behalf of the  Assignor  shall  bind and  inure to the  benefit  of the
successors  and  assigns  of such  Parties  whether  so  expressed  or not.  The
covenants,  promises  and  agreements  in  this  Agreement  may be  assigned  or
otherwise  transferred  to  Danaher  Corporation  or  an  affiliate  of  Danaher
Corporation.  For purposes of this Section 12.5, the term "affiliate" shall mean
any person or entity directly or indirectly controlling, controlled by, or under
direct or indirect common control with, Danaher Corporation.

     12.6  Further  Acts and  Documents.  Each of the Parties  hereby  agrees to
execute and deliver  such  further  instruments  and to do such further acts and
things  as may be  necessary  or  desirable  to carry out the  purposes  of this
Agreement.

     12.7  Counterparts.  This  Agreement  may  be  executed,  acknowledged  and
delivered in any number of counterparts,  each of such counterparts constituting
an original but all together constituting only one Agreement.

     12.8 Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the internal laws of the State of Delaware.

     12.9 Waiver of Jury Trial. The Assignee and the Assignor,  after consulting
or  having  had the  opportunity  to  consult  with  legal  counsel,  knowingly,
voluntarily and intentionally waive any right any of them may have to a trial by
jury in any litigation based upon or arising out of this Agreement, the Purchase
Agreement  or the Note or any related  instrument  or  agreement,  or any of the
transactions contemplated by this Agreement, the Purchase Agreement or the Note,
or any course of  conduct,  dealing,  statements  (whether  oral or  written) or
actions of any of them  ("Litigation").  Neither the  Assignee  nor the Assignor
shall seek to consolidate,  by counterclaim or otherwise,  any action in which a
jury trial has been waived with any other action in which a jury trial cannot be
or has not been  waived.  These  provisions  shall  not be  deemed  to have been
modified in any respect or  relinquished  by either the Assignee or the Assignor
except by written instrument executed by both of them.

     12.10 Consent to Jurisdiction,  Venue and Service of Process.  The Assignee
and the Assignor,  each after having  consulted or having had the opportunity to
consult with legal counsel, hereby knowingly, voluntarily and intentionally: (i)
consents to the  jurisdiction  of the State Court sitting in New Castle  County,
Delaware and the United States District Court with  jurisdiction over New Castle
County,  Delaware with respect to any Litigation;  (ii) waives any objections to
the venue of any  Litigation in either such court;  (iii) agrees not to commence
any  Litigation  except in one or the other of such  courts  and  agrees  not to
contest the removal of any Litigation commenced in any other court to one or the
other of such courts;  (iv) agrees not to seek to remove,  by  consolidation  or
otherwise, any Litigation commenced in either of such courts to any other court;
and (v) waives personal service of process in connection with any Litigation and
consents to service of process by  registered  or certified  mail in  accordance
with Applicable Law. These  provisions shall not be deemed to have been modified


                                       10

<PAGE>


in any respect or  relinquished by either the Assignee or the Assignor except by
written instrument executed by both of them.

     The parties have executed and delivered this Agreement  effective as of the
day and year first above written.

ASSIGNOR:                                    ASSIGNEE:

TANKNOLOGY - NDE INTERNATIONAL,              DH HOLDINGS CORP.
INC.


By:  //s//  JAY ALLEN CHAFFEE                By:  //s// DANIEL L. COMAS
Its:   Chairman                              Its: VP



                                       11
<PAGE>
                                 EXHIBIT 10.54





                AMENDMENT NO. 1 TO THE NOTE, PREFERRED STOCK AND
                           WARRANT PURCHASE AGREEMENT


     This  Amendment  No. 1 to the Note,  Preferred  Stock and Warrant  Purchase
Agreement (the "Amendment No. 1"), effective as of December 23, 1997, is entered
into by and  among  Tanknology-NDE  International,  Inc.  ("TNDE"),  a  Delaware
corporation,  ProEco, Inc. ("ProEco"),  a Delaware  corporation,  Tanknology/NDE
Corporation ("NDE"), a Delaware corporation,  2368692 Canada, Inc. ("Canada"), a
Canadian Federal corporation,  and Tanknology- NDE Construction  Services,  Inc.
("Construction"),  a Delaware  corporation  (collectively  referred to herein as
"Sellers"),  and  DH  Holdings  Corp.,  a  Delaware  corporation  ("Purchaser").
Capitalized  terms used  herein but not  defined  herein  shall have the meaning
assigned to them in the Note,  Preferred  Stock and Warrant  Purchase  Agreement
(the  "Agreement"),  dated as of December  23,  1997,  by and among  Sellers and
Purchaser.

                               W I T N E S S E T H

     WHEREAS,  the  Seller  and the  Purchaser  desire to  conform  the terms of
Section 11(a) of the Agreement to reflect the terms contained in Section 5.19 of
the Loan  Agreement  dated as of the 25th day of October,  1996, as amended (the
"Loan Agreement") by and among  Tanknology-NDE  International,  Inc., a Delaware
Corporation, Tanknology/NDE Corporation, a Delaware corporation, ProEco, Inc., a
Delaware Corporation,  2368692 Canada, Inc., a Canadian Federal Corporation, and
Tanknology-NDE Construction Services, Inc, a Delaware corporation, and Bank One,
Texas, N.A.; and

     WHEREAS,  the sole purpose of this  Amendment  No. 1 is to conform  Section
11(a) of the Agreement to Section 5.19 of the Loan Agreement.

     NOW THEREFORE, in consideration of the promises herein contained,  and each
intending to be legally bound hereby, the parties agree as follows:

     1. Pursuant to Section 13(a) of the Agreement,  Sellers and Purchaser agree
to amend  Section  11(a) of the  Agreement to replace and supersede the language
currently in that section. Section 11(a) shall henceforth read as follows:

     (a)  Total Liabilities to Net Worth Ratio. TNDE and the Subsidiaries  shall
          maintain,  at all  times,  a ratio of (A) Total  Liabilities  less (i)
          Subordinated Debt,  (ii) unrestricted cash, (iii) cash pledged to Bank
          One, Texas, N.A., a national banking association, (iv) the outstanding
          indebtedness of Sellers evidenced by the Note and (v) dividends of any
          kind due to Purchaser with respect to TNDE Preferred  Stock to (B) Net
          Worth plus (i) Subordinated Debt, (ii) the outstanding indebtedness of
          Sellers  evidenced by the Note and (iii)  dividends of any kind due to
          Purchaser with respect to TNDE Preferred Stock of not greater than the
          ratio set forth opposite the applicable period below:



<PAGE>




         Period Ending                                                 Ratio

         Closing Date through December 31, 1997                       2.50:1.0
         Thereafter through June 30, 1998                             2:25:1.0
         Thereafter through December 31, 1998                         2.00:1.0
         Thereafter through December 31, 1999                         1.75:1.0
         Thereafter through December 31, 2000                         1.75:1.0
         Thereafter through December 31, 2001                         1.75:1.0
         Thereafter through the Maturity Date                         1.75:1.0

     2. Sellers hereby warrant and represent that the sole purpose and effect of
this  Amendment  No. 1 is to conform  the  provisions  of  Section  11(a) of the
Agreement to the  provisions of Section 5.19 of the Loan  Agreement and that the
amendment contained in Section 1 hereof is such a conforming change.

     IN WITNESS  WHEREOF,  the  Sellers and the  Purchaser  have  executed  this
Amendment No. 1 effective as of the date first above written.

                                    Sellers:

                   TANKNOLOGY-NDE INTERNATIONAL, INC.


                   By:  //s//  JAY ALLEN CHAFFEE
                   Its:   Chairman



                   PROECO, INC.


                   By:  //s//  JAY ALLEN CHAFFEE
                   Its:   Chairman



                                       -2-


<PAGE>


                   TANKNOLOGY/NDE CORPORATION


                   By:  //s//  JAY ALLEN CHAFFEE
                   Its:   Chairman


                   2368692 CANADA, INC.


                   By:  //s//  JAY ALLEN CHAFFEE
                   Its:   President


                   TANKNOLOGY-NDE CONSTRUCTION
                   SERVICES, INC.


                   By:  //s//  JAY ALLEN CHAFFEE
                   Its:   Chairman


                   Purchaser:

                   DH HOLDINGS CORP.


                   By:   //s// DANIEL L. COMAS

                   Its: Vice President





                                       -3-

<PAGE>
                                 EXHIBIT 10.55




                        AMENDMENT NO. 3 TO LOAN AGREEMENT
                             DATED OCTOBER 25, 1996
               BY AND BETWEEN TANKNOLOGY-NDE INTERNATIONAL, INC.,
                           TANKNOLOGY/NDE CORPORATION,
                   TANKNOLOGY-NDE CONSTRUCTION SERVICES, INC.,
                      PROECO, INC. AND 2368692 CANADA, INC.
                            AND BANK ONE, TEXAS, N.A.

     This Amendment No. 3 ("Third  Amendment") to the Loan Agreement dated as of
the 25th day of  October,  1996,  as amended  ("Loan  Agreement"),  by and among
TANKNOLOGY-NDE   INTERNATIONAL,   INC.  (formerly  known  as  NDE  ENVIRONMENTAL
CORPORATION)  ("NDE"), a Delaware  corporation,  TANKNOLOGY/NDE  CORPORATION,  a
Delaware corporation, PROECO, INC., a Delaware corporation, 2368692 CANADA, INC.
(formerly  known  as  TANKNOLOGY   CANADA  (1988)  INC.),  a  Canadian   federal
corporation,   and  TANKNOLOGY-NDE   CONSTRUCTION  SERVICES,  INC.,  a  Delaware
corporation  (collectively,  "Borrower") and BANK ONE,  TEXAS,  N.A., a national
banking association (the "Bank") is entered into this 23rd day of December 1997.

                              W I T N E S S E T H:

     WHEREAS,  each Borrower (except for Tanknology-NDE  Construction  Services,
Inc.) is a party to that certain Note and Warrant Purchase Agreement dated as of
October  25,  1996  with  Banc  One  Capital  Partners,  L.P.,  an Ohio  limited
partnership (now known as Banc One Capital Partners,  L.L.C., a Delaware limited
liability  company,  hereinafter  called  "BOCP")  whereby  BOCP  agreed to make
certain loans and accommodations available to Borrower upon terms and conditions
therein   contained,   such   loans  and   accommodations   (the   "Subordinated
Indebtedness") evidenced, in part, by the Senior Subordinated Note dated of even
date therewith,  which is  subordinated to Borrower's  Obligations to Bank under
the Loan Agreement;

     WHEREAS,  Borrower  desires  to repay  the  Subordinated  Indebtedness  and
discharge all other obligations owed to BOCP;

     WHEREAS,  DH Holdings  Corp., a Delaware  corporation  ("DHH"),  desires to
provide a certain loan to, and capital investment in, Borrower, pursuant to that
certain Note,  Preferred Stock and Warrant Purchase Agreement to be entered into
on  or  soon  after  the  date  hereof,  between  Borrower  and  DHH  (the  "DHH
Agreement"),  a part of the  proceeds  of  which  shall  be used  to  repay  the
Subordinated Indebtedness to BOCP;

     WHEREAS,  Borrower,  DHH and BOCP have  requested  that Bank consent to the
aforementioned transactions in accordance with the terms and provisions herein;

     WHEREAS,  Borrower is desirous of  engaging,  as a general  contractor,  in
certain  construction  activities  (as herein  defined)  associated  with retail
service stations ("Construction Business");



                                       -1-

<PAGE>



     WHEREAS,  bonding  requirements  would be facilitated  if the  Construction
Business  is  conducted  as a  subsidiary  of NDE that  could  pledge its assets
(subject to the Surety  Subordination  Agreement) to secure its  obligations  to
Surety;

     WHEREAS,  NDE  has  formed  a new  wholly  owned  Subsidiary  of NDE  named
Tanknology-NDE  Construction  Services,  Inc. ("NDE Construction  Services"),  a
Delaware  corporation,   to  engage  in  the  Construction  Business,  and  such
Subsidiary desires to become a Borrower under the Revolving Note;

     WHEREAS,  Borrower has requested  that Bank consent to the formation by NDE
of  NDE  Construction  Services  to  engage  in  the  Construction  Business  in
accordance with the terms and provisions hereof;

     WHEREAS,   Borrower  has  further  requested  that  Bank  waive  Borrower's
non-compliance  with certain  covenants,  insofar as such  non-compliance is the
result of (1) NDE's formation of NDE  Construction  Services or (2) the pledging
of assets by NDE  Construction  Services  (subject  to the Surety  Subordination
Agreement) to secure its obligations to Surety; and

     WHEREAS,  Bank is willing to agree to the foregoing in accordance with, and
subject to, the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the promises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:

         I.       Amendments to Loan Agreement.

     Preamble.  The first grammatical paragraph of the Loan Agreement is amended
by: (1) deleting the  reference to "NDE  ENVIRONMENTAL  CORPORATION,  a Delaware
corporation"  and substituting in lieu thereof:  "TANKNOLOGY-NDE  INTERNATIONAL,
INC., a Delaware corporation," (2) deleting the reference to "USTMAN INDUSTRIES,
INC.  ("USTMAN"),  a Delaware  corporation"  and  substituting  in lieu thereof:
"TANKNOLOGY-NDE  CONSTRUCTION  SERVICES,  INC., a Delaware corporation," and (3)
deleting the reference to "TANKNOLOGY  CANADA (1988) INC." and  substituting  in
lieu thereof: "2368692 CANADA, INC."

     Article I, DEFINITIONS,  is amended by deleting "Banc One Capital Partners,
L.P." and  substituting in lieu thereof "DH Holdings Corp." in the definition of
"Subordinated Commitment Indebtedness".

     Article I,  DEFINITIONS,  is further amended by deleting  "USTMAN" from and
adding "NDE CONSTRUCTION SERVICES" to the definition of "Pledged Stock".




                                       -2-

<PAGE>



     Article I,  DEFINITIONS,  is  further  amended by  revising  the  following
defined terms in their entirety to read as follows:

          "Adjusted  Liabilities"  means  Total  Liabilities  less  the  sum  of
          Subordinated  Indebtedness,  unrestricted  cash,  and cash  pledged to
          Bank.

          "Agreement" or "Loan Agreement" shall mean this Loan Agreement, as the
          same may be amended or supplemented from time to time.

          Permitted  Liens (I)  Purchase  money  security  interests  granted to
          secure not more than seventy-five per cent (75%) of the purchase price
          of assets, except as permitted by Sections 6.14 and 6.15, the purchase
          of which does not violate this  Agreement or any  instrument  required
          hereunder;

          "Revolving  Note" means that certain  promissory  note in the original
          face  amount  of  $5,000,000.00  dated of even  date  with  the  Third
          Amendment made by the Borrower payable to the order of the Bank in the
          form attached as Exhibit "A" to the Third Amendment, together with all
          deferrals,   renewals,   extensions,   amendments,   modifications  or
          rearrangements  thereof,  which promissory note shall evidence certain
          advances to the  Borrower by the Bank  pursuant to Section 2.01 of the
          Loan Agreement.

          "Subordinated   Indebtedness"  means  the  Indebtedness   incurred  by
          Borrower  in  accordance  with  Section  3.14,  being  (a) the  Senior
          Subordinated  Note due  December 31,  2002,  in the initial  principal
          amount  of  $6,500,000  payable  to  Subordinated  Lender  and (b) the
          Subordinated  Preferred Stock  dividends of any kind due  Subordinated
          Lender from Borrower.

     Article  I,  DEFINITIONS,  is  further  amended  by  adding  the  following
definitions:

          "Agreement  of  Indemnity"  shall  mean that  certain  indemnification
          agreement  entered  into,  from  time  to  time,  by and  between  NDE
          Construction  Services,  and Surety,  the form of which is attached as
          Exhibit "B" to the Third Amendment.

          "Consolidated"  or  "consolidated"  as used with  respect to financial
          reporting   requirements   shall  mean  the   reporting  of  financial
          information by Borrower so as to include all Subsidiaries of Borrower.

          "Construction  Business" shall mean engaging, as a general contractor,
          in  construction  activities  related to the  upgrading,  modification
          and/or  retrofitting  of  underground  storage tanks located at retail
          gasoline service stations.

          "NDE  Construction  Services" shall mean  Tanknology-NDE  Construction
          Services, Inc., a Delaware corporation,  being that certain Subsidiary
          of NDE, formed in accordance with the Third Amendment,  engaged in the
          Construction Business.



                                       -3-

<PAGE>



          "Subordinated  Lender" shall mean BOCP from the effective  date of the
          Loan  Agreement  until 7:00 A.M.  on the  effective  date of the Third
          Amendment and shall mean DHH from 7:00 A.M. on the  effective  date of
          the Third Amendment and thereafter, according to the terms of the Loan
          Agreement, as amended from time to time.

          "Subordinated Preferred Stock" means the preferred stock issued and/or
          to be issued by Borrower to  Subordinated  Lender,  and any  dividends
          owed  pursuant  to  such  preferred  stock,  which  are and  shall  be
          subordinated  to the  Obligations  of Borrower to Bank pursuant to the
          Loan Agreement.

          "Surety" shall mean First  Indemnity of America  Insurance  Company or
          any replacement thereof.

          "Surety Subordination  Agreement" shall mean a subordination agreement
          substantially  in the form attached hereto as Exhibit "C", that may be
          entered  into by and  between  NDE  Construction  Services,  Bank  and
          Surety,  and which would  subordinate  the Bank's  liens and  security
          interests relating to the assets of NDE Construction Services to liens
          in favor of Surety securing NDE Construction Services's obligations to
          Surety  pursuant  to  the  Agreement  of  Indemnity,   not  to  exceed
          $1,000,000.00.

          "Subordination   Agreement"  shall  have  the  meaning  set  forth  in
          paragraph IV.F. of the Third Amendment.

          "Third  Amendment"  means  Amendment  No.  3 to this  Loan  Agreement,
          executed by Borrower and Bank on December 23, 1997.

               Section  2.01 is amended by deleting  subsection  (C)  (Revolving
     Commitment Reserve) in its entirety.

     Article II, THE LOAN, is modified by adding the following new section:

               2.17  Obligations of NDE Construction  Services.  Notwithstanding
          anything  contained  herein to the  contrary,  while NDE  Construction
          Services  is deemed a  Borrower  for all  other  purposes  (except  as
          otherwise noted herein),  NDE Construction  Services is not a Borrower
          with respect to the Term Note.

     Article  IV,  REPRESENTATIONS  AND  WARRANTIES,  is  modified by adding the
following new section:

               4.18 Representations and Warranties of NDE Construction Services.
          With  respect  to  any  representations  and  warranties  made  by NDE
          Construction  Services with respect to the Notes, such representations
          and warranties shall be applicable only to the Revolving Note.




                                                        -4-

<PAGE>



     Article V, AFFIRMATIVE  COVENANTS,  of the Loan Agreement is hereby amended
by revising the following Sections in their entirety to read as follows:

               5.19 Adjusted Liabilities to Adjusted Net Worth. Maintain a ratio
          of Adjusted Liabilities to Adjusted Net Worth of not more than 2.25 to
          1.0 through June 30, 1998;  thereafter  2.00 to 1.0 through  September
          30, 1998;  thereafter  1.75 to 1.0 through  June 30, 1999;  thereafter
          1.25 to 1.0 through December 31, 1999; and thereafter 1.0 to 1.0.

               5.20 Net Worth Requirement. Maintain its Net Worth as of December
          31,  1997,  which shall not be less than a negative  $1,100,000.00  at
          that time, with allowable cumulative interim losses during fiscal year
          1998  of not  more  than  $1,000,000  (tested  as of the  end of  each
          calendar  quarter),  and as of  December  31,  1998,  and  thereafter,
          maintain  at least  the Net  Worth in effect  as  December  31,  1997,
          increasing by 70% of positive annual income after December 31, 1998.

               5.21  Debt  Service  Coverage  Ratio.  Maintain  a  Debt  Service
          Coverage  Ratio of 0.30 to 1.0 for the three (3) months  ending  March
          31, 1998; 0.60 to 1.0 for the six (6) months ending June 30,1998; 1.10
          to 1.0 for the nine (9) months ending  September 30, 1998; 1.35 to 1.0
          for the twelve (12) months ending  December 31, 1998;  and 1.50 to 1.0
          thereafter, calculated on a rolling four quarter basis.

     Article V, AFFIRMATIVE  COVENANTS,  is modified by adding the following new
sections:

               5.34  Affirmative  Covenants of NDE Construction  Services.  With
          respect to any affirmative covenants made by NDE Construction Services
          with  respect  to the  Notes,  such  affirmative  covenants  shall  be
          applicable only to the Revolving Note.

     Article VI, NEGATIVE COVENANTS,  of the Loan Agreement is hereby amended by
revising the following Sections in their entirety to read as follows:

               6.01 Other Indebtedness. Incur, create, assume or suffer to exist
          any  Indebtedness,  whether by way of loan or the  issuance or sale of
          securities   except   (A)  Loans   hereunder,   (B)  loans  and  other
          Indebtedness by the Bank under other credit arrangements, (C) accounts
          payable  incurred  in the  ordinary  course of  business  which are in
          compliance  with Section  6.05,  (D) loans,  advances or extensions of
          credit from  suppliers,  contractors  or other  nonaffiliated  Persons
          under applicable contracts or agreements in connection with Borrowers'
          customary  business  operations,  which are not  overdue  or are being
          contested  in good  faith,  (E)  Existing  Indebtedness  described  on
          Schedule  4.09,  (F)  Subordinated   Indebtedness,   (G)  Subordinated
          Commitment Indebtedness; (H) Indebtedness for the payment of insurance
          premiums in the ordinary  course of business;  (I) other  Indebtedness
          not to exceed the total  aggregate  amount of  $750,000.00 at any time
          outstanding,  excluding (i) the $517,000 of Existing  Indebtedness  as
          item 2 in Schedule  4.09 and (ii) the  $300,000  Gilbarco  Patent Note
          identified  in  Schedule  4.09;  and  (J)  indebtedness  permitted  by
          Sections 6.14 and 6.15.



                                       -5-

<PAGE>



               6.11 Restricted Payments.  Except as provided on Schedule 6.11 or
          in the Intercreditor and Subordination  Agreement,  (A) declare or pay
          any dividend,  (B) issue,  purchase,  redeem or otherwise  acquire for
          value any of its outstanding stock, or make any payment on account of,
          or set apart  assets  for a sinking  or other  analogous  fund for the
          purchase, redemption,  defeasance,  retirement or other acquisition of
          any shares of any class of capital  stock of Borrower,  (C) return any
          capital  to its  stockholders,  or (D)  make any  distribution  of its
          assets to its stockholders as such provided,  however,  if no Event of
          Default or  Unmatured  Event of Default  has  occurred,  Borrower  may
          permit the accrual of  obligations  to pay  dividends or other similar
          distributions to its stockholders, provided such obligations are fully
          subordinated to all of Borrower's  obligations to the Bank or on terms
          acceptable to the Bank.

               6.13 Payment of  Subordinated  Indebtedness.  Make any payment of
          Subordinated  Indebtedness  principal  unless:  (i) such  payments are
          otherwise   permitted  by  the  Subordination   Agreement,   and  (ii)
          Borrower's Consolidated Net Worth has increased during the period from
          December  31,  1997  to  the  end of the  fiscal  quarter  immediately
          preceding   the  quarter  in  which  such   payment  of   Subordinated
          Indebtedness  is proposed by an amount at least equal to 1.5 times the
          aggregate  amount  of all prior  principal  payments  of  Subordinated
          Indebtedness  plus the  amount of the  proposed  principal  payment of
          Subordinated Indebtedness.

               6.14  Capital  Expenditures  Limitation.  Except as  permitted by
          Section 6.15, make Capital  Expenditures  in excess of:  $3,000,000 in
          the  1997  fiscal  year;  $2,500,000  in the  1998  fiscal  year;  and
          $2,000,000 for each fiscal year thereafter;  not more than $750,000 of
          which,  per annum,  shall be financed or incurred as  indebtedness  to
          finance  up to 100% of the cost of the  acquisition  of  vehicles  and
          non-gauge equipment to be used in Borrower's business.

     Article VI,  NEGATIVE  COVENANTS,  is modified by adding the  following new
sections:

               6.15 Additional Allowed Capital Expenditures. Make purchase money
          Capital  Expenditures,  or incur related indebtedness or liens, except
          to the extent that such Capital  Expenditures,  indebtedness or liens,
          do not exceed,  in the  aggregate,  $1,000,000  financed by DHH or its
          affiliates up to 100% for gauge purchase and related installation, per
          annum commencing with fiscal year 1998.

     Article VI,  NEGATIVE  COVENANTS,  is modified by adding the  following new
section:

               6.16  Negative  Covenants  of  NDE  Construction  Services.  With
          respect  to the  any  negative  covenants  made  by  NDE  Construction
          Services with respect to the Notes,  such negative  covenants shall be
          applicable only to the Revolving Note.

     Schedule  1.01(a),   Collateral,   is  hereby  amended  by  replacing  "NDE
Environmental Corporation" with "Tanknology-NDE International,  Inc." and adding
"Tanknology-NDE  Construction  Services,  Inc." as the  second  item in line (a)
under  Tanknology-NDE  International,  Inc.  and by deleting  the  reference  to
"USTMAN Industries, Inc." therefrom.



                                       -6-

<PAGE>



     Schedule  4.01,  Information  Regarding  the  Jurisdiction  in  Which  Each
Borrower and its  Subsidiaries  Are Incorporated and in Which Each Does Business
and Is Qualified  as a Foreign  Corporation,  is hereby  amended by deleting the
following:

         USTMAN Industries, Inc.
         State of Incorporation:                              Delaware
         Qualifications:                                      Colorado

and replacing same with the following:

         NDE Construction Services
         State of Incorporation:                              Delaware

     Schedule  4.01 is further  amended by adding the  following  address as the
principal place of business of each of the companies named therein:

                     Principal Place of Business of Borrower
                           8900 Shoal Creek, Bldg. 200
                               Austin, Texas 78757

     II. Certain Waivers. Bank hereby waives non-compliance by Borrower with (1)
the  covenants  set forth in Section 6.11 to the extent that  Borrower may issue
150 shares of  Subordinated  Preferred  Stock  pursuant  to the  Certificate  of
Designation  of  Preferences  and  Rights  of  Series A  Redeemable  Convertible
Preferred  Stock  of  Tanknology-NDE   International,   Inc.,  as  part  of  the
Subordinated Indebtedness pursuant to this Third Amendment and may pay dividends
thereon,  to the extent permitted by Intercreditor and Subordination  Agreement;
and (2) the covenants set forth in Sections 6.04 and 6.08 of the Loan Agreement,
but  only to the  extent  that  such  non-compliance  was the  result  of  NDE's
formation of NDE  Construction  Services.  Notwithstanding  anything that may be
contained herein to the contrary, except as provided in the Surety Subordination
Agreement,  if in effect at the time, no waiver or any other provision contained
herein shall serve to subordinate  any of Borrower's  Obligations to Bank to any
of Borrower's Obligations to any third party, including, but not limited to, any
of NDE Construction Services' obligations to Surety.

     III. Certain Consents. Bank hereby consents to (a) the formation by NDE of,
and the investment by NDE of up to $250,000 in, NDE  Construction  Services as a
wholly owned subsidiary of NDE; (b) the pledge by NDE  Construction  Services of
its assets  (subject  to the terms and  conditions  of the Surety  Subordination
Agreement)  to secure its  obligations  to Surety  pursuant to the  Agreement of
Indemnity,  which pledge (subject to, and conditioned on prior execution of, the
terms and limitations of the Surety Subordination  Agreement) shall constitute a
Permitted Encumbrance.

     IV. Conditions to the Effectiveness of the Third Amendment.  As a condition
to the effectiveness of the Third Amendment by Bank,  Borrower has satisfied the
following conditions:

               A. Receipt of Revolving Note,  Third Amendment and Certificate of
     Compliance.  The Bank shall have received the amended  Revolving  Note (the
     form of which is attached hereto as Exhibit "A"), multiple  counterparts of


                                       -7-

<PAGE>



     
     this  Third  Amendment,  as  requested  by the  Bank,  and  the  Compliance
     Certificate duly executed by an authorized officer for each Borrower.

               B.  Receipt of Articles of  Incorporation,  Bylaws and  Directors
     Organizational  Meeting  Minutes.  The Bank  shall have  received  from NDE
     Construction  Services  its  Articles  of  Incorporation  certified  by the
     Secretary of State of the jurisdiction of its  incorporation and its bylaws
     and the minutes of its  organizational  meeting of directors,  certified by
     the Secretary or an Assistant Secretary of such entity.

               C.  Receipt  of  Certified  Copy  of  Corporate  Proceedings  and
     Certificate of Incumbency.  The Bank shall have received from each Borrower
     copies of all  resolutions  of its board of  directors  with respect to the
     transactions  set forth in this Third  Amendment  and the execution of this
     Third Amendment,  the amended Revolving Note, and the Collateral Documents,
     such  copy or copies  to be  certified  by the  Secretary  or an  Assistant
     Secretary  as being true and correct and in full force and effect as of the
     date hereof. In addition, the Bank shall have received from each Borrower a
     certificate of incumbency signed by the Secretary or an Assistant Secretary
     setting forth (a) the names of the officers executing this Third Amendment,
     the amended Revolving Note, and the Collateral Documents, (b) the office(s)
     to which such Persons have been elected and in which they  presently  serve
     and (c) an original specimen signature of each such person.

               D. Receipt of Certificates of Authority and  Certificates of Good
     Standing. The Bank shall have received certificates,  as of the most recent
     dates  practicable,  of  the  Secretary  of  State  of  Delaware  as to its
     existence,  and of the  Secretary  of State of each other  jurisdiction  in
     which NDE Construction Services is qualified as a foreign corporation as to
     its qualification,  and of the department of revenue or taxation of each of
     the foregoing  jurisdictions,  as to the good standing of NDE  Construction
     Services.

               E.  Collateral  Documents.  As  security  for the  payment of the
     Revolving Note and the performance of the  obligations of NDE  Construction
     Services  under the Loan  Agreement,  Bank  shall  have  received  the duly
     executed  and  acknowledged  Collateral  Documents  described on Schedule 1
     attached hereto.

               F. Receipt of the Intercreditor and Subordination Agreement. Bank
     shall  have  received  evidence  satisfactory  to the  Bank,  in  its  sole
     discretion,  that Borrower has received  advances of at least Eight Million
     Dollars  ($8,000,000)  of  Indebtedness  and equity on terms and conditions
     satisfactory to the Bank, in its sole  discretion,  and Borrower,  the Bank
     and  DHH  shall  have  entered  into  an  Intercreditor  and  Subordination
     Agreement  (the  "Subordination  Agreement")  in the  form as  attached  as
     Exhibit "D".

               G. DHH  Agreement.  True and correct  copies of the DHH Agreement
     and all documents and  instruments to be executed or delivered by any party
     thereto, as set forth therein or as contemplated thereby (collectively, the
     "DHH  Agreement  Documents"),  shall have been provided to Bank, and all of
     the  terms  and  provisions  of  the  DHH  Agreement   Documents  shall  be
     satisfactory to Bank, in its sole discretion.


                                       -8-

<PAGE>



               H. Modification  Fee. As partial  consideration for its agreement
     to the terms of the Third  Amendment,  Bank shall have received  $50,000 in
     cash from Borrower.

               I.  Facility  Fee.  As  further  partial  consideration  for  its
     agreement  to the terms of the Third  Amendment,  Bank shall have  received
     three hundred and fifty thousand  (350,000) stock warrants,  evidenced by a
     warrant  certificate  in the form as attached  as Exhibit  "E", at a strike
     price no greater than $.375 per share.

               J.  Receipt  of  the  Standby  Commitment.   Bank,  Borrower  and
     Proactive  shall  have  entered  into  an  Amended  and  Restated   Standby
     Commitment in the form attached as Exhibit "F".

               K. Receipt of the  Certified  Copy of Corporate  Proceedings  and
     Certificate  of  Incumbency.  Bank  shall have  received  from DHH and from
     Borrowers,  respectively,  copies of all  resolutions  of their  respective
     boards of directors with respect to the  transactions  contemplated  by the
     DHH Agreement and this Third Amendment, such copy or copies to be certified
     by the Secretary or an Assistant Secretary as being true and correct and in
     full force and effect as of the date hereof.  In  addition,  the Bank shall
     have received from each Borrower a certificate of incumbency  signed by the
     Secretary  or an  Assistant  Secretary  setting  forth (a) the names of the
     officers  executing  this Third  Amendment,  and (b) the office(s) to which
     such Persons have been elected and in which they presently serve and (c) an
     original specimen signature of each such person.

               L. Opinions of Counsel. Bank shall have received from counsel for
     Borrower and counsel for DHH,  respectively,  written  opinions in form and
     substance  satisfactory to Bank, in its sole discretion,  as to the matters
     set forth on  Exhibits  G-1 and G-2,  respectively,  attached  to the Third
     Amendment.

               M.  Repayment  of  BOCP.   Bank  shall  have  received   evidence
     satisfactory to it, in its sole discretion, that all Indebtedness and other
     obligations  of  Borrower  to BOCP have been  fully  and  finally  paid and
     discharged,  and that BOCP has  terminated  all agreements to which it is a
     party with Bank that relate to the Loan Agreement,  the  Intercreditor  and
     Subordination  Agreement  by and  between  Bank and BOCP dated  October 25,
     1996,  the Standby  Commitment  by and  between  Bank,  Borrower,  BOCP and
     Proactive  dated  October 25,  1996,  and the  Investment  Agreement by and
     between Bank and BOCP dated October 24, 1996.

     V. Surety  Subordination  Agreement.  If requested  by Bank,  Surety or NDE
Construction  Services,  each such party  shall  execute  (and NDE  Construction
Services shall cause Surety to execute) the Surety Subordination Agreement.

     VI. Satisfaction of Conditions to Third Amendment. Upon the satisfaction of
the  conditions to the  effectiveness  of the Third  Amendment,  as set forth in
Article IV hereof,  Borrower  shall execute and deliver to Bank a Certificate of
Compliance,  and if Bank has been reasonably satisfied that such conditions have
been fulfilled,  Bank shall  contemporaneously  provide a letter to Borrower and
DHH stating "Bank One, Texas, N.A. is satisfied that the conditions set forth in


                                       -9-

<PAGE>



Article IV of the Third  Amendment to that certain Loan Agreement  dated October
25, 1996, among the Bank and Tanknology-NDE International, Inc. et al. have been
fulfilled," whereupon the Third Amendment shall become effective.

     VII.  Reaffirmation of  Representations  and Warranties.  To induce Bank to
enter into this  Third  Amendment,  Borrower  hereby  reaffirms,  as of the date
hereof, its representations  and warranties  contained in Article IV of the Loan
Agreement and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:

               A. The  execution  and delivery of this Third  Amendment  and the
     performance by Borrower of its  obligations  under this Third Amendment are
     within  the  Borrower's   corporate  power,  have  received  all  necessary
     governmental  approval (if any shall be required),  and do not and will not
     contravene  or  conflict  with  any  provision  of law or of any  agreement
     binding upon the Borrower.

               B.  The  Loan  Agreement  as  amended  by  this  Third  Amendment
     represents   the  legal,   valid  and  binding   obligations  of  Borrower,
     enforceable  against  Borrower in  accordance  with its terms subject as to
     enforcement only to bankruptcy, insolvency,  reorganization,  moratorium or
     other similar laws affecting the enforcement of creditors' rights generally
     and general principles of equity.

               C. No Event of Default or Unmatured Event of Default has occurred
     and is continuing as of the date hereof,  subject to the waivers as set out
     in Section II.

     VIII. Defined Terms.  Except as amended hereby,  terms used herein that are
defined in the Loan Agreement shall have the same meanings herein.

     IX.  Reaffirmation of Loan Agreement.  This Third Amendment shall be deemed
to be an amendment to the Loan  Agreement,  and the Loan  Agreement,  as amended
hereby,  is hereby  ratified,  approved and confirmed in each and every respect.
All  references  to  the  Loan  Agreement  herein  and in  any  other  document,
instrument,  agreement or writing shall hereafter be deemed to refer to the Loan
Agreement as amended hereby.

     X. Entire Agreement.  The Loan Agreement,  as hereby amended,  embodies the
entire agreement  between Borrower and Bank, and supersedes all prior proposals,
agreements and  understandings  relating to the subject matter hereof.  Borrower
certifies  that  it is  relying  on no  representation,  warranty,  covenant  or
agreement except for those set forth in the Loan Agreement as hereby amended and
the other documents previously executed or executed of even date herewith.

     XI.  Governing Law. THIS THIRD AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.  This Third  Amendment has been entered into in Harris
County,  Texas,  and it shall be performable  for all purposes in Harris County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes between Borrower and Bank, whether in law or equity, including, but not
limited  to,  any and all  disputes  arising  out of or  relating  to this Third


                                      -10-

<PAGE>



 
Amendment or any other Loan Document;  and venue in any such dispute wFhether in
federal or state court shall be laid in Harris County, Texas.

     XII. Severability. Whenever possible each provision of this Third Amendment
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this Third Amendment shall be prohibited
by or invalid under  applicable  law, such provision shall be ineffective to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provision or the remaining provisions of this Third Amendment.

     XIII.  Execution in  Counterparts.  This Third Amendment may be executed in
any  number  of   counterparts   and  by  the  different   parties  on  separate
counterparts,  and each such counterpart shall be deemed to be an original,  but
all such counterparts shall together constitute but one and the same agreement.

     XIV.  Section  Captions.  Section captions used in this Third Amendment are
for convenience of reference only, and shall not affect the construction of this
Third Amendment.

     XV. Successors and Assigns.  This Third Amendment shall be binding upon the
Borrower and Bank and their respective  successors and assigns,  and shall inure
to the benefit of the  Borrower  and Bank,  and the  respective  successors  and
assigns of Bank.

     XVI. Non-Application of Chapter 15 of Texas Credit Codes. The provisions of
Chapter 15 of the Texas  Credit Code  (Vernon's  Texas Civil  Statutes,  Article
5069-15) are specifically declared by the parties hereto not to be applicable to
the Loan  Agreement as hereby  amended or any of the other Loan  Documents or to
the transactions contemplated hereby.

     XVII. Notice. THIS THIRD AMENDMENT TOGETHER WITH THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS  REPRESENT THE FINAL AGREEMENT  BETWEEN THE PARTIES AND MAY
NOT BE  CONTRADICTED  BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL  AGREEMENTS  BETWEEN THE
PARTIES.

     IN WITNESS WHEREOF,  the parties hereto have caused this Third Amendment to
be duly executed as of the day and year first above written.


                                        BORROWER:

                                        TANKNOLOGY-NDE INTERNATIONAL, INC.
                                        (formerly known as NDE ENVIRONMENTAL
                                        CORPORATION)

                                        By:  //s//  JAY ALLEN CHAFFEE
                                           Jay Allen Chaffee
                                           Chairman of the Board


                                          -11-

<PAGE>



                                        TANKNOLOGY/NDE CORPORATION

                                        By:  //s//  JAY ALLEN CHAFFEE
                                           Jay Allen Chaffee
                                           Chairman of the Board

                                        TANKNOLOGY-NDE CONSTRUCTION
                                        SERVICES, INC.

                                        By:  //s//  JAY ALLEN CHAFFEE
                                           Jay Allen Chaffee
                                           Chairman of the Board

                                        PROECO, INC.

                                        By: //s//  JAY ALLEN CHAFFEE
                                           Jay Allen Chaffee
                                           Chairman of the Board

                                        2368692 CANADA, INC. (formerly known as
                                        TANKNOLOGY CANADA (1988) INC.)

                                        By:  //s//  JAY ALLEN CHAFFEE
                                           Jay Allen Chaffee
                                           President






                                      -12-

<PAGE>



                                      BANK:

                                        BANK ONE, TEXAS, N.A.


                                        By:  //s// CHARLES KINGSWELL-SMITH
                                           Charles Kingswell-Smith
                                           Senior Vice President


                                      -13-

<PAGE>



                                   Schedule 1

1.        Stock  Power  executed  by  Tanknology-NDE  International,  Inc.  with
          respect to its shares of Tanknology-NDE Construction Services, Inc., a
          wholly owned subsidiary.

2.        Amendment   to   Stock   Pledge   and   Security   Agreement   between
          Tanknology-NDE International, Inc. and Bank One, Texas.

3.        Security Agreement between Tanknology-NDE  Construction Services, Inc.
          and Bank One, Texas.

4.        Financing Statements

         Tanknology-NDE International, Inc.
         DELAWARE: Secretary of State
         TEXAS: Secretary of State & Travis County

         Tanknology-NDE Construction Services, Inc.
         DELAWARE: Secretary of State
         TEXAS: Secretary of State




<PAGE>



                                    EXHIBIT A

                             Form of Revolving Note

                                 REVOLVING NOTE

$5,000,000.00                                                  December 23, 1997

     FOR  VALUE  RECEIVED,   TANKNOLOGY-NDE  INTERNATIONAL,   INC.,  a  Delaware
corporation, TANKNOLOGY/NDE CORPORATION, a Delaware corporation, PROECO, INC., a
Delaware corporation,  TANKNOLOGY-NDE  CONSTRUCTION  SERVICES,  INC., a Delaware
corporation,  and 2368692 CANADA, INC., a Canadian federal  corporation,  all of
the foregoing  having an address at 8900 Shoal Creek Bldg.  200,  Austin,  Texas
78757, (collectively, "Borrower") unconditionally promise to pay to the order of
BANK ONE, TEXAS, NATIONAL ASSOCIATION, (herein called "Bank"), at its offices at
910 Travis,  Houston,  Texas 77001,  the principal  sum of FIVE MILLION  DOLLARS
($5,000,000.00)  or,  if less,  the  aggregate  unpaid  principal  amount of all
Revolving  Loans  (as  defined  in the Loan  Agreement)  made by the Bank to the
Borrower  pursuant to the Loan  Agreement,  as shown in the records of the Bank,
outstanding on such date.

     The undersigned also promise to pay interest on the unpaid principal amount
hereof  from  time to time  outstanding  from the  date  hereof  until  maturity
(whether by acceleration  or otherwise) and, after maturity,  until paid, at the
rates  per annum and on the dates  specified  in the Loan  Agreement;  provided,
however,  that in no event  shall  such  interest  exceed the  Maximum  Rate (as
hereinafter defined).

     "Maximum Rate" means the Maximum Rate of  non-usurious  interest  permitted
from day to day by Applicable Law.

     "Applicable  Law" means that law in effect from time to time and applicable
to this Note which  lawfully  permits the charging and collection of the highest
permissible lawful,  non-usurious rate of interest on this Note,  including laws
of the State of Texas and laws of the United  States of America.  It is intended
that Article 1.04,  Title 79, Revised Civil Statutes of Texas,  1927, as amended
(Article 5069-1.04, as amended, Vernon's Texas Civil Statutes) shall be included
in the laws of the State of Texas in  determining  Applicable  Law;  and for the
purpose of  applying  said  Article  1.04 to this  Note,  the  interest  ceiling
applicable  to this Note under said Article 1.04 shall be the  indicated  weekly
rate ceiling from time to time in effect. The Borrower and the Bank hereby agree
that Chapter 15 of Subtitle 3, Title 79, Revised Civil Statutes of Texas,  1925,
as amended,  shall not apply to this Note or the loan transaction  evidenced by,
and  referenced  in, the Loan  Agreement  (hereinafter  defined)  in any manner,
including without limitation, to any account or arrangement evidenced or created
by, or provided for in, this Note.

     In no event shall the  aggregate  of the  interest  on this Note,  plus any
other  amounts  paid in  connection  with the loan  evidenced by this Note which
would under Applicable Law be deemed  "interest," ever exceed the maximum amount
of interest which, under Applicable Law, could be lawfully charged on this Note.
The Bank and the Borrower  specifically  intend and agree to limit contractually


                                       -1-

<PAGE>



     
the interest  payable on this Note to not more than an amount  determined at the
Maximum Rate. Therefore, none of the terms of this Note or any other instruments
pertaining to or securing this Note shall ever be construed to create a contract
to pay  interest  at a rate in excess  of the  Maximum  Rate,  and  neither  the
Borrower nor any other party liable herefor shall ever be liable for interest in
excess of that  determined  at the  Maximum  Rate,  and the  provisions  of this
paragraph  shall  control  over  all  provisions  of this  Note or of any  other
instruments pertaining to or securing this Note. If any amount of interest taken
or  received  by the Bank shall be in excess of the  maximum  amount of interest
which,  under  Applicable  Law, could lawfully have been collected on this Note,
then the excess shall be deemed to have been the result of a mathematical  error
by the  parties  hereto and shall be  refunded  promptly  to the  Borrower.  All
amounts paid or agreed to be paid in connection with the indebtedness  evidenced
by this Note which would under Applicable Law be deemed "interest" shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated and spread
throughout the full term of this Note.

     This Note is the  Revolving  Note  referred  to in and is  entitled  to the
benefits of a certain Loan Agreement,  dated as of October 25, 1996 (as the same
may be amended,  modified,  supplemented,  extended,  rearranged and/or restated
from  time  to  time,  the  "Loan   Agreement"),   entered  into  by  and  among
Tanknology-NDE  International,  Inc., (f/k/a NDE  Environmental  Corporation) et
al., as Borrower,  and Bank One, Texas,  National Association and secured by the
Collateral Documents (as such term is defined in the Loan Agreement).  Reference
is hereby made to the Loan  Agreement for a statement of the  prepayment  rights
and penalties and  obligations of the Borrower,  a description of the properties
and assets  mortgaged,  encumbered  and  assigned,  the nature and extent of the
security and the rights of the parties to the Collateral Documents in respect of
such security,  and for a statement of the terms and conditions  under which the
due date of this Note may be  accelerated.  Upon the  occurrence of any Event of
Default as specified in the Loan Agreement, the principal balance hereof and the
interest  accrued  hereon may be  declared  to be  forthwith  due and payable in
accordance with the Loan Agreement, and any indebtedness of the holder hereof to
the Borrower may be appropriated and applied hereon.

     In addition to and not in  limitation  of the  foregoing,  the  undersigned
further agrees, subject only to any limitation imposed by applicable law, to pay
all  reasonable  expenses,   including  reasonable  attorneys'  fees  and  legal
expenses,  incurred  by the holder of this Note in  endeavoring  to collect  any
amounts payable  hereunder which are not paid when due,  whether by acceleration
or otherwise.

     All parties hereto, whether as makers,  endorsees, or otherwise,  severally
waive presentment for payment,  demand, protest, notice of intent to accelerate,
notice of acceleration and notice of dishonor.

     This Note is issued in substitution for, and in replacement,  modification,
rearrangement,  renewal  and  extension  of, but not in  extinguishment  of, the
outstanding   principal   indebtedness   evidenced   by  that  certain  note  of
Tanknology-NDE  International,   Inc.  (f/k/a  NDE  Environmental  Corporation),
Tanknology/NDE   Corporation,   ProEco,   Inc.,  2368692  Canada,  Inc.  (f/k/a/
Tanknology  Canada (1988) Inc.) and Ustman  Industries,  Inc., dated October 25,
1996,  payable to the order of Bank One, Texas,  N.A. in the original  principal
sum of $5,000,000.00,  (the "Prior Note");  it being  acknowledged and agreed by
Borrower that the  indebtedness  evidenced by this Note constitutes an extension


                                       -2-

<PAGE>



    
and renewal of the  outstanding  principal  indebtedness  evidenced by the Prior
Note, and that all security interests and other liens which secure the repayment
of the Prior Note shall  continue to secure the  indebtedness  evidenced by this
Note.

     THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE
OF TEXAS  AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE  STATE OF  TEXAS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

         EXECUTED this 23rd day of December, 1997.

TANKNOLOGY-NDE INTERNATIONAL,
   INC.

By:  //s//  JAY ALLEN CHAFFEE
    Jay Allen Chaffee
    Chairman of the Board

TANKNOLOGY/NDE CORPORATION


By:  //s//  JAY ALLEN CHAFFEE
    Jay Allen Chaffee
    Chairman of the Board

TANKNOLOGY-NDE CONSTRUCTION
SERVICES, INC.


By:  //s//  JAY ALLEN CHAFFEE
    Jay Allen Chaffee
    Chairman of the Board
PROECO, INC.


By:  //s//  JAY ALLEN CHAFFEE
    Jay Allen Chaffee
    Chairman of the Board


2368692 CANADA, INC.


By:  //s//  JAY ALLEN CHAFFEE
    Jay Allen Chaffee
    President



                                       -3-

<PAGE>



                                   EXHIBIT "B"

                             Agreement of Indemnity




<PAGE>



                                   EXHIBIT "C"

                     Form of Surety Subordination Agreement




<PAGE>



                                   EXHIBIT "D"

                Form of Intercreditor and Subordination Agreement






<PAGE>



                                   EXHIBIT "E"

                        Form of Stock Warrant Certificate
                             (in favor of Bank One)






<PAGE>



                                   EXHIBIT "F"

                           Form of Standby Commitment





<PAGE>



                                  EXHIBIT "G-1"

                     Form of Opinion of Counsel for Borrower




<PAGE>


                                  EXHIBIT "G-2"

                Form of Opinion of counsel for DH Holdings Corp.




<PAGE>


<PAGE>
                                 EXHIBIT 10.56




                     AMENDED AND RESTATED STANDBY COMMITMENT


     This AMENDED AND RESTATED STANDBY  COMMITMENT (this "Agreement") is made as
of this 23rd day of December,  1997, by and among  Proactive  Partners,  L.P., a
California    limited    partnership   (the    "Stockholder");    Tanknology-NDE
International,  Inc., a Delaware  corporation  (the  "Borrower");  and Bank One,
Texas, N.A., a national banking association (the "Lender").

     WHEREAS,   the  Lender,  the  Borrower,   and  certain  of  the  Borrower's
subsidiaries  have entered into that certain Loan Agreement  dated as of October
25, 1996,  as amended by Amendment  No. 1 and Amendment No. 2 thereto (the "Loan
Agreement"), whereby the Lender agreed to make certain loans and other financial
accommodations  available to the Borrower upon the terms and conditions  therein
contained,  such loans and  accommodations  evidenced by a Revolving  Note and a
Term Note dated as of October 25, 1996 (the "Notes"); and

     WHEREAS,  Bank One Capital  Partners,  L.L.C.,  an Ohio  limited  liability
company ("BOCP")  (formerly Bank One Capital  Partners,  L.P.), the Borrower and
certain of  Borrower's  subsidiaries  entered into that certain Note and Warrant
Purchase   Agreement   dated  as  of  October  25,  1996  ("BOCP  Note  Purchase
Agreement"),  whereby  BOCP  made  a loan  and  other  financial  accommodations
available to the Borrower on the terms and conditions therein contained; and

     WHEREAS,  as a condition to the obligations of the Lender to make any loans
under the Loan  Agreement  and the  obligations  of BOCP to make loans under the
Note Purchase Agreement, the Stockholder executed a Standby Commitment, dated as
of October 25, 1996 ("Standby  Commitment"),  to grant further  assurance to the
Lender and BOCP  regarding  the ability of the  Borrower to pay its  obligations
under the Loan Agreement and the Note Purchase Agreement; and

     WHEREAS,  the Borrower has requested  that the Lender enter into  Amendment
No. 3, dated the date hereof,  to the Loan  Agreement  ("Amendment  No. 3 to the
Loan Agreement") amending certain provisions thereof and permitting the Borrower
to repay its obligations under, and terminate,  the BOCP Note Purchase Agreement
and the agreements and  instruments  entered into pursuant  thereto and to enter
into a Note,  Preferred Stock,  and Warrant Purchase  Agreement with DH Holdings
Corp., a Delaware Corporation ("DHH"),  dated the date hereof ("DH Note Purchase
Agreement"),  and certain other  documents and instruments  pursuant  thereto in
substitution for and replacement of the BOCP Note Purchase Agreement; and

     WHEREAS, after the consummation of the transactions  contemplated by the DH
Note  Purchase  Agreement  and  Amendment  No.  3 to  the  Loan  Agreement,  the
Stockholder will be the owner of approximately 35% of the issued and outstanding
shares of common stock of the Borrower (assuming that all shares of common stock
of  Borrower  issuable  (a) upon  exercise  of the  Warrants  under the  Warrant
Certificate,  dated  the date  hereof,  issued  by the  Borrower  to the  Lender




<PAGE>


pursuant to Amendment  No. 3 to the Loan  Agreement and (b) upon exercise of the
Warrants  under  the  Warrant  Certificate,  dated  the  date  hereof,  and upon
conversion  of the shares of Series A  Redeemable  Convertible  Preferred  Stock
("Preferred  Stock"),  dated  the date  hereof,  issued  by the  Borrower  to DH
pursuant to the DH Note Purchase Agreement, were outstanding);

     WHEREAS,  as the owner of such  percentage  of the issued  and  outstanding
Common Stock of the Borrower, the Stockholder will benefit from the execution of
Amendment  No. 3 to the Loan  Agreement and the execution by the Borrower of the
DH Note Purchase Agreement; and

     WHEREAS,  the execution of this  Agreement is a condition  precedent to the
Lender's execution of Amendment No. 3 to the Loan Agreement;

     NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender to enter into  Amendment  No. 3 to the Loan  Agreement and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto hereby agree as follows:

     1. Stockholder's Contribution to Borrower.

     (a)  The Stockholder  hereby agrees that if a timely payment is not made on
          the  Notes  as  required  by  the  Loan  Agreement  or the  Note,  the
          Stockholder  will, at the direction of the Lender,  invest One Million
          Dollars   ($1,000,000)   in  the  Borrower  and  the  Borrower   shall
          contemporaneously  execute and deliver to the Stockholder an unsecured
          subordinate note (the  "Subordinate  Note")  substantially in the form
          and substance of Exhibit A attached hereto.

     (b)  The  Borrower  agrees  to use any  loan  made  available  to it  under
          paragraph (a) to repay principal and interest on the Notes.

     2. Representations and Warranties.  The Stockholder represents and warrants
to the Lender that:

     (a)  The  Stockholder  is a limited  partnership  duly  organized,  validly
          existing  and  in  good  standing  under  the  laws  of the  State  of
          California.  The Stockholder is qualified to transact business in, and
          is in good standing under the laws of, all  jurisdictions in which the
          Stockholder   is  required  by   applicable   law  to  maintain   such
          qualification, except where the failure to so qualify would not have a
          material adverse effect on the Stockholder;

     (b)  The Stockholder  has full power,  authority and legal right to execute
          this Agreement;

     (c)  This Agreement has been duly authorized, executed and delivered by the
          Stockholder and constitutes the legal, valid and binding obligation of
          the Stockholder enforceable against the Stockholder in accordance with
          its terms;



                                       -2-

<PAGE>



     (d)  No consent, approval or authorization of or designation or filing with
          any Person on the part of the  Stockholder  is required in  connection
          with the execution and delivery of this Agreement and the consummation
          of the transactions contemplated hereby;

     (e)  The  execution,  delivery and  performance  of this Agreement will not
          violate any  provision of any  applicable  law or regulation or of any
          order,  judgment,  writ,  award or decree of any court,  arbitrator or
          governmental  authority,  domestic or foreign, or of the Stockholder's
          partnership  agreement (as amended and supplemented,  the "Partnership
          Agreement"), or of any mortgage,  indenture, lease, contract, or other
          agreement,  instrument or  undertaking  to which the  Stockholder is a
          party or which purports to be binding upon the Stockholder or upon any
          of its assets;

     (f)  The  Stockholder  will at all times during the term of this  Agreement
          possess, or have unrestricted access to, sources of cash sufficient to
          carry out its obligations hereunder; and

     (g)  After giving effect to the transactions  contemplated by Amendment No.
          3 to the  Loan  Agreement  and the DH  Note  Purchase  Agreement,  the
          Stockholder  will be the beneficial  owner of record of  approximately
          35% of  the  issued  and  outstanding  common  stock  of the  Borrower
          (assuming  that  all  shares  of  common  stock of  Borrower  issuable
          (a) upon exercise of the Warrants under the Warrant Certificate, dated
          the date  hereof,  issued by the  Borrower  to the Lender  pursuant to
          Amendment  No. 3 to the Loan  Agreement  and (b) upon  exercise of the
          Warrants  under the Warrant  Certificate,  dated the date hereof,  and
          upon  conversion  of the  shares of  Preferred  Stock,  dated the date
          hereof,  issued  by the  Borrower  to DH  under  the DH Note  Purchase
          Agreement, were outstanding).

     3. Termination.  This Agreement shall terminate upon the payment in full of
the Notes.

     4.  Successors;  Applicable  Law. This Agreement and all obligations of the
parties  hereto shall be binding upon the successors and assigns of each of them
and shall, together with the rights of the Lender and the Borrower, inure to the
benefit of the Lender and the  Borrower,  and their  respective  successors  and
assigns.  This Agreement  shall be governed by, and be construed and interpreted
in  accordance  with,  the  internal  laws  (as  opposed  to  conflicts  of  law
provisions) of the State of Texas.

     5. Entire Agreement. This Agreement constitutes the entire agreement of the
parties  with  respect to the subject  matter  hereof and  supersedes  all other
understandings, oral or written, with respect to the subject matter hereof.

     6.  Reliance by Lender.  All  covenants,  agreements,  representations  and
warranties made herein shall,  notwithstanding  any investigation by the Lender,
be deemed to be material to, and to have been relied upon by, the Lender.



                                       -3-

<PAGE>




     7. Waiver. The Lender's failure, at any time or times hereafter, to require
strict  performance by any party hereto of any provision of this Agreement shall
not  waive,  affect or  diminish  any right of the Lender  thereafter  to demand
strict  compliance and  performance  therewith.  Any suspension or waiver by the
Lender of a default under this Agreement shall not suspend,  waive or affect any
other  default  under this  Agreement  whether  the same is prior or  subsequent
thereto and whether of the same or of a different kind or character. None of the
undertakings,  agreements,  warranties,  covenants  and  representations  of the
parties  hereto  contained in this Agreement and no default by the parties under
this  Agreement  shall be deemed to have been suspended or waived by the Lender,
unless such  suspension  or waiver is in writing and signed by an officer of the
Lender, and directed to the other parties hereto,  specifying such suspension or
waiver.  This  Agreement  may not be modified  or  amended,  except in a written
agreement signed by all of the parties hereto.

     8.  Parties.  Whenever in this  Agreement  reference  is made to any of the
parties hereto, such reference shall be deemed to include,  wherever applicable,
a reference to the successors and assigns of the parties hereto.

     9. Section Titles.  The section titles contained in this Agreement shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties.

     10. Notices.  Except as otherwise  expressly  provided  herein,  any notice
required  or desired  to be served,  given or  delivered  hereunder  shall be in
writing, and shall, if sent by United States mail, certified or registered mail,
return receipt  requested,  with proper postage prepaid,  be deemed to have been
validly served,  given or delivered upon receipt by the sender of such notice of
a return  receipt or upon  delivery  by courier or upon  transmission  by telex,
telecopy or similar electronic medium to the following addresses:

                           (i)      If to the Stockholder, at:

                                    Proactive Partners, L.P.
                                    50 Osgood Place, Penthouse
                                    San Francisco, CA 94153
                                    Attention:       Charles McGettigan

                           (ii)     If to the Lender, at:

                                    Bank One, Texas, N.A.
                                   910 Travis
                              Houston, Texas 77002
                                    Attention:       Charles Kingswell-Smith




                                       -4-

<PAGE>



                           (iii)    If to the Borrower, at:

                                    Tanknology-NDE International, Inc.
                                    8900 Shoal Creek Bldg. 200
                                    Austin, Texas 78757
                                    Attention:       Jay Allen Chaffee

or to such other  address as each  party  designates  to the other in the manner
herein prescribed.

     12. No Fiduciary  Relationship.  No provision herein or in any of the other
Loan  Documents and no course of dealing  between the parties shall be deemed to
create any fiduciary duty by the Lender to the Stockholder or any partner of the
Stockholder.

     13.  Definition  of  Stockholder.  After  completion  of the  Stockholder's
funding  obligations under Section 2, the term  "Stockholder"  shall include any
assignee of the Stockholder.





                                       -5-

<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered on the date first above written.

                                     PROACTIVE PARTNERS, L.P.

                                     By:   Proactive Investment Managers, L.P.,
                                              its General Partner

                                     By:  //s//  C. C. McGETTIGAN
                                          Charles C. McGettigan
                                          General Partner


                                     BANK ONE, TEXAS, N.A.

                                     By:   //s// GARY L. STONE
                                     Name:  Gary L. Stone
                                     Title:  Senior Vice President


                                     TANKNOLOGY-NDE INTERNATIONAL, INC.

                                     By:  //s//  JAY ALLEN CHAFFEE
                                     Jay Allen Chaffee
                                     Chairman of the Board






                                       -6-
<PAGE>
                                 EXHIBIT 10.57





--------------------------------------------------------------------------------


                              Termination Agreement

--------------------------------------------------------------------------------



                          Dated as of December 10, 1997



<PAGE>



                                TABLE OF CONTENTS


ARTICLE 1      DEFINITIONS...................................................-2-
               1.01     "Closing" ...........................................-2-
               1.02     "Closing Date" ......................................-2-
               1.03     "Capital Stock" .....................................-2-
               1.04     "Note and Warrant Purchase Agreement"................-2-
               1.05     "Related Agreements" ................................-3-
               1.06     "Senior Subordinated Note"...........................-3-
               1.07     "Stated Interest Rate"...............................-3-
               1.08     "Subsidiaries" ......................................-3-

ARTICLE 2      CLOSING DATE..................................................-3-
               2.01     Closing Date.  ......................................-3-
               2.02     Extension of Closing Date............................-3-

ARTICLE 3      OBLIGATIONS OF NDE............................................-3-
               3.01     NDE Payment to BOCP..................................-3-
               3.02     Post Closing Agreement...............................-4-

ARTICLE 4      RELEASES BY NDE AND ITS SUBSIDIARIES..........................-4-
               4.01     Surrender of Claims and Rights by NDE and its
                        Subsidiaries.  ......................................-4-
               4.02     Release of BOCP and Related Parties..................-4-

ARTICLE 5      OBLIGATIONS OF BOCP...........................................-4-
               5.01     Cancellation of Senior Subordinated Note.............-4-
               5.02     Return of Certificates, etc..........................-4-
               5.03     Execution of Post Closing Agreement..................-4-
               5.04     Resignation of Director..............................-5-
               5.05     Consent of Bank One, Texas, N.A......................-5-

ARTICLE 6      RELEASES BY BOCP..............................................-5-
               6.01     Surrender of Claims and Rights by BOCP.  ............-5-
               6.02     Release of NDE and Related Parties...................-5-
               6.03     Release of Security Interests.  .....................-5-

ARTICLE 7      REPRESENTATIONS OF NDE AND ITS SUBSIDIARIES...................-5-
               7.01     Organization.  ......................................-5-
               7.02     No Conflicts.........................................-6-
               7.03     Enforceability.......................................-6-
               7.04     Authorization and Consents...........................-6-




<PAGE>



ARTICLE 8      REPRESENTATIONS OF BOCP.......................................-6-
               8.01     Organization.........................................-6-
               8.02     Knowledge of BOCP....................................-6-
               8.03     No Conflicts.........................................-6-
               8.04     Enforceability.......................................-7-
               8.05     Authorization and Consents...........................-7-

ARTICLE 9      MISCELLANEOUS PROVISIONS......................................-7-
               9.01     Modifications, Amendments or Waivers.  ..............-7-
               9.02     Governing Law.  .....................................-7-
               9.03     Rules of Construction................................-7-
               9.04     Further Acts and Documents...........................-8-
               9.05     Counterparts.  ......................................-8-
               9.06     Terms and Conditions Contingent upon Closing.........-8-




<PAGE>




                              TERMINATION AGREEMENT

          This  is a  Termination  Agreement  dated  as  of  December  10,  1997
("Termination Agreement") by and between Tanknology-NDE  International,  Inc., a
Delaware corporation ("NDE"),  Tanknology/NDE  Corporation  ("TNDE"), a Delaware
corporation, ProEco, Inc. ("ProEco"), a Delaware corporation, and 2368692 Canada
Inc., a Canadian Federal  corporation  ("Canada") and Banc One Capital Partners,
LLC, a Delaware  limited  liability  company and the successor by merger to Banc
One Capital Partners, L.P., an Ohio limited partnership ("BOCP").

          NDE, TNDE, ProEco and Canada are sometimes referred to collectively as
the "Debtors" and individually as a "Debtor".  The Debtors and BOCP are referred
to individually as a "Party" and collectively as the "Parties."

                                   WITNESSETH

          WHEREAS, Tanknology-NDE International, Inc. was formerly known as "NDE
Environmental Corporation"; and

          WHEREAS,  2368692  Canada Inc. was formerly  known as  "Tanknology  of
Canada (1988), Inc."; and

          WHEREAS,  Debtors entered into a Note and Warrant  Purchase  Agreement
with BOCP dated as of October 25, 1996; and

          WHEREAS, pursuant to the Note and Warrant Purchase Agreement,  Debtors
and BOCP entered into (i) the Senior  Subordinated Note, dated October 25, 1996,
in the principal  amount of $8,000,000 and due on December 31, 2001 and (ii) the
Security Agreement - Personal Property, dated as of October 25, 1996; and

          WHEREAS,  pursuant to the Note and Warrant Purchase Agreement, NDE and
BOCP entered into the Security  Agreement - Pledge of Subsidiary  Stock, the Put
Option  Agreement,  the Preemptive  Rights  Agreement,  the Registration  Rights
Agreement, and the Co-Sale Agreement, each dated as of October 25, 1996; and

          WHEREAS, pursuant to the Note and Warrant Purchase Agreement, BOCP and
certain  shareholders of NDE entered into a Shareholder  Agreement,  dated as of
October 25, 1996 (the "Shareholder Agreement"); and

          WHEREAS,  pursuant to the Note and Warrant Purchase  Agreement,  BOCP,
Bank One, Texas,  N.A., NDE and Proactive  Partners,  L.P., a California limited
partnership,  entered  into a Standby  Commitment,  dated as of October 25, 1996
(the "Standby Commitment"); and



                                       -4-

<PAGE>



          WHEREAS,  USTMAN Industries,  Inc., a Delaware corporation ("USTMAN"),
was also a party to (i) the Note and Warrant Purchase Agreement, (ii) the Senior
Subordinated  Note and (iii) the  Security  Agreement - Personal  Property;  and
USTMAN,  formerly a  subsidiary  of NDE, has since been sold with the consent of
BOCP and released from each of the foregoing; and

          WHEREAS,  pursuant to the Note and  Warrant  Purchase  Agreement,  NDE
issued a  Warrant  Certificate  representing  the grant to BOCP of  warrants  to
purchase 13,022,920 shares of Capital Stock (the "Warrant Certificate"); and

          WHEREAS,  pursuant to the Note and Warrant Purchase  Agreement and the
Shareholder Agreement, certain Shareholders of NDE caused the nominee of BOCP to
be elected to NDE's Board of Directors, and NDE provided BOCP with financial and
other information concerning the business,  operations and conditions of NDE and
its Subsidiaries; and

          WHEREAS,  Debtors and BOCP desire that Debtors  shall repay the Senior
Subordinated  Note and that BOCP shall  terminate the Note and Warrant  Purchase
Agreement, Warrant Certificate, Related Agreements and Shareholder Agreement and
the rights and obligations of BOCP under the Standby Commitment; and

          WHEREAS,  the Senior  Subordinated  Note contains  certain  provisions
prohibiting the prepayment of the Senior  Subordinated Note before September 30,
1998 ("Prepayment Restriction"); and

          WHEREAS,  the Parties have agreed upon the terms and  conditions  upon
which the Note and Warrant  Purchase  Agreement,  Warrant  Certificate,  Related
Agreements  and  Shareholder  Agreement and the rights and  obligations  of BOCP
under the Standby Commitment will be terminated;

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
agreements  herein  contained  and other good and  valuable  consideration,  the
receipt and  sufficiency of which is hereby  acknowledged,  the Parties agree as
follows:

                                    ARTICLE 1
                                   DEFINITIONS

          1.01 "Closing" is defined in Section 2.01

          1.02 "Closing Date" is defined in Section 2.02.

          1.03  "Capital  Stock"  means the  shares of common  stock,  par value
$0.0001 per share, of NDE.



                                       -2-

<PAGE>



          1.04 "Note and Warrant Purchase  Agreement" means the Note and Warrant
Purchase Agreement dated as of October 25, 1996 by and between Debtors and BOCP.

          1.05 "Related Agreements" means the Senior Subordinated Note, Security
Agreement - Personal Property,  dated as of October 25, 1996 by and between BOCP
and  Debtors;  Security  Agreement  - Pledge of  Subsidiary  Stock,  dated as of
October 25, 1996 by and between NDE and BOCP; the Put Option Agreement, dated as
of  October  25,  1996  by and  between  NDE and  BOCP;  the  Preemptive  Rights
Agreement,  dated as of  October  25,  1996 by and  between  NDE and  BOCP;  the
Registration  Rights Agreement,  dated as of October 25, 1996 by and between NDE
and BOCP; and the Co-Sale  Agreement,  dated as of October 25, 1996 by and among
NDE, BOCP and specified shareholders.

          1.06 "Senior  Subordinated  Note" means the Senior  Subordinated  Note
dated October 25, 1996 in the principal  amount of  $8,000,000,  due on December
31, 2001.

          1.07  "Stated  Interest  Rate" means the stated  interest  rate in the
Senior Subordinated Note which is 13% per annum.

          1.08 "Subsidiaries" means TNDE, ProEco and Canada.

                                    ARTICLE 2
                                  CLOSING DATE

          2.01 Closing Date.  Subject to any extension  pursuant to Section 2.02
hereof,  the  closing  of the  transactions  contemplated  by  this  Termination
Agreement (the "Closing") shall occur on December 31, 1997 ("Closing Date").

          2.02 Extension of Closing Date. NDE, in its sole discretion and upon 1
day's written notice to BOCP, may  unilaterally  extend the Closing Date of this
Termination  Agreement  to any date not later than  January 31,  1998;  provided
that,  for any period  after  December  31,  1997 and until the  Closing on such
extended Closing Date, the interest payable pursuant to the Senior  Subordinated
Note shall be calculated by increasing  the Stated  Interest Rate by 3% (that is
from 13% per annum to 16% per annum); further provided that, if the Closing does
not occur, all interest payable pursuant to the Senior  Subordinated  Note shall
be calculated  using only the Stated  Interest Rate in accordance with the terms
of the Senior  Subordinated  Note.  The term  "Closing  Date" shall refer to the
closing date stated in Section 2.01 or extended in accordance with Section 2.02,
as applicable.

                                    ARTICLE 3
                               OBLIGATIONS OF NDE

          3.01 NDE Payment to BOCP.  Subject to the terms and conditions of this
Termination  Agreement and at the Closing,  NDE shall pay to BOCP the sum of (a)
the face amount of the Senior Subordinated Note (which is $8,000,000),  plus (b)
$500,000 in consideration of the waiver of the Prepayment Restriction,  plus (c)


                                       -3-

<PAGE>



          
all  accrued  but  unpaid  interest  on the Senior  Subordinated  Note as of the
Closing Date. Such payment shall be made in cash at the Closing.

          3.02 Post Closing  Agreement.  Subject to the terms and  conditions of
this Termination  Agreement and at the Closing, NDE shall execute and deliver to
BOCP the Post Closing  Agreement in  substantially  the form attached  hereto as
Exhibit A.

                                    ARTICLE 4
                      RELEASES BY NDE AND ITS SUBSIDIARIES

          4.01  Surrender  of Claims  and  Rights  by NDE and its  Subsidiaries.
Subject to the terms and  conditions  of this  Termination  Agreement and at the
Closing,  NDE and its  Subsidiaries  shall  release,  discharge and surrender to
BOCP,  any and all rights and claims which they now have,  then have,  or in the
future may have, either directly or indirectly, against BOCP or any other person
or entity under or arising out of the Note and Warrant Purchase Agreement or any
of the Related Agreements.

          4.02  Release of BOCP and  Related  Parties.  Subject to the terms and
conditions  of  this  Termination  Agreement  and at the  Closing,  NDE  and its
Subsidiaries  shall release and discharge  all  officers,  partners,  employees,
agents,  attorneys and controlling persons of BOCP from any and all claims which
they now have,  then  have,  or in the  future  may  have,  either  directly  or
indirectly,  under or arising out of the Note and Warrant Purchase  Agreement or
any of the Related Agreements.

                                    ARTICLE 5
                               OBLIGATIONS OF BOCP

          5.01 Cancellation of Senior  Subordinated  Note.  Subject to the terms
and  conditions of this  Termination  Agreement  and at the Closing,  BOCP shall
deliver  to  NDE  for  cancellation,   at  the  Closing,   the  original  Senior
Subordinated  Note with BOCP's  notation on the face of the Senior  Subordinated
Note that the Senior Subordinated Note has been paid in full.

          5.02 Return of Certificates,  etc. Subject to the terms and conditions
of this Termination  Agreement and at the Closing, BOCP shall deliver to NDE for
cancellation  or termination  (as  applicable) and NDE shall cancel or terminate
(as applicable), any and all stock certificates, warrant certificates (including
without limitation the Warrant Certificate),  security instruments and all other
instruments which were granted to BOCP pursuant to the Note and Warrant Purchase
Agreement,  any of the  Related  Agreements,  Shareholder  Agreement  or Standby
Commitment.

          5.03  Execution  of Post Closing  Agreement.  Subject to the terms and
conditions of this Termination  Agreement and at the Closing, BOCP shall execute
the Post Closing Agreement attached hereto as Exhibit A.



                                       -4-

<PAGE>



          5.04  Resignation of Director.  Subject to the terms and conditions of
this  Termination  Agreement  and at the  Closing,  BOCP  shall  deliver to NDE,
effective on the Closing Date, the written  resignation of BOCP's nominee,  Mark
Bober, from the NDE Board of Directors.

          5.05 Consent of Bank One, Texas,  N.A. BOCP shall use its commercially
reasonable best efforts to obtain,  and as a condition to the obligations of NDE
and its  Subsidiaries  hereunder and subject to the terms and conditions of this
Termination  Agreement and at the Closing, BOCP shall deliver to NDE the written
consent of Bank One, Texas, N.A. to all of the transactions contemplated by this
agreement,   including,  but  not  limited  to,  NDE's  payment  of  and  BOCP's
cancellation of the Senior Subordinated Note and the Warrant Certificate and the
termination  of the Note and Warrant  Purchase  Agreement,  Related  Agreements,
Shareholder Agreement, and Standby Committment.

                                    ARTICLE 6
                                RELEASES BY BOCP

          6.01 Surrender of Claims and Rights by BOCP.  Subject to the terms and
conditions of this Termination Agreement and at the Closing, BOCP shall release,
discharge  and surrender to NDE, any and all rights and claims which it now has,
then has, or in the future may have, either directly or indirectly, against NDE,
the Subsidiaries, or any other person or entity under or arising out of the Note
and Warrant Purchase  Agreement,  the Warrant  Certificate or any of the Related
Agreements,   Shareholder  Agreement  and  rights  of  BOCP  under  the  Standby
Commitment.

          6.02  Release  of NDE and  Related  Parties.  Subject to the terms and
conditions of this Termination  Agreement and at the Closing, BOCP shall release
and  discharge  all  officers,  directors,   employees,  agents,  attorneys  and
controlling  persons of NDE or any of its  Subsidiaries  from any and all claims
which it now has,  then has,  or in the  future  may have,  either  directly  or
indirectly,  under or arising  out of the Note and Warrant  Purchase  Agreement,
Warrant Certificate or any of the Related Agreements,  the Shareholder Agreement
or the Standby Commitment.

          6.03  Release  of  Security  Interests.   Subject  to  the  terms  and
conditions of this Termination  Agreement and at the Closing, BOCP shall release
any and all  security  interests  in any assets or property of NDE or any of its
Subsidiaries  including  any  security  interest  in  any  stock  of  any of the
Subsidiaries of NDE which it may hold pursuant to the Note and Warrant  Purchase
Agreement or any of the Related Agreements,  including,  without limitation, the
Security  Agreement - Personal  Property and the Security  Agreement - Pledge of
Subsidiary  Stock, and shall deliver in form suitable for filing releases of all
recorded or filed security interests.

                                    ARTICLE 7
                   REPRESENTATIONS OF NDE AND ITS SUBSIDIARIES

          7.01  Organization.  NDE and each of its Subsidiaries is a corporation
duly incorporated and validly existing under the laws of the jurisdiction of its
formation.  The  execution  and delivery of this  Termination  Agreement and any
instrument or agreement  required by this  Termination  Agreement are within the


                                       -5-

<PAGE>



          
corporate powers of NDE and its Subsidiaries,  have been duly authorized and are
not in  conflict  with the  terms of the  respective  charters,  bylaws or other
organizational documents of NDE or its Subsidiaries.

          7.02 No Conflicts.  The  execution,  delivery and  performance of this
Termination  Agreement and any other  instrument  or agreement  required by this
Termination  Agreement are not,  assuming  that the consent of Bank One,  Texas,
N.A. referred to in Section 5.05 above is obtained,  in conflict with any law or
any material indenture,  agreement or undertaking to which NDE or any one of its
Subsidiaries is a party or by which NDE or any one of its  Subsidiaries is bound
or affected.

          7.03 Enforceability.  This Termination Agreement is a legal, valid and
binding  agreement of NDE and its Subsidiaries  enforceable  against NDE and its
Subsidiaries  in accordance  with its terms,  and every  instrument or agreement
required under this Termination Agreement,  when executed and delivered, will be
legal,  valid,  binding  and  enforceable  against NDE and its  Subsidiaries  in
accordance its respective terms.

          7.04  Authorization and Consents.  No approval,  consent,  compliance,
exemption,  authorization  or other action by, or notice to, or filing with, any
governmental  authority or any other  person or entity  (other than that of Bank
One, Texas,  N.A. referred to in Section 5.05 above) pursuant to applicable law,
and no lapse of any waiting  period  under any  applicable  law, is necessary or
required in connection  with the execution,  delivery and performance by NDE and
its  Subsidiaries  or  enforcement  against  NDE  and its  Subsidiaries  of this
Termination Agreement or the transactions contemplated hereby and thereby.

                                    ARTICLE 8
                             REPRESENTATIONS OF BOCP

          8.01  Organization.  BOCP is a Delaware limited liability company duly
organized and validly existing under the laws of the state of its formation. The
execution  and delivery of this  Termination  Agreement  and any  instrument  or
agreement  required by this  Termination  Agreement  are within  BOCP's  limited
liability company powers, have been duly authorized and are not in conflict with
the terms of the organization  agreement or certificate or other  organizational
documents of BOCP.

          8.02 Knowledge of BOCP. BOCP is aware of and has  investigated NDE and
its  Subsidiaries'  business,  management and financial  condition,  has had the
opportunity to inspect NDE and its  Subsidiaries'  facilities and has had access
to all such other information about NDE and its Subsidiaries' as BOCP has deemed
necessary or desirable to reach an informed and knowledgeable decision to effect
the  transactions  pursuant  to the terms  and  conditions  of this  Termination
Agreement.

          8.03 No Conflicts.  The  execution,  delivery and  performance of this
Termination  Agreement and any other  instrument  or agreement  required by this
Termination  Agreement are not,  assuming  that the consent of Bank One,  Texas,


                                       -6-

<PAGE>



          
N.A. referred to in Section 5.05 above is obtained,  in conflict with any law or
any material indenture,  agreement or undertaking to which BOCP is a party or by
which BOCP is bound or affected.

          8.04 Enforceability.  This Termination Agreement is a legal, valid and
binding agreement of BOCP enforceable against BOCP in accordance with its terms,
and every  instrument or agreement  required under this  Termination  Agreement,
when  executed and  delivered,  will be legal,  valid,  binding and  enforceable
against BOCP in accordance with its respective terms.

          8.05  Authorization and Consents.  No approval,  consent,  compliance,
exemption,  authorization  or other action by, or notice to, or filing with, any
governmental  authority  or any other  person or  entity  (other  than Bank One,
Texas,  N.A.  referred to in Section 5.05 above) pursuant to applicable law, and
no lapse of any  waiting  period  under any  applicable  law,  is  necessary  or
required in connection  with the execution,  delivery and performance by BOCP or
enforcement  against  BOCP of this  Termination  Agreement  or the  transactions
contemplated hereby and thereby.

                                    ARTICLE 9
                            MISCELLANEOUS PROVISIONS

          9.01 Modifications,  Amendments or Waivers.  NDE, its Subsidiaries and
BOCP may enter into written  agreements  amending or changing  any  provision of
this  Termination  Agreement or the rights hereunder or give waivers or consents
to a departure from the due  performance of their  obligations  hereunder,  with
such  waivers or consents  not to be  unreasonably  withheld,  provided  that no
departure from a Party's due performance of its  obligations  hereunder shall be
effective unless agreed to in writing by the other Parties.

          9.02 Governing Law. This  Termination  Agreement  shall be governed by
and construed in accordance with the laws of the State of Ohio.

          9.03 Rules of Construction.  Unless otherwise specified, the following
rules  shall  be  applied  in  construing  the  provisions  of this  Termination
Agreement:

               (i)  Terms that imply  gender  shall be construed to apply to all
                    genders.

               (ii) Headings  to the  various  Articles  and  Sections  of  this
                    Termination  Agreement  are included  solely for purposes of
                    reference and shall be ignored in construing  the provisions
                    of this Termination Agreement.

               (iii)"Herein",  "hereto",  "hereof"  and words of similar  import
                    refer to this Termination Agreement.



                                       -7-

<PAGE>



               (iv) Any  reference to any  agreement  or other  document in this
                    Termination  Agreement  refers  to that  agreement  or other
                    document as amended from time to time.

               (v)  The recitals included in this Termination  Agreement are the
                    mutual representations of the Parties and are a part of this
                    Termination Agreement.

          9.04 Further Acts and Documents.  Each of the Parties hereby agrees to
execute and deliver all such further instruments and to do all such further acts
and things requested by any of the other Parties hereto,  or as may be necessary
or desirable, to carry out the purposes of this Termination Agreement.

          9.05  Counterparts.  This  Termination  Agreement  may be  executed in
multiple  counterparts,  each of which shall be deemed to be an original and all
of which shall constitute one and the same agreement.

          9.06 Terms and Conditions Contingent upon Closing. All rights, duties,
and  obligations  of the Parties  pursuant  to this  Termination  Agreement  are
contingent  upon the receipt of payment by BOCP pursuant to Section 3.01 hereof,
on or before  January 31,  1998.  In the event that BOCP does not  receive  such
payment, this Termination Agreement shall be null and void and of no effect.

          The Parties have caused this Termination  Agreement to be executed and
delivered effective as of the date first written above.


TANKNOLOGY-NDE INTERNATIONAL, INC.       BANC ONE CAPITAL PARTNERS, LLC
                                         By: Banc One Capital Partners Holdings,
                                                  Ltd, Manager

                                         By: BOCP Holdings Corporation, Manager

By:  //s// JAY ALLEN CHAFFEE             By: //s// WILLIAM P. LEAHY
                                              William P. Leahy
                                              Authorized Signer
Its: Chairman of the Board





                                       -8-

<PAGE>



TANKNOLOGY/NDE CORPORATION


By:  //s//  JAY ALLEN CHAFFEE
Its:   Chairman of the Board


PROECO, INC.


By:  //s//  JAY ALLEN CHAFFEE
Its:   Chairman of the Board


2368692 CANADA INC.


By:  //s//  JAY ALLEN CHAFFEE
Its:   President



                                       -9-

<PAGE>



                                    EXHIBIT A




                   ------------------------------------------

                             Post Closing Agreement
                   ------------------------------------------


                           Dated as of ________, 1997



                                       -1-

<PAGE>




                             POST CLOSING AGREEMENT

          This is a Post Closing  Agreement dated as of  ___________,  1997 (the
"Post Closing Agreement") by and between Tanknology-NDE  International,  Inc., a
Delaware  corporation  ("NDE"),  and Banc One Capital Partners,  LLC, a Delaware
limited  liability  company  and the  successor  by merger  to Banc One  Capital
Partners, L.P., an Ohio limited partnership ("BOCP").

          NDE  and  BOCP  are  referred  to   individually   as  a  "Party"  and
collectively as the "Parties."

                                   WITNESSETH

          WHEREAS, Tanknology-NDE International, Inc. was formerly known as "NDE
Environmental Corporation"; and

          WHEREAS, Banc One Capital Partners,  LLC, a Delaware limited liability
company is the successor by merger to Banc One Capital  Partners,  L.P., an Ohio
limited partnership; and

          WHEREAS,  NDE and certain of its subsidiaries  entered into a Note and
Warrant Purchase Agreement with BOCP dated as of October 25, 1996 (the "Note and
Warrant Purchase Agreement"); and

          WHEREAS,  pursuant to the Note and Warrant Purchase Agreement, NDE (in
some cases together with its  subsidiaries) and BOCP entered into (i) the Senior
Subordinated  Note dated October 25, 1996 in the principal  amount of $8,000,000
and due on December 31, 2001,  (ii) the Security  Agreement - Personal  Property
dated as of  October  25,  1996,  (iii)  the  Security  Agreement  -  Pledge  of
Subsidiary  Stock dated as of October 25,  1996,  (iv) the Put Option  Agreement
dated as of October 25, 1996, (v) the Preemptive  Rights  Agreement  dated as of
October 25, 1996, (vi) the Registration Rights Agreement dated as of October 25,
1996, and (vi) the Co-Sale  Agreement dated as of October 25, 1996  (hereinafter
collectively referred to as the "Related Agreements"); and

          WHEREAS,  the Parties have agreed upon the terms and  conditions  upon
which the Note and Warrant Purchase  Agreement,  Related  Agreements and certain
other agreements will be terminated;

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
agreements  herein  contained  and other good and  valuable  consideration,  the
receipt and  sufficiency of which is hereby  acknowledged,  the Parties agree as
follows:



                                       -1-

<PAGE>



                                    ARTICLE I
                              POST CLOSING PAYMENT

          Section 1.1 Post Closing Payment. In exchange for BOCP's surrender and
release of all  warrants  which were  issued  pursuant  to the Note and  Warrant
Purchase  Agreement  and  Related  Agreements  or  otherwise  held by BOCP,  NDE
covenants and agrees that it will pay the Post Closing Payment Amount determined
in  accordance  with  Section  1.3  hereof  upon the  closing  of any one of the
Triggering Events as defined in Section 1.2 hereof.

          Section  1.2  Triggering   Events.   The  entering  into  any  written
agreement,  understanding  or  letter  of  intent  providing  for any one of the
following   transactions  on  or  before  March  31,  1999  shall  constitute  a
"Triggering  Event";  provided that the closing of such transaction occurs prior
to the  later of (i)  three  months  after  the  date  such  written  agreement,
understanding or letter of intent is entered into, and (ii) March 31, 1999:

               (a) the dissolution or liquidation of NDE;

               (b) an event or series of events by which any Person (as  defined
in the Note and Warrant  Purchase  Agreement) or Persons (as defined in the Note
and  Warrant  Purchase  Agreement)  or other  entities  acting in  concert  as a
partnership or other group (a "Group of Persons") shall, as a result of a tender
or  exchange  offer,  open market  purchases,  privately  negotiated  purchases,
merger, consolidation or otherwise, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Voting Power
(as defined in the Note and Warrant Purchase Agreement) of the Company;

               (c) the Company is merged  with or into  another  corporation  or
other entity with the effect that either (i) immediately  after such transaction
the stockholders of the Company  immediately prior to such transaction hold less
than 50% of the  combined  Voting  Power  (as  defined  in the Note and  Warrant
Purchase   Agreement)  of  the   corporation  or  other  entity   surviving  the
transaction,  or (ii)  the  Company  is not the  surviving  corporation  of such
transaction;

               (d) the Company or its subsidiaries,  in a single  transaction or
in a series of transactions,  directly or indirectly,  sell or exchange for cash
or other property or securities,  lease or otherwise convey all or substantially
all of the  combined  assets of the  Company and its  subsidiaries  to any other
Person  (as  defined in the Note and  Warrant  Purchase  Agreement)  or Group of
Persons; or

               (e) the Company, any of its subsidiaries or any holders of shares
of any class of its or their  capital  stock  sells any  shares of such  capital
stock or any securities convertible, directly or indirectly, into shares of such
capital  stock  pursuant  to a  registration  statement  that has been  declared
effective by the  Securities  and Exchange  Commission;  provided that the gross
proceeds of such sale are at least $20,000,000.


                                       -2-

<PAGE>



          Section 1.3 Post Closing  Payment  Amount.  The Post  Closing  Payment
Amount  shall be equal to 20% of the amount by which (a) the  Market  Determined
Value at or as a result of the closing of the  Triggering  Event exceeds (b) the
Target  Amount as defined  in Section  1.4 in effect as of the date of the first
written  agreement,  understanding  or  letter  of  intent  providing  for  such
Triggering Event.

          The term  "Market  Determined  Value"  shall mean with  respect to any
Triggering  Event  (i) the fair  market  value  of all of the  then  outstanding
capital stock of the Company  determined by the Appraiser  based solely upon the
terms and  conditions of the  Triggering  Event and  determined  without  giving
consideration  to the tax  consequences  of  such  sale  to the  Company  or its
stockholders  or the existence of this  Agreement;  or (ii) such other amount as
the Company and BOCP shall  otherwise  mutually  agree upon within ten (10) days
after the date of such closing.

          The term "Appraiser"  means,  with respect to any determination of the
Market Determined Value, an independent  appraiser (which shall be an accounting
firm or  investment  banking firm that is not an affiliate of either the Company
or BOCP) selected in the manner provided for in this definition. Within ten (10)
days after the  closing of any  Triggering  Event,  the  Company  and BOCP shall
endeavor  in good faith to select a mutually  acceptable  Appraiser.  If no such
Appraiser  is  mutually  selected  within  such time  period or such longer time
period as the Company and BOCP shall mutually  agree upon,  then within ten (10)
days thereafter, the Company and BOCP shall each designate an investment banking
firm that is not an  Affiliate of either the Company or BOCP and within ten (10)
days  thereafter,  such  investment  banking  firms  shall  mutually  select the
Appraiser.  The  Company  shall  pay the  reasonable  fees and  expenses  of the
Appraiser, and, if applicable,  the Company and BOCP shall each pay the fees and
expenses  of the  investment  banking  firm  designated  by each of them for the
purpose of selecting the Appraiser.

          Section 1.4 Target Amount. The Target Amount shall be determined based
upon the date of the first written agreement,  understanding or letter of intent
providing for such Triggering Event. The Target Amount for each of the indicated
periods shall be as follows:

                  Date hereof thru March 31, 1998                  $10,000,000
                  April 1, 1998 thru June 30, 1998                 $12,500,000
                  July 1, 1998 thru September 30, 1998             $15,000,000
                  October 1, 1998 thru December 31, 1998           $17,500,000
                  January 1, 1999 thru March 31, 1999              $20,000,000

          Section 1.5 Payment of the Post Closing Payment Amount. Payment of the
Post Closing  Payment Amount shall be in kind such that BOCP will be entitled to
receive the same type of  consideration  in the same relative  proportion as the
holders of Capital Stock.  Payment shall be made to BOCP on the same date as the
NDE shareholders  receive such consideration in exchange for a written and final
release of the obligations of NDE hereunder.


                                       -3-

<PAGE>




                                   ARTICLE II
                            MISCELLANEOUS PROVISIONS

          Section 2.1  Modifications,  Amendments  or Waivers.  NDE and BOCP may
enter into written  agreements  amending or changing any  provision of this Post
Closing  Agreement  or the rights  hereunder  or give  waivers or  consents to a
departure from the due  performance of their  obligations  hereunder,  with such
waivers or consents not to be unreasonably withheld,  provided that no departure
from a Party's due performance of its  obligations  hereunder shall be effective
unless agreed to in writing by the other Parties.

          Section  2.2  Governing  Law.  This Post  Closing  Agreement  shall be
governed by and construed in accordance with the laws of the State of Ohio.

          Section 2.3 Rules of  Construction.  Unless otherwise  specified,  the
following  rules  shall be applied in  construing  the  provisions  of this Post
Closing Agreement:

               (i)  Terms that imply  gender  shall be construed to apply to all
                    genders.

               (ii) Headings to the various  Articles  and Sections of this Post
                    Closing  Agreement  are  included  solely  for  purposes  of
                    reference and shall be ignored in construing  the provisions
                    of this Post Closing Agreement.

               (iii)"Herein",  "hereto",  "hereof"  and words of similar  import
                    refer to this Post Closing Agreement.

               (iv) Any  reference to any  agreement  or other  document in this
                    Post  Closing  Agreement  refers to that  agreement or other
                    document as amended from time-to-time.

               (v)  The recitals included in this Post Closing Agreement are the
                    mutual representations of the Parties and are a part of this
                    Post Closing Agreement.

          Section 2.4 Further  Acts and  Documents.  Each of the Parties  hereby
agrees to execute and deliver all such  further  instruments  and to do all such
further acts and things requested by any of the other Parties hereto,  or as may
be  necessary  or  desirable,  to carry out the  purposes  of this Post  Closing
Agreement.

          Section 2.5 Counterparts.  This Post Closing Agreement may be executed
in multiple  counterparts,  each of which shall be deemed to be an original  and
all of which shall constitute one and the same agreement.


                                       -4-

<PAGE>


          Section 2.6 Shareholder Information.  NDE will send BOCP copies of all
public  filings and such other  information  which is  distributed by NDE to all
holders of Capital Stock through the term of this Post Closing Agreement.

          The Parties have caused this Post Closing Agreement to be executed and
delivered effective as of the date first written above.


TANKNOLOGY-NDE INTERNATIONAL, INC.      BANC ONE CAPITAL PARTNERS, LLC
                                        By: Banc One Capital Partners Holdings,
                                             Ltd, Manager

                                        By: BOCP Holdings Corporation, Manager


By:                                     By:    //s//  WILLIAM P. LEAHY
                                             William P. Leahy
                                             Authorized Signer
Its:                               



                                       -5-
<PAGE>

                                 EXHIBIT 10.58




                              EMPLOYMENT AGREEMENT


     This Employment  Agreement (this "Agreement")  effective as of July 1, 1997
(the  "Effective   Date"),  is  entered  into  by  and  between   Tanknology-NDE
International,  Inc.,  a Delaware  corporation  (the  "Company"),  and A. Daniel
Sharplin (the "Executive").

     WHEREAS, the Executive is an employee of the Company; and

     WHEREAS,  the  parties  hereto  desire  to  set  forth  the  terms  of  the
Executive's employment with the Company.

     NOW,  THEREFORE,  in consideration of the agreements  herein and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties agree as follows:

     1.  Employment.  Subject to the terms and conditions  set forth below,  the
Company  agrees to employ the Executive,  and the Executive  agrees to serve the
Company, in the capacity and for the term specified below.

     2. Duties and Responsibilities.  Subject to the other provisions hereof and
to the power of the board of directors  of the Company  (the  "Board") to manage
the business and affairs of the Company and to elect and remove its officers and
other managers, the Company will employ the Executive as the President and Chief
Executive  Officer of the Company,  and the  Executive  will perform the duties,
functions and services as are customarily or otherwise reasonably  incidental to
such  positions  and  such  other  duties,  functions  and  services  as are not
inconsistent  with the  Executive's  status as a manager  of the  Company as the
Board from time to time may request.  The Executive will report  directly to the
Board or to such other person as the Board may from time to time determine.

     3.  Compensation  and Other  Employee  Benefits.  As  compensation  for the
Executive's services hereunder during the Employment Term (as defined in Section
4), the Company agrees as follows:

     a.   Base  Salary.  The Company  shall pay to the  Executive an annual base
          salary  (the "Base  Salary"),  subject to such  withholdings  or other
          deductions as may be required by applicable laws or regulations and in
          accordance with the then current payroll  policies of the Company,  of
          $200,000  during the period from the  Effective  Date to December  31,
          1997,  $225,000 during the period from January 1, 1998 to December 31,
          1998, and $250,000 during all periods after December 31, 1998, in each
          case pro rated on a daily basis,  which Base Salary will be subject to
          increase  (but  not  decrease)  at  the  discretion  of   Compensation
          Committee  of the  Board  (the  "Compensation  Committee")  or, in the
          absence of the Compensation  Committee, at the discretion of the Board
          as a whole.



                                        1

<PAGE>



     b.   Qualitative   Bonus.   The  Company  shall  pay  to  the  Executive  a
          qualitative  annual bonus (the "Qualitative  Bonus") for each calendar
          year ending  during the  Employment  Term.  The maximum  amount of the
          Qualitative  Bonus,  if any,  shall be 25% of the Base  Salary for the
          Executive during the calendar year for which such Qualitative Bonus is
          paid.  Notwithstanding the preceding  sentence,  the maximum amount of
          the Qualitative Bonus for the calendar year 1997, if any, shall be 60%
          of the Base Salary for the  Executive  during the calendar  year 1997.
          The  Qualitative  Bonus  for each  calendar  year  shall be paid on or
          before March 31 of the following calendar year. In all other respects,
          the  payment and the amount of the  Qualitative  Bonus shall be in the
          discretion  of the  Compensation  Committee  or, in the absence of the
          Compensation Committee, at the discretion of the Board as a whole.

     c.   Quantitative   Bonus.  The  Company  shall  pay  to  the  Executive  a
          quantitative annual bonus (the "Quantitative Bonus") for each calendar
          year,  other than  calendar year 1997,  ending  during the  Employment
          Term.  The  amount  of  the  Quantitative  Bonus,  if  any,  shall  be
          determined  in  accordance  with the  terms set  forth on  Schedule  1
          hereto, and the Quantitative Bonus shall be paid on or before March 31
          of the following calendar year.

     d.   Benefits  and  Reimbursements.  Subject to the right of the Company to
          amend or terminate any employee benefit, compensation or welfare plan,
          the Company shall (i) afford the Executive the right to participate in
          (A) such  medical and dental plans as the Company  makes  available to
          its exempt salaried employees generally during the Employment Term and
          (B) any employee  and/or group  benefit  plans that the Company  makes
          available  to its  exempt  salaried  employees  generally  during  the
          Employment Term (including, without limitation,  disability, accident,
          medical, life insurance and hospitalization plans) and (ii) subject to
          the  requirements of the business expense  reimbursement  policies and
          procedures  of the Company as in effect  from time to time,  reimburse
          the Executive for the reasonable  out-of-pocket  expenses he incurs in
          the course of performing his duties hereunder.

     e.   Stock Incentives.  Pursuant to the Tanknology-NDE International,  Inc.
          Amended  and  Restated  1989  Stock  Option  Plan,  as  adopted by the
          shareholders  of the Company upon the  recommendation  of the Board at
          the  annual  meeting  of the  shareholders  on  August  14,  1997 (the
          "Incentive Plan"),  the Compensation  Committee hereby issues an Award
          (as  defined in the  Incentive  Plan) to the  Executive  of cash stock
          appreciation  rights (the "SARs") for an aggregate of 1,200,024 shares
          of Common Stock of the Company to accrue at a rate of 28,572 shares of
          Common Stock per month during the initial  Employment Term.  Except as
          otherwise provided herein, all accrued SARs shall vest on December 31,
          2000.  The strike price (the "Strike  Price") of the SARs shall be the
          per share  market price of the Common Stock as of the last trade prior
          to the close of business on the  Effective  Date.  Except as otherwise
          provided in this Agreement,  once the SARs have vested,  (i) the value
          of the SARs shall be equal to (A) the excess of the  average per share
          market price of the Common Stock for the 90 days immediately  prior to
          the vesting date over the Strike Price multiplied by (B) the number of
          shares of Common Stock represented by the SARs and (ii) a cash payment
          equal  to  such  amount  shall  be  made  to  the  Executive  (or  the
          Executive's  estate)  within  30 days  after the date the SARs vest in
          accordance  with the  terms  of this  Agreement.  Notwithstanding  the
          foregoing,  at any time prior to the earlier of (i) the vesting of the
          accrued SARs in  accordance  with this  Agreement or (ii) December 31,
          1998,  the Company may, at its option,  elect to convert the SARs into


                                                         2

<PAGE>



          
          non-qualified  options  (the  "Stock  Options")  to  purchase  up to a
          maximum of 1,200,024 shares of Common Stock at an exercise price equal
          to the Strike Price. The Stock Options shall accrue and vest under the
          terms set forth  herein  applicable  to the accrual and vesting of the
          SARs and shall expire if not exercised within ten years after the date
          such Stock Options vest.

     4. Term.  Unless  earlier  terminated in accordance  with Section 6 of this
Agreement,  the term of the  Executive's  employment  under this  Agreement (the
"Employment  Term")  will be for an  initial  term of three and  one-half  years
commencing  on the  Effective  Date of this  Agreement  and ending,  without the
necessity of further action by any person, on December 31, 2000; provided,  that
the Company and the  Executive  may extend the  Employment  Term for one or more
additional periods by their mutual written consent signed by each of them.

     5. Restrictive Covenants.

     The Executive  acknowledges  that: (i) the Company is currently  engaged in
the underground  storage tank testing,  monitoring,  construction  and equipment
business  and that the  Company  may  expand  its  operations  into  related  or
unrelated  lines of business in the future (the  business and  operations of the
Company at any time  during the  Employment  Term or at the  termination  of the
Executive's   employment  for  any  reason  being  referred  to  herein  as  the
"Business");  (ii) the Company  conducts  and expects to continue to conduct the
Business  throughout the United States and in international  markets;  (iii) the
Executive's  work  for the  Company  has  given  and will  continue  to give the
Executive access to and knowledge of the trade secrets of and other confidential
information  concerning  the  Company;  (iv) the  Executive's  covenants in this
Section 5 are essential to protect the Business and the goodwill of the Company;
and (v) the Executive has the means to support himself and his dependents, other
than by engaging in the  Business in  contravention  of this Section 5, and this
Section 5 will not impair his ability to provide that support.

     a.   Competition.  In light of the foregoing,  the Executive covenants that
          he will not, at any time during the  Employment  Term or the period of
          730 consecutive days after the first to occur of the expiration of the
          Employment  Term  or the  termination  of the  Executive's  employment
          pursuant to Section 6(a),  (c) or (d): (i) accept  employment  with or
          render service to any person,  firm,  corporation or other  enterprise
          that is engaged in a business  directly  competitive with the Business
          and is operating or  conducting  its business  within 200 miles of any
          office  of the  Company  or any  sales or  service  agent or any other
          representative  of the  Company as of the date of  termination  of the
          Executive's  employment  hereunder;  (ii) directly or indirectly  own,
          finance or control,  or participate in the ownership or control of, or
          be  connected  as  a  principal,  agent,  representative,  consultant,
          advisor,  investor,  owner,  partner,  financier,   manager  or  joint
          venturer with, or permit his name to be used by or in connection with,
          any  business or  enterprise  directly  competitive  with the Business
          (provided,  however,  that the  Executive may invest as an investor in
          the voting  securities of any person that is a reporting company under
          the Securities  Exchange Act of 1934, as amended (the "Exchange Act"),
          so long as (A) the aggregate  amount of those securities the Executive
          owns  directly or  indirectly  is less than five  percent of the total
          outstanding voting securities of that person and (B) the Executive has
          no other  affiliation  with that  person);  (iii) call on,  solicit or
          perform  services for,  directly or  indirectly,  or aid,  directly or
          indirectly,  any other person,  entity or organization (other than the
          Company)  in  calling  on,  soliciting  or  performing  services  for,


                                                         3

<PAGE>



          directly  or  indirectly,  any person  that at that time is, or at any
          time within one year prior to that time was, a customer of the Company
          or any  prospective  customer  that had or,  to the  knowledge  of the
          Executive,  was about to receive a business proposal from the Company,
          for the  purpose of  soliciting  or selling  any product or service in
          competition with the Company; (iv) accept (otherwise than on behalf of
          the Company),  directly or indirectly, the business of any person that
          at that time is, or at any time prior to that time was, a customer  of
          the  Company,  or  request,  advise or suggest to any such person that
          such person curtail, cancel or withdraw its business from the Company;
          or (v) otherwise than on behalf the Company, solicit the employment of
          any person who at that time is employed on a full- or part-time  basis
          by the  Company,  or  induce or  advise  any such  person to leave the
          employ the Company.

     b.   Confidential Information. The Executive acknowledges:  (i) the Company
          has  a  legitimate   business   interest  in  the  protection  of  its
          Confidential  Information  (as  hereinafter  defined);  and  (ii)  the
          Company's  Confidential  Information is a valuable asset worthy of and
          subject to  protection  by the  Company.  Accordingly,  the  Executive
          covenants  that: (i) during the Employment  Term and  thereafter,  the
          Executive will keep  confidential all Confidential  Information of the
          Company  which is known to him and,  except  with the  specific  prior
          written  consent of the Company or as required to be  disclosed by law
          or the order of any agency, court or other governmental authority, not
          disclose  that  Confidential  Information  to any  person  except  the
          Company and its employees,  accountants,  counsel and other designated
          representatives.  "Confidential  Information" of the Company means all
          know-how,   trade   secrets  and  other   confidential   or  nonpublic
          information  prepared for, by or on behalf of, or in the possession of
          the Company,  including  (i)  nonpublic  Proprietary  Information  (as
          hereinafter  defined),  (ii) other  information  derived from reports,
          investigations, research, studies, work in progress, codes, marketing,
          sales  or  service  programs,   capital  expenditure  projects,   cost
          summaries,  equipment,  product or system designs or drawings, pricing
          or  other  formulae,   contract   analyses,   financial   information,
          projections,  customer lists,  agreements with vendors,  joint venture
          agreements,  and confidential  filings with any agency, court or other
          governmental   authority  and  (iii)  all  other  concepts,   methods,
          techniques and processes of doing business,  ideas or information that
          can be used in the operation of a business or other  enterprise and is
          sufficiently  valuable, or potentially valuable,  and secret to afford
          an actual or potential  economic  advantage over others.  Confidential
          Information  of the  Company  does not include  any  information  that
          currently is generally  available to and generally known by the public
          or, through no fault of the  Executive,  hereafter  becomes  generally
          available to and generally known by the public.

     c.   Proprietary  Information.  "Proprietary  Information"  means  all  the
          following  that (i) relates to or is used or useful in the Business or
          any  reasonably   logical   extension  thereof  or  results  from  the
          Executive's  work for the Company and (ii) is  conceived or created by
          the Executive,  either alone or in collaboration with any other person
          or  persons,  at any time and in any place on or after  the  Effective
          Date of this Agreement and prior to the termination of the Executive's
          employment for any reason:  all  conceptions and ideas for inventions,
          improvements or valuable discoveries,  whether or not patentable,  all
          trade  secrets,  all  works of  authorship  (including  illustrations,
          writings,  computer  programs and software) and all other  business or
          technical  information.  The Executive  will promptly  disclose to the
          Company as it  becomes  available  to the  Executive  all  Proprietary
          Information and hereby assigns to the Company all his right, title and


                                        4

<PAGE>



          interest in all  Proprietary  Information  available  to him as of the
          Effective Date of this Agreement.  The Executive  covenants and agrees
          that the Executive will: (i) assign to the Company or its designee all
          his right,  title and  interest in all  Proprietary  Information  that
          hereafter becomes available to him; and (ii) whenever requested by the
          Company to do so, execute and deliver such applications,  assignments,
          licenses  or other  documents,  and perform  such other  acts,  as the
          Company  may  consider  necessary  to protect  the  rights,  title and
          interest of the Company or its designee in all Proprietary Information
          assigned or to be assigned by the  Executive  pursuant to this Section
          5(c).

     d.   Return of Confidential and Proprietary Information. At any time at the
          request  of  the  Company  and  promptly  on  the  termination  of the
          Executive's  employment for any reason without the  requirement of any
          request  therefor,  the Executive  will deliver to the Company all the
          following then in the Executive's possession or subject to disposition
          by the Executive: (i) the originals and all copies of all Confidential
          Information;  (ii) the  originals  and all  copies of all  Proprietary
          Information; (iii) the originals and all copies of all books, business
          forms, drawings,  files, lists, memoranda,  notebooks,  notes, records
          and other documents (including all thereof stored in computer memories
          or on disks,  on microfiche or by any other means) which relate to the
          Business or the  Company,  whether  compiled,  made or prepared by the
          Executive or by any other  person;  and (iv) all  devices,  equipment,
          tools and other tangible property owned or leased by the Company.

     e.   Enforceability.  It is the desire  and  intent of each of the  parties
          that the covenants and  agreements of the Executive in Sections  5(a),
          (b),  (c) and (d) (the  "Restrictive  Covenants")  be  enforced to the
          fullest  extent  permissible  under  all  applicable  laws and  public
          policies.  Accordingly,  if any particular  portion of any Restrictive
          Covenant  is  adjudicated  to  be  invalid  or   unenforceable,   that
          Restrictive  Covenant  will  be  deemed  amended  (i)  to  reform  the
          particular portion to provide for such maximum restrictions as will be
          valid and enforceable or, if that is not possible, then (ii) to delete
          therefrom the portion thus adjudicated to be invalid or unenforceable.
          The  Restrictive  Covenants will inure to the benefit of any successor
          or successors to the Company.

     f.   Equitable Relief. The Executive  acknowledges that (i) the Restrictive
          Covenants  are  expressly  for the  benefit of the  Company,  (ii) the
          Company  would be  irreparably  injured by a  violation  of any of the
          Restrictive  Covenants  and (iii) the  Company  would have no adequate
          remedy at law in the event of such violation. Therefore, the Executive
          acknowledges and agrees that injunctive relief,  specific  performance
          or any other  appropriate  equitable remedy (without any bond or other
          security  being   required)  are   appropriate   remedies  to  enforce
          compliance by the Executive with the Restrictive Covenants.

     6. Termination of Employment.

     a.   For Due Cause. If the Company has Due Cause (as  hereinafter  defined)
          to terminate the Executive's employment,  the Company will be entitled
          to terminate  the  Executive's  employment  at any time by  delivering
          written notice of that  termination  to the Executive,  in which event
          (i) that termination will be effective  immediately on the delivery of
          that  notice,  (ii) the  Company  will pay to the  Executive  his Base
          Salary accrued and unpaid to the date of that  termination,  (iii) all



                                        5

<PAGE>



          of the SARs or Stock  Options of the  Executive  granted  pursuant  to
          Section 3(e) of this Agreement which have not vested prior to the date
          of the  termination  will be  canceled  and (iv) all other  rights and
          benefits  the  Executive  may have under the employee  benefit,  bonus
          and/or stock option plans and programs of the Company, if any, will be
          determined in accordance  with the terms and conditions of those plans
          and  programs.  "Due Cause"  means:  (i) the Executive has committed a
          willful serious act, such as fraud, embezzlement or theft, against the
          Company,  intending  to enrich  himself at the expense of the Company;
          (ii) the Executive  has been  convicted of a felony (or entered a plea
          of nolo  contendere  to a felony  charge);  (iii)  the  Executive  has
          engaged in conduct that has caused  demonstrable  and serious  injury,
          monetary or otherwise,  to the Company,  except where such conduct was
          reasonable   at  the  time   taken   in  light  of  the   then-current
          circumstances  known to the Executive and/or such conduct was approved
          by  the  majority  of the  Board  or a  committee  thereof;  (iv)  the
          Executive,  in carrying out his duties  hereunder,  has been guilty of
          gross neglect or willful misconduct;  (v) the Executive has refused to
          carry out his duties  hereunder  in  dereliction  of those duties and,
          after receiving written notice to such effect from the Company, failed
          to cure the existing  problem  within five days; or (vi) the Executive
          has  materially  breached  this  Agreement  and has not remedied  that
          breach  within  five days after  receipt of  written  notice  from the
          Company that the breach has occurred.

     b.   Death.  If the Executive  dies, (i) the  Executive's  employment  will
          terminate  on the date of his death,  (ii) the Company will pay to the
          Executive's  estate the  Executive's  Base  Salary  accrued and unpaid
          through  the end of the month in which he dies,  (iii) all of the SARs
          or Stock Options of the Executive  granted pursuant to Section 3(e) of
          this Agreement  which have accrued but not vested prior to the date of
          his death will automatically vest as of the date of his death and (iv)
          all rights and benefits the  Executive  (or his estate) may have under
          the employee benefit,  bonus and/or stock option plans and programs of
          the Company,  if any, will be determined in accordance  with the terms
          and conditions of those plans and programs.

     c.   Disability.  If the  Executive  suffers a Disability  (as  hereinafter
          defined), (i) the Executive's employment will terminate on the date on
          which the Company  determines that  Disability has occurred,  (ii) the
          Company will pay to the Executive  his Base Salary  accrued and unpaid
          through  the end of the month in which his  employment  is  terminated
          because of that Disability,  (iii) all of the SARs or Stock Options of
          the Executive granted pursuant to Section 3(e) of this Agreement which
          have  accrued  but not vested  prior to the date on which the  Company
          determines that Disability has occurred will  automatically vest as of
          such date and (iv) all other  rights and benefits  the  Executive  may
          have under the employee  benefit,  bonus and/or stock option plans and
          programs of the Company, if any, will be determined in accordance with
          the terms and  conditions  of those plans and  programs.  "Disability"
          shall  have the  meaning  ascribed  to such term  under any  long-term
          disability   insurance  program  of  the  Company  applicable  to  the
          Executive  or, in the  absence  of any such  program,  shall  mean the
          inability  or  incapacity  (by  reason  of  a  medically  determinable
          physical or mental  impairment) of the Executive to perform the duties
          and responsibilities  then assigned to him hereunder for a period that
          can be reasonably  expected to last more than 120 days. That inability
          or incapacity will be documented to the reasonable satisfaction of the
          Company  by  appropriate  correspondence  from  registered  physicians
          reasonably satisfactory to the Company.



                                        6

<PAGE>



     d.   Voluntary  Termination.  The Executive may  voluntarily  terminate his
          employment  at any time by providing  at least 30 days' prior  written
          notice to the Company,  in which event,  subject to the  provisions of
          Section  6(e),  (i) the  termination  will be  effective 30 days after
          receipt of such notice by the Company or on such  earlier  date as the
          Company shall  determine,  (ii) the  Company will pay to the Executive
          his  Base  Salary  accrued  and  unpaid  to the  date  his  Employment
          terminates,  (iii) all of the SARs or Stock  Options of the  Executive
          granted  pursuant  to Section  3(e) of this  Agreement  which have not
          vested prior to the date of the termination  will be canceled and (iv)
          all  other  rights  and  benefits  the  Executive  may have  under the
          employee benefit,  bonus and/or stock option plans and programs of the
          Company,  if any, will be determined in accordance  with the terms and
          conditions of those plans and programs. Notwithstanding the foregoing,
          the Executive  may  voluntarily  terminate his  employment at any time
          within 180 days following a Change in Control (as hereinafter defined)
          by providing at least 30 days' prior written notice to the Company, in
          which  event  (i) the  termination  will be  effective  30 days  after
          receipt of such notice by the Company or on such  earlier  date as the
          Company  shall  determine,  (ii) the Company will pay to the Executive
          his Base  Salary  for a period  equal to the lesser of one year or the
          remaining  portion of the Employment Term,  payable in accordance with
          the  then-current  payroll  policies of the Company,  (iii) all of the
          SARs or Stock  Options of the  Executive  granted  pursuant to Section
          3(e) of this Agreement  which have accrued but not vested prior to the
          date of such termination will  automatically  vest as of such date and
          (iv) all other rights and benefits  the  Executive  may have under the
          employee benefit,  bonus and/or stock option plans and programs of the
          Company,  if any, will be determined in accordance  with the terms and
          conditions of such plans and programs.

     e.   Constructive Termination. If the Company (i) terminates the employment
          of the Executive  other than for Due Cause or because of a Disability,
          (ii)  effectively  demotes the Executive to a lesser  position than as
          provided in Section 2 or (iii) decreases the  Executive's  Base Salary
          below the level  provided for by the terms of Section 3(a),  then such
          action  by  the  Company,  unless  consented  to  in  writing  by  the
          Executive,   shall  be  deemed  to  be  a   constructive   termination
          ("Constructive   Termination")  by  the  Company  of  the  Executive's
          employment.  In the  event  of a  Constructive  Termination,  (A)  the
          Executive's  employment will terminate  immediately upon notice by the
          Company to the Executive pursuant to clause (i) above or 30 days after
          receipt  of notice by the  Executive  to the  Company  of  termination
          following  either of events set forth in clauses  (ii) and (iii) above
          (or on such  earlier  date as the Company  shall  determine),  (B) the
          Executive shall be entitled to receive,  from the date of Constructive
          Termination,  his  Base  Salary  for a period  equal to the  remaining
          portion  of the  Employment  Term,  payable  in  accordance  with  the
          then-current  payroll policies of the Company,  (C) all of the SARs or
          Stock  Options of the  Executive  granted  pursuant to Section 3(e) of
          this Agreement  which have accrued but not vested prior to the date of
          such Constructive  Termination will  automatically vest as of the date
          of  such  termination  and (D)  all  other  rights  and  benefits  the
          Executive  may have under the  employee  benefit,  bonus  and/or stock
          option plans and programs of the Company,  if any,  will be determined
          in  accordance  with  the  terms  and  conditions  of such  plans  and
          programs.

     7.  Change in  Control.  Upon the  occurrence  of a Change in  Control  (as
hereinafter defined), (i) if the employment of the Executive is terminated,  (A)
the Executive  will be entitled to receive,  from the date of such  termination,
his Base Salary for a period equal to the  remaining  portion of the  Employment



                                        7

<PAGE>



Term,  payable in  accordance  with the  then-current  payroll  policies  of the
Company,  (B) all of the SARs or Stock Options of the Executive granted pursuant
to Section 3(e) of this Agreement which have accrued but not vested prior to the
date on which the Change in Control has occurred will  automatically  vest as of
such date and (C) all other rights and benefits the Executive may have under the
employee  benefit,  bonus and/or stock option plans and programs of the Company,
if any, will be determined in accordance  with the terms and conditions of those
plans  and  programs  and  (ii)  if  the  employment  of  the  Executive  is not
terminated,  (A) the terms and provisions of this Agreement shall remain in full
force  and  effect,  (B) at the  election  of the  Executive,  the SARs or Stock
Options of the  Executive  granted  pursuant to Section  3(e) of this  Agreement
which have  accrued  but not vested  prior to the date of such Change in Control
shall either (x) vest or (y) remain accrued but not vested and (C) regardless of
the election of the Executive pursuant to the immediately  preceding clause, the
SARs or Stock Options  granted  pursuant to Section 3(e) of this Agreement shall
continue  to accrue  after the date of the Change in  Control.  In the event any
accrued  SARs vest as a result of a Change in  Control  (including  pursuant  to
Section  6(d)  above),  whether  automatically  or  upon  the  election  of  the
Executive,  the value of the SARs shall be  calculated  based on the average per
share market price of the Common Stock for the 10 trading days immediately prior
to the  vesting  date.  A "Change in  Control"  means a change in control of the
Company after the Effective Date,  which shall be deemed to have occurred in any
one of the following  circumstances  occurring  after such date: (i) there shall
have  occurred an event  required to be reported  with respect to the Company in
response to Item 6(e) of Schedule 14A of  Regulation  14A (or in response to any
similar  item on any similar  schedule or form)  promulgated  under the Exchange
Act,  whether or not the Company is then subject to such reporting  requirement;
(ii) any  "person"  (as such  term is used in  Sections  13(d)  and 14(d) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act),  directly or  indirectly,  of securities of the Company
representing  40% or more of the  combined  voting power of the  Company's  then
outstanding  voting  securities;  (iii)  the  Company  is a party  to a  merger,
consolidation,  sale of assets or other reorganization, or a proxy contest, as a
consequence  of which members of the Board in office  immediately  prior to such
transaction or event constitute less than a majority of the Board thereafter; or
(iv)  during  any  period  of  two  consecutive  years,  individuals  who at the
beginning of such period constituted the Board (including, for this purpose, any
new  director  whose  election  or  nomination  for  election  by the  Company's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were  directors at the  beginning of such period)  cease for
any reason to constitute at least a majority of the Board.

     8. Notices. All notices,  requests,  demands and other communications given
under or by reason of this Agreement must be in writing and will be deemed given
when  delivered in person or when  mailed,  by  certified  mail (return  receipt
requested), postage prepaid, addressed as follows (or to such other address as a
party may specify by notice pursuant to this provision):



                                                         8

<PAGE>



                  a.       If to the Company:

                           Tanknology-NDE International, Inc.
                           8900 Shoal Creek Boulevard
                           Austin, Texas 78758
                           Attn:  Chairman of the Board of Directors


                  b.       If to the Executive:

                           A. Daniel Sharplin
                           3509 Needles Drive
                           Austin, Texas  78746

     9.  Governing  Law.  This  Agreement  will be governed by and  construed in
accordance with the substantive  laws (other than the rules governing  conflicts
of laws) of the State of Texas.

     10. Dispute  Resolution.  If any dispute arises between the Company and the
Executive  in  connection  with or related to the terms of this  Agreement,  the
parties agree to promptly  negotiate in good faith to resolve their  differences
and to mutually agree upon a resolution or resolutions to such disputes.  If the
parties fail to agree within 30 days after a dispute arises,  either party shall
have the right to  submit  the  dispute  for  resolution  to  binding  and final
arbitration  of a single  arbitrator  mutually  agreed to by the Company and the
Executive conducted in Austin,  Texas in accordance with the rules of commercial
arbitration of the American Arbitration Association. The prevailing party in any
such  arbitration  proceeding  shall be  entitled to  attorney's  fees and other
out-of-pocket  expenses  reasonably and necessarily  incurred in connection with
such  proceeding,  the amounts of which shall be  contained  in the award of the
arbitrator.

     11. Additional Instruments.  The Executive and the Company will execute and
deliver any and all additional  instruments and agreements that may be necessary
or proper to carry out the purposes of this Agreement.

     12. Entire  Agreement and  Amendments.  This Agreement  contains the entire
agreement of the  Executive  and the Company  relating to the matters  contained
herein and supersedes all prior agreements and understandings,  oral or written,
between the Executive and the Company with respect to the subject matter hereof.
This Agreement may not be amended or modified  except by an agreement in writing
signed by the party against whom  enforcement of any waiver or  modification  is
sought.

     13. Headings.  The headings of Sections and subsections hereof are included
solely  for  convenience  of  reference  and will not  control  the  meaning  or
interpretation of any of the provisions hereof.



                                        9

      
<PAGE>



     14.  Tax  Withholding.  Notwithstanding  any other  provision  hereof,  the
Company may withhold from amounts payable  hereunder all federal,  state,  local
and  foreign  taxes that are  required  to be  withheld  by  applicable  laws or
regulations.

     15.  Separability.  If any  provision  of this  Agreement  is  rendered  or
declared  illegal,  invalid  or  unenforceable  by  reason  of any  existing  or
subsequently  enacted  legislation  or by the  final  judgment  of any  court of
competent  jurisdiction,  the  Executive  and the Company will promptly meet and
negotiate  substitute  provisions  for those  rendered  or  declared  illegal or
unenforceable  to preserve the original  intent of this  Agreement to the extent
legally  possible,  but all other  provisions of this Agreement  shall remain in
full force and effect.

     16.  Assignments.  The Company may assign this  Agreement  to any person or
entity  succeeding  to all or  substantially  all the business  interests of the
Company by merger or  otherwise.  The rights and  obligations  of the  Executive
under this Agreement are personal to him, and none of those rights,  benefits or
obligations will be subject to voluntary or involuntary  alienation,  assignment
or transfer, except as otherwise contemplated hereby.

     17.  Effect of  Agreement.  Subject  to the  provisions  of Section 16 with
respect to assignments,  this Agreement will be binding on the Executive and his
heirs, executors,  administrators,  legal representatives and assigns and on the
Company and its successors and assigns, except as otherwise contemplated hereby.

     18.  Execution.  This  Agreement may be executed in multiple  counterparts,
each of which will be deemed an original  and all of which will  constitute  one
and the same agreement.

     19.  Waiver of Breach.  The waiver by either  party to this  Agreement of a
breach of any  provision of the Agreement by the other party will not operate or
be construed as a waiver by the waiving  party of any  subsequent  breach by the
other party.


                                       10

<PAGE>





     IN WITNESS  WHEREOF,  the  Executive  and the Company  have  executed  this
Agreement effective as of the date first above written.


                                            TANKNOLOGY-NDE INTERNATIONAL, INC.



                                            By:  //s//  JAY ALLEN CHAFFEE
                                                  Jay Allen Chaffee
                                                  Chairman of the Board



                                            EXECUTIVE



                                              //s//  A. DANIEL SHARPLIN
                                            A. Daniel Sharplin



                                       11

<PAGE>


                       Schedule 1 to Employment Agreement

     Determination of Quantitative  Bonus: The Quantitative  Bonus to be paid to
the Executive pursuant to Section 3.c. of the Employment Agreement will be based
on achievement of "Target EBITDA" for the relative  calendar year. Target EBITDA
will be established by the Compensation Committee of the Board of Directors, and
agreed to by the  Executive,  in  conjunction  with the  Company's  budgeting or
budget  revision  processes.  Target EBITDA will be closely related to, or equal
to, the "mid-case"  operating  budget's EBITDA.  Target EBITDA will be initially
established as part of the Company's  annual budget process and will be adjusted
for subsequent significant transactions as part of the Company's budget revision
process.  The  CEO's  quantitative  bonus  will  be  equal  to the  sum of (i) a
"Threshold  bonus" as set forth in the table below for the achievement of 80% or
greater of the Target  EBITDA and (ii) an amount  equal to a  percentage  of the
amount of the excess of actual  EBITDA less 80% of Target EBITDA as set forth in
the table below.  In the event the  Compensation  Committee and the Executive do
not agree as to the Target EBITDA for any calendar year,  Target EBITDA for such
calendar year shall be $6,000,000.


                                                  additional
                                                 percentage of
                               threshold          EBITDA over
    actual EBITDA                bonus           baseline (80%)
    as % of target               amount             amount
----------------------------   ----------     ------------------
less than/equal to 79.5%               $0                  0.00%
79.6-84.5%                        $50,000                  0.00%
84.6-89.5%                        $50,000                  1.67%
89.6-94.5%                        $50,000                  2.50%
94.6%-99.5%                       $50,000                  3.33%
99.6-104.5%                       $50,000                  4.17%
104.6-109.5%                      $50,000                  5.00%
109.6-114.5%                      $50,000                  5.83%
114.6-119.5%                      $50,000                  6.67%
119.6-124.5%                      $50,000                  7.50%
greater than/equal to 124.6%      $50,000                  8.33%


<PAGE>

                                 EXHIBIT 10.59




                         EXECUTIVE CONSULTING AGREEMENT

     This Executive  Consulting  Agreement (this  "Agreement"),  effective as of
July  1,  1997  (the  "Effective   Date"),   is  entered  into  by  and  between
Tanknology-NDE International,  Inc., a Delaware corporation (the "Company"), and
Bunker Hill Associates, Inc., a Delaware corporation (the "Contractor").

     WHEREAS,  the Contractor is providing executive  consulting services to the
Company; and

     WHEREAS,  the  parties  hereto  desire  to  set  forth  the  terms  of  the
Contractor's engagement with the Company.

     NOW,  THEREFORE,  in consideration of the agreements  herein and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties agree as follows:

     1.  Engagement.  Subject to the terms and conditions  set forth below,  the
Company agrees to engage the Contractor,  and the Contractor agrees to serve the
Company, in the capacity and for the term specified below.

     2. Duties and Responsibilities.  Contractor shall provide,  during the Term
of Agreement  (as defined in Section 4), the services of Jay Allen  Chaffee,  or
such  other  individual  as  the  Company  shall  consent  to  in  writing  (the
"Consultant"),  who shall act for the Company in the capacity of Chairman of the
Board.  The  Consultant  is and shall remain an employee of the  Contractor  and
shall not be an  employee  of the  Company.  The  Consultant  shall  perform the
duties,  functions  and  services as are  customarily  or  otherwise  reasonably
incidental to the position of Chairman of the Board,  including  assistance with
(i) strategic  planning,  (ii)  negotiation of financing  arrangements and (iii)
negotiation  of  mergers,  acquisitions,   divestitures  and  other  significant
business  transactions,  provided that the Consultant  shall not be obligated to
expend  in  excess  of 40 hours  per  month  on the  provision  of such  duties,
functions or services.

     3. Consulting  Compensation.  As compensation for the Contractor's services
hereunder during the Term of Agreement, the Company agrees as follows:

     a.   The Company  shall pay to the  Contractor a monthly base retainer (the
          "Base  Retainer") of $7,500 within 30 days after receipt of an invoice
          from the Contractor.

     b.   The  Company  shall  pay  the   Contractor   $2,500  per  month  as  a
          reimbursement  for the  executive  secretarial  support  costs  of the
          Contractor  and shall  reimburse  the  Contractor  for the  reasonable
          out-of-pocket  expenses incurred by Consultant on behalf of Contractor
          in  the  course  of  performing  the  Contractor's  duties  hereunder.
          Contractor  shall  not  be  entitled  to  reimbursement  for  expenses
          incurred   by  any  other   personnel   of   Contractor   unless  such
          reimbursements shall have been approved by the Company in advance.


                                       -1-

<PAGE>



     c.   The  Company  shall pay to the  Contractor  an  annual  bonus fee (the
          "Bonus Compensation") for each calendar year ending during the Term of
          Agreement,   provided  that  the  payment  and  amount  of  the  Bonus
          Compensation,  if any,  shall be  determined  based  on a  qualitative
          review of the  performance of the Consultant  during the calendar year
          for which such Bonus  Compensation is paid, shall be paid on or before
          March 31 of the  following  calendar  year and shall be based upon the
          achievements of the Contractor during the applicable  calendar year as
          compared to the value of comparable consulting services, as determined
          in the reasonable discretion of the Compensation  Committee or, in the
          absence of the Compensation Committee, at the reasonable discretion of
          the Board as a whole.

     d.   Pursuant  to  the  Tanknology-NDE  International,   Inc.  Amended  and
          Restated 1989 Stock Option Plan, as adopted by the shareholders of the
          Company upon the  recommendation of the Board at the annual meeting of
          the  shareholders  on August  14,  1997 (the  "Incentive  Plan"),  the
          Compensation  Committee  hereby  issues  an Award (as  defined  in the
          Incentive  Plan) to the Contractor of cash stock  appreciation  rights
          (the "SARs") for an aggregate of 800,016 shares of Common Stock of the
          Company to accrue at a rate of 19,048 shares of Common Stock per month
          during the initial Term of  Agreement.  Except as  otherwise  provided
          herein,  all accrued SARs shall vest on December 31, 2000.  The strike
          price (the  "Strike  Price") of the SARs shall be the per share market
          price of the Common  Stock as of the last trade  prior to the close of
          business on the Effective Date.  Except as otherwise  provided in this
          Agreement,  once the SARs have vested, (i) the value of the SARs shall
          be equal to (A) the excess of the  average per share  market  price of
          the Common Stock for the 90 days immediately prior to the vesting date
          over the Strike Price multiplied by (B) the number of shares of Common
          Stock  represented  by the SARs and (ii) a cash payment  equal to such
          amount shall be made to the  Contractor  within 30 days after the date
          the  SARs  vest in  accordance  with  the  terms  of  this  Agreement.
          Notwithstanding the foregoing, at any time prior to the earlier of (i)
          the vesting of the accrued SARs in accordance  with this  Agreement or
          (ii)  December  31,  1998,  the Company  may, at its option,  elect to
          convert the SARs into  non-qualified  options (the "Stock Options") to
          purchase  up to a maximum  of  800,016  shares  of Common  Stock at an
          exercise  price equal to the Strike  Price.  The Stock  Options  shall
          accrue and vest  under the terms set forth  herein  applicable  to the
          accrual  and  vesting  of the SARs and shall  expire if not  exercised
          within five years after the date such Stock Options vest.

     4. Term.  Unless  earlier  terminated in accordance  with Section 6 of this
Agreement,  the term of the  Contractor's  engagement  under this Agreement (the
"Term of  Agreement")  will be for an initial term of three and  one-half  years
commencing  on the  Effective  Date of this  Agreement  and ending,  without the
necessity of further action by any person, on December 31, 2000; provided,  that
the Company and the  Contractor may extend the Term of Agreement for one or more
additional periods by their mutual written consent signed by each of them.

     5. Restrictive Covenants.

     The Contractor  acknowledges  that: (i) the Company is currently engaged in
the underground  storage tank testing,  monitoring,  construction  and equipment
business  and that the  Company  may  expand  its  operations  into  related  or



                                       -2-

<PAGE>




unrelated  lines of business in the future (the  business and  operations of the
Company at any time during the Term of  Agreement or at the  termination  of the
Contractor's  engagement  for  any  reason  being  referred  to  herein  as  the
"Business");  (ii) the Company  conducts  and expects to continue to conduct the
Business  throughout the United States and in international  markets;  (iii) the
Contractor's  work for the  Company  has  given  and will  continue  to give the
Contractor   access  to  and  knowledge  of  the  trade  secrets  of  and  other
confidential  information  concerning  the  Company;  and (iv) the  Contractor's
covenants  in this  Section 5 are  essential  to protect  the  Business  and the
goodwill of the Company.  The Contractor covenants to cause each employee of the
Contractor who works for or on behalf of the Company pursuant to this Agreement,
including the Consultant, to enter into an agreement with the Contractor for the
benefit of the Company providing for the restrictive covenants set forth in this
Section 5.

     a.   Competition.  In light of the foregoing, the Contractor covenants that
          the  Contractor  will not, at any time during the Term of Agreement or
          the  period of 730  consecutive  days  after the first to occur of the
          expiration  of  the  Term  of  Agreement  or  the  termination  of the
          Contractor's   engagement  pursuant  to  Section  6(a),  (c)  or  (d):
          (i) accept  employment  with or render  service to any  person,  firm,
          corporation or other enterprise that is engaged in a business directly
          competitive  with the  Business and is  operating  or  conducting  its
          business within 200 miles of any office of the Company or any sales or
          service agent or other representative of the Company as of the date of
          the  termination  of  the  engagement   hereunder;   (ii) directly  or
          indirectly own, finance or control, or participate in the ownership or
          control of, or be  connected as a  principal,  agent,  representative,
          consultant,  advisor, investor, owner, partner, financier,  manager or
          joint venturer with, or permit the Contractor's  name to be used by or
          in connection  with, any business or enterprise  directly  competitive
          with the Business (provided,  however,  that the Contractor may invest
          as an  investor  in the  voting  securities  of any  person  that is a
          reporting  company  under  the  Securities  Exchange  Act of 1934,  as
          amended (the "Exchange  Act"), so long as (A) the  aggregate amount of
          those  securities the  Contractor  owns directly or indirectly is less
          than five percent of the total  outstanding  voting securities of that
          person  and  (B) the  Contractor  has no other  affiliation  with that
          person);  (iii) call on, solicit or perform services for,  directly or
          indirectly,  or aid, directly or indirectly,  any other person, entity
          or organization  (other than the Company) in calling on, soliciting or
          performing  services for,  directly or indirectly,  any person that at
          that time is, or at any time within one year prior to that time was, a
          customer of the Company or any  prospective  customer  that had or, to
          the  knowledge  of the  Contractor,  was about to  receive a  business
          proposal  from the Company,  for the purpose of  soliciting or selling
          any product or service in  competition  with the Company;  (iv) accept
          (otherwise than on behalf of the Company), directly or indirectly, the
          business  of any person  that at that time is, or at any time prior to
          that time was,  a  customer  of the  Company,  or  request,  advise or
          suggest  to any such  person  that  such  person  curtail,  cancel  or
          withdraw  its  business  from the Company;  or  (v) otherwise  than on
          behalf the Company,  solicit the  employment of any person who at that
          time is  employed on a full- or  part-time  basis by the  Company,  or
          induce or advise any such person to leave the employ the Company.

     b.   Confidential Information. The Contractor acknowledges: (i) the Company
          has  a  legitimate   business   interest  in  the  protection  of  its
          Confidential  Information  (as  hereinafter  defined);  and  (ii)  the
          Company's  Confidential  Information is a valuable asset worthy of and
          subject to  protection  by the Company.  Accordingly,  the  Contractor


                                       -3-

<PAGE>



                   
          covenants that: (i) during the Term of Agreement and  thereafter,  the
          Contractor will keep confidential all Confidential  Information of the
          Company which is known to the Contractor and, except with the specific
          prior written consent of the Company or as required to be disclosed by
          law or the order of any agency, court or other governmental authority,
          not disclose that  Confidential  Information  to any person except the
          Company and its employees,  accountants,  counsel and other designated
          representatives.  "Confidential  Information" of the Company means all
          know-how,   trade   secrets  and  other   confidential   or  nonpublic
          information  prepared for, by or on behalf of, or in the possession of
          the Company,  including  (i)  nonpublic  Proprietary  Information  (as
          hereinafter  defined),  (ii) other  information  derived from reports,
          investigations, research, studies, work in progress, codes, marketing,
          sales  or  service  programs,   capital  expenditure  projects,   cost
          summaries,  equipment,  product or system designs or drawings, pricing
          or  other  formulae,   contract   analyses,   financial   information,
          projections,  customer lists,  agreements with vendors,  joint venture
          agreements,  and confidential  filings with any agency, court or other
          governmental   authority  and  (iii)  all  other  concepts,   methods,
          techniques and processes of doing business,  ideas or information that
          can be used in the operation of a business or other  enterprise and is
          sufficiently  valuable, or potentially valuable,  and secret to afford
          an actual or potential  economic  advantage over others.  Confidential
          Information  of the  Company  does not include  any  information  that
          currently is generally  available to and generally known by the public
          or, through no fault of the Contractor,  hereafter  becomes  generally
          available to and generally known by the public.

     c.   Proprietary  Information.  "Proprietary  Information"  means  all  the
          following  that (i) relates to or is used or useful in the Business or
          any logical  extension  thereof or results from the Contractor's  work
          for the Company and (ii) is  conceived  or created by the  Contractor,
          either alone or in collaboration with any other person or persons,  at
          any time  and in any  place on or  after  the  Effective  Date of this
          Agreement and prior to the termination of the Contractor's  engagement
          for any reason: all conceptions and ideas for inventions, improvements
          or valuable discoveries, whether or not patentable, all trade secrets,
          all works of authorship (including illustrations,  writings,  computer
          programs   and   software)   and  all  other   business  or  technical
          information.  The Contractor will promptly  disclose to the Company as
          it becomes available to the Contractor all Proprietary Information and
          hereby assigns to the Company all the  Contractor's  right,  title and
          interest in all Proprietary Information available to the Contractor as
          of the Effective Date of this Agreement.  The Contractor covenants and
          agrees  that the  Contractor  will:  (i) assign to the  Company or its
          designee  all  the  Contractor's  right,  title  and  interest  in all
          Proprietary  Information that hereafter  becomes available to him; and
          (ii) whenever  requested by the Company to do so,  execute and deliver
          such  applications,  assignments,  licenses  or other  documents,  and
          perform  such other acts,  as the Company may  consider  necessary  to
          protect the rights,  title and interest of the Company or its designee
          in all  Proprietary  Information  assigned  or to be  assigned  by the
          Contractor pursuant to this Section 5(c).

     d.   Return of Confidential and Proprietary Information. At any time at the
          request  of  the  Company  and  promptly  on  the  termination  of the
          Contractor's  engagement for any reason without the requirement of any
          request  therefor,  the Contractor will deliver to the Company all the
          following   then  in  the   Contractor's   possession  or  subject  to
          disposition by the Contractor: (i) the originals and all copies of all
          Confidential  Information;  (ii) the  originals  and all copies of all


                                       -4-

<PAGE>



          Proprietary  Information;  (iii) the  originals  and all copies of all
          books, business forms, drawings,  files, lists, memoranda,  notebooks,
          notes,  records and other  documents  (including all thereof stored in
          computer  memories or on disks,  on  microfiche or by any other means)
          which relate to the Business or the Company, whether compiled, made or
          prepared  by the  Contractor  or by any  other  person;  and  (iv) all
          devices,  equipment, tools and other tangible property owned or leased
          by the Company.

     e.   Enforceability.  It is the desire  and  intent of each of the  parties
          that the covenants and  agreements of the Contractor in Sections 5(a),
          (b),  (c) and (d) (the  "Restrictive  Covenants")  be  enforced to the
          fullest  extent  permissible  under  all  applicable  laws and  public
          policies.  Accordingly,  if any particular  portion of any Restrictive
          Covenant  is  adjudicated  to  be  invalid  or   unenforceable,   that
          Restrictive  Covenant  will  be  deemed  amended  (i)  to  reform  the
          particular portion to provide for such maximum restrictions as will be
          valid and enforceable or, if that is not possible, then (ii) to delete
          therefrom the portion thus adjudicated to be invalid or unenforceable.
          The  Restrictive  Covenants will inure to the benefit of any successor
          or successors to the Company.

     f.   Equitable Relief. The Contractor acknowledges that (i) the Restrictive
          Covenants  are  expressly  for the  benefit of the  Company,  (ii) the
          Company  would be  irreparably  injured by a  violation  of any of the
          Restrictive  Covenants  and (iii) the  Company  would have no adequate
          remedy  at  law  in  the  event  of  such  violation.  Therefore,  the
          Contractor  acknowledges and agrees that injunctive  relief,  specific
          performance or any other  appropriate  equitable  remedy  (without any
          bond or other security  being  required) are  appropriate  remedies to
          enforce compliance by the Contractor with the Restrictive Covenants.

     6. Termination of Engagement.

     a.   For Due Cause. If the Company has Due Cause (as  hereinafter  defined)
          to terminate the  Contractor's  or the  Consultant's  engagement,  the
          Company  will  be  entitled  to  terminate  the  Contractor's  or  the
          Consultant's  engagement at any time by delivering  written  notice of
          that   termination  to  the  Contractor,   in  which  event  (i)  that
          termination  will be  effective  immediately  on the  delivery of that
          notice,  (ii) the Company will pay to the Contractor the  Contractor's
          Base  Retainer  accrued  and  unpaid to the date of that  termination,
          (iii)  all of the  SARs or Stock  Options  of the  Contractor  granted
          pursuant to Section 3(d) of this Agreement which have not vested prior
          to the date of the  termination  will be  canceled  and (iv) all other
          rights and benefits the  Contractor or the  Consultant  may have under
          the employee benefit,  bonus and/or stock option plans and programs of
          the Company,  if any, will be determined in accordance  with the terms
          and conditions of those plans and programs. "Due Cause" means: (i) the
          Contractor or the Consultant has committed a willful serious act, such
          as fraud,  embezzlement  or theft,  against the Company,  intending to
          enrich the Contractor or the Consultant at the expense of the Company;
          (ii) the  Consultant has been convicted of a felony (or entered a plea
          of nolo  contendere to a felony  charge);  (iii) the Contractor or the
          Consultant  has engaged in conduct  that has caused  demonstrable  and
          serious injury,  monetary or otherwise,  to the Company,  except where
          such  conduct  was  reasonable  at the  time  taken  in  light  of the
          then-current  circumstances  known to the Contractor or the Consultant
          and/or  such  conduct  was  approved  by a majority  of the Board or a


                                       -5-

<PAGE>



          
          committee   thereof;   (iv)  the  Consultant,   in  carrying  out  the
          Consultant's  duties  hereunder,  has been guilty of gross  neglect or
          willful  misconduct;  (v) the Contractor or the Consultant has refused
          to carry out their  duties  hereunder in  dereliction  of those duties
          and, after  receiving  written notice to such effect from the Company,
          failed to cure the  existing  problem  within  five days;  or (vi) the
          Contractor or the Consultant  has  materially  breached this Agreement
          and has not  remedied  that breach  within five days after  receipt of
          written notice from the Company that the breach has occurred.

     b.   Death.  If the  Consultant  dies and is not  replaced  upon the mutual
          agreement  of the Company  and the  Contractor,  (i) the  Contractor's
          engagement will terminate on the date of the Consultant's  death, (ii)
          the Company will pay to the Contractor the Contractor's  Base Retainer
          accrued  and  unpaid  through  the  end  of the  month  in  which  the
          Consultant  dies,  (iii)  all of the  SARs  or  Stock  Options  of the
          Contractor  granted  pursuant to Section 3(d) of this Agreement  which
          have  accrued  but not  vested  prior to the date of the  Consultant's
          death will automatically vest as of the date of the Consultant's death
          and (iv) all rights and  benefits  the  Contractor  may have under the
          employee benefit,  bonus and/or stock option plans and programs of the
          Company,  if any, will be determined in accordance  with the terms and
          conditions of those plans and programs.

     c.   Disability.  If the Consultant  suffers a Disability  (as  hereinafter
          defined) and is not replaced upon the mutual  agreement of the Company
          and the Contractor,  (i) the Contractor's engagement will terminate on
          the date on which the Company determines that Disability has occurred,
          (ii) the Company  will pay to the  Contractor  the  Contractor's  Base
          Retainer  accrued and unpaid through the end of the month in which the
          Contractor's  engagement  is  terminated  because of that  Disability,
          (iii)  all of the  SARs or Stock  Options  of the  Contractor  granted
          pursuant to Section 3(d) of this Agreement  which have accrued but not
          vested  prior  to the  date  on  which  the  Company  determines  that
          Disability  has occurred will  automatically  vest as of such date and
          (iv) all other rights and benefits the  Contractor  may have under the
          employee benefit,  bonus and/or stock option plans and programs of the
          Company,  if any, will be determined in accordance  with the terms and
          conditions  of those plans and programs.  "Disability"  shall have the
          meaning ascribed to such term under any long-term disability insurance
          program of the Company applicable to the Consultant or, in the absence
          of any such program, shall mean the inability or incapacity (by reason
          of a  medically  determinable  physical or mental  impairment)  of the
          Consultant to perform the duties and responsibilities  assigned to the
          Consultant  hereunder for a period that can be reasonably  expected to
          last  more  than  120  days.  That  inability  or  incapacity  will be
          documented  to  the   reasonable   satisfaction   of  the  Company  by
          appropriate   correspondence  from  registered  physicians  reasonably
          satisfactory to the Company.

     d.   Voluntary   Termination   by  the   Contractor.   The  Contractor  may
          voluntarily  terminate  the  Contractor's  engagement  at any  time by
          providing at least 30 days' prior  written  notice to the Company,  in
          which  event  (i) the  termination  will be  effective  30 days  after
          receipt of such notice by the Company or on such  earlier  date as the
          Company shall  determine,  (ii) the Company will pay to the Contractor
          the  Contractor's  Base  Retainer  accrued  and unpaid to the date the
          Contractor's engagement, (iii) all of the SARs or Stock Options of the
          Contractor  granted  pursuant to Section 3(d) of this Agreement  which
          have not vested prior to the date of  the termination will be canceled


                                       -6-

<PAGE>



          and (iv) all other rights and benefits the  Contractor  may have under
          the employee benefit,  bonus and/or stock option plans and programs of
          the Company,  if any, will be determined in accordance  with the terms
          and conditions of those plans and programs.

     e.   Voluntary  Termination  by the  Company.  The Company may  voluntarily
          terminate the  Contractor's  engagement at any time,  provided that if
          the Company terminates the engagement of the Contractor other than for
          Due Cause or  because of a  Disability,  (i) the  Contractor  shall be
          entitled  to  receive,   from  the  date  of  such  termination,   the
          Contractor's Base Retainer for a period equal to the remaining portion
          of the Term of Agreement,  payable in accordance with the then-current
          payment arrangements between the Company and the Contractor,  (ii) all
          of the SARs or Stock  Options of the  Contractor  granted  pursuant to
          Section 3(d) of this Agreement which have accrued but not vested prior
          to the date of such termination will automatically vest as of the date
          of such  termination  and (iii)  all other  rights  and  benefits  the
          Contractor  may have under the  employee  benefit,  bonus and/or stock
          option plans and programs of the Company,  if any,  will be determined
          in  accordance  with  the  terms  and  conditions  of such  plans  and
          programs.

     7.  Change in  Control.  Upon the  occurrence  of a Change in  Control  (as
hereinafter defined), (i) if the engagement of the Contractor is terminated, (A)
the Contractor will be entitled to receive,  from the date of such  termination,
the  Contractor's  Base Retainer for a period equal to the remaining  portion of
the Term of  Agreement,  payable in accordance  with the then-  current  payment
arrangements  between  the Company  and the  Contractor,  (B) all of the SARs or
Stock  Options  of the  Contractor  granted  pursuant  to  Section  3(d) of this
Agreement  which  have  accrued  but not  vested  prior to the date on which the
Change in Control has occurred will  automatically  vest as of such date and (C)
all other  rights  and  benefits  the  Contractor  may have  under the  employee
benefit,  bonus and/or  stock option plans and programs of the Company,  if any,
will be determined in  accordance  with the terms and  conditions of those plans
and programs and (ii) if the engagement of the Contractor is not terminated, (A)
the  terms and  provisions  of this  Agreement  shall  remain in full  force and
effect, (B) at the election of the Contractor,  the SARs or Stock Options of the
Contractor granted pursuant to Section 3(d) of this Agreement which have accrued
but not vested prior to the date of such Change in Control shall either (x) vest
or (y) remain  accrued but not vested and (C)  regardless of the election of the
Contractor  pursuant  to the  immediately  preceding  clause,  the SARs or Stock
Options  granted  pursuant to Section 3(d) of this  Agreement  shall continue to
accrue  after the date of the Change in Control.  In the event any accrued  SARs
vest as a result  of a Change  in  Control,  whether  automatically  or upon the
election of the Contractor,  the value of the SARs shall be calculated  based on
the average per share  market  price of the Common Stock for the 10 trading days
immediately  prior to the vesting date. A "Change in Control"  means a change in
control of the Company after the Effective  Date,  which shall be deemed to have
occurred in any one of the following  circumstances  occurring  after such date:
(i) there shall have  occurred an event  required to be reported with respect to
the Company in response to Item 6(e) of Schedule  14A of  Regulation  14A (or in
response to any similar item on any similar schedule or form)  promulgated under
the Exchange Act,  whether or not the Company is then subject to such  reporting
requirement; (ii) any "person" (as such term is used in Sections 13(d) and 14(d)
of the  Exchange  Act) shall have become the  "beneficial  owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company  representing  40% or more of the combined voting power of the Company's


                                       -7-

<PAGE>




then outstanding  voting  securities;  (iii) the Company is a party to a merger,
consolidation,  sale of assets or other reorganization, or a proxy contest, as a
consequence  of which members of the Board in office  immediately  prior to such
transaction or event constitute less than a majority of the Board thereafter; or
(iv)  during  any  period  of  two  consecutive  years,  individuals  who at the
beginning of such period constituted the Board (including, for this purpose, any
new  director  whose  election  or  nomination  for  election  by the  Company's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were  directors at the  beginning of such period)  cease for
any reason to constitute at least a majority of the Board.

     8. Notices. All notices,  requests,  demands and other communications given
under or by reason of this Agreement must be in writing and will be deemed given
when  delivered in person or when  mailed,  by  certified  mail (return  receipt
requested), postage prepaid, addressed as follows (or to such other address as a
party may specify by notice pursuant to this provision):

                  a.       If to the Company:

                           Tanknology-NDE International, Inc.
                           8900 Shoal Creek Boulevard
                               Austin, Texas 78758
                                 Attn: President


                  b.       If to the Contractor:

                          Bunker Hill Associates, Inc.
                           712 Main Street, Suite 1700
                              Houston, Texas 77002
                                 Attn: Chairman

     9.  Governing  Law.  This  Agreement  will be governed by and  construed in
accordance with the substantive  laws (other than the rules governing  conflicts
of laws) of the State of Texas.

     10. Dispute  Resolution.  If any dispute arises between the Company and the
Contractor in  connection  with or related to the terms of this  Agreement,  the
parties agree to promptly  negotiate in good faith to resolve their  differences
and to mutually agree upon a resolution or resolutions to such disputes.  If the
parties fail to agree within 30 days after a dispute arises,  either party shall
have the right to  submit  the  dispute  for  resolution  to  binding  and final
arbitration  of a single  arbitrator  mutually  agreed to by the Company and the
Contractor conducted in Austin, Texas in accordance with the rules of commercial
arbitration of the American Arbitration Association. The prevailing party in any
such  arbitration  proceeding  shall be  entitled to  attorney's  fees and other
out-of-pocket  expenses  reasonably and necessarily  incurred in connection with
such  proceeding,  the amounts of which shall be  contained  in the award of the
arbitrator.



                                       -8-

<PAGE>



     11. Additional Instruments. The Contractor and the Company will execute and
deliver any and all additional  instruments and agreements that may be necessary
or proper to carry out the purposes of this Agreement.

     12. Entire  Agreement and  Amendments.  This Agreement  contains the entire
agreement of the  Contractor and the Company  relating to the matters  contained
herein and supersedes all prior agreements and understandings,  oral or written,
between the  Contractor  and the  Company  with  respect to the  subject  matter
hereof, including without limitation that certain Executive Consulting Agreement
between the Company and the  Contractor  dated May 30, 1991.  This Agreement may
not be amended or modified except by an agreement in writing signed by the party
against whom enforcement of any waiver or modification is sought.

     13. Headings.  The headings of Sections and subsections hereof are included
solely  for  convenience  of  reference  and will not  control  the  meaning  or
interpretation of any of the provisions hereof.

     14. Tax  Indemnification.  Contractor  hereby  agrees to indemnify and hold
harmless the Company from any loss, claim, liability or action arising out of or
related to the failure of the Company to withhold from amounts payable hereunder
any federal, state, local or foreign taxes required to be withheld by applicable
laws or regulations.

     15.  Separability.  If any  provision  of this  Agreement  is  rendered  or
declared  illegal,  invalid  or  unenforceable  by  reason  of any  existing  or
subsequently  enacted  legislation  or by the  final  judgment  of any  court of
competent  jurisdiction,  the  Contractor and the Company will promptly meet and
negotiate  substitute  provisions  for those  rendered  or  declared  illegal or
unenforceable  to preserve the original  intent of this  Agreement to the extent
legally  possible,  but all other  provisions of this Agreement  shall remain in
full force and effect.

     16.  Assignments.  The Company may assign this  Agreement  to any person or
entity  succeeding  to all or  substantially  all the business  interests of the
Company  by merger or  otherwise.  None of the  rights  and  obligations  of the
Contractor  under this  Agreement  will be subject to voluntary  or  involuntary
alienation, assignment or transfer, except as otherwise contemplated hereby.

     17.  Effect of  Agreement.  Subject  to the  provisions  of Section 16 with
respect to assignments, this Agreement will be binding on the Contractor and the
Company  and their  respective  successors  and  assigns,  except  as  otherwise
contemplated hereby.

     18.  Execution.  This  Agreement may be executed in multiple  counterparts,
each of which will be deemed an original  and all of which will  constitute  one
and the same agreement.

     19.  Waiver of Breach.  The waiver by either  party to this  Agreement of a
breach of any  provision of the Agreement by the other party will not operate or
be construed as a waiver by the waiving  party of any  subsequent  breach by the
other party.


                                       -9-

<PAGE>


     IN WITNESS  WHEREOF,  the  Contractor  and the Company have  executed  this
Agreement effective as of the date first above written.


                                TANKNOLOGY-NDE INTERNATIONAL, INC.



                                By:  //s//  A. DANIEL SHARPLIN
                                      A. Daniel Sharplin
                                      President and Chief Executive Officer



                                BUNKER HILL ASSOCIATES, INC.



                                By:  //s//  JAY ALLEN CHAFFEE
                               Name:  Jay Allen Chaffee
                              Title:  President







                                      -10-
<PAGE>
                                 EXHIBIT 10.60




                               AMENDMENT NO. 1 TO
                            THE EMPLOYMENT AGREEMENT

     This Amendment No. 1 to the Employment  Agreement (the  "Amendment No. 1"),
effective  as of July 2, 1997,  is entered  into by and  between  Tanknology-NDE
International,  Inc.,  a Delaware  corporation  (the  "Company")  and A.  Daniel
Sharplin (the "Executive"). Capitalized terms used herein but not defined herein
shall  have  the  meaning  assigned  to them in the  Employment  Agreement  (the
"Employment  Agreement"),  dated as of July 1, 1997,  by and between the Company
and the Executive.

     Pursuant to Section 3(e) of the Employment Agreement, the Company elects to
convert the SARs granted to the Executive  under the  Employment  Agreement into
Stock Options to purchase up to a maximum of 1,200,024 shares of Common Stock at
an exercise price equal to the Strike Price.

     IN WITNESS  WHEREOF,  the  Company and the  Executive  have  executed  this
Amendment No. 1 effective as of the date first above written.

                                         TANKNOLOGY-NDE INTERNATIONAL, INC.



                                       By:  //s//  JAY ALLEN CHAFFEE
                                               Jay Allen Chaffee
                                               Chairman of the Board


                                         EXECUTIVE



                                       By: //s//  A. DANIEL SHARPLIN
                                                A. Daniel Sharplin


                                       -1-
<PAGE>
                                 EXHIBIT 10.61




                               AMENDMENT NO. 1 TO
                       THE EXECUTIVE CONSULTING AGREEMENT

     This Amendment No. 1 to the Executive  Consulting Agreement (the "Amendment
No.  1"),  effective  as of  July  2,  1997,  is  entered  into  by and  between
Tanknology-NDE  International,  Inc., a Delaware corporation (the "Company") and
Bunker  Hill  Associates,  Inc.,  a  Delaware  corporation  (the  "Contractor").
Capitalized  terms used  herein but not  defined  herein  shall have the meaning
assigned  to  them  in  the  Executive   Consulting  Agreement  (the  "Executive
Consulting Agreement"), dated as of July 1, 1997, by and between the Company and
the Contractor.

     Pursuant to Section 3(e) of the Executive Consulting Agreement, the Company
elects to  convert  the SARs  granted  to the  Contractor  under  the  Executive
Consulting  Agreement  into Stock Options to purchase up to a maximum of 800,016
shares of Common Stock at an exercise price equal to the Strike Price.

     IN WITNESS  WHEREOF,  the Company and the  Contractor  have  executed  this
Amendment No. 1 effective as of the date first above written.

                             TANKNOLOGY-NDE INTERNATIONAL, INC.



                             By:  //s//  A. DANIEL SHARPLIN
                                   A. Daniel Sharplin
                                   President and Chief Executive Officer


                             BUNKER HILL ASSOCIATES, INC.



                             By:  //s//  JAY ALLEN CHAFFEE
                                   Jay Allen Chaffee
                                    President



                                       -1-
<PAGE>

                                  EXHIBIT 10.62




                      AMENDMENT TO STOCK PURCHASE AGREEMENT


     This AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment"),  dated as of
October 30, 1997, is entered into by and between Watson General  Corporation,  a
California  corporation  ("Buyer"),  and  Tanknology-NDE   International,   Inc.
("Seller").  This Amendment  amends the Stock Purchase  Agreement  dated May 22,
1997,  which was  entered  into by and  between  Buyer and  Seller  (the  "Stock
Purchase Agreement").

                                   WITNESSETH:

     WHEREAS, on August 13, 1996, NDE Environmental Corporation changed its name
to Tanknology-NDE International, Inc; and

     WHEREAS,  on May 22, 1997, Buyer and Seller entered into the Stock Purchase
Agreement  which provided for the sale by Seller of USTMAN  Industries,  Inc., a
Delaware corporation to Buyer; and

     WHEREAS,  pursuant to the Stock Purchase Agreement,  certain adjustments to
the purchase  price were to be made in accordance  with the terms and conditions
of Section 2.4 of the Stock Purchase Agreement; and

     WHEREAS,  a dispute has arisen  regarding the calculation of the adjustment
to the purchase price; and

     WHEREAS,  Buyer and Seller  desire to settle  such  dispute and have agreed
upon the adjustment to the purchase price;

     NOW,  THEREFORE,  in  consideration  of the premises and of the  respective
representations,  warranties,  covenants,  agreements and  conditions  contained
herein, the parties hereby agree as follows:

                                    ARTICLE I

     Section 1.1 Post Closing Adjustment.  The parties agree that the adjustment
required  pursuant  to  Section  2.4 of the Stock  Purchase  Agreement  shall be
$376,000 so that the purchase  price shall be adjusted  upward by $376,000  (the
"Post Closing Adjustment Amount").

     Section 1.2 Payment of Post  Closing  Adjustment.  Buyer  agrees to pay the
Post  Closing  Adjustment  Amount  within one  business  day of the date of this
Amendment by wire transfer to an account designated by Seller.



<PAGE>



                                   ARTICLE II

     Section 2.1  General  Release.  Buyer  agrees to release any and all claims
which relate to the calculation of the Post Closing Adjustment Amount, including
but not limited to, claims which arise from any accounting  issue which may have
effected the calculation of the Post Closing Adjustment Amount.

     Section  2.2 Other  Releases.  Buyer  agrees to release  any and all claims
which may arise or have arisen under Sections  4.13,  4.17 and 4.25 of the Stock
Purchase  Agreement.  Buyer also agrees to release any and all claims  which may
arise  or have  arisen  under  Section  4.15 of the  Stock  Purchase  Agreement;
provided that,  Buyer does not release any claims which may arise or have arisen
under Section 4.15 and for which Seller has agreed to indemnify  Buyer  pursuant
to Section 7.1(a)(iv) and (v) of the Stock Purchase Agreement;  further provided
that, Buyer does agree to release any and all claims which relate to any Gasamat
contract  credits and for which Seller has agreed to indemnify Buyer pursuant to
Section 7.1(a)(v) of the Stock Purchase Agreement.

                                   ARTICLE III

     Section 3.1 Pre-Closing  Intercompany Accounts. Both Buyer and Seller agree
to release  any and all  claims  related to any and all  billings  for  services
rendered between the two parties prior to the closing date of the Stock Purchase
Agreement.

                                   ARTICLE IV

     Section  4.1 Post  Closing  Billings - Buyer.  Buyer  agrees to process all
outstanding  billings  related  to  services  provided  to Seller and which were
rendered  after the closing date of the Stock  Purchase  Agreement,  through the
date of this  Amendment,  within 5 business days of the date of this  Amendment.
Buyer agrees to pay any and all billings which are payable for services rendered
by Seller and which are billed  pursuant to Section 4.2 hereof within 30 days of
the receipt of such billing.

     Section 4.2 Post Closing  Billings - Seller.  Seller  agrees to process all
outstanding  billings  related  to  services  provided  to Buyer and which  were
rendered  after the closing date of the Stock  Purchase  Agreement,  through the
date of this  Amendment,  within 5 business days of the date of this  Amendment.
Seller  agrees  to pay any and all  billings  which  are  payable  for  services
rendered by Buyer and which are billed  pursuant to Section 4.1 hereof within 30
days of the receipt of such billing.

                                    ARTICLE V

     Section  5.1  Effect of  Amendment.  This  Amendment  constitutes  the only
amendment to the Stock Purchase  Agreement.  Except as expressly provided for or
superseded by this  Amendment,  the original  provisions  of the Stock  Purchase
Agreement shall remain in effect.



<PAGE>



     IN WITNESS WHEREOF,  the parties hereto have executed this Amendment on the
date first above written.

                                 WATSON GENERAL CORPORATION



                                 By:  //s//  RONALD G. CRANE
                                        Ronald G. Crane
                                        Chairman of the Board


                       TANKNOLOGY-NDE INTERNATIONAL, INC.



                                 By:  //s//  JAY ALLEN CHAFFEE
                                        Jay Allen Chaffee
                                        Chairman of the Board of Directors

<PAGE>

                                 EXHIBIT 10.63



                         PRECISION TANK TESTING LIMITED
                               PURCHASE OF ASSETS
                                       OF
                          TANKNOLOGY CANADA (1988) INC.




                            ASSET PURCHASE AGREEMENT









                                   Smith Lyons



<PAGE>



                                TABLE OF CONTENTS


ARTICLE 1         DEFINITIONS.................................................1
         1.1      Definitions.................................................1
         1.2      Schedules and Appendices....................................5
         1.3      Sections and Headings.......................................6
         1.4      Extended Meanings...........................................6
         1.5      Currency....................................................6

ARTICLE 2         PURCHASE AND SALE OF PURCHASED ASSETS.......................7
         2.1      Agreement to Purchase.......................................7
         2.2      Excluded Assets.............................................8
         2.3      Assumed Liabilities.........................................8
         2.4      No Assumption of Other Liabilities..........................9

ARTICLE 3         PURCHASE PRICE..............................................9
         3.1      Purchase Price..............................................9
         3.2      Business Expenses...........................................9
         3.3      Sales and Transfer Taxes...................................10
         3.4      GST Election...............................................10

ARTICLE 4         ADDITIONAL COVENANTS OF THE PARTIES........................10
         4.1      Additional Agreements......................................10
         4.2      New Lease..................................................11
         4.3      Offers of Employment.......................................11
         4.4      Bulk Sales Act.............................................11
         4.5      Transfer and Delivery of Purchased Assets..................11

ARTICLE 5         CLOSING ARRANGEMENTS.......................................11
         5.1      Closing....................................................11
         5.2      Closing Procedures.........................................12

ARTICLE 6         CONDITIONS OF CLOSING......................................12
         6.1      Conditions for Purchaser's Benefit.........................12
         6.2      Conditions for Vendor's Benefit............................13

ARTICLE 7         REPRESENTATIONS AND WARRANTIES.............................15
         7.1      Representations and Warranties of Vendor...................15
         7.2      Representations and Warranties of Purchaser................22
         7.3      Survival...................................................23




<PAGE>



ARTICLE 8         INDEMNITY..................................................24
         8.1      Indemnity of Purchaser.....................................24
         8.2      Carriage of Legal Proceedings..............................24
         8.3      Settlement.................................................25
         8.4      Limitation on Liability....................................25
         8.5      Indemnity of Vendor........................................25

ARTICLE 9         POST-CLOSING COVENANTS.....................................25
         9.1      Corporate Name.............................................25
         9.2      Motor Vehicles.............................................26
         9.3      Collection of Accounts Receivable..........................26
         9.4      Administrative Assistance to Vendor........................26
         9.5      Sure-Test Western Canadian Licence.........................27

ARTICLE 10  ARBITRATION......................................................27
         10.1     Arbitration................................................27

ARTICLE 11  GENERAL..........................................................28
         11.1     Further Assurances.........................................28
         11.2     Entire Agreement...........................................28
         11.3     Invalidity of Provisions...................................28
         11.4     Applicable Law.............................................28
         11.5     Notices....................................................29
         11.6     No Brokers.................................................29
         11.7     Costs and Expenses.........................................30
         11.8     Announcements..............................................30
         11.9     Time of the Essence........................................30
         11.10    Successors and Assigns.....................................30
         11.11    Counterparts...............................................30





<PAGE>



                            ASSET PURCHASE AGREEMENT


     THIS  AGREEMENT made as of the 19th day of February,  1997 among  PRECISION
TANK TESTING LIMITED, a corporation  incorporated under the laws of the Province
of  Ontario   ("Purchaser"),   TANKNOLOGY  CANADA  (1988)  INC.,  a  corporation
incorporated  under the federal  laws of Canada  ("Vendor"),  NDE  ENVIRONMENTAL
CORPORATION,  a corporation  incorporated under the laws of Delaware  ("Parent")
and TANKNOLOGY/NDE CORPORATION, a corporation incorporated under the laws of the
State of Delaware ("Tanknology-USA").

     WHEREAS  Vendor  carries on the  business of the  testing  and  analysis of
underground storage tanks in Canada (the "Business"),  which Purchaser wishes to
acquire pursuant to the provisions hereof;

     NOW  THEREFORE  THIS  AGREEMENT  WITNESSES  THAT, in  consideration  of the
premises and the covenants and agreements herein  contained,  the parties hereto
agree as follows:


                                    ARTICLE 1
                                   DEFINITIONS

     1.1 Definitions:  In this Agreement,  the recitals and the Schedules and in
any amendments hereto, unless the context otherwise requires or unless otherwise
defined in any such Schedule or amendment, the following words and phrases shall
have the meanings set forth after them:

          "Accounts  Receivable"  means  the  accounts  receivable  of Vendor in
          connection with the Business conducted on or before the Effective Date
          and as listed on Schedule 7.1.26;

          "Affiliate" and "Associate" have the meanings  ascribed thereto in the
          Business Corporations Act (Ontario);

          "Agreement" means this agreement and all Schedules, Appendices and all
          instruments  supplemental  hereto  or  in  amendment  or  confirmation
          hereof, and "hereof",  "hereto",  "hereunder" and similar expressions,
          mean and refer to this  Agreement as a whole and not to any particular
          Article  or section or  subsection,  and  "Article"  or  "section"  or
          "subsection" or "paragraph" mean and refer to the specified Article or
          section or subsection or paragraph of this Agreement;

          "Appendices" means the appendices attached to and forming part of this
          Agreement;



                                        1

<PAGE>



          "Assignment,   Conveyance   and   Assumption   Agreement"   means  the
          assignment,  conveyance and assumption  agreement in the form attached
          hereto as Appendix 1.1;

          "Business"  has the meaning  ascribed  thereto in the recitals of this
          Agreement;

          "Business Day" means any day other than Saturday, Sunday and statutory
          holidays in the Province of Ontario;

          "Claims" has the meaning ascribed thereto in section 8.1;

          "Closing"  means the closing of the purchase and sale of the Purchased
          Assets as contemplated hereunder;

          "Closing  Date" means  February 19,  1997 or such other date as may be
          agreed to in writing by the parties hereto;

          "Contract"  means any agreement,  obligation,  license,  joint venture
          agreement, contract, understanding,  commitment, engagement, indenture
          or  instrument  to which  Vendor  is a party or by which it is  bound,
          whether written or oral, including,  without limitation,  the Customer
          Contracts, Other Contracts, Equipment Leases and Real Property Leases;

          "Customer   Contracts"   has   the   meaning   ascribed   thereto   in
          section 2.1(i);

         "Customer Lists" has the meaning ascribed thereto in section 2.1(i);

          "Effective  Date"  means  February 1,  1997,  the  effective  date  of
          completion of the within asset purchase transaction;

          "Employees" means the employees of Vendor employed on the date of this
          Agreement  including  those  on  pregnancy  or sick  leave,  temporary
          lay-off  or short term or long term  disability  and who are listed in
          Schedule 7.1.17;

          "Equipment" has the meaning ascribed thereto in section 2.1(b);

          "Equipment  Leases" means the lease agreements  relative to the Leased
          Equipment listed in Schedule 7.1.15;

          "Excluded Assets" has the meaning ascribed thereto in section 2.2;

          "Existing  Tanknology  Licence Agreement" means the agreement dated as
          of the 1st day of  September,  1997,  between  Vendor  and  Tanknology
          Corporation    International    (a    predecessor    corporation    of
          Tanknology-USA)  pursuant to which Vendor was granted a licence to use
          certain Intellectual Property;


                                        2

<PAGE>



          "GST" means any and all taxes  payable under Part IX of the Excise Tax
          Act (Canada);

          "Goodwill" has the meaning ascribed thereto in section 2.1(l);

          "Intellectual    Property"   means   patents,   patent   applications,
          inventions,  licences,  designs,  registered designs,  applications to
          register   designs,   registered   and   unregistered   copyright  and
          applications  to  register  copyright,  trade  secrets,   confidential
          information,  know-how, trade names, registered and unregistered trade
          marks and applications to register trade marks,  personalty rights and
          other proprietary rights used or proposed to be used;

          "Inventory" has the meaning ascribed therein in section 2.1(d);

          "Leased  Equipment" means the leased  equipment  currently used in the
          Business, as listed in Schedule 7.1.15;

          "Leased  Premises"  means  all of the lands  and  buildings  leased by
          Vendor  and  used  to  carry  on  the  Business   including,   without
          limitation,  the leased  real  property  interests  listed in Schedule
          7.1.14 hereto;

          "Office Equipment" has the meaning ascribed thereto in section 2.1(e);

          "Other Contracts" has the meaning ascribed thereto in section 2.1(j);

          "Patents"  means the patents  and patent  application  comprising  the
          Tanknology Intellectual Property and listed in Schedule 2.1(f);

          "Person" means an individual, corporation, partnership, trust, trustee
          or any unincorporated organization, and words importing persons have a
          similar meaning;

          "Pro  Eco"  means  Pro  Eco,  Inc.,  a  Delaware   corporation  and  a
          wholly-owned subsidiary of Parent;

          "Purchase Price" has the meaning ascribed thereto in section 3.1;

          "Purchased Assets" has the meaning ascribed thereto in section 2.1;

          "Purchaser's  Counsel"  means Smith Lyons of Toronto,  Ontario or such
          other firm of solicitors  reasonably acceptable to Vendor as Purchaser
          may  appoint   with  respect  to  this   Agreement   and  the  matters
          contemplated hereby;

          "Purchaser's   Counsel's   Closing   Opinion"   means  an  opinion  of
          Purchaser's  Counsel  addressed  to  Vendor  and in the form  appended
          hereto as Appendix 6.2.5;



                                        3

<PAGE>



          "Real  Property  Leases"  means the lease  agreements  relating to the
          Leased Premises listed in Schedule 7.1.14;

          "Records" has the meaning ascribed thereto in section 2.1(m);

          "Schedules"  means the schedules  attached to and forming part of this
          Agreement;

          "Sure-Test  Licence  Agreement" means the amended and restated licence
          agreement between Pro Eco and Purchaser in the form attached hereto as
          Appendix  4.1.4  pursuant  to  which  Pro  Eco  grants  an  exclusive,
          transferable,  perpetual,  fully-paid  licence  to use  the  Sure-Test
          software and related intellectual property in Canada;

          "Sure-Test Licence Fee" means the initial licence fee in the amount of
          $10,000  payable by  Purchaser  to Pro Eco  pursuant to the  Sure-Test
          Licence Agreement;

          "Sure-Test  Support  Agreement"  means  the  technology  and  software
          support  agreement  dated as of the date hereof between  Purchaser and
          Pro Eco in the form attached hereto as Appendix 4.1.5;

          "Tanknology  Intellectual  Property" means the  Intellectual  Property
          licensed  to  Vendor  pursuant  to  the  Existing  Tanknology  Licence
          Agreement;

          "Tanknology  Intellectual  Property Price" means the acquisition price
          in the  amount of  $1,000,000  for the  Patents  and  $25,000  for the
          Trade-marks  payable by  Purchaser to  Tanknology-USA  pursuant to the
          Tanknology's Intellectual Property Transfer Agreement;

          "Tanknology   Intellectual  Property  Transfer  Agreement"  means  the
          agreement between Tanknology-USA and Purchaser in the form appended as
          Appendix 4.1.1 pursuant to which Tanknology-USA  sells,  transfers and
          assigns to Purchaser all of its rights in certain  software,  patents,
          trade-marks and trade secrets relating to the Business;

          "Tanknology    Licence   Agreement"   means   an   agreement   between
          Tanknology-USA  and Purchaser in the form attached  hereto as Appendix
          4.1.2  pursuant  to  which  Tanknology-USA   grants  to  Purchaser  an
          exclusive,   transferable,   perpetual,  fully-paid  licence  to  use,
          throughout Canada,  certain computer programs and related intellectual
          property;

          "Tanknology  Licence  Fee"  means the fee in the  amount  of  $125,000
          payable by  Purchaser  to  Tanknology-USA  pursuant to the  Tanknology
          Licence Agreement;

          "Tanknology  Support  Agreement"  means the  technology  and  software
          support agreement between Purchaser,  Tanknology-USA and Parent in the
          form attached hereto as Appendix 4.1.3;



                                        4

<PAGE>



          "Tax" or  "Taxes"  means all  federal,  state,  provincial,  local and
          foreign income, estimated income, business, occupation,  franchise, ad
          valorem, property, value added, sales, use, gross receipts, employment
          or withholding taxes or assessments, including any interest, penalties
          or additions thereon or in respect thereof for which a party is or may
          become liable;

          "Tax Returns" means any return or statement  filed or to be filed with
          any Tax authority by or including  the Vendor in  connection  with the
          determination, assessment, collection or administration of any Tax;

          "Test Vans" has the meaning ascribed thereto in section 2.1(a);

          "Tools" has the meaning ascribed thereto in section 2.1(c);

          "Trade-marks"   means  the   trade-marks   comprising  the  Tanknology
          Intellectual Property and listed in Schedule 2.1(f);

          "USTMAN" means USTMAN Industries,  Inc., a Delaware corporation, and a
          wholly-owned subsidiary of Parent;

          "USTMAN SIR Licence  Agreement"  means the licence  agreement  between
          USTMAN and Purchaser in the form attached hereto as Appendix 4.1.7-A;

          "USTMAN SIR Support  Agreement"  means the licence  agreement  between
          USTMAN and Purchaser in the form attached hereto as Appendix 4.1.7-B;

          "Vendor's Counsel" means Baker & Botts,  L.L.P. of Houston,  Texas, as
          United States legal counsel to the Vendor, and Lucas, Bowker and White
          of Edmonton, Alberta, as Canadian counsel to the Vendor, or such other
          counsel reasonably  acceptable to Purchaser as Vendor may appoint with
          respect to this Agreement and the matters contemplated hereby; and

          "Vendor's  Counsel's  Closing  Opinion"  means  the  two  opinions  of
          Vendor's  Counsel  addressed  to Purchaser  and in the forms  appended
          hereto as Appendix 6.1.7; and

          "Vendor Financial Statements" means the unaudited financial statements
          of Vendor for the fiscal  period ended on October 24, 1996 prepared in
          accordance with generally accepted accounting principles of the United
          States of  America  applied on a  consistent  basis,  which  financial
          statements are attached hereto as Appendix 7.1.10.

          "Western Canada Licence Agreement" means the agreement made the fourth
          day of April, 1995 between Parent,  as licensor,  and Sure Test Canada
          Ltd., as licencee.

     1.2  Schedules  and  Appendices:   The  following  are  the  Schedules  and
Appendices attached to and forming part of this Agreement:


                                        5

<PAGE>



       Schedule 2.1(a)      Test Vans
       Schedule 2.1(b)      Equipment
       Schedule 2.1(c)      Tools
       Schedule 2.1(d)      Inventory
       Schedule 2.1(e)      Office Equipment
       Schedule 2.1(f)      Intellectual Property
       Schedule 2.1(i)-A    Customer Contracts
       Schedule 2.1(i)-B    Customer Lists
       Schedule 2.1(j)      Other Contracts
       Schedule 7.1.14      Leased Premises and Real Property Leases
       Schedule 7.1.15      Leased Equipment and Equipment Leases
       Schedule 7.1.16      Litigation
       Schedule 7.1.17      Employees
       Schedule 7.1.18      Warranties and Guarantees
       Schedule 7.1.20      Consents
       Schedule 7.1.23      Environmental Matters
       Schedule 7.1.25      Licences, Permits and Registrations
       Schedule 7.1.26      Accounts Receivable

       Appendix 1.1         Assignment, Conveyance and Assumption Agreement
       Appendix 4.1.1       Tanknology Intellectual Property Transfer Agreement
       Appendix 4.1.2       Tanknology Licence Agreement
       Appendix 4.1.3       Tanknology Support Agreement
       Appendix 4.1.4       Sure-Test Licence Agreement
       Appendix 4.1.5       Sure-Test Support Agreement
       Appendix 4.1.6       Non-Competition Agreement
       Appendix 4.1.7-A     USTMAN SIR Licence Agreement
       Appendix 4.1.7-B     USTMAN SIR Support Agreement
       Appendix 6.1.7       Vendor's Counsel's Closing Opinion
       Appendix 6.2.5       Purchaser's Counsel's Closing Opinion
       Appendix 7.1.10      Vendor Financial Statements

     1.3 Sections and Headings:  The division of this  Agreement  into articles,
sections,  subsections,  paragraphs  and  subparagraphs  and  the  insertion  of
headings  and any  index are for  convenience  of  reference  only and shall not
affect the construction or interpretation hereof.

     1.4 Extended  Meanings:  Words  importing the singular  number  include the
plural and vice-versa; words importing gender include all genders.

     1.5  Currency:  All dollar  amounts  referred to in this  Agreement  are in
lawful currency of the United States.




                                        6

<PAGE>



                                    ARTICLE 2
                      PURCHASE AND SALE OF PURCHASED ASSETS

     2.1  Agreement to  Purchase:  Subject to the terms and  conditions  of this
Agreement  and in  reliance  on the  representations  and  warranties  contained
herein,  Purchaser shall purchase and Vendor shall sell,  transfer and assign to
Purchaser on the Closing  Date,  free and clear of all liens,  claims,  security
interests,  encumbrances or obligations of any nature whatsoever,  substantially
all of the  assets,  tangible  and  intangible,  real and  personal,  rights and
undertakings,  used in connection  with the Business as at the  Effective  Date,
except  as  expressly  excluded  in  Section  2.2  hereof,  including,   without
limitation, all right, title and interest of Vendor in and to:

               (a)  all trucks, cars and other vehicles owned by Vendor and used
                    in connection  with the Business,  together with all testing
                    and  analysis  equipment  attached  to  or  stored  therein,
                    including,   without  limitation,   those  items  listed  in
                    Schedule 2.1(a) hereto (the "Test Vans");

               (b)  all machinery,  equipment, spare parts and supplies owned by
                    Vendor and used in connection  with the Business,  including
                    without  limitation  the  items  listed in  Schedule  2.1(b)
                    hereto (the "Equipment");

               (c)  all  small  tools  used in  connection  with  the  Business,
                    including,   without  limitation,   those  items  listed  in
                    Schedule 2.1(c) hereto (the "Tools");

               (d)  all  inventory  for  resale  owned  by  Vendor  and  used in
                    connection with the Business, including, without limitation,
                    those   items   listed  in  Schedule   2.1(d)   hereto  (the
                    "Inventory");

               (e)  all furniture, furnishings, accessories and office equipment
                    owned by Vendor and used in  connection  with the  Business,
                    including,   without  limitation,   those  items  listed  in
                    Schedule 2.1(e) hereto (the "Office Equipment");

               (f)  all   Intellectual   Property  owned  by  Vendor  (with  the
                    exception of Intellectual  Property licensed to Vendor under
                    the  Existing  Tanknology  Licence  Agreement),   including,
                    without  limitation,  those items listed in Schedule  2.1(f)
                    hereto;

               (g)  Vendor's  leasehold  interest in the Leased Premises and all
                    improvements,  appurtenances and fixtures situate thereon or
                    forming part thereof;

               (h)  Vendor's leasehold interest in the Leased Equipment;

               (i)  all of  Vendor's  rights  pursuant  to all  written  or oral
                    contracts to provide  testing and  analysis  services to its
                    customers  as  listed  on  Schedule   2.1(i)-A  hereto  (the



                                        7

<PAGE>



                    "Customer  Contracts")  together  with  Vendor's list of all
                    current and prospective  customers of the Business as listed
                    on Schedule 2.1(i)-B hereto (the "Customer Lists");

               (j)  all of Vendor's rights to non-competition,  non-solicitation
                    and  confidentiality   agreements  and  licences  listed  on
                    Schedule 2.1(j) hereto and other Contracts pertaining to the
                    Business  and not  otherwise  expressly  provided for herein
                    (collectively, the "Other Contracts");

               (k)  prepaids  consisting  of  workers'  compensation   payments,
                    equipment  rentals,  utilities and  subscriptions  and other
                    like items  which  corporations  normally  treat as prepaids
                    provided  they relate to the Business and are  transferable,
                    but excluding insurance prepaids;

               (l)  the goodwill of the Business, as well as the exclusive right
                    of Purchaser, at its option, to represent itself as carrying
                    on the  Business in  continuation  of and in  succession  to
                    Vendor, and all of Vendor's right, subject to the provisions
                    of  section 9.1,  to  use  the  names  "Tanknology  Canada",
                    "Tanknology" or any variation  thereof,  all of the Vendor's
                    rights to its  telephone  numbers and all other  intangibles
                    used in connection with the Business  (collectively referred
                    to as the "Goodwill");

               (m)  all documents,  or copies thereof, and other data, technical
                    or  otherwise,  owned by Vendor that relate to the  Business
                    and which are in the  possession of Vendor (the  "Records");
                    and

               (n)  all other  assets,  rights or  undertakings  (other than the
                    Excluded  Assets)  used or in any way  associated  with  the
                    Business of whatever nature or kind and wherever situated;

collectively, the "Purchased Assets".

     2.2  Excluded  Assets:  There  shall  be  specifically  excluded  from  the
Purchased Assets: (i) all Accounts Receivable, (ii) all cash on hand and in bank
accounts of Vendor,  and (iii) all insurance  prepaids and/or insurance premiums
termination credits of Vendor (the "Excluded Assets").

     2.3 Assumed  Liabilities:  As of the Effective Date, Purchaser shall assume
and thereafter  pay,  perform and discharge all  obligations  and liabilities of
Vendor in respect of the Customer Contracts, Other Contracts,  Equipment Leases,
Real Property Leases and all employment obligations in respect of the Employees,
including,   without   limitation,   notice,   severance  and  accrued  vacation
entitlements.



                                        8

<PAGE>



     2.4 No  Assumption  of Other  Liabilities:  Other than the  liabilities  of
Vendor  assumed  pursuant to section 2.3, it is expressly  understood and agreed
between the parties hereto that Purchaser  shall not assume and is not assuming,
nor shall Purchaser  become liable,  obligated or responsible for the payment of
any debts, liabilities or obligations or the performance of any duties of Vendor
of any kind or nature  whatsoever,  whether arising before,  on or subsequent to
the Effective  Date and whether  contingent or liquidated in amount,  including,
without limitation, any debts, liabilities, obligations or duties arising out of
accounts payable, tax liabilities,  environmental matters,  Contracts,  or other
liabilities of Vendor or related to the operation of the Business.


                                    ARTICLE 3
                                 PURCHASE PRICE

     3.1  Purchase  Price:  The  purchase  price  payable by  Purchaser  for the
Purchased Assets (the "Purchase Price") (subject to the adjustments,  if any, to
be made  pursuant  to section  3.2) shall be the sum of Fifty  Thousand  Dollars
($50,000) and shall be allocated to the Purchased Assets as follows:

                  Test Vans                        $  12,963
                  Equipment                        $   8,796
                  Tools                            $   9,559
                  Office Equipment                 $  10,000
                  Inventory                        $   4,667
                  Goodwill                         $   4,014
                  All other Purchased Assets       $       1

                                                   $  50,000

The Purchase  Price shall be satisfied in full by wire  transfer of  immediately
available funds to the order of the Vendor on Closing.

     3.2 Business  Expenses:  All expenses of the Business  attributable  to the
period  on and  prior to the  Effective  Date,  including,  without  limitation,
accrued and/or unpaid wages, salaries and commissions  (exclusive of all accrued
vacation  obligations which shall be the  responsibility of Purchaser),  and all
accrued  and/or unpaid sales tax, lease payments and telephone and other utility
charges of the Business  shall be borne by Vendor.  All expenses of the Business
attributable to the period after the Effective Date shall be borne by Purchaser.
In the  event  that  Purchaser  and  Vendor  fail to  agree  on  which  party is
responsible for any such payment obligation, such parties shall retain, at their
joint expense, the firm of Ernst & Young, Chartered  Accountants,  or such other
national firm of chartered accountants mutually acceptable to the parties hereto
to  determine  the  party  responsible  for such  payment  obligation  and whose
determination shall be final and binding on the parties. Any and all obligations
required to be paid by the  responsible  party pursuant to this section shall be
made to the applicable payee within 15 days after determination of the amount of
such payment.


                                        9

<PAGE>



     3.3  Sales  and  Transfer  Taxes:  All  Canadian  federal,  provincial  and
municipal GST, sales and transfer taxes payable in connection  with the transfer
of the Purchased Assets shall be borne by Purchaser.

     3.4 GST Election:  Each of Vendor and  Purchaser is a registrant  under the
Excise Tax Act (Canada) for the purposes of the GST.  Vendor's GST  registration
number is 13070 0727 RT.  Purchaser's GST registration  number is 89813 9837 RT.
Vendor and Purchaser elect for the provisions of subsection 167(1) of the Excise
Tax Act  (Canada)  to apply to the sale of the  Purchased  Assets.  The  parties
hereto  shall take all  necessary  actions in order to complete and file a valid
joint election as provided in subsection  167(1) of the Excise Tax Act (Canada).
If GST is payable in respect of this asset sale transaction,  such tax liability
shall be for the account of Purchaser,  and Purchaser  agrees to remit forthwith
Vendor the amount of such GST together with any interest and penalties levied in
respect thereof.


                                    ARTICLE 4
                       ADDITIONAL COVENANTS OF THE PARTIES

     As an inducement to all parties  hereto to enter into this Agreement and to
consummate the  transactions  contemplated  hereby,  Purchaser and Vendor hereby
covenant and agree to the following, and acknowledge that each such covenant and
agreement is material to and relied upon by each party hereto:

     4.1 Additional Agreements: On or prior to the Closing Date:

              4.1.1 Tanknology   Intellectual   Property   Transfer   Agreement:
                    Purchaser and Tanknology-USA shall enter into the Tanknology
                    Intellectual  Property Transfer Agreement and shall complete
                    the transactions contemplated thereunder on Closing;

              4.1.2 Tanknology Licence  Agreement:  Purchaser and Tanknology-USA
                    shall  enter  into  the  Tanknology  Licence  Agreement  and
                    Purchaser   shall  pay  the   Tanknology   Licence   Fee  to
                    Tanknology-USA;

              4.1.3 Tanknology  Support  Agreement:  Parent,  Tanknology-USA and
                    Purchaser shall enter into the Tanknology Support Agreement;

              4.1.4 Sure-Test  Licence  Agreement:  Purchaser  shall enter into,
                    and Parent shall cause Pro Eco to enter into,  the Sure-Test
                    Licence  Agreement  and  Purchaser  shall  pay  the  initial
                    licence fee in the amount of $10,000 to Pro Eco on Closing;



                                       10

<PAGE>



              4.1.5 Sure-Test  Support  Agreement:  Purchaser  and Parent  shall
                    enter  into,  and Parent  shall cause Pro Eco to enter into,
                    the Sure-Test Support Agreement;

              4.1.6 Non-Competition:    Vendor,   Tanknology-USA,   Parent   and
                    Purchaser   shall   enter   into   a   non-competition   and
                    non-solicitation   agreement   substantially   in  the  form
                    attached hereto as Appendix 4.1.6;

              4.1.7 USTMAN  Agreements:  Purchaser  shall enter into, and Parent
                    shall  cause  USTMAN to enter  into,  the USTMAN SIR Licence
                    Agreement and the USTMAN SIR Support Agreement;

     4.2 New Lease:  It is mutually  understood  and agreed that  Purchaser will
make a good  faith  effort to  negotiate  new lease  agreements  for the  Leased
Premises for effect on the Closing Date or as soon as is practicable thereafter.

     4.3  Offers of  Employment:  Purchaser  shall  offer  employment  as of the
Closing Date to all Employees on terms and conditions at least  equivalent on an
overall  basis to those enjoyed by each such Employee as of the Closing Date and
reflected in Schedule 7.1.17.  Purchaser will be responsible for any termination
and severance costs with respect to all Employees.

     4.4 Bulk Sales Act:  Purchaser  hereby waives  compliance of the Bulk Sales
Act (Ontario).  Vendor and Parent hereby,  jointly and severally,  shall pay and
satisfy all bona fide claims of trade creditors of the Business  relating to all
periods on and before the Closing Date forthwith  upon such claims  becoming due
and payable.  Vendor and Parent hereby jointly and severally  agree to indemnify
and hold harmless Purchaser from any liability or other consequence  arising out
of the waiver of such Act.

     4.5 Transfer and Delivery of  Purchased  Assets:  On Closing,  Vendor shall
execute and deliver to Purchaser all bills of sale, assignments,  instruments of
transfer,  assurances,  consents  and other  documents  as shall be necessary to
effectively transfer to Purchaser all the Purchased Assets, and shall deliver up
to Purchaser  possession of the Purchased Assets and Records,  free and clear of
any liens,  charges  or  encumbrances  or rights of third  persons  (other  than
permitted encumbrances and any liens, charges or encumbrances imposed or created
by the actions of Purchaser).


                                    ARTICLE 5
                              CLOSING ARRANGEMENTS

     5.1 Closing: The Closing of the transactions contemplated hereby shall take
place on the Closing Date at the offices of Purchaser's solicitors,  Suite 5800,
Scotia Plaza,  40 King Street West,  Toronto,  Ontario M5H 3Z7, or at such other
place or time as may be approved by Vendor and Purchaser.



                                       11

<PAGE>



     5.2 Closing  Procedures:  At or before the Closing on the Closing Date, the
parties  shall  take or cause to be  taken  all  actions,  steps  and  corporate
proceedings  necessary  or  desirable  to  validly  and  effectively  approve or
authorize the completion of the transactions contemplated hereby.


                                    ARTICLE 6
                              CONDITIONS OF CLOSING

     6.1 Conditions for Purchaser's Benefit: Purchaser shall not be obligated to
complete the transaction  contemplated  hereby unless, on the Closing Date, each
of the following  conditions has been satisfied,  it being understood that these
conditions are included for the exclusive benefit of Purchaser and may be waived
in writing in whole or in party by Purchaser at any time:

              6.1.1 Approvals: All necessary legal and corporate proceedings and
                    approvals,  regulatory or  otherwise,  applicable to Vendor,
                    Parent, Tanknology-USA and Pro Eco, shall have been taken or
                    obtained to permit the parties to complete the  transactions
                    provided for herein.

              6.1.2 Representations:   The  representations  and  warranties  of
                    Vendor,  Parent  and  Tanknology-USA,   set  forth  in  this
                    Agreement  shall be true and  correct at the time of Closing
                    with the same  force and effect as if made at and as of such
                    time.

              6.1.3 Compliance:  All of the terms,  covenants and agreements set
                    forth in this  Agreement to be complied with or performed by
                    Vendor,  Parent  and/or  Tanknology-USA  on  or  before  the
                    Closing Date shall have been  complied  with or performed by
                    Vendor,  Parent and/or  Tanknology-USA in all respects on or
                    before the Closing Date.

              6.1.4 Enforceable Agreement: This Agreement and all agreements and
                    documents  delivered  at  Closing  or  contemplated  in this
                    Agreement  shall  have been duly  authorized,  executed  and
                    delivered to Purchaser  by Vendor,  Parent,  Tanknology-USA,
                    USTMAN and Pro Eco as applicable,  and shall be, at Closing,
                    valid   and   binding   obligations   of   Vendor,   Parent,
                    Tanknology-USA, USTMAN and Pro Eco respectively, enforceable
                    in accordance with their  respective  terms,  subject to all
                    applicable laws, including,  without limitation,  bankruptcy
                    and creditors rights law and equitable principles.

              6.1.5 Vendor  Deliveries:  Vendor,  Parent  and/or  Tanknology-USA
                    shall have delivered to Purchaser:

                    (a)  each of the Tanknology  Intellectual  Property Transfer
                         Agreement,  Tanknology  Licence  Agreement,  Tanknology
                         Support   Agreement,   Sure-Test   Licence   Agreement,


                                       12

<PAGE>



                         Sure-Test  Support  Agreement,  USTMAN   Agreement  and
                         Non-Competition   Agreement   duly   executed   by  all
                         respective parties thereto other than Purchaser;

                    (b)  the Assignment  Conveyance and Assumption  Agreement to
                         be executed by all parties thereto;

                    (c)  a  certificate  dated as of Closing  executed by a duly
                         authorized  officer  of  each  of  Vendor,  Parent  and
                         Tanknology-USA  to the effect that all  representations
                         and warranties of Vendor,  Parent and  Tanknology-  USA
                         contained in this Agreement are true and correct at and
                         as of the Closing and all  conditions  precedent to the
                         obligations of Purchaser to consummate the transactions
                         contemplated  herein and not waived by  Purchaser  have
                         been fulfilled by Vendor, Parent and Tanknology- USA;

                    (d)  certified  copies  (dated  as of  the  Closing)  of the
                         Shareholders  of Vendor and the Board of  Directors  of
                         Parent and Tanknology-USA authorizing and approving the
                         execution  and  delivery  of  this  Agreement  and  the
                         consummation of each and every transaction contemplated
                         by this Agreement;

                    (e)  a  certificate   of   incumbency  of  Vendor,   Parent,
                         Tanknology-USA,  Pro Eco  and  USTMAN  dated  as of the
                         Closing;

                    (f)  the Vendor's Counsel's Closing Opinion; and

                    (g)  the consent and release of Bank One,  Texas,  N.A.  and
                         Bank One,  Capital  Partners  L.P.,  the consent of the
                         landlord to Purchaser's  assumption of the  Mississauga
                         office lease,  the waiver required by ULC  Underwriters
                         Laboratory of Canada and the Bell Canada  assumption of
                         Vendor's  phone  line,  each as referred to in Schedule
                         7.1.20.

     6.2  Conditions  for  Vendor's   Benefit:   None  of  Vendor,   Parent  and
Tanknology-USA shall be obligated to consummate the transactions herein provided
for unless,  on the Closing  Date,  each of the  following  conditions  has been
satisfied,  it being  understood  that these  conditions  are  included  for the
exclusive  benefit of Vendor,  Parent  and  Tanknology-USA  and may be waived in
writing in whole or in part by Vendor, Parent and Tanknology-USA at any time:

              6.2.1 Approvals: All necessary legal and corporate proceedings and
                    approvals, regulatory or otherwise, applicable to Purchaser,
                    shall have been taken or  obtained  to permit the parties to


                                       13

<PAGE>



                    
                    complete the transactions provided for herein.

              6.2.2 Representations  and  Warranties:  The  representations  and
                    warranties of Purchaser set forth in this Agreement shall be
                    true and correct at the time of Closing  with the same force
                    and effect as if made at and as of such time.

              6.2.3 Compliance:  All of the terms,  covenants and agreements set
                    forth in this  Agreement to be complied with or performed by
                    Purchaser  at or before  the  Closing  Date  shall have been
                    complied with or performed by Purchaser in all respects.

              6.2.4 Enforceable Agreement: This Agreement and all agreements and
                    documents  delivered  at  Closing  or  contemplated  in this
                    Agreement  shall  have been duly  authorized,  executed  and
                    delivered to Vendor by  Purchaser  and shall be, at Closing,
                    valid and binding  obligations of Purchaser,  enforceable in
                    accordance  with  their  respective  terms,  subject  to all
                    applicable laws including,  without  limitation,  bankruptcy
                    and creditors rights law and equitable principles.

              6.2.5 Purchaser's  Deliveries:  Purchaser  shall have delivered to
                    Vendor, Parent and Tanknology-USA:

                    (a)  each of the Tanknology  Intellectual  Property Transfer
                         Agreement,  Tanknology  Licence  Agreement,  Tanknology
                         Support   Agreement,   Sure-Test   Licence   Agreement,
                         Sure-Test  Support  Agreement,   USTMAN  Agreement  and
                         Non-Competition Agreement duly executed by Purchaser;

                    (b)  the Assignment,  Conveyance and Assumption Agreement to
                         be executed by all parties thereto;

                    (c)  payment of the  Purchase  Price as  provided in section
                         3.1;

                    (d)  payment of the Tanknology Intellectual Property Price;

                    (e)  payment of the Tanknology Licence Fee;

                    (f)  payment of the Sure-Test Licence Fee;

                    (g)  a certificated  dated as of Closing  executed by a duly
                         authorized  officer of Purchaser to the effect that all
                         representations and warranties of Purchaser,  contained
                         in this Agreement are true and correct at and as of the


                                       14

<PAGE>



                         Closing and all conditions precedent to the obligations
                         of Vendor,  Parent  and Tanknology-USA   to  consummate
                         the transactions  contemplated  herein  not  waived  by
                         Vendor, Parent and Tanknology-USA  have been  fulfilled
                         by Purchaser;

                    (h)  a certificate  of  incumbency of Purchaser  dated as of
                         the Closing;

                    (i)  certified copies (dated as of the Closing) of the Board
                         of Directors of Purchaser authorizing and approving the
                         execution  and  delivery  of  this  Agreement  and  the
                         consummation of each and every transaction contemplated
                         by this Agreement; and

                    (j)  the Purchaser's Counsel's Closing Opinion.


                                    ARTICLE 7
                         REPRESENTATIONS AND WARRANTIES

     7.1 Representations and Warranties of Vendor: As an inducement to Purchaser
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby, each of Vendor, Parent and Tanknology-USA, jointly and severally, hereby
represents  and  warrants  to  Purchaser,   and  acknowledges   that  each  such
representation  and  warranty  set forth in section  7.1 is  material  to and is
relied upon by Purchaser:

              7.1.1 Corporate Status:  Each of Vendor,  Parent,  Tanknology-USA,
                    USTMAN and Pro Eco is a corporation  duly  incorporated  and
                    organized  and  validly  existing  under  the  laws  of  its
                    jurisdiction of incorporation  with all requisite  corporate
                    power and capacity to execute and deliver this Agreement and
                    all other  instruments  and  documents  relating  hereto and
                    perform all of its  obligations  hereunder  and  thereunder.
                    Vendor  has all  requisite  power  and  capacity  to own and
                    operate  the  Business  and  to  lease  and  dispose  of the
                    Purchased  Assets  and  Vendor  is  qualified  and  in  good
                    standing in each  jurisdiction  where the  character  of its
                    properties  owned,  operated  or leased or the nature of its
                    activities makes such qualification necessary,  except where
                    the failure to be so  qualified  shall not,  alone or in the
                    aggregate, have a material adverse effect on the Business.

              7.1.2 Effect of  Agreement:  The  execution  and  delivery of this
                    Agreement   and  the   consummation   of  the   transactions
                    contemplated  hereunder  have  been duly  authorized  by all
                    necessary  corporate  action on the part of each of  Vendor,
                    Parent and Tanknology-USA. The execution and delivery of the
                    USTMAN  Agreement  by  USTMAN,  and  the  Sure-test  Support
                    Agreement   by  Pro  Eco,  and  the   consummation   of  the
                    transactions   contemplated   thereunder   have   been  duly


                                       15

<PAGE>



                    
                    authorized by all necessary  corporate action on the part of
                    USTMAN and Pro Eco,  respectively.  This  Agreement  and all
                    agreements and documents  executed and delivered pursuant to
                    this Agreement  constitute valid and binding  obligations of
                    Vendor,   Parent,   Tanknology-USA,   USTMAN  and  Pro  Eco,
                    enforceable  in  accordance  with  their  terms,  subject to
                    applicable    bankruptcy,    insolvency,     reorganization,
                    moratorium and other laws or equitable principles of general
                    application affecting the rights of creditors generally.

              7.1.3 No Breach  Caused by this  Agreement:  Neither the execution
                    nor  delivery  of  this  Agreement  nor  the  fulfilment  or
                    compliance  with  any of the  terms  hereof  will,  with  or
                    without the giving of notice and/or the passage of time, (i)
                    conflict   with,  or  result  in  a  breach  of  the  terms,
                    conditions or provisions  of, or constitute a default under,
                    the articles or by-laws, as amended,  of Vendor,  Parent and
                    Tanknology-USA or, if the consents  contemplated in Schedule
                    7.1.20 are obtained, any Contract or any judgment, decree or
                    order to which Vendor,  Parent or  Tanknology-USA is subject
                    or by which they are bound,  or (ii)  require any consent or
                    other action by any administrative or governmental body. The
                    execution,  delivery and  performance  of this Agreement and
                    compliance with the provisions hereof by Vendor,  Parent and
                    Tanknology-USA  will not violate any provision of law or any
                    regulation by which Vendor,  Parent and  Tanknology-USA  are
                    bound.

              7.1.4 Title to Assets: Vendor has good and marketable title to the
                    Purchased  Assets  (and a valid  and  enforceable  leasehold
                    interest  in all assets  subject to the  Equipment  Leases),
                    free and clear of all liens, privileges,  pledges,  options,
                    mortgages,  hypothecs,  charges  or  other  encumbrances  or
                    security interests of whatsoever nature or kind.

              7.1.5 Condition  of  Tangible  Assets:   All  Test  Vans,   Tools,
                    Equipment,  Office  Equipment  and Leased  Equipment  are in
                    good,  serviceable  condition  and fit  for  the  particular
                    purposes  for which they are used in the  Business,  subject
                    only to normal maintenance  requirements and normal wear and
                    tear reasonably expected in the ordinary course of business.

              7.1.6 Options:  Except as set out in this Agreement, no person has
                    any  agreement or option or any right or privilege  (whether
                    by law,  pre-emptive or contractual)  capable of becoming an
                    agreement or option for the  purchase  from Vendor of any of
                    the Purchased Assets, other than pursuant to purchase orders
                    accepted by Vendor in the ordinary course of the Business.

              7.1.7 Inventory: All items of Inventory are merchantable.  None of
                    such  items  is  below   standard   quality,   obsolete   or
                    obsolescent.


                                       16

<PAGE>



              7.1.8 All Assets: The Purchased Assets, the Intellectual  Property
                    listed on  Schedule  2.1(f)  and all  assets  subject to the
                    Equipment  Leases  constitute  all  material  assets  of any
                    nature with which Vendor has  conducted the Business for the
                    twelve   months  prior  to  the  date  hereof,   other  than
                    additional  Test Vans  provided by  Affiliates of the Vendor
                    from  time to time  during  periods  of  increased  business
                    activity, and subject to the addition and deletion of assets
                    in the ordinary course of business.  All Leased Premises are
                    supplied with utilities and other services necessary for the
                    operation  of  such   facilities  in  connection   with  the
                    Business.

              7.1.9 Customers  and  Suppliers:  Vendor has no  knowledge  of any
                    termination,   cancellation  or  modification,  not  in  the
                    ordinary course of business,  in the business  relationships
                    of Vendor with any of its material  customers  and suppliers
                    which may reasonably be expected, alone or in the aggregate,
                    to have a material adverse effect on the Business.

             7.1.10 Financial  Statements:  The Vendor Financial  Statements are
                    accurate,   complete,  true  and  correct  in  all  material
                    respects  and fairly  present in all  material  respects the
                    financial  condition and results of operations of Vendor and
                    the Business as of the date of such statements.

             7.1.11 Records  Complete:   All   material  transactions   of   the
                    Business are  properly  recorded in the books and records of
                    Vendor.

             7.1.12 Intellectual  Property:  Vendor  has full  right,  title and
                    interest  to  each  item  of  Intellectual  Property  owned,
                    licensed or used by Vendor in  connection  with the Business
                    as set forth on  Schedule  2.1(f).  There are no  pending or
                    threatened  claims against Vendor  alleging that the conduct
                    of the Business  infringes  or conflicts  with the rights of
                    others  under  patents,  trade-marks,  copyrights  or  trade
                    secrets.  The Business as now conducted does not infringe or
                    conflict  with the  rights  of  others,  including,  without
                    limitation,  to  patent,  trade-mark,  copyright  and  trade
                    secret rights, and Vendor owns or possesses all the patents,
                    trade-marks, trade names, copyrights, trade secrets, service
                    marks,  licences  and rights with  respect to the  foregoing
                    necessary   for  the   operation  of  the  Business  as  now
                    conducted. None of Vendor, Parent or Tanknology-USA is aware
                    of  any   violation   by  a  third  party  of  any  patents,
                    trade-marks,   trade  names,   copyrights,   trade  secrets,
                    services marks,  licences or other proprietary  rights owned
                    by Vendor,  Parent and Tanknology-USA and used in connection
                    with the Business.

             7.1.13 Contracts:    Vendor is not a party to any Contract relating
                    to the  Business,  except as listed in the Schedules to this
                    Agreement.  Vendor is not in  default  under or in breach of
                    any Customer  Contract,  Other Contract,  Equipment Lease or


                                       17

<PAGE>



                    
                    Real  Property  Lease except for defaults or breaches  which
                    individually  or in the  aggregate  are not material and, to
                    the knowledge of Vendor or Parent,  there exists no state of
                    facts which,  after  notice or lapse of time or both,  would
                    constitute  such a default  or breach by Vendor or any other
                    party  thereto.  Each  of  such  Contracts  is now  in  good
                    standing and in full force and effect and Vendor is entitled
                    to all rights and benefits thereunder.

             7.1.14 Real  Property:  Vendor  is not the  owner of or tenant or a
                    party to any  agreement to own or lease any real property of
                    or  pertaining  to  the  Business,  except  for  the  Leased
                    Premises.

             7.1.15 Leased  Equipment:  Schedule  7.1.15 contains a complete and
                    accurate  list  of  all  Equipment  Leases  and  all  Leased
                    Equipment used in the Business.

             7.1.16 Litigation:  Except as disclosed in Schedule  7.1.16,  there
                    are  no law  suits,  actions,  governmental  investigations,
                    claims or demands or other  proceedings  pending  or, to the
                    best of the knowledge of Vendor,  threatened against Vendor.
                    To the knowledge of Vendor or Parent,  there exists no state
                    of facts which  after  notice or lapse of time or both could
                    reasonably  be  expected  to give  rise to any such  action,
                    governmental  investigations,  claims  or  demands  or other
                    proceedings,   or  which   requires  or  may  require,   the
                    expenditure  of money as a condition to or a necessity  for,
                    the right or ability of Vendor to conduct  the  Business  in
                    the manner in which the  Business  has been carried on prior
                    to the date hereof. All threatened or pending claims,  suits
                    or  actions  against  Vendor  or  any  of  its  officers  or
                    directors  in their  capacities  as such which could  affect
                    Vendor have been described in Schedule 7.1.16.

             7.1.17 Employee  Matters:  Except as set forth in  Schedule  7.1.17
                    hereto, Vendor:

                    (a)  Collective Agreements: is not a party to any collective
                         agreement  with, or  commitment  to, any trade union or
                         employee  association  and has not made any commitments
                         to or extended  voluntary  recognition  to or conducted
                         negotiations   with  any   trade   union  or   employee
                         association  with  respect  to any  future  agreements.
                         Vendor is not aware of any current attempts to organize
                         any  employees or establish any trade union or employee
                         association  in  connection  with Vendor  other than as
                         disclosed on Schedule 7.1.17;

                    (b)  Benefit Plans:  except as set forth in Schedule 7.1.17,
                         is not a party  to nor  operates  any  bonus,  pension,
                         profit  sharing,  deferred  compensation,   retirement,
                         hospitalization  insurance,  life  insurance,  drug  or
                         dental insurance, eye care, weekly indemnity, long term


                                       18

<PAGE>



                         disability, medical insurance, or similar plan or
                         practice, formal or informal, with respect to any
                         Employee  or any other Person;

                    (c)  Employment  Contracts:  is not  bound by any  agreement
                         whether written or oral with any Employee providing for
                         a  specified   period  of  notice  of   termination  or
                         providing for any fixed term of employment,  and has no
                         Employee  who cannot be  dismissed  upon such period of
                         notice as may be required by applicable  law.  Schedule
                         7.1.17   contains  a  complete  and  accurate  list  of
                         Employees  as at  the  Closing  Date,  each  Employee's
                         annual remuneration, date of commencement of employment
                         and the amount of any accrued vacation benefit; and

                    (d)  Inactive Employees: Schedule 7.1.17 contains a complete
                         and  accurate  list of  Employees  of Vendor who are no
                         longer on the  payroll by reason of  pregnancy  or sick
                         leave,  temporary  lay-off  or short  term or long term
                         disability.

                    (e)  Employee Plans:  all employee benefit and welfare plans
                         to which  Vendor  contributes,  or in which  any of its
                         Employees  participate or are eligible to  participate,
                         have been established,  qualified and administered,  in
                         all  material   respects,   in   accordance   with  all
                         applicable   laws,   regulations,   orders   or   other
                         legislative,  administrative or judicial  promulgations
                         and   in    accordance    with   all    agreements   or
                         understandings, written or oral, between Vendor and its
                         Employees.  None of such plans,  nor any related trusts
                         thereunder,  is subject to any  pending  investigation,
                         examination  or  other  proceeding   initiated  by  any
                         governmental agency or instrumentality and there exists
                         no state of facts which  after  notice or lapse of time
                         or both could  reasonably  be  expected to give rise to
                         any   such   investigation,    examination   or   other
                         proceeding.  All contributions required by the terms of
                         such plans or by  applicable  laws have been made,  and
                         Vendor  has  no  liability   (other  than   liabilities
                         accruing  after the Closing  Date) with  respect to any
                         such plans,  except for current  contributions  not yet
                         due and payable based on  compensation  paid by Vendor,
                         as the case may be.

             7.1.18 Fulfilment  of  Guarantees:  There have been no  requests or
                    demands for  treatment  or other  services by  customers  of
                    Vendor to fulfil  warranties or guarantees  made or given by
                    Vendor  to  its  customers  which  services  have  not  been
                    provided to such customers,  except as set forth in Schedule
                    7.1.18.

             7.1.19 Taxes and Assessment:    Vendor has filed, or will file when
                    and as due,  all  foreign,  federal,  provincial  and local,
                    sales,  payroll,   excise,  GST  and  business  tax  returns


                                       19

<PAGE>



                    
                    required  by law to be filed by Vendor  with  respect to the
                    Business or the  ownership of the  Purchased  Assets for all
                    periods prior to and including the Closing Date.  Vendor has
                    paid or will pay all federal,  provincial,  local or foreign
                    taxes or other governmental charges,  including interest and
                    penalties imposed, with respect to the Business of Vendor or
                    the ownership of the Purchased  Assets for all periods prior
                    to and including the Closing Date.

             7.1.20 Consents:  Except as listed in Schedule 7.1.20,  no consents
                    or approvals are required  under any Contract  pertaining to
                    the Business or to which Vendor, Parent or Tanknology-USA is
                    a  party  in  order  to  permit  the   consummation  of  the
                    transactions provided for under this Agreement.

             7.1.21 No Material  Change:  Except as disclosed or provided for in
                     this Agreement, since October 24, 1996;

                    (a)  no material adverse change,  financial or otherwise, in
                         the condition of the Business or the  Purchased  Assets
                         shall have occurred; and

                    (b)  Vendor shall have  operated  the Business  consistently
                         with  prior  practices  and  shall  not  have  made any
                         material change to the Business.

             7.1.22 Solvency:  Vendor is  solvent  and the  consummation  of the
                    transactions  provided for in this Agreement will not render
                    it  insolvent.  There  are  no  conditions,  obligations  or
                    commitments of Vendor which will render Vendor insolvent.

             7.1.23 Environmental Matters:

                7.1.23.1 Other  than as set forth on  Schedule  7.1.23  attached
                         hereto,  no environmental  license,  permit or approval
                         relating to the  Purchased  Assets or the Business will
                         become void or  voidable as a result of the  completion
                         of the transactions contemplated hereby.

                7.1.23.2 To the best knowledge of the Vendor,  other than as set
                         orth on Schedule 7.1.23 attached hereto,  Vendor is not
                         responsible   or   potentially   responsible   for  the
                         remediation or cost of  remediation of any  pollutants,
                         contaminants,  chemicals  or  industrial,  hazardous or
                         toxic  substances  or  wastes  of any kind  ("Hazardous
                         Materials")  regulated under any  environmental  law or
                         regulation  at,  on  or  under the Leased Premises, any


                                       20

<PAGE>



                         land adjacent  thereto  or  any  other  property owned,
                         leased or occupied by Vendor.

                7.1.23.3 Other than as s et forth on  Schedule  7.1.23  attached
                         hereto,  Vendor  has not been nor is it the  subject of
                         any federal, provincial, local or private litigation or
                         proceeding  involving  a demand  for  damages  or other
                         potential  liability  with respect to violations of any
                         environmental law, regulation or order.

                7.1.23.4 Other than as s et forth on  Schedule  7.1.23  attached
                         hereto,  no notice or warning  has been issued or given
                         by  any  governmental  or  regulatory   authority  with
                         respect  to any  failure  or  alleged  failure  of,  or
                         necessity  for,   Vendor  to  have  any   environmental
                         license, permit or approval required in connection with
                         the conduct of the Business,  except where such failure
                         has been  fully  resolved  or  cured or other  required
                         action taken,  nor, to the knowledge of the Vendor,  is
                         any such notice or warning proposed or threatened;  nor
                         has a notice  or  warning  been  issued or given by any
                         governmental  or regulatory  authority  with respect to
                         the   generation,    treatment,    storage,   handling,
                         recycling,  transportation,  disposal or discharge of a
                         Hazardous Material by Vendor or the treatment, storage,
                         handling,   recycling,   disposal  or  discharge  of  a
                         Hazardous Material at the Leased Premises.

                7.1.23.5 Other than as set forth on Schedule 7.1.23 hereto,  the
                         Company has not handled any  Hazardous  Material at the
                         Leased  Premises  or  any  property  owned,  leased  or
                         occupied   by  Vendor,   other   than  in   substantial
                         compliance   with   applicable    environmental   laws,
                         regulations and orders. No polychlorinated  biphenyl or
                         asbestos  material is or has been present at the Leased
                         Premises or any  property  owned,  leased or  otherwise
                         occupied by Vendor.

               7.1.24 Copies of Agreement:  True, correct and complete copies of
                    all Contracts relating to the Business or by which Vendor is
                    bound and all Real Property Leases and Equipment Leases have
                    bene provided to Purchaser.

             7.1.25 Compliance  with Applicable  Laws:  Vendor is conducting the
                    Business in  compliance  in all material  respects  with all
                    applicable  federal,  provincial,  municipal and local laws,
                    rules  and  regulations  of each  jurisdiction  in  which it
                    carries  on  the  Business  including,  without  limitation,
                    zoning by-laws and regulations,  and Vendor is not in breach
                    of any such laws, rules or  regulations, except for breaches


                                       21

<PAGE>



                    which in the  aggregate  are not material or which have been
                    disclosed in writing to  Purchaser.  Vendor is duly licensed
                    or   registered   and  has  obtained  all  permits  in  each
                    jurisdiction  in which it owns or leases property or carries
                    on the Business,  to enable the Business to be carried on as
                    now conducted and the Purchased  Assets to be owned,  leased
                    and   operated,   and  all  such   licences,   permits   and
                    registrations are valid and subsisting and in good standing.
                    A complete and accurate  description  of all such  licences,
                    permits  and  registrations  held by  Vendor is set forth in
                    Schedule 7.1.25 hereto.

             7.1.26 Accounts  Receivable:  Schedule  7.1.26  is a  complete  and
                    accurate  list of all  Accounts  Receivable.  Vendor has not
                    rendered any invoice for services performed or products sold
                    after the Effective Date.

             7.1.27 Residency: Vendor is not a non-resident of Canada within the
                    meaning of the Income Tax Act (Canada).

             7.1.28 No  Forbidden  Disclosure:  There  is no  information  which
                    Vendor is prevented  by contract  from  disclosing  to third
                    parties, in respect to the transactions herein described.

             7.1.29 Not Misleading: The foregoing representations and warranties
                    and   statements  of  fact   (including  the  Schedules  and
                    Appendices  related  thereto)  do  not  contain  any  untrue
                    statement  of  material  fact or omit to state any  material
                    fact necessary to make any such representation,  warranty or
                    statement not misleading.

     7.2 Representations and Warranties of Purchaser: As an inducement to Vendor
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby,  Purchaser  hereby  represents and warrants to Vendor,  and acknowledges
that each such  representation and warranty set forth in section 7.2 is material
to and is relied upon by Vendor.

              7.2.1 Good Standing:  Purchaser is a corporation duly incorporated
                    and  organized  and  validly  existing  under  the  laws  of
                    Ontario.

              7.2.2 Authority  Relative to  Agreement:  Purchaser has the right,
                    power  and   authority  to   consummate   the   transactions
                    contemplated hereby,  including the execution,  delivery and
                    performance   of  this   Agreement   and   all   agreements,
                    instruments  and  documents  being  or  to be  executed  and
                    delivered by Purchaser in connection with such  transactions
                    and the  performance  of all  obligations  of Purchaser that
                    arise under this  Agreement or under such other  agreements,
                    instruments  or documents  or in  connection  herewith,  and
                    execution   and   delivery   of  this   Agreement   and  the
                    consummation of the  transactions  contemplated  herein have


                                       22

<PAGE>



                    been duly and  effectively  authorized  and  approved by all
                    necessary corporate action. This Agreement constitutes,  and
                    each such other agreement,  instrument,  and document,  upon
                    due  execution  by  Purchaser  will  constitute,  the legal,
                    valid,  and  binding  obligation  of  Purchaser  enforceable
                    against Purchaser,  in accordance with its respective terms,
                    subject to applicable  bankruptcy,  insolvency,  moratorium,
                    reorganization,  and other laws or equitable  principles  of
                    general  application   affecting  the  rights  of  creditors
                    generally. The Board of Directors of Purchaser have approved
                    the consummation of the transactions contemplated hereby.

              7.2.3 No Breach  Caused by this  Agreement:  Neither the execution
                    nor  delivery  of  this  Agreement  nor  the  fulfilment  or
                    compliance  with  any of the  terms  hereof  will,  with  or
                    without the giving of notice and/or the passage of time, (i)
                    conflict   with,  or  result  in  a  breach  of  the  terms,
                    conditions or provisions  of, or constitute a default under,
                    the  articles or by-laws,  as amended,  of  Purchaser or any
                    contract  to  which  Purchaser  is a party or by which it is
                    bound or any judgment, decree or order to which Purchaser is
                    subject or by which it is bound, or (ii) require any consent
                    or other action by any  administrative or governmental body.
                    The  execution,  delivery and  performance of this Agreement
                    and compliance with the provisions  hereof by Purchaser will
                    not violate any provision of law or any  regulation by which
                    Purchaser is bound.

     7.3   Survival:    Except   as   otherwise   specifically   provided,   all
representations,   warranties,   covenants  and  agreements  contained  in  this
Agreement  on the part of each of the parties  shall  survive the  Closing,  the
execution  and  delivery  of any  bills  of  sale,  instruments  of  conveyance,
assignments or other  instruments  for transfer of title to any of the Purchased
Assets and the payment of the consideration  therefor and shall continue in full
force and  effect  for the  benefit  of the  respective  party,  subject  to the
following provisions:

                    (a)  in  respect to any Claim  arising  under  Section  8.1,
                         other   than   a   Claim    based   upon    intentional
                         misrepresentation or fraud, or pertaining to Taxes, for
                         a period of three (3) years following the Closing Date;
                         and

                    (b)  in respect to any Claim  arising  under  Section 8.5 or
                         any Claim based upon intentional  misrepresentation  or
                         fraud, or pertaining to Taxes, for an unlimited period.




                                       23

<PAGE>



                                    ARTICLE 8
                                    INDEMNITY

     8.1  Indemnity  of  Purchaser:  Subject  to the  limitations  set  forth in
sections  7.3 and 8.4  hereof,  each of Vendor and  Parent  hereby  jointly  and
severally covenants and agrees to indemnify and save harmless Purchaser from and
against all claims, demands, actions, causes of action, liabilities, obligations
(including,  without limitation, any removal or remedial action required by law,
regulation or order) damages,  losses,  costs and expenses  (including,  without
limitation,  reasonable legal fees) (hereinafter sometimes collectively referred
to as the  "Claims")  which may be made or brought  against  Purchaser  or which
Purchaser  may suffer or incur as a result  of, in respect of or arising  out of
any matter or thing  relating to: (i) the conduct of the  Business  prior to the
Closing Date,  including,  without limitation,  the pre-Closing Date liabilities
set forth on the balance sheet included in the Vendor  Financial  Statements and
incurred in the ordinary  course of business;  (ii) any  non-fulfillment  of any
covenant or agreement on the part of Vendor, Parent or Tanknology-USA under this
Agreement;  (iii) any breach of any representation or warranty of Vendor, Parent
or  Tanknology-USA  contained  herein or in any  certificate  or other  document
furnished by Vendor,  Parent or  Tanknology-USA  pursuant to this Agreement;  or
(iv) Claims in respect of  litigation or  threatened  litigation  whether or not
referred  to in  Schedule  7.1.16,  arising  from  actions of Vendor,  Parent or
Tanknology-USA  (including  a failure  to act)  taken or not taken  prior to the
Closing Date, provided that this section 8.1 shall not cover any Claims relating
to vacation accruals of Employees,  and provided further,  that this section 8.1
shall not be  applicable to any Claim based upon any  representation,  warranty,
covenant or agreement  contained in this Agreement where notice of such Claim is
not  given in  accordance  with  section  8.2  prior to the  expiration  of such
representation,  warranty,  covenant or  agreement  pursuant to section 7.3. For
greater  certainty,  the  provisions  of this Article 8 shall apply to any Claim
arising  under the  indemnity  set out in section 4.4 relating to the Bulk Sales
Act  (Ontario).  Subject  to the  provisions  of  section  10.1,  the  indemnity
provisions of this Article 8 shall be Purchaser's exclusive remedy in respect of
any such Claim.

     8.2 Carriage of Legal  Proceedings:  If a Claim should arise and  Purchaser
wishes to claim indemnification  under section 8.1 hereof,  Purchaser shall give
notice within 30 days of the Purchaser  becoming  aware of such Claim in writing
to Vendor, Parent and Tanknology-USA  stating the nature and basis of the Claim.
Upon receipt of such notice,  Vendor,  Parent and Tanknology-USA  shall have the
right by notice to  Purchaser  not later than thirty  days after  receipt of the
initial notice described above, to assume control of the defense,  compromise or
settlement of any Claim,  provided that such assumption  shall, by its terms, be
without cost to Purchaser,  subject to the right of  reimbursement  provided for
below.  Upon assumption of control by Vendor,  Parent and/or  Tanknology-USA  as
aforesaid,  such indemnifying party or parties shall at their expense diligently
proceed with the  defense,  compromise  or  settlement  of the Claim,  including
employment of counsel  reasonably  satisfactory  to Purchaser and, in connection
therewith,   Purchaser   shall  cooperate  fully  but  at  the  expense  of  the
indemnifying  party or parties to make  available to the  indemnifying  party or
parties all pertinent  information and witnesses under the control of Purchaser,
make such assignments and take such other steps as in the opinion of Purchaser's
Counsel,  acting  reasonably,  are necessary to enable the indemnifying party or
parties to  conduct  such  defense,  provided  always  that  Purchaser  shall be


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<PAGE>




entitled to reasonable  security from the indemnifying  party or parties for any
expense,  cost and other  liabilities  to which  each of them may or may  become
exposed by reason of such cooperation.

     8.3 Settlement: In the event that Vendor, Parent and/or Tanknology-USA have
assumed  the  defense of any Claim and have  obtained  or  received  an offer to
compromise  or settle  such  Claim on terms and  conditions  acceptable  to such
indemnifying  party or parties (which offer  provides for a monetary  settlement
and any  non-monetary  terms or conditions  that are not material and adverse to
the interests of Purchaser) and Purchaser  refuses for any reason  whatsoever to
agree to the  terms  and  conditions  of such  compromise  or  settlement,  such
indemnifying  party or  parties  may  continue  to defend the action or claim or
tender the further  defense of such Claim to Purchaser  and, in either case, the
liability of the indemnifying party or parties to Purchaser shall not exceed the
cost of implementation of such compromise or settlement.  If Vendor,  Parent and
Tanknology-USA  do not give notice to  Purchaser  of their desire to control the
defense,  compromise or settlement of any Claim as provided for above, Purchaser
shall be entitled to make such settlement of the Claim as in its sole discretion
may appear  advisable,  and such settlement or any other final  determination of
such third party Claim shall be binding on Vendor, Parent and Tanknology-USA.

     8.4 Limitation on Liability:  The maximum aggregate amount of all liability
of Vendor,  Parent and  Tanknology-USA,  collectively,  pursuant  to section 8.1
herein, and pursuant to each of the other agreements between or among any of the
parties  specifically  referencing  this section 8.4,  other than any  liability
arising  from any  fraudulent  acts of Vendor,  Parent or  Tanknology-USA  or in
respect  of  Taxes,  shall  be  limited  to  the  sum  of  Two  Million  Dollars
($2,000,000.00),  regardless of whether such liability is in the form of payment
or performance obligations.

     8.5 Indemnity of Vendor: Purchaser hereby covenants and agrees to indemnify
and save harmless Vendor,  Parent and Tanknology-USA from and against all Claims
which may be made or brought against Vendor,  Parent or  Tanknology-USA or which
they may suffer or incur as a result  of, in  respect  of or arising  out of any
matter or thing  relating to: (i) the conduct of the Business  after the Closing
Date;  (ii) any  non-fulfillment  of any  covenant or  agreement  on the part of
Purchaser  under  this  Agreement,  (iii) any  breach of any  representation  or
warranty of Purchaser  contained  herein or in any certificate or other document
furnished by Purchaser  pursuant to this  Agreement or (iv) arising from actions
of  Purchaser  (including  failure to act) taken or not taken  after the Closing
Date.  Subject to the  provisions of section 10.1,  the indemnity  provisions of
this  Article  8  shall  be  the   exclusive   remedy  of  Vendor,   Parent  and
Tanknology-USA in respect of any such Claim.


                                    ARTICLE 9
                             POST-CLOSING COVENANTS

     9.1 Corporate Name:  Immediately  following the Closing,  Vendor shall take
all necessary steps and corporate  proceedings as may be necessary to change its
name to a new name which does not contain the word  "Tanknology",  "Vacutect" or
"Sure-Test." Except for the purposes  of carrying out  administrative  functions


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<PAGE>



relating to the wind-up of its financial affairs, Vendor shall not use the words
"Tanknology" or "Tanknology Canada" or any other trade mark or trade name listed
on Schedule  2.1(f) after the Closing Date.  Notwithstanding  the  provisions of
section 7.3 or  anything  else to the  contrary  contained  herein,  the parties
covenant and agree that:

                    (a)  for as long as Purchaser or any successor thereto is in
                         existence,   neither   Parent   nor  any  of   Parent's
                         Affiliates  shall conduct any business of any nature in
                         Canada   under   any   name    containing   the   words
                         "Tanknology", "Vacutect" or "Sure-Test"; and

                    (b)  for as long as Parent or any Affiliate of Parent or any
                         successor  to  Parent  or  any  such  Affiliate  is  in
                         existence,  neither  Purchaser  nor any of  Purchaser's
                         Affiliates  shall  conduct  any  business of any nature
                         outside of Canada under any name  containing  the words
                         "Tanknology", "Vacutect" or "Sure-Test";

     9.2 Motor  Vehicles:  Purchaser  shall be  responsible  for the transfer of
ownership under applicable  motor vehicle  legislation of all motor vehicles and
trailers  owned by Vendor and forming part of the  Purchased  Assets.  Purchaser
shall complete the transfer of such ownership within 30 days of the Closing, and
shall   indemnify  and  save  harmless  Vendor  from  and  against  all  claims,
liabilities,  costs, damages and expenses made against or sustained by Vendor as
a result of Purchaser  operating such motor vehicles and/or  trailers  following
the Closing.

     9.3  Collection  of Accounts  Receivable:  Purchaser  shall use  reasonable
efforts,  consistent  with the practice of a Person  carrying on a business of a
similar  nature to the Business,  for a period of one year following the Closing
Date, to collect those  Accounts  Receivable  owing by customers of the Business
which request  future  services  from the  Purchaser.  Any payments  received by
Purchaser in respect of the Accounts  Receivable  shall be remitted by Purchaser
to Vendor on a monthly basis  together with a written  report in respect of such
collections.  Any payments  received by Purchaser  from  customers in connection
with the conduct of the Business  during the one year following the Closing date
from  customers who are debtors in respect of the Accounts  Receivable  shall be
firstly applied against the applicable  accounts receivable on an oldest invoice
first basis.

     9.4  Administrative  Assistance to Vendor:  Purchaser shall, in addition to
the assistance to be provided  pursuant to section 9.3, for a period of one year
following  the Closing  Date,  provide  reasonable  assistance  to Vendor in the
following administrative matters:

                    (a)  the processing and mailing of test reports to customers
                         of the  Business in respect of all testing and analysis
                         completed  by  Vendor  from  January  1,  1997  to  and
                         including January 31, 1997;

                    (b)  the  preparation  and mailing of all  invoices  for all
                         services  rendered and  products  sold by Vendor in the
                         ordinary course of business from January 1, 1997 to and
                         including January 31, 1997;


                                       26

<PAGE>



                    (c)  the processing  and payment of all accounts  payable of
                         Vendor  relating to the  Business  and  incurred in the
                         ordinary  course  of  business  from  January  1 to and
                         including January 31, 1997,  provided that Vendor shall
                         fund  Purchaser to pay all such accounts  payable prior
                         to the payment  deadline  specified  in the  respective
                         invoice.   Purchaser  shall  be  entitled  to  use  the
                         proceeds of the Accounts Receivable collected on behalf
                         of Vendor  pursuant to the provisions of section 9.3 to
                         satisfy payment of such accounts payable; and

                    (d)  the attendance to limited  accounting  tasks in closing
                         the  books  and   records  of  Vendor  for  the  period
                         commencing  September  30,  1996 and ending on February
                         19, 1997.

The foregoing  assistance to be provided by Purchaser to Vendor shall be without
cost to Vendor  except for any third  party  expenses  necessarily  incurred  in
respect of the performance thereof. Vendor shall remit to Purchaser full payment
of any such third party expenses  forthwith  upon  Purchaser's  written  request
therefor (including delivery of a copy of the related invoice).  Purchaser shall
be entitled to use the proceeds of the Accounts  Receivable  collected on behalf
of Vendor  pursuant to the provisions of section 9.3 to satisfy such third party
expenses.

     9.5 Sure-Test  Western Canadian  Licence:  Parent hereby  acknowledges that
Purchaser has entered into  discussions with Sure Test Canada Ltd., the licencee
under the Western  Canada  Licence  Agreement,  for the purpose of acquiring the
business of such licencee.  If, as a result of such  discussions,  Parent and/or
Pro Eco (as licensor  under the Western  Canada  Licence  Agreement)  receives a
request  from  Purchaser  or the said Sure Test  Canada Ltd.  to  terminate  the
Western Canada Licence Agreement,  Parent shall consent, and shall cause Pro Eco
to consent,  to such termination in  consideration of the increased  licence fee
which would arise under section 6.2 of the Sure-Test Licence  Agreement.  Parent
hereby  waives,  and  agrees  to cause  Pro Eco to  waive,  any and all of their
respective   rights  contained  in  the  Western  Canada  Licence  Agreement  to
repurchase  any  equipment  and other  assets owned and used by Sure Test Canada
Ltd. in the operation of its business.


                                   ARTICLE 10
                                   ARBITRATION

     10.1  Arbitration:  Any dispute between the parties that cannot be resolved
by  discussion  between  the  parties  hereto,  shall be  submitted  to  binding
arbitration.  The arbitration shall be held in the Province of Ontario and shall
be settled in accordance with the provisions of the Arbitration Act (Ontario) or
The  International  Commercial  Arbitration Act (Ontario),  as  appropriate.  An
arbitrator  shall be  selected  by the  parties  within  thirty  (30) days after
written  notice is received  from any other party hereto  invoking  this section
10.1 (the "Arbitration Notice Date"). If the parties are unable to agree upon an
arbitrator  on or before thirty (30) days after such written  notice,  any party
hereto may apply to a judge of the Ontario Court of Justice  (General  Division)
to choose an arbitrator.  There shall be a single arbitrator who shall order the
full  exchange  of  documents   before  the   commencement  of  any  arbitration


                                       27

<PAGE>




proceedings, but no other discovery process shall be permitted. It is the intent
of the parties  that the  arbitration  shall be concluded  as  expeditiously  as
possible.  The  arbitrator  shall be  instructed  that time is of the essence in
proceeding  with  the  determination  of the  dispute  and,  in any  event,  the
arbitrator's decision shall be rendered within thirty (30) days of the selection
of an arbitrator.  The arbitration  award shall be given in writing and shall be
final and  binding on the  parties,  and not  subject to any  appeal,  provided,
however,  that the  arbitrator  shall have no  authority  to award  punitive  or
consequential damages under any circumstances regardless of whether such damages
may be  available  under the laws of the  Province of Ontario or the  applicable
laws of Canada,  the parties  hereby  waiving  their  right,  if any, to recover
punitive or consequential damages in connection with any dispute submitted to an
arbitrator pursuant to this section 10.1. The arbitrator shall have the right to
award costs of the arbitration.  Judgment upon the award rendered may be entered
in any court of competent jurisdiction, or application may be made to such court
for judicial recognition of the award or an order of enforcement thereof, as the
case may be.


                                                    ARTICLE 11
                                                      GENERAL

     11.1 Further Assurances: Each of the parties hereto shall from time to time
at the other's  request and expense and without further  consideration,  execute
and deliver such other  instruments  of transfer,  conveyance and assignment and
take such further action as the other may require to more  effectively  complete
any matter provided for herein.

     11.2 Entire  Agreement:  This Agreement  constitutes  the entire  agreement
between the parties  hereto  pertaining  to the subject  matter hereof except as
specifically  set forth or referred to herein.  This  Agreement  supersedes  any
prior or contemporaneous agreements, negotiations and discussions of the parties
in respect of the subject matter hereof,  including without  limitation a letter
of intent dated November 6, 1996. No amendment or waiver of this Agreement shall
be binding  unless  executed in writing by the parties and no such  amendment or
waiver shall extend to anything other than the specific  subject matter thereof.
The  failure  at any time of any party to insist  on strict  performance  of any
provision of this Agreement  shall not limit the ability of that party to insist
at any  future  time  whatsoever  on the  performance  of the same or any  other
provision  (except  insofar as that  party may have given a valid and  effective
written waiver or release).

     11.3 Invalidity of Provisions:  The invalidity or  unenforceability  of any
provision of this Agreement shall not affect the validity or  enforceability  of
any other provision hereof and any such invalid or unenforceable provision shall
be deemed to be severable.

     11.4  Applicable  Law:  This  Agreement  shall be governed and construed in
accordance  with the laws of the  Province  of  Ontario  and the laws of  Canada
applicable therein.



                                       28

<PAGE>



     11.5 Notices:  Any notice required or permitted to be given hereunder shall
be in writing and shall be  effectively  given if (i) delivered  personally,  or
(ii) sent on any Business Day by telecopier, addressed, as follows:

                    (a)  in the case of notice  to  Parent,  Tanknology-USA,  or
                         Vendor,

                           Tanknology/NDE Corporation
                        8900 Shoal Creek Blvd., Bldg. 200
                               Austin, Texas 78757

                         Attention:       President, Dan Sharplin
                         Telecopier:      (512) 459-1459

                    (b)  with a copy to:

                          NDE Environmental Corporation
                           712 Main Street, Suite 1700
                              Houston, Texas 77002

                         Attention:       Chairman, Jay Allen Chaffee
                         Telecopier:      (713) 223-5379

                    (c)  and in the case of notice to  Purchaser,  addressed  as
                         follows:

                         Precision Tank Testing Limited
                          2550 Argentia Road, Suite 215
                         Mississauga, Ontario
                         L5N 5R1

                         Attention:       Mr. David Lowndes, President
                         Telecopier:      (905) 826-5315

and in all cases so sent by means of electronic communication, so confirmed. Any
notice so given is deemed  conclusively  to have been given and  received on the
date  when so  personally  delivered  or  sent by  telex,  telecopier  or  other
electronic communication.  Any party hereto or others mentioned above may change
any  particulars  of its  address  for  notice by  notice  of at least  five (5)
Business Days to the others in the manner aforesaid.

     11.6 No Brokers: None of the parties to this Agreement has entered into any
agreement  that would  entitle  any Person to any valid  claim  against any such
party or parties for a broker's commission,  finder's fee or any like payment in
respect of the purchase and sale of the  Purchased  Assets or any other  matters
contemplated by this Agreement.



                                       29

<PAGE>



     11.7 Costs and Expenses:  Each party to this Agreement shall be responsible
for its own legal and audit fees and other charges  incurred in connection  with
the purchase and sale of the Purchased Assets,  including,  without  limitation,
the preparation of this Agreement,  all negotiations  between the parties hereto
and the consummation of all transactions contemplated hereunder.

     11.8  Announcements:   All  public  announcements  about  the  transactions
provided for herein or  contemplated  hereby,  or about the  termination of this
Agreement  prior to the  Closing  Date for any  reason,  shall be approved as to
form, content and timing by Vendor and Purchaser.

     11.9 Time of the  Essence:  Time shall be of the essence with regard to the
performance of obligations set forth in this Agreement.

     11.10  Successors and Assigns:  This Agreement enures to the benefit of and
is binding upon the parties hereto and their respective successors and permitted
assigns.  No party  hereto may assign  any of its  rights  under this  Agreement
without the prior written consent of the other parties hereto.

     11.11  Counterparts:  This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed to be an  original  and which taken
together shall be deemed to constitute one and the same instrument.




                                       30

<PAGE>


     IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.

                                               PRECISION TANK TESTING LIMITED



                                               Per:    //s// DAVID LOWNDES
                                                        David Lowndes,
                                                        President

                                               TANKNOLOGY CANADA (1988) INC.



                                               Per:    //s// JAY ALLEN CHAFFEE
                                                        Jay Allen Chaffee,
                                                        President

                                               NDE ENVIRONMENTAL CORPORATION



                                               Per:    //s// JAY ALLEN CHAFFEE
                                                        Jay Allen Chaffee,
                                                        Chairman

                                               TANKNOLOGY/NDE CORPORATION



                                               Per:    //s// JAY ALLEN CHAFFEE
                                                        Jay Allen Chaffee,
                                                        Chairman




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