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EXHIBIT 10.9
STANDBY COMMITMENT
This STANDBY COMMITMENT (this "Agreement") is made as of this
25th day of October, 1996, by and among Proactive Partners, L.P., a California
limited partnership (the "Stockholder"); NDE Environmental Corporation, a
Delaware corporation (the "Borrower"); Banc One Capital Partners, L.P., a Ohio
limited partnership ("BOCP"); and Bank One, Texas, N.A., a national banking
association ("BOT"; BOCP and BOT, collectively, the "Lenders").
WHEREAS, BOT, the Borrower, and certain of the Borrower's
subsidiaries have entered into that certain Loan Agreement dated as of the date
hereof (the "Loan Agreement") whereby BOT has agreed to make certain loans and
other financial accommodations available to the Borrower upon the terms and
conditions therein contained, such loans and accommodations to be evidenced by
a Revolving Note and a Term Note dated as of the date hereof (the "BOT Notes");
WHEREAS, BOCP, the Borrower, and certain of the Borrower's
subsidiaries have entered into that certain Note and Warrant Purchase Agreement
dated as of the date hereof (the "Note Purchase Agreement"; the Loan Agreement
and the Note Purchase Agreement, collectively, the "Credit Agreements") whereby
BOCP has agreed to make certain loans and other financial accommodations
available to the Borrower upon the terms and conditions therein contained, such
loans and accommodations to be evidenced by a Senior Subordinate Note dated as
of the date hereof (the "BOCP Note"; the BOT Notes and the BOCP Note,
collectively, the "Notes");
WHEREAS, the Borrower, BOCP and BOT have entered into security
agreements of even date herewith (the "Security Agreements");
WHEREAS, after the consummation of the transactions contemplated
by the Credit Agreements the Stockholder will be the owner of approximately
32.7% of the issued and outstanding shares of Common Stock of the Borrower
(assuming that all shares of common stock of Borrower issuable pursuant to
Warrants under the Warrant Certificate, dated the date hereof, issued to BOCP
by the Borrower were outstanding);
WHEREAS, as the owner of such percentage of the issued and
outstanding Common Stock of the Borrower, the Stockholder will benefit by the
making of the loans and other financial accommodations available to the
Borrower pursuant to the terms and conditions of the Credit Agreements;
WHEREAS, the Stockholder wishes to grant further assurance to the
Lenders regarding the ability of the Borrower to pay its Obligations under the
Credit Agreements, and to that effect the Stockholder agrees to perform the
terms of this Agreement; and
WHEREAS, the execution of this Agreement is a condition precedent
to the Lenders' obligation to fund any loans under the Credit Agreements;
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NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make the loans to the Borrower under the Credit
Agreements 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 any of the Notes as required by either of the Credit
Agreements or any of the Notes, the Stockholder will, at the direction of
either BOCP or BOT, invest One Million Dollars ($1,000,000) in the Borrower by
executing and delivering to the Borrower 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;
provided, the BOCP Note shall be subordinate to the BOT Notes, as provided for
in the Intercreditor Agreement between BOT and BOCP, dated as of even date
herewith.
2. Representations and Warranties. The Stockholder
represents and warrants to the Lenders 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;
(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"),
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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 the Credit Agreements, the Stockholder will be the beneficial
owner of record of approximately 32.7% of the issued and outstanding Common
Stock of the Borrower (assuming that all shares of common stock of Borrower
issuable pursuant to Warrants under the Warrant Certificate, dated the date
hereof, issued to BOCP by the Borrower 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 Lenders and
the Borrower, inure to the benefit of the Lenders 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 Ohio.
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 Lenders. All covenants, agreements,
representations and warranties made herein shall, notwithstanding any
investigation by the Lenders, be deemed to be material to and to have been
relied upon by the Lenders.
7. Waiver. The Lenders' 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 Lenders
thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by the Lenders 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 Lenders, unless such suspension or waiver is in
writing and signed by an officer of each of BOT and BOCP, and directed to the
other parties hereto, specifying such suspension or waiver. This
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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 BOCP, at:
Banc One Capital Partners, L.P.
00 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attention: _______________________
(ii) If to the Stockholder, at:
Proactive Partners, L.P.
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx XxXxxxxxxx
(iii) If to BOT, at:
Bank One, Texas, N.A.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx-Xxxxx
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(iv) If to Borrower, at:
NDE Environmental Corporation
0000 Xxxxx Xxxxx Xxxx. 000
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx Xxxxxxx
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 Lenders 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.
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/ XXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxx X. XxXxxxxxxx
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Title: General Partner
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BANC ONE CAPITAL PARTNERS, L.P.
By: BOCP Corporation, its General Partner
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Authorized Signer
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BANK ONE, TEXAS, N.A.
By: /s/ XXXXXXX XXXXXXXXX-XXXXX
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Name: Xxxxxxx Xxxxxxxxx-Xxxxx
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Title: Vice President
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NDE ENVIRONMENTAL CORPORATION
By: /s/ XXX XXXXX XXXXXXX
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Name: Xxx Xxxxx Xxxxxxx
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Title: Chairman of the Board
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Exhibit "A"
PROMISSORY NOTE
THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE
SUBORDINATE TO: (A) THE PROMISSORY NOTES EXECUTED AND
DELIVERED BY NDE ENVIRONMENTAL CORPORATION (THE "BORROWER") TO
BANK ONE, TEXAS, N.A. ("BOT"), PURSUANT TO THAT CERTAIN LOAN
AGREEMENT DATED AS OF OCTOBER __, 1996, BETWEEN BOT, THE
BORROWER, AND CERTAIN OF THE BORROWER'S SUBSIDIARIES; AND (B)
THE PROMISSORY NOTE EXECUTED AND DELIVERED BY THE BORROWER AND
CERTAIN OF BORROWER'S SUBSIDIARIES TO BANC ONE CAPITAL
PARTNERS, L.P., ("BOCP") PURSUANT TO THAT CERTAIN NOTE AND
WARRANT PURCHASE AGREEMENT DATED AS OF OCTOBER __, 1996,
BETWEEN BOCP, THE BORROWER, AND CERTAIN OF THE BORROWER'S
SUBSIDIARIES, IN THE MANNER AND TO THE EXTENT SET FORTH IN
THAT CERTAIN INTERCREDITOR AGREEMENT, DATED AS OF OCTOBER __,
1996, BETWEEN BOT AND BOCP, AND NO PAYMENTS SHALL BE MADE ON
THIS NOTE OR OF THE INDEBTEDNESS EVIDENCED HEREBY SO LONG AS
ANY INDEBTEDNESS OUTSTANDING UNDER THE NOTES AND AGREEMENTS
REFERRED TO IN (A) OR (B) PRECEDING SHALL BE OUTSTANDING.
THIS NOTE SHALL NOT BE SOLD, ASSIGNED, NEGOTIATED OR CONVEYED,
BY OPERATION OF LAW OR OTHERWISE, WITHOUT THE EXPRESS WRITTEN
CONSENT OF, AND UPON THE TERMS AND CONDITIONS SATISFACTORY TO
BOT AND BOCP.
$1,000,000.00
FOR VALUE RECEIVED, the undersigned, NDE ENVIRONMENTAL
CORPORATION, a Delaware corporation (the "Borrower"), subject to the
limitations and express subordination above, HEREBY PROMISES TO PAY to the
order of PROACTIVE PARTNERS, L.P., a limited partnership organized under the
laws of the State of California (the "Payee"), on or before June 30, 2002 (the
"Maturity Date"), the principal sum of ONE MILLION and No/100 Dollars
($1,000,000.00) together with interest on the unpaid balance thereof from the
date hereof until maturity, at a rate per annum (based on a year of 365 or 366
days, as the case may be) which shall be equal to the lesser of (i) _____% per
annum or (ii) the nonusurious interest rate as in effect from time to time
which may be contracted for, charged, reserved or received by Payee (the
"Highest Lawful Rate").
The outstanding principal balance of this Note, together with
all accrued and unpaid interest thereon, shall be due and payable on the
Maturity Date. The Borrower promises to pay interest on the unpaid principal
balance of this Note from the date hereof until the principal balance thereof
is paid in full.
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Payments of principal and interest shall be made in lawful
money of the United States of America in immediately available funds, without
deduction, set-off or counterclaim to the Payee.
All agreements between the Borrower and the Payee, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
demand being made on this Note or otherwise, shall the amount contracted for,
charged, reserved or received by the Payee for the use, forbearance, or
detention of the money evidenced by this Note or otherwise, exceed the Highest
Lawful Rate. If, as a result of any circumstances whatsoever, fulfillment of
any provision hereof or otherwise, at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
applicable usury law or result in the Payee having or being deemed to have
contracted for, charged, reserved or received interest (or amounts deemed to be
interest) in excess of the maximum lawful rate or amount of interest allowed by
applicable law to be so contracted for, charged, reserved or received by the
Payee, then, ipso facto, the obligation to be fulfilled by the Borrower shall
be reduced to the limit of such validity, and if, from any such circumstance,
the Payee shall ever receive interest or anything which might be deemed
interest under applicable law which would exceed the Highest Lawful Rate, such
amount which would be excessive interest shall be refunded to the Borrower, or
to the extent (i) permitted by applicable law and (ii) such excessive interest
does not exceed the unpaid principal balance of this Note, applied to the
reduction of the principal amount owing on account of this Note and not to the
payment of interest. In determining whether or not the interest paid or
payable under any specific contingencies exceeds the Highest Lawful Rate, the
Borrower and the Payee shall, to the maximum extent permitted under applicable
law, (a) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest; (b) exclude voluntary prepayments and the effects
thereof; and (c) amortize, prorate, allocate and spread in equal parts during
the period of the full stated term of this Note until payment in full of the
principal thereof (including the period of any renewal or extension thereof),
all interest at any time contracted for, charged, reserved or received in
connection with the indebtedness evidenced by this Note.
If Borrower does not pay when due any principal, interest or
fees, if any, on or with respect to the Indebtedness (as defined below)
evidenced by this Note, then, subject to the terms and conditions of the Loan
Agreement, the holder of this Note may, by notice in writing to Borrower (given
by United States mail, postage prepaid, at any address for Borrower known to
Payee at the time such notice is given) declare the outstanding principal
balance of this Note, together with any other sums that Borrower may owe to
Payee under or in connection with this Note (collectively, the "Indebtedness")
to be, and thereupon the Indebtedness shall forthwith become, due and payable
together with accrued interest thereon without further notice of any kind to
Borrower.
The Borrower and any and all endorsers, guarantors and
sureties severally waive grace, demand, presentment for payment, notice of
dishonor or default, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and diligence in collecting and bringing of
suit against any party hereto, and agree to all renewals, extensions or partial
payments hereon and to
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any release or substitution of security hereof, in whole
or in part, with or without notice, before or after maturity.
This Note is unsecured.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF __________ AND APPLICABLE FEDERAL LAW.
THIS WRITTEN AGREEMENT REPRESENTS 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 Borrower has caused this Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
NDE ENVIRONMENTAL CORPORATION
By:
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Name:
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Title:
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