EXHIBIT 10.4
SECOND AMENDMENT TO SECURITY
AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT
(this “ Amendment ”) is executed as of
May 29, 2009, by DEEP DOWN, INC., a Nevada corporation (“
Parent ”), ELECTROWAVE USA, INC., a Nevada
corporation (“ Electrowave ”), FLOTATION
TECHNOLOGIES, INC., a Maine corporation (“
Flotech ”), MAKO TECHNOLOGIES, LLC, a Nevada
limited liability company (“ Mako ”), and
DEEP DOWN INC., a Delaware corporation (“ DD
Delaware ,” and together with Parent, Electrowave,
Flotech, and Mako, collectively, “ Debtor
”), for the benefit of WHITNEY NATIONAL BANK, a national
banking association (“ Secured Party
”). Capitalized terms used but not defined in this
Amendment have the meanings given them in the Security Agreement
(defined below).
RECITALS
A. Parent,
as borrower (in such capacity, “ Borrower
”), and Secured Party, as lender, have entered into that
certain Credit Agreement dated as of November 11, 2008 (as amended
by that certain First Amendment to Credit Agreement dated as of
December 18, 2008, that certain Second Amendment to Credit
Agreement dated as of February 13, 2009, that certain Third
Amendment to Credit Agreement dated as of the date hereof, and as
further amended, restated, or supplemented, the “
Credit Agreement ”).
B. To
further secure the obligations of Borrower under the Credit
Agreement, Electrowave, Flotech, Mako, and DD Delaware executed
that certain Guaranty dated as of November 11, 2008 (as amended,
restated, or supplemented, the “ Guaranty
”) for the benefit of Secured Party, together with certain
other Loan Documents.
C. To
further secure their respective obligations under the Credit
Agreement and Guaranty, each Debtor executed that certain Security
Agreement dated as of November 11, 2008 (as amended by that certain
First Amendment to Security Agreement dated as December 18, 2008,
and as further amended, restated, or supplemented, the “
Security Agreement ”).
D. Debtors
and Secured Party have agreed to amend the Security Agreement,
subject to the terms and conditions of this Amendment.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are
acknowledged, the undersigned hereby agree as follows:
1. Exhibits
and Schedules . Schedule 1 to the
Security Agreement is hereby deleted in its entirety and replaced
with Schedule 1 to this Amendment.
2.
Representations and Warranties . Each Debtor
represents and warrants to Secured Party that (a) it possesses all
requisite power and authority to execute, deliver and comply with
the terms of this Amendment, (b) this Amendment has been duly
authorized and approved by all requisite corporate action on the
part of Parent, (c) no other consent of any Person (other than
Secured Party) is required for this Amendment to be effective, (d)
the execution and delivery of this Amendment does not violate its
organizational documents, (e) the representations and warranties in
each Loan Document to which it is a party are true and correct in
all material respects on and as of the date of this Amendment as
though made on the date of this Amendment ( except to the
extent that such representations and warranties speak to a specific
date), (f) it is in full compliance with all covenants and
agreements contained in each Loan Document to which it is a party,
and (g) no Default or Potential Default has occurred and is
continuing. The representations and warranties made in
this Amendment shall survive the execution and delivery of this
Amendment. No investigation by Secured Party is required
for Secured Party to rely on the representations and warranties in
this Amendment.
3. Scope of
Amendment; Reaffirmation; Release . All references
to the Security Agreement shall refer to the Security Agreement as
amended by this Amendment. Except as effected by this
Amendment, the Security Agreement is unchanged and continues in
full force and effect. Each Debtor hereby reaffirms its
obligations under the Loan Documents to which it is a party and
agrees that all Loan Documents to which they are a party remain in
full force and effect and continue to be legal, valid, and binding
obligations enforceable in accordance with their terms (as the same
are affected by this Amendment). Each Debtor hereby
releases Secured Party from any liability for actions or omissions
in connection with the Credit Agreement, Security Agreement, and
the other Loan Documents prior to the date of this
Amendment.
4.
Miscellaneous .
(a) No
Waiver of Defaults . Except as expressly set out
above, this Amendment does not constitute (i) a waiver of, or a
consent to, (A) any provision of the Credit Agreement, Security
Agreement, or any other Loan Document not expressly referred to in
this Amendment, or (B) any present or future violation of, or
default under, any provision of the Loan Documents, or (ii) a
waiver of Secured Party’s right to insist upon future
compliance with each term, covenant, condition and provision of the
Loan Documents.
(b) Form
. Each agreement, document, instrument or other writing
to be furnished Secured Party under any provision of this Amendment
must be in form and substance satisfactory to Secured Party and its
counsel.
(c)
Headings . The headings and captions used in this
Amendment are for convenience only and will not be deemed to limit,
amplify or modify the terms of this Amendment, the Credit
Agreement, the Security Agreement, or the other Loan
Documents.
(d) Costs,
Expenses and Attorneys’ Fees . Each Debtor
agrees to pay or reimburse Secured Party on demand for all its
reasonable out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation, and execution of this Amendment,
including, without limitation, the reasonable fees and
disbursements of Secured Party’s counsel.
(e)
Successors and Assigns . This Amendment shall be
binding upon and inure to the benefit of each of the undersigned
and their respective successors and permitted assigns.
(f) Multiple
Counterparts . This Amendment may be executed in any
number of counterparts with the same effect as if all signatories
had signed the same document. All counterparts must be
construed together to constitute one and the same
instrument. This Amendment may be transmitted and signed
by facsimile or portable document format (PDF). The
effectiveness of any such documents and signatures shall, subject
to applicable law, have the same force and effect as
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