Document:

exv4w1

Exhibit 4.1

EXECUTION VERSION

AMENDMENT NO. 10

     This Amendment No. 10 (“Agreement”) dated as of August 25, 2009 (“Effective
Date”) is among Mariner Energy, Inc., a Delaware corporation (the “Parent”), Mariner
Energy Resources, Inc., a Delaware corporation (“Mariner Energy Resources” and together
with the Parent, the “Borrowers”, each a “Borrower”), the Lenders (as defined in
the Credit Agreement described below), and Union Bank, N.A. (f/k/a Union Bank of California, N.A.)
as administrative agent (in such capacity, the “Administrative Agent”) and as issuing
lender (in such capacity, the “Issuing Lender”).

RECITALS

     A. The Borrowers, the Lenders, the Issuing Lender and the Administrative Agent are parties to
the Amended and Restated Credit Agreement dated as of March 2, 2006, as amended by Amendment No. 1
and Consent dated as of April 7, 2006, Amendment No. 2 dated as of October 13, 2006, Amendment No.
3 and Consent dated as of April 23, 2007, Amendment No. 4 dated as of August 24, 2007, Amendment
No. 5 and Agreement dated as of January 31, 2008, Master Assignment, Agreement and Amendment No. 6
dated as of June 2, 2008, Amendment No. 7 dated as of December 12, 2008, Amendment No. 8 and
Consent dated as of March 24, 2009, and Amendment No. 9 dated as of June 15, 2009 (as so amended
and as the same may be further amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”). Each term defined in the Credit Agreement and used herein
without definition shall have the meaning assigned to such term in the Credit Agreement, unless
expressly provided to the contrary.

     B. The Parent has notified the Administrative Agent in writing that it wishes to form a new,
wholly-owned subsidiary as a corporation under the laws of the province of British Columbia, Canada
(the “Canadian Subsidiary”).

     C. Section 5.08 of the Credit Agreement requires that each Borrower and Subsidiary grant
certain Acceptable Security Interests to the Administrative Agent, and Section 5.10 requires
Borrowers to deliver certain title opinions reflecting that the Administrative Agent has an
Acceptable Security Interest in certain Oil and Gas Properties.

     D. Section 6.03(a) of the Credit Agreement prohibits any Borrower or Subsidiary from certain
arrangements that restrict Liens on its Property to secure the Obligations.

     E. Section 6.04(b) of the Credit Agreement prohibits certain Property dispositions.

     F. Section 6.10 of the Credit Agreement restricts a Borrower from permitting its Subsidiaries
to operate or carry on business in any jurisdiction other than the United States.

     G. Section 6.15 of the Credit Agreement requires that a Borrower give the Administrative Agent
prior written notice of the creation of a new Subsidiary, that such new Subsidiary execute and
deliver a Guaranty and at the Administrative Agent’s request, Security Instruments, and that a
holder of Equity Interest of such new Subsidiary execute and deliver a Pledge Agreement.

     H. In connection with the formation of the Canadian Subsidiary, the Borrowers have requested
that the Lenders consent to the formation of the Canadian Subsidiary, waive certain requirements
under Sections 5.08, 5.10, 6.03(a), 6.04(b) and 6.15, and amend the restriction in Section 6.10.

     THEREFORE, the Borrowers, the subsidiaries of the Borrowers signatory hereto (the
“Guarantors”), the Lenders, the Issuing Lender and the Administrative Agent hereby agree as
follows:

 

 

ARTICLE I.

DEFINITIONS

     Section 1.01 Terms Defined Above. As used in this Agreement, each of the terms
defined in the opening paragraph and the Recitals above shall have the meanings assigned to such
terms therein.

     Section 1.02 Other Definitional Provisions. The words “hereby”, “herein”,
“hereinafter”, “hereof”, “hereto” and “hereunder” when used in this Agreement shall refer to this
Agreement as a whole and not to any particular Article, Section, subsection or provision of this
Agreement. Article, Section, subsection and Exhibit references herein are to such Articles,
Sections, subsections and Exhibits of this Agreement unless otherwise specified. All titles or
headings to Articles, Sections, subsections or other divisions of this Agreement or the exhibits
hereto, if any, are only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such Articles, Sections, subsections, other
divisions or exhibits, such other content being controlling as the agreement among the parties
hereto. Whenever the context requires, reference herein made to the single number shall be
understood to include the plural; and likewise, the plural shall be understood to include the
singular. Words denoting sex shall be construed to include the masculine, feminine and neuter,
when such construction is appropriate; and specific enumeration shall not exclude the general but
shall be construed as cumulative. Definitions of terms defined in the singular or plural shall be
equally applicable to the plural or singular, as the case may be, unless otherwise indicated.

ARTICLE II.

WAIVER

     The Lenders hereby agree, subject to the terms and conditions of this Agreement, to waive (a)
the requirements in Sections 5.08, 5.10 and 6.15(b) of the Credit Agreement that the Canadian
Subsidiary execute and deliver a Guaranty and Security Instruments or pertaining to the existence
of an Acceptable Security Interest in Property of the Canadian Subsidiary, (b) the application of
Sections 6.03(a) and 6.04(b) to the Canadian Subsidiary, and (c) the requirement in Section 6.15(c)
that the Parent execute and deliver a Pledge Agreement pledging its Equity Interest in the Canadian
Subsidiary; provided that, the Parent must execute and deliver a Pledge Agreement pledging
65% of its Equity Interest in the Canadian Subsidiary (the “Canadian Pledge Agreement”).
The waiver by the Lenders described in this Article 2 is limited to the extent described above and,
except for the waivers expressly described above, shall not otherwise be construed to be a
permanent waiver of Sections 5.08, 5.10, 6.03, 6.04 and 6.15 of the Credit Agreement or any other
terms, provisions, covenants, warranties or agreements contained in any Loan Document that do not
conflict with the waivers given in this Article 2.

ARTICLE III.

AMENDMENT

     Section 3.01 Section 1.01 of the Credit Agreement is hereby amended by adding the following
new defined terms in alphabetical order:

     “Canadian Subsidiary” means a wholly-owned subsidiary of Parent formed as a
corporation under the laws of the province of British Columbia, Canada.

     “Non-Obligor Entity” means the Canadian Subsidiary which is not an Obligor.

Page 2

 

     Section 3.02 Section 6.02 of the Credit Agreement is hereby amended by deleting the “and” at
the end of clause (j), by replacing the “.” at the end of clause (k) with “;”, and by adding the
following new clauses (l), (m) and (n) to the end thereof:

     (l) Debt owing by the Canadian Subsidiary to an Obligor pursuant to Section 6.06(l);

     (m) Debt owing by an Obligor to the Canadian Subsidiary which together with the amount
of investments, loans and advances permitted by Section 6.06(l), does not in the aggregate
exceed $25,000,000 outstanding at any time;

     (n) Guaranties by an Obligor incurred on behalf of the Canadian Subsidiary, which
together with the amount of investments, loans and advances permitted by Section 6.06(l),
does not in the aggregate exceed $25,000,000 outstanding at any time.

     Section 3.03 Section 6.06 of the Credit Agreement is hereby amended by deleting the “and” at
the end of clause (j), by replacing the “.” at the end of clause (k) with “; and”, and by adding
the following new clause (l) to the end thereof:

     (l) investments, loans and advances to a Non-Obligor Entity, which together with the
amount of Debt permitted by Sections 6.02(m) and 6.02(n), does not in the aggregate exceed
$25,000,000 outstanding at any time.

     Section 3.04 Section 6.10 of the Credit Agreement is hereby amended by deleting the second
sentence and replacing it with the following new sentence:

     No Borrower shall, nor shall any Borrower permit any of its Subsidiaries to, operate
or carry on business in any jurisdiction other than the United States, including the Gulf
of Mexico, except that the Canadian Subsidiary is permitted to operate and carry on
business in Canada.

     Section 3.05 Article VI of the Credit Agreement is hereby amended by adding the following new
Section 6.19:

     Section 6.19 Non-Obligor Entities. Notwithstanding anything to the contrary
contained herein except Sections 6.02(m), 6.02(n) and 6.06(l), including any provision of
this Article VI other than Sections 6.02(m), 6.02(n) and 6.06(l), no Borrower shall, nor
shall it permit any of its Subsidiaries, other than any Non-Obligor Entity, to, (a) create,
assume, incur or suffer to exist any Lien on or in respect of any of its Property for the
benefit of any Non-Obligor Entity, (b) sell, assign, pledge, or otherwise transfer any of
its Properties to any Non-Obligor Entity except for software and other licenses and transfer
of immaterial rights and property that are used in the ordinary course of business to assist
in the operation or administration of the Canadian Subsidiary, or (c) make or permit to
exist any loans, advances, or capital contributions to, or make any investment in, or
purchase or commit to purchase any stock or other securities or evidences of indebtedness of
or interests in, any Non-Obligor Entity or in any Properties of any Non-Obligor Entity other
than the Debt permitted by Sections 6.02(m) and 6.02(n) and the investments, loans and
advances permitted by Section 6.06(l).

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

     Section 4.01 Borrowers Representations and Warranties. Each of the Borrowers
represents and warrants that: (a) its representations and warranties contained in Article IV of the
Credit

Page 3

 

Agreement and its representations and warranties contained in the Security Instruments, the
Guaranties, and each of the other Loan Documents to which it is a party are true and correct in all
material respects on and as of the Effective Date, after giving effect to the terms of this
Agreement, as though made on and as of such date, except those representations and warranties that
speak of a certain date, which representations and warranties were true and correct as of such
date; (b) no Default has occurred and is continuing; (c) the execution, delivery and performance of
this Agreement and the other documents, instruments, certificates and agreements (“Other
Documents”) required to be delivered by this Agreement and to which each of the Borrowers is a
party are within the corporate power and authority of each of the Borrowers and have been duly
authorized by appropriate corporate action and proceedings; (d) this Agreement and the Other
Documents to which each of the Borrowers is a party constitute legal, valid, and binding
obligations of such Borrower enforceable in accordance with their respective terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity; (e) there are no governmental
or other third party consents, licenses and approvals required in connection with the execution,
delivery, performance, validity and enforceability of this Agreement or any of the Other Documents;
and (f) the Liens under the Security Instruments are valid and subsisting and secure each of the
Borrowers’ obligations under the Loan Documents.

     Section 4.02 Guarantors Representations and Warranties. Each Guarantor represents and
warrants that: (a) its representations and warranties contained in Article IV of the Credit
Agreement and its representations and warranties contained in the Security Instruments, the
Guaranties, and each of the other Loan Documents to which it is a party are true and correct in all
material respects on and as of the Effective Date, as though made on and as of such date, except
those representations and warranties that speak of a certain date, which representations and
warranties were true and correct as of such date; (b) no Default has occurred and is continuing;
(c) the execution, delivery and performance of this Agreement and the Other Documents to which such
Guarantor is a party are within the corporate power and authority of such Guarantor and have been
duly authorized by appropriate corporate action and proceedings; (d) this Agreement and the Other
Documents to which such Guarantor is a party constitute legal, valid, and binding obligations of
such Guarantor enforceable in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights
of creditors generally and general principles of equity; (e) there are no governmental or other
third party consents, licenses and approvals required in connection with the execution, delivery,
performance, validity and enforceability of this Agreement or any of the Other Documents; (f) it
has no defenses to the enforcement of its Guaranty; and (g) the Liens under the Security
Instruments are valid and subsisting and secure such Guarantor’s obligations under the Loan
Documents.

ARTICLE V.

CONDITIONS

     This Agreement shall become effective and enforceable against the parties hereto upon the
occurrence of the following conditions precedent:

     Section 5.01 Documents. The Administrative Agent shall have received multiple
original counterparts, as requested by the Administrative Agent, of this Agreement duly and validly
executed and delivered by duly authorized officers of the Borrowers, the Guarantors, the
Administrative Agent, and the Lenders.

     Section 5.02 Payment of Fees. The Borrowers shall have paid all costs and expenses
that have been invoiced and are payable pursuant to Section 10.04 of the Credit Agreement.

     Section 5.03 No Default. No Default shall have occurred and be continuing.

Page 4

 

     Section 5.04 Representations. The representations and warranties contained in
Article IV of the Credit Agreement and in each other Loan Document shall be true and correct in all
material respects other than such representations and warranties that speak of a certain earlier
date, which representations and warranties shall be true and correct as of such earlier date.

ARTICLE VI.

COVENANTS

     Section 6.01 Documents. Within thirty (30) Business Days of the formation of the
Canadian Subsidiary, the Borrowers agree to deliver, or to cause the Canadian Subsidiary to
deliver, the following documents:

          (a) The Administrative Agent shall have received multiple original counterparts, as requested
by the Administrative Agent, of the Canadian Pledge Agreement duly and validly executed and
delivered by duly authorized officers of the Parent and the Administrative Agent.

          (b) The Administrative Agent shall have received stock or, to the extent applicable under the
Canadian Subsidiary’s organizational documents, membership or partnership interest certificates
required in connection with the Canadian Pledge Agreement and stock powers executed in blank for
each such stock certificate endorsed in blank to the Administrative Agent.

          (c) The Administrative Agent shall have received a favorable opinion of the Borrowers’ local
counsel in the province of British Columbia, Canada in form and substance reasonably satisfactory
to the Administrative Agent and the Lenders and covering such matters as the Administrative Agent
may reasonably request.

          (d) The Administrative Agent shall have received copies, certified by a Responsible Officer of
the Parent of (i) a certificate stating that the resolutions of the board of directors of the
Parent certified to the Administrative Agent on January 31, 2008 are in full force and effect
without modification or amendment, (ii) the certificate of incorporation and the bylaws or similar
governing documents of the Canadian Subsidiary and (iii) all other documents evidencing other
necessary corporate action and governmental approvals required by law, if any, with respect to the
Canadian Pledge Agreement and the formation of the Canadian Subsidiary.

     Section 6.02 Effect on Permitted Investments and Debt. Notwithstanding anything
contained in this Agreement, until the Borrowers have delivered, or caused the Canadian Subsidiary
to deliver, all documents required by Section 6.01 of this Agreement, the amount of investments,
loans and advances otherwise permitted by Section 6.06(l) of the Credit Agreement, together with
the Debt permitted by Sections 6.02(m) and 6.02(n) of the Credit Agreement shall not in the
aggregate exceed $5,000,000 outstanding at any time.

     Section 6.03 Event of Default. Failure to comply with Section 6.01 of this Agreement
shall constitute an Event of Default under the Credit Agreement.

ARTICLE VII.

MISCELLANEOUS

     Section 7.01 Effect on Loan Documents; Acknowledgments.

          (a) Each of the Borrowers acknowledges that on the date hereof all Obligations are payable
without defense, offset, counterclaim or recoupment.

Page 5

 

          (b) The Administrative Agent, the Issuing Lender, and the Lenders hereby expressly reserve all
of their rights, remedies, and claims under the Loan Documents. Nothing in this Agreement shall
constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Loan
Documents, (ii) any of the agreements, terms or conditions contained in any of the Loan Documents
other than as expressly set forth above, (iii) any rights or remedies of the Administrative Agent,
the Issuing Lender or any Lender with respect to the Loan Documents, or (iv) the rights of the
Administrative Agent, any Issuing Lender or any Lender to collect the full amounts owing to them
under the Loan Documents.

          (c) Each of the Borrowers, the Guarantors, Administrative Agent, Issuing Lender, and Lenders
does hereby adopt, ratify, and confirm the Credit Agreement, as amended hereby, and acknowledges
and agrees that the Credit Agreement, as amended hereby, and all other Loan Documents are and
remain in full force and effect, and each of the Borrowers and the Guarantors acknowledges and
agrees that its liabilities under the Credit Agreement and the other Loan Documents are not
impaired in any respect by this Agreement or the consent granted hereunder.

          (d) From and after the Effective Date, all references to the Credit Agreement and the Loan
Documents shall mean such Credit Agreement and such Loan Documents as amended by this Agreement.

          (e) This Agreement is a Loan Document for the purposes of the provisions of the other Loan
Documents. Without limiting the foregoing, any breach of representations, warranties, and
covenants under this Agreement shall be a Default or Event of Default, as applicable, under the
Credit Agreement.

     Section 7.02 Reaffirmation of the Guaranty. Each Guarantor hereby ratifies, confirms,
acknowledges and agrees that its obligations under its Guaranty are in full force and effect and
that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual
payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the
Guaranteed Obligations (as defined in its Guaranty), as such Guaranteed Obligations may have been
amended by this Agreement, and its execution and deliver of this Agreement does not indicate or
establish an approval or consent requirement by such Guarantor under its Guaranty in connection
with the execution and delivery of amendments to the Credit Agreement, the Notes or any of the
other Loan Documents.

     Section 7.03 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original and all of which, taken together, constitute a
single instrument. This Agreement may be executed by facsimile signature and all such signatures
shall be effective as originals.

     Section 7.04 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Lenders, the Borrowers and the Administrative Agent hereto and their
respective successors and assigns permitted pursuant to the Credit Agreement.

     Section 7.05 Invalidity. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision of
this Agreement.

     Section 7.06 Governing Law. This Agreement shall be deemed to be a contract made
under and shall be governed by and construed in accordance with the laws of the State of Texas.

     Section 7.07 Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT, AS AMENDED BY
THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS
CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH

Page 6

 

RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[SIGNATURES BEGIN ON NEXT PAGE]

Page 7

 

     EXECUTED effective as of the date first above written.

	 	 	 	 	 	 	 
	 	 	MARINER ENERGY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Karnes
 

John H. Karnes,
	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	MARINER ENERGY RESOURCES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Karnes
 

John H. Karnes,
	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	MARINER LP LLC, a Delaware
limited liability company	 	 
	 

	 	 	 	By: Mariner Energy, Inc., its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Karnes
 

John H. Karnes,
	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	MC BELTWAY 8 LLC, a Delaware limited liability company	 	 
	 

	 	 	 	By: Mariner Energy, Inc. as its manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Karnes
 

John H. Karnes,
	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	MARINER GULF OF MEXICO LLC, a Delaware
limited liability company	 	 
	 

	 	 	 	By: Mariner Energy, Inc., its sole member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John H. Karnes
 

John H. Karnes,
	 	 
	 

	 	 	 	Senior Vice President and Chief Financial Officer	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	UNION BANK, N.A. (f/k/a Union Bank of California, N.A.),

as Administrative Agent, Issuing Lender, Lender, Joint
Lead Arranger and Sole Book Runner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Damien G. Meiburger
 

Damien G. Meiburger
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	BNP PARIBAS, as a Lender, Joint Lead Arranger and
Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Douglas R. Liftman
 

Douglas R. Liftman
	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Polly Schott
 

Polly Schott
	 	 
	 

	 	Title:
	 	Director	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	BMO CAPITAL MARKETS FINANCING, INC., as a Lender and as
a Co-Documentation Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ James V. Ducote
 

James V. Ducote
	 	 
	 

	 	Title:
	 	Director	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	GUARANTY BANK, as a Lender and as a Co-Documentation
Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A. , as a Lender and as a
Co-Documentation Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael A. Kamauf
 

Michael A. Kamauf
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	CAYLON NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Tom Byargeon
 

Tom Byargeon
	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael Willis
 

Michael Willis
	 	 
	 

	 	Title:
	 	Managing Director	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	CITICORP USA, INC., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ James F. Reilly, Jr.
 

James F. Reilly, Jr.
	 	 
	 

	 	Title:
	 	Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 
	 	 
	 

	 	 	 	 
	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ David G. Mills
 

David G. Mills
	 	 
	 

	 	Title:
	 	Managing Director	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles W. Randall
 

Charles W. Randall
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	COMERICA BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Gregory D. Smith
 

Gregory D. Smith
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	NATIXIS, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Donovan C. Broussard
 

Donovan C. Broussard
	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Louis P. Laville, III
 

Louis P. Laville, III
	 	 
	 

	 	Title:
	 	Managing Director	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	BANK OF SCOTLAND PLC, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Julia R. Franklin
 

Julia R. Franklin
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	CAPITAL ONE, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Paul D. Hein
 

Paul D. Hein
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK

FRANKFURT AM MAIN, NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 
	 	 
	 
	 	 	 	 
	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 
	 	 
	 

	 	 	 	 
	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles W. Randall
 

Charles W. Randall
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	AMEGY BANK NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Kenneth R. Batson, III
 

Kenneth R. Batson, III
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)

 

 

	 	 	 	 	 	 	 
	 	 	THE FROST NATIONAL BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Thomas H. Dungan
 

Thomas H. Dungan
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

Signature Page to Amendment No. 10

(Mariner Energy, Inc. and Mariner Energy Resources, Inc.)EX-10(J)

Exhibit
10(j)

	 	 	 
	Customer No.

	 	___________________________
	Loan No.

	 	___________________________
	Loan No.

	 	___________________________
	Loan No.

	 	___________________________

RBC BANK (USA)

AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER 

     This Amendment to Loan and Security Agreement and Waiver (this “Amendment”) is made and
entered into as of August 25, 2009 by and between VIDEO DISPLAY CORPORATION, a Georgia corporation
(“Parent”), LEXEL IMAGING SYSTEMS, INC. (“Lexel”), FOX INTERNATIONAL, LTD., INC. (“Fox”), Z-AXIS,
INC. (“Z-Axis”), TELTRON TECHNOLOGIES, INC. (“Teltron”) and AYDIN DISPLAYS, INC. (“Aydin” and
together with Lexel, Fox, Z-Axis and Teltron, collectively, the “Subsidiaries”; and the
Subsidiaries, together with Parent, collectively, the “Borrower”), and RBC BANK (USA) (formerly
known as RBC Centura Bank) (the “Bank”);

WITNESSETH:

     WHEREAS, the Borrower and the Bank have made and entered into that certain Loan and Security
Agreement, dated as of September 26, 2008, as amended (the “Loan Agreement”; capitalized terms used
herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement);

     WHEREAS, pursuant to the Loan Agreement, the Bank has extended to the Borrower (a) a primary
revolving loan facility in the original principal amount of up to $17,000,000, which primary
revolving loan is evidenced by a promissory note, dated as of September 26, 2008, as amended, from
Borrower to the order of the Bank in the principal amount of $17,000,000, (b) a secondary revolving
loan facility in the original principal amount of up to $3,500,000, which secondary revolving loan
is evidenced by a promissory note, dated as of September 26, 2008, as amended, from Borrower to the
order of the Bank in the principal amount of $3,500,000, and (c) a term loan in the original
principal amount of up to $1,700,000, which term loan is evidenced by a promissory note, dated as
of September 26, 2008, as amended, from Borrower to the order of the Bank in the principal amount
of $1,700,000;

     WHEREAS, Defaults and Events of Default have occurred and are continuing under certain
provisions of the Loan Agreement and has asked the Bank to waive the same;

     WHEREAS, the Borrower and Bank desires to amend certain provisions of the Loan Agreement in
connection therewith, and the Bank is willing to agree to the same on the terms and conditions set
forth herein;

     NOW THEREFORE, for and in consideration of the foregoing and for ten dollars ($10.00) and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:

 

 

ARTICLE 1.

Amendments to Loan Agreement

     Section 1.1 Definition Amendments. The following new definitions are hereby added in Section
1.1 of the Loan Agreement to read in their entirety as follows:

“New York Mortgage” means the deed of trust, mortgage or other similar lien
instrument from Z-Axis in favor of Bank with respect to the New York Property, dated
as of August ___, 2009, as amended, modified, supplemented or restated from time to
time.

“New York Property” means Z-Axis’s real property located at 1916 Rt. 96, Phelps, NY
14532.

“Pennsylvania Mortgage” means the deed of trust, mortgage or other similar lien
instrument from Parent in favor of Bank with respect to the Pennsylvania Property,
dated as of August ___, 2009, as amended, modified, supplemented or restated from
time to time.

“Pennsylvania Property” means Parent’s real property located at 8-18 Riverside
Drive, White Mills, PA 18473.

     Section 1.2 Definition Amendments. The following definitions in Section 1.1 of the Loan
Agreement are hereby amended in their entirety to read as follows:

“Adjusted Total Liabilities to Adjusted Tangible Net Worth Ratio” means, as of any
date of calculation, calculated on a consolidated basis for Borrower and all
Subsidiaries, the ratio of Adjusted Total Liabilities as of such date to Adjusted
Tangible Net Worth as of such date

“Adjusted Tangible Net Worth” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and in accordance with GAAP,
Shareholder Equity, less Intangible Assets, less leasehold improvements and loans
receivable from related parties, plus Subordinated Debt.

Adjusted Total Liabilities” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and (except with respect to
Contingent Liabilities) in accordance with GAAP, Total Liabilities, including
Contingent Liabilities, less Subordinated Debt.

“Asset Coverage Ratio” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries, the ratio of (a) the total
amount of Funded Debt outstanding consisting of revolving debt, including, but not
limited to, the Primary Revolving Loan and the Secondary Revolving Loan, divided by
(b) the sum of (i) Accounts, net of allowance for doubtful Accounts,

2

 

plus (ii) Inventory, net of reserves (such net Inventory capped at (x) $20,000,000
through and including August 31, 2009 and (y) $17,500,000 on and after September 1,
2009), less (iii) its accounts payable.

“EBITDA” shall mean, as of any date of calculation, calculated on a consolidated
basis for Borrower and all Subsidiaries and in accordance with GAAP, net income,
plus Interest Expense, plus income tax expense, plus depreciation and amortization.

“Fixed Charge Coverage Ratio” means, as of any date of calculation, calculated on a
consolidated basis for Borrower and all Subsidiaries and in accordance with GAAP:
(a) the sum of EBITDA, plus rent and lease expense, less Unfunded Capital
Expenditures, less cash taxes, divided by (b) the sum of rent and lease expense,
plus current maturities of long term Funded Debt (“CMLTD”), plus Interest Expense,
plus Corporate Distributions.

“Revolving Loan Termination Date” or “Termination Date” means (i) with respect to
the Primary Revolving Loan only, June 30, 2010 and (ii) with respect to the
Secondary Revolving Loan only, September 30, 2009, in each case as such date may be
renewed from time to time as provided herein.

“Term Loan Amount” means $1,403,170.42.

     Section 1.3 Covenant Amendment. Section 2.2 of the Loan Agreement is hereby amended in its
entirety to read as follows:

2.2. Promissory Notes.

(a) The Primary Revolving Loan shall be evidenced by a renewal promissory note in
the face amount of the Maximum Primary Revolving Loan Amount, dated as of August ___,
2009, from Borrower to the order of Bank (as amended, modified, supplemented,
restated or renewed from time to time, the “Primary Revolving Note”).

(b) The Secondary Revolving Loan shall be evidenced by a renewal promissory note in
the face amount of the Maximum Secondary Revolving Loan Amount, dated as of August
___, 2009, from Borrower to the order of Bank (as amended, modified, supplemented,
restated or renewed from time to time, the “Secondary Revolving Note”).

(c) The Term Loan shall be evidenced by a renewal promissory note in the face amount
of the Term Loan Amount, dated as of August ___, 2009, from Borrower to the order of
Bank (as amended, modified, supplemented, restated or renewed from time to time, the
“Term Note” and together with the Revolving Note and the Revolving Note, the
“Notes”).

3

 

     Section 1.4 Covenant Amendment. Section 2.3 of the Loan Agreement is hereby amended to add a
new subsection (e) to read in its entirety as follows:

(e) Upon the sale of the New York Property and the Pennsylvania Property from time
to time, Bank shall release the applicable New York Mortgage or Pennsylvania
Mortgage upon Borrower’s payment to Bank of the net proceeds of the sale of such New
York Property and the Pennsylvania Property (with costs of such sale not to exceed
10% of the gross sales price thereof), with such payments to be applied first to the
principal of the Primary Revolving Loan until paid in full, next to the principal of
the Term Loan until paid in full, and next to the principal of the Secondary
Revolving Loan until paid in full. For any such payment applied to the Primary
Revolving Loan or the Secondary Revolving Loan, the Maximum Primary Revolving Loan
Amount and the Maximum Secondary Revolving Loan Amount, as applicable, and the
Bank’s lending commitment thereunder, shall be reduced on a dollar-for-dollar basis.

     Section 1.5 Covenant Amendment. Section 5.6 of the Loan Agreement is hereby amended to add a
new subsection (f) to read in its entirety as follows:

Guarantor Financial Statements. As soon as available, but in any event
within 150 days after each fiscal year end of Borrower, Guarantor’s personal
financial statements, on the form provided by Bank (or otherwise in a form
reasonably satisfactory to Bank and certified to Bank as true and correct in all
material respects.

     Section 1.6 Covenant Amendment. Section 6.3 of the Loan Agreement is hereby amended in its
entirety to read as follows:

6.3. Corporate Distributions; Subordinated Debt; Stock Repurchases. Shall
pay or declare any dividends (other than stock dividends) or other Corporate
Distribution or make any payment on or otherwise acquire any Subordinated Debt if
any Default or Event of Default has occurred and is continuing or would be caused
thereby; provided, notwithstanding anything to the contrary herein or in any other
Loan Document, Borrower shall not effect the purchase, directly or indirectly of any
of its stock, whether held in treasury or otherwise, without the written consent of
the Bank.

     Section 1.7 Covenant Amendment. Article 7 of the Loan Agreement is hereby amended in its
entirety to read as follows:

7.1. Fixed Charge Coverage Ratio. Borrower shall have a Fixed Charge
Coverage Ratio of at least 1.35 to 1.00, calculated on a consolidated basis for
Borrower and all Subsidiaries (i) at each fiscal quarter end from May 31, 2009
through November 30, 2009, on a year to date basis for the period (including the
proration of CMLTD) and (ii) at each
fiscal quarter end after December 1, 2009,

4

 

on a rolling 4 quarters basis for the
fiscal quarter then ended and the immediately preceding 3 fiscal quarters.

7.2. Adjusted Total Liabilities to Adjusted Tangible Net Worth Ratio.
Borrower shall have an Adjusted Total Liabilities to Adjusted Tangible Net Worth
Ratio of not greater than 2.00 to 1.0 at each fiscal quarter end, calculated on a
consolidated basis for Borrower and all Subsidiaries.

7.3. Asset Coverage Ratio. Borrower shall have an Asset Coverage Ratio of
not greater than 1.0 to 1.0 at each fiscal quarter end, calculated on a consolidated
basis for Borrower and all Subsidiaries.

     Section 1.8 Attachments. Exhibit 5.6 to the Loan Agreement is hereby amended in its entirety
to read in the form attached hereto as Exhibit 5.6.

ARTICLE 2.

Acknowledgment of Defaults

     Section 2.1 Acknowledgment of Default. Events of Default (the “Existing Defaults”) have
occurred under Section 8.1(b) of the Loan Agreement as a result of the (i) Borrower’s failure to
comply with Section 7.1 of the Loan Agreement (Fixed Charge Coverage Ratio) for the fiscal
quarter ending May 31, 2009, and (ii) Borrower’s failure to comply with Section 6.3 of the Loan
Agreement (Corporate Distributions; Subordinated Debt) as a result of Borrower’s making
Corporate Distributions of up to $343,889 to repurchase its treasury shares during the fiscal
quarter ending May 31, 2009 during the occurrence of an Event of Default.

     Section 2.2 Acknowledgment of the Borrower. The execution, delivery and performance of this
Amendment by the Bank and the acceptance by the Bank of performance of the Borrower hereunder (a)
shall not constitute a waiver or release by the Bank of any Default or Event of Default that may
now or hereafter exist under the Loan Documents, except the Existing Defaults to the extent
provided herein, (b) shall not constitute a novation of the Loan Documents as it is the intent of
the parties to modify the Loan Documents as expressly set out herein and (c) except as expressly
provided in this Amendment, shall be without prejudice to, and is not a waiver or release of, the
Bank’s rights at any time in the future to exercise any and all rights conferred upon the Bank by
the Loan Documents or otherwise at law or in equity, including but not limited to the right to
institute foreclosure proceedings against the Collateral and/or institute collection or arbitration
proceedings against the Borrower and/or to exercise any right against any other Person not a party
to this Amendment

ARTICLE 3.

Waivers

     Section 3.1 Waiver Covenant. Upon strict satisfaction of the conditions specified hereinafter
in Article 5, Bank shall waive the Existing Defaults and shall not because of the Existing
Defaults,

5

 

     3.1.1 accelerate any of the Loans or demand accelerated payment of the same;

     3.1.2 require the payment of interest at the Default Rate set forth in the Loan
Documents; or

     3.1.3 exercise any other remedies under the Loan Agreement or under the other Loan
Documents.

     Bank’s waiver of the Existing Defaults from such actions, subject to the terms and conditions
of this Waiver, is herein referred to as the “Waiver Covenant”. The effectiveness of each term of
the Waiver Covenant is expressly conditioned on the strict satisfaction of each and every condition
set forth in Article 5 of this Waiver. The Waiver Covenant applies solely to the Existing Defaults
and to no other Defaults or Events of Default, whether now existing or hereinafter arising and
whether now known to the Bank or the Borrower and/or its Subsidiaries and/or any Guarantors.

     Section 3.2 Continued Compliance With the Loan Documents. Notwithstanding this Amendment,
Borrower will continue to perform and comply strictly with each and every provision of the Loan
Documents, except for the Existing Defaults, which have been waived by the Bank pursuant to this
Amendment (upon satisfaction of the conditions set forth in Article 5 hereof).

ARTICLE 4.

Release; Waivers by Borrower

     Section 4.1 Release. In consideration of the accommodations and concessions made by the Bank
pursuant to this Amendment, the Borrower does hereby irrevocably remise, release, acquit, satisfy
and forever discharge the Bank, its successors and assigns, all of its affiliates and subsidiaries,
past, present and future, and all of its shareholders, officers, directors, employees, agents,
attorneys, representatives and participants, from any and all manner of debts, accountings, bonds,
warranties, representations, covenants, promises, contracts, controversies, agreements, claims,
executions, counterclaims, demands and causes of action of any nature or type whatsoever, whether
at law or in equity, whether known or unknown, either now accrued or hereafter maturing, which it
now has or hereafter can, shall or may have by reason of any matter, claim or action arising
through the date hereof out of or relating to the administration, funding or existence of the Loan
from the Bank to the Borrower, or the Loan Documents, or any other agreement or transaction between
or among the Borrower, the Guarantors and Bank.

     Section 4.2 Waivers. The Borrower acknowledges and agrees that the Bank has all rights and
remedies of a “secured party” under the Code and all rights and remedies provided by applicable
law. Borrower waives any additional right to notice of any Default or Event of Default or
opportunity to cure any Default or Event of Default. Notwithstanding anything to the contrary in
Loan Agreement, any Security Agreement, any Guaranty Agreement or any other Loan Document to which
it is a party, the Borrower hereby irrevocably waives (i) any right to notification required under
Code Section 11-9-611 of the disposition of any “Collateral” (as

6

 

defined in the Loan Agreement and as defined in any Security Agreement) or any other
collateral in which the Borrower or any Guarantor has granted (or may hereafter grant) the Bank a
Lien, (ii) any right to redeem, under Code Section 11-9-623, any “Collateral” (as defined in the
Loan Agreement and as defined in any Security Agreement) or any other collateral in which the
Borrower or any Guarantor has granted (or may hereafter grant) Bank a Lien, and (iii) any other
right which the Borrower or any such Guarantor may waive under the Code (whether before or after
default). Any notice required to be given by Bank to the Borrower or any Guarantor (which is not
otherwise waivable under the Code), may be given by the Bank in the shortest time period permitted
by the Code, notwithstanding any provision of the Loan Documents requiring a longer notice period;
where “reasonable” notice is required under the Code and cannot be waived, 10 days’ notice shall be
deemed “reasonable” notice for purposes of the Loan Agreement and each Security Agreement (except
for circumstances described in Code Section 11-9-611(d)).

     Section 4.3 Waiver of Trial by Jury. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY
RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     Section 4.4 Relief From Stay. (a) In entering into this Amendment, the Borrower and the Bank
hereby stipulate, acknowledge and agree that the Bank gave up valuable rights and agreed to forbear
from exercising legal remedies available to it in exchange for the promises, representations,
acknowledgments and warranties of Borrower as contained herein and that the Bank would not have
entered into this Amendment but for such promises, representations, acknowledgments, agreements,
and warranties, all of which have been accepted by the Bank in good faith, the breach of which by
the Borrower in any way, at any time, now or in the future, would admittedly and confessedly
constitute cause for dismissal of any such bankruptcy petition pursuant to 11 U.S.C. § 1112(b).

(b) As additional consideration for the Bank agreeing to forbear from immediately enforcing its
rights and remedies under this Amendment and in the Loan Documents, including but not limited to
the institution of foreclosure proceedings, the Borrower agrees that in the event a bankruptcy
petition under any Chapter of the Bankruptcy Code (11 U.S.C. §101, et seq.) is filed by or against
the Borrower at any time after the execution of this Amendment, the Bank shall be entitled to the
immediate entry of an order from the appropriate bankruptcy court granting Bank complete relief
from the automatic stay imposed by §362 of the Bankruptcy Code (11 U.S.C. §362) to exercise its
foreclosure and other rights, including but not limited to obtaining a foreclosure judgment and
foreclosure sale, upon the filing with the appropriate court of a motion for relief from the
automatic stay with a copy of this Amendment attached thereto. The Borrower

7

 

specifically agrees (i) that upon filing a motion for relief from the automatic stay, the Bank
shall be entitled to relief from the stay without the necessity of an evidentiary hearing and
without the necessity or requirement of the Bank to establish or prove the value of the Collateral,
the lack of adequate protection of its interest in the Collateral, or the lack of equity in the
Collateral; (ii) that the lifting of the automatic stay hereunder by the appropriate bankruptcy
court shall be deemed to be “for cause” pursuant to §362(d)(1) of the Bankruptcy Code (11 U.S.C.
§362(d)(1)); and (iii) that the Borrower will not directly or indirectly oppose or otherwise defend
against the Bank’s efforts to gain relief from the automatic stay, and (iv) the Bank shall be
entitled to recover from Borrower all of Bank’s costs and expenses (including the Bank’s attorneys
fees) incurred in connection with any bankruptcy or insolvency proceeding of any of them. This
provision is not intended to preclude Borrower from filing for protection under any Chapter of the
Bankruptcy Code. The remedies prescribed in this paragraph are not exclusive and shall not limit
Bank’s rights under the Loan Agreement, any Guaranty, any other Loan Document or under any law.

(c) All of the above terms and conditions have been freely bargained for and are all supported by
reasonable and adequate consideration and the provisions herein are material inducements for Bank
entering into this Amendment.

ARTICLE 5.

Conditions to Effectiveness 

     Section 5.1 Conditions. The amendments to the Loan Agreement set forth in this Amendment,
and the Waiver Covenant, shall become effective as of the date first above written (the “Effective
Date”) after all of the conditions set forth in Sections 5.2 through 5.6 hereof shall have been
satisfied.

     Section 5.2 Execution of Amendment. This Amendment shall have been executed and delivered by
the Borrower.

     Section 5.3 Execution of Notes. The renewal Notes shall have been executed and delivered by
the Borrower.

     Section 5.4 Confirmations of Guaranties. Ronald D. Ordway shall have executed and delivered
his Unconditional Limited Guaranty Agreement, in form and substance satisfactory to Bank.

     Section 5.5 Mortgages. Bank shall have received first priority mortgages (and related UCC
financing statements) on Borrower’s real property in 8-18 Riverside Drive, White Mills, PA 18473
and 1916 Rt. 96, Phelps, NY 14532, and such other documents in connection therewith as Bank may
require, including, without limitation, (i) and environmental indemnity agreement, (ii) title
searches for each such property and (iii) title affidavits for each such property, each in form and
substance satisfactory to Bank.

     Section 5.6 Representations and Warranties. As of the Effective Date, the representations and
warranties set forth in the Loan Agreement, and the representations and warranties set forth in
each of the Loan Documents, shall be true and correct in all material

8

 

respects; (b) as of the Effective Date, no Defaults or Events of Default shall have occurred
and be continuing, other than the Existing Defaults that are the subject of the Waiver Covenant;
(c) the Bank shall have received from the Borrower a certificate dated the Effective Date,
certifying the matters set forth in subsections (a) and (b) of this Section 5.6.

     Section 5.7 Loan Fee. Borrower shall have paid a waiver fee of $5,000, which fee has been
fully earned by the Bank and is non-refundable in its entirety.

ARTICLE 6.

Miscellaneous

     Section 6.1 Entire Agreement; No Novation or Release. This Amendment, together with the Loan
Documents, as in effect on the Effective Date, reflects the entire understanding with respect to
the subject matter contained herein, and supersedes any prior agreements, whether written or oral.
This Amendment is not intended to be, and shall not be deemed or construed to be, a satisfaction,
novation or release of the Loan Agreement or any other Loan Document. Except as expressly amended
hereby, all representations, warranties, terms, covenants and conditions of the Loan Agreement and
the other Loan Documents shall remain unamended and unwaived and shall continue in full force and
effect.

     Section 6.2 Fees and Expenses. All fees and expenses of the Bank incurred in connection with
the issuance, preparation and closing of the transactions contemplated hereby shall be payable by
the Borrower promptly upon the submission of the bill therefor. If the Borrower shall fail to
promptly pay such bill, the Bank is authorized to pay such bill through an advance of funds under
the Revolver Facility or by debiting its accounts with the Bank.

     Section 6.3 Choice of Law; Successors and Assigns. This Amendment shall be construed and
enforced in accordance with and governed by the internal laws (as opposed to the conflicts of laws
provisions) of the State of Georgia. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

9

 

     WITNESS the hand and seal of each of the undersigned as of the date first written above.

	 	 	 	 	 
	 	BANK:

RBC BANK (USA)

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 
	 	BORROWER:

VIDEO DISPLAY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	LEXEL IMAGING SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	FOX INTERNATIONAL, LTD., INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	Z-AXIS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]

10

 

	 	 	 	 	 

	 	 	 	 	 
	 	TELTRON TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]
	 
	 	AYDIN DISPLAYS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 
	 
	 	[SEAL]

11

 

	 	 	 	 	 

Exhibit 5.6

COMPLIANCE CERTIFICATE

	TO: 	 	RBC BANK (USA)

(the “Bank”)

FROM:     VIDEO DISPLAY CORPORATION

The undersigned authorized officer of VIDEO DISPLAY CORPORATION (“Parent”) hereby certifies that in
accordance with the terms and conditions of the Loan and Security Agreement between Parent, certain
of its Subsidiaries and Bank, dated September 26, 2008, as amended (the “Agreement”), (i) Borrowers
are in complete compliance for the period ending _________ with all covenants set forth in
the Agreement, except as noted below and (ii) all representations and warranties of Borrowers
stated in the Agreement are true, correct and accurate as of the date hereof. Attached herewith
are the required documents supporting the above certification. The undersigned authorized officer
further certifies that this Compliance Certificate and any supporting financial documents have been
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently
applied from one period to the next except as explained in an accompanying letter or footnotes —
or unless otherwise permitted in the Agreement. Reference is made to the Agreement for the
relevant meanings of the reporting requirements and covenants which are stated below in a
“short-hand” manner.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	 
	 	 	 	 	 	 
	Quarterly financial statements

	 	Quarterly within 45 days
	 	Yes
	 	No
	Annual financial statements (Audited)

	 	FYE within 150 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	 

	 	 	 	Yes
	 	No
	Budget/Forecast

	 	30 days after FYE
	 	Yes
	 	No
	Guarantor personal financial statements

	 	FYE within 150 days
	 	Yes
	 	No

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	 	Actual	 	 	Complies	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted
Total Liabilities to Adjusted Tangible Net
Worth
	 	 	2.00	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fixed Charge Coverage Ratio
	 	 	1.35	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Coverage Ratio
	 	 	1.00	 	 	 	1.00	 	 	 	 	 	 	 	1.00	 	 	Yes	 	No
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

(Continued on Next Page)

12

 

Compliance Certificate

(Continued from Previous Page)

	 	 	 	 	 
	 
	 	 	 	 
	Comments Regarding Exceptions: See Attached.

	 	  BANK USE ONLY	 	 
	 
	 	 	 	 
	 

	 	  Received by:
                                                                                    	 	 
	 

	 	                         Authorized Signer	 	 
	 
	 	 	 	 
	 

	 	  Date:
                                                                                                 	 	 
	Authorized Signatory of Borrower
	 	 	 	 
	 

	 	  Verified:
                                                                                               	 	 
	 

	 	                 Authorized Signer	 	 
	Title
	 	 	 	 
	 
	 	 	 	 
	 

	 	  Date:
                                                                                                      	 	 
	Date
	 	 	 	 
	 

	 	  Compliance Status                                                                Yes
	 	No
	 
	 	 	 	 

13

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