Exhibit 10.1





Exhibit 10.1




SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED

FINANCING AND SECURITY AGREEMENT




THIS SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this
“Agreement”) is made as of the 17th day of October, 2011, by and among ARGAN, INC., a
corporation organized and in good standing under the laws of the State of Delaware (“Argan”),
SOUTHERN MARYLAND CABLE, INC., a corporation organized and in good standing under the laws of the
State of Delaware, GEMMA POWER, INC., a corporation organized and in good standing under the laws
of the State of Connecticut, GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized and in
good standing under the laws of the State of California, GEMMA POWER SYSTEMS, LLC, a limited
liability company organized and in good standing under the laws of the state of Connecticut
(“Gemma”), GEMMA POWER HARTFORD, LLC, a limited liability company organized and in good standing
under the laws of the State of Connecticut, jointly and severally (each a “Borrower”; and
collectively, the “Borrowers”), and BANK OF AMERICA, N.A., a national banking association, its
successors and assigns (the “Lender”).



RECITALS




A. Borrowers, VITARICH LABORATORIES, INC., a corporation organized and in good standing under
the laws of the State of Delaware (“Vitarich”) and Lender are parties to a Second Amended and
Restated Financing and Security Agreement dated as of December 11, 2006 (the same, as amended,
modified, substituted, extended, and renewed from time to time, the “Financing Agreement”).



B. The Financing Agreement provides for some of the agreements between the Borrowers, Vitarich
and the Lender with respect to the Loans.



C. Pursuant to that certain Consent and Release Agreement dated as of February 1, 2011, Lender
consented to the release of Vitarich, from any and all liability under each of the Financing
Documents.



D. The Borrowers have requested that the Lender consent to certain transactions and revise the
Financing Agreement as more fully set forth herein.



E. Although Lender is under no obligation to do so, Lender is willing to consent to certain
transactions and amend certain provisions of the Financing Agreement on the terms and conditions
set forth in this Amendment, subject to Borrower’s compliance with the terms, covenants, and
conditions set forth in this Amendment.


 


 









 





AGREEMENTS




NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, Borrowers and Lender agree as follows:



1. Recitals. Borrowers and Lender agree that the Recitals above are a part of this
Agreement. Unless otherwise expressly defined in this Agreement, terms defined in the Financing
Agreement shall have the same meaning under this Agreement.



2. Defined Terms. The following terms and their respective definitions are hereby
added in their entirety in alphabetical order to Section 1.1 to the Financing Agreement as follows:




“Permitted Guarantee Indebtedness” means all Indebtedness incurred by any of the
Borrowers or any Guarantor in connection with guarantees, indemnities and other similar
obligations of any of the Borrowers or any Guarantor arising solely out of the issuance of
performance or surety bonds which arise in the ordinary course of such Borrowers’ or
Guarantor’s business, provided that the obligations being guaranteed, indemnified or
otherwise supported (a) do not exceed Ten Million Dollars ($10,000,000) in the aggregate at
any time, and (b) except Indebtedness which is subject to the Travelers Letter Agreement,
are unsecured.




“Travelers Letter Agreement” means that certain Letter Agreement between the Lender and
Travelers dated December 11, 2006.



3. Dividends. Notwithstanding the restrictions on the issuance of dividends set forth
in Section 6.2.4 of the Financing Agreement, Lender agrees that Argan may declare and pay a onetime
dividend of $0.50 per share on its common stock prior to December 31, 2011, provided that, at the
time of the payment of such dividend and after giving effect thereto, no Default or Event of
Default has occurred and is continuing.



4. Indebtedness. The following is added to Section 6.2.5 of the Financing Agreement,
immediately after subsection (h) as subsection (i):




(i) Indebtedness incurred by any of the Borrowers or any Guarantor in connection with
guarantees, indemnities and other similar obligations of any of the Borrowers or any
Guarantor arising solely out of the issuance of performance or surety bonds which arise in
the ordinary course of such Borrowers’ or Guarantor’s business, provided that the
obligations being guaranteed, indemnified or otherwise supported (a) do not exceed Ten
Million Dollars ($10,000,000) in the aggregate at any time, and (b) except Indebtedness
which is subject to the Travelers Letter Agreement, are unsecured (collectively, “Permitted
Guarantee Indebtedness”).



5. Section 6.2.6 (Investments, Loans and Other Transactions). Section 6.2.6 of the
Financing Agreement is hereby amended by deleting it in its entirety and replacing it as follows:




6.2.6 Investments, Loans and Other Transactions.


 


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Except as otherwise provided in this Agreement, none of the Borrowers will, or will
permit any of its Subsidiaries to, (a) make, assume, acquire or continue to hold any
investment in any real property (unless used in connection with its business and treated as
a Fixed or Capital Asset of any Borrower or any Subsidiary) or any Person, whether by stock
purchase, capital contribution, acquisition of indebtedness of such
Person or otherwise (including, without limitation, investments in any joint venture or
partnership), (b) guaranty or otherwise become contingently liable for the Indebtedness or
obligations of any Person, or (c) make any loans or advances, or otherwise extend credit to
any Person, except:




(i) any loan or advance to an officer or employee of any Borrower or any Subsidiary,
provided that the aggregate amount of all such loans advances by all of the Borrowers and
their Subsidiaries (taken as a whole) outstanding at any time shall not exceed Twenty-Five
Thousand Dollars ($25,000);




(ii) the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;




(iii) any investment in Cash Equivalents, which are pledged to the Lender as collateral
and security for the Obligations;




(iv) trade credit extended to customers in the ordinary course of business;




(v) investments of the Acquired Companies held in investment accounts, as set forth in
detail and disclosed on the Schedule 2.1.5 attached hereto;




(vi) investments in the Acquired Companies under the Acquisition Documentation;




(vii) investments in the joint venture with Invenergy Wind Management LLC that were
consented to by the Lender pursuant to that certain Second Amendment to Second Amended and
Restated Financing and Security Agreement among the Borrowers and the Lender dated June 3,
2008;




(viii) any guaranty, indemnity or other similar contingent liability for the benefit of
any Person which constitutes Permitted Guarantee Indebtedness; and




(xi) any investment, loan, or advance in any Person organized under the laws of any
State in the United States or the District of Columbia provided the aggregate amount
invested, loaned, or advanced does not exceed Ten Million Dollars ($10,000,000) in any
fiscal year (each a “Permitted Investment”), and further, provided that each of the
following conditions is satisfied at the time of, and after giving effect to, any Permitted
Investment:




(1) The Borrowers shall, on a pro forma basis, have the sum of (a) unused availability
under the Revolving Loan, plus (b) cash and cash equivalents of the Borrowers, of not less
than Twenty Million Dollars ($20,000,000);




(2) The Borrowers ratio of Senior Funded Debt to EBITDA, on a consolidated basis, shall
be less than 1.50 to 1.00;


 


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(3) No Default or Event of Default shall have occurred and be continuing;




(4) Not less than five (5) Business Days prior to the closing of any Permitted
Investment, Borrowers shall have provided the Lender written notice of such Permitted
Investment, together with calculations and supporting materials which demonstrate that the
Borrowers will satisfy each of the requirements for a Permitted Investment; and




(5) To the extent not prohibited under the terms of the documents evidencing the
Permitted Investment, if requested by the Lender, in its sole discretion, pledge any notes,
stock or other instruments received in connection with each such Permitted Investment to the
Lender as additional Collateral for the Obligations.



6. Acknowledgment/Consent of Liens in favor of Travelers. The Lender hereby agrees
and consents to the liens granted by Gemma to Travelers Casualty and Surety Company of America
(“Travelers”) pursuant to a certain General Agreement of Indemnity from Cavallo — Cavallo, Inc.
and, pursuant to an Additional Indemnitor Rider, Gemma in favor of Travelers dated September 27,
2011, and the Lender acknowledges that such liens and relative priorities of Travelers and the
Lender with respect thereto are subject to the terms of that certain Letter Agreement between the
Lender and Travelers dated December 11, 2006 (the “Travelers Letter Agreement”).



7. Exclusion of Permitted Guarantee Indebtedness in Financial Calculations. Borrower
and the Lender hereby acknowledge and agree that Permitted Guarantee Indebtedness shall not be
included in the calculation of any of the financial covenants set forth in Section 6.1.14 of the
Financing Agreement unless and until payment under such guarantee or indemnity is no longer a
contingent obligation.




8. Limitation of Amendments.



(a) The amendments set forth in Sections 2 through 7 above are effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent
to any amendment, waiver or modification of any other term or condition of any Financing Document,
or (b) otherwise prejudice any right or remedy which Lender may now have or may have in the future
under or in connection with any Financing Document.



(b) This Agreement shall be construed in connection with and as part of the Financing
Documents and all terms, conditions, representations, warranties, covenants and agreements set
forth in the Financing Documents, except as herein amended, are hereby ratified and confirmed and
shall remain in full force and effect.



9. Counterparts. This Agreement may be executed in any number of duplicate originals
or counterparts, each of such duplicate originals or counterparts shall be deemed to be an original
and all taken together shall constitute but one and the same instrument. Each Borrower agrees that
Lender may rely on a telecopy of any signature of any Borrower. The
Lender agrees that the Borrowers may rely on a telecopy of this Agreement executed by the
Lender.


 


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10. Representations. Each Borrower hereby represents and warrants that:



(a) Borrowers have the power and authority to execute and deliver this Agreement and perform
their respective obligations hereunder and have taken all necessary and appropriate action to
authorize the execution, delivery and performance of this Agreement



(b) The Financing Agreement, as heretofore amended and as amended by this Agreement, and each
of the other Financing Documents remains in full force and effect, and each constitutes the valid
and legally binding obligation of each Borrower, enforceable in accordance with its terms;



(c) Except for those representations and warranties which relate to a specific date, all of
Borrower’s representations and warranties contained in the Financing Agreement and the other
Financing Documents are true and correct on and as of the date of each Borrower’s execution of this
Agreement and the Borrowers have performed or observed all of the terms, covenants, conditions and
obligations of the Financing Agreement and the other Financing Documents, which are required to be
performed or observed by any or all of them on or prior to the date hereof;



(d) No Event of Default and no event which, with notice, lapse of time or both would
constitute an Event of Default, has occurred and is continuing under the Financing Agreement or the
other Financing Documents which has not been waived in writing by the Lender; and



11. Fees and Expenses. The Borrowers shall pay at the time this Agreement is executed
and delivered all fees, commissions, costs, charges, taxes and other expenses incurred by the
Lender and its counsel in connection with this Agreement, including, but not limited to, reasonable
fees and expenses of the Lender’s counsel.



12. Financing Documents; Governing Law; Etc. This Agreement is one of the Financing
Documents defined in the Financing Agreement and shall be governed and construed in accordance with
the laws of the State of Maryland. The headings and captions in this Agreement are for the
convenience of the parties only and are not a part of this Agreement.



13. Acknowledgments. The Borrowers acknowledge and warrant that the Lender has acted
in good faith and has conducted in a commercially reasonable manner its relationships with the
Borrowers in connection with this Agreement and generally in connection with the Financing
Documents and the Obligations, each Borrower hereby waiving and releasing any claims to the
contrary. Each Borrower hereby issues, ratifies and confirms the representations, warranties and
covenants contained in the Financing Agreement, as amended hereby or other Financing Documents.
The Borrowers agree that this Agreement is not intended to and shall not cause a novation with
respect to any or all of the Obligations


 


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In addition, each Borrower hereby agrees to the execution and delivery of this Agreement and
the terms and provisions, covenants or agreements contained in this Agreement
shall not in any manner release, impair, lessen, modify, waive or otherwise limit the liability and
obligations of each Borrower under the terms of any of the Financing Documents, except as otherwise
specifically set forth in this Agreement.



14. Modifications. This Agreement may not be supplemented, changed, waived,
discharged, terminated, modified or amended, except by written instrument executed by the parties.



[SIGNATURES APPEAR ON THE FOLLOWING PAGE]




 


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IN WITNESS WHEREOF, each of the parties hereto have executed and delivered this Agreement
under their respective seals as of the day and year first written above.



	 	 	 	 	 	 	 
	 	 	Borrowers:	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	ARGAN, INC.	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Rainer Bosselmann	 	 
	 

	 	 	 	Chairman of the Board and President	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	SOUTHERN MARYLAND CABLE, INC	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Arthur Trudel	 	 
	 

	 	 	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	GEMMA POWER, INC.	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Arthur Trudel	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	GEMMA POWER SYSTEMS

CALIFORNIA, INC.	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Arthur Trudel	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	GEMMA POWER SYSTEMS, LLC	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Daniel Martin	 	 
	 

	 	 	 	Manager	 	 





 


 









 





	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	GEMMA POWER HARTFORD, LLC	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Daniel Martin	 	 
	 

	 	 	 	Manager	 	 





 


 









 





	 	 	 	 	 	 	 
	 	 	Lender:	 	 
	 
	 	 	 	 	 	 
	WITNESS:	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(Seal)
	 

	 	 	 	Michael J. Radcliffe	 	 
	 

	 	 	 	Senior Vice President	 	 






 


 









 







AGREEMENT OF GUARANTOR




The undersigned is the “Guarantor” under a Guaranty of Payment Agreement, dated April 26, 2010
(as amended, modified, substituted, extended and renewed from time to time, the “Guaranty”), in
favor of the Lender. In order to induce the Lender to enter into the foregoing Agreement, the
undersigned (a) consents to the transactions contemplated by, and agreements made by the Borrowers
under, the foregoing Agreement, and (b) ratifies, confirms and reissues the terms, conditions,
promises, covenants, grants, assignments, security agreements, agreements, representations,
warranties and provisions contained in the Guaranty.




WITNESS signature and seal of the undersigned as of the date of the Agreement.



	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	GEMMA RENEWABLE POWER, LLC	 	 
	 
	 	 	 	 	 	 
	 
 


	 	By:
	 	 
 

	 	(SEAL)
	 

	 	 	 	Arthur Trudel	 	 
	 

	 	 	 	Chief Financial Officer