Document:

pollex_10k-ex1001.htm

    EXHIBIT 10.1

     

    

     

    
      
         

      

      
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    11Exhibit 10.26

Exhibit 10.26

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING

AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this
“Agreement”) is made as of the 3rd day of June, 2008, 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, VITARICH LABORATORIES, 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”), and 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 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 and the
Lender with respect to the Loans.

C. Gemma contemplates forming Gemma Renewable Power, LLC, a Delaware limited liability company
(the “Joint Venture”), with Invenergy Wind Management LLC, pursuant to a limited liability company
agreement in substantially the form of Exhibit A attached hereto (the “Joint Venture
Transaction”). Borrowers have requested that the Lender consent to the formation of the Joint
Venture and certain related transactions and the Lender has agreed to do so, on the condition,
among others, that this Agreement be executed.

AGREEMENTS

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Borrowers and the 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. Revised Definition. The definition of EBITDA in Section 1.1 of the Financing
Agreement is amended and restated in its entirety as follows:

“EBITDA” means as to the Borrowers and their Subsidiaries on a consolidated basis for
any period of determination thereof, the sum of (a) the net profit (or loss)(including,
without limitation, all net income (loss) recognized by any Borrower from the Joint Venture,
all determined in accordance with GAAP consistently applied), plus (b) interest expense for
such period, plus (c) income tax provisions for such period, plus (d) depreciation and
amortization of assets for such period, plus (e) non-cash stock compensation expense and
p]us (f) non-cash impairment of goodwill arising from the acquisition of Vitarich.

3. Additional Covenant Regarding New Equity. The Borrowers covenant and agree that
Argan shall raise not less than Twenty Million Dollars ($20,000,000) (the “Additional Equity”) on
or before the 21st Business Day after the Joint Venture is created (the “Additional
Equity Raise Period”).

4. Investments in Joint Venture. Notwithstanding anything set forth in the Financing
Agreement to the contrary, Lender and Borrowers agree that during the Additional Equity Raise
Period, Gemma may contribute up to One Million Dollars ($1,000,000) of initial equity to the Joint
Venture (the “Initial Equity”). Thereafter, no additional equity may be contributed by Gemma or
any Borrower to the Joint Venture, unless on or before the last day of the Equity Raise Period the
Additional Equity has been raised. If the Additional Equity has been raised on or before the last
day of the Equity. Raise Period, Gemma may contribute additional equity to the Joint Venture, which
when combined with the Initial Equity does not exceed Seven Million Dollars ($7,000,000),
provided, however, that at the time of each such equity contribution and after
giving effect thereto, no Default or Event of Default has or would occur and is continuing.

5. Consent. Subject to the terms of this Agreement, the Lender agrees to waive the
requirements of Sections 6.1.7, 6.2.2, 6.2,6. 6.2.10 and 6.2.11 of the Financing Agreement for the
purposes of creating the Joint Venture. In addition, and subject to the terms of this Agreement,
the Lender agrees that Gemma may enter into agreements with the Joint Venture to provide the Joint
Venture with Development support, engineering, construction and technical support services in
connection with Projects (as defined in the Joint Venture Agreement), provided, that all such
agreements are on fair and reasonable terms no less favorable to the Borrowers than would be
obtained in a comparable arm’s length transaction. The Lender’s consent to the Joint Venture
Transaction, is 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.

6. Counterparts. This Agreement may he 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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7. Representations. Each Borrower hereby represents and warrants that:

(a) Attached hereto as Exhibit A, are true, correct and complete copies of all
documents executed and delivered by any Borrower in connection with the Joint Venture Transaction
(the “Joint Venture Documents”);

(b) None of the Joint Venture Documents will be amended, modified or supplemented without the
Lender’s prior written consent;

(c) All of the warranties and representations of each Borrower in the Financing Agreement, as
amended hereby, are true and correct on the date of the execution hereof (except those
representations which relate only to a specific date, which are confirmed as of such date only),
and the Borrowers have performed or observed all of the terms, covenants, conditions and
obligations of the Financing Agreement, which are required to be performed or observed by any or
all of them on or prior to the date hereof; and

(d) No Defaults or Event of Default exists under any of the Financing Documents.

8. Fees and Expenses. Borrowers agree to pay all of Lender’s legal fees and expenses
in connection with the negotiation and preparation of this Agreement.

9. 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.

10. Acknowledgments. Each Borrower hereby confirms to the Lender the enforceability
and validity of each of the Financing Documents. 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. Each Borrower
issues, ratifies and confirms the representations, warranties and covenants contained in the
Financing Documents.

11. 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]

 

3

 

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:	 	 	 	ARGAN, INC.	 	 
	 
	WITNESS/ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Arthur Trudel

	 	 	 	By:
	 	/s/ Rainer Bosselmann
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Rainer Bosselmann	 	 
	 

	 	 	 	 	 	Title: Chairman and CEO	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	SOUTHERN MARYLAND CABLE, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	VITARICH LABORATORIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	GEMMA POWER, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	GEMMA POWER SYSTEMS CALIFORNIA, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 

 

 

	 	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	GEMMA POWER SYSTEMS, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	 	 	GEMMA POWER HARTFORD, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Deily

	 	 	 	By:
	 	/s/ Arthur Trudel
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Arthur Trudel	 	 
	 

	 	 	 	 	 	Title: Vice President and CFO	 	 
	 
	 	 	 	 	 	 	 	 
	Lender:
	 	 	 	 	 	 	 	 
	 
	WITNESS:	 	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Crystal Fairconeture

	 	 	 	By:
	 	/s/ Michael J. Radcliffe
	 	(Seal)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael J. Radcliffe	 	 
	 

	 	 	 	 	 	Title: Senior Vice President

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