PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
THIS
PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”)
is
made this 11th
day of
December, 2006, by ARGAN, INC., a corporation organized under the laws of
the
State of Delaware (the “Pledgor”)
for
the benefit of BANK OF AMERICA, N.A., a national banking association, its
successors and assigns (the “Lender”).
RECITALS
A. The
Pledgor, Southern
Maryland Cable, Inc., a corporation organized under the laws of the State
of
Delaware, Vitarich Laboratories, Inc., a corporation organized under the
laws of
the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability
company, Gemma Power, Inc., a corporation organized under the laws of the
State
of Connecticut, Gemma Power Systems California, Inc., a corporation organized
under the laws of the State of California, and Gemma Power Hartford, LLC,
a
limited liability company organized under the laws of the State of
Connecticut (collectively,
the “Borrowers”)
and
the
Lender have entered into a Second Amended and Restated Financing and Security
Agreement dated the same date as this Agreement (as amended, modified, restated,
substituted, extended and renewed at any time and from time to time, the
“Financing
Agreement”).
B. It
is a
condition precedent, among others, to the Lender’s agreement to enter into the
Financing Agreement and to make loans and other financial accommodations
thereunder that the Pledgor enter into this Agreement in order to secure
the
full and prompt performance of all of the “Obligations”
defined
in the Financing Agreement and under all of the other Financing
Documents.
C. All
defined terms used in this Agreement and not defined in this Agreement shall
have the meaning given to such terms in the Financing Agreement.
AGREEMENTS
NOW,
THEREFORE, in consideration of the Lender’s entering into the Financing
Agreement and for other good and valuable consideration, the receipt of which
is
hereby acknowledged, the Pledgor hereby agrees as follows:
ARTICLE
I
SECURITY
|
Section
1.1
|
The
Collateral.
|
As
security for the prompt and full performance of the Obligations, and as security
for the prompt and full performance of all obligations of the Pledgor under
this
Agreement, and all of the Obligations of the Pledgor and/or any other Person
under the Financing Agreement and all of the other Financing Documents, all
of
the foregoing, whether now in existence or hereafter created and whether
joint,
several, or both, primary, secondary, direct, contingent or otherwise, the
Pledgor hereby pledges, assigns and grants to the Lender a security interest
in
the following property of the Pledgor (collectively, the “Collateral”),
whether now existing or hereafter created or arising:
(a) all
rights, title and interest in and to the membership interests and any other
equity ownership interests (the “LLC
Interest”)
of
Gemma Power Systems, LLC, a limited liability company organized under the
laws
of the State of Connecticut (the “Company”),
as
its the sole member, under the operating agreement, as the same may have
been or
may be amended, supplemented, restated, or otherwise modified at any time
and
from time to time (the “Operating
Agreement”);
(b) all
rights to receive any and all cash and non-cash distributions (regardless
of how
such distributions are classified and including any and all
distributions-in-kind and liquidating distributions), profits, losses, income,
revenue, returns of capital, repayments of any loans made by Pledgor to the
Company (including interest and fees with respect to such loans), and any
and
all development, management and similar fees payable by the Company to Pledgor
of any kind or nature whatsoever, together with any and all other rights
and
property interests including, but not limited to, accounts, contract rights,
instruments and general intangibles arising out of, under or relating to
the
Operating Agreement;
(c) all
other
or additional equity or debt interests, other securities or property (including
cash) paid or distributed in respect of the LLC Interest by way of any spin-off,
merger, consolidation, dissolution, combination, reclassification or exchange
of
equity interests, asset sales, or similar rearrangement or
reorganization;
(d) all
other
or additional equity or debt interests, other securities or property (including
cash) which may be paid or distributed in respect of the LLC Interest by
reason
of any consolidation, merger, exchange of equity of debt interests, conveyance
of assets, liquidation or similar corporate reorganization; and
(e) all
proceeds and products (both cash and non-cash) of the foregoing, whether
now or
hereafter arising under any of the foregoing.
|
Section
1.2
|
Rights
of the Lender in the
Collateral.
|
The
Pledgor agrees that with respect to the Collateral the Lender shall have
all the
rights and remedies of a secured party under the Uniform Commercial Code,
as
well as those provided by law and/or in this Agreement. Notwithstanding the
fact
that the proceeds of the Collateral constitute part of the Collateral, the
Pledgor may not dispose of the Collateral or any part thereof.
|
Section
1.3
|
Registration
of Pledge.
|
If
any of
the Collateral is or shall become evidenced or represented by an uncertificated
security and if
and to
the extent requested by the Lender, the Pledgor agrees, by Notice of Pledge,
substantially in the form attached to this Agreement as Exhibit B, to (i)
notify the Company immediately of the pledge, assignment and security agreement
under this Agreement and (ii) issue the Initial Transaction Statement,
substantially in the form attached to this Agreement as Exhibit C. The
Pledgor hereby authorizes and directs the Company to (i) register the Pledgor’s
pledge to the Lender of the Collateral on the Company’s books (ii) make,
following written notice to do so by the Lender, direct payment to the Lender
of
any amounts due or to become due to the Pledgor with respect to the Collateral
and (iii) comply with all instructions originated by the Lender without further
consent by the Pledgor. The Pledgor acknowledges that the Lender has control
over the Collateral within the meaning of Section 8-106 of the Uniform
Commercial Code.
|
Section
1.4
|
Rights
of the Pledgor in the
Collateral.
|
Until
an
Event of Default (as that term is defined in ARTICLE
IV
(Default
and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote
all
ownership or equity interests, (b) to give consents, waivers and ratification
to
any and all actions of the Company requiring member approval, and (c) to
receive
all cash and non-cash distributions which may be paid on the Collateral and
which are not otherwise prohibited by the Financing Documents. Any cash
distribution payable in respect of the Collateral which represents, in whole
or
in part, a return of capital or a violation of this Agreement or the other
Financing Documents shall be received by the Pledgor in trust for the Lender,
shall be paid immediately to the Lender and shall be retained by the Lender
as
part of the Collateral.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
To
induce
the Lender to advance sums to the Pledgor under the Financing Agreement,
the
Pledgor represents and warrants to the Lender and shall be deemed to represent
and warrant at the time of each request for, and the time of each advance
under,
the credit facilities described in the Financing Agreement, as
follows:
|
Section
2.1
|
Percentage
Ownership.
|
The
LLC
Interest represents one hundred percent (100%) of the membership interests
of
the Company and thereafter the Collateral will continue to represent the
same
percentage of the membership interest of the Company, unless otherwise permitted
under the Financing Agreement.
|
Section
2.2
|
Power
and Authority.
|
The
Pledgor has full corporate power and authority to execute and deliver this
Agreement and the other Financing Documents to which it is a party, to assign
and pledge the Collateral and perform all other obligations required hereunder
with respect to the Collateral and interests, and to incur and perform its
obligations whether under this Agreement, the other Financing Documents or
otherwise, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of the shareholders or any creditors
of
the Pledgor, the Company, or members of the Company, and no consent, approval,
filing or registration with or notice to any Governmental Authority on the
part
of the Pledgor, is required as a condition to the execution, delivery, validity
or enforceability of this Agreement or the other Financing Documents or the
performance of the Obligations, including, without limitation, the right
of the
Lender to dispose of the Collateral following an Event of Default. The Pledgor
has full right, power and authority and has all voting rights in any
organizational matters as may be represented by the Collateral.
|
Section
2.3
|
Binding
Agreements.
|
This
Agreement and the other Financing Documents executed and delivered by the
Pledgor have been properly executed and delivered and constitute the valid
and
legally binding obligations of the Pledgor and are fully enforceable against
the
Pledgor in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties, and general
principles of equity regardless of whether applied in a proceeding in equity
or
at law.
|
Section
2.4
|
No
Conflicts.
|
Neither
the execution, delivery and performance of the terms of this Agreement or
of any
of the other Financing Documents executed and delivered by the Pledgor nor
the
consummation of the transactions contemplated by this Agreement will conflict
with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any
existing mortgage, indenture, contract or agreement binding on the Pledgor
or
affecting its property, or (c) any Laws.
|
Section
2.5
|
Compliance
with Laws.
|
The
Pledgor is not in violation of any applicable Laws (including, without
limitation, any Laws relating to employment practices, to environmental,
occupational and health standards and controls) or order, writ, injunction,
decree or demand of any court, arbitrator, or any Governmental Authority
affecting the Pledgor or any of its properties, the violation of which could
adversely affect the authority of the Pledgor to enter into, or the ability
of
the Pledgor to perform under, this Agreement or any of the other Financing
Documents executed by the Pledgor.
|
Section
2.6
|
Title
to Properties.
|
The
Pledgor has good and marketable title to the Collateral. The Pledgor has
legal,
enforceable and uncontested rights to use freely such property and assets.
The
Pledgor is the sole owner of all of the Collateral, free and clear of all
security interests, pledges, voting trusts, agreements, Liens, claims and
encumbrances whatsoever, other than the security interest, assignment and
lien
granted under this Agreement.
|
Section
2.7
|
Perfection
and Priority of Collateral.
|
The
Lender has, or upon execution, delivery and recording of this Agreement and
the
Security Documents will have, and will continue to have as security for the
Obligations and the other obligations secured by this Agreement, a valid
and
perfected Lien on and security interest in all of the Collateral, free of
all
other Liens, claims and rights of third parties whatsoever.
ARTICLE
III
COVENANTS
Until
payment in full and the performance of all of the Obligations and all of
the
obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants
and agrees with the Lender as follows:
|
Section
3.1
|
Corporate
Existence.
|
The
Pledgor shall maintain its corporate existence in good standing in the
jurisdiction in which it is incorporated and in each other jurisdiction where
it
is required to register or qualify to do business if the failure to do so
in
such other jurisdiction might have a material adverse effect on the ability
of
the Pledgor to perform its obligations under this Agreement, on the conduct
of
the Pledgor’s operations, on the Pledgor’s financial condition, or on the value
of, or the ability of the Lender to realize upon, the Collateral.
|
Section
3.2
|
Delivery
of Certificated Collateral.
|
If
any of
the Collateral is or shall become evidenced or represented by a certificated
security, the Pledgor shall deliver immediately to the Lender (a) the
certificates representing the LLC Interests, (b) immediately upon its receipt
of
any additional (or fewer) LLC Interests in the Company, the certificates
representing such additional LLC Interests, (c) all instruments, items of
payment and other Collateral received by the Pledgor, and (d) executed
irrevocable, undated and blank membership powers, substantially
in the form attached to this Agreement as Exhibit
A,
for all
of the assigned LLC Interests. All Collateral at any time received or held
by
the Pledgor shall be received and held by the Pledgor in trust for the benefit
of the Lender, and shall be kept separate and apart from, and not commingled
with, the Pledgor’s other assets.
|
Section
3.3
|
Defense
of Title and Further
Assurances.
|
The
Pledgor will do or cause to be done all things necessary to preserve and
to keep
in full force and effect its interests in the Collateral, and shall defend,
at
its sole expense, the title to the Collateral and any part thereof. The Pledgor
hereby authorizes the filing of any financing statement or continuation
statement required under the Uniform Commercial Code. Further, the Pledgor
shall
promptly, upon request by the Lender, execute, acknowledge and deliver any
financing statement, endorsement, renewal, affidavit, deed, assignment,
continuation statement, security agreement, certificate or other document
as the
Lender may require in order to perfect, preserve, maintain, protect, continue,
realize upon, and/or extend the lien and security interest of the Lender
under
this Agreement and the priority thereof. The Pledgor shall pay to the Lender
upon demand all taxes, costs and expenses (including but not limited to
reasonable attorney’s fees) incurred by the Lender in connection with the
preparation, execution, recording and filing of any such document or instrument
mentioned aforesaid.
|
Section
3.4
|
Compliance
with Laws.
|
The
Pledgor shall comply with all applicable Laws and observe the valid requirements
of Governmental Authorities, the noncompliance with or the nonobservance
of
which might have a material adverse effect on the ability of the Pledgor
to
perform its obligations under this Agreement or any of the Financing Documents
to which the Pledgor is a party or on the conduct of the Pledgor’s operations,
on the Pledgor’s financial condition, or on the value of, or the ability of the
Lender to realize upon, the Collateral.
|
Section
3.5
|
Protection
of Collateral.
|
The
Pledgor agrees that the Lender may at any time take such steps as the Lender
deems reasonably necessary to protect the Lender’s interest in, and to preserve
the Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts
to preserve the Collateral and will take such actions to preserve the Collateral
as the Lender may in good faith direct. All of the Lender’s expenses of
preserving the Collateral, including, without limitation, reasonable attorneys’
fees, shall be part of the Enforcement Costs.
|
Section
3.6
|
Certain
Notices.
|
The
Pledgor will promptly notify the Lender in writing of any Event of Default
and
of any litigation, regulatory proceeding, or other event which materially
and
adversely affects the value of the Collateral, the ability of the Pledgor
or the
Lender to dispose of the Collateral, or the rights and remedies of the Lender
in
relation thereto.
|
Section
3.7
|
Books
and Records; Information.
|
(a) The
Pledgor shall maintain proper books of record and account in which full,
true
and correct entries are made of all dealings and transactions in relation
to the
Collateral and which reflect the Lien of the Lender thereon.
(b) The
Pledgor agrees that the Lender may from time to time and at its option (i)
require the Pledgor to, and the Pledgor shall, periodically deliver to the
Lender records and schedules, which show the status of the Collateral and
such
other matters which affect the Collateral; (ii) verify the Collateral and
inspect the books and records of the Pledgor and make copies thereof or extracts
therefrom; (iii) notify any prospective buyers or transferees of the Collateral
of the Lender’s interest in the Collateral; and (iv) disclose to prospective
buyers or transferees from the Lender any and all information regarding the
Company, the Collateral and/or the Pledgor.
|
Section
3.8
|
Disposition
of Collateral.
|
The
Pledgor will not sell, assign, convey, transfer or otherwise dispose of the
Collateral or any part thereof.
|
Section
3.9
|
Distributions.
|
The
Pledgor shall receive no dividend or distribution or other benefit with respect
to the Company, and shall not vote, consent, waive or ratify any action taken,
which would violate or be inconsistent with any of the terms and provisions
of
this Agreement, the Financing Agreement or any of the other Financing Documents
or which would materially impair the position or interest of the Lender in
the
Collateral or dilute the percentage of the ownership interests of the Company
pledged to the Lender hereunder, except as expressly permitted by the Financing
Agreement.
|
Section
3.10
|
Liens.
|
The
Pledgor will not create, incur, assume or suffer to exist any Lien upon any
of
the Collateral, other than Liens in favor of the Lender.
|
Section
3.11
|
Survival.
|
All
representations and warranties contained in or made under or in connection
with
this Agreement and the other Financing Documents shall survive the making
of any
advance under the Financing Agreement and the incurring of any other Obligations
and the other obligations secured by this Agreement.
ARTICLE
IV
DEFAULT
AND RIGHTS AND REMEDIES
|
Section
4.1
|
Events
of Default.
|
The
occurrence of any one or more of the following events shall constitute an
“Event
of Default” under the provisions of this Agreement:
|
4.1.1
|
Default
under Financing Agreement.
|
An
Event
of Default shall occur under the Financing Agreement.
|
4.1.2
|
Default
under this Agreement.
|
If
the
Pledgor shall fail to duly perform, comply with or observe any of the terms,
conditions or covenants of this Agreement.
|
4.1.3
|
Breach
of Representations and
Warranties.
|
Any
representation or warranty made in this Agreement or in any report, statement,
schedule, certificate, opinion (including any opinion of counsel for the
Pledgor), financial statement or other document furnished by the Pledgor
or its
agents or representatives in connection with this Agreement, any of the other
Financing Documents, or the Obligations or the other obligations secured
by this
Agreement, shall prove to have been false or misleading when made (or, if
applicable, when reaffirmed) in any material respect.
|
Section
4.2
|
Remedies.
|
Upon
the
occurrence of any Default or Event of Default, the Lender may at any time
thereafter exercise any one or more of the following rights, powers or
remedies:
|
4.2.1
|
Uniform
Commercial Code.
|
The
Lender shall have all of the rights and remedies of a secured party under
the
applicable Uniform Commercial Code and other applicable Laws.
|
4.2.2
|
Sale
or Other Disposition of
Collateral.
|
The
Lender may sell or redeem the Collateral, or any part thereof, in one or
more
sales, at public or private sale, conducted by any officer or agent of, or
auctioneer or attorney for, the Lender, at the Lender’s place of business or
elsewhere, for cash, upon credit or future delivery, and at such price or
prices
as the Lender shall, in its sole discretion, determine, and the Lender may
be
the purchaser of any or all of the Collateral so sold. Further, any written
notice of the sale, disposition or other intended action by the Lender with
respect to the Collateral which is sent by regular mail, postage prepaid,
to the
Pledgor at the address set forth in Section
5.1
(Notices), or such other address of the Pledgor which may from time to time
be
shown on the Lender’s records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute commercially reasonable notice
to
the Pledgor. The Lender may alternatively or additionally give such notice
in
any other commercially reasonable manner. Nothing in this Agreement shall
require the Lender to give any notice not required by applicable
Laws.
If
any
consent, approval, or authorization of any Governmental Authority or any
Person
having any interest therein, should be necessary to effectuate any sale or
other
disposition of the Collateral, the Pledgor agrees to execute all such
applications and other instruments, and to take all other action, as may
be
required in connection with securing any such consent, approval or
authorization.
The
Pledgor recognizes that the Lender may be unable to effect a public sale
of all
or a part of the Collateral consisting of securities by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and other
applicable federal and state Laws. The Lender may, therefore, in its discretion,
take such steps as it may deem appropriate to comply with such Laws and may,
for
example, at any sale of the Collateral consisting of securities restrict
the
prospective bidders or purchasers as to their number, nature of business
and
investment intention, including, without limitation, a requirement that the
Persons making such purchases represent and agree to the satisfaction of
the
Lender that they are purchasing such securities for their account, for
investment, and not with a view to the distribution or resale of any thereof.
The Pledgor covenants and agrees to do or cause to be done promptly all such
acts and things as the Lender may request from time to time and as may be
necessary to offer and/or sell the securities or any part thereof in a manner
which is valid and binding and in conformance with all applicable
Laws.
|
4.2.3
|
Specific
Rights With Regard to
Collateral.
|
In
addition to all other rights and remedies provided hereunder or as shall
exist
at law or in equity from time to time, the Lender may (but shall be under
no
obligation to), without notice to the Pledgor, and the Pledgor hereby
irrevocably appoints the Lender as its attorney-in-fact, with power of
substitution, in the name of the Lender or in the name of the Pledgor or
otherwise, for the use and benefit of the Lender, but at the cost and expense
of
the Pledgor and without notice to the Pledgor:
(a) compromise,
extend or renew any of the Collateral or deal with the same as it may deem
advisable;
(b) make
exchanges, substitutions or surrenders of all or any part of the
Collateral;
(c) copy,
transcribe, or remove from any place of business of the Pledgor all books,
records, ledger sheets, correspondence, invoices and documents, relating
to or
evidencing any of the Collateral or without cost or expense to the Lender,
make
such use of the Pledgor’s places of business as may be reasonably necessary to
administer, control and collect the Collateral;
(d) institute
and prosecute legal and equitable proceedings to enforce collection of, or
realize upon, any of the Collateral;
(e) settle,
renew, extend, compromise, compound, exchange or adjust claims in respect
of any
of the Collateral or any legal proceedings brought in respect
thereof;
(f) endorse
or sign the name of the Pledgor upon any instruments, securities, powers,
documents, or other writing relating to or part of the Collateral;
and
(g) take
any
other action necessary or beneficial to realize upon or dispose of the
Collateral.
|
4.2.4
|
Application
of Proceeds.
|
Any
proceeds of sale or other disposition of the Collateral will be applied by
the
Lender to the payment of the Enforcement Costs, and any balance of such proceeds
will be applied by the Lender to the payment of the balance of the Obligations
and the other obligations secured by this Agreement in such order and manner
of
application as the Lender may from time to time in its sole and absolute
discretion determine. If the sale or other disposition of the Collateral
fails
to fully satisfy the Obligations and the other obligations secured by this
Agreement, the Pledgor shall remain liable to the Lender for any
deficiency.
|
4.2.5
|
Performance
by Lender.
|
If
the
Pledgor shall fail to perform, observe or comply with any of the conditions,
covenants, terms, stipulations or agreements contained in this Agreement
or any
of the other Financing Documents, the Lender without notice to or demand upon
the Pledgor and without waiving or releasing any of the Obligations or any
Default or Event of Default, may (but shall be under no obligation to) at
any
time thereafter make such payment or perform such act for the account and
at the
expense of the Pledgor, and may enter upon the premises of the Pledgor for
that
purpose and take all such action thereon as the Lender may consider necessary
or
appropriate for such purpose and the Pledgor hereby irrevocably appoints
the
Lender as its attorney-in-fact to do so, with power of substitution, in the
name
of the Lender or in the name of the Pledgor or otherwise, for the use and
benefit of the Lender, but at the cost and expense of the Pledgor and without
notice to the Pledgor. All sums so paid or advanced by the Lender together
with
interest thereon from the date of payment, advance or incurring until paid
in
full at the Post-Default Rate and all costs and expenses, shall be deemed
part
of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand,
and shall constitute and become a part of the Obligations.
|
4.2.6
|
Other
Remedies.
|
The
Lender may from time to time proceed to protect or enforce its rights by
an
action or actions at law or in equity or by any other appropriate proceeding,
whether for the specific performance of any of the covenants contained in
this
Agreement or in any of the other Financing Documents, or for an injunction
against the violation of any of the terms of this Agreement or any of the
other
Financing Documents, or in aid of the exercise or execution of any right,
remedy
or power granted in this Agreement, the Financing Documents, and/or applicable
Laws.
|
Section
4.3
|
Costs
and Expenses.
|
The
Pledgor shall pay on demand all costs and expenses (including reasonable
attorney’s fees), all of which shall be deemed part of the Obligations, incurred
by and on behalf of the Lender incident to any collection, servicing, sale,
disposition or other action taken by the Lender with respect to the Collateral
or any portion thereof.
|
Section
4.4
|
Receipt
Sufficient Discharge to
Purchaser.
|
Upon
any
sale or other disposition of the Collateral or any part thereof, the receipt
of
the Lender or other Person making the sale or disposition shall be a sufficient
discharge to the purchaser for the purchase money, and such purchaser shall
not
be obligated to see to the application thereof.
|
Section
4.5
|
Remedies,
etc. Cumulative.
|
Each
right, power and remedy of the Lender as provided for in this Agreement or
in
any of the other Financing Documents or in any related instrument or agreement
or now or thereafter existing at law or in equity or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to every other
right, power or remedy provided for in this Agreement or in the other Financing
Documents or in any related document, instrument or agreement or now or
hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by the Lender of any one or more of
such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Lender of any or all such other rights, powers or remedies.
|
Section
4.6
|
No
Waiver, etc.
|
No
failure or delay by the Lender to insist upon the strict performance of any
term, condition, covenant or agreement of this Agreement or of any of the
other
Financing Documents or of any related documents, instruments or agreements,
or
to exercise any right, power or remedy consequent upon a breach thereof,
shall
constitute a waiver of any such term, condition, covenant or agreement or
of any
such breach, or preclude the Lender from exercising any such right, power
or
remedy at any later time or times. By accepting payment after the due date
of
any amount payable under this Agreement or under any of the other Financing
Documents or under any related document, instrument or agreement, the Lender
shall not be deemed to waive the right either to require prompt payment when
due
of all other amounts payable under this Agreement or under any other of the
Financing Documents, or to declare a default for failure to effect such prompt
payment of any such other amount.
ARTICLE
V
MISCELLANEOUS
|
Section
5.1
|
Notices.
|
All
notices, requests and demands to or upon the parties to this Agreement shall
be
in writing and shall be deemed to have been given or made when delivered
by hand
on a Business Day, or two (2) days after the date when deposited in the mail,
postage prepaid by registered or certified mail, return receipt requested,
or
when sent by overnight courier, on the Business Day next following the day
on
which the notice is delivered to such overnight courier, addressed as
follows:
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Pledgor:
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Argan,
Inc.
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Xxx Xxxxxx Xxxxxx, Xxxxx 000 |
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Xxxxxxxxx, Xxxxxxxx 00000 |
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Attention: Xxxxxx X. Xxxxxx |
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Chief Financial Officer |
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with
a copy to:
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Xxxxxxxx
& Xxxx LLP
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000 Xxxxxxxx Xxxxxx |
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Xxxxxxxx, Xxxxxxxxxxx 00000 |
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Attention: Xxxxxx X. Xxxxxxx, Esq. |
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Lender:
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Bank
of America, N.A.
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0000 Xxxxxxx Xxxxxxx, 0xx Xxxxx |
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Xxxxxxxxx, Xxxxxxxx 00000 |
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Attention: Xxxxxxx X. Xxxxxxxxx |
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Senior Vice President |
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with
a copy to:
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Xxxxxxxx
Xxxxxxx LLP
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0000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000 |
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XxXxxx, Xxxxxxxx 00000 |
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Attention: Xxxxxxx X. Xxxxxx, Esq. |
By
written notice, each party to this Agreement may change the address to which
notice is given to that party, provided that such changed notice shall include
a
street address to which notices may be delivered by overnight courier in
the
ordinary course on any Business Day.
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Section
5.2
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Amendments;
Waivers.
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This
Agreement and the other Financing Documents may not be amended, modified,
or
changed in any respect except by an agreement in writing signed by the Lender
and the Pledgor. No waiver of any provision of this Agreement or of any of
the
other Financing Documents, nor consent to any departure by the Pledgor
therefrom, shall in any event be effective unless the same shall be in writing.
No course of dealing between the Pledgor and the Lender and no act or failure
to
act from time to time on the part of the Lender shall constitute a waiver,
amendment or modification of any provision of this Agreement or any of the
other
Financing Documents or any right or remedy under this Agreement, under any
of
the other Financing Documents or under applicable Laws.
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Section
5.3
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Cumulative
Remedies.
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The
rights, powers and remedies provided in this Agreement and in the other
Financing Documents are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as the Lender shall
determine and are in addition to, and not exclusive of, rights, powers and
remedies provided by existing or future applicable Laws. In order to entitle
the
Lender to exercise any remedy reserved to it in this Agreement, it shall
not be
necessary to give any notice, other than such notice as may be expressly
required in this Agreement. Without limiting the generality of the foregoing,
the Lender may:
(a) proceed
against the Pledgor with or without proceeding against any other Person who
may
be liable for all or any part of the Obligations;
(b) proceed
against the Pledgor with or without proceeding under any of the other Financing
Documents or against any Collateral or other collateral and security for
all or
any part of the Obligations;
(c) without
notice, release or compromise with any guarantor or other Person liable for
all
or any part of the Obligations under the Financing Documents or otherwise;
and
(d) without
reducing or impairing the obligations of the Pledgor and without notice thereof:
(i) fail to perfect the Lien in any or all Collateral or to release any or
all
the Collateral or to accept substitute collateral, (ii) waive any provision
of
this Agreement or the other Financing Documents, (iii) exercise or fail to
exercise rights of set-off or other rights, or (iv) accept partial payments
or
extend from time to time the maturity of all or any part of the
Obligations.
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Section
5.4
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Severability.
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In
case
one or more provisions, or part thereof, contained in this Agreement or in
the
other Financing Documents shall be invalid, illegal or unenforceable in any
respect under any Law, then without need for any further agreement, notice
or
action:
(a) the
validity, legality and enforceability of the remaining provisions shall remain
effective and binding on the parties thereto and shall not be affected or
impaired thereby;
(b) the
obligation to be fulfilled shall be reduced to the limit of such
validity;
(c) if
such
provision or part thereof pertains to repayment of the Obligations, then,
at the
sole and absolute discretion of the Lender, all of the Obligations of the
Pledgor to the Lender shall become immediately due and payable; and
(d) if
affected provision or part thereof does not pertain to repayment of the
Obligations, but operates or would prospectively operate to invalidate this
Agreement in whole or in material part, then such provision or part thereof
only
shall be void, and the remainder of this Agreement shall remain operative
and in
full force and effect.
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Section
5.5
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Successors
and Assigns.
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This
Agreement and all other Financing Documents shall be binding upon and inure
to
the benefit of the Pledgor and the Lender and their respective heirs, personal
representatives, successors and assigns, except that the Pledgor shall not
have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender.
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Section
5.6
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Applicable
Law; Jurisdiction.
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5.6.1
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Applicable
Law.
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This
Agreement, shall be governed by the Laws of the State, as if each of the
Financing Documents and this Agreement had been executed, delivered,
administered and performed solely within the State.
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5.6.2
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Submission
to Jurisdiction.
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The
Pledgor irrevocably submits to the jurisdiction of any state or federal court
sitting in the State over any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Financing Documents. The Pledgor
irrevocably waives, to the fullest extent permitted by law, any objection
that
it may now or hereafter have to the laying of the venue of any such suit,
action
or proceeding brought in any such court and any claim that any such suit,
action
or proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action or proceeding brought in any
such
court shall be conclusive and binding upon the Pledgor and may be enforced
in
any court in which the Pledgor is subject to jurisdiction, by a suit upon
such
judgment, provided that service of process is effected upon the Pledgor in
one
of the manners specified in this Section or as otherwise permitted by applicable
Laws.
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5.6.3
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Appointment
of Agent for Service of
Process.
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The
Pledgor hereby irrevocably designates and appoints CT Corporation System,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
as the
Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and
all process that may be served in any suit, action or proceeding of the nature
referred to in this Section in any state or federal court sitting in the
State.
If such agent shall cease so to act, the Pledgor shall irrevocably designate
and
appoint without delay another such agent in the State satisfactory to the
Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent’s acceptance of such appointment and its agreement that such appointment
shall be irrevocable.
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5.6.4
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Service
of Process.
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The
Pledgor hereby consents to process being served in any suit, action or
proceeding of the nature referred to in this Section by (a) the mailing of
a
copy thereof by registered or certified mail, postage prepaid, return receipt
requested, to the Pledgor at the Pledgor’s address designated in or pursuant to
Section
5.1 (Notices),
and (b) serving a copy thereof upon the agent, if any, designated and appointed
by the Pledgor as the Pledgor’s agent for service of process by or pursuant to
this Section. The Pledgor irrevocably agrees that such service (y) shall
be
deemed in every respect effective service of process upon the Pledgor in
any
such suit, action or proceeding, and (z) shall, to the fullest extent permitted
by law, be taken and held to be valid personal service upon the Pledgor.
Nothing
in this Section shall affect the right of the Lender to serve process in
any
manner otherwise permitted by law or limit the right of the Lender otherwise
to
bring proceedings against the Pledgor in the courts of any jurisdiction or
jurisdictions.
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Section
5.7
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Headings.
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The
headings in this Agreement are included herein for convenience only, shall
not
constitute a part of this Agreement for any other purpose, and shall not
be
deemed to affect the meaning or construction of any of the provisions
hereof.
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Section
5.8
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Entire
Agreement.
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This
Agreement is intended by the Lender and the Pledgor to be a complete, exclusive
and final expression of the agreements contained herein. Neither the Lender
nor
the Pledgor shall hereafter have any rights under any prior agreements but
shall
look solely to this Agreement for definition and determination of all of
their
respective rights, liabilities and responsibilities under this
Agreement.
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Section
5.9
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Waiver
of Trial by Jury.
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THE
BORROWER AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY
IN ANY
ACTION OR PROCEEDING TO WHICH THE BORROWER AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF
THE
FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER
OF
TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS,
INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT.
This
waiver is knowingly, willingly and voluntarily made by the Pledgor and the
Lender, and the Pledgor and the Lender hereby represent that no representations
of fact or opinion have been made by any individual to induce this waiver
of
trial by jury or to in any way modify or nullify its effect. The Pledgor
and the
Lender further represent that they have been represented in the signing of
this
Agreement and in the making of this waiver by independent legal counsel,
selected of their own free will, and that they have had the opportunity to
discuss this waiver with counsel.
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Section
5.10
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Liability
of the Lender.
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The
Pledgor hereby agrees that the Lender shall not be chargeable for any
negligence, mistake, act or omission of any accountant, examiner, agency
or
attorney employed by the Lender in making examinations, investigations or
collections, the Lender’s failure to preserve or protect any rights of the
Pledgor under the Collateral or the Lender’s failure to perfect, maintain,
protect or realize upon any lien or security interest or any other interest
in
the Collateral or other security for the Obligations. By inspecting the
Collateral or any other properties of the Pledgor or by accepting or approving
anything required to be observed, performed or fulfilled by the Pledgor or
to be
given to the Lender pursuant to this Agreement or any of the other Financing
Documents, the Lender shall not be deemed to have warranted or represented
the
condition, sufficiency, legality, effectiveness or legal effect of the same,
and
such acceptance or approval shall not constitute any warranty or representation
with respect thereto by the Lender.
[SIGNATURE
APPEARS ON THE FOLLOWING PAGE]
IN
WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security
Agreement to be executed, sealed and delivered, as of the day and year first
written above.
| WITNESS: |
ARGAN,
INC.
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| |
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| /s/ Xxxxxx Xxxxxx | By: | /s/ Xxxxxx Xxxxxxxxxx (SEAL) |
|
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Name:
Xxxxxx Xxxxxxxxxx
Title:
Chairman and CEO
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|
EXHIBIT
A
LLC
POWER
FOR
VALUE
RECEIVED, the undersigned, ARGAN, INC., a Delaware corporation (“Pledgor”)
does
hereby sell, assign and transfer to __________________________________* all
of
its Equity Interests (as hereinafter defined) represented by Certificate
No(s).
_______* in Gemma Power Systems, LLC, a Connecticut limited liability company
(“Issuer”),
standing in the name of Pledgor on the books of said Issuer. Pledgor does
hereby
irrevocably constitute and appoint ________________________________*, as
attorney, to transfer the Equity Interest in said Issuer with full power
of
substitution in the premises. The term “Equity
Interest”
means
any security, share, unit, partnership interest, membership interest, ownership
interest, equity interest, option, warrant, participation, “equity security” (as
such term is defined in Rule 3(a)11-1 of the General Rules and Regulations
of the Securities Exchange Act of 1934, as amended, or any similar statute
then
in effect, promulgated by the Securities and Exchange Commission and any
successor thereto) or analogous interest (regardless of how designated) of
or in
a corporation, partnership, limited partnership, limited liability company,
limited liability partnership, business trust or other entity, of whatever
nature, type, series or class, whether voting or nonvoting, certificated
or
uncertificated, common or preferred, and all rights and privileges incident
thereto.
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Dated:
________________*
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PLEDGOR:
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ARGAN,
INC.
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| By: | ||
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Name:
Title:
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*To
Remain Blank - Not Completed at Closing.
EXHIBIT
B
NOTICE
OF PLEDGE
Pledge
by
Argan, Inc. (the
“Pledgor”)
To: Gemma
Power Systems, LLC (the
“Company”)
Notice
is
hereby given that, pursuant to a Pledge, Assignment and Security Agreement
(a
copy of which is attached hereto), dated December __, 2006, (the “Assignment
Agreement”)
from
the Pledgor to Bank of America, N.A. (the “Lender”),
the
Pledgor has pledged, assigned and granted to the Lender a continuing security
interest in, all of its right, title and interest, whether now existing or
hereafter arising our acquired, in, to, and under the following (the
“Collateral”):
(a) All
rights, title and interest in and to the membership interests and any other
equity ownership interests (the “LLC
Interest”)
of the
Company, as its the [sole]
member,
under the operating agreement, as the same may have been or may be amended,
supplemented, restated, or otherwise modified at any time and from time to
time
(the “Operating
Agreement”);
(b) all
rights to receive any and all cash and non-cash distributions (regardless
of how
such distributions are classified and including any and all
distributions-in-kind and liquidating distributions), profits, losses, income,
revenue, returns of capital, repayments of any loans made by Pledgor to the
Company (including interest and fees with respect to such loans), and any
and
all development, management and similar fees payable by the Company to Pledgor
of any kind or nature whatsoever, together with any and all other rights
and
property interests including, but not limited to, accounts, contract rights,
instruments and general intangibles arising out of, under or relating to
the
Operating Agreement;
(c) all
other
or additional equity or debt interests, other securities or property (including
cash) paid or distributed in respect of the Company by way of any spin-off,
merger, consolidation, dissolution, combination, reclassification or exchange
of
equity interests, asset sales, or similar rearrangement or reorganization;
and
(d) all
proceeds and products (both cash and non-cash) of the foregoing, whether
now or
hereafter arising under any of the foregoing..
Pursuant
to the Assignment Agreement, the Company is hereby authorized and directed
to:
(i) register
on the Company’s books the Pledgor’s pledge to the Lender of the Pledgor’s
interests in the Company;
(ii) make
direct payment to the Lender of any amounts due or to become due to the Pledgor
under the Operating Agreement, if so notified by the Lender; and
(iii) comply
with all instructions originated by the Lender without further consent by
the
Pledgor.
The
Pledgor hereby requests the Company to indicate the Company’s acceptance of this
Notice of Pledge and consent to and confirm its terms and provisions by signing
a copy hereof where indicated below and returning the same to the Lender
along
with an Initial Transaction Statement in the form attached hereto.
Dated
as
of ____________, 200_
|
ARGAN,
INC.
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| By: | /s/ Xxxxxx Xxxxxxxxxx (SEAL) | |
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Name: Xxxxxx Xxxxxxxxxx Title:
Chairman and CEO
|
||
|
GEMMA
POWER SYSTEMS, LLC
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||
| |
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| By: |
/s/
Xxxxxxx X. Xxxxxxx,
Xx. (Seal)
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Name:
Xxxxxxx X. Xxxxxxx, Xx.
Title:
Manager
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EXHIBIT
C
INITIAL
TRANSACTION STATEMENT
(Pledge
by Argan, Inc, the “Pledgor”)
To:
Attention:
Re: Member
Interests in Gemma Power Systems, LLC, (the “Company”)
1. Registration
of Pledge.
This is
to confirm registration by the Company of the pledge to the Lender of the
entire
right, title and interest in and to the Company (the “Interest”)
owned
of record by the Pledgor, the holder of one hundred percent (100%) of the
ownership interests in the Company.
Such
pledge was registered on _________, _____.
The
address of the registered owner of the Interest is:
The
registered owner’s Taxpayer I.D. No. is ___________________.
2. Liens,
Adverse Claims and Restrictions.
The
Interest is not subject to any liens or restrictions of the Company or adverse
claims.
(a) The
Interest is subject to all of the terms of the operating agreement of the
Company and of applicable laws.
(b) The
Interest may not be transferred without compliance with the provisions of
the
operating agreement of the Company and compliance with applicable federal
and
state securities laws.
(c) At
the
time of registration of the pledge described above, the Interest was not
subject
to any liens or restrictions of the Company (except as set forth above or
in the
operating agreement), or any adverse claims as to which the Company has a
duty
pursuant to applicable state law.
This
Initial Transaction Statement is a record of the rights of the Lender as
of the
time of its issuance, and is neither a negotiable instrument nor a
security.
Dated
as
of ____________, 200_.
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GEMMA
POWER SYSTEMS, LLC
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| |
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| By: | /s/ Xxxxxxx X. Xxxxxxx, Xx. (Seal) | |
|
Name:
Xxxxxxx X. Xxxxxxx, Xx.
Title:
Manager
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