UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Title of Each Class: | Trading Symbol(s): | Name of Each Exchange on | ||
Item 1.01. Entry into a Material Definitive Agreement.
On May 24, 2024, Argan, Inc. (the “Company”) and certain of its subsidiaries, as borrowers, entered into the Second Amended and Restated Replacement Credit Agreement with Bank of America, N.A. (the “Bank”), as the lender, with an expiration date of May 31, 2027 (the “New Credit Agreement”).
The New Credit Agreement supersedes the expiring credit agreement, as amended, that was executed on May 15, 2017, reduces the base lending commitment amount from $50.0 million to $35.0 million, increases the letter of credit fees to be consistent with current market conditions, and establishes the interest rate for revolving loans at the Secured Overnight Financing Rate (“SOFR”) plus 1.85%. In addition to the base commitment, the facility includes an accordion feature that allows for an additional commitment of $30.0 million, subject to certain conditions, that represents an increase from the $10.0 million accordion provided by our expiring credit agreement. The Company may use the borrowing ability to cover other credit instruments issued by the Bank for the Company’s use in the ordinary course of business as defined in the New Credit Agreement. Further, on May 31, 2024, the Company completed the negotiation of a companion facility, in the amount of $25.0 million, pursuant to which the Company’s Irish subsidiary, Atlantic Projects Company Limited (“APCL”), may cause the Bank’s European entity to issue letters of credit on its behalf (the “Master Issuance and Indemnity Agreement”) that will be secured by a blanket parent company guarantee issued by the Company to the Bank (the “Guarantee of Payment Agreement”).
Together, the New Credit Agreement, the companion facility, and the parent company guarantee are hereinafter referred to as the “Credit Facilities.”
The Credit Facilities include customary terms, covenants and events of default for credit facilities of this size and nature. Despite the reduction in the base amount of the credit commitment provided by the New Credit Agreement, the increased accordion amount and the addition of the Master Issuance and Indemnity Agreement companion facility provide the Company with greater flexibility in managing its credit requirements, at a potentially lower overall cost.
The foregoing summary of the Credit Facilities is not complete and is qualified in its entirety by reference to the New Credit Agreement; the Master Issuance and Indemnity Agreement between APCL and the Bank; and the Guaranty of Payment Agreement between the Company and the Bank, which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is hereby incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
Exhibit No. |
| Description |
10.1 |
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10.2 | ||
10.3 | Guarantee of Payment Agreement, dated May 24, 2024, between Argan, Inc. and Bank of America, N.A. | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| ARGAN, INC. | ||||
Date: May 31, 2024 |
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| By: |
| /s/ Richard H. Deily | |
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| Richard H. Deily | |||
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| Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary |
Exhibit 10.1
SECOND AMENDED AND RESTATED REPLACEMENT CREDIT AGREEMENT
Dated as of May 24, 2024
among
ARGAN, INC.,
as the Company or Borrower,
CERTAIN SUBSIDIARIES OF THE COMPANY,
as Designated Borrowers,
and
BANK OF AMERICA, N.A.,
as the Lender
TABLE OF CONTENTS
Page
BORROWER PREPARED SCHEDULES
Schedule 1.01(b)Responsible Officers
Schedule 5.10Insurance
Schedule 5.12Pension Plans
Schedule 5.20(a) | Subsidiaries, Joint Ventures, Partnerships and Other Equity Investments |
Schedule 5.20 (b)Loan Parties
Schedule 5.21(b)Intellectual Property
Schedule 5.21(c)Documents, Instrument, and Tangible Chattel Paper
Schedule 5.21(d)(i)Deposit Accounts & Securities Accounts
Schedule 5.21(d)(ii)Electronic Chattel Paper & Letter-of-Credit Rights
Schedule 5.21(e)Commercial Tort Claims
Schedule 5.21(f)Pledged Equity Interests
Schedule 5.21(g)(ii)Other Properties
Schedule 5.21(h)Material Contracts
Schedule 7.01Existing Liens
Schedule 7.02Existing Indebtedness
Schedule 7.03Existing Investments
LENDER PREPARED SCHEDULES
Schedule 1.01(a)Certain Addresses for Notices
Schedule 1.01(c)Existing Letters of Credit
EXHIBITS
Exhibit A(Form of) Compliance Certificate
Exhibit B(Form of) Joinder Agreement
Exhibit C(Form of) Loan Notice
Exhibit E(Form of) Solvency Certificate
Exhibit F(Form of) Notice of Loan Prepayment
Exhibit G(Form of) Designated Borrower Request and Assumption Agreement
Exhibit H(Form of) Designated Borrower Notice
Exhibit I(Form of) Officer’s Certificate
SECOND AMENDED AND RESTATED REPLACEMENT CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REPLACEMENT CREDIT AGREEMENT is entered into as of May 24, 2024, among ARGAN, INC., a corporation organized and in good standing under the laws of the State of Delaware (the “Company” or the “Borrower”), certain Subsidiaries of the Company party hereto pursuant to Section 2.13 (each, a “Designated Borrower” and, together with the Company, the “Borrowers”, and each, a “Borrower”), and BANK OF AMERICA, N.A., as the Lender.
PRELIMINARY STATEMENTS:
WHEREAS, certain of the Borrowers and the Lender are parties to an Amended and Restated Replacement Credit Agreement dated as of May 15, 2017 (the same, as amended, modified, substituted, extended, and renewed from time to time prior to the Closing Date, the “Existing Credit Agreement”);
WHEREAS, the Loan Parties (as hereinafter defined) have requested that the Lender amend and restate the Existing Credit Agreement in its entirety and make loans and other financial accommodations to the Loan Parties in an aggregate amount of up to $35,000,000; and
WHEREAS, the Lender has agreed to amend and restate the Existing Credit Agreement in its entirety and make such loans and other financial accommodations to the Loan Parties on the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
As used in this Agreement, the following terms shall have the meanings set forth below:
“Applicable Rate” means, for any day, the rate per annum set forth:
Term SOFR Revolving Loans | Daily Simple SOFR Revolving Loans | Base Rate Revolving Loans | Letters of Credit | Cash Collateralized Letters of Credit | Unused Fee |
1.85% | 1.85% | 1.00% | 1.85% | 1.25% | 0.25% |
“CME” means CME Group Benchmark Administration Limited.
“Designated Lender” shall have the meaning set forth in Section 2.14.
For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.
“Judgment Currency” has the meaning specified in Section 10.19.
provided that if the Term SOFR determined in accordance with either of the foregoing provisions (a) or (b) of this definition would otherwise be less than zero, the Term SOFR shall be deemed zero for purposes of this Agreement.
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that, with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.
(a)The Lender does not warrant, nor accept responsibility, nor shall the Lender have any liability with respect to the administration, submission or any other matter related any reference rate referred to herein or with respect to any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternative or replacement for or successor to any such rates (including, without limitation, any Successor Rate) (or any component of any of the foregoing) or the effect of any of the foregoing, or of any Conforming Changes. The Lender and its affiliates or other related entities may engage in transactions or other activities that affect any reference rate referred to herein, or any alternative, successor or replacement rate (including, without limitation, any Successor Rate) (or any component of any of the foregoing) or any related spread or other adjustments thereto, in each case, in a manner adverse to the Borrower. The Lender may select information sources or services in its reasonable discretion to ascertain any reference rate referred to herein or any alternative, successor or replacement rate (including, without limitation, any Successor Rate) (or any component of any of the foregoing), in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or other action or omission related to or affecting the selection, determination, or calculation of any rate (or component thereof) provided by any such information source or service.
(b) The Lender shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates
employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Lender.
(a)The Company and any Designated Borrower may from time to time request that Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency”; provided that such requested currency is an Eligible Currency. Such request shall be subject to the approval of the Lender.
(b)Any such request shall be made to the Lender not later than 11:00 a.m., twenty (20) Business Days prior to the date of the desired Credit Extension (or such other time or date as may be agreed by the Lender in its sole discretion).
(c)Any specified currency of an Existing Letter of Credit that is neither Dollars nor one of the Alternative Currencies specifically listed in the definition of “Alternative Currency” shall be deemed an Alternative Currency with respect to such Existing Letter of Credit only.
(a)Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.
(b)Each provision of this Agreement shall be subject to such reasonable changes of construction as the Lender may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.
(c)Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Lender may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.
All requests for a Revolving Loan, Letters of Credit and other Credit Extensions shall be made by the Company on behalf of a Borrower and each Borrower hereby irrevocably appoints the Company as its agent and true and lawful attorney in fact and grants to the Company (i) full and exclusive power to execute this Agreement and any amendments hereto for and on its behalf or on behalf of any other Borrower, all other Loan Documents and all other documents and electronic platforms entered into in connection herewith and therewith, (ii) full power to request Revolving Loans, Letters of Credit and other Credit Extensions for an on its behalf or on behalf of any other Borrower, (iii) full power to prepare, or authorize the preparation of, any and all documents, certificates or disclosure materials reasonable and ordinarily prepared in connection with the issuance of Revolving Loans, Letters of Credit and other Credit Extensions under this Agreement, and to execute and deliver such items to the appropriate parties in connection therewith. Each Borrower further agrees that (i) the Company may execute such documents on behalf of any Borrower as the Company deems appropriate in its sole discretion, (ii) and each Borrower shall be obligated by all of the terms of any such document executed on its behalf any notice or communication delivered by the Lender to the Company shall be deemed delivered to each Borrower and (iii) the
Lender may accept, and be permitted to rely on, any document, instrument or agreement executed by the Company on behalf of each Loan Party.
Subject to the terms and conditions set forth herein, the Lender agrees to make loans (each such loan, a “Revolving Loan”) to the Borrowers (as requested by the Company), in Dollars or in one or more Alternative Currencies, from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of the Revolving Commitment; provided, however, that after giving effect to any Revolving Borrowing, (i) the Total Revolving Outstandings shall not exceed the Revolving Facility, (ii) the aggregate Outstanding Amount of all Loans made to the Designated Borrowers shall not exceed the Designated Borrower Sublimit, and (iii) the aggregate Outstanding Amount of all Loans denominated in Alternative Currencies shall not exceed the Alternative Currency Sublimit. Within the limits of the Revolving Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow Revolving Loans, prepay under Section 2.05, and reborrow under this Section 2.01(b). Revolving Loans may be Base Rate Loans or Term SOFR Loans, as further provided herein; provided, however, that any Revolving Borrowings made on the Closing Date or any of the three (3) Business Days following the Closing Date shall be made as Base Rate Loans unless the Company on behalf of each Borrower delivers a Funding Indemnity Letter not less than three (3) Business Days prior to the date of such Revolving Borrowing.
Without limiting the foregoing, neither the Lender nor any of its Related Parties shall have any liability or responsibility by reason of (A) any presentation that includes forged or fraudulent documents or that is otherwise affected by the fraudulent, bad faith, or illegal conduct of the beneficiary or other Person, (B) the Lender declining to take-up documents and make payment, (C) against documents that are fraudulent, forged, or for other reasons by which that it is entitled not to honor, (D) following a Borrower’s waiver of discrepancies with respect to such documents or request for honor of such documents, or (E) the Lender retaining proceeds of a Letter of Credit based on an apparently applicable attachment order, blocking regulation, or third-party claim notified to the Lender.
(a)Optional. The Company may, upon notice to the Lender pursuant to delivery to the Lender of a Notice of Loan Prepayment, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty; provided, that, unless otherwise agreed by the Lender (A) such notice must be received by the Lender not later than 11:00 a.m. (1) two (2) Business Days prior to any date of prepayment of Term SOFR Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Term SOFR Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Term SOFR Loans are to be prepaid, the Interest Period(s) of such Loans. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Term SOFR Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.
(b)Mandatory.
(i)Revolving Outstandings. If for any reason the Total Revolving Outstandings at any time exceed the Revolving Facility at such time, the Borrower shall immediately prepay Revolving Loans (together with all accrued but unpaid interest thereon) and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that, the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b) unless, after the prepayment of the Revolving Loans, the Total Revolving Outstandings exceed the Revolving Facility at such time.
(ii)Application of Other Payments. Prepayments of the Revolving Facility made pursuant to this Section 2.05(b), first, shall be applied ratably to the L/C Borrowings, second, shall be applied to the outstanding Revolving Loans, and, third, shall be used to Cash Collateralize the remaining L/C Obligations; and, in the case of prepayments of the Revolving Facility required pursuant to clauses (i) of this Section 2.05(b), the amount remaining, if any, after the prepayment in full of all L/C Borrowings and Revolving Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full (the sum of such prepayment amounts, Cash Collateralization amounts and remaining amount being, collectively, the “Reduction Amount”) may be retained by the Borrower for use in the ordinary course of its business. Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Borrower or any other Loan Party that has provided Cash Collateral) to reimburse the Lender.
(iii)Alternative Currencies. If the Lender notifies the Company at any time that the Outstanding Amount of all Loans and L/C Obligations denominated in Alternative Currencies at such time exceeds an amount equal to 105% of the Alternative Currency Sublimit then in effect, then, within two (2) Business Days after receipt of such notice, the Borrowers shall prepay Loans and/or Cash Collateralize Letters of Credit in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Alternative Currency Sublimit then in effect.
Within the parameters of the applications set forth above, prepayments pursuant to this Section 2.05(b) shall be applied first (1st) to Base Rate Loans and then to Term SOFR Loans in direct order of Interest Period maturities. All prepayments under this Section 2.05(b) shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment.
(a)Optional. The Company may, upon notice to the Lender, terminate the Revolving Facility or the Letter of Credit Sublimit, or from time to time reduce the Revolving Facility or the Letter of Credit Sublimit; provided, that, (i) any such notice shall be received by the Lender not later than 11:00 a.m. five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess thereof and (iii) the Company shall not terminate or reduce (A) the Revolving Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Outstandings would exceed the Revolving Facility or (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit.
(b)Mandatory. If after giving effect to any reduction or termination of Revolving Commitments under this Section 2.06, the Letter of Credit Sublimit, the Alternative Currency Sublimit or the Designated Borrower Sublimit exceeds the Revolving Facility at such time, the Letter of Credit Sublimit, the Alternative
Currency Sublimit or the Designated Borrower Sublimit, as the case may be, shall be automatically reduced by the amount of such excess.
(c)Payment of Fees. All fees in respect of the Revolving Facility accrued until the effective date of any termination of the Revolving Facility shall be paid on the effective date of such termination.
The Borrower shall repay to the Lender on the Maturity Date for the Revolving Facility the aggregate principal amount of all Revolving Loans outstanding on such date.
(a)Interest. Subject to the provisions of Section 2.08(b), (i) each Term SOFR Loan under a Facility shall bear interest on the outstanding principal amount thereof for each Interest Period from the applicable Borrowing date at a rate per annum equal to Term SOFR for such Interest Period plus the Applicable Rate for such Facility; and (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable Borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility. To the extent that any calculation of interest or any fee required to be paid under this Agreement shall be based on (or result in) a calculation that is less than zero, such calculation shall be deemed zero for purposes of this Agreement.
(b)Default Rate.
(i)If any amount of principal of any Loan is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws.
(ii)If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Lender such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws.
(iii)Upon the request of the Lender, while any Event of Default exists (including a payment default), all outstanding Obligations (including Letter of Credit Fees) may accrue at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws.
(iv)Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c)Interest Payments. Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
In addition to certain fees described in clauses (m) and (p) of Section 2.03:
(a)Unused Fee. The Borrowers shall pay to the Lender an unused fee in Dollars equal to the Applicable Rate times the actual daily amount by which the Revolving Facility exceeds the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the Outstanding Amount of L/C Obligations. The unused fee
shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first (1st) such date to occur after the Closing Date, and on the last day of the Availability Period for the Revolving Facility.
(b)Upfront Fee. The Borrowers shall pay to the Lender on the Closing Date an upfront fee in the amount of $105,000 (the “Upfront Fee”). The Upfront Fee is considered earned when paid and is not refundable.
(a)Computation of Interest and Fees. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to Term SOFR) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365 day year), or, in the case of interest in respect of Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11, bear interest for one (1) day. Each determination by the Lender of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
(a) General Payment Terms. All payments to be made by the Borrowers shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all payments by the Borrower hereunder shall be made to the Lender at the Lender’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all payments by the Borrowers hereunder shall be made to the Lender at the Lender’s Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specified herein. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Lender at the Lender’s Office in such Alternative Currency and in Same Day Funds not later than the Applicable Time specified by the Lender on the dates specified herein. Without limiting the generality of the foregoing, the Lender may require that any payments due under this Agreement be made in the United States. If, for any reason, any Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, such Borrower shall make such payment in Dollars in the Dollar Equivalent of the Alternative Currency payment amount. All payments received by the Lender (i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable Time specified by the Lender, in the case of payments in an Alternative Currency, shall in each case be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. Subject to Section 2.07(a) and as otherwise specifically provided for in this Agreement, if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(a)Certain Credit Support Events. If (i) any L/C Obligation for any reason remains outstanding as of the Maturity Date, or (ii) the Borrower shall be required to provide Cash Collateral pursuant to the terms hereof, the Borrower shall immediately following any request by the Lender, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount. Additionally, if the Lender notifies the Company at any time that the Outstanding Amount of all L/C Obligations at such time exceeds one-hundred and ten percent
(110.0)% of the Letter of Credit Sublimit then in effect, then within two (2) Business Days after receipt of such notice, the Company shall provide Cash Collateral for the Outstanding Amount of the L/C Obligations in an amount not less than the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.
(b)Grant of Security Interest. The Borrowers hereby grant to (and subjects to the control of) the Lender and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as Collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.12(c). If at any time the Lender determines that Cash Collateral is subject to any right or claim of any Person other than the Lender, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Lender, pay or provide to the Lender additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more blocked, non-interest bearing deposit accounts at Bank of America. The Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.
(c)Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.12 or Sections 2.03, 2.05 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.
(d)Release. Cash Collateral (or the appropriate portion thereof) provided to secure obligations shall be released promptly following the determination by the Lender that there exists excess Cash Collateral; provided, however, that, (i) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (ii) the Person providing Cash Collateral and the Lender may agree that Cash Collateral shall not be released but instead held to support future anticipated obligations.
(a)Designated Borrowers. The Company may at any time, upon not less than fifteen (15) Business Days’ notice from the Company to the Lender (or such shorter period as may be agreed by the Lender in its sole discretion), request to designate any Subsidiary of the Company (an “Applicant Borrower”) as a Designated Borrower to receive Loans hereunder by delivering to the Lender a duly executed notice and agreement in substantially the form of Exhibit G (a “Designated Borrower Request and Assumption Agreement”). The parties hereto acknowledge and agree that prior to any Applicant Borrower becoming entitled to utilize the credit facilities provided for herein (i) the Lender must agree to such Applicant Borrower becoming a Designated Borrower and (ii) the Lender shall have received such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, content and scope reasonably satisfactory to the Lender, as may be required by the Lender (the requirements in clauses (i) and (ii) hereof, the “Designated Borrower Requirements”). If the Designated Borrower Requirements are met, the Lender shall send a notice in substantially the form of Exhibit H (a “Designated Borrower Notice”) to the Company specifying the effective date upon which the Applicant Borrower shall constitute a Designated Borrower for purposes hereof, whereupon the Lender agrees to permit such Designated Borrower to receive Loans hereunder, on the terms and conditions set forth herein, and each of the parties agrees that such Designated Borrower otherwise shall be a Borrower for all purposes of this Agreement; provided, that, no Loan Notice or Letter of Credit Application may be submitted by or on behalf of such Designated Borrower until the date five (5) Business Days after such effective date.
(b)Obligations. Except as specifically provided herein, the Secured Obligations of the Company and each of the Borrowers shall be joint and several in nature (unless such joint and several liability (i) shall result in adverse tax consequences to any such Designated Borrower or (ii) is not permitted by any Law applicable to such Designated Borrower, in which either such case, the liability of such Designated Borrower shall be several in
nature) regardless of which such Person actually receives Credit Extensions hereunder or the amount of such Credit Extensions received or the manner in which the Lender accounts for such Credit Extensions on its books and records. Notwithstanding anything contained to the contrary herein or in any Loan Document (including any Designated Borrower Request and Assumption Agreement), (A) no Designated Borrower that is a Foreign Subsidiary shall be obligated with respect to any Secured Obligations of the Company or of any Domestic Subsidiary, (B) the Secured Obligations owed by a Designated Borrower that is a Foreign Subsidiary shall be several and not joint with the Secured Obligations of the Company or of any Designated Borrower that is a Domestic Subsidiary and (C) no Designated Borrower that is a Foreign Subsidiary shall be obligated as a Guarantor under Article IX with respect to the Secured Obligations of the Company or any Domestic Subsidiary.
(c)Appointment. Each Subsidiary of the Company that is or becomes a “Designated Borrower” pursuant to this Section 2.13 hereby irrevocably appoints the Company to act as its agent for all purposes of this Agreement and the other Loan Documents.
The Lender at its option may make any Credit Extension or otherwise perform its obligations hereunder through the Lender’s Office (each, a “Designated Lender”); provided, that, any exercise of such option shall not affect the obligation of such Borrower to repay any Credit Extension in accordance with the terms of this Agreement. Any Designated Lender shall be considered a Lender; provided, that, designation of a Designated Lender is for administrative convenience only and does not expand the scope of liabilities or obligations of any Lender or Designated Lender beyond those of the Lender designating such Person as a Designated Lender as provided in this Agreement.
If any payments to the Lender under this Agreement are made from outside the United States, the Borrower will not deduct any foreign Taxes from any payments it makes to the Lender. If any such Taxes are imposed on any payments made by the Borrower (including payments under this Section 3.01), the Borrower shall pay the Taxes and will also pay to the Lender, at the time interest is paid, any additional amount which the Lender specifies as necessary to preserve the after-tax yield the Lender would have received if such taxes had not been imposed. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority, as provided in this Section 3.01, the Borrower will deliver to the Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender.
The Borrower will confirm that it has paid the Taxes by giving the Lender official tax receipts (or notarized copies) within thirty (30) days after the due date.
(a) If the Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for the Lender or the applicable Lender’s Office to make, maintain or fund or charge interest with respect to any Credit Extension, or to determine or charge interest rates based upon SOFR or Term SOFR, then, upon notice thereof by the Lender to the Company, (a) any obligation of the Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Term SOFR Loans or to convert Base Rate Loans to Term SOFR Loans shall be suspended, and (b) if such notice asserts the illegality of the Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the
Term SOFR component of the Base Rate, the interest rate on which Base Rate Loans of the Lender shall, if necessary to avoid such illegality, be determined by the Lender without reference to the Term SOFR component of the Base Rate, in each case until the Lender notifies the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Borrowers shall, upon demand from the Lender, prepay or, if applicable, convert all Term SOFR Loans to Base Rate Loans (the interest rate on which Base Rate Loans of the Lender shall, if necessary to avoid such illegality, be determined by the Lender without reference to the Term SOFR component of the Base Rate), either on the last day of the Interest Period therefor, if the Lender may lawfully continue to maintain such Term SOFR Loan to such day, or immediately, if the Lender may not lawfully continue to maintain such Term SOFR Loan and (ii) if such notice asserts the illegality of the Lender determining or charging interest rates based upon SOFR, the Lender shall during the period of such suspension compute the Base Rate applicable to the Lender without reference to the Term SOFR component thereof until the Borrowers are advised in writing by the Lender that it is no longer illegal for the Lender to determine or charge interest rates based upon SOFR. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 3.05.
(b) If, in any applicable jurisdiction, Lender or any Designated Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for Lender or its applicable Designated Lender to (i) perform any of its obligations hereunder or under any other Loan Document, (ii) to fund, hold a commitment or maintain its participation in any Loan or Letter of Credit or (iii) issue, make, maintain, fund or charge interest or fees with respect to any Credit Extension to any Designated Borrower who is organized under the laws of a jurisdiction other than the United States, a State thereof or the District of Columbia, Lender shall promptly notify the Company, and until such notice by Lender is revoked, any obligation of Lender to issue, make, maintain, fund or charge interest or fees with respect to any such Credit Extension shall be suspended, and to the extent required by Applicable Law, cancelled. Upon receipt of such notice, the Loan Parties shall, (A) repay outstanding Obligations, (B) to the extent applicable, Cash Collateralize that portion of applicable L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized and (C) take all reasonable actions requested by Lender to mitigate or avoid such illegality.
(a)If in connection with any request for a Term SOFR Loan or a conversion of Base Rate Loans to Term SOFR Loans or a to or continuation of any of such Loans, as applicable, (i) the Lender determines (which determination shall be conclusive absent manifest error) that (A) no Successor Rate has been determined in accordance with Section 3.03(b), and the circumstances under clause (i) of Section 3.03(b) or the Scheduled Unavailability Date has occurred, or (B) adequate and reasonable means do not otherwise exist for determining Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan or in connection with an existing or proposed Base Rate Loan, or (ii) the Lender determines that for any reason that Term SOFR for any requested Interest Period with respect to a proposed Loan does not adequately and fairly reflect the cost to the Lender of funding such Loan, the Lender will promptly so notify the Borrowers. Thereafter, (x) the obligation of the Lender to make or maintain Term SOFR Loans or to convert Base Rate Loans to Term SOFR Loans shall be suspended (to the extent of the affected Term SOFR Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of the Base Rate, the utilization of the Term SOFR component in determining the Base Rate shall be suspended, in each case until the Lender revokes such notice. Upon receipt of such notice, (i) the Borrowers may revoke any pending request for a Borrowing of, or conversion to or continuation of Term SOFR Loans (to the extent of the affected Term SOFR Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein and (ii) any outstanding Term SOFR Loans shall be deemed to have been converted to Base Rate Loans immediately at the end of their respective applicable Interest Period.
then, on a date and time determined by the Lender (any such date, the “Term SOFR Replacement Date”), which date shall be at the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and, solely with respect to clause (ii) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any Loan Document with Daily Simple SOFR plus the SOFR Adjustment for any payment period for interest calculated that can be determined by the Lender, in each case, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document (the “Successor Rate”).
If the Successor Rate is Daily Simple SOFR plus the SOFR Adjustment, all interest payments will be payable on a monthly basis.
Notwithstanding anything to the contrary herein, (i) if the Lender determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date or (ii) if the events or circumstances of the type described in Section 3.03(b)(i) or (ii) have occurred with respect to the Successor Rate then in effect, then in each case, the Lender and the Borrower may amend this Agreement solely for the purpose of replacing Term SOFR or any then current Successor Rate in accordance with this Section 3.03 at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with an alternative benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated bilateral credit facilities executed in the United States for such alternative benchmark and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated bilateral credit facilities executed in the United States for such benchmark. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a Successor Rate.
The Lender will promptly (in one or more notices) notify the Borrower of the implementation of any Successor Rate.
Any Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Lender, such Successor Rate shall be applied in a manner as otherwise reasonably determined by the Lender.
Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero, the Successor Rate will be deemed to be zero for the purposes of this Agreement and the other Loan Documents.
In connection with the implementation of a Successor Rate, the Lender will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Lender shall provide each such amendment implementing such Conforming Changes to the Borrowers reasonably promptly after such amendment becomes effective.
(a)Increased Costs Generally. If any Change in Law shall:
(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender;
(ii)subject the Lender to any taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)impose on the Lender any other condition, cost or expense affecting this Agreement or Term SOFR Loans made by the Lender or any Letter of Credit;
and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to the Lender of issuing or maintaining any Letter of Credit (or of maintaining its obligation to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest or any other amount) then, upon request of the Lender, the Borrower will pay (or cause the applicable Designated Borrower to pay) to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
(b)Capital Requirements. If the Lender determines that any Change in Law affecting the Lender or the Lender’s Office or the Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on the Lender’s capital or on the capital of the Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of the Lender or the Loans made by or the Letters of Credit issued by the Lender, to a level below that which the Lender or the Lender’s holding company could have achieved but for such Change in Law (taking into consideration the Lender’s policies and the policies of the Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay (or cause the applicable Designated Borrower to pay) to the Lender such additional amount or amounts as will compensate the Lender or the Lender’s holding company for any such reduction suffered.
(c)Certificates for Reimbursement. A certificate of the Lender setting forth the amount or amounts necessary to compensate the Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section 3.04 and delivered to the Company shall be conclusive absent manifest error. The Company shall pay (or cause the applicable Designated Borrower to pay) the Lender the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.
(d)Delay in Requests. Failure or delay on the part of the Lender to demand compensation pursuant to the foregoing provisions of this Section 3.04 shall not constitute a waiver of the Lender’s right to demand such compensation, provided that the Company shall not be required to compensate the Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that the Lender notifies the Company of the Change in Law giving rise to such increased costs or reductions and of the Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).
Upon demand of the Lender from time to time, the Borrower shall promptly compensate (or cause the applicable Designated Borrower to compensate) the Lender for and hold the Lender harmless from any loss, cost or expense incurred by it as a result of:
(a)any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b)any failure by the Borrower (for a reason other than the failure of the Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower or the applicable Designated Borrower; or
(c)any failure by any Borrower to make payment of any Loan or drawing under any Letter of Credit (or interest due thereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency.
including any loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Borrower shall also pay (or cause the applicable Designated Borrower to pay) any customary administrative fees charged by the Lender in connection with the foregoing.
All of the Borrower’s obligations under this Article III shall survive termination of the Commitments, repayment of all other Obligations hereunder and the Facility Termination Date.
The obligation of the Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
The obligation of the Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Term SOFR Loans) is subject to the following conditions precedent:
Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Term SOFR Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
Each Loan Party represents and warrants to the Lender, as of the date made or deemed made, that:
Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. The copy of the Organization Documents of each Loan Party provided to the Lender pursuant to the terms of this Agreement is a true and correct copy of each such document, each of which is valid and in full force and effect.
The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of (or the requirement to create) any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Applicable Law.
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or (d) the exercise by the Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, other than (i) authorizations, approvals, actions, notices and filings which have been duly obtained and (ii) filings to perfect the Liens created by the Collateral Documents.
This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principals of equity.
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Loan Parties, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any Subsidiary or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document or any of the transactions contemplated hereby, or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or could result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts , with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party or the applicable Subsidiary operates. The general liability, casualty, property, terrorism and business interruption insurance coverage of the Loan Parties as in effect on the Closing Date, and as of the last date such Schedule 5.10 was required to be updated in accordance with Sections 6.02, 6.13 and 6.14, is outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 5.10 and such insurance coverage complies with the requirements set forth in this Agreement and the other Loan Documents.
Each Loan Party and each of its Subsidiaries have timely filed all federal, state and other material tax returns and reports required to be filed, and have timely paid all federal, state and other material Taxes (whether or not shown on a tax return) levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect, nor is there any tax sharing agreement applicable to the Borrower or any Subsidiary.
The Company has disclosed to the Lender all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries or any other Loan Party is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
Each Loan Party and each Subsidiary thereof is in compliance with the requirements of all Applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
Each Loan Party is, individually and together with its Subsidiaries on a Consolidated basis, Solvent.
Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
The Responsible Officers are the duly elected and qualified officers of such Loan Party which are duly authorized to execute and deliver, on behalf of the respective Loan Party, this Agreement, and the other Loan Documents.
The information included in the Beneficial Ownership Certification, if applicable, is true and correct in all respects.
Each of the Loan Parties hereby covenants and agrees that, on the Closing Date and thereafter until the Facility Termination Date, such Loan Party shall, and shall cause each of its Subsidiaries, to:
Deliver to the Lender, in form and detail satisfactory to the Lender:
As to any information contained in materials furnished pursuant to Section 6.02(f), the Company shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Company to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.
Deliver to the Lender, in form and detail satisfactory to the Lender:
Promptly, but in any event within five (5) Business Days, notify the Lender:
Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and to the extent applicable, stating what action the Company has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
Pay and discharge as the same shall become due and payable (after giving effect to any applicable grace or cure periods), all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.
Comply with the requirements of all Applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which: (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Loan Party or such Subsidiary, as the case may be.
Use the proceeds of the Credit Extensions for Permitted Acquisitions and for general corporate purposes of the Company and its Subsidiaries not in contravention of any Law or of any Loan Document.
Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Lender and, upon request of the Lender, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
The Loan Parties will cause each of their Subsidiaries whether newly formed, after acquired or otherwise existing to promptly (and in any event within sixty (60) days after such Subsidiary is formed or acquired (or such longer period of time as agreed to by the Lender in its reasonable discretion)) become a Guarantor hereunder by way of execution of a Joinder Agreement (unless such Subsidiary has already been designated a Designated Borrower in accordance with the terms of Section 2.13 hereof); provided, that, no Foreign Subsidiary shall be required to become a Guarantor to the extent such Guaranty would result in a material adverse tax consequence for the Company or any of its Subsidiaries. In connection therewith, the Loan Parties shall give notice to the Lender not less than three (3) days prior to creating a Subsidiary (or such shorter period of time as agreed to by the Lender in its reasonable discretion), or acquiring the Equity Interests of any other Person. In connection with
the foregoing, the Loan Parties shall deliver to the Lender, with respect to each new Guarantor to the extent applicable, substantially the same documentation required pursuant to Sections 4.01 (b) – (f), (j) and 6.13 and such other documents or agreements as the Lender may reasonably request, including without limitation, updated Schedules 1.01(b), 5.10, 5.12, 5.20(a), 5.20(b), 5.21(b), 5.21(c), 5.21(d)(i), 5.21(d)(ii), 5.21(e), 5.21(f), 5.21(g)(ii) and 5.21(h).
Except with respect to Excluded Property:
Conduct its business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other applicable anti-corruption legislation in other jurisdictions and with all applicable Sanctions, and maintain policies and procedures designed to promote and achieve compliance with such laws and Sanctions.
Maintain all authorizations, consents, approvals and licenses from, exemptions of, and filings and registrations with, each Governmental Authority of the jurisdiction in which each Foreign Subsidiary is organized and existing, and all approvals and consents of each other Person in such jurisdiction, in each case that are required in connection with the Loan Documents.
Maintain all primary cash management and treasury business with Bank of America, including, without limitation, all deposit accounts, disbursement accounts, investment accounts and lockbox accounts, other than (i) the operating accounts of The Roberts Company, Inc., (ii) any Subsidiary acquired after the execution of this Agreement for the first year of ownership, and (iii) primary accounts of Foreign Subsidiaries outside of the United States.
Promptly upon request by the Lender, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Lender may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by Applicable Law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.
Each of the Loan Parties hereby covenants and agrees that on the Closing Date and thereafter until the Facility Termination Date, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for the following (the “Permitted Liens”):
Create, incur, assume or suffer to exist any Indebtedness, except:
Make or hold any Investments, except:
i. | The Borrowers shall, on a consolidated Pro Forma Basis after giving effect to such Investment, have Liquidity of not less than Thirty Five Million Dollars ($35,000,000); |
ii. | The Borrowers ratio of Total Funded Debt to EBITDA, on a consolidated Pro Forma Basis, shall be less than 2.00 to 1.00; |
iii. | No Default or Event of Default shall have occurred and be continuing; |
iv. | Not less than three (3) 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 |
v. | 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; and |
(i) | Any other Investment approved in writing by the Lender in its sole and absolute discretion. |
Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that so long as no Default exists or would result therefrom:
Make any Disposition or enter into any agreement to make any Disposition, except:
Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:
The Loan Parties shall be permitted to make (i) dividends or other distributions, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interests of the Company or any of its Subsidiaries, now or hereafter outstanding, (ii) redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares (or equivalent) of any class of Equity Interests of the Company or any of its Subsidiaries, now or hereafter outstanding, (iii) payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding (each, a “Permitted Payment” and collectively, the “Permitted Payments”), provided the Permitted Payments do not exceed (i) Fifty-Five Million Dollars ($55,000,000) in the fiscal year ending January 31, 2023, and (ii) Forty-Seven Million Five Hundred Thousand Dollars ($47,500,000) in any other fiscal year, and shall be made out of available funds as set forth on the Consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and further, provided that each of the following conditions is satisfied at the time of, and after giving effect to, any Permitted Payments:
(i)The Borrowers shall, on a consolidated Pro Forma Basis after giving effect to such Permitted Payment, have a positive balance in the Borrowers’ retained earnings account as reflected on the related Consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto;
(ii)No Default or Event of Default shall have occurred and be continuing;
(iii)Not less than three (3) Business Days prior to the closing of any Permitted Payment (excluding a share repurchase program), Borrowers shall have provided the Lender written notice of such Permitted Payment, together with calculations and supporting materials which demonstrate that the Borrowers will satisfy each of the requirements for a Permitted Payment; and
(iv)Not less than three (3) Business Days prior to the execution of a share repurchase program transacting in the capital markets, Borrowers shall have provided the Lender written notice of such share repurchase program, together with calculations and supporting materials which demonstrate that the Borrowers will satisfy each of the requirements for a Permitted Payment.
Engage in any material line of business substantially different from those lines of business conducted by the Company and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.
Enter into or permit to exist any transaction or series of transactions with any officer, director or Affiliate of such Person, other than (a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party, (c) intercompany transactions expressly permitted by this Agreement, (d) normal and reasonable compensation and reimbursement of expenses of officers and directors, and (e) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person’s business on fair and reasonable terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arms’ length transaction with a Person other than an officer, director or Affiliate.
Enter into, or permit to exist, any Contractual Obligation (except for this Agreement and the other Loan Documents) that (a) encumbers or restricts the ability of any such Person to (i) to act as a Loan Party; (ii) make Restricted Payments to any Loan Party, (iii) pay any Indebtedness or other obligation owed to any Loan Party, (iv) make loans or advances to any Loan Party, or (v) create any Lien upon any of their properties or assets, whether now owned or hereafter acquired (other than Permitted Liens).
Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.
Enter into any Sale and Leaseback Transaction.
Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension, or lend, contribute or otherwise make available such Credit Extension or the proceeds of any Credit Extension to any Person, to fund any activities of or business with any Person, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender or otherwise) of Sanctions.
Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other anti-corruption legislation in other jurisdictions.
Any of the following shall constitute an event of default (each, an “Event of Default”):
If a Default shall have occurred under the Loan Documents, then such Default will continue to exist until it either is cured (to the extent specifically permitted) in accordance with the Loan Documents or is otherwise expressly waived by Lender as determined in accordance with Section 10.01; and once an Event of Default occurs under the Loan Documents, then such Event of Default will continue to exist until it is expressly waived by the Lender, as required hereunder in Section 10.01.
If any Event of Default occurs and is continuing, the Lender may take any or all of the following actions:
provided, however, that, upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, the obligation of the Lender to make Loans and L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Lender.
After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02) or if at any time insufficient funds are received by and available to the Lender to pay fully all Secured Obligations then due hereunder, any amounts received on account of the Secured Obligations shall, subject to the provisions of Section 2.12, be applied by the Lender in its sole discretion. Excluded Swap Obligations with respect to any Loan Party shall not be paid with amounts received from such Loan Party or its assets.
Each Guarantor hereby absolutely and unconditionally, jointly and severally guarantees, as primary obligor and as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Secured Obligations (for each Guarantor, subject to the proviso in this sentence, its “Guaranteed Obligations”); provided, that, (a) the Guaranteed Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor and (b) the liability of each Guarantor individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any applicable state law. Without limiting the generality of the foregoing, the Guaranteed Obligations shall include any such indebtedness, obligations, and liabilities, or portion thereof, which may be or hereafter become unenforceable or compromised or shall be an allowed or disallowed claim under any proceeding or case commenced by or against any debtor under any Debtor Relief Laws. The Lender’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Secured Obligations. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Secured Obligations or any instrument or agreement evidencing any Secured Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Secured Obligations which might otherwise constitute a defense to the obligations of the Guarantors, or any of them, under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Secured Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Secured Obligations; (c) apply such security and direct the order or manner of sale thereof as the Lender in its sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Secured Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
Each Guarantor waives: (a) any defense arising by reason of any disability or other defense of the Borrower or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrower or any other Loan Party; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other Loan Party; (c) the benefit of any statute of limitations affecting any Guarantor’s liability hereunder; (d) any right to proceed against the Borrower or any other Loan Party, proceed against or exhaust any security for the Secured Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by Applicable Law limiting the liability of or exonerating guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Secured Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Secured Obligations.
The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Secured Obligations and the obligations of any other guarantor, and a separate action may be brought against each Guarantor to enforce this Guaranty whether or not the Borrowers or any other person or entity is joined as a party.
No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Secured Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments and the Facility is terminated. If any amounts are paid to a Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Secured Obligations, whether matured or unmatured.
This Guaranty is a continuing and irrevocable guaranty of all Secured Obligations now or hereafter existing and shall remain in full force and effect until the Facility Termination Date. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrowers or a Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Secured Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this Section 9.06 shall survive termination of this Guaranty.
If acceleration of the time for payment of any of the Secured Obligations is stayed, in connection with any case commenced by or against a Guarantor or a Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by each Guarantor, jointly and severally, immediately upon demand by the Secured Parties.
Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrowers and any other guarantor such information concerning the financial condition, business and operations of the Borrowers and any such other guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to it any information relating to the business, operations or financial condition of the Borrowers or any other guarantor (each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
Each of the Loan Parties hereby appoints the Company to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic platforms entered into in connection
herewith and agrees that: (a) the Company may execute such documents and provide such authorizations on behalf of such Loan Parties as the Company deems appropriate in its sole discretion and each Loan Party shall be obligated by all of the terms of any such document and/or authorization executed on its behalf; (b) any notice or communication delivered by the Lender to the Company shall be deemed delivered to each Loan Party; and (c) the Lender may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Company on behalf of each of the Loan Parties.
The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under Applicable Law.
Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty or the grant of a Lien under the Loan Documents, in each case, by any Specified Loan Party becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Article IX voidable under Applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 9.11 shall remain in full force and effect until the Secured Obligations have been indefeasibly paid and performed in full. Each Loan Party intends this Section 9.11 to constitute, and this Section 9.11 shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Lender and the Borrower or the applicable Loan Party, as the case may be, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by fax transmission shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the
recipient). Notices and other communications delivered through electronic communications to the extent provided in clause (b) below shall be effective as provided in such clause (b).
(ii)Unless the Lender otherwise prescribes, (A) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (B) notices and other communications posted to an Internet or intranet website shall be deemed received by the intended recipient upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail address or other written acknowledgement) indicating that such notice or communication is available and identifying the website address therefor; provided, that, for both clauses (A) and (B), if such notice or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
No failure by the Lender to exercise, and no delay by the Lender in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
To the extent that any payment by or on behalf of any Borrower is made to the Lender, or the Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.
This Agreement is binding on each Loan Party’s and the Lender’s successors and assignees. Each Loan Party agrees that it may not assign this Agreement without the Lender’s prior written consent. The Lender may sell participations in or assign this Loan, and may exchange information about the Loan Parties (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees. If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrower.
If an Event of Default shall have occurred and be continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by the Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or any other Loan Party now or hereafter existing under this Agreement or any other Loan Document to the Lender or its Affiliates, irrespective of whether or not the Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or any other Loan Party may be contingent or unmatured, secured or unsecured, or are owed to a branch, office or Affiliate of the Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The rights of the Lender and its Affiliates under this Section 10.08 are in addition to other rights and remedies (including other rights of setoff) that the Lender or its Affiliates may have under Applicable Law. The Lender agrees to notify the Borrower promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (the “Maximum Rate”). If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
This Agreement, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Lender, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Lender and when the Lender shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Lender, regardless of any investigation made by the Lender or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding and until the Facility Termination Date.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.14.
Each Loan Party (a “Subordinating Loan Party”) hereby subordinates the payment of all obligations and indebtedness of any other Loan Party owing to it, whether now existing or hereafter arising, including but not limited to any obligation of any such other Loan Party to the Subordinating Loan Party as subrogee of the Secured Parties or resulting from such Subordinating Loan Party’s performance under this Agreement, to the indefeasible payment in full in cash of all Obligations. If the Secured Parties so request, any such obligation or indebtedness of any such other Loan Party to the Subordinating Loan Party shall be enforced and performance received by the Subordinating Loan Party as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Secured Obligations, but without reducing or affecting in any manner the liability of the Subordinating Loan Party under this Agreement. Without limitation of the foregoing, so long as no Default has occurred and is continuing, the Loan Parties may make and receive payments with respect to Intercompany Debt; provided, that, in the event that any Loan Party receives any payment of any Intercompany Debt at a time when such payment is prohibited by this Section 10.15, such payment shall be held by such Loan Party, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to the Lender.
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) the services regarding this Agreement provided by the Lender and any Affiliate thereof are arm’s-length commercial transactions between the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Lender and its Affiliates, on the other hand, (ii) each of the Borrower and the other Loan Parties has consulted its
own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower and each other Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) the Lender and its Affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Borrower, any other Loan Party or any of their respective Affiliates, or any other Person and (ii) neither the Lender nor any of its Affiliates has any obligation to the Borrower, any other Loan Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) the Lender and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and neither the Lender nor any of its Affiliates has any obligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrower and each other Loan Party hereby waives and releases any claims that it may have against the Lender or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby.
This Agreement, any Loan Document and any other Communication, including Communications required to be in writing, may be in the form of an Electronic Record and may be executed using Electronic Signatures. Each of the Loan Parties and the Lender agrees that any Electronic Signature on or associated with any Communication shall be valid and binding on such Person to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Lender may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary, the Lender is not under any obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by such Person pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Lender has agreed to accept such Electronic Signature, the Lender shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any Loan Party without further verification and regardless of the appearance or form of such Electronic Signature, and (b) upon the request of the Lender, Electronic Signature shall be promptly followed by a manually executed counterpart.
Other than the Lender’s obligation to act in good faith, the Lender shall not be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with the Lender’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Lender shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any Communication (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution or signed using an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof) unless the Lender’s reliance is grossly negligent or the result of the Lender’s willful misconduct.
Each of the Loan Parties hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, and (ii) waives any claim against the Lender and each Related Party for any liabilities arising solely from the Lender’s reliance on or use of Electronic Signatures, including any liabilities arising as a result of the failure of the Loan Parties to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature, other than any claims which directly arise from the Lender’s gross negligence or willful misconduct.
Each of the parties represents and warrants to the other parties that it has the corporate capacity and authority to execute this Agreement and any other Communication through electronic means and there are no restrictions on doing so in that party’s constitutive documents.
The Lender hereby notifies the Borrower and the other Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107–56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower and each other Loan Party, which information includes the name and address of the Borrower and each other Loan Party and other information that will allow the Lender to identify the Borrower and each other Loan Party in accordance with the Patriot Act. The Borrower and each other Loan Party shall, promptly following a request by the Lender, provide all such other documentation and information that the Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Lender could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Loan Party in respect of any such sum due from it to the Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Lender of any sum adjudged to be so due in the Judgment Currency, the Lender may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Lender from any Loan Party in the Agreement Currency, such Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Lender against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Lender in such currency, the Lender agrees to return the amount of any excess to such Loan Party (or to any other Person who may be entitled thereto under Applicable law).
This Agreement is amends and restates in its entirety the Existing Credit Agreement and any Indebtedness outstanding thereunder shall be deemed to be outstanding under this Agreement. Nothing in this Agreement shall be deemed to be a repayment or novation of the Indebtedness, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Lender against any guarantor, surety or other party primarily or secondarily liable for such Indebtedness.
To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States): In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
BORROWER: | ARGAN, INC. |
By: /s/ David Watson (Seal)
David Watson
Chief Executive Officer
DESIGNATED
BORROWERS: | SOUTHERN MARYLAND CABLE, INC. |
By: /s/ David Watson (Seal)
David Watson
Vice President and Treasurer
GEMMA POWER, INC.
By: /s/ Richard H. Deily (Seal)
Richard H. Deily
Chief Financial Officer
GEMMA POWER SYSTEMS CALIFORNIA, INC.
By: /s/ Richard H. Deily (Seal)
Richard H. Deily
Chief Financial Officer
GEMMA POWER SYSTEMS, LLC
By: /s/ Richard H. Deily (Seal)
Richard H. Deily
Manager
GEMMA POWER HARTFORD, LLC
By: /s/ David Watson (Seal)
David Watson
Manager
GEMMA PLANT OPERATIONS, LLC
By: /s/ David Watson (Seal)
David Watson
Manager
ATLANTIC PROJECTS COMPANY, INC.
By: /s/ Richard H. Deily (Seal)
Richard H. Deily
Chief Financial Officer
GEMMA RENEWABLE POWER, LLC
By: /s/ Richard H. Deily (Seal)
Richard H. Deily
Manager
TRC ACQUISITION, LLC
By: /s/ David Watson (Seal)
David Watson
Manager
THE ROBERTS COMPANY, INC.
By: /s/ Bobby Foister, Jr. (Seal)
Bobby Foister, Jr.
Chief Executive Officer
[Signature Pages Continue]
BANK OF AMERICA, N.A.,
as Lender
By: /s/ Colleen Landau
Colleen Landau
Senior Vice President
Exhibit 10.2
MASTER ISSUANCE AND INDEMNITY AGREEMENT (CORPORATE) (BANA)
This Agreement is executed as a Deed and delivered the 31st day of May 2024.
BETWEEN:
(1) Bank of America, National Association, 2 King Edward Street, London EC1A 1HQ (the “the Bank”); and
(2) Atlantic Projects Company Limited, a company incorporated under the laws of the Republic of Ireland with Registered number 276990 and located at the 4th and 5th Floors, Bedford Place, Howley’s Quay, Limerick, Ireland, (the “Indemnifier” and an “Applicant”),
each a “Party” and together the “Parties”.
1. | DEFINITIONS: |
“Affiliate” means with respect to a specified person, an entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified;
“Applicant”, means each of the Indemnifier and the Designated Affiliates and the term “the Applicant” shall be a reference to any one or more of them, individually or collectively, and, for the avoidance of doubt, including the Indemnifier in its capacity as Indemnifier, in each case as the context may require.
“Application” means the form containing the request of the Applicant for the issue of an Undertaking;
“Authorised Signatory" means any person (whether legal or natural) from time to time authorised by Applicant for the purposes of the Agreement;
“Damages” means any and all losses, claims, actions, proceedings, judgments, orders, liabilities, demands, damages, costs and expenses (including without limitation, legal fees and allocated costs for in-house legal services);
“Designated Affiliate” means an Affiliate of the Indemnifier listed in Schedule 1 (Designated Affiliates) and any other Affiliate of the Indemnifier that the Indemnifier designates as a Designated Affiliate by delivering a notice in the form set out in Schedule 2 (Notice of additional Designated Affiliate) and the Bank accepting such notice by countersigning it;
“ETS System” means Bank of America CashPro® Online and/or any of the Bank’s successor access electronic channel(s) from time to time;
“Fees” means any and all fees, charges, costs, interest or commission in connection with an Undertaking, as agreed from time to time, between the Indemnifier and the Bank.
“Losses” means:
(i) | all Damages arising out of the issuance by the Bank of, or any other action taken by the Bank in connection with, any Undertaking; and |
(ii) | all Damages arising out of the issuance by the Bank of any Undertaking or incident to the collection of amounts owed by the Indemnifier under this Agreement or in enforcing, or attempting to enforce, the Bank’s rights under this Agreement), including, without limitation, in relation to any court order, injunction, or other process, any regulation or regulatory or other action by any person, in each case seeking to restrain the Bank from paying any amount under any Undertaking; and |
(iii) | all Damages arising out of the Indemnifier’s or any of its Affiliates’ failure to procure on a timely basis any licences or to comply with any applicable laws, regulations or rules or any other conduct or failure of the Indemnifier or any of its Affiliates relating to or affecting any Undertaking; and |
(iv) | any increased cost incurred by the Bank in connection with an Undertaking arising as a result of the introduction of or any change in (or in the interpretation, administration or application of) of any law or regulation of the United Kingdom or other relevant jurisdiction; and/or, compliance with any law or regulation made after the date of this Agreement; and/or compliance by the Bank with any request from |
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any central bank, regulator or other fiscal monetary or other authority of United Kingdom or elsewhere (as the case may be); and
(v) | any tax or withholding that may be imposed on or claimed from the Bank in relation to the above or otherwise in relation to this Agreement or any Undertaking but not including taxes imposed upon the Bank with respect to its overall net income. |
“Undertaking” means any indemnity, guarantee, bond, letter of credit or other form of undertaking whatsoever and howsoever described.
2. | UNDERTAKING ISSUANCE |
2.1 | The Bank shall be under no obligation or commitment of any kind but may, in its sole and absolute discretion, issue any Undertaking requested by the Indemnifier or any Designated Affiliate for the account of the Indemnifier whether such Undertaking is on its own behalf, that of its Affiliate or of a third party. An Undertaking may be issued by any branch, office or Affiliate of the Bank anywhere in the world or by a correspondent of the Bank supported as required by the Bank’s Undertaking in favour thereof and the Indemnifier undertakes the obligations hereunder in relation to all such Undertakings without exception; |
2.2 | The Bank may at any time give notice to the Indemnifier that no further Undertakings will be issued at the request of any or all Applicants pursuant to this Agreement and no requests shall thereafter be made by any such Applicant; and |
2.3 | Applicant is responsible for the final text of any Undertaking as issued by the Bank, whether prepared by Applicant or the Bank (whether by utilising a template instrument or otherwise) and unless the sole and direct result of the Bank’s gross negligence or wilful misconduct, the Bank shall have no liability in respect of, and the Indemnifier’s obligations under this Agreement shall not be affected by, Undertaking text that is erroneous, ambiguous, inconsistent, insufficient, ineffective or illegal or fails to incorporate appropriate rules. |
3. | REIMBURSEMENT AND INDEMNITY |
3.1 | The Indemnifier shall forthwith on demand: |
(a) | pay to the Bank all Fees; |
(b) | reimburse the Bank for all sums demanded of, or paid out by, the Bank under or in respect of any Undertaking; |
(c) | indemnify the Bank against any loss it incurs as a result of the conversion of any amount due under this Agreement from the currency in which it is payable hereunder into another currency in any related judgment or order or as required in order to file a claim or proof or for the purposes of enforcement; |
(d) | where the Bank acts in accordance with Clause 8.3, indemnify, and keep indemnified, the Bank from and against all Damages incurred or sustained by the Bank of whatever nature and howsoever arising except in the event such Damages are directly caused by the Bank’s fraud, gross negligence or wilful misconduct (and this indemnity will survive the termination of the Agreement without limit in time); and |
(e) | indemnify, and keep indemnified, the Bank against all Losses which arise in relation to or out of, or as a result of the Bank having issued, each Undertaking, |
in each case, together with interest thereon as well after as before judgment, from the due date thereof or, if earlier, the date when the relevant payments or Losses were first disbursed or satisfied by the Bank (whether directly or by way of set-off, counterclaim or otherwise) until payment by the Indemnifier in full, at the rate of two per cent (2%) per annum above what the Bank conclusively in its sole discretion determines is or would have been the cost to the Bank of acquiring the funds in the relevant amount. Interest will be computed on the basis of the actual days elapsed and a 360-day year, or, where the practice in the relevant interbank market differs, in accordance with that practice.
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3.2 | However, the Indemnifier, shall not be obliged to indemnify the Bank pursuant to clause (c) (d) and (e) if Indemnifier can produce a final, non-appealable judgement of the courts mentioned in clause 23 concluding that any Loss or Damage referred to in point (c) (d) and (e) was the sole and direct result of the Bank’s gross negligence or willful misconduct. This indemnity shall be a continuing security and shall not be satisfied or discharged by any intermediate payment or settlement of account. |
4. | PAYMENTS |
4.1 | Each payment (including interest) of the Indemnifier shall be either in the currency or currencies in which each of the Bank’s disbursements or satisfaction was made or, at the Bank’s option, its equivalent in pounds sterling or U.S. dollars at the rate prevailing on the date of the Bank’s disbursements or satisfaction and paid without set-off or counterclaim and in immediately available funds to such account at such bank as the Bank may from time to time specify. |
4.2 | The Indemnifier irrevocably authorises the Bank, without prejudice to any other right or remedy, to debit any account which the Indemnifier may have with the Bank or its Affiliates or such other account as the Indemnifier notifies to Bank from time to time (including any other account held with a third party bank from time to time), for an amount the Bank determines is equal to the sum of any liability due and payable by the Indemnifier hereunder, whether the relevant account is in credit or in debit or may thereby become overdrawn or otherwise. If requested by the Bank to do so, the Indemnifier hereby undertakes to take such steps and do all things as the Bank considers necessary or desirable to give effect to this clause. The Bank must notify as soon as reasonably practicable prior to make a debit pursuant to this clause. |
4.3 | The Bank may (at any time and without prejudice to any of the Bank’s other rights howsoever arising and without prior notice or demand for payment) combine, consolidate merge, retain, apply or set off any money held in any account of the Indemnifier at the Bank against any money owed by the Bank to the Indemnifier in any currency towards payment of any amount owing by the Indemnifier to the Bank in relation to this Agreement or any Undertaking; and/or accelerate the maturity of any fixed term deposit. For the purposes of this Clause 4.3, the Bank may affect currency conversions at such times or rates as the Bank considers reasonable and may affect such transfers between any account as the Bank considers necessary. |
5. | NO ENQUIRY, NO CONSEQUENTIAL DAMAGES |
5.1 | The Indemnifier authorises the Bank without any reference to, or further authority from, the Indemnifier or the Applicant and without prior notification to the Applicant of any presentation or demand for payment: |
(a) | to make any payments or comply with any demands which are, or which appear or purport to be, claimed or made under each Undertaking: |
(i) | without enquiry into the justification for the making of the demand or the validity, binding nature, completeness, genuineness or accuracy of any statement or certificate received by the Bank with respect to or under any Undertaking; and |
(ii) | despite any contestation whatsoever on the part of the Applicant or any other person; |
and the Indemnifier agrees that any such claim or demand shall, as between the Bank and the Indemnifier, be accepted by the Indemnifier as conclusive evidence that the Bank was liable to pay or comply with the same and was, in all respects, liable to do so in the manner, and for the amount, in which the Bank made payment or effected compliance; and
(b) | to elect not to make payments or comply with any demands (i) as a result of discrepancies notwithstanding any waiver by the Applicant thereof, or (ii) in accordance with any attachment order, blocking regulation or third-party claim alleged to be applicable to the Undertaking. |
5.2 | In no event will either Party be liable for any indirect, consequential or punitive loss, damage, cost or expense of any nature (even if advised of the possibility of such loss, damage, cost or expense) of the other Party, including, without limitation, any economic loss or damage, expense and loss of business, profits or |
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revenue, goodwill and anticipated savings, loss of or corruption to any other Party’s ’s data, loss of operation time or loss of contracts.
6. | REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS |
6.1 | The Indemnifier hereby represents and warrants that: |
(a) | in all respects, the obligations of the Indemnifier under this Agreement constitute and will always constitute legal, valid, binding and enforceable obligations of the Indemnifier, compliant with its constitutive documents, internal authorisations and applicable law and all import and export licences and other governmental approvals required for any goods or documents described in any Undertaking have been obtained; |
(b) | any request by Applicant for an Undertaking that relates to a third party other than the Applicant has been duly authorised by that third party; |
(c) | all information the Applicant may have provided to the Bank regarding the beneficial ownership and controlling parties of the Applicant is, to the best of the Indemnifier’s knowledge, complete and correct; |
(d) | the entry into and performance by it of, and the transactions contemplated by, this Agreement promote the success of the Indemnifier for the benefit of its members as a whole; and |
(e) | the Indemnifier has acknowledged and understood that the Agreement contemplates applications for issuance of Undertakings being made by the Indemnifier for and on behalf of its Affiliates and/or Designated Affiliates, or by the Designated Affiliates directly, in each case with the Indemnifier being liable for reimbursing and indemnifying the Bank in accordance with the terms of the Agreement and at the date of this Agreement, the Indemnifier is solvent and will not become insolvent due to entering into, and/or performing its obligations under, the Agreement. |
6.2 | The Applicant shall promptly notify the Bank if: (i) there is a Change of Control, or (ii) the Applicant becomes aware of circumstances that may result in a Change of Control. For the purposes of this Clause 6.2, a “Change of Control” means a situation where a shareholder of the Applicant ceases directly or indirectly to: (i) have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: (A) cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Applicant; or (B) appoint or remove all, or the majority, of the directors or other equivalent officers of the Applicant; or (C) give directions with respect to the operating and financial policies of the Applicant with which the directors or other equivalent officers of the Applicant are obliged to comply; or (ii) hold beneficially more than 50% of the issued share capital of the Applicant (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital). |
7. | WAIVER OF DEFENCES |
The provisions of this Agreement shall not be affected by any act, omission, matter or thing which, but for this provision, would release, reduce or prejudice any of the Indemnifier’s liabilities under this Agreement, including without limitation, any incapacity or lack of power, authority or legal personality of or dissolution or change in the members, or status of, the Indemnifier, any unenforceability, illegality or invalidity of any Undertaking or any insolvency or similar proceedings.
8. | INSTRUCTIONS, NOTICES, ELECTRONIC COMMUNICATIONS, RECORDS AND SIGNATURES |
8.1 | Applicant’s instructions to the Bank in respect of all transactions under this Agreement will be delivered: (i) electronically and authenticated in accordance with such electronic transfer agreement(s) as may be agreed in writing between the Parties from time to time; or (ii) in writing (with Applicant’s stamp, where applicable) by the Authorised Signatory(ies) in accordance with such authority and limitations on authority as may be agreed from time to time between the Parties ("Written Instructions"); or (iii) by electronic mail, SWIFT (authenticated or otherwise) message or other electronic means (in such format as may be specified by the Bank from time to time) ("Instructions"). Applicant authorises the Bank to rely, accept and act on any |
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instruction with regard to any transaction, provided that such instruction is delivered in accordance with Clause 8.1.
8.2 | Applicant will: (i) furnish the Bank with such documents regarding Applicant’s Authorised Signatories as the Bank may reasonably request; (ii) promptly notify the Bank in writing of any change in the authority or identity of any Authorised Signatory and/or (iii) furnish the Bank with specimen signatures of any additional or substitute Authorised Signatory. Any such notice must be provided using such means and be in such form as the Bank may specify from time to time, and will not be effective until the Bank receive such notice and have had a reasonable time to act on it. Until such notice becomes effective, the Bank may rely on the existing list of Authorised Signatories. Clause 8.6 does not apply to notices given pursuant to this Clause 8.2. In the absence of any express limitation agreed between Applicant and the Bank on the authority of the Authorised Signatories, Applicant confirms that the authority of a single Authorised Signatory is sufficient for all purposes in relation to all transactions under this Agreement. |
8.3 | Subject to the Bank not acting in gross negligence or wilful misconduct, the Applicant authorises the Bank (but the Bank is not bound) to rely on and act in accordance with and/or take such steps as the Bank may in good faith consider appropriate in connection with or in reliance on any Instruction (as defined in Clause 8.1) which is or purports to be (whether by reason of forgery, misrepresentation or otherwise) given by or on behalf of Applicant, regardless of the circumstances prevailing at that time. |
8.4 | Applicant agrees that the Bank will not be liable for any Damages that Applicant may suffer or incur if the Bank acts on Instructions provided by: (i) electronic mail or other electronic means, whether or not authorised by an Authorised Signatory or (ii) SWIFT (authenticated or otherwise) message, whether or not authorised, provided only that, in the case of sub-Clause 8.4(i), the Bank acts in good faith believing (i) such person to be an Authorised Signatory and (ii) the instructions on their face appear to emanate from the Applicant. |
8.5 | The Bank shall not have any obligation to take any action in respect of instructions that in the Bank’s reasonable opinion are incomplete, incorrect, vague or ambiguous. The Bank will exercise reasonable care in verifying the signatures and/or Applicant’s stamp, where applicable, appearing on Written Instructions (as defined in Clause 8.1) from Applicant, but the Bank will not be liable for any loss or damage caused by or arising from the execution of Written Instructions which have been altered or on which the signatures have been forged where such alteration or forgery could not be detected by using reasonable care. |
8.6 | Unless otherwise provided in the Agreement, a notice under or in connection with this Agreement (a "Notice") will be in writing and in the English language. In the case of a Notice to be provided: (i) to the Applicant, such Notice may be: (A) mailed, faxed, or sent by electronic means (including by electronic mail or hyperlink) to the Applicant’s address, using the details given by the Applicant or any other address or details subsequently communicated by the Applicant to the Bank in writing; or (B) made available to the Applicant through the ETS System; or (ii) to the Bank, such Notice may be: (A) mailed, or sent by electronic mail by the Applicant to the Bank using the address or details of the local branch or the Applicant’s client services representative as communicated by the Bank to the Applicant in writing or any other address or details subsequently communicated by the Bank to the Applicant in writing for the purposes of this Clause 8.6; or (B) if agreed by the Bank, made available to the Bank through the ETS System. Such Notices will be effective when actually received. |
8.7 | Applicant consents to the use of electronic communications and electronic signatures for all purposes under or in connection with the Agreement. Both Parties are conscious of the risks that the use of electronic documents and signatures may entail and, nonetheless, have agreed to use them for their mutual benefit and agreed that this Agreement so executed and delivered must be recognised and have the same effects as if it were a paper-based document with wet-ink signatures. The Parties r represent and warrant to each other that any and all authorised signatories or other persons executing this Agreement (or otherwise accepting the terms of this Agreement on its behalf) have been duly authorised by it to do so, each in accordance with its constitutive documents and applicable law. |
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9. | ADDITIONAL SECURITY |
The Bank’s rights under this Agreement shall be in addition to, and shall not be in any way prejudiced or affected by, any one or more other indemnities, guarantees, security or other obligations whatsoever which the Bank may now or hereafter hold whether from the Indemnifier or from any other person.
10. | APPROPRIATIONS |
The Bank may at any time and without reference to the Indemnifier give time for payment or grant any other indulgence and give up, deal with, vary, exchange or abstain from perfecting or enforcing any other indemnities, guarantees, securities or other obligations whatsoever held by the Bank at any time and discharge any party thereto, and realise the same or any of them, and compound with, accept compositions from and make any other arrangements with the beneficiary of any Undertaking or any person or persons, as the Bank think fit, without affecting the Indemnifier’s liability under this Agreement.
11. | NO DISCHARGE OF INDEMNIFIER |
11.1 | The Bank at liberty, but not bound to, resort for the Bank’s own benefit to any other means of payment at any time and in any order the Bank think fit without thereby diminishing the Indemnifier’s liability hereunder. The Bank may enforce the Bank’s rights under this Agreement: |
(a) | either for the payment of the ultimate balance, after resorting to other means of payment; or |
(b) | for any balance due at any time notwithstanding that other means of payment have not been resorted to (without entitling the Indemnifier to any benefit from such other means of payment), |
so long as any moneys remain due or owing or payable (whether actually or contingently) from or by the Indemnifier to the Bank.
12. | AMENDMENTS TO UNDERTAKINGS |
12.1 | Any Undertaking may from time to time be, or be deemed to have been, modified, amended, renewed or extended: |
(a) | with the agreement of the beneficiary of such Undertaking and: |
(i) | either in accordance with its original terms; or |
(ii) | at the request of the Indemnifier or the Applicant; or |
(b) | as required under applicable law, regulation or by the action of any governmental or regulatory authority; and |
the Indemnifier’s liability under this Agreement shall continue to apply to any such Undertaking as so modified, amended, renewed or extended.
13. | APPLICABILITY, ASSIGNMENT AND TRANSFER |
13.1 | This Agreement shall be binding upon the Indemnifier, its successors and assigns, and shall inure to the benefit of the Bank, its successors, transferees and assigns. |
13.2 | The Bank may at any time assign any of the Bank’s rights or transfer or novate the Bank’s rights and obligations under this Agreement to another bank or financial institution. The Indemnifier shall promptly execute all documents and formalities which the Bank consider necessary or expedient to affect any such transfer or novation. |
13.3 | This Agreement shall continue to bind the Indemnifier notwithstanding any transfer, assignment, amalgamation, merger or reconstruction effected by the Bank and all references in this Agreement to “the Bank” shall, unless the context otherwise requires, be construed as including a reference to the Bank’s successors and assigns. |
13.4 | The Indemnifier may not at any time assign any of its rights or transfer or novate any of its rights or obligations under this Agreement. Any actual or attempted assignment, transfer or novation by the |
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Indemnifier of any of its rights or obligations under this Agreement without the Bank’s prior written consent shall be void.
14. | GROSS AMOUNT OF LOSSES |
The Indemnifier shall be liable for the gross amount of the Bank’s Losses and liabilities under or in respect of each Undertaking notwithstanding that the actual amount paid by the Bank in respect of such Undertaking is, for any reason whatsoever (including, without limitation, the operation or exercise of a right of set-off or counterclaim), less than such gross amount.
15. | GROSS-UP |
15.1 | All payments by the Indemnifier shall be made free and clear of any withholding or deduction whatsoever, whether in respect of present or future taxes, duties or other charges. If the Indemnifier is compelled by law to make any withholding or deduction from any payment, it shall: |
(a) | immediately notify the Bank; |
(b) | immediately, pay to the Bank such additional amounts as are necessary for the Bank to receive the amount which the Bank would have received if no such withholding or deduction had been required; |
(c) | pay the amount so deducted or withheld to the relevant taxing authority when due; |
(d) | provide the Bank with evidence that the taxes, duties or charges have been paid by forwarding to the Bank official receipts within 30 days of payment; and |
(e) | on demand, indemnify the Bank for the full amount of all taxes paid by the Bank and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such taxes were correctly or legally asserted. |
16. | COLLATERAL |
16.1 | Notwithstanding any other provision of this Agreement, the Indemnifier shall, on demand, deposit with the Bank as cash security for the Indemnifier’s obligations to the Bank under this Agreement, an amount equal to the Bank’s maximum contingent liability under each Undertaking. The Bank will hold any payment received from the Indemnifier as cash collateral with interest accruing for the Indemnifier’s account at the Bank’s normal deposit rate as determined by the Bank or apply such sums against the Bank’s contingent liability under the Undertakings. The Indemnifier shall not be entitled to repayment of any such sums unless all the Bank’s obligations in respect of the Undertakings have been discharged and only to the extent that there are sums left over after such discharge. |
16.2 | The Indemnifier agrees to create over any sum or sums deposited in accordance with paragraph 16.1 above and over the account in which the sum or sums are held, any security interest in the Bank’s favour which the Bank may request from time to time, if the Bank decides to hold that sum or sums as cash collateral. |
16.3 | The Indemnifier hereby irrevocably and by way of security appoints the Bank and any person nominated in writing under the hand of any officer of the Bank as attorney of the Indemnifier, for the Indemnifier, and in its name and on its behalf and as its act and deed, to prepare, complete, execute, seal, deliver, lodge and file and otherwise perfect any agreement, deed, assurance, instrument, memorandum, form or document and to institute and conduct any proceedings and to do any act or thing which it ought to do hereunder or which may be deemed by the Bank necessary, proper or prudent for any of the purposes of paragraph 16.2 above or necessary, proper or prudent for the purposes of perfecting, protecting, maintaining, preserving, enforcing or realising the Bank’s rights and interests under or pursuant to or in respect of the moneys deposited as cash collateral under this clause. |
17. | NO WAIVER OF THE BANK’S RIGHTS |
17.1 | No delay or omission on the Bank’s part in exercising any right, power, privilege or remedy (“Rights”) in respect of this Agreement shall impair any Right, or be construed as a waiver of any thereof. No single or |
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partial exercise of any Right shall preclude any further exercise thereof or the exercise of any other Rights. The Rights are cumulative and not exclusive of any rights, powers, privileges or remedies provided by law.
17.2 | Nothing in this Agreement shall affect any right of set-off or any other right whatsoever in the Bank’s favour existing or arising at common law, by statute or otherwise howsoever. |
18. | SEVERABILITY |
In the event that any of the terms or provisions of this Agreement are or shall become invalid, illegal or unenforceable, the remaining terms and provisions hereof shall survive unaffected.
19. | NO THIRD-PARTY RIGHTS |
A person who is not a party to this Agreement, other than the Bank, has no right under the Contracts (Rights of Third Parties) Act 1999 or otherwise to enforce or to enjoy the benefit of any term of this Agreement.
20. | SANCTIONS |
By submitting any request for the issue of any Undertaking and/or provision of any trade service by the Bank, the Indemnifier agrees on its own behalf, and on behalf of any Affiliates, not to undertake any business through the Bank involving (directly or indirectly) any jurisdiction, government, entity or person subject to economic sanctions imposed from time to time by any applicable United Kingdom, European Union, United States, United Nations or other authorities.
21. | ANTI-MONEY LAUNDERING AND ANTI-CORRUPTION LAWS |
Neither the Indemnifier, nor any of its directors, officers, agents, employees or Affiliates has engaged in any activity or conduct which would violate any applicable anti-money laundering and/or anti-bribery and corruption law or regulation in all the jurisdictions in which it conducts business and will comply, and has appropriate systems and controls in place to so comply, with all applicable anti-money laundering and anti-bribery and corruption laws and regulations.
22. | GOVERNING LAW |
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
23. | JURISDICTION |
23.1 | It is irrevocably agreed for the Bank’s exclusive benefit that the courts of England are to have jurisdiction to settle any disputes that may arise out of or in connection with this Agreement (including a dispute relating to any non-contractual obligation arising out of or in connection with this Agreement). (“Proceedings”). Nothing in this clause shall limit the Bank’s right to take Proceedings against the Indemnifier in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. |
23.2 | Without prejudice to any other mode of service and at the request of the Bank, Indemnifier shall promptly appoint an agent located in England for service of process with respect to proceedings in the courts of England, but if Indemnifier fails to do so, or the appointed agent is unable to act for whatever reason as Indemnifier’s agent for service of process, the Bank may appoint, at Indemnifier’s cost, an agent for service of process on behalf of Indemnifier. |
24. | SUPPLEMENTARY DOCUMENTS |
The Indemnifier agrees to provide a copy of any authorisation or other document, opinion or assurance, whether in relation to the Indemnifier, any Designated Affiliate or any other relevant person, which the Bank may from time to time consider necessary in connection with any Undertaking or for the validity and enforceability of this Agreement.
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25. | CONFIDENTIALITY |
25.1 | The Bank is hereby authorised to disclose the contents of this Agreement, any Undertaking or other documents delivered in connection with this Agreement, any information regarding the Applicant or which is publicly available: |
(a) | to any transferee, novating party, assignee or participant (whether actual or potential), any Affiliate or any person with whom the bank may otherwise consider entering into contractual relations in relation to this Agreement; |
(b) | in connection with any court proceedings; |
(c) | to the Bank’s, or any Affiliate’s, officers, directors, employees, auditors and professional advisers; and |
(d) | any information whatsoever in relation to the Applicant or the aforesaid documents and notices if required to do so by any law or regulation or by any request or the requirement (whether or not having the force of law) of any central bank, governmental, monetary, regulatory or other authority. |
26. | AMENDMENT |
Any amendment to this Agreement may be made by the Bank on reasonable prior notice given to the Indemnifier. Following such notice, if any request is made by the Applicant under or in connection with an Undertaking including in relation to any issuance, extension, renewal, amendment or other step to be taken by the Bank with respect to any Undertaking and/or the Applicant permits any Undertaking to continue to subsist, the Indemnifier will also be deemed to have accepted such amendment.
THIS DEED has been entered into as a deed on this 31st day of May 2024.
EXECUTED as a DEED by Atlantic Projects Company Limited acting by Mark S. Shinners and [NAME OF AUTHORISED SIGNATORY] who is permitted to execute for Atlantic Projects Company Limited under the laws of The Republic of Ireland | ) ………………………………………………………. Authorised signatory ) ………………………………………………………. Authorised signatory |
EXECUTED as a DEED by [NAME OF AUTHORISED SIGNATORY] as attorney for BANK OF AMERICA, NATIONAL ASSOCIATION under a power of attorney dated [DATE] in the presence of: Signature of witness: Name of witness: Address of witness: Occupation of witness: | ) ………………………………………………………. Attorney |
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SCHEDULE 1
DESIGNATED AFFILIATES
Name of Designated Affiliate | Company Number | Registered address of |
| | |
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SCHEDULE 2
NOTICE OF ADDITIONAL DESIGNATED AFFILIATES
To:Bank of America, National Association
From:[insert name of Indemnifier]
Dated:[please insert]
Dear Sirs
Master Issuance and Indemnity Agreement dated [insert] (the “Agreement”)
1. | We refer to the Agreement, we hereby designate [please insert name of Designated Affiliate], incorporated in [please insert], with company number [please insert] and registered address [please insert] as a Designated Affiliate under and as defined in the Agreement. |
2. | The Indemnifier hereby represents and warrants that: (i) the entry into and performance by it of, and the transactions contemplated by, this notice promote the success of the Indemnifier for the benefit of its members as a whole; and (ii) the Indemnifier has acknowledged and understood that the Agreement contemplates applications for issuance of Undertakings being made by the Indemnifier for and on behalf of its Designated Affiliates, or by the Designated Affiliates directly, in each case with the Indemnifier being liable for reimbursing and indemnifying the Bank in accordance with the terms of the notice and at the date of this notice, the Indemnifier is solvent and will not become insolvent due to performing its obligations under, the Agreement. |
3. | This notice and any non-contractual obligations arising out of or in connection with it are governed by English law. |
[insert name of Indemnifier]
|
| |
Name: | | Name: |
| | |
Title: | | Title: |
| | |
| | |
Accepted and agreed by | | |
| | |
Bank of America, National Association | | |
| | |
Name: | | |
| | |
Title: | | |
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Exhibit 10.3
GUARANTY OF PAYMENT AGREEMENT
THIS GUARANTY OF PAYMENT AGREEMENT (this “Agreement”) is made this 24th day of May, 2024, by ARGAN, INC., a corporation organized and in good standing under the laws of the State of Delaware (the “Guarantor”) for the benefit of BANK OF AMERICA, N.A. (the “Lender”).
RECITALS
NOW, THEREFORE, in order to induce the Lender to enter into the Financing Documents, the Guarantor covenants and agrees with the Lender as follows:
The Guarantor hereby unconditionally and irrevocably guarantees to the Lender:
170495890v4 200207.000070
The obligations and liabilities of the Guarantor under this Agreement shall be absolute and unconditional, irrespective of the genuineness, validity, priority, regularity or enforceability of the Financing Documents or any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or guarantor, unless a there is a final finding by a court having jurisdiction over the parties that the Lender’s conduct constituted gross negligence or willful misconduct. The Guarantor expressly agrees that the Lender may, in its sole and absolute discretion, without notice to or further assent of the Guarantor and without in any way releasing, affecting or in any way impairing the obligations and liabilities of the Guarantor hereunder:
The obligations and liabilities of the Guarantor under this Agreement shall be primary, direct and immediate, shall not be subject to any counterclaim, recoupment, setoff, reduction or defense based upon any claim that the Guarantor may have against the Borrower, the Lender and/or any other guarantor, other than a claim arising from the final finding by a court having jurisdiction over the parties that the Lender’s conduct constituted gross negligence or willful misconduct and shall not be conditional or contingent upon pursuit or enforcement by the Lender of any remedies it may have against the Borrower with respect to any of the Financing Documents, whether pursuant to the terms thereof or by operation of law. Without limiting the generality of the
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foregoing, the Lender shall not be required to make any demand upon the Borrower, or to sell any collateral securing the Obligations or otherwise pursue, enforce or exhaust its remedies against the Borrower or such collateral either before, concurrently with or after pursuing or enforcing its rights and remedies hereunder. Any one or more successive or concurrent actions or proceedings may be brought against the Guarantor under this Agreement, either in the same action, if any, brought against the Borrower or in separate actions or proceedings, as often as the Lender may deem expedient or advisable. Without limiting the foregoing, it is specifically understood that any modification, limitation or discharge of any of the liabilities or obligations of the Borrower, any other guarantor or any obligor under any of the Financing Documents, arising out of, or by virtue of, any bankruptcy, arrangement, reorganization or similar proceeding for relief of debtors under federal or state law initiated by or against the Borrower or the Guarantor or any obligor under any of the Financing Documents shall not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the liability of the Guarantor hereunder in any manner whatsoever, and this Agreement shall remain and continue in full force and effect. It is the intent and purpose of this Agreement that the Guarantor shall and does hereby waive all rights and benefits which might accrue to any other guarantor by reason of any such proceeding, and the Guarantor agrees that it shall be liable for the full amount of the obligations and liabilities under this Agreement, regardless of, and irrespective to, any modification, limitation or discharge of the liability of the Borrower, any other guarantor or any obligor under any of the Financing Documents, that may result from any such proceedings.
The Guarantor hereby unconditionally, irrevocably and expressly waives:
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In the event the Lender shall commence any action or proceeding for the enforcement of this Agreement, then the Guarantor will reimburse the Lender, promptly upon demand, for any and all documented out of pocket expenses incurred by the Lender in connection with such action or proceeding including, without limitation, reasonable attorneys’ fees together with interest thereon at the default rate.
The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement (individually, an “Event of Default” and collectively, the “Events of Default”):
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In the event the Lender shall elect to accelerate the maturity of any promissory note evidencing all or any part of the Obligations as to the Guarantor pursuant to the provisions of this Agreement, such election may be rescinded by written acknowledgment to that effect by the Lender; provided, however, that the acceptance of a partial payment on account of any promissory note evidencing all or any part of the Obligations shall not alone effect or rescind such election.
In the event the Guarantor shall advance any sums to the Borrower, or in the event the Borrower has heretofore or shall hereafter become indebted to the Guarantor before the Obligations have been paid in full, all such advances and indebtedness shall be subordinate in all respects to the Obligations (the “Guarantor Subordinated Debt”). Any payment to the Guarantor
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on account of the Guarantor Subordinated Debt shall be collected and received by the Lender or the Guarantor in trust for the Lender and shall be paid over to the Lender on account of the Obligations without impairing or releasing the obligations of the Guarantor hereunder.
Without the prior written consent of the Lender, the Guarantor shall not ask, demand, receive, accept, sue for, set off, collect or enforce the Guarantor Subordinated Debt or any collateral and security therefor. The Guarantor represents and warrants to the Lender that the Guarantor Subordinated Debt is unsecured and agrees not to receive or accept any collateral or security therefor without the prior written permission of the Lender. The Guarantor shall not assign, transfer, hypothecate or dispose of the Guarantor Subordinated Debt while this Agreement is in effect. In the event of any sale, receivership, insolvency or bankruptcy proceeding, or assignment for the benefit of creditors, or any proceeding by or against the Borrower for any relief under any bankruptcy or insolvency law or other laws relating to the relief of debtors, readjustment of indebtedness, reorganizations, compositions or extensions, then and in any such event any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon, or with respect to, all or any part of the Guarantor Subordinated Debt or otherwise shall be paid or delivered directly to the Lender for application to the obligations and liabilities of the Guarantor under this Agreement (whether due or not due and in such order and manner as the Lender may determine in the exercise of its sole discretion) until the obligations of the Guarantor hereunder shall have been fully paid and satisfied. The Guarantor hereby irrevocably authorizes and empowers the Lender to demand, sue for, collect and receive every such payment or distribution on account of the Guarantor Subordinated Debt and give acquittance therefor and to file claims and take such other proceedings in the Lender’s own name or in the name of the Guarantor or otherwise, as the Lender may deem necessary or advisable to carry out the provisions of this Agreement. The Guarantor hereby agrees to execute and deliver to the Lender such powers of attorney, assignments, endorsements or other instruments as may be requested by the Lender in order to enable the Lender to enforce any and all claims upon, or with respect to, the Guarantor Subordinated Debt, and to collect and receive any and all payments or distributions which may be payable or deliverable at any time upon or with respect thereto.
So as to secure the performance by the Guarantor of the provisions of this Agreement, the Guarantor assigns, pledges and grants to the Lender a security interest in, and lien on, the Guarantor Subordinated Debt, all proceeds thereof and all and any security and collateral therefor. Upon the request of the Lender, the Guarantor shall endorse, assign and deliver to the Lender all notes, instruments and agreements evidencing, securing, guarantying or made in connection with the Guarantor Subordinated Debt.
Nothing contained in this Agreement shall be construed to give the Guarantor any right of subrogation in or to the Obligations or any of the Financing Documents, or all or any part of the interest of the Lender therein, until the Obligations have been paid in full.
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The Guarantor represents and warrants to the Lender as follows:
The Guarantor (a) is duly organized, existing and in good standing under the laws of the jurisdiction set forth in the preamble to this Agreement, (b) has the power to own its property and to carry on its business as now being conducted, and (c) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned by it therein or in which the transaction of its business makes such qualification necessary.
The Guarantor has full power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party and to incur and perform the Obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary action under the governing documents of the Guarantor. No consent or approval of owners or any creditors of the Guarantor, and no consent, approval, filing or registration with or notice to any governmental authority on the part of the Guarantor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance by the Guarantor of the Obligations.
This Agreement and the other Financing Documents executed and delivered by the Guarantor have been properly executed and delivered and constitute the valid and legally binding obligations of the Guarantor and are fully enforceable against the Guarantor in accordance with their respective terms.
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 Guarantor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Guarantor’s organizational documents, (b) any existing mortgage, indenture, contract or agreement binding on the Guarantor or affecting its property, or (c) any Laws.
The Guarantor 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 Guarantor or any of its properties, the violation of which,
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considered in the aggregate, could materially adversely affect the business, operations or properties of the Guarantor.
There are no proceedings, actions or investigations pending or, so far as the Guarantor knows, threatened before or by any court, arbitrator or any governmental authority which, in any one case or in the aggregate, if determined adversely to the interests of the Guarantor, would have a material adverse effect on the business, properties, condition (financial or otherwise) or operations, present or prospective, of the Guarantor.
Any financial statements of the Guarantor provided to Lender are complete and correct and fairly present the financial position of the Guarantor and the results of its operations and transactions in its surplus accounts as of the date and for the period referred to and have been prepared in accordance with GAAP applied on a consistent basis throughout the period involved. There are no liabilities, direct or indirect, fixed or contingent, of the Guarantor as of the date of any such financial statements that are not reflected therein or in the notes thereto. There has been no adverse change in the financial condition or operations of the Guarantor since the date of any such financial statements and to the Guarantor’s knowledge no such adverse change is pending or threatened. The Guarantor has not guaranteed the obligations of, or made any investment in or advances to, any person, except as disclosed in any such financial statements. The representations and warranties contained in this Section shall also cover financial statements furnished from time to time to the Lender pursuant to Section 3.3 (Financial Records; Inspection).
The financial statements referred to in Section 2.1.7 (Financial Condition), the Financing Documents (including, without limitation, this Agreement), and the statements, reports or certificates furnished by the Guarantor in connection with the Financing Documents (a) do not contain any untrue statement of a material fact and (b) when taken in their entirety, do not omit any material fact necessary to make the statements contained therein not misleading. There is no fact known to the Guarantor which the Guarantor has not disclosed to the Lender in writing prior to the date of this Agreement which materially and adversely affects or in the future could, in the reasonable opinion of the Guarantor materially adversely affect the condition, financial or otherwise, results of operations, business, or assets of the Guarantor.
The Guarantor has a financial interest in the Borrower and will derive a benefit from the Loan extended to and the Obligations incurred by the Borrower.
All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the Closing Date, the making of any advance under the Financing Documents and the incurring of any Obligations.
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The Guarantor hereby covenants and agrees as follows:
The Guarantor shall maintain its existence in good standing in the jurisdiction in which it is organized 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 Guarantor to perform the Obligations, on the conduct of the Guarantor’s operations, on the Guarantor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.
The Guarantor will make, execute, acknowledge and deliver all and every such further acts and assurances as the Lender shall from time to time require for confirming or carrying out the intentions or facilitating the performance of the terms of this Agreement.
The Guarantor will (a) maintain or cause to be maintained full, complete, accurate and adequate records and books of account in accordance with generally accepted accounting principles consistently applied; (b) permit the Lender and its duly authorized agents, attorneys and accountants to inspect, examine, and copy its records and books of account at all reasonable times; (c) promptly deliver to the Lender such other information with respect to the financial statements of the Guarantor as the Lender may from time to time require.
Within ten (10) days following any request of the Lender so to do, the Guarantor will furnish the Lender and such other persons as the Lender may direct with a written certificate, duly acknowledged stating in detail whether or not any credits, offsets or defenses exist with respect to this Agreement.
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 to the Lender or to the Guarantor at the Borrower’s address in accordance with the Financing Documents.
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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This Agreement may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Guarantor. No waiver of any provision of this Agreement, nor consent to any departure by the Guarantor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Guarantor 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 right or remedy under this Agreement or under applicable Laws.
Without implying any limitation on the foregoing:
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:
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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:
The Lender may, without notice to, or consent of, the Guarantor, sell, assign or transfer to or participate with any person or persons all or any part of the Obligations, and each such person or persons shall have the right to enforce the provisions of this Agreement and any of the other Financing Documents as fully as the Lender, provided that the Lender shall continue to have the unimpaired right to enforce the provisions of this Agreement and any of the other Financing Documents as to so much of the Obligations that the Lender has not sold, assigned or transferred. In connection with the foregoing, the Lender shall have the right to disclose to any such actual or potential purchaser, assignee, transferee or participant all financial records, information, reports, financial statements and documents obtained in connection with this Agreement and any of the other Financing Documents or otherwise.
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This Agreement shall be binding upon the Guarantor and its successors and assigns, and shall inure to the benefit of the Lender and its successors and assigns.
All covenants, agreements, representations and warranties made by the Guarantor in this Agreement and in any certificate delivered pursuant hereto shall survive the making by the Lender of advances and other extensions of credit under the Loan and the execution and delivery of each promissory note evidencing all or any part of the Obligations, shall be binding upon the Guarantor regardless of how long before or after the date hereof any of the Obligations were or are incurred, and shall continue in full force and effect so long as any of the Obligations are outstanding and unpaid. From time to time upon the Lender’s request, and as a condition of the release of any one or more of the Security Documents, the Guarantor and other persons obligated with respect to the Obligations shall provide the Lender with such acknowledgments and agreements as the Lender may require to the effect that there exists no defenses, rights of setoff or recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against the Lender, its agents and others, or to the extent there are, the same are waived and released.
The Guarantor agrees to pay to the Lender on demand all Enforcement Costs, together with interest thereon from the date incurred or advanced until paid in full at a per annum rate of interest equal at all times to the default rate. Enforcement Costs shall be immediately due and payable at the time advanced or incurred, whichever is earlier. Without implying any limitation on the foregoing, the Guarantor agrees, as part of the Enforcement Costs, to pay upon demand any and all stamp and other Taxes and fees payable or determined to be payable in connection with the execution and delivery of this Agreement and to save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay any Taxes or fees referred to in this Section. The provisions of this Section shall survive the execution and delivery of this Agreement, the repayment of the other Obligations and shall survive the termination of this Agreement.
As a material inducement to the Lender to enter into this Agreement, the Guarantor acknowledges and agrees that the Financing Documents, including, this Agreement, shall be governed by the Laws of the State of New York, as if each of the Financing Documents and this Agreement had each been executed, delivered, administered and performed solely within the State of New York even though for the convenience and at the request of the Borrower, one or more of the Financing Documents may be executed elsewhere. The Lender acknowledges, however, that remedies under certain of the Financing Documents that relate to property outside the State of New York may be subject to the laws of the state in which the property is located.
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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.
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. The above Recitals are part of this Agreement.
Nothing contained in this Agreement shall be construed in a manner to create any relationship between the Guarantor and the Lender other than the relationship of guarantor and lender and the Guarantor and the Lender shall not be considered partners or co-venturers for any purpose. The terms and provisions of this Agreement are for the benefit of the Lender and its successors, assigns, endorsees and transferees and all persons claiming under or through it and no other person shall have any right or cause of action on account thereof. The Lender has no obligation to make any advance of any loan provided for in the Financing Documents or otherwise for the benefit of the Guarantor; the Guarantor has no beneficial interest in the proceeds of any of the loans or otherwise under the Obligations or rights or claims under the Financing Documents. The obligations and liabilities of the Guarantor shall in no manner be affected by the actual use of the proceeds of the Loan or otherwise or whether the Lender waives any or all of the conditions to advances set forth in the Financing Documents.
The Guarantor, irrevocably submits to the jurisdiction of any state or federal court sitting in the State of New York over any suit, action, or proceeding arising out of or relating to this Agreement. The Guarantor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to laying 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 Guarantor and may be enforced in any court to the jurisdiction of which the Guarantor is subject, by a suit upon such judgment provided that service of process is effected upon the Guarantor in a manner specified in this Agreement or as otherwise permitted by applicable law.
THE GUARANTOR AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE GUARANTOR 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
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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 Guarantor and the Lender, and the Guarantor 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 Guarantor 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.
The Guarantor 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, or otherwise in perfecting, maintaining, protecting or realizing 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 Borrower or by accepting or approving anything required to be observed, performed or fulfilled by the Borrower 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.
If at any time any payment, or portion thereof, made by, or for the account of, the Borrower or the Guarantor on account of any of the obligations and liabilities arising hereunder or under any of the Financing Documents is set aside by any court or trustee having jurisdiction as a voidable preference or fraudulent conveyance or must otherwise be restored or returned by the Lender to the Borrower or to the Guarantor under any insolvency, bankruptcy or other federal and/or state laws or as a result of any dissolution, liquidation or reorganization of the Borrower or upon, or as a result of, the appointment of any receiver, intervenor or conservator of, or trustee, or similar officer for, the Borrower or any substantial part of its properties or assets, the Guarantor hereby agrees that this Agreement shall continue and remain in full force and effect or be reinstated, as the case may be, all as though such payment(s) had not been made.
This Agreement is intended by the Lender and the Guarantor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Guarantor shall hereafter have any rights under any prior agreements pertaining to the matters addressed by this Agreement but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement. No course of dealing, course of performance or trade usage, and no parol evidence of any nature, shall be used to
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supplement or modify any terms of this Agreement. The Lender and the Guarantor further agree that there are no conditions to the full effectiveness of this Agreement, unless otherwise expressly stated herein. The Guarantor has unconditionally delivered this Agreement to the Lender, and failure to sign this or any other guarantee by any other person shall not discharge the liability of the Guarantor hereunder.
[Signatures appear on following page]
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170495890v4 200207.000070
WITNESS the signature and seal of the Guarantor as of the day and year first above written.
WITNESS OR ATTEST:ARGAN, INC.
/s/ Joshua Baugher By: /s/ David Watson (SEAL)
David Watson
Chief Executive Officer
170495890v4 200207.000070
Document and Entity Information |
May 24, 2024 |
---|---|
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | May 24, 2024 |
Entity File Number | 001-31756 |
Entity Registrant Name | ARGAN, INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-1947195 |
Entity Address, Address Line One | One Church Street |
Entity Address, Adress Line Two | Suite 201 |
Entity Address, City or Town | Rockville |
Entity Address, State or Province | MD |
Entity Address, Postal Zip Code | 20850 |
City Area Code | 301 |
Local Phone Number | 315-0027 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $0.15 Par Value |
Trading Symbol | AGX |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000100591 |
Amendment Flag | false |
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