8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 8, 2006

ARGAN, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-31756	13-1947195
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

One Church Street, Suite 401, Rockville, MD	20850
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (301) 315-0027

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Agreement.

The information described below under Items 2.01, 2.03 and 3.02 is hereby incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets

On December 8, 2006, Argan, Inc. (the “Company”) acquired all of the outstanding membership interests of GPS LLC (as defined below) and all of the issued and outstanding shares of capital stock of GPS-Connecticut (as defined below) and GPS-California (as defined below), for an aggregate purchase price of $25,000,000, consisting of $11,250,000 in cash and 3,666,667 shares (valued at $3.75 per share) of common stock of the Company, as described in further detail below.

On December 8, 2006, the Company acquired all of the outstanding membership interests (the “Membership Acquisition”) of Gemma Power Systems, LLC, a Connecticut limited liability company (“GPS LLC”), from William F. Griffin, Jr. and Joel M. Canino (collectively, the “Sellers”), pursuant to the terms and conditions of a certain Membership Interest Purchase Agreement, dated as of December 8, 2006 (“Membership Purchase Agreement”) by and among, the Company, GPS LLC, Gemma Power, Inc., a Connecticut corporation (“GPS-Connecticut”), Gemma Power Systems California, a California corporation (“GPS-California”) and the Sellers, a copy of which is attached as Exhibit 10.1 to this Form 8-K. In consideration for the acquisition of the Sellers’ membership interests in GPS LLC, the Company paid or will pay (as set forth herein) the Sellers an amount equal to $20,125,000 (the “Consideration”), comprised of $11,250,000 in cash (the “Cash Consideration”) and $8,875,000 in common stock of the Company (or 2,366,667 shares; valued at $3.75 per share) (the “Stock Consideration”). The Consideration is subject to adjustment as set forth in Section 2.2(c) of the Membership Agreement.

The Cash Consideration was paid or is payable by the Company to the Sellers as follows:

(i) $8,350,000 of the Cash Consideration was paid on the closing of the Membership Acquisition;

(ii)$810,000 of the Cash Consideration is payable on or before January 10, 2007;

(iii)$90,000 of the Cash Consideration is payable on or before April 10, 2007; and

(iv)$2,000,000 of the Cash Consideration is payable, if and only if, the “Adjusted EBITDA of the Companies”, as reflected on the “December 31, 2007 Financial Statements” (such terms in quotes are as defined in the Membership Purchase Agreement), is greater than $12,000,000, any such amount to be paid at the earlier of: (i) March 31, 2008, or (ii) the Company’s receipt of the “Escrow Funds” following satisfaction of the “Escrow Release Conditions” (such terms in quotes are as defined in the Second Restated Financing Agreement (as defined in Item 2.03 below)).

At the Sellers’ direction, a total of 100,000 shares of the Stock Consideration were issued to Michael Price, in payment of the commission due him in connection with the Membership Acquisition.

In addition, a portion of the Stock Consideration having an aggregate value of $2,500,000 (or 666,667 shares of common stock of the Company), was deposited in escrow pursuant to a certain Escrow Agreement dated as of December 8, 2006 by and among the Company, the Sellers, Michael Price (16,667 shares of the 100,000 shares that were issued to Mr. Price at the direction of the Sellers were included in escrow) and Curtin Law Roberson Dunigan & Salans, P.C., a copy of which is attached as Exhibit 4.6 to this Form 8-K, to secure the Sellers’ indemnification obligations under Section 10 of the Membership Purchase Agreement.

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In connection with the Membership Acquisition, (i) on December 8, 2006, each of the Sellers entered into an employment agreement with GPS LLC to continue their employment with GPS LLC, a copy of each such employment agreement is attached as Exhibits 10.3 and 10.4 to this Form 8-K, (ii) the Company assumed responsibility for payment of premiums of the term life insurance policies of the Sellers, up to a face value of $5,000,000 each, and (iii) the Company agreed to grant up to 40,000 qualified or unqualified stock options to certain employees, which stock options shall be granted no later than at the first regularly scheduled meeting of the board of directors of the Company following December 8, 2006, with a strike price equal to the price of the Company’s common stock at the time of grant, but in no event, lower than $4.50 per share.

Simultaneous with the Membership Acquisition, the Company acquired all of the issued and outstanding shares of capital stock of GPS-Connecticut and GPS-California (the “Stock Acquisition”, the Stock Acquisition and the Membership Acquisition are hereinafter collectively referred to as the “Acquisitions”) pursuant to the terms and conditions of a certain Stock Purchase Agreement dated as of December 8, 2006 by and among the Company, GPS-Connecticut, GPS-California and the Sellers, a copy of which is attached as Exhibit 10.2 to this Form 8-K. In consideration for the acquisition of the outstanding capital stock of GPS-Connecticut and GPS-California, the Company issued to the Sellers and other stockholders of GPS-Connecticut (the “Other Stockholders”) shares of common stock of the Company having an aggregate value of $4,875,000 (or 1,300,000 shares; valued at $3.75 per share) (“Stock Payment”; Stock Consideration and Stock Payment are collectively referred to herein as the “Acquisition Shares”), allocated as follows: (i) $2,047,500 (or 546,000 shares) for all of the outstanding capital stock of GPS-Connecticut, and (ii) $2,827,500 (or 754,000 shares) for all of the outstanding capital stock of GPS-California.

In connection with the Acquisitions, the Company agreed,

(i) to file a registration statement to register for resale the Acquisition Shares pursuant to a certain Registration Rights Agreement dated as of December 8, 2006 by and among the Company and the Sellers, a copy of which is attached as Exhibit 4.5 to this Form 8-K,

(ii) that in the event that one or more holders (the “Tag Along Holders”) of common stock of the Company (including any successor thereof) transfers (or agrees to transfer) more than 50% of the outstanding common stock of the Company, then the Company shall use commercially reasonable efforts to include the Sellers and the Other Stockholders (including any assignees or successors thereof), to the extent that they then hold shares of common stock of the Company, in said sale upon the same terms and subject to the same conditions as apply to the Tag Along Holders, and

(iii) that, in the event the Company proposes any underwritten secondary offering of its common stock, the Company will give prior written notice thereof to each Seller and the Other Stockholders offering them the opportunity to include in any such offering such number of shares as they may request in writing not later than ten (10) days before such filing, and shall use reasonable efforts to cause the managing underwriter to include such shares in such secondary offering.

All of the Acquisition Term Loan (as defined below in Item 2.03) was used in connection with the Acquisitions. See Item 2.03 below for a description of the Acquisition Term Loan. The Company also used $8,350,000 of the proceeds received in connection with the Private Offering (as defined in Item 3.02 below) to consummate the Acquisitions. The information described below under Items 2.03 and 3.02 with respect to the Company’s relationship with the source of funds used in the Acquisitions is hereby incorporated herein by reference.

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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Background

By way of background, the Company and Southern Maryland Cable, Inc., a wholly-owned subsidiary of the Company, entered into a Financing and Security Agreement dated as of August 19, 2003, as amended, with Bank of America, N.A. (the “Lender”), whereby the Lender extended to the Company and SMC a certain revolving line of credit and a term loan. On May 5, 2006, the Company, SMC, Vitarich Laboratories, Inc., a wholly owned subsidiary of the Company (“Vitarich”), and the Lender entered into an Amended and Restated Financing and Security Agreement, as amended (“Original Restated Financing Agreement”) to, among other things, extend the maturity date of the revolving line of credit and make a new term loan.

Current Transaction

In connection with the Acquisitions described in Item 2.01 above, on December 11, 2006, the Company, SMC, Vitarich, GPS-LLC, GPS-Connecticut, GPS-California and Gemma Power Hartford, LLC (collectively, the “Borrowers”) and the Lender entered into a Second Amended and Restated Financing and Security Agreement (“Second Restated Financing Agreement”), a copy of which is attached as Exhibit 10.5 to this Form 8-K, to, among other things, make available a new term loan and a new standby letter of credit facility to the Borrowers.

In accordance with the Second Restated Financing Agreement, the Lender has provided to the Borrowers a revolving line of credit in the amount of $4,250,000 bearing interest at the LIBOR rate plus 3.25% per annum (“Revolving Loan”).

The obligation of the Company to pay the Revolving Loan is evidenced by a Fourth Amended and Restated Revolving Credit Note dated as of December 11, 2006 by and among the Borrowers and the Lender (“Note”), a copy of which is attached as Exhibit 10.6 to this Form 8-K. Pursuant to the Note, interest only on the principal sum of the Revolving Loan is due and payable monthly on the last day of each month, commencing on December 30, 2006, with the full amount, including interest thereon, being due and payable on May 31, 2008. Upon the occurrence of an Event of Default (as defined in the Note), the Note may become immediately due and payable at the option of the Lender. The unpaid principal sum upon an Event of Default shall bear interest thereafter at the LIBOR rate plus 4.0% until such Event of Default is cured. In the event that the Borrowers fail to make any payment under the terms of the Note, within five (5) days after the date such payment is due, the Borrowers shall pay to the Lender, on demand, a late charge equal to five percent (5%) of such payment. The Note amends and restates that certain Third Amended and Restated Revolving Credit Note dated May 5, 2005 (the “Prior Note”) in favor of the Lender issued pursuant to the Original Restated Financing Agreement. The indebtedness evidenced by the Prior Note has not been extinguished or discharged by the Note.

In addition, if the outstanding principle balance of the Revolving Loan outstanding from time to time exceeds $4,250,000, the excess shall bear interest at the LIBOR rate plus 4.0%, and shall be payable, with accrued interest, on demand. The Borrowers have the option to prepay the Revolving Loan in whole or in part without premium or penalty. The Borrowers shall also pay to the Lender a revolving credit facility fee in an amount equal to 0.375% per annum of the average daily unused and undisbursed portion of the Revolving Loan amount in effect accruing during each month.

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Pursuant to the Original Restated Financing Agreement, the Lender has made a term loan to the Borrowers in the principal amount of $1,500,000, which as of December 11, 2006, had a principal outstanding balance of $1,374,996.99. The obligation of the Borrowers to pay the balance of $1,374,996.99 of such term loan (the “2006 Term Loan”), with interest at the LIBOR Rate plus 325 basis points per annum, is evidenced by an Amended and Restated 2006 Term Note dated December 11, 2006 (“2006 Term Note”), a copy of which is attached as Exhibit 10.7 to this Form 8-K. The 2006 Term Note shall remain in full force and effect without setoff, and the Borrowers shall continue to pay the 2006 Term Note in accordance with the terms of the Second Restated Financing Agreement and the 2006 Term Note. Pursuant to the 2006 Term Note, the unpaid principal sum, together with interest, is due and payable in 32 monthly installments of $41,667.67, plus accrued and unpaid interest, on the last day of each month, commencing on December 31, 2006, with the full amount, including interest thereon, being due and payable on August 31, 2009. Upon an Event of Default (as defined in the 2006 Term Note), the unpaid principal sum shall bear interest thereafter at the LIBOR rate plus 4.0% until such Event of Default is cured. In the event that the Borrowers fail to make any payment under the terms of the 2006 Term Note within five (5) days after the date such payment is due, the Borrowers shall pay to the Lender, on demand, a late charge equal to five percent (5%) of such payment. The Borrowers may, at their option, prepay the 2006 Term Loan, in whole or in part, upon five (5) business days’ prior written notice without premium or penalty. The 2006 Term Note amends and restates that certain 2006 Term Note dated May 5, 2005 (the “Prior 2006 Term Note”) in favor of the Lender issued pursuant to the Original Restated Financing Agreement. The indebtedness evidenced by the Prior 2006 Term Note has not been extinguished or discharged by the 2006 Term Note.

Under the Second Restated Financing Agreement, the Lender has agreed, subject to the satisfaction of certain conditions as provided therein, to make an additional term loan to the Borrowers if requested in writing by the Borrowers in the principal amount of $8,000,000, with interest at the LIBOR Rate plus 325 basis points per annum (the “Acquisition Term Loan”). The obligation of the Borrowers to pay the Acquisition Term Loan with interest shall be evidenced by a certain Acquisition Term Note dated December 11, 2006, a copy of which is attached as Exhibit 10.8 to this Form 8-K. Pursuant to the Acquisition Term Loan, the unpaid principal sum, together with interest, is due and payable in 47 monthly installments of $166,666.67, plus accrued and unpaid interest, on the last day of each month, commencing on January 31, 2007 and one monthly payment at maturity of $166,666.51 plus accrued and unpaid interest, with the full amount, including interest thereon, being due and payable on January 31, 2011. Upon an Event of Default (as defined in the Acquisition Term Loan), the unpaid principal sum shall bear interest thereafter at the LIBOR rate plus 4.0% until such Event of Default is cured. In the event that the Borrowers fail to make any payment under the terms of the Acquisition Term Loan within five (5) days after the date such payment is due, the Borrowers shall pay to the Lender, on demand, a late charge equal to five percent (5%) of such payment. The Borrowers may, at their option, prepay the Acquisition Term Loan, in whole or in part, upon five (5) business days’ prior written notice without premium or penalty. The Borrowers have deposited in escrow with the Lender an amount equal to $2,000,000 of the Acquisition Term Loan (the “Escrow Funds”), which shall be released upon the satisfaction of the Escrow Release Conditions (as such term is defined in the Second Restated Financing Agreement).

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The Borrowers are required to make mandatory payments on the Acquisition Term Loan as follows: (i) the Acquisition Term Loan shall be reduced by 100% of all net cash proceeds from (a) sales and other dispositions of property and assets of any Borrower and its subsidiaries, subject to exception as provided in the Second Restated Financing Agreement, (b) the issuance or incurrence after December 11, 2006 of additional Indebtedness of the Borrowers or any of its subsidiaries, except as otherwise provided in the Second Restated Financing Agreement, and (c) the issuance after December 11, 2006 of additional equity interests in the Borrowers or any of its subsidiaries except as otherwise provided in the Second Restated Financing Agreement; (ii) if for any fiscal year, commencing on January 31, 2008, the “Total Funded Debt” to “EBITDA” ratio as of the last day of such fiscal year is greater than or equal to 1.00, the Borrowers shall, on the relevant “Excess Cash Flow Application Date”, apply 50% of such “Excess Cash Flow” toward the prepayment of the Acquisition Term Loan (those terms in quotes are as defined in the Second Restated Financing Agreement); and (iii) if for any reason the Borrowers have not satisfied either of the Escrow Release Conditions (as such term is defined in the Second Restated Financing Agreement) by February 1, 2008, the Lender shall, without notice, apply the full amount of the Escrow Funds toward the prepayment of the Acquisition Term Loan.

In addition, subject to the provisions of the Second Restated Financing Agreement, the Borrowers, upon prior approval of the Lender, may obtain standby letters of credit from the Lender for the benefit of Travelers Casualty and Surety Company of America or other similar insurance company (the “Letter of Credit”), provided that the obligations under the Letter of Credit does not exceed $10,000,000. The Borrowers shall pay to the Lender a letter of credit fee equal to 1% per annum of the face amount of the Letter of Credit. In connection with the foregoing, the Company pledged an amount equal to $10,000,000 to the Lender, pursuant to a certain Pledge and Assignment Agreement dated December 11, 2006, a copy of which is attached as Exhibit 10.15 to this Form 8-K, to secure a certain standby letter of credit issued by the Lender on behalf of the Borrowers for the benefit of Travelers Casualty and Surety Company of America.

It was agreed that that (a) the Revolving Loan shall be used for the payment of expenses incurred in the ordinary course of any Borrower’s business, (b) the Acquisition Term Loan shall be used to finance a portion of the Acquisitions described in Item 2.01 above, and (c) the Letter of Credit shall be used to support issuance of bonding to Travelers Casualty and Surety Company of America.

The Obligations (as such term is defined in the Second Restated Financing Agreement) of the Borrowers are secured by all of the Borrowers’ assets of any kind and nature, whether now owned or hereafter acquired (subject only to Permitted Liens as defined therein, if any). The Lender has a first priority, perfected lien on all such assets. The Company entered into certain Pledge, Assignment and Security Agreements, each dated December 11, 2006, for each of its wholly owned subsidiaries, SMC, Vitarich, GPS LLC, GPS-Connecticut and GPS-California, pursuant to which the Company pledged to the Lender all of the Company’s right, title and interest in and to such subsidiaries to secure the Obligations of such subsidiaries. In addition, GPS LLC entered into a certain Pledge, Assignment and Security Agreement dated December 11, 2006, for its wholly owned subsidiary, Gemma Power Hartford, LLC (“Gemma-Hartford”), pursuant to which the GPS LLC pledged to the Lender all of GPS LLC ‘s right, title and interest in and to Gemma-Hartford to secure the Obligations of Gemma-Hartford. A copy of each of the foregoing Pledge, Assignment and Security Agreements are attached to this Form 8-K as Exhibit 10.9 through Exhibit 10.14.

The Second Restated Financing Agreement also contains certain: (A) affirmative covenants, including without limitation, so long as any of the Obligations (as such term is defined in the Second Restated Financing Agreement) of the Borrowers are outstanding, the Borrowers shall, among other things, deliver annual and quarterly financial statements to the Lender, comply with applicable law and maintain its books and records; and (B) negative covenants including without limitation, so long as any of the Obligations of the Borrowers are outstanding, the Borrowers shall not, among other things: (i) alter or amend its capital structure; (ii) authorize any additional class of equity; (iii) issue any stock or the right to purchase any if its capital stock; (iv) purchase or redeem any of its capital stock or outstanding warrants, or declare or pay any dividends thereon (other than stock dividends); (v) incur certain indebtedness; or (vi) enter into any merger or consolidation, or windup or dissolve itself, or acquire all or substantially all of the asset of any person, or sell, lease or otherwise dispose if its assets.

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Item 3.02 Unregistered Sales of Equity Securities.

Gemma Acquisitions

The information described above under Item 2.01 is hereby incorporated herein by reference. As set forth in Item 2.01 above, on December 8, 2006, the Company issued an aggregate of3,666,667 shares of common stock of the Company in exchange for the issued and outstanding capital stock of GPS LLC, GPS-Connecticut and GPS-California, pursuant to an exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Private Offering

On December 8, 2006, the Company issued an aggregate of 2,853,335 shares constituting the Buyers Shares and AI Shares (each as defined below) (collectively, the “Shares”) of the Company’s common stock, $.15 par value, at a purchase price of $3.75 per share, yielding an aggregate purchase price of $10,700,006 (the “Share Consideration”), pursuant to the exemption provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act, as described in greater detail below.

On December 8, 2006, the Company and the Buyers (defined below) entered into a certain Stock Purchase Agreement, dated as of December 8, 2006 (the “Buyers Purchase Agreement”), a copy of which is attached as Exhibit 4.1 to this Form 8-K, pursuant to which, subject to the fulfillment of the Release Condition (defined below), the Company offered for sale, and the purchasers identified on Schedule A attached to the Buyers Purchase Agreement (the “Buyers”) purchased (the “Buyers Transaction”), an aggregate of 1,853,335 shares (“Buyers Shares”) of the Company’s common stock, $.15 par value. The Buyers Shares were sold at a purchase price of $3.75 per share, yielding an aggregate purchase price of $6,950,006. Pursuant to the Buyers Purchase Agreement, the Company has agreed to file a registration statement under the Securities Act relating to the resale of the Buyer Shares as soon as practicable following the closing of the Buyers Transaction.

Also, on December 8, 2006, the Company and Argan Investments LLC (“AI”) entered into a separate Stock Purchase Agreement, dated as of December 8, 2006 (the “AI Purchase Agreement”), a copy of which is attached as Exhibit 4.2 to this Form 8-K, pursuant to which, subject to the fulfillment of the Release Condition (defined below), the Company offered for sale, and AI purchased (the “AI Transaction”; the AI Transaction and the Buyers Transaction are collectively referred to as the “Private Offering”), an aggregate of 1,000,000 shares (the “AI Shares”) of the Company’s common stock, $.15 par value. The AI Shares were sold at a purchase price of $3.75 per share, yielding an aggregate purchase price of $3,750,000. In connection with the AI Transaction, the Company and AI entered into a Registration Rights Agreement dated as of December 8, 2006, a copy of which is attached as Exhibit 4.3 to this Form 8-K, pursuant to which the Company agreed to file a registration statement under the Securities Act relating to the resale of the AI Shares as soon as practicable following the closing of the AI Transaction, but in no event later than 120 days following the closing of the AI Transaction.

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In connection with the Private Offering, the Company and the Buyers entered into a certain Escrow Agreement dated as of December 8, 2006, a copy of which is attached as Exhibit 4.4 to this Form 8-K, pursuant to which it was agreed that the Shares and the Share Consideration were to be deposited in escrow and released (the “Release Condition”) only upon the consummation of the Acquisitions (as described in Item 2.01 above). Simultaneous with the closing of the Private Offering, on December 8, 2006, the Company consummated the Acquisitions. The Company used $8,350,000 of the proceeds received in connection with the Private Offering to consummate the Acquisitions. The remaining proceeds of the Private Offering will be used by the Company for general corporate purposes. Since the Acquisitions were consummated simultaneously with the Private Offering, the Shares and Share Consideration were never deposited in escrow and were released directly to the Buyers and the Company, respectively.

MSRI SBIC, LP (“MSRI”) and MSR Fund II, L.P. (“MSR Fund”) acquired 92,793 and 440,540 Buyer Shares, respectively. MSRI and MSR Fund are affiliates of Daniel Levinson, a director of the Company.

Allen & Company LLC (“Allen LLC”) and Allen SBH Investments, LLC (“Allen SBH”) acquired 80,000 and 266,667 Buyer Shares, respectively. Allen LLC and Allen SBH are affiliates ofJames Quinn, a director of the Company. In addition, James Quinn acquired 26,667 Buyer Shares for his own account.

Item 9.01. Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired.

The financial statements required to be filed pursuant to this Item 9.01(a) will be filed by amendment not later than 71 calendar days after the date that this initial report on Form 8-K was required to be filed.

(b)Pro Forma Financial Information.

The pro forma financial information required to be filed pursuant to this Item 9.01(b) will be filed by amendment not later than 71 calendar days after the date that this initial report on Form 8-K was required to be filed.

(d)Exhibits.

Exhibit No.	Description
4.1	Stock Purchase Agreement dated as of December 8, 2006 by and among Argan, Inc. and the purchasers identified on Schedule A attached thereto.
4.2	Stock Purchase Agreement dated as of December 8, 2006 by and between Argan, Inc. and Argan Investments LLC.
4.3	Registration Rights Agreement dated as of December 8, 2006 by and between Argan, Inc. and Argan Investments LLC.
4.4	Escrow Agreement dated as of December 8, 2006 by and among Argan, Inc., the purchasers identified on Schedule A attached thereto and Robinson & Cole LLP.
4.5	Registration Rights Agreement dated as of December 8, 2006 by and among Argan, Inc., William F. Griffin, Jr. and Joel M. Canino.

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4.6	Escrow Agreement, dated as of December 8, 2006 by and among the Argan, Inc., William F. Griffin, Jr., Joel M. Canino, Michael Price and Curtin Law Roberson Dunigan & Salans, P.C
10.1	Membership Interest Purchase Agreement, dated as of December 6, 2006, by and among, Argan, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, William F. Griffin, Jr. and Joel M. Canino.
10.2	Stock Purchase Agreement, dated as of December 8, 2006, by and among Argan, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, William F. Griffin, Jr. and Joel M. Canino.
10.3	Employment Agreement dated as of December 8, 2006 by and between Gemma Power Systems, LLC and Joel M. Canino.
10.4	Employment Agreement dated as of December 8, 2006 by and between Gemma Power Systems, LLC and William M. Griffin, Jr.
10.5	Second Amended and Restated Financing and Security Agreement dated December 11, 2006 by and among Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, Gemma Power Hartford, LLC and Bank of America, N.A.
10.6	Fourth Amended and Restated Revolving Credit Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.
10.7	Amended and Restated 2006 Term Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.
10.8	Acquisition Term Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.
10.9	Pledge, Assignment and Security Agreement dated as of December 8, 006 by Argan, Inc. (on behalf of Southern Maryland Cable, Inc.) in favor of Bank of America, N.A.

10.10 Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Vitarich Laboratories, Inc.) in favor of Bank of America, N.A.

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10.11	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power Systems, LLC) in favor of Bank of America, N.A.
10.12	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power, Inc.) in favor of Bank of America, N.A.
10.13	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power Systems California) in favor of Bank of America, N.A.
10.14	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Gemma Power Systems, LLC (on behalf of Gemma Power Hartford, LLC) in favor of Bank of America, N.A.
10.15	Pledge and Assignment Agreement dated as of December 8, 2006 by Argan, Inc. in favor of Bank of America, N.A. for the benefit of Travelers Casualty and Surety Company of America

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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.

	ARGAN, INC.
Date: December 14, 2006	By:	/s/ Rainer Bosselmann
		Rainer Bosselmann Chairman of the Board and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
4.1	Stock Purchase Agreement dated as of December 8, 2006 by and among Argan, Inc. and the purchasers identified on Schedule A attached thereto.
4.2	Stock Purchase Agreement dated as of December 8, 2006 by and between Argan, Inc. and Argan Investments LLC.
4.3	Registration Rights Agreement dated as of December 8, 2006 by and between Argan, Inc. and Argan Investments LLC.
4.4	Escrow Agreement dated as of December 8, 2006 by and among Argan, Inc., the purchasers identified on Schedule A attached thereto and Robinson & Cole LLP.
4.5	Registration Rights Agreement dated as of December 8, 2006 by and among Argan, Inc., William F. Griffin, Jr. and Joel M. Canino.
4.6	Escrow Agreement, dated as of December 8, 2006 by and among the Argan, Inc., William F. Griffin, Jr., Joel M. Canino, Michael Price and Curtin Law Roberson Dunigan & Salans, P.C
10.1	Membership Interest Purchase Agreement, dated as of December 6, 2006, by and among, Argan, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, William F. Griffin, Jr. and Joel M. Canino.
10.2	Stock Purchase Agreement, dated as of December 8, 2006, by and among Argan, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, William F. Griffin, Jr. and Joel M. Canino.
10.3	Employment Agreement dated as of December 8, 2006 by and between Gemma Power Systems, LLC and Joel M. Canino.
10.4	Employment Agreement dated as of December 8, 2006 by and between Gemma Power Systems, LLC and William M. Griffin, Jr.
10.5	Second Amended and Restated Financing and Security Agreement dated December 11, 2006 by and among Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California, Gemma Power Hartford, LLC and Bank of America, N.A.
10.6	Fourth Amended and Restated Revolving Credit Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.

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10.7	Amended and Restated 2006 Term Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.
10.8	Acquisition Term Note dated December 11, 2006, issued by Argan, Inc., Southern Maryland Cable, Inc., Vitarich Laboratories, Inc., Gemma Power Systems, LLC, Gemma Power, Inc., Gemma Power Systems California and Gemma Power Hartford, LLC in favor of Bank of America, N.A.
10.9	Pledge, Assignment and Security Agreement dated as of December 8, 006 by Argan, Inc. (on behalf of Southern Maryland Cable, Inc.) in favor of Bank of America, N.A.
10.10	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Vitarich Laboratories, Inc.) in favor of Bank of America, N.A.
10.11	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power Systems, LLC) in favor of Bank of America, N.A.
10.12	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power, Inc.) in favor of Bank of America, N.A.
10.13	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Argan, Inc. (on behalf of Gemma Power Systems California) in favor of Bank of America, N.A.
10.14	Pledge, Assignment and Security Agreement dated as of December 8, 2006 by Gemma Power Systems, LLC (on behalf of Gemma Power Hartford, LLC) in favor of Bank of America, N.A.
10.15	Pledge and Assignment Agreement dated as of December 8, 2006 by Argan, Inc. in favor of Bank of America, N.A. for the benefit of Travelers Casualty and Surety Company of America

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EX-4.1

Stock Purchase Agreement

This Stock Purchase Agreement (this “Agreement”) is made as of this 8^th day of December, 2006, by and among Argan, Inc., a Delaware corporation (the “Company”) and the purchasers identified on Schedule A, attached hereto (each a “Buyer”, and collectively the “Buyers”).

WHEREAS, the Company is offering up to 2,853,335 shares of the Company’s Common Stock, $.15 par value (the “Common Stock”) to a limited number of sophisticated investors in a non-public offering; and

WHEREAS, each Buyer desires to purchase that number of shares of Common Stock as set forth opposite the name of such Buyer on Schedule A, attached hereto (the “Shares”).

NOW THEREFORE, in consideration of the foregoing and for valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows:

1.Issuance of Shares

Subject to the terms and conditions contained herein and in a certain Escrow Agreement by and among the Company and the Buyers of even date herewith (the “Escrow Agreement”), the Company will issue to each Buyer, and each Buyer will purchase from Company, for the purchase price of $3.75 per share, that number of shares of Common Stock as set forth opposite the name of such Buyer on Schedule A, attached hereto. Pursuant to the terms of the Escrow Agreement, the Company shall deliver to each Buyer a certificate in the name of such Buyer for the respective number of Shares issued to such Buyer.

2.Restrictive Legends

All certificates representing Shares shall have affixed thereto legends in substantially the following form, in addition to any other legends that may be required under federal or state securities laws:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.

3.Investment Representations

Each Buyer represents, warrants and covenants as follows:

(a) The Buyer is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and is purchasing the applicable Shares for its own account for investment only, and not with a view to, or for sale in connection with, any distribution of such Shares in violation of the Securities Act or applicable state securities laws, or any rule or regulation thereunder.

(b) The Buyer has had such opportunity as it has deemed adequate to obtain from representatives of the Company such information as is necessary to permit it to evaluate the merits and risks of its investment in the Company, and has done so.

(c) The Buyer understands that the Company is required to file periodic reports pursuant to the Securities Exchange Act of 1934, as amended. The Buyer acknowledges that they have had such opportunity to obtain such periodic reports and are familiar with the information contained in such periodic reports, including without limitation the risk factors contained therein.

(d) The Buyer has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

(e) The Buyer can afford a complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

(f) The Buyer understands that: (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act; (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Buyer.

4.Company Representations

The Company represents and warrants as follows:

(a)Organization, Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not have a material adverse effect on the Company’s business. The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

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(b)Authorization of Transaction. The Company has all requisite power and authority to execute and deliver this Agreement and the Escrow Agreement and to perform its obligations hereunder and thereunder. Theexecution and delivery by the Company of this Agreement and the Escrow Agreement and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Company. This Agreement and the Escrow Agreement have been duly and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against it in accordance with their respective terms.

(c)Noncontravention. Subject to compliance with the applicable requirements of the Securities Act, the Securities Exchange Act of 1934 and any applicable state securities laws, neither the execution and delivery by the Company of this Agreement or the Escrow Agreement, nor the consummation by the Company of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the charter or Bylaws of the Company, (b) require on the part of the Company any filing with, or permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (“Governmental Entity”), (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company is a party or by which it is bound or to which any of its assets are subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets.

(d)Litigation. There is no action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity which is pending or has been threatened against the Company. There are no judgments, orders or decrees outstanding against the Company. To the knowledge of the Company, there is no threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any governmental entity with respect to the business of the Company.

(e)Valid Issuance. The Shares, when sold, issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable, and will be subject to restrictions on transfer under federal and applicable state securities law until the Registration Statement (as defined in Section 6(a) below) is declared effective by the Securities and Exchange Commission (the “SEC”), and then may be sold in accordance with the terms provided in the prospectus to the Registration Statement. The Shares will be issued in compliance in all material respects with an exemption from the registration of the Securities Act, and the registration and qualification requirements of the securities laws of the applicable states.

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5.Use of Proceeds. The Company will use substantially all of the proceeds of this offering in connection with the acquisition of Gemma Power Systems, LLC and its affiliates. The remaining proceeds will be used by the Company for general corporate purposes.

6.Registration.

(a)The Company agrees that it will, as soon as practicable following the closing of the transaction contemplated hereby, prepare and file with the SEC a registration statement on Form S-1 or, if applicable, Form S-3, or any equivalent form for registration by issuers similar to the Company in accordance with the Securities Act (“Registration Statement”), to permit a public offering and resale of the Shares on a continuous basis under Rule 415. The Company agrees that it will use commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC as soon as practicable following the filing thereof. The Company will cause the Registration Statement to remain effective until such time as all of the Shares are sold or the holders thereof are entitled to rely on Rule 144(k) for sales of the Shares without registration under the Securities Act and without compliance with the public information, sales volume, manner of sale or notice requirements of Rule 144(c), (e), (f) or (h). The Company will pay all registration expenses of the registration of the Shares pursuant to this Section 6(a).

(b)In the event of the offer and sale of Shares held by Buyers pursuant to the Registration Statement under the Securities Act, the Company must, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Buyer, its directors, officers, partners, consultants, each other person who participates as an underwriter in the offering or sale of such securities, and each other person, if any, who controls or is under common control with such Buyer or any such underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses to which the Buyer or any such director, officer, partner, consultant or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such shares were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, and the Company must reimburse the Buyer, and each such director, officer, partner, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided that the Company is not liable in any such case (i) to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or omission from such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Buyer or (ii) if the person asserting any such loss, claim, damage, liability (or action or proceeding in respect thereof) who purchased the Shares that are the subject thereof did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended or supplemented) at or prior to the written confirmation of the sale of such Shares to such person because of the failure of such Buyer or underwriter to so provide such amended preliminary or final prospectus and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact made in such preliminary prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended or supplemented). Such indemnity remains in full force and effect regardless of any investigation made by or on behalf of the Buyers, or any such director, officer, partner, underwriter or controlling person and survives the transfer of such shares by the Buyer.

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(c)As a condition to including Shares in a registration statement, each such Buyer agrees to be bound by the terms of this Section 6 and to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers, its consultants, underwriters and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director, officer, consultant or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Buyer, and such Buyer must reimburse the Company, and each such director, officer, and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling any such loss, claim, damage, liability, action, or proceeding.Such indemnity remains in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer by any Buyer of such shares.

(d)Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Sections 6(a) or (b) hereof (including any governmental action), such indemnified party must, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided that the failure of any indemnified party to give notice as provided herein does not relieve the indemnifying party of its obligations under Section 6(a) or (b) hereof, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in the reasonable judgment of counsel to such indemnified party a conflict of interest between such indemnified and indemnifying parties may exist or the indemnified party may have defenses not available to the indemnifying party in respect of such claim, the indemnifying party is entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party is not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim in a diligent manner. Neither an indemnified nor an indemnifying party is liable for any settlement of any action or proceeding effected without its consent. No indemnifying party may, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth herein, and without limiting any of the rights set forth above, in any event any party has the right to retain, at its own expense, counsel with respect to the defense of a claim.

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(e)In the event that an indemnifying party does or is not permitted to assume the defense of an action pursuant to Section 6(c) or in the case of the expense reimbursement obligation set forth in Sections 6(a) and (b), the indemnification required by Sections 6(a) and (b) hereof must be made by periodic payments of the amount thereof during the course of the investigation or defense, as, and when bills received or expenses, losses, damages, or liabilities are incurred.

(f)If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, must (i) contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense as is appropriate to reflect the proportionate relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount hereinafter calculated, not only the proportionate relative fault of the indemnifying party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) is entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.

7.Miscellaneous

(a) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

(b) Waiver. Any provision for the benefit of the Company contained in this Agreement may be waived, either generally or in any particular instance, by the Board of Directors of the Company.

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(c) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and each Buyer and their respective heirs, executors, administrators, legal representatives, successors and assigns.

(d) Notice. All notices required or permitted hereunder shall be in writing and deemed effectively given upon personal delivery or five days after deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party hereto at the address shown beneath his or its respective signature to this Agreement, or at such other address or addresses as either party shall designate to the other in accordance with this Section 7(d).

(e) Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

(f) Entire Agreement. This Agreement, together with the Escrow Agreement, constitutes the entire agreement between the parties with respect to the Shares, and supersedes all prior agreements and understandings, relating to the subject matter of this Agreement.

(g) Amendment. This Agreement may be amended or modified only by a written instrument executed by the Buyers and the Company.

(h) Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State Delaware without regard to any applicable conflicts of laws.

(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and constitute the same instrument.

[NEXT PAGE IS SIGNATURE PAGE]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

THE COMPANY:

ARGAN, INC.

/s/ Rainer Bosselmann

By: Rainer Bosselmann

Its: President

BUYERS:

ALLEN SBH INVESTMENTS, LLC

/s/ Kim M. Wieland

By: Kim M. Wieland

Its: CFO

ALLEN & COMPANY, LLC

/s/ Kim M. Wieland

By: Kim M. Wieland

Its: Managing Director and CFO

/s/ Bruce Allen

Bruce Allen

/s/ James Quinn

James Quinn

/s/ John Simon

John Simon

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/s/ Mark Levy

Mark Levy

/s/ Stephen J. Adler

Stephen J. Adler

WHITNEY GREEN RIVER MANAGEMENT
CO., LLC

/s/ John Hockin

By: John Hockin

Its:

PERENNIAL PARTNERS LP

/s/ Paul Fino

By: Paul Fino

Its: Principal

WESTWIND EQUITY PARTNERS, LLC

/s/ Beth Maxwell

By: Beth Maxwell

Its: Executive Director

MSR I SBIC, L.P.

By: MSR I SBIC Partners, LLC (its General Partner)

By: MSR Advisors, Inc. (its Manager)

/s/ Daniel A. Levinson

By: Daniel A. Levinson

Its: President

MSR FUND II, L.P.

MSR Fund II GP, LLC (its General Partner)

By: MSR Advisors, Inc. (its Manager)

/s/ Daniel A. Levinson

By: Daniel A. Levinson

Its: President

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Schedule A

Buyers of Restricted Stock

Buyer	Number of Shares		Purchase Price
Allen SBH Investments, LLC		266,667	$	1,000,000.00
Perennial Partners LP		266,667	$	1,000,000.00
Whitney Green River Management Co., LLC		266,667	$	1,000,000.00
Westwind Equity Partners, LLC		266,667	$	1,000,000.00
MSR I SBIC, L.P.		92,793	$	347,974.00
MSR Fund II, L.P.		440,540	$	1,652,025.00
Allen & Company LLC		80,000	$	300,000.00
Bruce Allen		53,333	$	200,000.00
John Simon		80,000	$	300,000.00
James Quinn		26,667	$	100,000.00
Mark Levy		6,667	$	25,000.00
Stephen J. Adler		6,667	$	25,000.00

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EX-4.2

Stock Purchase Agreement

This Stock Purchase Agreement (this “Agreement”) is made as of this 8^th day of December, 2006, by and among Argan, Inc., a Delaware corporation (the “Company”) and the purchasers identified on Schedule A, attached hereto (each a “Buyer”, and collectively the “Buyers”).

WHEREAS, the Company is offering up to 2,854,933 shares of the Company’s Common Stock, $.15 par value (the “Common Stock”) to a limited number of sophisticated investors in a non-public offering; and

WHEREAS, each Buyer desires to purchase that number of shares of Common Stock as set forth opposite the name of such Buyer on Schedule A, attached hereto (the “Shares”).

NOW THEREFORE, in consideration of the foregoing and for valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows:

1.Issuance of Shares

Subject to the terms and conditions contained herein and in a certain Escrow Agreement by and among the Company and the Buyers of even date herewith (the “Escrow Agreement”), the Company will issue to each Buyer, and each Buyer will purchase from Company, for the purchase price of $3.75 per share, that number of shares of Common Stock as set forth opposite the name of such Buyer on Schedule A, attached hereto. Pursuant to the terms of the Escrow Agreement, the Company shall deliver to each Buyer a certificate in the name of such Buyer for the respective number of Shares issued to such Buyer.

2.Restrictive Legends

All certificates representing Shares shall have affixed thereto legends in substantially the following form, in addition to any other legends that may be required under federal or state securities laws:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.

3.Investment Representations

Each Buyer represents, warrants and covenants as follows:

(a) The Buyer is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and is purchasing the applicable Shares for its own account for investment only, and not with a view to, or for sale in connection with, any distribution of such Shares in violation of the Securities Act or applicable state securities laws, or any rule or regulation thereunder.

(b) The Buyer has had such opportunity as it has deemed adequate to obtain from representatives of the Company such information as is necessary to permit it to evaluate the merits and risks of its investment in the Company, and has done so.

(c) The Buyer understands that the Company is required to file periodic reports pursuant to the Securities Exchange Act of 1934, as amended. The Buyer acknowledges that they have had such opportunity to obtain such periodic reports.

(d) The Buyer has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

(e) The Buyer can afford a complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

(f) The Buyer understands that: (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act; (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Buyer.

4.Company Representations

The Company represents and warrants as follows:

(a)Organization, Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not have a material adverse effect on the Company’s business. The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

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(b)Authorization of Transaction. The Company has all requisite power and authority to execute and deliver this Agreement, the Registration Rights Agreement and the Escrow Agreement and to perform its obligations hereunder and thereunder. Theexecution and delivery by the Company of this Agreement, the Registration Rights Agreement and the Escrow Agreement and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Company. This Agreement, the Registration Rights Agreement and the Escrow Agreement have been duly and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against it in accordance with their respective terms.

(c)Noncontravention. Subject to compliance with the applicable requirements of the Securities Act, the Securities Exchange Act of 1934 and any applicable state securities laws, neither the execution and delivery by the Company of this Agreement, the Registration Rights Agreement or the Escrow Agreement, nor the consummation by the Company of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the charter or Bylaws of the Company, (b) require on the part of the Company any filing with, or permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (“Governmental Entity”), (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company is a party or by which it is bound or to which any of its assets are subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets.

(d)Capitalization. The authorized capital stock of the Company consists of 12,000,000 shares of Common Stock. As of the date of this Agreement, there were 4, shares of Common Stock issued and outstanding. The Company has no outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter, other than outstanding warrants and options (including out-of-the-money warrants and options) to purchase up to 458,000 shares of common stock. All issued and outstanding shares of Common Stock are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights.

(e)SEC Documents. The Company has delivered (incorporated by reference to the Company’s filings as reported on the SEC’s web site) to Buyers each registration statement, report, proxy statement or information statement prepared and filed with the Securities and Exchange Commission by it since July 31, 2004, each in the form (including exhibits and any amendments thereto) filed with the SEC (collectively, the “Company Reports”). As of their respective dates, the Company Reports (i) complied as to form in all material respects with the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each of the consolidated balance sheets included in or incorporated by reference into the Company Reports (including the related notes and schedules) fairly presents, in all material respects, the consolidated financial position of the Company as of its date, and each of the consolidated statements of income, retained earnings and cash flows included in or incorporated by reference into the Company Reports (together with the related notes and schedules) fairly presents, in all material respects, the results of operations, retained earnings or cash flows, as the case may be, of the Company for the periods set forth therein (subject to the lack of footnote disclosure and normal year-end audit adjustments which would not be material in amount or effect), in each case in accordance with generally accepted accounting principles consistently applied during the periods involved, except as may be noted therein. Except as and to the extent set forth in the consolidated balance sheet of the Company at July 31, 2006, including all notes thereto, or as set forth in the Company Reports, the Company has no material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on, or reserved against in, a balance sheet of the Company or in the notes thereto, prepared in accordance with generally accepted accounting principles consistently applied, except liabilities arising in the ordinary course of business since such date.

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(f)Absence of Certain Changes. Since July 31, 2006, the Company has conducted its business only in the ordinary course of such business, and, other than as set forth in the Company Reports, there has not been (i) any material adverse effect on the Company’s business; (ii) any declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock; or (iii) any material change in its accounting principles, practices or methods.

(g)Litigation. There is no action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity which is pending or has been threatened against the Company. There are no judgments, orders or decrees outstanding against the Company. To the knowledge of the Company, there is no threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any governmental entity with respect to the business of the Company.

(h)Valid Issuance. The Shares, when sold, issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable, and will be subject to restrictions on transfer under federal and applicable state securities law until a registration statement covering such shares is declared effective by the Securities and Exchange Commission (the “SEC”), and then may be sold in accordance with the terms provided in the prospectus to such registration statement. The Shares will be issued in compliance in all material respects with an exemption from the registration of the Securities Act, and the registration and qualification requirements of the securities laws of the applicable states.

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5.Use of Proceeds. The Company will use substantially all of the proceeds of this offering in connection with the acquisition of Gemma Power Systems, LLC and its affiliates. The remaining proceeds will be used by the Company for general corporate purposes.

6.Deliveries.

(a)Deliveries by the Company. At the Closing, the Company shall deliver or cause to be delivered to Buyers the following:

1.Irrevocable instruction letter to the Company’s transfer agent, accompanied by an appropriate legal opinion, for the issuance of certificates evidencing an aggregate of 2,933,334 shares of Common Stock, duly authorized, issued, fully paid and non-assessable, registered in the name of Buyers in the denominations set forth on Schedule A hereto;

2.A Registration Rights Agreement between the Company and the Buyers in the form attached hereto as Schedule B (the “Registration Rights Agreement”), duly executed by the Company.

3.A legal opinion of Robinson & Cole LLP (“Company Counsel”), counsel to the Company, in form and substance satisfactory to Buyers.

4.A certificate of the Secretary of the Company (the “Secretary’s Certificate”), in form and substance satisfactory to Buyers, certifying as follows:

(i)that attached to the Secretary’s Certificate is a true and complete copy of the Certificate of Incorporation of the Company, as amended to date, including all certificates of designation and documents or instruments amending or restating the Certificate of Incorporation of the Company;

(ii)that a true copy of the Bylaws of the Company, as amended to the date hereof, is attached to the Secretary’s Certificate;

(iii)that attached thereto are true and complete copies of the resolutions of the Board of Directors of the Company (A) authorizing the execution, delivery and performance of this Agreement and the Registration Rights Agreement, instruments and certificates required to be executed by it in connection herewith and approving the consummation of the transactions in the manner contemplated hereby including, but not limited to, the authorization and issuance of the Common Stock;

(iv)at the Closing, that the representations and warranties herein are true and complete as of the date thereof, and that there has not occurred any event which has had a material adverse effect on the business of the Company,

(v)such other matters as Buyers may reasonably request.

5.Such other documents as the Buyers shall reasonably request.

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(b) Deliveries by Buyers. At the Closing, each Buyer shall deliver or cause to be delivered to the Company payment for the Common Stock by (x) wire transfer of immediately available funds to an account designated in writing by the Company prior to the date hereof, or (y) bank or cashier’s check; (ii) an executed copy of this Agreement; and (iii) an executed copy of the Registration Rights Agreement.

7.Miscellaneous

(a) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

(b) Waiver. Any provision for the benefit of the Company contained in this Agreement may be waived, either generally or in any particular instance, by the Board of Directors of the Company.

(c) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and each Buyer and their respective heirs, executors, administrators, legal representatives, successors and assigns.

(d) Notice. All notices required or permitted hereunder shall be in writing and deemed effectively given upon personal delivery or five days after deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party hereto at the address shown beneath his or its respective signature to this Agreement, or at such other address or addresses as either party shall designate to the other in accordance with this Section 7(d).

(e) Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.

(f) Entire Agreement. This Agreement, together with the Registration Rights Agreement and the Escrow Agreement, constitutes the entire agreement between the parties with respect to the Shares, and supersedes all prior agreements and understandings, relating to the subject matter of this Agreement.

(g) Amendment. This Agreement may be amended or modified only by a written instrument executed by the Buyers and the Company.

(h) Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State Delaware without regard to any applicable conflicts of laws.

(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and constitute the same instrument.

[NEXT PAGE IS SIGNATURE PAGE]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

THE COMPANY:

ARGAN, INC.

/s/ Rainer Bosselmann

By: Rainer Bosselmann

Its: President

BUYERS:

Argan Investments LLC

/s/ Robert Averick

By: Robert Averick

Its: Member

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Schedule A

Buyers of Restricted Stock

Buyer	Number of Shares	Purchase Price
Argan Investments LLC	1,000,000	$3,750,000.00

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EX-4.3

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of December 8, 2006, among Argan, Inc., a Delaware corporation (the “Company”), and the parties identified on Schedule A attached hereto (each a “Stockholder” or “Holder”).

RECITAL:

The Company and Stockholders are parties to that certain Stock Purchase Agreement of even date herewith (the “Purchase Agreement”), whereby Stockholders purchased 1,000,000 shares of the common stock of the Company, par value $0.15 per share (the “Common Stock”). Capitalized terms used but not defined in this Agreement have the meanings assigned to such terms in the Purchase Agreement. As an inducement to Stockholders to enter into the Purchase Agreement, the Company agrees with Stockholders as follows:

AGREEMENT:

NOW,THEREFORE,the parties hereby agree as follows:

1.CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings:

1.1Affiliates. “Affiliate” shall mean any person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any party specified in this Agreement.

1.2Commission. “Commission” shall mean the United States Securities Exchange Commission or any other federal agency at the time administering the Securities Act.

1.3Common Shares. “Common Shares” shall mean the shares of Common Stock issued at any time to the Stockholders pursuant to the Purchase Agreement.

1.4Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

1.5Person. “Person” shall mean any individual, partnership, limited liability company, corporation, trust or other entity.

1.6Register; Registered; Registration. “Register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement by the Commission.

1.7Registrable Shares. “Registrable Shares” shall mean (i) the Common Shares and (ii) all shares of the Company’s Common Stock issued as a dividend on, or other distribution with respect to, or in exchange or in replacement of, the Common Shares, until, in the case of any such security, the earliest of (i) its effective registration under the Securities Act and resale in accordance with the registration statement covering it, (ii) the earliest date all of such shares may be sold pursuant to Rule 144(k) under the Securities Act, (iii) its sale pursuant to Rule 144 or otherwise, except in sales referenced in the proviso to Section 5.1.

1.9Registration Expenses. “Registration Expenses” shall mean all expenses incurred by the Company in complying with Section 3, including all registration and filing fees, exchange listing fees, printing expenses, fees and disbursements of counsel for the Company, state securities’ law fees and expenses, and the expense of any special consents and advice or similar audit services of independent auditors incident to or required by any such registration.

1.10Securities Act. “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

1.11Selling Expenses. “Selling Expenses” shall mean any underwriting discounts and selling commissions associated with the sale of Registrable Securities by a Holder hereunder. Selling Expenses are and shall be the responsibility of the Holders.

2. RESTRICTIONS ON TRANSFER.

2.1Notice of Proposed Transfers. Unless there is an effective registration statement under the Securities Act covering a proposed transfer, Stockholder shall notify the Company of its intention to affect a transfer of any of its Common Shares. Such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall be accompanied (except that the requirements set forth in the balance of this sentence need not be complied with where the proposed transaction complies with Rule 144 as long as the Company is furnished with evidence of compliance with such rule) by:

(a)an unqualified written opinion of legal counsel which is reasonably satisfactory to the Company addressed to the Company’s counsel, to the effect that the proposed transfer of the Common Shares may be effected without registration of the Securities Act; or

(b)a “no action” letter from the Commission to the effect that the distribution of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto;

provided, that this Section 2.1 shall not require a legal opinion or “no action letter” in connection with any transfer described in the proviso to Section 5.1 of this Agreement.

2.2Compliance.Each certificate evidencing the Common Shares transferred as above provided shall bear the appropriate restrictive legend set forth in the Purchase Agreement, except that such certificate shall not bear such restrictive legend if in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provisions of the Securities Act or applicable state securities laws.

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3. REGISTRATION RIGHTS

3.1Shelf Registration.

(a) The Company shall prepare and file with the Commission as soon as practicable but in no event later than 120 days after the closing of the transaction contemplated by the Purchase Agreement, a registration statement (the “Initial Shelf Registration Statement,” and together with any Subsequent Shelf Registration Statement (as defined below), including, in each case, the prospectus, amendments and supplements to such registration statements, including post-effective amendments, all exhibits, and all materials incorporated by reference or deemed to be incorporated by reference in such registration statements, are herein collectively referred to as the “Shelf Registration Statement”) for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”) (the “Shelf Registration”), registering the resale from time to time by Stockholders of all of the Registrable Securities. The Initial Shelf Registration Statement shall be on an appropriate form under the Securities Act permitting registration of such Registrable Securities for resale by Stockholders from time to time as set forth in the Initial Shelf Registration Statement. The Company shall use its best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf Registration Statement) continuously effective under the Securities Act to permit the prospectus included therein to be lawfully delivered by the Stockholders, for a period that will terminate when (i) all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant thereto or (except in sales described in the proviso to Section 5.1) otherwise or (ii) such Registrable Securities may be sold pursuant to the provisions of Rule 144 under the Securities Act (such period, the “Effectiveness Period”).

(b) If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because all Registrable Securities registered thereunder have been resold pursuant thereto or have otherwise ceased to be Registrable Securities), the Company shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend such Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a “Subsequent Shelf Registration Statement”). If a Subsequent Shelf Registration Statement is filed, the Company shall use its best efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep such Subsequent Shelf Registration Statement continuously effective until the end of the Effectiveness Period.

(c) The Company shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act.

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(d) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading.

3.2Registration Procedures. In connection with the Shelf Registration contemplated by Section 3.1 hereof, the following provisions shall apply:

(a) The Company shall (i) furnish to each Stockholder, prior to the filing thereof with the Commission, a copy of any Shelf Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and the Company shall use its best efforts to reflect in the Shelf Registration Statement, when so filed with the Commission, such comments as a Stockholder may reasonably and timely propose.

(b) The Company shall give written notice to each Stockholder (which notice pursuant to clauses (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

(i) when the Shelf Registration Statement or any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the prospectus included therein or for additional information;

(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for that purpose;

(iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

(v) of the happening of any event that requires the Company to make changes in the Shelf Registration Statement or the prospectus in order that the Shelf Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

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(c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale.

(d) The Company shall furnish to each Stockholder, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if such Stockholder so requests, all exhibits thereto (including those, if any, incorporated by reference).

(e) The Company shall, during the Effectiveness Period, deliver to each Stockholder, without charge, except for normal copying and actual delivery costs, as many copies of the prospectus (including each preliminary prospectus, if any) included in the Shelf Registration Statement and any amendment or supplement thereto as such Stockholder may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by Stockholders in connection with the offering and sale of the Registrable Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(f) Prior to any public offering of the Registrable Securities pursuant to any Shelf Registration Statement the Company shall register or qualify or cooperate with the Stockholders and their counsel in connection with the registration or qualification of the Registrable Securities for offer and sale under the securities or “blue sky” laws of such states of the United States as any Stockholder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by such Shelf Registration Statement, provided, however, that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (f), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction.

(g) The Company shall cooperate with Stockholders to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to any Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Registrable Securities pursuant to such Shelf Registration Statement. Stockholders shall provide such representations as may be reasonably requested by the Company’s transfer agent in this regard.

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(h) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3.2(b) above during the period for which the Company is required to maintain an effective Shelf Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Shelf Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Stockholders, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Stockholders in accordance with paragraphs (ii) through (v) of Section 3.2(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then each Stockholder shall suspend use of such prospectus and, if so directed by the Company, destroy or deliver to the Company all copies then in Stockholder’s possession of the prospectus covering such Registrable Securities that was in effect at the time of such notice (such period during which the availability of the Shelf Registration Statement and any related prospectus is suspended being a “Deferral Period”). The period of effectiveness of the Shelf Registration Statement provided for in Section 3.1(a) above shall be extended by the number of days from and including the date of the giving of such notice to and including the date when the Holders of Registrable Securities shall have received such amended or supplemented prospectus pursuant to this Section 3.2(h). The Company will use its best efforts to ensure that the use of the prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3.2(h) to suspend the availability of the Shelf Registration Statement or any prospectus for one or more periods not to exceed 30 days in any 3 month period and not to exceed, in the aggregate, 90 days in any 12 month period.

(i) The Company shall prepare and file with the Commission such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective for the applicable period specified in Section 3.1(a) and shall cause the related prospectus to be supplemented by any required prospectus supplement to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act. The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Shelf Registration and the Company will make generally available to its securityholders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Shelf Registration Statement, which statement shall cover such 12-month period.

(j) The Company may require Stockholders to furnish to the Company such information regarding the Stockholders and the distribution of the Registrable Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement.

(k) The Company shall (i) make reasonably available for inspection by Stockholders, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by Stockholders or any such underwriter, all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by Stockholders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act.

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(l) The Company shall use its best efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by a Shelf Registration Statement contemplated hereby.

(m) The Company shall as promptly as practicable (if reasonably requested by Stockholders), incorporate in a prospectus supplement or post-effective amendment to the Shelf Registration Statement such information as any Stockholder or shall, on the basis of an opinion of nationally recognized counsel experienced in such matters, determine to be required to be included therein and make any required filings of such prospectus supplement or such post-effective amendment; provided that the Company shall not be required to take any actions under this Section 3.2(m) that are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law.

3.3Expenses of Registration. The Company shall pay all Registration Expenses incurred in connection with the performance of the Company’s obligations under this Agreement.

4. INDEMNIFICATION

4.1Indemnification by the Company. The Company agrees to indemnify and hold harmless each Stockholder and its Affiliates, against all claims, losses, damages and liabilities, joint or several (or actions in respect thereof, and including, but not limited to, any claims, losses, damages, liabilities or actions relating to purchases and sales of the Registrable Securities), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, to which any of them may become subject under the Securities Act, the Exchange Act or other federal or state law, arising out of or based on the following:

(a)any untrue statement or alleged untrue statement of a material fact contained in any such registration statement, preliminary prospectus, prospectus, offering circular or other similar document (including any related registration statement, notification or the like, and including any amendment or supplement thereto) incident to any such registration, or based on any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading;

(b)any violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with any such registration, qualification or compliance; and

(c)any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as incurred related to the foregoing.

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4.2Indemnification by Stockholders. If Registrable Securities held by Stockholders are included in the securities as to which such registration is being effected, each Stockholder shall, severally and not jointly, indemnify the Company, each of its officers and directors, each underwriter and each person who controls any underwriter, and each person, if any, who controls the Company or any such underwriter within the meaning of Section 15 of the Securities Act, and each person affiliated with or retained by the Company and who may be subject to liability under any applicable securities laws, against all claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, to which they may become subject under the Securities Act or other federal or state law, arising out of or based on:

(a)any untrue statement or alleged untrue statement of a material fact contained in any such registration statement, prospectus, offering circular or other similar document, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Stockholder and stated to be specifically for use therein; and

(b)any legal and other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as incurred.

4.3Limitation on the Indemnification Obligation.

(a)No party required to provide indemnification under this Section 4 (the “Indemnifying Party”) shall be liable, and shall have any indemnification obligation hereunder, for any amounts paid in settlement by any party entitled to indemnification hereunder (the “Indemnified Party”) of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld).

(b)The Company shall not be liable under Section 4.1 hereof for any such claim, loss, damage, liability or expense to the extent it arises out of or is based on any untrue statement or omission, made in reliance on and in conformity with written information furnished to the Company by an instrument duly executed by any Stockholder, underwriter or controlling person and stated to be specifically for use therein.

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4.4Indemnification Procedure. Each Indemnified Party” shall give notice to the Indemnifying Party promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided the Indemnifying Party acknowledges its obligations to indemnify the Indemnified Party with respect to the claim and provided further that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 4 except to the extent that the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action and provided further, that the Indemnifying Party shall not assume the defense for matters as to which there is a conflict of interest or separate and different defenses but shall bear the expense of such defense nevertheless. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. If the Indemnifying Party does not assume the defense of any claim or proceeding resulting therefrom, the Indemnified Party may defend against such claim or proceeding as the Indemnified Part may deem appropriate and may settle such claim or proceeding in such manner as the Indemnified Party may deem appropriate, all without prejudice to its right to indemnification hereunder.

4.5Contribution, Allocation, etc. If the indemnification provided for in this Section 4 is unavailable or insufficient to hold harmless an Indemnified Party under such paragraphs in respect of any losses, claims, damages or liabilities or actions in respect thereof referred to therein, then each Indemnifying Party shall in lieu of indemnifying such Indemnified Party contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or actions in such proportion as appropriate to reflect the relative fault of the Company, on the one hand, and the underwriters and Stockholders, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or actions as well as any other relevant equitable considerations, including the failure to give any notice under Section 4.4. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact relates to information supplied by the Company, on the one hand, or the underwriters or Stockholders, on the other, and to the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and Stockholders agree that it would not be just and equitable if contributions pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which did not take account of the equitable considerations referred to above in this paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages, liabilities or action in respect thereof, referred to above in this paragraph, shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this paragraph, no Stockholder shall be required to contribute any amount in excess of the lesser of (i) the proportion that the public offering price of shares sold by such Stockholders under such registration statement bears to the total public offering price of all securities sold thereunder, but not to exceed the proceeds received by such Stockholder for the sale of Registrable Shares covered by such registration statement and (ii) the amount of any damages which it would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No person guilty of fraudulent misrepresentations (within the meaning of Section 11(f) of the Securities Act), shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.

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4.6Conflicts with Underwriting Agreement. Notwithstanding anything in this Section 4 to the contrary, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

5. MISCELLANEOUS PROVISIONS.

5.1No Transfer of Registration Rights. The registration rights granted under this Agreement may not be assigned or otherwise conveyed by Stockholders without the consent of the Company, which consent shall not be unreasonably withheld; provided, that registration rights may be assigned by a Stockholder in connection with a sale or other transfer to an immediate family member or to an entity controlled by or under common control with Stockholders.

5.2Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to conflict of laws or any other rules or principles which may require the application of the laws of any other jurisdiction.

5.3Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Stockholders, upon any breach or default by the Company under this Agreement, shall impair any such right, power or remedy of Stockholders nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Stockholder or any breach or default under this Agreement, or any waiver on the part of any Stockholder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to Stockholders, shall be cumulative and not alternative.

5.4Rule 144.The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time, the Company is not required to file such reports, it will, upon the request of any Stockholder, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rule 144 under the Securities Act. The Company covenants that it will take such further action as any Stockholder may reasonably request, all to the extent required from time to time to enable Stockholders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. Upon the request of Stockholders, the Company shall deliver to such Stockholder a written statement as to whether it has complied with such filing requirements. Notwithstanding the foregoing, nothing in this Section 5.4 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act if not otherwise registered.

5.5Remedies.Each of the parties hereto acknowledges and agrees that any failure by a party to perform its obligations hereunder or otherwise breach this Agreement, irreparable injury may occur for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, a party may obtain such relief as may be required to specifically enforce the other party’s obligations hereunder.

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5.6No Inconsistent Agreements. The Company will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to Stockholders in this Agreement or otherwise conflicts with the provisions hereof. The Company represents and warrants that the rights granted to Stockholders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of securities of the Company under any agreement in effect on the date hereof.

5.7Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements, correspondence, arrangements and understandings relating to the subject matter hereof.

5.8Binding Effect. All of the terms, provisions and conditions hereof shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto, and their respective heirs, personal representatives, successors and assigns.

5.9Headings; Construction. The headings contained herein are for the purposes of convenience only, and will not be deemed to constitute a part of this Agreement or to affect the meaning or interpretation of this Agreement in any way. Unless the context clearly states otherwise, the use of the singular or plural in this Agreement shall include the other and the use of any gender shall include all others. The parties have participated jointly in the negotiation and drafting of this Agreement. If any ambiguity or question of intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. All references herein to Sections shall refer to this Agreement unless the context clearly otherwise requires.

5.10Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) transmitter’s confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand or (c) the expiration of five (5) business days (or seven (7) business days where the addressee is not in the United States) after the day when mailed by certified or registered mail, postage prepaid, to the addresses set forth on the signature pages hereto, or to such other address as any party may, from time to time, designate in a written notice given in a like manner.

5.11Severability of Provisions. If a court in any proceeding holds any provision of this Agreement or its application to any person or circumstance invalid, illegal or unenforceable, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it was held to be invalid, illegal or unenforceable, shall not be affected, and shall be valid, legal and enforceable to the fullest extent permitted by law, but only if and to the extent such enforcement would not materially and adversely frustrate the parties’ essential objectives as expressed in this Agreement. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties intend that the court add to this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be valid and enforceable, so as to effect the original intent of the parties to the greatest extent possible.

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5.12No Third Party Beneficiaries. This Agreement does not create, and will not be construed as creating, any rights enforceable by any person not a party to this Agreement.

5.13Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT NOT LIMITED TO, THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN, COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATIONS. EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

5.14Amendment. This Agreement may be amended, modified, superseded, or canceled only by a written instrument signed by all of the parties hereto and any of the terms, provisions and conditions hereof may be waived, only by a written instrument signed by the waiving party.

5.15Counterparts. This Agreement may be executed in any number of counterparts and each such counterpart shall for al purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

Signature Pages Follow

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IN WITNESS WHEREOF,the parties have entered into this Agreement as of the date first written above.

THE COMPANY:

ARGAN, INC.

/s/ Rainer Bosselmann

By: Rainer Bosselmann

Its: President

BUYERS:

ARGAN INVESTMENTS LLC

/s/ Robert Averick

By: Robert Averick

Its: Member

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EX-4.4

ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Escrow Agreement”) is dated as of the 8^th day of December, 2006, by and among Argan, Inc., a Delaware corporation (the “Company”), the purchasers identified on Schedule A attached hereto (each a “Buyer”, and collectively the “Buyers”) and Robinson & Cole LLP (the “Escrow Agent”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement (defined below)

P R E M I S E S:

WHEREAS, the Company and the Buyers are parties to that certain Stock Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which the Company is offering, and the Buyers are purchasing (the “Transaction”), an aggregate of up to 2,853,335 shares (the “Shares”) of the Company’s common stock, $.15 par value, at a purchase price of $3.75 per share (the “Share Consideration”); and

WHEREAS, pursuant to the terms of the Purchase Agreement, the Company and the Buyers shall deliver to the Escrow Agent the Shares and the Share Consideration, respectively (collectively, the “Escrow Amount”), to provide for certain contingencies as set forth herein.

A G R E E M E N T S:

NOW, THEREFORE, in consideration of the above premises and of the covenants and agreements contained herein, the Company, the Buyers and the Escrow Agent agree as follows:

Section 1

Escrow Fund

1.1Delivery. Simultaneously with the execution and delivery of this Agreement, (i) the Company shall deliver to the Escrow Agent written instructions to its transfer agent instructing it to issue a stock certificate in the name of each Buyer for the respective number of Shares issued to such Buyer as set forth on Schedule A attached hereto (collectively, “Certificates”), pursuant to the Purchase Agreement, and (ii) each Buyer shall deliver to the Escrow Agent such Buyer’s respective portion of the Share Consideration for the number of Shares purchased by such Buyer as set forth on Schedule A attached hereto, pursuant to the Purchase Agreement. Upon receipt of the Escrow Amount by the Escrow Agent, the Escrow Amount held by the Escrow Agent pursuant to this Escrow Agreement shall be deemed to comprise the “Escrow Fund”. The Escrow Agent agrees to hold the Escrow Amount in an interest bearing account with JP Morgan Chase & Co. until the Escrow Amount is released from escrow in accordance with the provisions of Section 2 hereof.

Section 2

Disbursement of Escrow Fund

The Escrow Agent agrees to hold the Escrow Amount as provided hereunder until the Escrow Amount is released as follows:

2.1Disbursement of Escrow Amount. The Escrow Agent shall release the Escrow Amount in accordance with this Paragraph 2.1 upon the consummation of the acquisition by the Company of Gemma Power Systems, LLC and its affiliated entities (the “Release Condition”). Upon satisfaction of the Release Condition, the Escrow Agent shall deliver (i) the Share Consideration, and the interest earned thereon, to the Company and (ii) the Certificates to the Buyers.

2.2Expiration of Escrow Period. In the event that the Release Condition is not fulfilled by January 1, 2007, unless otherwise agreed in writing by the parties, the Transaction shall terminate and the Escrow Agent shall return (i) the Certificates to the Company, and (ii) the Share Consideration (including interest earned thereon) to the Buyers in their respective amounts.

2.3Dispute Resolution. In the event that any dispute arises with respect to this Agreement or in the event that any claim is made with respect to the Escrow Fund, then the Escrow Agent, upon receipt of written notice of such dispute, is authorized and directed to retain in its possession without liability to any person or party, all of the Escrow Amount until such dispute shall have been settled either by the mutual agreement of the parties involved or by a final, unappealable order, decree or judgment of a court of competent jurisdiction.

Section 3

Escrow Agent

3.1Appointment and Duties. The Company and each Buyer hereby appoints the Escrow Agent to serve hereunder, and the Escrow Agent hereby agrees to perform all duties which are expressly set forth in this Escrow Agreement.

3.2Acknowledgement. The Company and each Buyer acknowledges that the Escrow Agent acts as counsel to the Company and is likely to continue to act in such capacity in any matter not in conflict with its duties as the Escrow Agent hereunder.

3.3Indemnification. Each Buyer severally but not jointly, and the Company, jointly and severally with each Buyer, will indemnify and defend the Escrow Agent, and hold it harmless from any and all claims, regardless of nature, arising out of or because of this Escrow Agreement, and exonerate the Escrow Agent from any liability in connection with its discharge of obligations pursuant to this Escrow Agreement in the absence of fraud or gross negligence.

3.4Resignation. The Escrow Agent may resign at any time upon giving the other parties hereto ten (10) days prior written notice of resignation. In such event, the successor shall be such person, firm or corporation as shall be mutually selected by the Company and the Buyers. It is understood and agreed that such resignation shall not be effective until a successor agrees to act hereunder; provided, however, if no successor is appointed and acting hereunder within ten (10) days after such notice is given, the Escrow Agent may pay and deliver the Escrow Fund to a court as part of an interpleader or like action.

3.5 Payment of Fees. The Company shall pay all of the Escrow Agent’s fees and expenses arising out of or relating to this Escrow Agreement.

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Section 4

Liabilities of Escrow Agent

4.1Limitations.The Escrow Agent shall be liable only to accept, hold and deliver the Escrow Fund in accordance with the provisions of this Escrow Agreement and amendments hereto; provided, however, that the Escrow Agent shall not incur any liability with respect to any action taken or omitted (a) in good faith upon the advice of its counsel given with respect to any questions relating to its duties and responsibilities as the Escrow Agent under this Escrow Agreement, or (b) in reliance upon any instrument which the Escrow Agent shall in good faith believe to be genuine (including the execution, identity, or authority of any person executing such instrument, its validity and effectiveness, and the truth and accuracy of any information contained therein), to have been signed by a proper person or persons, and to conform to the provisions of this Escrow Agreement.

4.2Collateral Agreements. The Escrow Agent shall not be bound in any way by any contract or agreement between the parties hereto, whether or not it has knowledge of any such contract or agreement or of the terms or conditions of any such contract or agreement, including without limitation, the Purchase Agreement.

Section 5

Termination

This Escrow Agreement, other than Paragraph 3.4, Paragraph 3.5 and Section 4, shall be terminated upon the earliest to occur of: (i) the full disbursement of the Escrow Fund by the Escrow Agent; (ii) written mutual consent signed by the Company and Buyers; or (iii) the transfer of the Escrow Fund to a court in accordance with Paragraph 3.4 hereof. This Escrow Agreement shall not otherwise be terminated.

Section 6

Other Provisions

6.1Notices. Any notices required or permitted to be given to any party hereto shall be given to all of the parties hereto. Any notices required or permitted hereunder shall be sufficiently given pursuant to the notice provisions in the Purchase Agreement.

6.2Benefit. This Escrow Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

6.3Entire Agreement; Amendment. This Escrow Agreement contains all the terms agreed upon by the parties with respect to the subject matter hereof. This Escrow Agreement may be amended only by a written instrument signed by all of the parties hereto.

6.4Headings. The headings of the sections and sub-sections of this Escrow Agreement are for ease of reference only and do not evidence the intentions of the parties.

6.5Governing Law. This Escrow Agreement shall be governed by, and construed according to, the laws of the State of Connecticut, without regard to the principles thereof relating to conflicts of laws. The parties hereto consent to the jurisdiction of the courts of the State of Connecticut in Fairfield County and the United States District Court for the District of Connecticut.

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6.6Counterparts. This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Agreement may be executed by telecopied signatures with the same effect as original signatures.

[signatures to follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date first written above.

THE COMPANY:

ARGAN, INC.

/s/ Rainer Bosselmann

By: Rainer Bosselmann

Its: President

BUYERS:

Argan Investments LLC

/s/ Robert Averick

By: Robert Averick

Its: Member

ALLEN SBH INVESTMENTS, LLC

/s/ Kim M. Wieland

By: Kim M. Wieland

Its: CFO

ALLEN & COMPANY, LLC

/s/ Kim M. Wieland

By: Kim M. Wieland

Its: Managing Director and CFO

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/s/ Bruce Allen

Bruce Allen

/s/ James Quinn

James Quinn

/s/ John Simon

John Simon

/s/ Mark Levy

Mark Levy

/s/ Stephen J. Adler

Stephen J. Adler

WHITNEY GREEN RIVER MANAGEMENT

CO., LLC

/s/ John Hockin

By: John Hockin

Its:

PERENNIAL PARTNERS LP

/s/ Paul Fino

By: Paul Fino

Its: Principal

WESTWIND EQUITY PARTNERS, LLC

/s/ Beth Maxwell

By: Beth Maxwell

Its: Executive Director

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MSR I SBIC, L.P.

By: MSR I SBIC Partners, LLC (its General Partner)

By: MSR Advisors, Inc. (its Manager)

/s/ Daniel A. Levinson

By: Daniel A. Levinson

Its: President

MSR FUND II, L.P.

MSR Fund II GP, LLC (its General Partner)

By: MSR Advisors, Inc. (its Manager)

/s/ Daniel A. Levinson

By: Daniel A. Levinson

Its: President

ESCROW AGENT:

ROBINSON & COLE LLP

/s/ Richard A. Krantz

By: Richard A. Krantz

Its: Partner

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Schedule A

Buyers of Restricted Stock

Buyer	Number of Shares		Purchase Price		Number of Shares		Purchase Price
Argan Investments LLC		1,000,000	$	3,750,000.00		1,000,000	$	3,750,000.00
Allen SBH Investments, LLC		266,667	$	1,000,000.00		173,333	$	649,999.00
Perennial Partners LP		266,667	$	1,000,000.00		266,667	$	1,000,000.00
Whitney Green River Management Co., LLC		266,667	$	1,000,000.00		266,667	$	1,000,000.00
Westwind Equity Partners, LLC		266,667	$	1,000,000.00		266,667	$	1,000,000.00
MSR I SBIC, L.P.		92,793	$	347,974.00		92,793	$	347,974.00
MSR Fund II, L.P.		440,540	$	1,652,025.00		440,540	$	1,652,025.00
Allen & Company, LLC		80,000	$	300,000.00		266,667	$	1,000,000.00
Bruce Allen		53,333	$	200,000.00		160,000	$	600,000.00
John Simon		80,000	$	300,000.00
James Quinn		26,667	$	100,000.00
Mark Levy		6,667	$	25,000.00
Stephen J. Adler		6,667	$	25,000.00

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EX-4.5

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of December 8, 2006, by and among ARGAN, INC., a Delaware corporation (the “Company”); and WILLIAM F. GRIFFIN, Jr. and JOEL M. CANINO (each, a “Holder” and together, the “Holders”).

RECITALS:

WHEREAS, on the date hereof, the Company is acquiring, among other things, all of the membership interests in Gemma Power Systems, LLC, a Connecticut limited liability company (“GPS”), and all of the issued and outstanding shares of capital stock of Gemma Power, Inc., a Connecticut corporation (“GPS-Connecticut”), and Gemma Power Systems, Inc., a California corporation (“GPS-California”) pursuant to the Acquisition Agreements (the “Acquisition”), and pursuant thereto the Holders will receive shares of common stock of the Company (the “Common Stock”); and

WHEREAS, in connection with the issuance by the Company of the shares of Common Stock, and as an inducement to consummate the transactions contemplated by the Acquisition Agreements, the Company has agreed to file a registration statement with the Commission in compliance with the Securities Act in respect to the Common Stock issued in connection with the Acquisition.

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, the parties hereby agree with each other as follows:

1.Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

“Acquisition Agreements” shall mean the Membership Interest Purchase Agreement and that certain a Stock Purchase Agreement dated as of December 8, 2006, by and among the Company and GPS-Connecticut, GPS-California, and the Holders.

“Acquisition Shares” shall mean shares of: (a) Common Stock issued in connection with the Acquisition in accordance with the terms of the Acquisition Agreements; and (b) any securities of the Company issued as (or issuable upon the conversion or exercise of any warrant, right, or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities.

“Closing” shall have the meaning as set forth in the Acquisition Agreements.

“Commission” shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.

“Common Stock” shall mean the Company’s Common Stock, $0.15 par value, as constituted as of the date of this Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Membership Interest Purchase Agreement” shall mean that certain Membership Interest Purchase Agreement dated as of December 8, 2006, by and among the Company, and GPS, GPS-Connecticut, GPS-California, and the Holders.

“Registration Expenses” shall mean the expenses so described in Section 5.

“Restricted Stock” shall mean the Acquisition Shares, excluding Acquisition Shares which have been: (a) registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them; or (b) publicly sold pursuant to Rule 144 under the Securities Act.

“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Selling Expenses” shall mean the expenses so described in Section 5.

2.Restrictive Legend. Each certificate representing Acquisition Shares shall, except as otherwise provided in this Section 2, be stamped or otherwise imprinted with a legend substantially in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

A certificate shall not bear such legend if: (a) the Acquisition Shares represented by such certificate have been registered under the Securities Act; or (b) in the opinion of counsel satisfactory to the Company the securities represented thereby may be publicly sold without registration under the Securities Act and any applicable state securities laws.

3.Required Registration. The Company shall use its best efforts to effect the registration under the Securities Act of all of the shares of Restricted Stock held by the Holder, or his assigns, pursuant to the terms of this Agreement.

4.Registration Procedures. Whenever the Company is required by the provisions of Section 3 to use its best efforts to effect the registration of any shares of Restricted Stock under the Securities Act, the Company will, as expeditiously as possible:

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(a)prepare and file with the Commission, as soon as practicable following Holders delivery of the Closing Date Balance Sheet (as defined in the Membership Interest Purchase Agreement), a registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as hereinafter provided) or until the Restricted Stock held by the Holder can be publicly sold pursuant to Rule 144 under the Securities Act;

(b)prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified in subsection (a) above and comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the sellers’ intended method of disposition set forth in such registration statement for such period;

(c)furnish to each seller of Restricted Stock, and to each underwriter if applicable, such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement;

(d)use its best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or “blue sky” laws of such jurisdictions as the sellers of Restricted Stock or, in the case of an underwritten offering, the managing underwriter reasonably shall request; provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;

(e)use its best efforts to list the Restricted Stock covered by such registration statement with any securities exchange or stock market on which the Common Stock of the Company is then listed;

(f)immediately notify each seller of Restricted Stock and each underwriter, if applicable, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(g)if the offering is underwritten and at the request of any seller of Restricted Stock, use its best efforts to furnish on the date that Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and to such seller, stating that such registration statement has become effective under the Securities Act and that (A) to the best knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act; (B) the registration statement, the related prospectus and each amendment or supplement thereof comply as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any opinion as to financial statements contained therein); and (C) to such other effects as reasonably may be requested by counsel for the underwriters or by such seller or its counsel; and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters and to such seller, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request;

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(h)make available for inspection by each seller of Restricted Stock, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or representative or agent in connection with such registration statement; and

(i)if at such time as the Company files a registration statement pursuant to the requirements of Section 3 it is a registrant entitled to use Form S-3 or any successor thereto to register the Restricted Stock, use its best efforts to register the Restricted Stock under the Securities Act on Form S-3 or any successor thereto, for public sale in the manner specified by the holders thereof.

In connection with any registration pursuant to Section 3 that is underwritten, the Company and each seller agree to enter into a written agreement with the managing underwriter selected by the sellers in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter and companies of the Company’s size and investment stature.

For purposes of Sections 4(a) and 4(b), the period of distribution of Restricted Stock in any registration statement shall be deemed to extend until the earlier of the sale of all Restricted Stock covered thereby and 180 days after the effective date of such registration statement.

In connection with each registration hereunder, the sellers of Restricted Stock will furnish to the Company in writing such information with respect to themselves and the proposed distribution by them as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws.

5.Expenses.

(a)All expenses incurred by the Company in complying with Sections 3 and 4, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, and costs of insurance, but excluding any Selling Expenses, are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of Restricted Stock are called “Selling Expenses.”

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(b)The Company will pay all Registration Expenses in connection with each registration statement under Section 3. All Selling Expenses in connection with each registration statement under Section 3 shall be borne by the participating sellers in proportion to the number of shares sold by each, or by such participating sellers other than the Company (except to the extent the Company shall be a seller) as they may agree.

6.Indemnification and Contribution.

(a)Upon the registration of any of the Restricted Stock under the Securities Act pursuant to Section 3, the Company will indemnify and hold harmless each seller of such Restricted Stock thereunder, each underwriter, if applicable, of such Restricted Stock thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, along with the partners, members, directors, and officers of each such seller, underwriter or controlling person, against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 3, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such seller, each such underwriter and each such controlling person, along with the partners, members, directors, and officers of each such seller, underwriter or controlling person, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such seller, any such underwriter or any such controlling person in writing specifically for use in such registration statement or prospectus or supplement thereof.

(b)In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 3, each seller of such Restricted Stock thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 3, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus or supplement thereof, and; provided, further, however, that the liability of each seller hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense that is equal to the proportion that the public offering price of the shares sold by such seller under such registration statement bears to the total public offering price of all securities sold thereunder, but not in any event to exceed the net proceeds received by such seller from the sale of Restricted Stock covered by such registration statement.

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(c)The Company hereby agrees to indemnify and hold harmless each holder of Restricted Stock against and in respect of: (i) any loss, claim, liability, obligation, or damage which such holder may suffer or incur resulting from or arising in connection with any misrepresentation, breach of warranty or non-fulfillment of any covenant or agreement on the part of the Company contained in Section 9; and (ii) all actions, suits, proceedings, demands, assessments, judgments, reasonable attorneys’ fees, costs and expenses incident to the forgoing.

(d)Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof. The omission so to notify the indemnifying party shall not relieve it from any liability that it may have to such indemnified party other than under this Section 6 and shall only relieve it from any liability that it may have to such indemnified party under this Section 6 if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 6 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

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(e)In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any holder of Restricted Stock exercising rights under this Agreement, or any controlling person of any such holder, makes a claim for indemnification pursuant to this Section 6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 6 provides for indemnification in such case; or (ii) contribution under the Securities Act may be required on the part of any such selling holder or any such controlling person in circumstances for which indemnification is provided under this Section 6; then, and in each such case, the Company and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that such holder is responsible for the portion represented by the percentage that the public offering price of its Restricted Stock offered by the registration statement bears to the public offering price of all securities offered by such registration statement, and the Company shall be responsible for the remaining portion; provided, however, that, in any such case: (A) no such holder will be required to contribute any amount in excess of the net proceeds received by such seller from the sale of Restricted Stock covered by such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

7.Changes in Common Stock. If, and as often as, there is any change in the Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock as so changed.

8.Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission, which may at any time permit the sale of the Restricted Stock to the public without registration, at all times after 180 days after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to:

(a)make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

(b)use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(c)furnish to each holder of Restricted Stock forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such holder to sell any Restricted Stock without registration.

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9.Representations and Warranties of the Company. The Company represents, warrants and covenants to the Holders and any other holder of Restricted Stock as follows:

(a)the execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Charter or By-laws of the Company;

(b)this Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms;

(c)that it will not file with the Commission a registration statement with respect to any shares of its capital stock other than the Restricted Stock prior to ninety (90) days after the effective date of the registration statement registering the shares of Restricted Stock to be issued at Closing; and

(d)that it will not include any shares of its capital stock other than Restricted Stock in any registration statement filed with the Commission with respect to any Restricted Stock, without the prior written consent of the holders of Restricted Stock.

10.Miscellaneous.

(a)An original copy of this Agreement shall be kept by the Secretary of the Company.

(b)All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including without limitation transferees of any Restricted Stock), whether so expressed or not.

(c)All notices, requests, consents and other communications hereunder shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by telecopier or telex, addressed as follows:

(i) if to the Company or any other party hereto, at the address of such party set forth in the Acquisition Agreements;

(ii) if to any subsequent holder of Restricted Stock, to it at such address as may have been furnished to the Company in writing by such holder;

or, in any case, at such other address or addresses as shall have been furnished in writing to the Company (in the case of a holder of Restricted Stock) or to the holders of Restricted Stock (in the case of the Company) in accordance with the provisions of this paragraph.

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(d)This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of law.

(e)This Agreement may not be amended or modified, and no provision hereof may be waived, without the written consent of the Company and the holders of at least a majority of the Restricted Stock.

(f)This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)The Company shall not grant to any third party any registration rights more favorable than or inconsistent with any of those contained herein, so long as any of the registration rights under this Agreement remain in effect.

(h)If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein.

(i)This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

[Signatures on following page]

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the day and year first written above.

 COMPANY:

ARGAN, INC.

By:  /s/ Rainer Bosselmann

Title: Chairman and CEO

HOLDERS:

/s/ William F. Griffin, Jr.

WILLIAM F. GRIFFIN, JR.

/s/ Joel M. Canino

JOEL M. CANINO

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EX-4.6

ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Escrow Agreement”), is made and entered into as of the 8^th day of December, 2006, by and among (i) ARGAN, INC., a Delaware corporation (“Purchaser”), (ii) WILLIAM F. GRIFFIN, JR. (“Griffin”), and JOEL M. CANINO (“Canino,” and together with Griffin sometimes hereinafter referred to together as, the “Sellers”); (iii) MICHAEL PRICE (“Price”); and (iv) CURTIN LAW ROBERSON DUNIGAN & SALANS, P.C., a District of Columbia professional corporation (“Escrow Agent”).

WHEREAS, Purchaser, the Sellers, and Gemma Power Systems, LLC, a Connecticut limited liability company (“GPS”), Gemma Power, Inc., a Connecticut corporation (“GPS-Connecticut”), and Gemma Power Systems California, Inc., a California corporation (“GPS-California”), entered into that certain Membership Interest Purchase Agreement dated December 8, 2006 (the “MIPA”), pursuant to which Purchaser acquired, on the date hereof, all of the membership interests of GPS; and

WHEREAS, Purchaser, the Sellers and GPS-Connecticut and GPS-California entered into that certain Stock Purchase Agreement dated December 8, 2006 (the “SPA”), pursuant to which Purchaser acquired, on the date hereof, all of the issued and outstanding shares of capital stock of GPS-Connecticut and GPS-California (the acquisition of all of said membership interests of GPS under the MIPA and of all of said shares of capital stock of GPS-Connecticut and GPS-California under the SPA sometimes hereinafter referred to together as, the “Acquisition”); and

WHEREAS, all definitions of terms used in the MIPA shall have the same meaning when those terms are used in this Escrow Agreement; and

WHEREAS, as a result of the Acquisition, the Sellers are entitled to, among other things, the Stock Consideration; provided, however, that, in accordance with the terms and conditions of the MIPA, Purchaser has retained from the Stock Consideration the Escrowed Stock Consideration and is depositing same in escrow with the Escrow Agent to be held subject to the terms and conditions of this Escrow Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

1. Establishment of Escrow.

1.1Pursuant to Section 2.2(b) of the MIPA, Purchaser hereby deposits with Escrow Agent the Escrowed Stock Consideration, consisting of three (3) stock certificates evidencing the issuance to each of the Sellers of 325,000 shares of Argan Common Stock, and, at the direction of Sellers, the issuance to Price of 16,667 shares of Argan Common Stock, together having an aggregate value (valued at the Argan Per Share Value) of Two Million Five Hundred Thousand Dollars ($2,500,000), together with three (3) stock powers attached to each of said stock certificates executed by each of the Sellers, and by Price, as the case may be, in blank, which will be held subject to the terms and conditions of this Escrow Agreement.

1.2Purchaser and the Sellers and Price hereby acknowledge and agree that the Escrowed Stock Consideration is to secure the Sellers’ obligation to indemnify, defend, protect, and hold harmless each Buyer Indemnitee pursuant to Section 10 of the MIPA.

1.3 Escrow Agent hereby acknowledges receipt of the Escrowed Stock Consideration and agrees to hold the Escrowed Stock Consideration in accordance with the terms and conditions of this Escrow Agreement.

2.Term; Claims for Indemnification.

2.1The term of this Escrow Agreement shall commence on the date hereof and shall expire one (1) year from the Closing Date (the “Escrow Release Date”), unless a claim for indemnification under Section 10 of the MIPA is made on or before the Escrow Release Date, in which event this Escrow Agreement shall continue in effect in accordance the following provisions.

2.2Escrow Agent shall hold and release the Escrowed Stock Consideration as follows:

(a)In the event that Purchaser makes a claim for indemnification under Section 10of the MIPA (which Purchaser may do on one or more occasions during the term of this Escrow Agreement), it shall notify the Escrow Agent and the Sellers and Price of such claim and the amount thereof in writing (the “Indemnification Claim Notice”) no later than the Escrow Release Date. Upon the giving of the Indemnification Claim Notice, the Sellers shall have the right to dispute such claim by giving notice of dispute to the Escrow Agent and Purchaser and Price in writing (the “Dispute Notice”) within five (5) business days of Purchaser’s giving of the Indemnification Claim Notice. Purchaser and the Sellers thereafter shall attempt to agree in writing on the dollar amount owed by the Sellers pursuant to such claim. If the parties are unable to agree in writing to such dollar amount, the matter shall be resolved in accordance with Paragraph 2.3 below.

(b)Upon receipt by the Escrow Agent of joint written instructions from Purchaser and the Sellers setting forth the agreed amount of any claim for indemnification, or of a copy of a final decision by an arbitrator or arbitrators in accordance with Section 2.3 below, or in the event that the Sellers do not timely dispute Purchaser’s claim for indemnification, in accordance with Paragraph 2.2(a) above, then the Escrow Agent shall release to Purchaser the amount claimed by Purchaser in the Indemnification Claim Notice (if the Sellers do not timely dispute such claim) or the amount set forth in the joint written instructions of Purchaser and the Sellers or as set forth in a final decision by an arbitrator or arbitrators (if the Sellers do timely dispute such claim) (such amount as determined in any of such cases hereinafter referred to as the “Indemnification Amount”), by completing stock powers indicating thereon the number of shares of the Escrowed Stock Consideration to be transferred to Purchaser, which number shall be prorata among the Sellers and Price in accordance with their respective ownership of the Escrowed Stock Consideration. Thereafter the Escrow Agent shall continue to hold the remaining balance of the Escrowed Stock Consideration, if any, in accordance with the terms and conditions of this Escrow Agreement; provided, however, that if pending resolution of any dispute the Escrow Release Date has passed, then (i) this Escrow Agreement shall continue in effect, but only with respect to one hundred twenty percent (120%) of the amount of the Escrowed Stock Consideration sufficient to meet the amount of the then pending claim(s) and the remainder of the Escrowed Stock Consideration shall be released to the Sellers and to Price prorata in accordance with their respective ownership of the Escrowed Stock Consideration, and (ii) upon receipt by the Escrow Agent of joint written instructions from Purchaser and the Sellers, or of a copy of a final decision by an arbitrator or arbitrators, setting forth the Indemnification Amount with respect to such pending claim(s), the Escrow Agent shall release to Purchaser theIndemnification Amount by completing stock powers indicating thereon the number of shares of the Escrowed Stock Consideration to be transferred to Purchaser, which number shall be prorata among the Sellers and Price in accordance with their respective ownership of the Escrowed Stock Consideration, and shall release to the Sellers and Price (prorata among them in accordance with their respective ownership of the Escrowed Stock Consideration) the balanceof the Escrowed Stock Consideration.

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(c)Whenever the Escrow Agent is required to release less than all of the Escrowed Stock Consideration to Purchaser or to the Sellers pursuant to the terms of this Escrow Agreement, then the Escrow Agent shall exchange each of the stock certificates held by it as part of the Escrowed Stock Consideration hereunder (each, an “Original Stock Certificate”) for two (2) stock certificates, the first for the number of shares of Argan Common Stock having a value equal to the issuee’s pro rata share of the applicable Indemnification Amount (as set forth above), and the second for the balance of the shares represented by said Original Stock Certificate. For purposes of determining the number of shares of Argan Common Stock to be released hereunder in payment of an Indemnification Amount, the value per share shall be equal to the trailing thirty (30) day average trading price per share of Argan Common Stock (that is, the average trading price per share of Argan Common Stock occurring during the thirty (30) day period ending on date of the release), if any trades occurred during such thirty (30) day period, or halfway between the weighted average bid and ask prices per share of Argan Common Stock during such thirty (30) day period, if no trades occurred during such thirty (30) day period.

2.3Any dispute between the parties arising out of this Escrow Agreement shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association in Rockville, Maryland. Any final decision by the arbitrator(s) in any such proceeding may be entered as a judgment in accordance with the rules of the Circuit Court of Maryland for Montgomery County or the rules of the Superior Court of the State of Connecticut for the Judicial District of Hartford.

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3.Termination of Escrow.

3.1Subject to the provisions of Paragraph 2.2 above, on the Escrow Release Date, this Escrow Agreement shall terminate and the Escrow Agent shall deliver the Escrowed Stock Consideration, or the remaining amount thereof, to the Sellers and to Price pro rata in accordance with their ownership of the Escrowed Stock Consideration.

3.2Notwithstanding anything contained in this Escrow Agreement to the contrary, this Escrow Agreement may be terminated by the written agreement of the Purchaser and the Sellers delivered to the Escrow Agent, which agreement shall include instructions to the Escrow Agent as to the disposition of the Escrowed Stock Consideration.

3.3It is understood and agreed that the termination of this Escrow Agreement and the disbursement of the Escrowed Stock Consideration shall not terminate, limit or otherwise affect in any way the Sellers’ continuing obligations to indemnify, defend, protect and hold harmless each Buyer Indemnitee under Section 10 of the MIPA with respect to (i) Income Tax Matters, (ii) title matters, and (iii) actual fraud or intentional non-disclosure by the Sellers, which obligations shall expire as set forth in Section 10 of the MIPA.

4.Escrow Agent.

4.1Each of Purchaser and the Sellersand Pricerecognizes and acknowledges that the Escrow Agent is serving solely as an accommodation to the parties hereto, and each of them agrees that the Escrow Agent shall not be liable to any of the parties for any error of judgment, mistake, or act or omission hereunder, or any matter or thing arising out of its conduct hereunder, except for the Escrow Agent's willful misfeasance or gross negligence. The Escrow Agent shall be entitled to rely upon the authenticity of any signature and the genuineness and/or validity of any writing received by the Escrow Agent pursuant to or otherwise relating to this Escrow Agreement.

4.2The Escrow Agent is acting, and may continue to act, as counsel to Purchaser in connection with the subject transaction, whether or not the Escrowed Stock Consideration is being held by the Escrow Agent or has been delivered to a court of appropriate jurisdiction pursuant to Section 4.5 hereof.

4.3For services rendered hereunder, Purchaser and the Sellers shall each pay the Escrow Agent one-half of the fees and expenses it may bill for its services hereunder at its regular hourly rates, payable within thirty (30) days of invoice therefor. In no event shall this Section 4.3 apply to any fees, charges, or disbursements incurred by the Escrow Agent in its capacity as counsel to Purchaser.

4.4Each of Purchaser and the Sellers jointly and severally agrees to indemnify and hold harmless the Escrow Agent from and against any and all costs, claims, damages, or expenses (including, without limitation, reasonable attorneys’ fees and disbursements), that may be incurred by the Escrow Agent acting under this Escrow Agreement (including, without limitation, any costs incurred by the Escrow Agent pursuant to Section 4.5 hereof) or to which the Escrow Agent may be put in connection with the Escrow Agent acting under this Escrow Agreement, except for costs, claims, or damages arising out of the Escrow Agent’s willful misfeasance or gross negligence.

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4.5In the event that: (a) the Escrow Agent shall receive contrary instructions from Purchaser and the Sellers; or (b) any dispute shall arise as to any matter arising under this Escrow Agreement; or (c) there shall be any uncertainty as to the meaning or applicability of any of the provisions hereof, or the Escrow Agent’s duties, rights or responsibilities hereunder, or any written instructions received by the Escrow Agent pursuant hereto, the Escrow Agent shall not itself determine such dispute, controversy or uncertainty, but shall either (i) continue to hold the Escrowed Stock Consideration until otherwise directed in writing by joint instruction of Purchaser and the Sellers, or by a final non-appealable court order, or (ii) at its option, at any time that such dispute, controversy or uncertainty continues, deposit the Escrowed Stock Consideration into any court having appropriate jurisdiction. Upon the Escrow Agent’s disposition of the Escrowed Stock Consideration in accordance with clause (i) or clause (ii) of the immediately preceding sentence, the Escrow Agent shall, thereupon, be relieved of, and discharged and released from, any and all liability hereunder and with respect to the Escrowed Stock Consideration.

4.6Upon the delivery of the Escrowed Stock Consideration in accordance with the other provisions of this Escrow Agreement, the Escrow Agent shall, thereupon, be relieved of, and discharged and released from, any and all liability hereunder and with respect to the Escrowed Stock Consideration.

5.Miscellaneous.

5.1Each of the recitals set forth in the introductory paragraphs of this Escrow Agreement is hereby incorporated into the body hereof.

5.2Any consent required by any party hereto, by way of any document or notice requiring mutual agreement, or otherwise, shall not be unreasonably withheld.

5.3This Agreement shall be governed by the laws and construed, interpreted and enforced in the courts of the State of Maryland.

5.4 This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

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5.5 All notices, requests, instructions, or other communications required or permitted hereunder shall be deemed to have been given or made when delivered by (i) U.S. registered or certified mail, return receipt requested, postage prepaid, (ii) messenger, or (iii) overnight delivery service, or when delivery is refused, to:

If Purchaser then:	Argan, Inc.
	One Church Street, Suite 401
	Rockville, Maryland 20950
	Attn: Arthur F. Trudel
	Fax: (301) 315-0064
With a copy to:	David B. Law
	Curtin Law Roberson Dunigan
	& Salans, PC
	1900 M Street, N.W.
	Suite 600
	Washington, D.C. 20036
	Fax: 202/530-4411
If Griffin then:	Mr. William F. Griffin, Jr.
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607
If Canino then:	Mr. Joel M. Canino
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607
With a copy to:	John W. Beck
	Siegel, O’Connor, O’Donnell & Beck, P.C.
	150 Trumbull Street
	Hartford, Connecticut 06103
	Fax: (860) 724-3550
If Price then:	Michael Price
	______________________
	______________________
	______________________
If to Escrow Agent then:	Curtin Law Roberson Dunigan
	& Salans, PC
	1900 M Street, N.W.
	Suite 600
	Washington, D.C. 20036
	Attention: David B. Law, Esq.

Any party may from time to time give the others written notice of a change in the address to which notices are to be sent and of any successors in interest.

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4.6Nothing in this Escrow Agreement, expressed or implied, shall give or be construed to give any person, firm or corporation, other than the parties hereto and their successors and assigns, any legal claim under any covenant, condition or provision hereof, all the covenants, conditions and provisions contained in this Escrow Agreement being for the sole benefit of the parties hereto and their successors and assigns. No party may assign any of its rights or obligations under this Escrow Agreement without the written consent of all the other parties, which consent be may withheld in the sole discretion of the party whose consent is sought.

4.7This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

4.8This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and supersedes all prior agreements and understandings pertaining thereto. No covenant, representation, or condition not expressed in this Escrow Agreement shall affect or be deemed to interpret, change or restrict the express provisions hereof and no amendments hereto shall be valid unless made in writing and signed by all parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on the day and year first above written.

PURCHASER:
ARGAN, INC.
By:	/s/ Rainer Bosselmann
	Title: Chairman and CEO

[Signatures continue on following page]

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THE SELLERS:

/s/ William F. Griffin, Jr.

WILLIAM F. GRIFFIN, JR.

/s/ Joel M. Canino

JOEL M. CANINO

[Signatures continue on following page]

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PRICE:

/s/ Michael Price

MICHAEL PRICE

[Signatures continue on following page]

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ESCROW AGENT:
CURTIN LAW ROBERSON DUNIGAN & SALANS, P.C.
By:	/s/ David B. Law
	David B. Law, Vice President

10

EX-10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

By and Among

ARGAN, INC.

and

GEMMA POWER SYSTEMS, LLC

and

GEMMA POWER, INC., and

GEMMA POWER SYSTEMS CALIFORNIA, INC.

and

WILLIAM F. GRIFFIN, JR. and JOEL M. CANINO

Table of Contents

		Page
INTRODUCTORY STATEMENT			1
DEFINITIONS			1
SECTION 1 - ACQUISITION OF MEMBERSHIP INTERESTS			6
1.1	Acquisition of Membership Interests		6
1.2	Organizational Documents, Management		7
SECTION 2 - CONSIDERATION			7
2.1	Consideration		7
2.2	Payment of Consideration; Adjustment of Consideration		7
2.3	Consideration Allocation		9
2.4	Registration		9
SECTION 3 - CLOSING			9
3.1	Closing, Deliveries into Escrow		9
3.2	Deliveries by Escrow Agent		10
SECTION 4 - REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF THE SELLERS AND THE COMPANIES			10
4.1	Organization, Qualifications and Company or Corporate Power		10
4.2	Authorization of Agreement		11
4.3	Membership Interests; Capital Stock		12
4.4	Financial Statements		12
4.5	Absence of Changes		13
4.6	Legal Actions		14
4.7	Business Property Rights		14
4.8	Liabilities		14
4.9	Ownership of Assets and Leases		15
4.10	Taxes		16
4.11	Contracts, Other Agreements		16
4.12	Governmental Approvals		18
4.13	Lack of Defaults, Compliance with Law		18
4.14	Employees and Employee Benefit Plans		19
4.15	Insurance; Bonds		20
4.16	Labor and Employment Matters		20
4.17	Brokers and Finders		20
4.18	Accounts Receivable		21

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4.19	Conflicts of Interests	21
4.20	Environmental Compliance	21
4.21	Ownership of the Ownership Interests	22
4.22	Absence of Sensitive Payments	22
4.23	Approval of Transactions; Related Matters	23
4.24	Withholding	23
4.25	Amounts Due From Sellers	23
SECTION 5 - REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF PURCHASER		23
5.1	Organization, Standing, etc	23
5.2	Authorization, etc	24
5.3	No Breach or Defaults Caused by Agreement	24
5.4	Governmental Approvals	24
5.5	Brokers Fees	24
5.6	Authorized Shares of Stock	24
5.7	Capitalization	24
5.8	Voting Stock	24
5.9	No Audit	24
5.10	Net Worth of Purchaser	25
5.11	Private Offering	25
SECTION 6 - CONDITIONS TO CLOSING FOR PURCHASER		25
6.1	Performance of Agreements	25
6.2	Lack of Material Liabilities	25
6.3	Financial Statements	25
6.4	Lack of Defaults	25
6.5	Material Adverse Change	25
6.6	Employment Agreements	26
6.7	Opinion of Counsel	26
6.8	Compliance Certificate	26
6.9	Term Life Insurance	26
6.10	Registration Rights Agreement	26
6.11	[Intentionally omitted.	26
6.12	Release from the Sellers; Payment of Amounts Owed by the Seller]	26
6.13	Certificates; Organizational Documents	27
6.14	Corporate Filings	27
6.15	[Intentionally omitted.]	27
6.16	Release of Buy-Sell Rights	27
6.17	Third-Party Consents or Approvals	28
6.18	Escrow Agreement	28
6.19	Termination of Operating Agreement	28

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SECTION 7 - CONDITIONS TO CLOSING FOR THE SELLERS		28
7.1	Performance of Agreements	28
7.2	Compliance Certificate	28
7.3	Registration Rights Agreement	28
7.4	Employment Agreements	29
7.5	Term Life Insurance	29
7.6	Employee Stock Options	29
7.7	Escrow Agreement	29
SECTION 8 - TRANSACTIONS PRIOR TO CLOSING		29
8.1	Taxes	29
8.2	Books of Record and Account; Inspection	29
8.3	Insurance	29
8.4	Entity Existence	29
8.5	Maintenance of Properties	30
8.6	Organizational Documents	30
8.7	Issuances of Ownership Interests	30
8.8	Declaration of Distributions, etc	30
8.9	Material Contracts	30
SECTION 9 - RESTRICTIVE COVENANTS		30
9.1	Covenant Not to Compete	30
9.2	Confidentiality	31
9.3	Non-Solicitation	31
9.4	Acknowledgment by the Sellers	32
9.5	Reformation by Court	32
9.6	Extension of Time	32
9.7	Injunction	32
9.8	Survival	33
SECTION 10 - INDEMNIFICATION		33
10.1	Indemnification by the Sellers	33
10.2	No Circular Recovery	35
10.3	Sellers’ Indemnification Threshold; Cap	35
10.4	Release of Excess Escrowed Stock	36
SECTION 11 - TERMINATION		36
11.1	Termination by Purchaser	36
11.2	Termination by Sellers	36
SECTION 12 - DEFAULT		36
12.1	Events of Default	36
12.2	Termination by Reason of Event of Default or Failure of a Condition Precedent	37
12.3	Waiver by Purchaser	37

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SECTION 13 - MISCELLANEOUS		37
13.1	Costs	37
13.2	Attorneys Fees	37
13.3	Relationships to Other Agreements	37
13.4	Titles and Captions	37
13.5	Exhibits	38
13.6	Applicable Law	38
13.7	Binding Effect and Assignment	38
13.8	Notices	38
13.9	Severability	39
13.10	Acceptance or Approval	39
13.11	Survival	39
13.12	Entire Agreement	39
13.13	Counterparts	40
13.14	Securities Matters	40
13.15	Preparation and Filing of SEC Documents	40
13.16	Further Assurances	40
13.17	Tag Along Rights	40
13.18	Access to Company Records	41
13.19	Non-Reliance	41
13.20	Disclaimer	41
SECTION 14 - ESCROW PROVISIONS		42

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this 8^th day of December, 2006, by and among (i) ARGAN, INC., a Delaware corporation (“Purchaser”), (ii) GEMMA POWER SYSTEMS, LLC, a Connecticut limited liability company (“GPS”), (iii) GEMMA POWER, INC., a Connecticut corporation (“GPS-Connecticut”), (iv) GEMMA POWER SYSTEMS CALIFORNIA, INC., a California corporation (“GPS-California”), and (v) WILLIAM F. GRIFFIN, JR. (“Griffin”), and (vi) JOEL M. CANINO (“Canino,” and together with Griffin sometimes hereinafter referred to together as, the “Sellers”).

INTRODUCTORY STATEMENT

A.The Sellers own all of the membership interests of GPS (the “GPS Membership Interests”).

B.GPS is engaged in the engineering and construction of power energy systems and also provides consulting, owner’s representative, operating, and maintenance services to the energy market.

C.GPS-Connecticut and GPS-California are affiliates of GPS and are also engaged in the engineering and construction of power energy systems and also provide consulting, owner’s representative, operating, and maintenance services to the energy market.

D.The Board of Directors of Purchaser and the managers and members of GPS have approved the acquisition of GPS by Purchaser by acquisition from the Sellers of all of the GPS Membership Interests, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, for and in consideration of the premises and the mutual representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do agree as follows:

DEFINITIONS

The following terms when used in this Agreement shall have the following meanings:

“Accounts Receivable” means accounts receivable, Note due from all sources of the Company, and credits for returned or damaged merchandise.

“Act” shall mean the Securities Act of 1933, as the same has been and shall be amended from time to time.

“Adjusted EBITDA of the Companies” shall have the meaning set forth in Section 2.2(d)(iii) hereof.

“Adverse Consequences” means all material actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, liabilities, obligations, taxes, liens, losses, expenses, and fees, including court costs and attorneys' fees and expenses, net of all tax savings and insurance proceeds actually received by an Indemnitee with respect to any of the foregoing, but not for any punitive, indirect or consequential damages.

“Argan” shall mean Purchaser, Argan, Inc., a Delaware corporation, with its principal offices located at One Church Street, Suite 401, Rockville, Maryland 20850, and its successors and assigns.

“Argan Per Share Value” shall mean Three and 75/100 Dollars ($3.75) per share, being the same price per share as that paid by investors for Argan Common Stock in connection with the Private Offering.

“Argan Common Stock” shall mean the authorized voting common stock of Argan.

“Business Day” shall mean shall mean any day of the week other than Saturday, Sunday or a day on which banking institutions in either New York, New York, or Washington, D.C., are obligated or authorized by law to close.

“Canino” shall mean Joel M. Canino, a member and manager of GPS and a stockholder,officer and director of GPS-Connecticut and of GPS-California, and a signatory to this Agreement.

“Canino Employment Agreement” shall mean the employment agreement to be entered into by Canino and the Company pursuant to Section 6.6 below.

“Cash Consideration” shall have the meaning set forth in Section 2.2(a) hereof.

“Closing” means the transfer of the Ownership Interests to Purchaser and the payment of the Consideration to the Sellers pursuant to this Agreement.

“Closing Date” means the date of Closing, established under Section 3 of this Agreement.

“Closing Date Balance Sheet” means the audited combining and combined balance sheet of the Companies, as at the close of business on the Closing Date, presented on an accrual basis, prepared in accordance with GAAP by the Companies’ Regular CPA.

“Closing Date Financial Statements” shall mean the Closing Date Balance Sheet, together with the related audited combining and combined statement of operations and changes in financial position of the Companies for the period from January 1, 2006through the close of business on the Closing Date, prepared in accordance with GAAP by the Companies’ Regular CPA, after making all appropriate adjustments required to present same on an accrual basis, using the same accounting methods, historical policies, practices, principles and procedures with consistent classifications, judgments and estimation methodologies as were used in the preparation of the Interim Financial Statements.

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“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Companies” means Gemma Power Systems, LLC, Gemma Power, Inc., and Gemma Power Systems California, Inc. and all of their respective subsidiaries and affiliates (unless the context clearly indicates otherwise). Each of Gemma Power Systems, LLC, Gemma Power, Inc., and Gemma Power Systems California, Inc. (and all of their respective subsidiaries and affiliates, unless the context clearly indicates otherwise) is sometimes referred to as “a Company.”

“Companies’ Regular CPA” means the accounting firm of Kostin, Ruffkess & Company, LLC, Certified Public Accountants, the Companies’ regular independent certified public accountant.

“Confidential Information”has the meaning set forth in Section 9.2 below.

“Consideration” means the aggregate consideration set forth in Section 2 hereof.

“Contingent Cash Consideration” shall have the meaning set forth in Section 2.2(d)(iii) hereof.

“Contract” means any contract, agreement, obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding, under which any Company has or may acquire any rights, or has or may become subject to any obligation or liability, or by which any Company or any of the assets owned or used by it is or may become bound.

“December 31, 2007 Financial Statements” shall mean the consolidated balance sheets of the Companies as at December 31, 2007, and the related consolidated statements of income, changes in equity, and cash flow for the twelve month period then ended, prepared by the accounting firm of Grant Thornton (or such other accounting firm as is then regularly engaged by Purchaser), together with the report thereon of said accounting firm, including the notes thereto, prepared in accordance with GAAP, using, to the extent discernable by Grant Thornton or such other accounting firm, the same accounting methods, historical policies, practices, principles and procedures with consistent classifications, judgments and estimation methodologies as were used in the preparation of the Interim Financial Statements.

“Delivery Date”has the meaning set forth in Section 3.1 below.

“Environmental, Health, and Safety Laws” means the United States federal Comprehensive Environmental Response, Compensation and Liability Act of 1990, the Resource Conservation and Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, and judicial decisions thereunder of federal, state, local, and foreign governments and all agencies thereof) concerning pollution or protection of the environment, public health and safety, or employee health and safety, including laws relating to emissions, discharges, releases, or threatened releases of Hazardous Materials into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials.

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“Escrow Agent” shall mean Curtin Law Roberson Dunigan & Salans, P.C.

“Escrow Agreement” shall mean the escrow agreement in the form of the escrow agreement attached hereto as Exhibit 2.2(b).

“Escrowed Stock Consideration” shall have the meaning set forth in Section 2.2(b) hereof.

“Extremely Hazardous Substance” has the meaning set forth in Section 401 of the Emergency Planning and Community Right-to-Know Act of 1996, as amended.

“Financial Statements” means collectively (i) the audited balance sheets of the Companies as at December 31 in each of the years 2002 through 2005, and the related audited statements of income, changes in equity, and cash flow for each of the fiscal years then ended, prepared by the Companies’ Regular CPA, together with the report thereon of the Companies’ Regular CPA, (ii) the Interim Financial Statements, and (iii) the Closing Date Financial Statements, including in all cases the notes thereto; all of which have been prepared in accordance with GAAP.

“GAAP” shall mean in accordance with generally accepted accounting principles, consistently applied.

“GDI” shall have the meaning set forth in Section 4.1(g).

“GPS-California Stock” shall have the meaning set forth in Section 4.21.

“GPS-Connecticut Stock” shall have the meaning set forth in Section 4.21.

“GPS-Hartford” shall mean Gemma Power Hartford, LLC, a Connecticut limited liability company wholly-owned by GPS.

“GPS Membership Interests” has the meaning set forth in the introductory statement.

“GPS Stock Purchase Agreement” shall mean that certain Stock Purchase Agreement by and among Purchaser, GPS-Connecticut, GPS-California, Griffin and Canino to be executed contemporaneously with this Agreement.

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“Griffin” shall mean William F. Griffin, Jr., a member and manager of GPS and a stockholder,officer and director of GPS-Connecticut and of GPS-California, and a signatory to this Agreement.

“Griffin Employment Agreement” shall mean the employment agreement to be entered into by Griffin and the Company pursuant to Section 6.6 below.

“Hazardous Materials” shall include, without limitation, any pollutants or other toxic or hazardous substances or any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste (including materials to be recycled, reconditioned or reclaimed), oil or petroleum flammable materials, explosives, radioactive materials, hazardous waste, hazardous or toxic substances, or related materials, asbestos requiring treatment as a matter of law, or any other substance or materials defined as hazardous or harmful, or requiring special treatment or special handling by any federal, state or local environmental law, ordinance, rule or regulation including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1990, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1901, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 et seq.), the Occupational Safety and Health Act of 1970 and the regulations adopted and publications promulgated pursuant thereto.

“Interim Financial Statements” means the internally generated combining and combined balance sheet of the Companies as at September 30, 2006, and the related internally generated combining and combined statements of income, changes in equity, and cash flow for the nine (9) month period then ended, prepared in accordance with GAAP, after making all appropriate adjustments required to present same on an accrual basis.

“Main Facility Lease” shall have the meaning set forth in Section 4.9(b) hereof.

“Material Adverse Change” shall mean any change that is materially adverse to the current business, operations, properties, prospects, assets, or financial condition of any of the Companies, taken as a whole.

“Minimum Net Worth” shall have the meaning set forth in Section 2.2(c) hereof.

“Net Worth” shall mean the total assets of the Companies less the total liabilities of the Companies as those terms are shown on the Closing Date Balance Sheet.

“Organizational Documents” shall mean (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the articles of organization and the operating agreement of any limited liability company; (c) the partnership agreement and any statement of partnership of a general partnership; (d) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (e) any charter or similar document adopted or filed in connection with the creation, formation, or organization of any entity; and (f) any amendment to any of the foregoing.

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“Other Stockholders” shall mean the stockholders of GPS-Connecticut other than the Sellers.

“Ownership Interests” shall mean all of the outstanding membership interests of GPS and all of the authorized issued and outstanding capital stock of GPS-Connecticut and GPS-California, including all warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire membership interests or stock of the any of the Companies.

“Private Offering” shall mean the private offering of up to 2,900,000 shares of Argan Common Stock to a limited number of sophisticated investors pursuant to Private Offering Stock Purchase Agreement and the Private Offering Escrow Agreement.

“Private Offering Stock Purchase Agreement” shall have the meaning set forth in Section 5.11 hereof.

“Private Offering Escrow Agreement” shall have the meaning set forth in Section 5.11 hereof.

“Project Contract” shall mean any contract entered into by a Company for the engineering and construction of a power energy system.

“Project Site” shall mean the physical site of projects under the management or control of any of the Companies pursuant to any Project Contract.

“Registration Rights Agreement” shall mean the Registration Rights Agreement executed by the Sellers and Purchaser pursuant to Section 2.4 hereof.

“SEC” shall have the meaning set forth in Section 2.4.

“Sellers” has the meaning set forth in the preface above.

“Sellers’ Indemnification Threshold” shall have the meaning set forth in Section 10.3.

“Stock Consideration” shall have the meaning set forth in Section 2.2(a) hereof.

SECTION 1

ACQUISITION OF MEMBERSHIP INTERESTS

1.1Acquisition of Membership Interests. On the Closing Date (as defined in Section 3), and subject to and upon the fulfillment or waiver of the terms and conditions of this Agreement, Purchaser shallacquire from the Sellers all of the GPS Membership Interests.

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1.2Organizational Documents, Management.

(a)Organizational Documents. At Closing, the Organizational Documents of GPS, and of its wholly-owned subsidiary, GPS-Hartford, shall be amended in the manner determined by Purchaser, as sole member of GPS.

(b)Management. At Closing, Purchaser, as sole member of GPS, shall take all appropriate action to elect or appoint the person(s) designated on Schedule 1.2(b) as the manager(s) of GPS, and of its wholly-owned subsidiary, GPS-Hartford, until their respective successors are duly elected or appointed and qualified.

SECTION 2

CONSIDERATION

2.1Consideration. The total consideration to be paid by Purchaser to the Sellers (the “Consideration”) shall be an amount equal to Twenty Million One Hundred Twenty-Five Thousand Dollars ($20,125,000), comprised of Eleven Million Two Hundred Fifty Thousand Dollars ($11,250,000) in cash (the “Cash Consideration”) and Eight Million Eight Hundred Seventy-Five Thousand Dollars ($8,875,000) in Argan Common Stock (the “Stock Consideration”), subject to adjustment in accordance with Section 2.2(c). The Consideration shall be determined and paid in accordance with Section 2.2.

2.2Payment of Consideration; Adjustment of Consideration.

(a)Subject to Section 2.2(c), and except as set forth in Section 2.2(d) below, the Consideration shall be paid at Closing in cash, wire transfer or certified funds in the amount of the Cash Consideration, and through issuance of the number of shares of Argan Common Stock equal in value to the Stock Consideration, such shares valued at the Argan Per Share Value; provided, however, that Purchaser shall retain from the Stock Consideration and not deliver to the Sellers at Closing Argan Common Stock having an aggregate value (valued at the Argan Per Share Value) of Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Escrowed Stock Consideration”), but instead at Closing deposit the Escrowed Stock Consideration in escrow with the Escrow Agent to be held pursuant to the Escrow Agreement described in Section 2.2(b) below. At Closing, the Sellers shall receive their respective pro rata shares of the Cash Consideration and the Stock Consideration (less the Escrowed Stock Consideration) as set forth in Schedule 2.2(a).

(b)At Closing, Purchaser shall deliver the Escrowed Stock Consideration to the Escrow Agent to be held and/or released pursuant to the terms and conditions of the Escrow Agreement, substantially in form and substance as set forth in Exhibit 2.2(b).

(c)Notwithstanding anything to the contrary contained in Section 2.2(a), (i) in the event that the Net Worth of the Companies as of the Closing Date, as set forth on the Closing Date Balance Sheet, is less than Four Million One Hundred Thousand Dollars ($4,100,000) (the “Minimum Net Worth”), then such deficiency shall reduce, dollar for dollar, the Cash Consideration paid to the Sellers pursuant to Section 2.2(a) hereof; and (ii) in the event that the Net Worth of the Companies as of the Closing Date, as set forth on the Closing Date Balance Sheet, is greater than the Minimum Net Worth, as set forth on the Closing Date Balance Sheet, then the Cash Consideration paid to Sellers pursuant to Section 2.2(a) hereof shall be increased by the amount by which the Net Worth of the Companies as of the Closing Date, as set forth on the Closing Date Balance Sheet, exceeds the Minimum Net Worth. To enable all parties to determine the Net Worth of the Companies as of the Closing Date, the Sellers shall cause the Closing Date Financial Statements to be delivered to Purchaser on or before January 15, 2007. The Closing Date Financial Statements shall be subject to the Sellers’ and Purchaser’s review. In the event that there is any adjustment to the Cash Consideration pursuant to this Section 2.2(c), the amount by which the Cash Consideration has been reduced, if any, shall be repaid by Sellers to Purchaser, and the amount by which the Cash Consideration has been increased, if any, shall be paid by Purchaser to the Sellers, in either case within two (2) Business Days following the determination of such adjustment.

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(d)Notwithstanding anything to the contrary contained in Section 2.2(a), Two Million Nine Hundred Thousand Dollars ($2,900,000) of the Cash Consideration shall not be paid at Closing, but rather shall be paid as follows:

(i)Eight Hundred Ten Thousand Dollars ($810,000) of the Cash Consideration shall be paid on or before January 10, 2007;

(ii)Ninety Thousand Dollars ($90,000) of the Cash Consideration shall be paid on or before April 10, 2007; and

(iii)Two Million Dollars ($2,000,000) of the Cash Consideration (the “Contingent Cash Consideration”) shall be paid if and only if the Adjusted EBITDA of the Companies, as reflected on the December 31, 2007 Financial Statements, is greater than Twelve Million Dollars ($12,000,000), any such amount to be paid at the earlier of: (i) March 31, 2008, or (ii) Purchaser’s receipt of the Escrow Funds following satisfaction of the Escrow Release Conditions, as said terms are defined in and pursuant to the terms and conditions of that certain Second Amended and Restated Financing and Security Agreement, dated December ___, 2006, by and among Purchaser, Bank of America, N.A. and the other parties named therein. Purchaser will not be obligated to pay, and the Sellers will not be entitled to payment of, any portion of the Contingent Cash Consideration if the Adjusted EBITDA of the Companies, as reflected on the December 31, 2007 Financial Statements, is equal to or less than Twelve Million Dollars ($12,000,000). For purposes of this Section 2.2(d)(iii), the “Adjusted EBITDA of the Companies” shall mean earnings of the Companies for the designated period determined in accordance with GAAP, adjusted by adding back all deductions taken in determining such number, if any, for (A) interest expense, (B) income taxes, (C) depreciation, (D) amortization, and (E) corporate overhead of Purchaser allocated to the Companies by Purchaser in the regular course of business. It is understood and agreed that Adjusted EBITDA shall include interest income of the Companies for the designated period.

(e)In the event that any payment or repayment, as the case may be, of the applicable portion of the Cash Consideration payable under Sections 2.2(c) and 2.2(d) above is not timely made, then the party obligated to pay shall also be liable to the party entitled to payment for interest thereon from the date that such payment was due, in accordance with Section 2.2(c) or Section 2.2(d), as the case may be, until paid at an annual rate equal to the sum of (i) the Prime Rate as published in the Money Rates section of The Wall Street Journal on the Business Day prior to the date such payment was due, and (ii) five percent (5%); and for all costs to enforce payments under said Sections 2.2(c) or 2.2(d), as the case may be, including reasonable attorneys’ fees.

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2.3Consideration Allocation. Before the Closing, Purchaser and the Sellers shall negotiate in good faith to determine that portion of the Consideration and other relevant amounts allocable to the Sellers’ covenant not to compete in Section 9.1. The parties shall prepare and file their respective tax returns consistent with the reporting requirements of Sections 1060.The parties shall take no positions contrary thereto in any tax return, tax contest or other tax filing or proceeding. If any tax authority challenges such allocation, the party receiving notice of such challenge shall give the other prompt written notice thereof and the parties shall cooperate in order to preserve the effectiveness of such allocation.

2.4Registration. Purchaser shall prepare and file a registration statement or similar document in compliance with the Act with respect to Stock Consideration (and the GPS-Connecticut Stock Consideration and the GPS-California Stock Consideration, as said terms are defined in the GPS Stock Purchase Agreement) as soon as practicable following Sellers’ delivery of the Closing Date Balance Sheet. Thereafter, Purchaser shall use its commercially reasonable efforts to obtain from United States Securities and Exchange Commission (the “SEC”) the declaration or ordering of effectiveness of such registration statement or document. Such registration will permit the Sellers, as holders of Argan Common Stock, to sell shares of Argan Common Stock at their discretion, subject to applicable law. Stock certificates issued as part of the Consideration shall be accompanied by any documents necessary to permit the transfer agent to transfer shares of Argan Common Stock as directed by the Sellers. At the Closing Purchaser shall execute and deliver to the Sellers a Registration Rights Agreement in the form attached hereto as Exhibit 2.4.

SECTION 3

CLOSING

3.1Closing; Deliveries into Escrow . The closing of the acquisition of the GPS Membership Interests (the “Closing”) shall take place on a date designated by Purchaser in a notice given to the Sellers that shall be not earlier than one (1) Business Day nor later than five (5) Business Days following the execution of this Agreement, the Stock Purchase Agreement, and of all documents contemplated under this Agreement and under the Stock Purchase Agreement, and placement thereof, together with all other documents or items to be delivered by the parties at Closing under this Agreement and under the Stock Purchase Agreement (including those items described in Sections 3.2 and 3.3 below) into escrow with the Escrow Agent (the “Delivery Date”) (subject to satisfaction or waiver by the parties of their respective conditions to Closing set forth in Sections 5 and 6, other than such conditions that by their nature must be satisfied with the Closing), or at such other time, date and place as Purchaser and the Sellers may agree (the “Closing Date”).

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3.2Deliveries by Escrow Agent. At or before 2:00 p.m. on the Closing Date, Purchaser shall initiate a wire transfer of immediately available funds in an amount equal to the Cash Consideration (other than the portion thereof to be paid following Closing in accordance with Section 2.2(d)) to an account or accounts to be designated by the Sellers, such designation to be made no later than the Delivery Date. Upon confirmation from either of the parties that said wire transfer of funds has been effected, the Escrow Agent shall be authorized, and hereby agrees, to date as of the Closing Date all documents held by it in escrow which, in accordance with the terms of this Agreement, are to be dated as of the Closing Date and to deliver, and the Escrow Agent shall release from escrow and deliver, (i) to the Sellers stock certificates representing the Stock Consideration described in Section 2, the Registration Rights Agreement, and all other documents and instruments received by it which, in accordance with the terms of this Agreement, are to be delivered by Purchaser to the Sellers at Closing, and (ii) to Purchaser duly endorsed certificates or other evidences of ownership representing all of the GPS Membership Interests together with such other customary documents as may be required to transfer same, and all other documents and instruments received by it which, in accordance with the terms of this Agreement, are to be delivered by Purchaser to Sellers at the Closing.

SECTION 4

REPRESENTATIONS, WARRANTIES AND CERTAIN

COVENANTS OF THE SELLERS AND THE COMPANIES

As a material inducement to induce Purchaser to consummate the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement, but subject to the limitations set forth in Section 10 below, each of the Sellers and the Companies represent and warrant that each of the matters set forth in this Section 4 is true and correct as of the date hereof (or, in the case of the Closing Date Financial Statements to be provided hereafter in accordance with the following provisions of this Section 4 below, will be true and correct as of the Closing Date),and acknowledge that Purchaser’s entry into this Agreement and the GPS Stock Purchase Agreement and the performance of its obligations hereunder and thereunder are made in reliance upon the completeness and accuracy of each of the matters set forth herein. The representations and warranties being made by the Companies shall survive up and until the Closing Date. The representations and warranties being made by the Sellers shall survive as set forth in Section 13.11 below.

4.1Organization, Qualifications and Company or Corporate Power.

(a)GPS is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Connecticut. Attached as Schedule 4.1(a) is a list of all states in which GPS is qualified to do business. GPS is duly qualified as a foreign limited liability company in each other jurisdiction in which qualification is required.

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(b)GPS-Connecticut is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Connecticut. Attached as Schedule 4.1(b) is a list of all states in which GPS-Connecticut is qualified to do business. GPS-Connecticut is duly qualified as a foreign corporation in each other jurisdiction in which qualification is required. On or before the Closing Date GPS-Connecticut will file IRS Form 2553 “Election by a Small Business Corporation” in which it elects to be treated as an S corporation pursuant to applicable provisions of the Code.

(c)Gemma Power Hartford, LLC (“GPS-Hartford”) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Connecticut. Attached as Schedule 4.1(c) is a list of all states in which GPS-Hartford is qualified to do business. GPS-Hartford is duly qualified as a foreign limited liability company in each other jurisdiction in which qualification is required. All of the membership interests of GPS-Hartford are owned by GPS.

(d)GPS-California is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California. Attached as Schedule 4.1(d) is a list of all states in which GPS-California is qualified to do business. GPS-California is duly qualified as a foreign corporation in each other jurisdiction in which qualification is required. GPS-California has duly elected status, and qualifies as of the date of this Agreement, as an S corporation pursuant to applicable provisions of the Code.

(e)Each of GPS and GPS-Hartford has the limited liability company power and authority, and each of GPS-Connecticut and GPS-California has the corporate power and authority, to own and hold its properties and to conduct its businesses as currently conducted and as proposed to be conducted, and to execute, deliver and perform this Agreement, the GPS Stock Purchase Agreement, and all other agreements and instruments related hereto or contemplated hereby to which such Company is a signatory.

(f)Except as set forth on Schedule 4.1(f), none of the Companies owns of record or beneficially, directly or indirectly, (i) any shares of outstanding capital stock or securities convertible into capital stock of any other corporation, or (ii) any participating interest in any partnership, joint venture, limited liability company, or other non-corporate business enterprise.

(g)Gemma Development, Inc. (“GDI”) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware.

4.2Authorization of Agreement.The execution, delivery and performance by each of the Companies of this Agreement, the GPS Stock Purchase Agreement, and any other instruments or documents required to be executed and delivered hereby, have been duly authorized by all requisite limited liability company or corporate action, as the case may be, and will not (a) violate any applicable provision of law, any order, writ, injunction, decree, judgment, or ruling of any court or other agency of government, the Articles of Organization or the Operating Agreement of GPS or GPS-Hartford, the Articles of Incorporation or Bylaws of GPS-Connecticut or GPS-California, or any provision of any indenture, agreement, insurance policy, bond or other instrument by which any of the Companies, or any of their respective properties or assets, are bound or affected, (b) conflict with, result in a material breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, insurance policy, bond, agreement or other instrument, (c) result in being declared void, voidable or withoutfurther binding effect any license, governmental permit or certification, employee plan, note, bond, mortgage, indenture, deed of trust, franchise, lease, contract, agreement, or other instrument or commitment or obligation to which any of the Companies is a party, or by which any of the Companies, or any of their respective assets, may be bound, subject or affected, or (d) except as otherwise provided in this Agreement, result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever not arising in the ordinary course of business upon any of the properties or assets of any of the Companies.

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4.3Membership Interests; Capital Stock. The membership interests of GPS and GPS-Hartford and the authorized capital stock of GPS-Connecticut and GPS-California and the holders of the issued and outstanding shares of such capital stock are set forth in Schedule 4.3 hereto. Except as disclosed in Schedule 4.3, there is no (i) subscription, warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any membership interests or shares of any class of capital stock of any of the Companies, which is authorized or outstanding, (ii) none of the Companies has any commitment to issue any membership interests, shares, warrants, options or other such rights or to distribute to holders of any membership interests or any class of its capital stock any evidence of indebtedness or assets, (iii) none of the Companies has any obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any membership interests or shares of its capital stock or any interest therein or to payany dividend or make any other distribution in respect thereof, and (iv) none of the Companies has any obligation or commitment to register under the Act any securities issued or to be issued by it. All of the outstanding membership interests and all of the issued and outstanding shares of the capital stock of the Companies, as the case may be, have been validly issued in compliance with all federal and state securities laws and are fully paid and non-assessable.

4.4Financial Statements. The Companies have delivered the Financial Statements to Purchaser (or with respect to the Closing Date Financial Statements will timely deliver same to Purchaser in accordance with the terms of this Agreement). Subject to the provisions of the Disclaimer set forth in Section 13.20 of this Agreement, the Financial Statements are, orwill be, as the case may be, true, complete and correct, have been, or will be, as the case may be, prepared in accordance with GAAP and fairly present the financial condition of the Companies as of such respective datesand the results of operations for the respective periods then endedafter making, with respect to the Interim Financial Statements and the Closing Date Financial Statements, all appropriate adjustments required to present such Financial Statements on an accrual basis. Except as or as will be set forth in such Financial Statements,or as incurred in the ordinary course of business, to the knowledge of the Sellers and the Companies, the Companies have no material obligation or liability, absolute, accrued or contingent, except contingent liabilities as set forth in the Contracts disclosed pursuant to Section 4.11 below, and obligations and liabilities which do not adversely affect the business, property or assets of the Companies.

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4.5Absence of Changes. Except as listed in Schedule 4.5 and since the time period covered by the Interim Financial Statements, none of the Companies has:

(a)Transferred, assigned, conveyed or liquidated any of its assets or entered into any transaction or incurred any liability or obligation which affects the assets or the conduct of its business, other than in the ordinary course of business;

(b)Incurred any Material Adverse Change, or become aware of any fact, circumstance, occurrence or event which could reasonably be expected to result in a Material Adverse Change;

(c)Suffered any material destruction, damage or loss relating to its assets or the conduct of its business whether or not covered by insurance;

(d)Suffered, permitted or incurred other than in the ordinary course of business the imposition of any lien, charge, encumbrance (which as used herein includes, without limitation, any mortgage, deed of trust, conveyance to secure debt or security interest) whether or not contingent in nature, or claim upon any of its assets, except for any current year lien with respect to personal or real property taxes not yet due and payable;

(e)Committed, suffered, permitted or incurred any default in any liability or obligation of the Company;

(f)Made or agreed to any change in the terms of any contract or instrument to which it is a party, other than change orders as occur in the regular course of business in connection with any Project Contract;

(g)Knowingly waived, canceled, sold or otherwise disposed of, other than in the ordinary course of business, for less than the face amount thereof, any claim or right relating to its assets or the conduct of its business, which it has against others;

(h)Declared, promised or made any distribution from its assets or other payment from the assets to its members or shareholders, as the case may be (other than reasonable compensation for services actually rendered and pre-closing distributions of cash to Griffin and/or Canino in their capacity as the sole members of GPS, provided same does not result in the failure of the Companies to meet the Minimum Net Worth requirement as set forth in Section 2.2(c)), or issued any additional membership interests, shares or rights, options or calls with respect to its membership interests or shares of capital stock, or redeemed, purchased or otherwise acquired any of its membership interests or shares, or made any change whatsoever in its capital structure;

(i)Paid, agreed to pay or incurred any obligation for any payment for, any contribution or other amount to, or with respect to, any employee benefit plan, or paid or agreed to pay any bonus or salary increase to its executive officers or directors, or made any increase in the pension, retirement or other benefits of its managers, directors or executive officers other than in the ordinary course of business;

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(j)Committed, suffered, permitted, incurred or entered into any transaction or event other than in the normal course of business which would increase its liability for any prior taxable year;

(k)Incurred any other liability or obligation or entered into any transaction other than in the ordinary course of business; or

(l)Received any notices of, or has reason to believe, that any of its customers or clients have taken or contemplate any steps which could disrupt its business relationship with said customer or client or could result in the diminution in the value of the business of the Company as a going concern.

4.6Legal Actions. Except as listed on Schedule 4.6, there is no action, suit, investigation, or proceeding pending or, to the knowledge of the Companies or the Sellers, threatened against or affecting the Sellers, any of the Companies, or any of their respective properties or rights, before any court or by or before any governmental body or arbitration board or tribunal and no basis exists for any such action, suit, investigation or proceeding which will result in any material liability or affirmative or negative injunction being imposed on any of the Companies or the Sellers. The foregoing includes, without limiting its generality, actions pending or threatened involving the prior employment of any employees or prospective employees of any of the Companies, or their use, in connection with their respective businesses, of any information or techniques which might be alleged to be proprietary to its former employer(s). In addition, no action, suit, investigation or proceeding has been brought against any of the Companies or the Sellers relating to any claims relating to the presence or effect of Hazardous Materials in any design or construction project or other matter in which any of the Companies or the Sellers have been involved.

4.7Business Property Rights. To the best of each of the Companies’ or each of the Seller’s knowledge, no person or entity has made or threatened to make any claims that the operations of the businesses of the Companies are or will be in violation of or infringe on any technology, patents, copyrights, trademarks, trade names, service marks (and any application for any of the foregoing), licenses, proprietary information, know-how, or trade secrets (“Business Property Rights”). To the best of each of the Companies’ or each of the Seller’s knowledge, no third party is infringing upon or violating any of the Companies’ Business Property Rights and each of the Companies has the exclusive right to use the same. None of the employees, directors, officers, members or shareholders of any of the Companies has any valid claim whatsoever (whether direct, indirect or contingent) of right, title or interest in or to any of the Companies’ Business Property Rights.

4.8Liabilities. Except as listed in Schedule 4.8, to the knowledge of the Sellers and the Companies, none of the Companies has any liabilities or obligations, whether accrued, absolute, contingent or otherwise (individually or in the aggregate), which are of a nature required to be reflected in financial statements prepared in accordance with GAAP, including without limitation any liability which might result from an audit of its tax returns by any appropriate authority, except (i) the liabilities and obligations set forth in the Financial Statements delivered or to be delivered in accordance with Section 4.4, and (ii) liabilities and obligations incurred for the purpose of enabling the Companies to conduct their normal business (in each case in normal amounts and incurred only in the ordinary course of business). Except as disclosed in the Financial Statements (or to be disclosed in the Closing Date Financial Statements), to the knowledge of the Sellers and the Companies, none of the Companies is in default with respect to any liabilities or obligations and all such liabilities or obligations are shown and reflected in the Financial Statements (or will be shown and reflected in the Closing Date Financial Statements), and such liabilities incurred or accrued subsequent to the Companies’ incorporation, have been, or are being, paid or discharged as they become due, and all such liabilities and obligations were incurred in the ordinary course of business.

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4.9Ownership of Assets and Leases.

(a)Attached hereto as Schedule 4.9(a) is a complete and correct list and brief description, as of the date of this Agreement, of all real property and material items of personal property owned by the Companies and all of the long term capital leases and other agreements relating to any real, personal or intangible property owned, used, licensed or leased (other than term leases of equipment entered into in connection with any Project Contract) by the Companies or any of them. Each of the Companies has good and marketable title to all of its assets, including those listed on Schedule 4.9(a), and any income or revenue generated therefrom, in each case free and clear of any liens, claims, charges, options, rights of tenants or other encumbrances, except (i) as disclosed and reserved against in the Financial Statements (to the extent and in the amounts so disclosed and reserved against), (ii) for liens arising from current taxes not yet due and payable, and (iii) as separately and specifically set forth on Schedule 4.9(a). Each of the aforementioned leases and agreements of the Companies is in full force and effect and constitutes a legal, valid and binding obligation of the Company and the other respective parties thereto, enforceable in accordance with its terms, except as enforceability may be limited by applicable equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to time in effect affecting the enforcement of creditors’ rights generally, and there is not under any of such leases or agreements existing any default of any of the Companies or, to the best of the Companies’ or eachSeller’s knowledge, of any other parties thereto (or event or condition which, with notice or lapse of time, or both, would constitute a default). None of the Companies has received any notice of violation of any applicable regulation, ordinance or other law with respect to its operations or assets and, to the best of the Companies’ and the Sellers’ knowledge, there is not any such violation or grounds therefor which could adversely affect any of the Company’s assets or the conduct of its business. None of the Companies is a party to any contract or obligation whereby an absolute or contingent right to purchase, obtain or acquire any rights in any of the assets has been granted to anyone. There does not exist and will not exist by virtue of the transactions contemplated by this Agreement any claim or right of third persons which may be legally asserted against any asset of the Companies.

(b)GPS’s main facility, located at 2461 Main Street, Glastonbury, Connecticut 06033 (the “Main Facility”), is leased by GPS pursuant to that certain Lease dated October 5, 1999 by and between Glastonbury Bank and Trust Company, as Lessor, and Gemma Power Systems, LLC, as Lessee, which lease was amended pursuant to an Amendment to Lease dated as of the ____ day of July, 2000, a Second Amendment to Lease, effective April 1, 2004, and a Third Amendment to Lease, effective November 1, 2005, a true, correct and complete copy of which lease, and all amendments and modifications thereof (the “Main Facility Lease”), has been provided by the Sellers to Purchaser.

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4.10Taxes. The Companies have paid, or made provisions for the payment of, all taxes due, assessed and owed by them, if any, as reflected on their respective tax returns and have timely filed all federal, state, local and other tax returns which were required to be filed and which were due prior to the Closing Date, except for those taxes set forth on Schedule 4.10(a). All federal, state, local, and other taxes of the Companies accruable since the filing of such returns have been properly accrued on the respective books of each of the Companies. No federal income tax returns for any of the Companies have ever been audited by the Internal Revenue Service or any state or local taxing authority, except as described in Schedule 4.10(b). No other proceedings or other actions which are still pending or open havebeen taken for the assessment or collection of additional taxes of any kind from any of the Companies for any period for which returns have been filed, and to the Companies’ and the Sellers’ knowledge, no other examination by the Internal Revenue Service or any other taxing authority affecting any of the Companies is now pending. Except for those taxes set forth on Schedule 4.10(a), taxes which any of the Companies were required by law to withhold or collect subsequent to the formation or incorporation of the Companies have been withheld or collected and have been paid over to the proper governmental authorities or are properly held by the Companies for such payment and are so withheld, collected and paid over as of the date hereof. No waivers of statutes of limitations with respect to any tax returns of any of the Companies, nor extensions of time for the assessment of any tax, have been given by any current employees of any of the Companies. There are not, and there will not be, any liabilities for federal, state or local income, sales, use, excise or other taxes arising out of, or attributable to, or affecting either the assets or the conduct of the business of any of the Companies throughthe close of business on the Closing Date for which Purchaser will have any liability for payment. After the Closing, there does not and will not exist any liability for taxes resulting from the conduct of the business of any of the Companies throughthe close of business on the Closing Date, which may be asserted by any taxing authority against the assets of any of the Companies, or the operation of any of their businesses (which liability is not reimbursable pursuant to “pass-throughs” under the Companies’ existing Project Contracts), including without limitation any liability arising from disallowance of any S corporation election by any of the Companies, and no lien or other encumbrance for taxes will attach to such assets or the operation of their businesses. The Sellers agree to give Purchaser immediate notice of any claim or assertion by the Internal Revenue Service, or any other taxing authority, of any such disallowance.

4.11Contracts, Other Agreements.

(a)Attached hereto as Schedule 4.11(a) is a complete and accurate list, and Sellers have delivered to Purchaser true and complete copies, of:

(i) each Contract that involves performance of services or delivery of goods or materials by or to one or more of the Companies of an amount or value in excess of $5,000,000, including without limitation Project Contracts and other contracts, subcontracts and agreements for the provision or prospective provision by any Company of engineering, design, procurement, construction, consulting, operation, maintenance or other services;

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(ii) each Contract that was not entered into in the ordinary course of business and that involves expenditures or receipts of one or more Companies in excess of $500,000;

(iii) each employment agreement, consulting agreement, or agreement providing for severance payments that obligates or could obligate one or more Companies to make payments in excess of $100,000 per annum;

(iv) each joint venture, partnership, and other Contract (however named) involving a sharing of profits, losses, costs, or liabilities by any Company with any other person or entity;

(v)each Contract containing covenants that in any way purport to restrict the business activity of any Company or any affiliate of a Company or limit the freedom of any Company or any affiliate of a Company to engage in any line of business or to compete with any person or entity; and

(vi) each Contract providing for payments to or by any person or entity based on sales, purchases, or profits, other than direct payments for goods.

(b)Except as set forth in Schedule 4.11(a), each Contract identified or required to be identified in Schedule 4.11(a) is in full force and effect and is valid and enforceable in accordance with its terms.

(c)Except as set forth in Schedule 4.11(a), no Contract identified or required to be identified in Schedule 4.11(a), including without limitation the Main Facility Lease, will be materially breached or violated as a result of the sale of membership interests or stock contemplated hereunder and under the GPS Stock Purchase Agreement, nor will consummation of such transactions result in a default thereunder or give any party thereto the right to terminate such Contract or any provision thereof, nor will consummation of such transactions require the consent or approval of any other party to such Contract or any other person or entity.

(d)Except as set forth in Schedule 4.11(a),

(i)each Company is in full compliance with all applicable terms and requirements of each Contract, including without limitation the maintenance of all insurance required to be maintained by such Company thereunder;

(ii) to the best of the Companies’ or each Seller’s knowledge, each other party to any Contract is in full compliance with all applicable terms and requirements of such Contract;

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(iii) no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with, or result in a violation or breach of, or give any Company or other person or entity the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Contract;

(iv) no Company has given to or received from any other person or entity any notice or other communication regarding any actual, alleged, possible, or potential violation or breach of, or default under, any Contract identified or required to be identified in Schedule 4.11(a); and

(e)To the extent applicable to any Contract identified or required to be identified in Schedule 4.11(a), the Company has satisfied any performance criteria that it has been required to satisfy through the date of this Agreement, and does not know of any fact or circumstance that would prevent the Company from satisfying any performance criteria that it may be required to satisfy after the date of this Agreement.

(f)There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to any Company under current or completed Contracts and no other party to any Contract has made written demand for such renegotiation. For purposes of this Section 4.11(f), “material amounts” shall mean any amounts in excess of $2,000,000.

(g)Attached hereto as Schedule 4.11(g) is a complete and accurate list of (i) each Contract under which any Company has a current warranty obligation, (ii) the remaining period of each such warranty obligation, and (iii) any claim that has been made and remains outstanding under such warranty obligation. Except as set forth on Schedule 4.11(g), no Company has received notice of any warranty claim and, to the knowledge of the Sellers and the Companies, no warranty claim is threatened and no event has occurred or circumstance exists that (with or without notice or lapse of time) could reasonably be anticipated to result in a warranty claim.

4.12Governmental Approvals. Except as set forth on Schedule 4.12, no registration or filing with, or consent or approval of, or other action by, any federal, state or other governmental agency or instrumentality is or will be necessary for the valid execution, delivery and performance of this Agreement or the GPS Stock Purchase Agreement by any of the Companies, or the continuation of the business of the Companies following the transactions contemplated by this Agreement and the GPS Stock Purchase Agreement.

4.13Lack of Defaults; Compliance with Law. No default has occurred or exists in performance of any obligation, covenant or condition contained in any note, debenture, mortgage or other contract or agreement of any nature or kind to which any of the Companies or any of the Sellers is a party, nor has any default occurred, nor does any default exist, with respect to any order, writ, injunction or decree of any court, governmental authority or arbitration board or tribunal to which any of the Companies or any of the Sellers is a party. The Companies and the Sellers know of no violation of any law, ordinance, governmental rule or regulation to which any of the Companies or any of the Sellers is subject, nor has any of the Companies or any of the Sellers failed to obtain any licenses, permits, franchises or other governmental authorizations necessary for the ownership of their properties, or to the conduct of their business, or for the legal sale of their products. Each of the Companies has conducted and will conduct its business and operations in substantial compliance with all federal, state, county and municipal laws, statutes, ordinances and regulations, including without limitation the rules, regulations and requirements of the Federal Trade Commission (including all such rules, regulations and requirements relating to truth in advertising), and is in substantial compliance with all applicable requirements of all federal, state, county and municipal regulatory authorities.

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4.14Employees and Employee Benefit Plans.

(a)Schedule 4.14 annexed hereto lists all of the Companies’ Plans. For the purposes of this Agreement, “Plan” means any “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 or any successor law, and rules and regulations issued pursuant to such Act or any successor law (“ERISA”)) and each other plan, arrangement or policy (other than employment agreements with individuals employed by any of the Companies) relating to stock options, stock purchases, compensation, deferred compensation, severance, fringe benefits or other employee benefits, in each case maintained or contributed to, or required to be maintained or contributed to, by any of the Companies for the benefit of any present or former employees of any of the Companies. All of the Plans listed on Schedule 4.14 which are employee benefit plans within the meaning of Section 3(3) of ERISA are in material compliance with the applicable provisions of ERISA, the Code, and the rules and regulations thereunder, except where the failure to do so would not, individually or in the aggregate, reasonably be expected to result in a material adverse effect on any of the Companies. There are no claims (except claims for benefits payable in the normal operation of the Plans), suits, proceedings, and, to the Sellers’ or the Companies’ knowledge, investigations by any governmental agency against or involving any Plan or asserting any rights to or claims for benefits or reimbursements under any Plan. All contributions to the Plans required to be made by any of the Companies in accordance with the terms of the Plans have been timely made and all such contributions have been adequate to ensure that such Plans are fully funded. No event has occurred and, to the Sellers’ and the Companies’ knowledge, no circumstances exist that could adversely affect the tax-qualification of any Plan that is intended to be a tax-qualified plan. To the Sellers’ and the Companies’ knowledge, no event has occurred and no circumstances exist that could adversely affect the tax-qualification of each Plan that is intended to be a tax-qualified plan. None of the Companies has, nor have any of their ERISA Affiliates, ever maintained, contributed to or otherwise had any liability with respect to an employee benefit plan subject to Title IV of ERISA, Section 401 of ERISA or Section 412 of the Code. For purposes of this Section, “ERISA Affiliate” shall mean any person (as defined in Section 3(9) of ERISA) that is or has been a member of any group of persons described in Section 414(b), (c), (m), or (o) of the Code including any of the Companies. The transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement will not alone entitle any such employee to any additional payments or benefits or any acceleration of the time of payment or vesting of any benefits under any employee benefit or executive compensation plan, arrangement or agreement maintained by or entered into with any of the Companies. Any amount to be received (whether in cash or property or the vesting of property) as a result of any of the transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement by any employee of any of the Companies under any employment, severance or termination agreement, other compensation arrangement or benefit plan would not be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code). To the Sellers’ and the Companies’ knowledge, each of the Companies and its Plans has materially complied with all required tax filings.

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(b)Attached hereto as Schedule 4.14(b) are the names, citizenship and immigration status (with respect to any non-U.S. citizen), of all salaried employees employed by any of the Companies as of the date hereof, and at Closing the Companies will provide an updated list of all such employees as of the Closing Date, such updated list to be initialed by both parties at Closing. To the best of the Companies’ and the Sellers’ knowledge, no employee of any of the Companies is a party to or bound by any contract, or subject to any restrictions (including, without limitation, any non-competition restriction), that would restrict the right of such person to be employed by or to participate in the affairs of the Companies following the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement.

4.15Insurance; Bonds. Attached hereto as Schedule 4.15 is a complete and correct list and description of all of the policies of liability, property, workers’ compensation and other forms of insurance or bonds carried by the Companies for the benefit of or in connection with their assets and businesses. All of such policies or bonds are in full force and effect and there are no overdue premiums or other payments due on such policies or bonds and the Companies have not received any notice of cancellation or termination of any of said policies or bonds. Neither the Sellers nor the Companies have knowledge of any change or proposed change to any of the rates set forth in the policies or bonds listed on Schedule 4.15 other than as set out therein. No insurance policy, bond or other instrument to which any of the Companies is a party or which has been issued to or for the benefit of any of the Companies, will be materially breached or violated as a result of the transaction contemplated hereunder and under the GPS Stock Purchase Agreement, nor will consummation of such transactions result in a default thereunder or give any party thereto the right to terminate such policy, bond, commitment or arrangement or any provision thereof, or if any consent to or approval of the transaction contemplated hereunder and under the GPS Stock Purchase Agreement is required thereunder, such consent or approval has been obtained.

4.16Labor and Employment Matters. No labor dispute, strike, work stoppage, employee collective action or labor relations problem of any kind which has materially adversely affected or may so affect any of the Companies or any of their businesses or operations, is pending or, to the best knowledge of the Companies or the Sellers, is threatened. The Companies have complied in all material respects with the reporting and withholding provisions of the Code and the Federal Insurance Contribution Act and all similar state and local laws, and with the federal, state, and local laws, ordinances, rules and regulations with respect to employment and employment practices, terms and conditions of employment and of the workplace, wages and hours and equal employment opportunity.

4.17Brokers and Finders. Except as listed on Schedule 4.17, neither the Sellers nor any of the Companies have incurred or become liable for any commission, fee or other similar payment to any broker, finder, agent or other intermediary in connection with the negotiation or execution of this Agreement or of the GPS Stock Purchase Agreement or the consummation of the transactions contemplated hereby and thereby. Each of the Sellers agrees to be responsible for paying all broker fees, commissions or other compensation incurred by the Sellers or any of the Companies as a result of the transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement.

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4.18Accounts Receivable.

(a)All accounts receivable of the Companies shown on the Financial Statements reflect (and, in the case of the Closing Date Balance Sheet, will reflect) actual transactions, have (or will have as of the Closing Date) arisen in the ordinary course of business and have been collected or are now (or will be as of the Closing Date) in the process of collection without recourse to any judicial proceedings in the ordinary course of business in the aggregate recorded amounts thereof, less the applicable allowances reflected on the Financial Statements.

(b)Except as set forth on Schedule 4.18(b), the Sellers and the Companies have no knowledge as to any of the accounts receivable of any of the Companies being subject to any lien orclaim of offset,set off or counterclaim not provided for by the Companies’ allowance for doubtful accounts as of the date of execution hereof.

4.19 Conflicts of Interests. Except as described in Schedule 4.19, no officer, director, stockholder, manager of member of any of the Companies was or is, directly or indirectly, a joint investor or co-venturer with, or owner, lessor, lessee, licensor or licensee of any real or personal property, tangible or intangible, owned or used by, or a lender to or debtor of, any of the Companies and none of the Companies has any commitment or obligation as a result of any such transactions prior to the date hereof. Except as described in Schedule 4.19, and except for directly or indirectly holding less than five percent (5%) of the outstanding shares of stock in a company which is publicly traded, none of such officers, directors, stockholders, managers or members currently own, directly or indirectly, individually or collectively, an interest in any entity which is a competitor, customer or supplier of (or has any existing contractual relationship with) any of the Companies.

4.20Environmental Compliance.

(a)No Environmental Claims. Except as set forth on Schedule 4.20(a) attached hereto, (i) there are no claims, liabilities, judgments or orders, or investigations, litigation or administrative proceedings relating to any Hazardous Materials (collectively called“Environmental Claims”), now pending or, to the knowledge of the Sellers and the Companies, threatened against any of the Companies or relating to any Project Site, and, to the knowledge of the Sellers and the Companies, there are no Environmental Claims now pending or threatened relating to any former Project Site; (ii) neither the Sellers nor any of the Companies have caused or permitted any Hazardous Material to be used, generated, reclaimed, transported, released, treated, stored or disposed of in a manner which could reasonably be expected to result in liability under Environmental Laws (as hereinafter defined) against any of the Companies or any subsequent owner or operator of a Project Site; and (iii) neither the Sellers nor any of the Companies have assumed (by contract or by operation of law) any liability of any person for cleanup, remediation, compliance or required capital expenditures in connection with any Environmental Claim.

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(b)[Intentionally omitted.]

(c)Compliance with Environmental Laws. Each of the Companies has been and is currently in compliance in all material respects with and has received no notice or other communication concerning a claim related to disposal of Hazardous Materials or an alleged violation of any and all applicable Environmental Laws, including obtaining and maintaining in effect all permits, licenses and other authorizations required by applicable Environmental Laws. As used herein, the term “Environmental Laws” shall mean any federal, state or local law, rule, regulation or order relating to pollution, waste disposal, industrial hygiene, land use or the protection of human health or safety, plant life or animal life, natural resources or the environment.

4.21Ownership of the Ownership Interests. The Sellers (together with the Other Stockholders with respect to ownership of the GPS-Connecticut Stock) own all of the Ownership Interests beneficially and of record, free and clear of all liens, restrictions, encumbrances, charges, and adverse claims and the Ownership Interests to be purchased hereunder constitute one hundred percent (100%) of issued and outstanding membership interests and capital stock, as the case may be, of the Companies. The names, addresses and percentages of GPS Membership Interests, the issued and outstandingshares of capital stock of GPS-Connecticut (the “GPS-Connecticut Stock”), and the issued and outstandingshares of capital stock of GPS-California (the “GPS-Connecticut Stock”), held by each of the Sellers and each of the Other Stockholders, as the case may be, is set forth on Schedule 4.21.

4.22Absence of Sensitive Payments. Neither the Sellers nor, to the knowledge of the Sellers and the Companies, any of the directors, officers, stockholders, managers or members of any of the Companies:

(a)has made or has agreed to make any contributions, payments or gifts of funds or property to any governmental official, employee or agent where either the payment or the purpose of such contribution, payment or gift was or is illegal under the laws of the United States, any state thereof, or any other jurisdiction (foreign or domestic);

(b)has established or maintained any unrecorded fund or asset for any purpose, or has made any false or artificial entries on any of its books or records for any reason; or

(c) has made or has agreed to make any contribution or expenditure, or has reimbursed any political gift or contribution or expenditure made by any other person, to candidates for public office, whether federal, state or local foreign or domestic, where such contributions were or would be a violation of applicable law.

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4.23Approval of Transactions; Related Matters. Each of the Sellers represents and warrants that such Seller, in his capacity as a member or shareholder of the Companies, and each of the Other Stockholders, in his or her capacity as a stockholder of GPS-Connecticut, (i) approves of and consents to the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement as set forth herein and therein, (ii) waives any notice of a member or shareholder meeting or similar company or corporate formality in connection with the approval of the transactions described herein and therein, (iii) waives any rights to protest or object to the transactions contemplated under this Agreement or under the GPS Stock Purchase Agreement or to the exercise of any statutory remedy of appraisal as to the Ownership Interests owned by such Seller, or by such Other Stockholder, as the case may be, as provided by applicable law, (iv) has received a copy of resolutions approving the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement in accordance with applicable law, and (v) to the extent such Seller or Other Stockholder owes any amounts to any of the Companies pursuant to any promissory note issued by such Seller or such Other Stockholder to the Company, consents to the use of a portion of the Consideration payable to such Seller or such Other Stockholder, as the case may be, to pay off each such promissory note at Closing.

4.24Withholding. Neither Companies nor either of the Sellers, nor any of the Other Stockholders, is a foreign person or entity, or has other status, such that Purchaser would be required to deduct and withhold from the Consideration otherwise payable pursuant to this Agreement or pursuant to the GPS Stock Purchase Agreement to any holder of the Ownership Interests any amounts under the Code, or any provision of state, local or foreign tax law.

4.25Amounts Due From Sellers. All amounts due from the Sellers, or either of them, or from the Other Stockholders, or any of them, to any of the Companies have been paid in full.

SECTION 5

REPRESENTATIONS, WARRANTIES AND CERTAIN

COVENANTS OF PURCHASER

As a material inducement to induce the Sellers to consummate the transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement, Purchaser represents and warrants that each of the matters set forth in this Section 5 is true and correct as of the date hereof, and acknowledges that the Sellers’ entry into this Agreement and the GPS Stock Purchase Agreement and the performance of their obligations hereunder and thereunder are made in reliance upon the completeness and accuracy of each of the matters set forth herein. The representations and warranties being made by Purchaser shall survive as set forth in Section 13.11 herein.

5.1Organization, Standing, etc. Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

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5.2Authorization, etc. The execution and delivery of this Agreement, the GPS Stock Purchase Agreement and any other instruments or documents required to be executed and delivered hereby and thereby, and the purchase of the Ownership Interests contemplated hereby and thereby, have been authorized by such authorities or by such court of competent jurisdiction, if any, as may be required by applicable law and constitute valid and binding obligations of Purchaser, enforceable against it in accordance with the terms of this Agreement and the GPS Stock Purchase Agreement, respectively.

5.3No Breach or Defaults Caused by Agreement. The making and execution, delivery, and performance by Purchaser of this Agreement and the GPS Stock Purchase Agreement does and will not breach or constitute (with due notice or lapse of time or both) any default in any articles, by-laws, agreements, or instruments of any kind or character to which Purchaser is a signatory or a party, or by which it may be bound, subject to, or affected, now or in the future.

5.4Governmental Approvals. Except as set forth on Schedule 4.12, with respect to which Purchaser is relying on the representations and warranties of the Sellers, no registration or filing with, or consent or approval of, or other action by, any federal, state, or other governmental agency or instrumentality, which has not been made or obtained prior to the execution of this Agreement by Purchaser, is or will be necessary for the valid execution, delivery and performance of this Agreement and the GPS Stock Purchase Agreement by Purchaser, and the continuation of the business of the Companies following the acquisition of the Ownership Interests.

5.5Brokers Fees. Purchaser represents that there are no brokers involved in this transaction on its behalf.

5.6Authorized Shares of Stock. There exists sufficient authorized, but unissued, shares of Argan Common Stock necessary to enable Purchaser to satisfy any obligation of it to issue shares of Argan Common Stock pursuant to the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement.

5.7Capitalization. Purchaser’s authorized and issued and outstanding shares of stock as of the date hereof and as of the Closing are set forth in Schedule 5.7(a) hereof. Said list will include, as of the date of Closing, the shares sold pursuant to the Private Offering. Purchaser has no intention of issuing any additional shares of its stock in anticipation of Closing hereunder. Attached hereto as Schedule 5.7(b) is a list of stock options which the Company has outstanding, the recipients of said options, and the exercise price for each of said stock options. Neither Purchaser nor any subsidiary thereof has any unfunded pension plan or retirement plan liability.

5.8Voting Stock. The Stock Consideration to be paid to the Sellers under this Agreement and under the GPS Stock Purchase Agreement shall constitute stock of the Purchaser which qualifies as voting stock pursuant to IRC §368(a)(1)(B).

5.9No Audit. Neither Purchaser nor any subsidiary thereof is under audit by any state or federal taxing authority, and to the knowledge of Purchaser, no such audit is threatened.

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5.10Net Worth of Purchaser. To the knowledge of Purchaser, no facts or circumstances exist, which are not reflected or referenced on Purchaser’s most recent Form 10-QSB, that would cause Purchaser’s liabilities to exceed its assets.

5.11 Private Offering. True and complete copies of that certain Stock Purchase Agreement dated as of December 7, 2006, by and among Argan and the Buyers identified therein (the “Private Offering Stock Purchase Agreement”), and of that certain Escrow Agreement dated as of December 7, 2006, by and among Argan, the Buyers identified therein and the escrow agent identified therein (the “Private Offering Escrow Agreement”), entered into in connection with the Private Offering have been provided to Sellers by Purchaser. The Private Offering Stock Purchase Agreement and the Private Offering Escrow Agreement constitute the only material documents entered into by Purchaser in connection with the Private Offering.

SECTION 6

CONDITIONS TO CLOSING FOR PURCHASER

Purchaser’s obligation to consummate the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement (notwithstanding anything to the contrary contained therein) shall be subject to fulfillment of all of the following conditions on or prior to the Closing, any of which may be waived in writing by Purchaser:

6.1Performance of Agreements. The Sellers and the Companies shall have performed all agreements contained herein and in the GPS Stock Purchase Agreement and required to be performed by them prior to or at Closing and all of the representations and warranties made by them in this Agreement shall be true and correct as of the Closing Date.

6.2Lack of Material Liabilities. None of the Companies shall have incurred any material liability, direct or contingent (as that term is ordinarily used), other than in the ordinary course of business, not reflected on the Interim Financial Statements; including, but not limited to, any tax liability resulting from the transactions contemplated hereby, or by the Companies’ compliance with any of the terms and conditions hereof.

6.3Financial Statements. Purchaser shall have received the Financial Statements other than the Closing Date Financial Statements and Purchaser shall have accepted the Interim Financial Statements.

6.4Lack of Defaults. No Event of Default (as defined in Section 12 hereof) and no event or condition which, with notice or the lapse of time, or both, would constitute an Event of Default, shall exist.

6.5Material Adverse Change. No Material Adverse Change, and no event or circumstance that may result in a Material Adverse Change shall have occurred between the date hereof and the Closing Date or exist as of the Closing Date.

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6.6Employment Agreements. Griffin and Canino and the Companies shall have executed those certain Employment Agreements, copies of which are attached hereto as Exhibits 6.6(a) and 6.6(b).

6.7Opinion of Counsel. Purchaser shall have received an opinion of counsel from the attorneys for the Companies, dated as of the Closing Date, in form and substance substantially similar to that attached hereto as Exhibit 6.7.

6.8Compliance Certificate. The Sellers and the Companies shall have delivered to Purchaser the certificates, attached hereto as Exhibit 6.8, executed by the Sellers and the respective managers or Presidents, as the case may be, of the Companies dated as of the Closing Date, certifying the fulfillment of the conditions specified in this Section 6 and the accuracy of the representations and warranties contained in Section 4 hereof.

6.9Term Life Insurance. The Companies shall continue to have in place term life insurance policies on the lives of each of Griffin and Canino, each of such policies (a) to name Purchaser as sole beneficiary (or, to the extent either of such policies do not name Purchaser as owner and as sole beneficiary at the Closing Date, Sellers or the Companies shall produce at Closing completed Transfer of Ownership and Change of Beneficiary forms, on the insurer’s standard form, signed by the owners of said policies, and ready to be delivered to the insurer), (b) to be in form and substance satisfactory to Purchaser, including having terms that expire in 2010, and (c) to be in the amount of not less than Five Million Dollars ($5,000,000). The existing policy on the life of Canino shall remain in full force and effect for the duration of employment by the Companies, or any of them, of Canino, or until the expiration of the term of said policy, if sooner. The existing policy on the life of Griffin shall remain in full force and effect for the duration of employment by the Companies, or any of them, of Griffin, or until the expiration of the term of said policy, if sooner. Each of Griffin and Canino agrees to take whatever action is reasonably required by the insurer to maintain the policy on his life in full force and effect for such time. During the term of employment of Canino the Companies shall pay the premium on policy insuring Canino’s life; and during the term of employment of Griffin the Companies shall pay the premium on the policy insuring Griffin’s life. Upon the termination of Canino’s employment, each of the Companies shall assign to Canino any and all rights which it may have in and to policy insuring his life for the value of the prepaid unearned premium thereof. Upon the termination of Griffin’s employment, each of the Companies shall assign to Griffin any and all rights which it may have in and to policy insuring his life for the value of the prepaid unearned premium thereof.

6.10Registration Rights Agreement. The Sellers and Purchaser shall have executed the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 2.3.

6.11[Intentionally omitted.]

6.12Release from the Sellers; Payment of Amounts Owed by the Sellers. The Sellers shall execute and deliver to Purchaser, in a form satisfactory to Purchaser’s counsel, a release of any claim that they, or either of them, may have against any of the Companies for the repayment of any loan, claim for unpaid compensation (except for accrued and unpaid compensation due to the Sellers in the regular course of business in the event Closing occurs before the close of any regular pay period), claim for indemnification, claim for management fee (except for any accrued and unpaid fee for management services, or portion thereof, due to GDI under the Operating Agreement referenced in Section 6.19 below relating to the period prior to Closing and payable in the regular course of business), or otherwise. All amounts due to any of the Companies from the Sellers, or either of them, shall have been paid in full.

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6.13Certificates; Organizational Documents. Purchaser shall have received copies of the following documents:

(a)a certificate of the Manager or the President of each of the Companies, as the case may be, dated the Closing Date and certifying (i) that attached thereto is a true and complete copy of the Organizational Documents of the Company as in effect on the date of such certification; and (ii) that attached thereto are true and complete copies of resolutions adopted by the members or the Board of Directors of the Company, as the case may be, authorizing the execution, delivery and performance of this Agreement and of the GPS Stock Purchase Agreement, and that all such resolutions are still in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement;

(b)a certificate of the President of GDI dated the Closing Date and certifying (i) that attached thereto is a true and complete copy of the Organizational Documents of GDI as in effect on the date of such certification and (ii) certifying to the incumbent officers of GDI; and

(c) such additional supporting documents and other information with respect to the operations and affairs of the Companies as Purchaser may reasonably request.

All such documents described in (a), (b) and (c) shall be satisfactory in form and substance to Purchaser and its counsel.

6.14Corporate Filings. All relevant documents required be filed with the appropriate governmental agencies in connection with the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement shall be filed and copies thereof shall be attached hereto as Exhibit 6.14.

6.15[Intentionally omitted.]

6.16Release of Buy-Sell Rights. The Sellers shall deliver to Purchaser a waiver and/or release of any rights that they may have under any and all operating, stockholder or other agreements by and among the Sellers and/or any of the Companies which would in any way affect the transactions contemplated by this Agreement and by the GPS Stock Purchase Agreement. True and complete copies of all such agreements are attached hereto as Exhibit 6.16.

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6.17Third-Party Consents or Approvals. Except for any necessary third-party consents or approvals not obtained as of the Closing Date, as disclosed on Schedule 6.17, the Sellers shall deliver to Purchaser copies of all consents or approvals of, and evidence reasonably satisfactory to Purchaser of all actions by, any third-party necessary for the valid execution, delivery and performance of this Agreement and of the GPS Stock Purchase Agreement by any of the Companies, including without limitation the consent of any party required under any ofthe Contracts listed or required to be listed on Schedule 4.11(a).

6.18Escrow Agreement. The Sellers, the Companies, Purchaser and all other parties thereto shall have executed the Escrow Agreement, a copy of which is attached hereto as Exhibit 2.2(b).

6.19Termination of Operating Agreement. That certain Operating Agreement dated as of January 1, 2001, by and between GPS and GDI, providing for, among other things, the payment to GDI of a fee for management services as described therein, will be terminated effective as of Closing; any and all amounts payable thereunder, including without limitation the fee for management services, will be paid and satisfied in full; and GDI will release any claims it may have against GPS, including without limitation any claims for indemnification under said Operating Agreement, all pursuant to a Termination Agreement in the form attached hereto as Exhibit 6.19.

SECTION 7

CONDITIONS TO CLOSING FOR THE SELLERS

The Sellers’ obligations to consummate the transactions contemplated under this Agreement and under the GPS Stock Purchase Agreement(notwithstanding anything to the contrary contained therein) shall be subject to fulfillment of all of the following conditions on or prior to Closing, any of which may be waived in writing by Sellers:

7.1Performance of Agreements. Purchaser shall have performed all agreements contained herein and in the GPS Stock Purchase Agreement and required to be performed by it prior to or at Closing, and all of the representations and warranties made by Purchaser in this Agreement shall be true and correct as of the Closing Date.

7.2Compliance Certificate. Purchaser shall have delivered to the Sellers the certificate, attached hereto as Exhibit 7.2, executed by its duly authorized officer, dated as of the Closing Date, certifying the fulfillment of the conditions specified in this Section 7 and the accuracy of the representations and warranties contained in Section 5 hereof.

7.3Registration Rights Agreement. The Sellers and Purchaser shall have executed the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 2.4.

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7.4Employment Agreements. The Companies, Griffin and Canino shall have executed the Employment Agreements, copies of which are attached hereto as Exhibits 6.6(a) and 6.6(b).

7.5Term Life Insurance. Purchaser shall have assumed responsibility for payment of premiums of each of the life insurance policies described in Section 6.9 above up to the face value of $5,000,000.

7.6Employee Stock Options. Purchaser shall have resolved to take any and all actions necessary to grant up to 40,000 qualified or unqualified stock options to the employees listed, and in the amounts designated, in Schedule 7.6. All such stock options shall be granted no later than at the first regularly scheduled meeting of the board of directors of Purchaser after Closing, with the strike price of such options being Argan’s stock price at the time of grant, but no lower than $4.50 per share.

7.7Escrow Agreement. Purchaser, the Sellers, the Companies, and all other parties thereto shall have executed the Escrow Agreement, a copy of which is attached hereto as Exhibit 2.2(b).

SECTION 8

TRANSACTIONS PRIOR TO CLOSING

Between the date of this Agreement and Closing, the managers, executive officers and Board of Directors, as the case may be, of the Companies shall retain full control of the management and business of the Companies. To enable Purchaser to prepare for settlement at Closing, Purchaser, the Sellers and the Companies agree that between the date hereof and Closing:

8.1Taxes. The Companies will promptly pay and discharge, or cause to be paid and discharged, all federal, state and other governmental taxes, assessments, fees and charges imposed upon it or on any of its property or assets and timely file any returns and reports in connection with the foregoing.

8.2Books of Record and Account; Inspection. Each of the Companies will maintain at all times proper books of record and account in accordance with GAAP.

8.3Insurance. The Companies will maintain in effect liability insurance, property insurance, workers’ compensation insurance, and extended coverage insurance on their personal property referenced in Section 4.15 above, and will cause the term life insurance policies on the lives of Griffin and Canino referenced in Section 6.9 above to remain in effect.

8.4Entity Existence. Each of the Companies shall at all times cause to be done every act necessary to maintain and preserve its existence, rights, franchises, and certifications in the jurisdictions of its organization or incorporation and to remain qualified as foreign limited liability company or corporation, as the case may be, in every jurisdiction in which qualification is required.

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8.5Maintenance of Properties. Each of the Companies shall maintain or cause to be maintained in good repair, working order and condition all tangible properties required for its business.

8.6Organizational Documents. None of the Companies will amend its Organizational Documents.

8.7Issuances of Ownership Interests. Except for the issuance of shares of common stock of GPS-Connecticut to the Other Stockholders, none of the Companies will issue any of its Ownership Interests to any person or entity or grant any person or entity an option, warrant, convertible security or any other right or agreement to acquire any membership interests or shares of its capital stock, as the case may be, without the prior written consent of Purchaser.

8.8Declaration of Distributions, etc. None of the Companies will (i) make, pay or declare any distributions or dividends of cash or property with respect to its issued Ownership Interests (except for pre-closing distributions of cash to Griffin and Canino in their capacity as the sole members of GPS, provided same does not result in the failure of the Companies to meet the Minimum Net Worth requirement as set forth in Section 2.2(c)); (ii) directly or indirectly redeem, repurchase or otherwise reacquire any of its Ownership Interests; (iii) increase the salary or pay any bonuses to any management employees, officers, directors, managers or members of the Company, if such action decreases the Net Worth of the Companies below the Minimum Net Worth set forth in Section 2.2(c).

8.9Material Contracts. None of the Companies shall enter into, assume, renew or permit to be renewed (including by not giving a permitted notice of termination) any contract, lease or obligation outside the ordinary course of business. Except as expressly set forth therein, none of the Companies shall modify, amend, terminate, waive or release any benefit or right under any employment agreement, or any other material agreement to which any of the Companies is a party, without the prior written consent of Purchaser, other than amendments or modifications to agreements made in the regular course of business (e.g., change orders in connection with any Project Contract).

SECTION 9

RESTRICTIVE COVENANTS

9.1Covenant Not to Compete. Except as authorized by Purchaser or by the terms of this Agreement, at all times during the period of five (5) years from the Closing Date (the “Restrictive Period”), neither Griffin nor Canino shall, directly or indirectly, alone or with others, engage in any competition with, or have any financial or ownership interest in any sole proprietorship, corporation, company, partnership, association, venture or business or any other person or entity (whether as an employee, officer, director, partner, manager, member, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) competes with the business of the Companies; provided that such provision shall not apply to (i) Griffin’s or Canino’s ownership of Argan Common Stock, (ii) Griffin’s or Canino’s ownership of interests in entities which may develop, own and operate (but not design or build) power plants, or (iii) or the acquisition by Griffin or Canino, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the Nasdaq Stock Market, or any similar system or automated dissemination of quotations of securities prices in common use, so long as neither Griffin nor Canino controls, acquires a controlling interest in or becomes a member of a group which exercises direct or indirect control of, more than five percent (5%) of any class of capital stock or other indicia of ownership of such issuer. For purposes of clause (ii) of this Section 9.1 above, and for clause (b) of Section 9.3 below, “develop” or “development of” power plants shall mean the usual and customary actions taken by an owner or potential owner of a power plant to obtain licenses, permits or other governmental approvals required in order to own and operate a power plant, but not the designing or constructing of a power plant.

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9.2Confidentiality. The Sellers shall not divulge, communicate, use to the detriment of the Companies or Purchaser, or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Companies or Purchaser. Any Confidential Information or data now or hereafter acquired by the Sellers with respect to the business of the Companies or Purchaser (which shall include, but not be limited to, information concerning the Companies’ or Purchaser’s financial condition, prospects, technology (including Business Property Rights), personnel information, customers, suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and unique asset of the Companies or Purchaser, as the case may be, that is received by each of the Sellers in confidence and as a fiduciary, and each of the Sellers shall remain a fiduciary to Purchaser with respect to all of such information. For purposes of this Agreement, “Confidential Information” means all trade secrets and information disclosed to the Sellers or known by the Sellers as a consequence of or through the unique position of their employment with any of the Companies or otherwise (including information conceived, originated, discovered or developed by either of the Sellers and information acquired by any of the Companies from others) prior to or after the date hereof, and not generally or publicly known (other than as a result of unauthorized disclosure by the Sellers), about any of the Companies, Purchaser or their respective businesses. Notwithstanding the foregoing, nothing herein shall be deemed to restrict Griffin from disclosing Confidential Information as required to perform his duties under the Griffin Employment Agreement, or to restrict Canino from disclosing Confidential Information as required to perform his duties under the Canino Employment Agreement, or to the extent required by law.

9.3Non-Solicitation. At all times during the Restrictive Period, the Sellers shall not, directly or indirectly, for themselves or for any other person, firm, corporation, company, partnership, association, venture or business or any other person or entity: (a) solicit for employment, employ or attempt to employ or enter into any contractual arrangement with any employee or former employee of any of the Companies or Purchaser (other than Raymond J. Bednarz and Fred Kresse); and/or (b) call on or solicit any of the actual or targeted prospective customers or clients, or any actual independent contractors, subcontractors, distributors or suppliers, of any of the Companies (except in connection with the Sellers’ development, ownership and operation (but not the designing or building) of power plants) or Purchaser on behalf of themselves or on behalf of any person or entity in connection with any business that competes with the business of the Companies, nor shall either of the Sellers make known the names or addresses or other contact information of such actual or prospective customers or clients, or any such actual independent contractors, subcontractors, distributors or suppliers, or any information relating in any manner to the Companies’ trade or business relationships with such actual or prospective customers or clients, or any such actual independent contractors, subcontractors, distributors or suppliers, other than in connection with the performance by Griffin of his duties under the Griffin Employment Agreement and the performance by Canino of his duties under the Canino Employment Agreement.

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9.4Acknowledgment by the Sellers. Each of the Sellers acknowledges and confirms that the restrictive covenants contained in this Article 9 (including without limitation the length of the term of the provisions of this Article 9) are required by Purchaser as an inducement in enter into this Agreement and the GPS Stock Purchase Agreement and to complete the transactions contemplated hereby and thereby, are reasonably necessary to protect the value of the Ownership Interests Purchaser is to acquire under this Agreement and under the GPS Stock Purchase Agreement and the legitimate business interests of the Companies and Purchaser, and are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. Each of the Sellers further acknowledges that the restrictions contained in this Article 9 are intended to be, and shall be, for the benefit of and shall be enforceable by, Purchaser and its successors and assigns. Each of the Sellers expressly agrees that upon any breach or violation of the provisions of this Article 9, Purchaser shall be entitled, as a matter of right, in addition to any other rights or remedies it may have, to: (a) temporary and/or permanent injunctive relief in any court of competent jurisdiction as described in Section 9.7 hereof; and (b) such damages as are provided at law or in equity. The existence of any claim or cause of action against any of the Companies or Purchaser or their respective affiliates, whether predicated upon this Agreement, the GPS Stock Purchase Agreement or otherwise, shall not constitute a defense to the enforcement of the restrictions contained in this Article 9.

9.5Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of this Article 9 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Article 9 within the jurisdiction of such court, such provision shall be interpreted or reformed and enforced as if it provided for the maximum restriction permitted under such governing law.

9.6Extension of Time. If either of the Sellers shall be in violation of any provision of this Article 9, then each time limitation set forth in this Article 9 shall be extended for a period of time equal to the period of time during which such violation or violations occur. If Purchaser seeks injunctive relief from such violation in any court, then the covenants set forth in this Article 9 shall be extended for a period of time equal to the pendency of such proceeding including all appeals by either of the Sellers.

9.7Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by either of the Sellers of any of the covenants contained in Article 9 of this Agreement will cause irreparable harm and damage to the Companies or Purchaser, as the case may be, the monetary amount of which may be virtually impossible to ascertain. As a result, each of the Sellers recognizes and hereby acknowledges that the Companies or Purchaser shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Article 9 of this Agreement by either of the Sellers or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Companies or Purchaser may possess.

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9.8Survival. The provisions of this Article 9 shall survive the Closing.

SECTION 10

INDEMNIFICATION

Subject to the conditions, limitations and terms as set forth in this Section 10 (including without limitation the Sellers’ Indemnification Threshold, the Sellers’ Indemnification Cap, and the time limitations hereinafter set forth), each ofthe Sellers shall indemnify, defend (with counsel acceptable to the indemnified party) and hold harmless Purchaser and its subsidiaries and affiliates, and their respective directors, officers, shareholders, members, managers, agents, employees, representatives, successors and assigns (each in its capacity as an indemnified party, a “Buyer Indemnitee”) from and against and in respect to the following (in addition to any losses otherwise specifically indemnified against in this Agreement):

10.1Indemnification by the Sellers.

(a)Breach. Subject to the provisions of this Section 10 and except as otherwise more specifically set forth herein, each of the Sellers hereby covenants and agrees to indemnify, defend, protect, and hold harmless each Buyer Indemnitee at all times from and after the date of this Agreement from and against all Adverse Consequences suffered or incurred by such Buyer Indemnitee (i) as a result of or incident to any material breach of any representation or warranty of the Companies or the Sellers set forth in Section 4 of this Agreement (including without limitation representations or warranties with respect to income and other tax matters as set forth in Section 4.10), (ii) as a result of or incident to any material breach or nonfulfillment by the Companies or the Sellers of, or any noncompliance by any of the Companies or either of the Sellers with, any covenant, agreement, or obligation contained herein or in any certificate delivered in connection herewith, or (iii) resulting directly from the material inaccuracy of any list, certificate or other instrument delivered by or on behalf of the Sellers or the Companies in connection herewith.

(b)Environmental Indemnification. The Sellers hereby covenants and agrees to indemnify and defend each Buyer Indemnitee and hold each Buyer Indemnitee harmless from and against any and all damages, losses, liabilities, costs and expenses of removal, relocation, elimination, remediation or encapsulation of any Hazardous Materials, obligations, penalties, fines, impositions, fees, levies, lien removal or bonding costs, claims, actions, causes of action, injuries, administrative orders, consent agreements and orders, litigation, demands, defenses, judgments, suits, proceedings, disbursements or expenses (including without limitation, attorney’s and experts’ reasonable fees and disbursements) of any kind and nature whatsoever resulting from the operation of the Companies business as of the Closing Date: (i) which (A) is imposed upon, or incurred by, a Buyer Indemnitee by reason of, relating to or arising out of the violation by any of the Companies prior to the Closing of any Environmental, Health, and Safety Laws, (B) arises out of the discharge, dispersal, release, storage, treatment, generation, disposal or escape of any Hazardous Materials, on or from any Project Site as of the Closing Date, or (C) arises out of the use, specification, or inclusion of any product, material or process containing Hazardous Materials, or the failure to detect the existence or proportion of Hazardous Materials in the soil, air, surface water or groundwater, or the performance or failure to perform the abatement of any Hazardous Materials source as of the Closing Date or the replacement or removal of any soil, water, surface water, or groundwater containing Hazardous Materials; and/or (ii) is imposed upon, or incurred by, a Buyer Indemnitee by reason of or relating to any material breach, act, omission or misrepresentation contained in Section 4.20.

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(c)Income Tax Matters. Canino and Griffin severally, but not jointly, shall indemnify, defend and hold harmless each Buyer Indemnitee from and against all Adverse Consequences incurred by any Buyer Indemnitee as a result of or incident to any income taxes imposed on any Buyer Indemnitee or for which any Buyer Indemnitee may otherwise be liable by law or regulation (including, without limitation, the provisions of Treasury Regulation Section 1.1502-6) or contract, for any taxable year or period that ends on or before the Closing Date. The Sellers and the Companies agree that the Companies will take all actions, including making appropriate elections under the Code, to terminate the Companies’ tax years as of the Closing Date and to report and make all allocations of tax items based upon such short tax years.

(i)The Sellers shall furnish to Purchaser copies of the federal, state, and local tax returns of each of the Companies for the period ending on the Closing Date not later than ten (10) Business Days prior to the due date(s) of the filing of such returns, and shall obtain the consent of Purchaser before filing such returns, which consent shall not be unreasonably withheld or delayed beyond the earlier of (i) ten (10) Business Days after Purchaser’s receipt of said copies, or (ii) said due date(s).

(ii)The Sellers shall have the sole right to represent the interests of any Buyer Indemnitee in any tax audit or administrative or court proceeding relating to any taxable period ending on or before the Closing Date, and to compromise, settle, or contest any tax claims in connection therewith in their sole discretion, provided that the Sellers shall provide Purchaser with written notice of their intent to exercise their rights hereunder. Purchaser shall have the right, at its expense, to join the Sellers in any such defense.

(iii)The Sellers shall provide Purchaser with written notice of any claim or assertion by the Internal Revenue Service, or any other taxing authority, of any disallowance of any S corporation election by any of the Companies relating to any period prior to the Closing Date immediately upon learning of any such claim or assertion.

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(d)Broker Fee. The Sellers hereby covenant and agree to indemnify each Buyer Indemnitee from any claim made by a broker, finder, agent or other intermediary against any Buyer Indemnitee or any of the Companies after Closing in connection with the negotiation or execution of this Agreement or of the GPS Stock Purchase Agreement or the consummation of the transactions contemplated hereby or thereby.

(e)Costs and Expenses. Except as otherwise provided in this Agreement, all amounts indemnified pursuant to this Section 10 shall include all reasonable costs and expenses of the Buyer Indemnitee, including, but not limited to, the reasonable costs of any actions, reasonable attorneys’ fees, and other reasonable expenses necessary for Buyer Indemnitees to enforce their rights to indemnification granted hereunder, provided they are the prevailing party in any such enforcement actions.

(f)Termination of the Sellers’ Obligations. The Sellers’ obligations to indemnify any Buyer Indemnitee, or to contribute to any party indemnifying any Buyer Indemnitee, pursuant to this Section 10, shall expireone (1) year from the Closing Date, except as to those involving (i) income tax matters, but only with respect to federal, state and local income tax (“Income Tax Matters”), which obligations shall expire sixty (60) days after the expiration date of the applicable statute of limitations for any such income tax claim, (ii) any claim for breach of the Sellers’ representations in Sections 4.3 and 4.21 (“title matters”), which obligations shall expire sixty (60) days after the expiration date of the applicable statute of limitations for any such claim, and (iii) actual fraud or intentional non-disclosure by the Sellers, which obligations shall expire sixty (60) days after the expiration date of the applicable statute of limitations for any such claim under Delaware law; provided, however, that if a claim is asserted prior to the expiration of any of such indemnification periods, then the obligation to indemnify or to contribute shall be extended until the final disposition or termination of such claim.

10.2No Circular Recovery. Each of the Sellers hereby agrees that he will not make any claim for indemnification against Purchaser by reason of the fact that said Seller was a director, officer, employee, agent or other representative of any of the Companies or any of its subsidiaries (whether such claim is for Adverse Consequences of any kind or otherwise and whether such claim is pursuant to any statute, charter, by-law, contractual obligation or otherwise) with respect to any claim for indemnification brought by Purchaser, or its subsidiaries and affiliates, against said Seller.

10.3Sellers’ Indemnification Threshold; Cap. Notwithstanding anything in this Agreement to the contrary, (a) the Sellers shall not have any indemnification payment obligations hereunder unless and until all Adverse Consequences suffered or incurred by any or all of the Buyer Indemnities resulting from any untrue representation, breach of warranty, nonfulfillment of any covenants, or other indemnified matter exceed the Sellers’ Indemnification Threshold (as defined hereinafter), at which point all amounts to be paid hereunder (including amounts under the Sellers’ Indemnification Threshold) shall be due and owing; and (b) the maximum aggregate liability of the Sellers to the Buyer Indemnitees under this Agreement (the “Sellers’ Indemnification Cap”) shall be the Escrowed Stock Consideration. For purposes of this Section 10.3, the “Sellers’ Indemnification Threshold” shall mean One Hundred Fifty Thousand Dollars ($150,000) in the aggregate. The foregoing limitations shall not apply to indemnification obligations arising from (i) claims relating to Income Tax Matters; (ii) claims relating to title matters; or (iv) subject to the Disclaimer set forth in Section 13.20 of this Agreement, actual fraud or intentional non-disclosure by the Sellers.

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10.4Release of Excess Escrowed Stock. In the event that, as of the expiration of the period during which the Escrowed Stock Consideration is to be held in escrow pursuant to the Escrow Agreement, there is a dispute as to a matter for which the Buyer Indemnities seek indemnification, and the amount in dispute is more than the Sellers’ Indemnification Threshold, but less than the maximum aggregate liability of the Sellers as set forth in Section 10.3 hereof, then, in accordance with the terms of the Escrow Agreement, the Escrow Agent shall release from escrow and deliver to the Sellers that amount of the Escrowed Stock Consideration which is in excess of one hundred twenty percent (120%) of the Buyer Indemnities’ indemnification claim.

SECTION 11

TERMINATION

11.1Termination by Purchaser. This Agreement and the GPS Stock Purchase Agreement (notwithstanding anything to the contrary contained therein) may be terminated by Purchaser, on or before the Closing Date, upon the occurrence of the following:

(a)If any of the material conditions specified in Section 6 shall not have been met prior to the Closing Date.

(b)If an Event of Default, as defined in Section 12, has occurred, and has not been cured during any applicable cure period.

11.2Termination by Sellers. This Agreement and the GPS Stock Purchase Agreement (notwithstanding anything to the contrary contained therein) may be terminated by the Sellers, on or before the Closing Date, if any of the conditions specified in Section 5 shall not have been met prior to Closing.

SECTION 12

DEFAULT

12.1Events of Default. It shall be considered an Event of Default if any one or more of the following events shall occur:

(a)If any statement, certificate, report, representation or warranty of a material nature made or furnished by the Sellers or any of the Companies under this Agreement or under the GPS Stock Purchase Agreement shall prove to have been false or erroneous in any material respect.

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(b)The occurrence of any event of default under any contract, financing agreement, note, lease, mortgage, security agreement, factoring agreement or any other obligation of any of the Companies the result of which will have a material adverse effect on the Company, unless any such event of default shall be timely cured under any applicable cure provision or waived by the person to whom or to which the Company is obligated or indebted.

12.2Termination by Reason of Event of Default or Failure of a Condition Precedent. In the event that prior to Closing an Event of Default shall occur by the Sellers or Purchaser, or if any of the representations or warranties of the parties, as set forth in Sections 4 or 5 above, are breached, and such breach is not waived by the appropriate party, or if any of the conditions precedent to Closing as set forth in Sections 6 or 7 above, are not met and the same are not waived by the appropriate party, then the non-breaching party’s sole remedy shall be to terminate this Agreement and the GPS Stock Purchase Agreement, in which case no party shall be liable to any other party for any claims or damages.

12.3Waiver by Purchaser. Any failure by Purchaser to insist upon strict performance by the Sellers or any of the Companies of any of the terms and provisions of this Agreement or of the GPS Stock Purchase Agreement shall not be deemed to be a waiver of any of the terms and conditions hereof or thereof and Purchaser shall have the right thereafter to insist upon strict performance thereof by the Sellers or the Companies.

SECTION 13

MISCELLANEOUS

13.1Costs. Each party shall pay its own expenses incident to the transaction contemplated hereby, including fees and expenses of their attorneys, accountants, appraisers or consultants, whether or not those transactions are consummated at Closing, subject to the indemnification and termination provisions hereof.

13.2Attorneys Fees. If any party initiates any litigation against any other party involving this Agreement, the prevailing party in such action shall be entitled to receive reimbursement from the other party for all reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party in respect of that litigation, including any appeal, and such reimbursement may be included in the judgment or final order issued in that proceeding.

13.3Relationships to Other Agreements. In the event of a conflict between any of the provisions of this Agreement and any other agreement relating to this transaction between the Sellers, the Companies and Purchaser, including without limitation the GPS Stock Purchase Agreement, the provisions of this Agreement shall control.

13.4Titles and Captions. All articles or section titles or captions in this Agreement are for convenience of reference and shall in no way define, limit, extend or describe the scope or intent of provisions herein.

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13.5Exhibits. The Exhibits and Schedules referred to herein are hereby made a part hereof.

13.6Applicable Law. This Agreement is to be governed by, and construed, interpreted, and enforced in accordance with, the laws of the State of Delaware.

13.7Binding Effect and Assignment. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective heirs, personal representative, affiliates, successors and assigns. Notwithstanding the foregoing, neither the Companies nor Purchaser shall have any right to assign any of its or their rights or obligations under this Agreement without the prior written consent of the other parties hereto; provided, however, that Purchaser shall be permitted to assign to Bank of America, N.A. (together with its successors and assigns, the "Bank"), all of Purchaser's rights, title and interest in, to and under this Agreement, including all rights of Purchaser to indemnification from the Sellers, as collateral security for the obligations of Purchaser to the Bank.

13.8Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

If the Companies then:	Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Attention: Mr. William F. Griffin, Jr. and
	Joel M. Canino
	Fax: (860) 659-0607
If Griffin then:	Mr. William F. Griffin, Jr.
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607
If Canino then:	Mr. Joel M. Canino
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607

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Counsel for the Companies, Griffin and
Canino:	John W. Beck
	Siegel, O’Connor, O’Donnell & Beck, P.C.
	150 Trumbull Street
	Hartford, Connecticut 06103
	Fax: (860) 724-3550
If Purchaser then:	Argan, Inc.
	One Church Street, Suite 401
	Rockville, Maryland 20950
	Attn: Arthur Trudel
	Fax: (301) 315-0064
Counsel for Purchaser:	David B. Law
	Curtin Law Roberson Dunigan
	& Salans, PC
	1900 M Street, N.W.
	Suite 600
	Washington, D.C. 20036
	Fax: 202/530-4411

13.9Severability. Inapplicability or unenforceability of any provision of this Agreement shall not impair the operation or validity of any other provision hereof. If any provision shall be declared inapplicable or unenforceable, there shall be added automatically as part of this Agreement a provision as similar in terms to such inapplicable or unenforceable provision as may be possible and be legal, valid and enforceable.

13.10Acceptance or Approval. By accepting all or approving anything required to be observed, performed, or fulfilled, or to be given to Purchaser pursuant to this Agreement, including, but not limited to, any certificate, balance sheet, statement of profit or loss or other financial statement, or insurance policy, Purchaser shall not be deemed to have accepted or approved the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof as to third parties.

13.11Survival. All covenants, representations, and warranties made by the Sellers and Purchaser in this Agreement shall survive the Closing hereunder for a period of one (1) year, except as otherwise specifically provided in this Agreement.

13.12Entire Agreement. This Agreement, including all Exhibits and Schedules, constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and supersedes all prior agreements and understandings pertaining thereto. No covenant, representation, or condition not expressed in this Agreement shall affect or be deemed to interpret, change or restrict the express provisions hereof and no amendments hereto shall be valid unless made in writing and signed by all parties hereto.

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13.13Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one instrument.

13.14Securities Matters. By executing this Agreement, Purchaser acknowledges that: (i) Purchaser has been advised that the GPS Membership Interests have not been and will not have been registered under the Act or the applicable securities laws of any state, that the Sellers in transferring such interests to Purchaser will be relying, if applicable, upon the exemption from such registration requirements contained in Section 4(1) or 4(2) of the Act as a transaction by a person other than an issuer, underwriter or dealer and the applicable state exemption; (ii) the GPS Membership Interests may be “restricted” as that term is used in Rule 144 under the Act as a consequence of which Purchaser may not be able to sell the interests unless such interests are first registered under the Act and any applicable state securities laws or unless an exemption from such registration is, in the opinion of counsel, available; (iii) the GPS Membership Interests will be acquired by Purchaser for purposes other than “distribution” as that term is used in Section 2(11) of the Act, and (iv) Purchaser will execute, if Sellers so request, an appropriate letter affirming that its intention with respect to the proposed acquisition of the GPS Membership Interests is that such acquisition be for investment purposes only and not with a view toward resale or distribution thereof.

13.15Preparation and Filing of SEC Documents. If and whenever, as a result of the transaction contemplated hereunder, Purchaser is under an obligation to provide financial information to, or prepare a filing of any kind with, the SEC, the Sellers shall assist Purchaser in preparing any audited financial statements required by the SEC for this purpose. The cost of preparing any such financial statements shall be borne by Purchaser.

13.16Further Assurances. From time to time at or after the Closing, upon request, the parties each will execute and deliver such other instruments of conveyance, assignment, transfer and delivery and take such actions as the other party reasonably may request in order to consummate, complete and carry out the purposes of the transactions contemplated hereby.

13.17Tag Along Rights.

13.17.1 In the event that one or more holders (the "Tag Along Holders") of common stock of Purchaser (including any successor thereof) shall transfer (or agree to transfer) more than fifty percent (50%) of the outstanding common stock of Purchaser, then Purchaser shall use commercially reasonable efforts to include the Sellers (including any assignees or successors thereof), to the extent that they then hold shares of common stock of Purchaser, in said sale upon the same terms and subject to the same conditions as apply to the Tag Along Holders.

13.17.2 In addition, in the event Purchaser proposes any underwritten secondary offering of its common stock, Purchaser will give prior written notice thereof to each Seller offering them the opportunity to include in any such offering such number of shares as they may request in writing not later than ten (10) days before such filing. Upon receipt by Purchaser of any such request, Purchaser shall use reasonable efforts to cause the managing underwriter to include such shares in such secondary offering.

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13.18Access to Company Records. From and after the Closing, Purchaser shall allow Griffin, Canino, and their respective authorized agents, access to the Companies’ books and records in the event that the same is necessary in connection with any tax audits or other indemnifiable claims, which audit or indemnifiable claim arose with respect to the Sellers’ period of ownership of the GPS Membership Interests prior to the Closing Date.

13.19 Non-Reliance. Purchaser warrants and represents that it has consulted with its attorneys regarding the effect of the Indemnification limitations and the Disclaimer set forth in Article X and Section 13.20, respectively, and that Purchaser has executed this Agreement fully aware of their content, purpose and effect, based upon its sole judgment, belief and knowledge, and after consulting with its own attorneys, and that Purchaser is not relying on any representations or statements made by any other party to this Agreement, or by anyone representing any other party to this Agreement. Purchaser acknowledges that neither the Sellers, nor any agent or attorney of the Sellers, has made any promise, representation or warranty whatsoever, express or implied, not contained herein concerning the subject matters hereof to induce Purchaser to execute this Agreement, and acknowledges that Purchaser has not executed this Agreement in reliance upon any such promise, representation or warranty. Purchaser further acknowledges and agrees that it has been represented by independent counsel of its own choice throughout all negotiations which have preceded this Agreement, and that it has entered into and executed this Agreement after consultation with said independent counsel. This Agreement is executed voluntarily by Purchaser without any duress or undue influence.

13.20 Disclaimer. In connection with Purchaser’s investigation of the Companies, Purchaser may have received from or on behalf of the Sellers certain projections, including projected statements of operating revenues, income and estimates of percentage of completion from operations of the Companies, which projections are included in the Interim Financial Statements and will be included in the Closing Date Financial Statements. These statements include the costs incurred to the date (as set forth in said statements), the total costs estimated by management as necessary to complete each of said construction jobs, management’s estimate of the contract value and the profit margin based upon those assumptions. Purchaser acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts and plans, that Purchaser is familiar with such uncertainties, that Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections and other forecasts and plans so furnished to it (including the reasonableness of the assumptions underlying them), and that Purchaser has received no representation or warranty from any of the Sellers with respect to such estimates, projections and other forecasts and plans (including the reasonableness of the assumptions underlying them). All projections of financial or operating results are based on estimates made by the Sellers and there can be no assurance that such results will be realized. Each of the Sellers expressly disclaims any and all liability that may be based upon errors in management’s judgment, and Purchaser agrees not to pursue any action, claim or cause of action against Sellers (including any claim for indemnification or claim based upon fraud) which is based wholly or partially upon the inaccuracy or inadequacy of said estimates, projections and/or forecasts (including the reasonableness of management’s assumptions underlying them).

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SECTION 14

ESCROW PROVISIONS

14.1Each of the parties to this Agreement recognizes and acknowledges that the Escrow Agent is serving solely as an accommodation to the parties, and each of them agrees that the Escrow Agent shall not be liable to any of the parties for any error of judgment, mistake, or act or omission hereunder, or any matter or thing arising out of its conduct hereunder, except for the Escrow Agent's willful misfeasance or gross negligence. The Escrow Agent shall be entitled to rely upon the authenticity of any signature, and the genuineness and/or validity of any writing received by the Escrow Agent pursuant to or otherwise relating to this Agreement.

14.2The Escrow Agent is acting, and may continue to act, as counsel to Purchaser in connection with the transactions contemplated by this Agreement.

14.3Each of the parties jointly and severally agrees to indemnify and hold harmless the Escrow Agent from and against any and all costs, claims, damages, or expenses (including, without limitation, reasonable attorneys’ fees and disbursements, whether paid to retained attorneys or representing the fair value of legal services rendered to itself) that may be incurred by the Escrow Agent acting under this Agreement (including, without limitation, any costs incurred by the Escrow Agent pursuant to Section 14.4 hereof) or to which the Escrow Agent may be put in connection with the Escrow Agent acting under this Agreement, except for costs, claims, or damages arising out of the Escrow Agent’s willful misfeasance or gross negligence.

14.4In the event that: (a) the Escrow Agent shall receive contrary instructions from the parties; or (b) any dispute shall arise as to any matter arising under this Agreement; or (c) there shall be any uncertainty as to the meaning or applicability of any of the provisions hereof, or the Escrow Agent’s duties, rights or responsibilities hereunder, or any written instructions received by the Escrow Agent pursuant hereto, the Escrow Agent shall not itself determine such dispute, controversy or uncertainty, but shall either (i) continue to hold the documents and other items placed with it pursuant to the terms of this Agreement until otherwise directed in writing by joint instruction of the parties, or by a final non-appealable court order, or (ii) at its option, at any time that such dispute, controversy or uncertainty continues, deposit said documents and other items into any court having appropriate jurisdiction.

14.5Upon the delivery or disposition of the documents and other items placed with it in accordance with the provisions of this Agreement, the Escrow Agent shall thereupon be relieved of, and discharged and released from, any and all liability hereunder and with respect to said documents and other items and Escrow Agent’s obligations under this Agreement shall be deemed to have been completed.

[Signatures on following pages]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ATTEST:	ARGAN, INC.
/s/ Sherolyn Nanson	By:	/s/ Arthur Trudel
		Name: Arthur Trudel Title: CFO
ATTEST:	GEMMA POWER SYSTEMS, LLC
	By:	/s/ William F. Griffin, Jr.
		William F. Griffin, Jr., Manager
ATTEST:	GEMMA POWER, INC.
	By:	/s/ William F. Griffin, Jr.
		William F. Griffin, Jr., President
ATTEST:	GEMMA POWER SYSTEMS            CALIFORNIA, INC.
	By:	/s/ William F. Griffin, Jr.
		William F. Griffin, Jr., President

[Signatures continue on following page]

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WITNESS:
	By:	/s/ William F. Griffin, Jr.
		WILLIAM F. GRIFFIN, JR.
WITNESS:
		/s/ Joel M. Canino
		JOEL M. CANINO

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Escrow Agent hereby executes the foregoing Agreement for the sole purpose of agreeing to the provisions of Section 3.2 thereof, subject to the provisions of Section 14 thereof.

ESCROW AGENT:

CURTIN LAW ROBERSON DUNIGAN & SALANS, P.C.

By:	/s/ David B. Law
	David B. Law, Vice President

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EX-10.2

STOCK PURCHASE AGREEMENT

By and Among

ARGAN, INC.

and

GEMMA POWER, INC., and

GEMMA POWER SYSTEMS CALIFORNIA, INC.

and

WILLIAM F. GRIFFIN, JR. and JOEL M. CANINO

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this 8^th day of December, 2006, by and among (i) ARGAN, INC., a Delaware corporation (“Purchaser”), (ii) GEMMA POWER, INC., a Connecticut corporation (“GPS-Connecticut”), (iii) GEMMA POWER SYSTEMS CALIFORNIA, INC., a California corporation (“GPS-California,” and, together with GPS-Connecticut, the “Corporations”), and (iv) WILLIAM F. GRIFFIN, JR. (“Griffin”), and (v) JOEL M. CANINO (“Canino,” and together with Griffin sometimes hereinafter referred to together as, the “Sellers”).

INTRODUCTORY STATEMENT

A.The Sellers own a majority of the issued and outstandingshares of capital stock of GPS-Connecticut, and all of the issued and outstandingshares of capital stock of GPS-California.

B.GPS-Connecticut and GPS-California are engaged in the engineering and construction of power energy systems and also provide consulting, owner’s representative, operating, and maintenance services to the energy market.

C.The Boards of Directors of Purchaser and of GPS-Connecticut and GPS-California have approved the acquisition of the Corporations by Purchaser by acquisition (i) from the Sellers and the Other Stockholders of all of the GPS-Connecticut Stock, and from the Sellers of all of the GPS-California Stock, upon the terms and subject to the conditions set forth herein.

D.For federal income tax purposes, it is intended that the acquisition of GPS-Connecticut and GPS-California shall qualify as a tax-free reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”), and for such purpose the parties have adopted the Plan of Reorganization in the form of the Plan of Reorganization attached hereto as Exhibit D.

NOW, THEREFORE, for and in consideration of the premises and the mutual representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do agree as follows:

DEFINITIONS

The following terms when used in this Agreement shall have the following meanings:

“Act” shall mean the Securities Act of 1933, as the same has been and shall be amended from time to time.

“Argan Per Share Value” shall mean Three and 75/100 Dollars ($3.75) per share, being the same price per share as that paid by investors for Argan Common Stock in connection with that certain private offering of up to 2,900,000 shares of Argan Common Stock to a limited number of sophisticated investors pursuant to that certain Stock Purchase Agreement dated as of December 7, 2006, by and among Argan and the Buyers identified therein, and that certain Escrow Agreement dated as of December 7, 2006, by and among Argan, the Buyers identified therein and the escrow agent identified therein.

“Argan Common Stock” shall mean the authorized voting common stock of Argan.

“Business Day” shall mean shall mean any day of the week other than Saturday, Sunday or a day on which banking institutions in either New York, New York, or Washington, D.C., are obligated or authorized by law to close.

“Canino” shall mean Joel M. Canino, a stockholder,officer and director of GPS-Connecticut and of GPS-California, and a signatory to this Agreement.

“Closing” means the transfer of the GPS-Connecticut Stock and the GPS-California Stock to Purchaser and the payment of the Consideration to the Sellers pursuant to this Agreement.

“Closing Date” means the date of Closing, established under Section 3 of this Agreement.

“Code” has the meaning set forth in the introductory statement.

“Corporations” means GPS-Connecticut and GPS-California and all of their respective subsidiaries and affiliates (unless the context clearly indicates otherwise). Each of GPS-Connecticut and GPS-California (and all of their respective subsidiaries and affiliates, unless the context clearly indicates otherwise) is sometimes referred to as “a Corporation.”

“Consideration” means the aggregate consideration set forth in Section 2 hereof.

“Delivery Date”has the meaning set forth in Section 3.1 below.

“Escrow Agent” shall mean Curtin Law Roberson Dunigan & Salans, P.C.

“GPS-California Stock” have the meaning set forth in Section 1.1.

“GPS-Connecticut Stock” shall have the meaning set forth in Section 1.1.

“Griffin” shall mean William F. Griffin, Jr., a stockholder,officer and director of GPS-Connecticut and of GPS-California, and a signatory to this Agreement.

“Membership Interest Purchase Agreement” shall mean that certain Membership Interest Purchase Agreement by and among Purchaser, Gemma Power Systems, LLC (a Connecticut limited liability company), GPS-Connecticut, GPS-California, Griffin and Canino to be executed contemporaneously with this Agreement.

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“Organizational Documents” shall mean (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the articles of organization and the operating agreement of any limited liability company; (c) the partnership agreement and any statement of partnership of a general partnership; (d) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (e) any charter or similar document adopted or filed in connection with the creation, formation, or organization of any entity; and (f) any amendment to any of the foregoing.

“Other Stockholders” shall have the meaning set forth in Section 1.1.

“Plan of Reorganization” shall mean the Plan of Reorganization adopted and approved by the Boards of Directors of Purchaser, GPS-Connecticut and GPS-California and by the managers of GPS in the form of the Plan of Reorganization attached hereto as Exhibit D.

“SEC” shall have the meaning set forth in Section 4.12.

“Sellers” has the meaning set forth in the preface above.

SECTION 1

ACQUISITION OF STOCK

1.1Acquisition of Stock. On the Closing Date (as defined in Section 3), and subject to and upon the fulfillment or waiver of the terms and conditions of this Agreement and of the Membership Interest Purchase Agreement, Purchaser shallacquire (i) from the Sellers and the other stockholders of GPS-Connecticut (the “Other Stockholders”) all of the authorized issued and outstanding capital stock of GPS-Connecticut, including all warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire stock of GPS-Connecticut (the “GPS-Connecticut Stock”), and (ii) from the Sellers all of the authorized issued and outstanding capital stock of GPS-California, including all warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or acquire stock of GPS-California (the “GPS-California Stock”). Purchaser’s acquisition of all of the GPS-Connecticut Stock and all of the GPS-California Stock shall be by means of a tax-free reorganization under Section 368(a)(1)(B) of the Code. The names, addresses and numbers of shares of GPS-Connecticut Stock and of GPS-California Stock held by each of the Sellers and each of the Other Stockholders is set forth on Schedule 1.1.

1.2Organizational Documents, Management.

(a)Organizational Documents. At Closing, the Organizational Documents of the Corporations shall be amended in the manner determined by Purchaser, as sole stockholder of GPS-Connecticut and of GPS-California.

3

(b)Management. At Closing, Purchaser, as sole stockholder of GPS-Connecticut and of GPS-California, shall take all appropriate action to elect the persons designated on Schedule 1.2(b) as the directors and the officers of GPS-Connecticut and of GPS-California, respectively, until their respective successors are duly elected or appointed and qualified.

SECTION 2

CONSIDERATION

2.1Consideration. The total consideration to be paid by Purchaser to the Sellers and to the Other Stockholders (the “Consideration”) shall be an amount equal to Four Million Eight Hundred Seventy-Five Thousand Dollars ($4,875,000) in Argan Common Stock. The Consideration shall be allocated Two Million Forty-Seven Thousand Five Hundred Dollars ($2,047,500) for all of the GPS-Connecticut Stock, and Two Million Eight Hundred Twenty-Seven Thousand Five Hundred Dollars ($2,827,500) for all of the GPS-California Stock, and shall be determined and paid in accordance with Section 2.2.

2.2Payment of Consideration . The Consideration shall be paid at Closing:.

(a) for the shares of GPS-Connecticut Stock, through issuance of the number of shares of Argan Common Stock equal in value to Two Million Forty-Seven Thousand Five Hundred Dollars ($2,047,500), valued at the Argan Per Share Value (the “GPS-Connecticut Stock Consideration”). At Closing, the Sellers and the Other Stockholders shall receive their respective pro rata shares of the GPS-Connecticut Stock Consideration as set forth in Schedule 2.2; and

(b)for the shares of GPS-California Stock, through issuance of the number of shares of Argan Common Stock equal in value to Two Million Eight Hundred Twenty-Seven Thousand Five Hundred Dollars ($2,827,500), valued at the Argan Per Share Value (the “GPS-California Stock Consideration”). At Closing, the Sellers shall receive their respective pro rata shares of the GPS-California Stock Consideration as set forth in Schedule 2.2.

SECTION 3

CLOSING

3.1Closing; Deliveries into Escrow. The closing of the acquisition of the GPS-Connecticut Stock and the GPS-California Stock (the “Closing”) shall take place on a date designated by Purchaser in a notice given to the Sellers that shall be not earlier than one (1) Business Day nor later than five (5) Business Days following the execution of this Agreement, the Membership Interest Purchase Agreement, and of all documents contemplated under this Agreement and under the Membership Interest Purchase Agreement, and placement thereof, together with all other documents or items to be delivered by the parties at Closing under this Agreement and under the Membership Interest Purchase Agreement into escrow with the Escrow Agent (the “Delivery Date”), or at such other time, date and place as Purchaser and the Sellers may agree (the “Closing Date”). In satisfying their obligations hereunder, the Sellers shall cause the Other Stockholders to transfer to the Escrow Agent, to be held in escrow pursuant to this Section 3, duly endorsed stock certificates representing all of the outstanding shares owned by the Other Stockholders of GPS-Connecticut Stock together with such other customary documents as may be required to transfer same.

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3.2Deliveries by Escrow Agent. Upon confirmation from either Purchaser or the Sellers that the wire transfer of funds described in Section 3.2 of the Membership Interest Purchase Agreement has been effected, the Escrow Agent shall be authorized, and hereby agrees, to date as of the Closing Date all documents held by it in escrow which, in accordance with the terms of this Agreement, are to be dated as of the Closing Date and to deliver, and the Escrow Agent shall release from escrow and deliver, (i) to the Sellers, and to the Other Stockholders, as the case may be, stock certificates representing the Consideration described in Section 2, and (ii) to Purchaser (A) duly endorsed stock certificates representing all of the outstanding shares of GPS-Connecticut Stock together with such other customary documents as may be required to transfer same, (B) duly endorsed stock certificates representing all of the outstanding shares of GPS-California Stock together with such other customary documents as may be required to transfer same.

SECTION 4

MISCELLANEOUS

4.1Costs. Each party shall pay its own expenses incident to the transaction contemplated hereby, including fees and expenses of their attorneys, accountants, appraisers or consultants, whether or not those transactions are consummated at Closing.

4.2Attorneys Fees. If any party initiates any litigation against any other party involving this Agreement, the prevailing party in such action shall be entitled to receive reimbursement from the other party for all reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party in respect of that litigation, including any appeal, and such reimbursement may be included in the judgment or final order issued in that proceeding.

4.3Titles and Captions. All articles or section titles or captions in this Agreement are for convenience of reference and shall in no way define, limit, extend or describe the scope or intent of provisions herein.

4.4Applicable Law. This Agreement is to be governed by, and construed, interpreted, and enforced in accordance with, the laws of the State of Delaware.

5

4.5Binding Effect and Assignment. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective heirs, personal representative, affiliates, successors and assigns. Notwithstanding the foregoing, neither the Corporations nor Purchaser shall have any right to assign any of its or their rights or obligations under this Agreement without the prior written consent of the other parties hereto.

4.6Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

If the Corporations then:	Gemma Power, Inc. and
	Gemma Power Systems of California, Inc.
	2461 Main Street
	Glastonbury, Connecticut 06033
	Attention: Mr. William F. Griffin, Jr. and Joel M. Canino
	Fax: (860) 659-0607
If Griffin then:	Mr. William F. Griffin, Jr.
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607
If Canino then:	Mr. Joel M. Canino
	c/o Gemma Power Systems, LLC
	2461 Main Street
	Glastonbury, Connecticut 06033
	Fax: (860) 659-0607
Counsel for the Corporations, Griffin and Canino:	John W. Beck
	Siegel, O’Connor, O’Donnell & Beck, P.C.
	150 Trumbull Street
	Hartford, Connecticut 06103
	Fax: (860) 724-3550
If Purchaser then:	Argan, Inc.
	One Church Street, Suite 401
	Rockville, Maryland 20950
	Attn: Arthur Trudel
	Fax: (301) 315-0064

6

Counsel for Purchaser:	David B. Law
	Curtin Law Roberson Dunigan
	& Salans, PC
	1900 M Street, N.W.
	Suite 600
	Washington, D.C. 20036
	Fax: 202/530-4411

4.7Severability. Inapplicability or unenforceability of any provision of this Agreement shall not impair the operation or validity of any other provision hereof. If any provision shall be declared inapplicable or unenforceable, there shall be added automatically as part of this Agreement a provision as similar in terms to such inapplicable or unenforceable provision as may be possible and be legal, valid and enforceable.

4.8Acceptance or Approval. By accepting all or approving anything required to be observed, performed, or fulfilled, or to be given to Purchaser pursuant to this Agreement, Purchaser shall not be deemed to have accepted or approved the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision, or condition thereof as to third parties.

4.9Entire Agreement. This Agreement, including all Exhibits and Schedules, constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof, and supersedes all prior agreements and understandings pertaining thereto. No covenant, representation, or condition not expressed in this Agreement shall affect or be deemed to interpret, change or restrict the express provisions hereof and no amendments hereto shall be valid unless made in writing and signed by all parties hereto.

4.10Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute one instrument.

4.11Securities Matters. By executing this Agreement, Purchaser acknowledges that: (i) Purchaser has been advised that the GPS-Connecticut Stock and the GPS-California Stock has not been and will not have been registered under the Act or the applicable securities laws of any state, that the Sellers in transferring such stock to Purchaser will be relying, if applicable, upon the exemption from such registration requirements contained in Section 4(1) or 4(2) of the Act as a transaction by a person other than an issuer, underwriter or dealer and the applicable state exemption; (ii) the GPS-Connecticut Stock and the GPS-California Stock may be “restricted” as that term is used in Rule 144 under the Act as a consequence of which Purchaser may not be able to sell the interests unless such stock is first registered under the Act and any applicable state securities laws or unless an exemption from such registration is, in the opinion of counsel, available; (iii) the GPS-Connecticut Stock and the GPS-California Stock will be acquired by Purchaser for purposes other than “distribution” as that term is used in Section 2(11) of the Act, and (iv) Purchaser will execute, if Sellers so request, an appropriate letter affirming that its intention with respect to the proposed acquisition of the GPS-Connecticut Stock and the GPS-California Stock is that such acquisition be for investment purposes only and not with a view toward resale or distribution thereof.

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4.12Preparation and Filing of SEC Documents. If and whenever, as a result of the transaction contemplated hereunder, Purchaser is under an obligation to provide financial information to, or prepare a filing of any kind with, the United States Securities and Exchange Commission (the “SEC”), the Sellers shall assist Purchaser in preparing any audited financial statements required by the SEC for this purpose. The cost of preparing any such financial statements shall be borne by Purchaser.

4.13Further Assurances. From time to time at or after the Closing, upon request, the parties each will execute and deliver such other instruments of conveyance, assignment, transfer and delivery and take such actions as the other party reasonably may request in order to consummate, complete and carry out the purposes of the transactions contemplated hereby.

4.14Tag Along Rights.

4.14.1 In the event that one or more holders (the "Tag Along Holders") of common stock of Purchaser (including any successor thereof) shall transfer (or agree to transfer) more than fifty percent (50%) of the outstanding common stock of Purchaser, then Purchaser shall use commercially reasonable efforts to include the Sellers and the Other Stockholders (including any assignees or successors thereof), to the extent that they then hold shares of common stock of Purchaser, in said sale upon the same terms and subject to the same conditions as apply to the Tag Along Holders.

4.14.2 In addition, in the event Purchaser proposes any underwritten secondary offering of its common stock, Purchaser will give prior written notice thereof to each Seller and the Other Stockholders offering them the opportunity to include in any such offering such number of shares as they may request in writing not later than ten (10) days before such filing. Upon receipt by Purchaser of any such request, Purchaser shall use reasonable efforts to cause the managing underwriter to include such shares in such secondary offering.

4.15Access to Corporate Records. From and after the Closing, Purchaser shall allow Griffin, Canino, and their respective authorized agents, access to the Corporations’ books and records in the event that the same is necessary in connection with any tax audits or other indemnifiable claims, which audit or indemnifiable claim arose with respect to the Sellers’ period of ownership of the GPS-Connecticut Stock and the GPS-California Stock prior to the Closing Date.

SECTION 5

ESCROW PROVISIONS

5.1Each of the parties to this Agreement recognizes and acknowledges that the Escrow Agent is serving solely as an accommodation to the parties, and each of them agrees that the Escrow Agent shall not be liable to any of the parties for any error of judgment, mistake, or act or omission hereunder, or any matter or thing arising out of its conduct hereunder, except for the Escrow Agent's willful misfeasance or gross negligence. The Escrow Agent shall be entitled to rely upon the authenticity of any signature, and the genuineness and/or validity of any writing received by the Escrow Agent pursuant to or otherwise relating to this Agreement.

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5.2The Escrow Agent is acting, and may continue to act, as counsel to Purchaser in connection with the transactions contemplated by this Agreement.

5.3Each of the parties jointly and severally agrees to indemnify and hold harmless the Escrow Agent from and against any and all costs, claims, damages, or expenses (including, without limitation, reasonable attorneys’ fees and disbursements, whether paid to retained attorneys or representing the fair value of legal services rendered to itself) that may be incurred by the Escrow Agent acting under this Agreement (including, without limitation, any costs incurred by the Escrow Agent pursuant to Section 5.4 hereof) or to which the Escrow Agent may be put in connection with the Escrow Agent acting under this Agreement, except for costs, claims, or damages arising out of the Escrow Agent’s willful misfeasance or gross negligence.

5.4In the event that: (a) the Escrow Agent shall receive contrary instructions from the parties; or (b) any dispute shall arise as to any matter arising under this Agreement; or (c) there shall be any uncertainty as to the meaning or applicability of any of the provisions hereof, or the Escrow Agent’s duties, rights or responsibilities hereunder, or any written instructions received by the Escrow Agent pursuant hereto, the Escrow Agent shall not itself determine such dispute, controversy or uncertainty, but shall either (i) continue to hold the documents and other items placed with it pursuant to the terms of this Agreement until otherwise directed in writing by joint instruction of the parties, or by a final non-appealable court order, or (ii) at its option, at any time that such dispute, controversy or uncertainty continues, deposit said documents and other items into any court having appropriate jurisdiction.

5.5Upon the delivery or disposition of the documents and other items placed with it in accordance with the provisions of this Agreement, the Escrow Agent shall thereupon be relieved of, and discharged and released from, any and all liability hereunder and with respect to said documents and other items and Escrow Agent’s obligations under this Agreement shall be deemed to have been completed.

[Signatures on following pages]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ATTEST:		ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann
		Name: Rainer Bosselmann Title: Chairman and CEO

ATTEST:		GEMMA POWER, INC.
	By:	/s/ William F. Griffin, Jr.
		William F. Griffin, Jr., President

ATTEST:		GEMMA POWER SYSTEMS CALIFORNIA, INC.
	By:	/s/ William F. Griffin, Jr.
		William F. Griffin, Jr., President

WITNESS:
	By:	/s/ William F. Griffin, Jr.
		WILLIAM F. GRIFFIN, JR.

WITNESS:
	/s/ Joel M. Canino
	JOEL M. CANINO

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Escrow Agent hereby executes the foregoing Agreement for the sole purpose of agreeing to the provisions of Section 3.2 thereof, subject to the provisions of Section 5 thereof.

ESCROW AGENT:

	CURTIN LAW ROBERSON DUNIGAN & SALANS, P.C.
By:	/s/ David B. Law
	David B. Law, Vice President

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EX-10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 8^th December, 2006, by and between GEMMA POWER SYSTEMS, LLC, a Connecticut limited liability company (the “Company”), and JOEL M. CANINO (the “Employee”).

RECITALS:

R-1.Argan, Inc., a Delaware corporation (“Argan”), has acquired all of the membership interests of the Company pursuant to that certain Membership Interest Purchase Agreement (the “PurchaseAgreement”), of even date herewith, by and among Argan, the Company, Gemma Power, Inc., a Connecticut corporation (“GPS-Connecticut”), Gemma Power Systems California, Inc., a California corporation (“GPS-California,” and together with GPS-Connecticut, the “Affiliates”), the Employee and William F. Griffin, Jr.; and has acquired and all of the issued and outstanding shares of capital stock of the Affiliates pursuant to that certain Stock Purchase Agreement, of even date herewith, by and among Argan, the Affiliates, the Employee and William F. Griffin, Jr.

R-2.The Company and the Affiliates are in the business of engineering and constructing power energy systems, and providing consulting, owner’s representative, operating, and maintenance services to the energy market (collectively, the “Business”).

R-3.The Employee possesses intimate knowledge of the Business as a result of his long-term employment by the Company.

R-4.The Company wishes to continue to employ the Employee, and the Employee wishes to accept such continued employment, subject to and in accordance with the following terms and conditions.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Employment. The Company hereby agrees to continue to employ the Employee, and the Employee hereby agrees to accept such continued employment, subject to the terms and conditions set forth in this Agreement. This Agreement supersedes and replaces any previous oral or written agreement concerning the Employee’s employment by the Company.

2.Duties of the Employee. During the “Term” (as defined below) of employment of the Employee, the Employee shall serve as a senior executive and Vice Chairman of the Board of the Company, and shall faithfully and diligently perform all services as may be assigned to him by the Board of Directors of the Company (the “Board”), and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Employee shall perform all services to be rendered by him hereunder to the best of his ability and use his best efforts to promote the interests of the Company and the Affiliates. Notwithstanding the foregoing, it shall not be a breach or violation of this Agreement for the Employee to manage personal investments so long as such activities do not significantly interfere with or significantly detract from the performance of the Employee’s responsibilities to the Company in accordance with this Agreement.

3.Term of Employment. Employment of the Employee pursuant to the terms and provisions of this Agreement shall commence on the date of Closing, as defined in the Purchase Agreement (the “Effective Date”), and shall continue for a term of eighteen (18) months thereafter (the “Initial Term”), unless earlier terminated as provided in this Agreement. At the end of the Initial Term, the Employee’s employment hereunder shall automatically renew for successive one year terms (each, a “Renewal Term”), subject to earlier termination as provided in this Agreement, unless the Company or the Employee delivers written notice to the other at least three (3) months prior to the expiration date of the Initial Term or any Renewal Term, as the case may be, of its or his election not to renew the term of employment. The period during which the Employee shall be employed by the Company pursuant to the terms and provisions of this Agreement is sometimes referred to herein as the “Term.”

4.Compensation.

4.1 Salary. The Company shall pay the Employee compensation at the annual rate of $310,000 (the “Salary”) during the Initial Term, payable in installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. Not later than four (4) months prior to the expiration of the Initial Term or of any Renewal Term, as the case may be, Argan and the Employee shall commence discussions aimed at determining a mutually acceptable Salary for the then impending Renewal Term.

4.2 Bonus. In addition to Salary, the Employee shall be eligible for bonus compensation as determined by the Board based upon the Employee’s performance and the results of the Company’s operations.

5.Benefit Plans; Insurance.

5.1Benefit Plans. The Employee shall be permitted to participate in all employee medical, retirement and insurance benefit plans applicable to officers of the Company, and such other plans as may from time to time be made available or applicable to the Company, consistent with the policies of the Company.

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5.2 Key-Man Term Life Insurance. The Company will maintain and will pay the premiums on a key-man term life insurance policy on the life of the Employee. Such policy shall (a) name Argan as sole beneficiary, (b) be in the amount of not less than Five Million Dollars ($5,000,000), and (c) remain in full force and effect for the Term, or until the expiration of the term of said policy, if sooner. Each of the Employee and the Company agrees to take whatever action is reasonably required by the insurer to maintain such policy in full force and effect for such time. Upon the termination of the Employee’s employment hereunder for any reason, the Company shall assign to the Employee any and all rights which it may have in and to said insurance policy for the value of the prepaid unearned premium thereof.

6.Vacation. The Employee shall be entitled to unlimited paid vacation during the Term; provided that the Employee is available by telephone during such periods of paid vacation; and provided that the Employee notifies the Company a reasonable period in advance of taking any such vacation and schedules same at a time and in a manner that will not adversely affect the Company.

7.Expenses. The Company shall reimburse the Employee, consistent with the Company’s expense reimbursement policies and procedures and subject to receipt of appropriate documentation, for all reasonable and necessary out-of-pocket travel, business entertainment, and other business expenses incurred or expended by the Employee incident to the performance of his duties hereunder.

8.Working Facilities; Parking. During the Term the Company shall furnish the Employee with an office, secretarial help and such other facilities and services suitable to his position and adequate for the performance of his duties hereunder; and will provide the Employee with and pay for covered (if reasonably available) and reserved parking.

9.Withholding. Notwithstanding anything in this Agreement to the contrary, all payments required to be made by the Company hereunder to the Employee or his estate or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes and withholding as required by law, provided it is satisfied that all requirements of law affecting its responsibilities to withhold have been satisfied.

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10.Termination of Employment.

10.1For Cause. The Company may terminate the Employee’s employment at any time for “Cause” (as defined below). For the purposes of this Agreement, “Cause” shall mean (i) habitual drunkenness or any substance abuse which adversely affects the Employee’s performance of his job responsibilities; (ii) any illegal use of drugs; (iii) commission of a felony (including, without limitation, any violation of the Foreign Corrupt Practices Act); (iv) dishonesty materially relating to the Employee’s employment; (v) any misconduct by the Employee which would cause the Company to violate any state or federal law relating to sexual harassment or age, sex or other prohibited discrimination, or any intentional violation of any written policy of the Company or any successor entity adopted in respect to any such law; (vi) any other conduct in the performance of the Employee’s employment which the Employee knows or should know (either as a result of a prior warning by the Company, custom within the industry or the flagrant nature of the conduct) violates applicable law or causes the Company to violate applicable law in any material respect; (vii) failure to follow the lawful written instructions of the Board, if such failure continues uncured for a period of 10 days after receipt by the Employee of written notice from the Company stating that continuation of such failure would constitute grounds for termination for Cause; (viii) any violation of the confidentiality or non-competition provisions hereof; or (ix) any other material violation of this Agreement.

10.2Upon Death or Disability. The employment of the Employee shall automatically terminate upon the death of the Employee and may be terminated by the Company upon the “Disability” (as defined below) of the Employee. For purposes of this Section 10.2, the Employee shall be deemed “Disabled” (and termination of his employment shall be deemed to be due to such “Disability”) if an independent medical doctor (selected by the Company’s applicable health or disability insurer) certifies that the Employee, for a cumulative period of more than 120 days during any 365-day period, has been disabled in a manner which seriously interferes with his ability to perform the essential functions of his job even with a reasonable accommodation to the extent required by law. Any refusal by the Employee to submit to a medical examination for the purpose of certifying Disability shall be deemed conclusively to constitute evidence of the Employee’s Disability.

10.3For Convenience of the Company. Notwithstanding any other provisions of this Agreement, the Company shall have the right, upon ninety (90) days written notice to the Employee, to terminate the Employee’s employment at the “Company’s Convenience” (i.e., for reasons other than Cause, resignation for reasons other than “Good Reason” [as defined below], death or Disability). For purposes hereof, resignation by the Employee for Good Reason also shall be deemed to constitute termination by the Company at the Company’s Convenience.

10.4Resignation; Good Reason.

(a)The Employee shall have the right to resign at any time upon ninety (90) days’ written notice to the Company.

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(b)For the purposes of this Agreement, resignation by the Employee as a result of the following shall be deemed to constitute resignation for “Good Reason,” provided that and on condition that the Employee has not consented to the action constituting Good Reason and such resignation occurs within 15 days following the occurrence of such action (or, in the case of clause (iv) below, following the expiration of the 45-day cure period), and that the Employee is not Disabled (or incapacitated in a manner which would, with the passage of time and appropriate doctor’s certification, constitute Disability) at the time of resignation: (i) a transfer of the Company’s offices, or a transfer of the Employee (other than on a temporary basis), to a location which would increase the Employee’s commute (by the most direct route) from his residence as of the date hereof by more than 25 miles in each direction, or (ii) a material adverse change made by the Company to the Employee’s duties, responsibilities and/or working conditions such that such duties, responsibilities and/or working conditions are inappropriate and not customary for a president and chief executive officer of a similarly situated company, or (iii) a material breach by the Company of this Agreement which breach continues uncured for a period of 45 days after receipt by the Company of written notice thereof from the Employee specifying the breach.

11.Effect of Termination on Compensation.

11.1Termination for Cause; Resignation. In the event (i) the Employee’s employment with the Company is terminated by the Company for Cause, or (ii) the Employee resigns (for reasons other than Good Reason), the Company shall have no further liability to the Employee hereunder, whether for salary, benefits, or otherwise, other than for salary and benefits accrued, reimbursement of expenses properly incurred, payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination or resignation, and any other benefits required by applicable law (e.g., COBRA) for which the Employee may be eligible.

11.2Death or Disability. In the event the Employee’s employment with the Company terminates as a result of the death of the Employee or is terminated by the Company as a result of the Disability of the Employee, the Employee or, in the event of his death, his surviving spouse (or his estate, if there is no surviving spouse), shall be entitled to receive his salary and benefits accrued, reimbursement of expenses properly incurred and payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination, as well as applicable health, disability or death benefits, if any, offered by the Company at the time consistent with the policies of the Company and subject to the eligibility requirements of such benefits.

11.3.The Company’s Convenience or Good Reason.

(a)In the event the Employee’s employment with the Company is terminated by the Company at the Company’s Convenience or by the Employee for Good Reason, then the Employee shall be entitled to (i) continue to receive his Salary for the duration of the Term, and (ii) continue to participate in the Company’s health and benefit plans and programs described in Section 6 (but specifically excluding the vacation benefit described in Section 7) for the duration of the Term (provided that continued participation during such period does not cause a plan, program or practice to cease to be qualified under any applicable law or regulation and is permitted by the plan or program, and that continuation under any such plan, program or practice shall be limited to benefits customarily provided by the Company to its senior executives during the period of such continuation, and provided further that any such plan or program shall be subject to modifications applicable to executive-level employees generally). Such compensation, allowances and benefits shall continue to be paid or provided at the times and in the manner consistent with the standard payroll practices of the Company for its active executive-level employees. In addition, the Employee shall be entitled to receive his salary and benefits accrued, reimbursement of expenses properly incurred and payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination. Except as provided in this Section, no other compensation or benefits hereunder shall be payable during the balance of the Term. The foregoing benefits are in lieu, inter alia, of any notice obligation on the part of the Company.

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(b)As a condition to receiving the severance benefits described in clause (a) above, the Employee shall be required to execute and deliver to the Company, and not to have revoked, the written confirmation described in Section 13 and a general release of all claims the Employee may have against the Company or Argan and their respective subsidiaries and affiliates, and the officers, directors, shareholders and agents of each of them, in each case in such form as may be reasonably requested by the Company, including without limitation all claims for wrongful termination, for employment discrimination under Title VII of the Civil Rights Act of 1964, as amended, and claims under the Americans with Disabilities Act of 1990, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Civil Rights Act of 1866, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974 and any equivalent state, local and municipal laws, rules and regulations). Notwithstanding the foregoing, the Employee shall not be required to release any claims (i) for unpaid compensation or other benefits remaining unpaid by the Company at the time of termination, but may be required to agree upon and acknowledge the amount, if any, thereof remaining unpaid if such amount is calculable at the time, and (ii) which the Employee may have in connection with any unexercised Stock Options granted pursuant to Section 5.

(c)Upon the occurrence of any material breach of this Agreement after the effective date of employment termination (it being understood that, without limitation, any breach of Sections 12, 13 or 14 of this Agreement shall be deemed material), the Company shall have no further liability to pay severance benefits hereunder and may, in addition to exercising any other remedies it may have hereunder or under law, immediately discontinue payment of remaining unpaid severance benefits.

11.4Adjustments to Comply with American Jobs Creation Act. In the event any of the severance payment provisions of this Section should prove to be inconsistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, or the regulations thereunder, the Company and the Employee shall endeavor to amend those severance payment provisions in order to eliminate any inconsistency with Section 409A while ensuring, to the greatest extent possible, that the Employee will continue to be entitled to the benefits provided under this Agreement without increase in the economic cost to either party.

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12.Confidentiality. The Employee recognizes and acknowledges that certain information possessed by the Company and its affiliates constitutes valuable, special, and unique proprietary information and trade secrets. Accordingly, the Employee shall not, during the term of his employment with the Company, divulge, use, furnish, disclose or make available to any person, whether or not a competitor of the Company, any confidential or proprietary information concerning the assets, business, or affairs of the Company, of any affiliate of the Company or of its suppliers, customers, licensees or licensors, including, without limitation, any information regarding trade secrets and information (whether or not constituting trade secrets) concerning sources of supply, costs, pricing practices, financial data, business plans, employee information, manufacturing processes, product designs, production applications and technical processes (hereinafter called “Confidential Information”), except as may be required by law or as may be required in the ordinary course of performing his duties hereunder. The foregoing shall not be applicable to any information which now is or hereafter shall be in the public domain other than through the fault of the Employee. Upon the expiration or termination of the Employee’s employment, for any reason, whether voluntary or involuntary and whether by the Company or the Employee, or at any time the Company may request, the Employee shall (a) surrender to the Company all documents and data of any kind (including data in machine-readable form) or any reproductions (in whole or in part) of any items relating to the Confidential Information, as well as information stored in an electronic or digital format, containing or embodying Confidential Information including without limitation internal and external business forms, manuals, notes, customer lists, and computer files and programs (including information stored in any electronic or digital format), and shall not make or retain any copy or extract of any of the foregoing, and (b) will confirm in writing that (i) no Confidential Information exists on any computers, computer storage devices or other electronic media that were at any time within the Employee’s control (other than those which remain at, or have been returned to, the Company) and (ii) he has not disclosed any Confidential Information to others outside of the Company in violation of this Section. The Company shall have the right at any time at its option to replace the hard drive in the Employee’s laptop or other computer supplied by the Company with another equivalent hard drive. As used in this Agreement, “affiliate” means, with respect to the Company or any other entity, any person or entity controlling, controlled by or under common control with, the Company or such other entity, including without limitation Argan, and “control” for such purpose means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities or voting interests, by contract or otherwise.

13.Rights in the Company’s Property; Inventions.

(a)The Employee hereby recognizes the Company’s proprietary rights in the tangible and intangible property of the Company and acknowledges that notwithstanding the relationship of employment, the Employee will not obtain or acquire, and has not obtained or acquired, through such employment any personal property rights in any of the property of the Company, including without limitation any writing, communications, manuals, documents, instruments, contracts, agreements, files, literature, data, technical information, secrets, formulas, products, methods, mailing lists, business models, business plans, procedures, processes, devices, apparatuses, trademarks, trade names, trade styles, service marks, logos, copyrights, patents, or other matters which are the property of the Company.

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(b)The Employee agrees that during the Term of his employment with the Company and for a period of three (3) months thereafter, any and all discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) (“Inventions”), whether or not patentable, copyrightable or reduced to writing, which the Employee may have conceived or made, or may conceive or make, either alone or in conjunction with others and whether or not during working hours or by the use of the facilities of the Company, which are related or in any way connected with the Business of the Company and the Affiliates or any affiliate, are and shall be the sole and exclusive property of the Company. The Employee shall promptly disclose all such Inventions to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem necessary to protect or perfect its rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. The Employee hereby appoints the Company as his attorney-in-fact to execute on his behalf any assignments or other documents deemed necessary by the Company to protect or perfect its rights to any Inventions.

14.Non-Competition, Non-Solicitation Covenants.

14.1Covenant Not to Compete. At all times during the Term and for a period of two years after the Term (the “Restrictive Period”), the Employee shall not, directly or indirectly, alone or with others, engage in any competition with, or have any financial or ownership interest in any sole proprietorship, corporation, company, partnership, association, venture or business or any other person or entity (whether as an employee, officer, director, partner, manager, member, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) competes with the Business of the Company and the Affiliates; provided that such provision shall not apply to (i) the Employee’s ownership of Argan stock, (ii) the Employee’s ownership of interests in entities which may develop, own and operate (but not design or build) power plants, or (iii) the acquisition by the Employee, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the Nasdaq Stock Market, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Employee does not control, acquire a controlling interest in, or become a member of a group that exercises direct or indirect control of, more than 5% of any class of capital stock or other indicia of ownership of such issuer. For purposes of clause (ii) of this Section 14.1 above, and for clause (b) of Section 14.2 below, “develop” or “development of” power plants shall mean the usual and customary actions taken by an owner or potential owner of a power plant to obtain licenses, permits or other governmental approvals required in order to own and operate a power plant, but not the designing or constructing of a power plant.

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14.2Non-Solicitation. At all times during the Restrictive Period, the Employee shall not, directly or indirectly, for himself or for any other person, firm, corporation, company, partnership, association, venture or business or any other person or entity: (a) solicit for employment, employ or attempt to employ or enter into any contractual arrangement with any employee or former employee (which, for purposes of this Section 14.2 shall mean anyone employed during the 24 month period ending on the date of termination of the Employee’s employment with the Company) of the Company, the Affiliates, or Argan or any affiliate or subsidiary of Argan, except Raymond J. Bednarz and Fred Kresse; and/or (b) call on or solicit any of the actual or targeted prospective customers or clients, or any actual distributors or suppliers, of the Company (except in connection with the Employee’s development, ownership and operation (but not the designing or building) of power plants), the Affiliates, or Argan or any affiliate or subsidiary of Argan on behalf of himself or on behalf of any person or entity in connection with any business that competes with the Business of the Company and the Affiliates, nor shall the Employee make known the names or addresses or other contact information of such actual or prospective customers or clients, or any such actual distributors or suppliers, or any information relating in any manner to the Company’s, or the Affiliates’ or Argan’s or any subsidiary or affiliate of Argan’s trade or business relationships with such actual or prospective customers or clients, or any such actual distributors or suppliers, other than in connection with the performance by the Employee of his duties under this Agreement.

15.Acknowledgment by the Employee. The Employee acknowledges and confirms that the restrictive covenants contained in Sections 12, 13 and 14 hereof (including without limitation the length of the term of the provisions of Section 14) are required by the Company as an inducement to enter into this Agreement, are reasonably necessary to protect the legitimate business interests of the Company, and are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Employee further acknowledges that the restrictions contained in Sections 12, 13 and 14 hereof are intended to be, and shall be, for the benefit of and shall be enforceable by the Company and its successors and assigns. The Employee expressly agrees that upon any breach or violation of the provisions of Sections 12, 13, or 14 hereof, the Company shall be entitled, as a matter of right, in addition to any other rights or remedies it may have, to: (a) temporary and/or permanent injunctive relief in any court of competent jurisdiction as described in Section 16 hereof; and (b) such damages as are provided at law or in equity. The existence of any claim or cause of action against any of the Company, the Affiliates, or Argan or their respective subsidiaries or affiliates, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement of any of the restrictions contained in Sections 12, 13 or 14 hereof.

16.Enforcement; Modification.

16.1Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Employee of any of the covenants contained in Sections 12, 13 or 14 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Employee recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Sections 12, 13 or 14 of this Agreement by the Employee or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.

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16.2Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of Sections 12, 13 or 14 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of Sections 12, 13 or 14 within the jurisdiction of such court, such provision shall be interpreted or reformed and enforced as if it provided for the maximum restriction permitted under such governing law.

16.3Extension of Time. If the Employee shall be in violation of any provision of Sections 12, 13 or 14, then each time limitation set forth in Sections 12, 13 or 14 shall be extended for a period of time equal to the period of time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in Sections 12, 13 and 14 shall be extended for a period of time equal to the pendency of such proceeding including all appeals by either of the Sellers.

16.4Survival. The provisions of Sections 12, 13 and 14 shall survive the termination of this Agreement.

16.5Purchase Agreement. Notwithstanding anything to the contrary contained in this Agreement, nothing herein shall limit or otherwise affect the restrictive covenants applicable to the Employee, as Seller, under and pursuant to the terms, covenants and conditions of the Purchase Agreement, including without limitation the covenant not to compete for a period of five years from the Closing Date (as defined in the Purchase Agreement), all of which such restrictive covenants shall remain in full force and effect in accordance with the terms and conditions of the Purchase Agreement.

17.Assignment. The Company shall have the right to assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said corporation or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Employee may not assign or transfer this Agreement or any rights or obligations hereunder.

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18.Benefits; Binding Effect. This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where permitted and applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.

19.Severability. The invalidity of any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, provisions or provisions, section or sections or article or articles had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.

20.Waivers. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

21.Damages; Attorneys Fees. Nothing contained herein shall be construed to prevent the Company or the Employee from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto seeks to collect any damages resulting from, or the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable costs and attorneys’ fees of the other party.

22.Section Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

23.No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, and the parties hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

24.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same.

25.Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Connecticut, without regard to principles of conflict of laws.

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26.Jurisdiction and Venue. Each of the parties irrevocably and unconditionally: (a) agrees that any suit, action or legal proceeding arising out of or relating to this Agreement which is expressly permitted by the terms of this Agreement to be brought in a court of law, shall be brought in the Superior Court of the State of Connecticut for the Judicial District of Hartford or in the United States District Court for the District of Connecticut; (b) consents to the jurisdiction of each such court in any such suit, action or proceeding; (c) waives any objection which it or he may have to the laying of venue of any such suit, action or proceeding in any of such courts; and (d) agrees that service of any court papers may be effected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws or court rules in such courts.

27.Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Employee and the Company (or any of its affiliates) with respect to such subject matter. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Employee.

28.Notices. All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested, sent by overnight courier, or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three days after deposit in the U.S. mail. Notice shall be sent: (a) if to the Company, addressed to the Company, One Church Street, Suite 401, Rockville, Maryland 20850, Attention: Arthur F. Trudel; and (b) if to the Employee, to his address as reflected on the payroll records of the Company, or to such other address as either party shall request by notice to the other in accordance with this provision.

[SIGNATURES ON NEXT PAGE]

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IN WITNESS WHEREOF, each of the undersigned has executed, or has caused its duly authorized representative to execute, this Agreement as of the date first above written.

THE COMPANY:
GEMMA POWER SYSTEMS, LLC
By:	/s/ William F. Griffin, Jr.
	Name: William F. Griffin, Jr. Title: Manager

THE EMPLOYEE:
	/s/ Joel M. Canino
	JOEL M. CANINO

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EX-10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 8^th December, 2006, by and between GEMMA POWER SYSTEMS, LLC, a Connecticut limited liability company (the “Company”), and WILLIAM F. GRIFFIN, JR. (the “Employee”).

RECITALS:

R-1.Argan, Inc., a Delaware corporation (“Argan”), has acquired all of the membership interests of the Company pursuant to that certain Membership Interest Purchase Agreement (the “PurchaseAgreement”), of even date herewith, by and among Argan, the Company, Gemma Power, Inc., a Connecticut corporation (“GPS-Connecticut”), Gemma Power Systems California, Inc., a California corporation (“GPS-California,” and together with GPS-Connecticut, the “Affiliates”), the Employee and William F. Griffin, Jr.; and has acquired and all of the issued and outstanding shares of capital stock of the Affiliates pursuant to that certain Stock Purchase Agreement, of even date herewith, by and among Argan, the Affiliates, the Employee and William F. Griffin, Jr.

R-2.The Company and the Affiliates are in the business of engineering and constructing power energy systems, and providing consulting, owner’s representative, operating, and maintenance services to the energy market (collectively, the “Business”).

R-3.The Employee possesses intimate knowledge of the Business as a result of his long-term employment by the Company.

R-4.The Company wishes to continue to employ the Employee, and the Employee wishes to accept such continued employment, subject to and in accordance with the following terms and conditions.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Employment. The Company hereby agrees to continue to employ the Employee, and the Employee hereby agrees to accept such continued employment, subject to the terms and conditions set forth in this Agreement. This Agreement supersedes and replaces any previous oral or written agreement concerning the Employee’s employment by the Company.

2.Duties of the Employee. During the “Term” (as defined below) of employment of the Employee, the Employee shall serve as President and Chief Operating Officer of the Company, and shall faithfully and diligently perform all services as may be assigned to him by the Board of Directors of the Company (the “Board”), and shall exercise such power and authority as may from time to time be delegated to him by the Board. The Employee shall devote his time and attention to the business and affairs of the Company, perform all services to be rendered by him hereunder to the best of his ability, and use his best efforts to promote the interests of the Company and the Affiliates. Notwithstanding the foregoing, it shall not be a breach or violation of this Agreement for the Employee to manage personal investments so long as such activities do not significantly interfere with or significantly detract from the performance of the Employee’s responsibilities to the Company in accordance with this Agreement.

3.Term of Employment. Employment of the Employee pursuant to the terms and provisions of this Agreement shall commence on the date of Closing, as defined in the Purchase Agreement (the “Effective Date”), and shall continue for a term of eighteen (18) months thereafter (the “Initial Term”), unless earlier terminated as provided in this Agreement. At the end of the Initial Term, the Employee’s employment hereunder shall automatically renew for successive one year terms (each, a “Renewal Term”), subject to earlier termination as provided in this Agreement, unless the Company or the Employee delivers written notice to the other at least three (3) months prior to the expiration date of the Initial Term or any Renewal Term, as the case may be, of its or his election not to renew the term of employment. The period during which the Employee shall be employed by the Company pursuant to the terms and provisions of this Agreement is sometimes referred to herein as the “Term.”

4.Compensation.

4.1 Salary. The Company shall pay the Employee compensation at the annual rate of $430,000 (the “Salary”) during the Initial Term, payable in installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. Not later than four (4) months prior to the expiration of the Initial Term or of any Renewal Term, as the case may be, Argan and the Employee shall commence discussions aimed at determining a mutually acceptable Salary for the then impending Renewal Term.

4.2 Bonus. In addition to Salary, the Employee shall be eligible for bonus compensation as determined by the Board based upon the Employee’s performance and the results of the Company’s operations.

5.Benefit Plans; Insurance.

5.1Benefit Plans. The Employee shall be permitted to participate in all employee medical, retirement and insurance benefit plans applicable to officers of the Company, and such other plans as may from time to time be made available or applicable to the Company, consistent with the policies of the Company.

5.2 Key-Man Term Life Insurance. The Company will maintain and will pay the premiums on a key-man term life insurance policy on the life of the Employee. Such policy shall (a) name Argan as sole beneficiary, (b) be in the amount of not less than Five Million Dollars ($5,000,000), and (c) remain in full force and effect for the Term, or until the expiration of the term of said policy, if sooner. Each of the Employee and the Company agrees to take whatever action is reasonably required by the insurer to maintain such policy in full force and effect for such time. Upon the termination of the Employee’s employment hereunder for any reason, the Company shall assign to the Employee any and all rights which it may have in and to said insurance policy for the value of the prepaid unearned premium thereof.

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6.Vacation. The Employee shall be entitled to unlimited paid vacation during the Term; provided that the Employee is available by telephone during such periods of paid vacation; and provided that the Employee notifies the Company a reasonable period in advance of taking any such vacation and schedules same at a time and in a manner that will not adversely affect the Company.

7.Expenses. The Company shall reimburse the Employee, consistent with the Company’s expense reimbursement policies and procedures and subject to receipt of appropriate documentation, for all reasonable and necessary out-of-pocket travel, business entertainment, and other business expenses incurred or expended by the Employee incident to the performance of his duties hereunder.

8.Working Facilities; Parking. During the Term the Company shall furnish the Employee with an office, secretarial help and such other facilities and services suitable to his position and adequate for the performance of his duties hereunder; and will provide the Employee with and pay for covered (if reasonably available) and reserved parking.

9.Withholding. Notwithstanding anything in this Agreement to the contrary, all payments required to be made by the Company hereunder to the Employee or his estate or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes and withholding as required by law, provided it is satisfied that all requirements of law affecting its responsibilities to withhold have been satisfied.

10.Termination of Employment.

10.1For Cause. The Company may terminate the Employee’s employment at any time for “Cause” (as defined below). For the purposes of this Agreement, “Cause” shall mean (i) habitual drunkenness or any substance abuse which adversely affects the Employee’s performance of his job responsibilities; (ii) any illegal use of drugs; (iii) commission of a felony (including, without limitation, any violation of the Foreign Corrupt Practices Act); (iv) dishonesty materially relating to the Employee’s employment; (v) any misconduct by the Employee which would cause the Company to violate any state or federal law relating to sexual harassment or age, sex or other prohibited discrimination, or any intentional violation of any written policy of the Company or any successor entity adopted in respect to any such law; (vi) any other conduct in the performance of the Employee’s employment which the Employee knows or should know (either as a result of a prior warning by the Company, custom within the industry or the flagrant nature of the conduct) violates applicable law or causes the Company to violate applicable law in any material respect; (vii) failure to follow the lawful written instructions of the Board, if such failure continues uncured for a period of 10 days after receipt by the Employee of written notice from the Company stating that continuation of such failure would constitute grounds for termination for Cause; (viii) any violation of the confidentiality or non-competition provisions hereof; or (ix) any other material violation of this Agreement.

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10.2Upon Death or Disability. The employment of the Employee shall automatically terminate upon the death of the Employee and may be terminated by the Company upon the “Disability” (as defined below) of the Employee. For purposes of this Section 10.2, the Employee shall be deemed “Disabled” (and termination of his employment shall be deemed to be due to such “Disability”) if an independent medical doctor (selected by the Company’s applicable health or disability insurer) certifies that the Employee, for a cumulative period of more than 120 days during any 365-day period, has been disabled in a manner which seriously interferes with his ability to perform the essential functions of his job even with a reasonable accommodation to the extent required by law. Any refusal by the Employee to submit to a medical examination for the purpose of certifying Disability shall be deemed conclusively to constitute evidence of the Employee’s Disability.

10.3For Convenience of the Company. Notwithstanding any other provisions of this Agreement, the Company shall have the right, upon ninety (90) days written notice to the Employee, to terminate the Employee’s employment at the “Company’s Convenience” (i.e., for reasons other than Cause, resignation for reasons other than “Good Reason” [as defined below], death or Disability). For purposes hereof, resignation by the Employee for Good Reason also shall be deemed to constitute termination by the Company at the Company’s Convenience.

10.4Resignation; Good Reason.

(a)The Employee shall have the right to resign at any time upon ninety (90) days’ written notice to the Company.

(b)For the purposes of this Agreement, resignation by the Employee as a result of the following shall be deemed to constitute resignation for “Good Reason,” provided that and on condition that the Employee has not consented to the action constituting Good Reason and such resignation occurs within 15 days following the occurrence of such action (or, in the case of clause (iv) below, following the expiration of the 45-day cure period), and that the Employee is not Disabled (or incapacitated in a manner which would, with the passage of time and appropriate doctor’s certification, constitute Disability) at the time of resignation: (i) a transfer of the Company’s offices, or a transfer of the Employee (other than on a temporary basis), to a location which would increase the Employee’s commute (by the most direct route) from his residence as of the date hereof by more than 25 miles in each direction, or (ii) a material adverse change made by the Company to the Employee’s duties, responsibilities and/or working conditions such that such duties, responsibilities and/or working conditions are inappropriate and not customary for a president and chief executive officer of a similarly situated company, or (iii) a material breach by the Company of this Agreement which breach continues uncured for a period of 45 days after receipt by the Company of written notice thereof from the Employee specifying the breach.

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11.Effect of Termination on Compensation.

11.1Termination for Cause; Resignation. In the event (i) the Employee’s employment with the Company is terminated by the Company for Cause, or (ii) the Employee resigns (for reasons other than Good Reason), the Company shall have no further liability to the Employee hereunder, whether for salary, benefits, or otherwise, other than for salary and benefits accrued, reimbursement of expenses properly incurred, payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination or resignation, and any other benefits required by applicable law (e.g., COBRA) for which the Employee may be eligible.

11.2Death or Disability. In the event the Employee’s employment with the Company terminates as a result of the death of the Employee or is terminated by the Company as a result of the Disability of the Employee, the Employee or, in the event of his death, his surviving spouse (or his estate, if there is no surviving spouse), shall be entitled to receive his salary and benefits accrued, reimbursement of expenses properly incurred and payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination, as well as applicable health, disability or death benefits, if any, offered by the Company at the time consistent with the policies of the Company and subject to the eligibility requirements of such benefits.

11.3.The Company’s Convenience or Good Reason.

(a)In the event the Employee’s employment with the Company is terminated by the Company at the Company’s Convenience or by the Employee for Good Reason, then the Employee shall be entitled to (i) continue to receive his Salary for the duration of the Term, and (ii) continue to participate in the Company’s health and benefit plans and programs described in Section 6 (but specifically excluding the vacation benefit described in Section 7) for the duration of the Term (provided that continued participation during such period does not cause a plan, program or practice to cease to be qualified under any applicable law or regulation and is permitted by the plan or program, and that continuation under any such plan, program or practice shall be limited to benefits customarily provided by the Company to its senior executives during the period of such continuation, and provided further that any such plan or program shall be subject to modifications applicable to executive-level employees generally). Such compensation, allowances and benefits shall continue to be paid or provided at the times and in the manner consistent with the standard payroll practices of the Company for its active executive-level employees. In addition, the Employee shall be entitled to receive his salary and benefits accrued, reimbursement of expenses properly incurred and payment for all accrued vacation calculated in accordance with the Company’s standard payroll practices, in each case through the date of termination. Except as provided in this Section, no other compensation or benefits hereunder shall be payable during the balance of the Term. The foregoing benefits are in lieu, inter alia, of any notice obligation on the part of the Company.

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(b)As a condition to receiving the severance benefits described in clause (a) above, the Employee shall be required to execute and deliver to the Company, and not to have revoked, the written confirmation described in Section 13 and a general release of all claims the Employee may have against the Company or Argan and their respective subsidiaries and affiliates, and the officers, directors, shareholders and agents of each of them, in each case in such form as may be reasonably requested by the Company, including without limitation all claims for wrongful termination, for employment discrimination under Title VII of the Civil Rights Act of 1964, as amended, and claims under the Americans with Disabilities Act of 1990, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Civil Rights Act of 1866, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974 and any equivalent state, local and municipal laws, rules and regulations). Notwithstanding the foregoing, the Employee shall not be required to release any claims (i) for unpaid compensation or other benefits remaining unpaid by the Company at the time of termination, but may be required to agree upon and acknowledge the amount, if any, thereof remaining unpaid if such amount is calculable at the time, and (ii) which the Employee may have in connection with any unexercised Stock Options granted pursuant to Section 5.

(c)Upon the occurrence of any material breach of this Agreement after the effective date of employment termination (it being understood that, without limitation, any breach of Sections 12, 13 or 14 of this Agreement shall be deemed material), the Company shall have no further liability to pay severance benefits hereunder and may, in addition to exercising any other remedies it may have hereunder or under law, immediately discontinue payment of remaining unpaid severance benefits.

11.4Adjustments to Comply with American Jobs Creation Act. In the event any of the severance payment provisions of this Section should prove to be inconsistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, or the regulations thereunder, the Company and the Employee shall endeavor to amend those severance payment provisions in order to eliminate any inconsistency with Section 409A while ensuring, to the greatest extent possible, that the Employee will continue to be entitled to the benefits provided under this Agreement without increase in the economic cost to either party.

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12.Confidentiality. The Employee recognizes and acknowledges that certain information possessed by the Company and its affiliates constitutes valuable, special, and unique proprietary information and trade secrets. Accordingly, the Employee shall not, during the term of his employment with the Company, divulge, use, furnish, disclose or make available to any person, whether or not a competitor of the Company, any confidential or proprietary information concerning the assets, business, or affairs of the Company, of any affiliate of the Company or of its suppliers, customers, licensees or licensors, including, without limitation, any information regarding trade secrets and information (whether or not constituting trade secrets) concerning sources of supply, costs, pricing practices, financial data, business plans, employee information, manufacturing processes, product designs, production applications and technical processes (hereinafter called “Confidential Information”), except as may be required by law or as may be required in the ordinary course of performing his duties hereunder. The foregoing shall not be applicable to any information which now is or hereafter shall be in the public domain other than through the fault of the Employee. Upon the expiration or termination of the Employee’s employment, for any reason, whether voluntary or involuntary and whether by the Company or the Employee, or at any time the Company may request, the Employee shall (a) surrender to the Company all documents and data of any kind (including data in machine-readable form) or any reproductions (in whole or in part) of any items relating to the Confidential Information, as well as information stored in an electronic or digital format, containing or embodying Confidential Information including without limitation internal and external business forms, manuals, notes, customer lists, and computer files and programs (including information stored in any electronic or digital format), and shall not make or retain any copy or extract of any of the foregoing, and (b) will confirm in writing that (i) no Confidential Information exists on any computers, computer storage devices or other electronic media that were at any time within the Employee’s control (other than those which remain at, or have been returned to, the Company) and (ii) he has not disclosed any Confidential Information to others outside of the Company in violation of this Section. The Company shall have the right at any time at its option to replace the hard drive in the Employee’s laptop or other computer supplied by the Company with another equivalent hard drive. As used in this Agreement, “affiliate” means, with respect to the Company or any other entity, any person or entity controlling, controlled by or under common control with, the Company or such other entity, including without limitation Argan, and “control” for such purpose means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities or voting interests, by contract or otherwise.

13.Rights in the Company’s Property; Inventions.

(a)The Employee hereby recognizes the Company’s proprietary rights in the tangible and intangible property of the Company and acknowledges that notwithstanding the relationship of employment, the Employee will not obtain or acquire, and has not obtained or acquired, through such employment any personal property rights in any of the property of the Company, including without limitation any writing, communications, manuals, documents, instruments, contracts, agreements, files, literature, data, technical information, secrets, formulas, products, methods, mailing lists, business models, business plans, procedures, processes, devices, apparatuses, trademarks, trade names, trade styles, service marks, logos, copyrights, patents, or other matters which are the property of the Company.

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(b)The Employee agrees that during the Term of his employment with the Company and for a period of three (3) months thereafter, any and all discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) (“Inventions”), whether or not patentable, copyrightable or reduced to writing, which the Employee may have conceived or made, or may conceive or make, either alone or in conjunction with others and whether or not during working hours or by the use of the facilities of the Company, which are related or in any way connected with the Business of the Company and the Affiliates or any affiliate, are and shall be the sole and exclusive property of the Company. The Employee shall promptly disclose all such Inventions to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem necessary to protect or perfect its rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. The Employee hereby appoints the Company as his attorney-in-fact to execute on his behalf any assignments or other documents deemed necessary by the Company to protect or perfect its rights to any Inventions.

14.Non-Competition, Non-Solicitation Covenants.

14.1Covenant Not to Compete. At all times during the Term and for a period of two years after the Term (the “Restrictive Period”), the Employee shall not, directly or indirectly, alone or with others, engage in any competition with, or have any financial or ownership interest in any sole proprietorship, corporation, company, partnership, association, venture or business or any other person or entity (whether as an employee, officer, director, partner, manager, member, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) competes with the Business of the Company and the Affiliates; provided that such provision shall not apply to (i) the Employee’s ownership of Argan stock, (ii) the Employee’s ownership of interests in entities which may develop, own and operate (but not design or build) power plants, or (iii) the acquisition by the Employee, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the Nasdaq Stock Market, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Employee does not control, acquire a controlling interest in, or become a member of a group that exercises direct or indirect control of, more than 5% of any class of capital stock or other indicia of ownership of such issuer. For purposes of clause (ii) of this Section 14.1 above, and for clause (b) of Section 14.2 below, “develop” or “development of” power plants shall mean the usual and customary actions taken by an owner or potential owner of a power plant to obtain licenses, permits or other governmental approvals required in order to own and operate a power plant, but not the designing or constructing of a power plant.

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14.2Non-Solicitation. At all times during the Restrictive Period, the Employee shall not, directly or indirectly, for himself or for any other person, firm, corporation, company, partnership, association, venture or business or any other person or entity: (a) solicit for employment, employ or attempt to employ or enter into any contractual arrangement with any employee or former employee (which, for purposes of this Section 14.2 shall mean anyone employed during the 24 month period ending on the date of termination of the Employee’s employment with the Company) of the Company, the Affiliates, or Argan or any affiliate or subsidiary of Argan, except Raymond J. Bednarz and Fred Kresse; and/or (b) call on or solicit any of the actual or targeted prospective customers or clients, or any actual distributors or suppliers, of the Company (except in connection with the Employee’s development, ownership and operation (but not the designing or building) of power plants), the Affiliates, or Argan or any affiliate or subsidiary of Argan on behalf of himself or on behalf of any person or entity in connection with any business that competes with the Business of the Company and the Affiliates, nor shall the Employee make known the names or addresses or other contact information of such actual or prospective customers or clients, or any such actual distributors or suppliers, or any information relating in any manner to the Company’s, or the Affiliates’ or Argan’s or any subsidiary or affiliate of Argan’s trade or business relationships with such actual or prospective customers or clients, or any such actual distributors or suppliers, other than in connection with the performance by the Employee of his duties under this Agreement.

15.Acknowledgment by the Employee. The Employee acknowledges and confirms that the restrictive covenants contained in Sections 12, 13 and 14 hereof (including without limitation the length of the term of the provisions of Section 14) are required by the Company as an inducement to enter into this Agreement, are reasonably necessary to protect the legitimate business interests of the Company, and are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Employee further acknowledges that the restrictions contained in Sections 12, 13 and 14 hereof are intended to be, and shall be, for the benefit of and shall be enforceable by the Company and its successors and assigns. The Employee expressly agrees that upon any breach or violation of the provisions of Sections 12, 13, or 14 hereof, the Company shall be entitled, as a matter of right, in addition to any other rights or remedies it may have, to: (a) temporary and/or permanent injunctive relief in any court of competent jurisdiction as described in Section 16 hereof; and (b) such damages as are provided at law or in equity. The existence of any claim or cause of action against any of the Company, the Affiliates, or Argan or their respective subsidiaries or affiliates, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement of any of the restrictions contained in Sections 12, 13 or 14 hereof.

16.Enforcement; Modification.

16.1Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Employee of any of the covenants contained in Sections 12, 13 or 14 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Employee recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Sections 12, 13 or 14 of this Agreement by the Employee or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.

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16.2Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of Sections 12, 13 or 14 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of Sections 12, 13 or 14 within the jurisdiction of such court, such provision shall be interpreted or reformed and enforced as if it provided for the maximum restriction permitted under such governing law.

16.3Extension of Time. If the Employee shall be in violation of any provision of Sections 12, 13 or 14, then each time limitation set forth in Sections 12, 13 or 14 shall be extended for a period of time equal to the period of time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in Sections 12, 13 and 14 shall be extended for a period of time equal to the pendency of such proceeding including all appeals by either of the Sellers.

16.4Survival. The provisions of Sections 12, 13 and 14 shall survive the termination of this Agreement.

16.5Purchase Agreement. Notwithstanding anything to the contrary contained in this Agreement, nothing herein shall limit or otherwise affect the restrictive covenants applicable to the Employee, as Seller, under and pursuant to the terms, covenants and conditions of the Purchase Agreement, including without limitation the covenant not to compete for a period of five years from the Closing Date (as defined in the Purchase Agreement), all of which such restrictive covenants shall remain in full force and effect in accordance with the terms and conditions of the Purchase Agreement.

17.Assignment. The Company shall have the right to assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said corporation or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Employee may not assign or transfer this Agreement or any rights or obligations hereunder.

18.Benefits; Binding Effect. This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where permitted and applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.

10

19.Severability. The invalidity of any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, provisions or provisions, section or sections or article or articles had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.

20.Waivers. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

21.Damages; Attorneys Fees. Nothing contained herein shall be construed to prevent the Company or the Employee from seeking and recovering from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto seeks to collect any damages resulting from, or the injunction of any action constituting, a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable costs and attorneys’ fees of the other party.

22.Section Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

23.No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, and the parties hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

24.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same.

25.Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Connecticut, without regard to principles of conflict of laws.

11

26.Jurisdiction and Venue. Each of the parties irrevocably and unconditionally: (a) agrees that any suit, action or legal proceeding arising out of or relating to this Agreement which is expressly permitted by the terms of this Agreement to be brought in a court of law, shall be brought in the Superior Court of the State of Connecticut for the Judicial District of Hartford or in the United States District Court for the District of Connecticut; (b) consents to the jurisdiction of each such court in any such suit, action or proceeding; (c) waives any objection which it or he may have to the laying of venue of any such suit, action or proceeding in any of such courts; and (d) agrees that service of any court papers may be effected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws or court rules in such courts.

27.Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Employee and the Company (or any of its affiliates) with respect to such subject matter. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Employee.

28.Notices. All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested, sent by overnight courier, or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three days after deposit in the U.S. mail. Notice shall be sent: (a) if to the Company, addressed to the Company, One Church Street, Suite 401, Rockville, Maryland 20850, Attention: Arthur F. Trudel; and (b) if to the Employee, to his address as reflected on the payroll records of the Company, or to such other address as either party shall request by notice to the other in accordance with this provision.

[SIGNATURES ON NEXT PAGE]

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IN WITNESS WHEREOF, each of the undersigned has executed, or has caused its duly authorized representative to execute, this Agreement as of the date first above written.

THE COMPANY: GEMMA POWER SYSTEMS, LLC
By:	/s/ William F. Griffin, Jr.
	Name: William F. Griffin, Jr. Title: Manager
THE EMPLOYEE:
	/s/ William F. Griffin, Jr.
	WILLIAM F. GRIFFIN, JR

13

EX-10.5

SECOND AMENDED AND RESTATED

FINANCING AND SECURITY AGREEMENT

Dated

December 11, 2006

By and Among

ARGAN INC.,

SOUTHERN MARYLAND CABLE, INC.,

VITARICH LABORATORIES, INC.,

GEMMA POWER, INC.,

GEMMA POWER SYSTEMS CALIFORNIA, INC.,

GEMMA POWER SYSTEMS, LLC,

GEMMA POWER HARTFORD, LLC

And

BANK OF AMERICA, N.A.

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TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS			2
Section 1.1	Certain Defined Terms.		2
Section 1.2	Accounting Terms and Other Definitional Provisions.		17
ARTICLE II THE CREDIT FACILITIES			18
Section 2.1	The Revolving Credit Facility.		18
2.1.1	Revolving Credit Facility.		18
2.1.2	Procedure for Making Advances Under the Revolving Loan; Lender Protection Loans.		18
2.1.3	Revolving Credit Note.		19
2.1.4	Optional Prepayments of Revolving Loan.		19
2.1.5	Treasury Management.		19
2.1.6	Revolving Loan Account.		19
2.1.7	Revolving Credit Unused Line Fee.		20
2.1.8	The Collateral Account.		20
Section 2.2	The Term Loan Facilities.		21
2.2.1	The 2006 Term Loan Facility.		21
2.2.2	The Acquisition Term Loan Facility.		21
2.2.3	Optional Prepayments of Term Loans.		22
2.2.4	Mandatory Prepayments of Acquisition Term Loan.		22
2.2.5	The Acquisition Term Loan Fee.		23
Section 2.3	The Letter of Credit Facility.		23
2.3.1	Letters of Credit.		23
2.3.2	Letter of Credit Fees.		23
2.3.3	Terms of Letters of Credit.		23
2.3.4	Procedures for Letters of Credit.		24
2.3.5	Payments of Letters of Credit.		25
2.3.6	Change in Law; Increased Cost.		26
2.3.7	General Letter of Credit Provisions.		26
Section 2.4	Escrow Reserve.		27
Section 2.5	General Financing Provisions.		27
2.5.1	Borrowers’ Representatives.		27
2.5.2	Use of Proceeds of the Loans.		29
2.5.3	Computation of Interest and Fees.		29
2.5.4	Maximum Interest Rate.		29
2.5.5	Payments.		30
2.5.6	Liens; Setoff.		30
2.5.7	Requirements of Law.		30
2.5.8	Guaranty.		31
2.5.9	ACH Transactions and Swap Contracts.		33
ARTICLE III THE COLLATERAL			34
Section 3.1	Debt and Obligations Secured.		34
Section 3.2	Grant of Liens.		34
Section 3.3	Collateral Disclosure List.		35
Section 3.4	Personal Property.		35
3.4.1	Investment Property, Chattel Paper, Promissory Notes, etc.		35
Section 3.5	Record Searches.		36

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Section 3.6	Costs.	36
Section 3.7	Release.	36
Section 3.8	Inconsistent Provisions.	36
ARTICLE IV REPRESENTATIONS AND WARRANTIES		37
Section 4.1	Representations and Warranties.	37
4.1.1	Subsidiaries.	37
4.1.2	Existence.	37
4.1.3	Power and Authority.	37
4.1.4	Binding Agreements.	37
4.1.5	No Conflicts.	37
4.1.6	No Defaults, Violations.	38
4.1.7	Compliance with Laws.	38
4.1.8	Margin Stock.	38
4.1.9	Investment Company Act; Margin Stock.	38
4.1.10	Litigation.	39
4.1.11	Financial Condition.	39
4.1.12	Full Disclosure.	39
4.1.13	Indebtedness for Borrowed Money.	39
4.1.14	Taxes.	39
4.1.15	ERISA.	40
4.1.16	Title to Properties.	40
4.1.17	Patents, Trademarks, Etc.	40
4.1.18	Employee Relations.	40
4.1.19	Presence of Hazardous Materials or Hazardous Materials Contamination.	41
4.1.20	Perfection and Priority of Collateral.	41
4.1.21	Collateral Disclosure List.	41
4.1.22	Business Names and Addresses.	41
4.1.23	Equipment.	42
4.1.24	Inventory.	42
4.1.25	Accounts.	42
4.1.26	Solvency	42
4.1.27	Pro-forma Financial Statements.	42
4.1.28	Acquisition Agreement.	43
4.1.29	Certain Documents.	43
Section 4.2	Survival; Updates of Representations and Warranties.	43
ARTICLE V CONDITIONS PRECEDENT		43
Section 5.1	Conditions to the Initial Advance and Letter of Credit.	43
5.1.1	Organizational Documents - Borrowers.	43
5.1.2	Opinion of Borrowers’ Counsel.	44
5.1.3	Consents, Licenses, Approvals, Etc.	44
5.1.4	Notes.	44
5.1.5	Financing Documents and Collateral.	44
5.1.6	Other Documents, Etc.	44
5.1.7	Payment of Fees.	45
5.1.8	Collateral Disclosure List.	45
5.1.9	Recordings and Filings.	45
5.1.10	Insurance Certificate.	45
5.1.11	Pro-forma Balance Sheet and Projections.	45
5.1.12	Adverse Change.	45
Section 5.2	Conditions to all Extensions of Credit.	45
5.2.1	Compliance.	45
5.2.2	Default.	45

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5.2.3	Representations and Warranties.	46
5.2.4	Adverse Change.	46
5.2.5	Legal Matters.	46
Section 5.3	Conditions to Acquisition Term Loan and Letter of Credit.	46
5.3.1	Acquisition Term Note.	46
5.3.2	Acquisition.	46
5.3.3	Lien Searches.	47
5.3.4	Pledged Equity and Membership Interests; Stock Powers; Pledged Notes.	47
5.3.5	Financial Covenants.	47
5.3.6	Default.	48
5.3.7	Interest Rate Protection Agreement.	48
5.3.8	Compliance.	48
5.3.9	Other Documents, Etc.	48
5.3.10	Legal Matters.	48
ARTICLE VI COVENANTS OF THE BORROWERS		48
Section 6.1	Affirmative Covenants.	48
6.1.1	Financial Statements.	48
6.1.2	Reports to SEC and to Stockholders.	49
6.1.3	Recordkeeping, Rights of Inspection, Field Examination, Etc.	49
6.1.4	Existence.	50
6.1.5	Compliance with Laws.	50
6.1.6	Preservation of Properties.	51
6.1.7	Line of Business.	51
6.1.8	Insurance.	51
6.1.9	Taxes.	51
6.1.10	ERISA.	52
6.1.11	Notification of Events of Default and Adverse Developments.	52
6.1.12	Hazardous Materials; Contamination.	53

6.1.13	Disclosure of Significant Transactions.	53
6.1.14	Financial Covenants.	53
6.1.15	Collection of Receivables.	54
6.1.16	Assignments of Receivables.	54
6.1.17	Government Accounts.	55
6.1.18	Inventory.	55
6.1.19	Maintenance of the Collateral.	55
6.1.20	Equipment.	55
6.1.21	Defense of Title and Further Assurances.	56
6.1.22	Business Names; Locations.	56
6.1.23	Use of Premises and Equipment.	56
6.1.24	Protection of Collateral.	57
6.1.25	Appraisals.	57
Section 6.2	Negative Covenants.	57
6.2.1	Capital Structure, Merger, Acquisition or Sale of Assets.	57
6.2.2	Subsidiaries.	58
6.2.3	Issuance of Stock.	58
6.2.4	Purchase or Redemption of Securities, Dividend Restrictions.	58
6.2.5	Indebtedness.	58
6.2.6	Investments, Loans and Other Transactions.	59
6.2.7	Stock of Subsidiaries.	59
6.2.8	Subordinated Indebtedness.	59
6.2.9	Liens; Confessed Judgment.	60
6.2.10	Transactions with Affiliates.	60
6.2.11	Other Businesses.	60
6.2.12	ERISA Compliance.	60

iv

6.2.13	Prohibition on Hazardous Materials.	61
6.2.14	Method of Accounting; Fiscal Year.	61
6.2.15	Compensation.	61
6.2.16	Transfer of Collateral.	61
6.2.17	Sale and Leaseback.	61
6.2.18	Disposition of Collateral.	61
6.2.19	Interest Rate Protection Agreements.	62
6.2.20	Amendments to Acquisition Documents	62
ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES		62
Section 7.1	Events of Default.	62
7.1.1	Failure to Pay.	63
7.1.2	Breach of Representations and Warranties.	63
7.1.3	Failure to Comply with Covenants.	63
7.1.4	Other Defaults.	63
7.1.5	Default Under Other Financing Documents or Obligations.	63
7.1.6	Receiver; Bankruptcy.	63
7.1.7	Involuntary Bankruptcy, etc.	64
7.1.8	Judgment.	64
7.1.9	Execution; Attachment.	64
7.1.10	Default Under Other Borrowings.	64
7.1.11	Challenge to Agreements.	64
7.1.12	Material Adverse Change.	65
7.1.13	Impairment of Position.	65
7.1.14	Liquidation, Termination, Dissolution, Change in Responsible Officers.	65
7.1.15	Swap Default.	65
Section 7.2	Remedies.	65
7.2.1	Acceleration.	65
7.2.2	Further Advances.	65
7.2.3	Uniform Commercial Code.	66
7.2.4	Specific Rights With Regard to Collateral.	66
7.2.5	Application of Proceeds.	67
7.2.6	Performance by Lender.	68
7.2.7	Other Remedies.	68
ARTICLE VIII MISCELLANEOUS		68
Section 8.1	Notices.	68
Section 8.2	Amendments; Waivers.	69
Section 8.3	Cumulative Remedies.	70
Section 8.4	Severability.	71
Section 8.5	Assignments by Lender.	71
Section 8.6	Participations by Lender.	71
Section 8.7	Disclosure of Information by Lender.	72
Section 8.8	Successors and Assigns.	72
Section 8.9	Continuing Agreements.	72
Section 8.10	Enforcement Costs.	72
Section 8.11	Applicable Law; Jurisdiction.	73
8.11.1	Applicable Law.	73
8.11.2	Submission to Jurisdiction.	73
8.11.3	Appointment of Agent for Service of Process.	73
8.11.4	Service of Process.	73
Section 8.12	Duplicate Originals and Counterparts.	74

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Section 8.13	Headings.	74
Section 8.14	No Agency.	74
Section 8.15	Date of Payment.	74
Section 8.16	Entire Agreement.	74
Section 8.17	Waiver of Trial by Jury.	74
Section 8.18	Liability of the Lender.	75
Section 8.19	Indemnification.	76

LIST OF EXHIBITS

A. Additional Borrower Joinder Supplement

B-1. Amended and RestatedRevolving Credit Note

B-2. Amended and Restated 2006Term Note

B-3. Acquisition Term Note

C. Form of Compliance Certificate

D. Form of Stock Pledge Agreement

E. Form of Assignment of Membership Interest

F. Form of Pledge and Assignment Agreement

G. Form of Letter of Credit Agreement

H-1 Pro-forma Balance Sheet

H-2 Pro-forma Financial Projections

LIST OF SCHEDULES

Schedule 1.1 Copyrights, Patents and Trademarks

Schedule 2.1.5 Investment Accounts

Schedule 4.1.10 Litigation

Schedule 4.1.13 Indebtedness for Borrowed Money

Schedule 4.1.18 Employee Relations

Schedule 4.1.20 Perfection and Priority of Collateral

Schedule 6.2.3 Issuance of Stock

Schedule 6.2.16 Transfer of Collateral

vi

SECOND AMENDED AND RESTATED

FINANCING AND SECURITY AGREEMENT

THIS SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this “Agreement”) is made this 11th day of December 2006, by and among ARGAN, INC. (formerly Puroflow Incorporated), a corporation organized under the laws of the State of Delaware (“Argan”), SOUTHERN MARYLAND CABLE, INC., a corporation organized under the laws of the State of Delaware (“SMC”), VITARICH LABORATORIES, INC. (formerly AGAX/VLI Acquisition Corporation), a corporation organized under the laws of the State of Delaware (“Vitarich”), GEMMA POWER, INC., a corporation organized under the laws of the State of Connecticut (“GP”), GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized under the laws of the State of California (“GPSC”), GEMMA POWER SYSTEMS, LLC, a limited liability company organized under the laws of the State of Connecticut (“GPS”), and GEMMA POWER HARTFORD, LLC, a limited liability company organized under the laws of the State of Connecticut (“GPH”), jointly and severally (each of Argan, SMC, Vitarich, GP, GPSC, GPS, and GPH, a “Borrower” and collectively, the “Borrowers”); and BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Lender, Argan and SMC have entered into that certain Financing and Security Agreement, dated as of August 19, 2003, as amended and restated by that certain Amended and Restated Financing and Security Agreement, dated as of May 5, 2006, by and among Argan, SMC, Vitarich and the Lender (as thereafter amended from time to time, the “Existing Financing Agreement”). Pursuant to the Existing Financing Agreement, the Lender agreed to make certain loans described therein, and other financial accommodations to Argan, SMC, and Vitarich.

B.The Borrowers have requested that the Lender make available a new term loan and a new standby letter of credit facility to the Borrowers.

C.The Borrowers and the Lender have agreed, pursuant to this Agreement, to amend and restate the Existing Financing Agreement in its entirety. The Lender is willing to make the credit facilities available jointly and severally to the Borrowers upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree to amend and restate the Existing Financing Agreement in its entirety as follows:

ARTICLE I

DEFINITIONS

Section 1.1Certain Defined Terms.

As used in this Agreement, the terms defined in the Preamble and Recitals hereto shall have the respective meanings specified therein, and the following terms shall have the following meanings:

“2006 Term Loan” has the meaning described in Section 2.2.1 (2006 Term Loan Commitment).

“2006 Term Loan Commitment” has the meaning described in Section 2.2.1 (2006 Term Loan Commitment).

“2006 Term Loan Committed Amount” has the meaning described in Section 2.2.1 (2006 Term Loan Commitment).

“2006 Term Loan Facility” means the term loan facility established by the Lender pursuant to Section 2.2.1 (2006 Term Loan Facility).

“2006 Term Note” has the meaning described in Section 2.2.1(b) (The 2006 Term Note).

“Account” individually and “Accounts” collectively mean all presently existing or hereafter acquired or created accounts, accounts receivable, health-care insurance receivables, contract rights, notes, drafts, instruments, acceptances, chattel paper, leases and writings evidencing a monetary obligation or a security interest in, or a lease of, goods, all rights to payment of a monetary obligation or other consideration under present or future contracts (including, without limitation, all rights (whether or not earned by performance) to receive payments under presently existing or hereafter acquired or created letters of credit), or by virtue of property that has been sold, leased, licensed, assigned or otherwise disposed of, services rendered or to be rendered, loans and advances made or other considerations given, by or set forth in or arising out of any present or future chattel paper, note, draft, lease, acceptance, writing, bond, insurance policy, instrument, document or general intangible, and all extensions and renewals of any thereof, all rights under or arising out of present or future contracts, agreements or general interest in goods which gave rise to any or all of the foregoing, including all commercial tort claims, other claims or causes of action now existing or hereafter arising in connection with or under any agreement or document or by operation of law or otherwise, all collateral security of any kind (including, without limitation, real property mortgages and deeds of trust) Supporting Obligations, letter-of-credit rights and letters of credit given by any Person with respect to any of the foregoing, all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing and all equipment and general intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all Proceeds of the foregoing.

“Account Debtor” means any Person who is obligated on a Receivable and “Account Debtors” mean all Persons who are obligated on the Receivables.

“ACH Transactions” means any cash management or related services including the automatic clearing house transfer of funds by the Lender for the account of any of the Borrowers pursuant to agreement or overdrafts.

2

“Acquired Company”means each of Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut and each of its Affiliates, Subsidiaries, successors and assigns and “Acquired Companies” means the collective reference to each of GPS, GP, GPSC and GPH.

“Acquisition” has the meaning described in Section 5.3.2.

“Acquisition Agreement” means each of (i) the Membership Interest Purchase Agreement, dated as of December 8, 2006 among Argan, GPS, GP, GPSC, William F. Griffin, Jr. and Joel M. Cannio and (ii) the Stock Purchase Agreement, dated as of December 8, 2006 among Argan, GP, GPSC, William F. Griffin, Jr. and Joel M. Cannio and “Acquisition Agreements” means the collective reference to each of the Membership Interest Purchase Agreement and the Stock Purchase Agreement.

“Acquisition Documentation”means collectively, the Acquisition Agreements and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof, previously, now or hereafter executed and delivered by Argan, each Acquired Company or any other Person in connection with the Acquisition, in each case as amended, supplemented or otherwise from time to time in accordance with Section 6.2.20.

“Acquisition Term Loan” has the meaning described in Section 2.2.2 (Acquisition Term Loan).

“Acquisition Term Loan Commitment” has the meaning described in Section 2.2.2 (Acquisition Term Loan Commitment).

“Acquisition Term Loan Committed Amount” has the meaning described in Section 2.2.2 (Acquisition Term Loan Commitment).

“Acquisition Term Loan Facility”means the term loan facility established by the Lender pursuant to Section 2.2.2 (Acquisition Term Loan Facility).

“Acquisition Term Loan Fee”has the meaning described in Section 2.2.5 (The Acquisition Term Loan Fee).

“Acquisition Term Loan Mandatory Prepayment” has the meaning described in Section 2.2.4(b) (The Acquisition Term Loan Mandatory Prepayment).

“Acquisition Term Note” has the meaning described in Section 2.2.2(b) (The Acquisition Term Note).

“Additional Borrower” means each Person that has executed and delivered an Additional Borrower Joinder Supplement that has been accepted and approved by the Lender.

“Additional Borrower Joinder Supplement” means an Additional Borrower Joinder Supplement in substantially the form attached hereto as EXHIBIT A, with the blanks appropriately completed and executed and delivered by the Additional Borrower and accepted by Argan on behalf of the Borrowers.

“Adjustment Date” has the meaning described in Section 8.5 (Assignments by Lender).

3

“Affiliate” means, with respect to any designated Person, any other Person, (a) directly or indirectly controlling, directly or indirectly controlled by, or under direct or indirect common control with the Person designated, (b) directly or indirectly owning or holding ten percent (10%) or more of any equity interest in such designated Person, or (c) ten percent (10%) or more of whose stock or other equity interest is directly or indirectly owned or held by such designated Person. For purposes of this definition, the term “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or other equity interests or by contract or otherwise.

“Agreement” means this Second Amended and Restated Financing and Security Agreement, as amended, restated, supplemented or otherwise modified in writing in accordance with the provisions of Section 8.2 (Amendments; Waivers).

“Argan” means Argan, Inc. (formerly Puroflow Incorporated), a corporation organized under the laws of the State of Delaware, and its successors and assigns.

“Assignee” means any Person to which the Lender assigns all or any portion of its interests under this Agreement, any Commitment, and any Loan, in accordance with the provisions of Section 8.5 (Assignments by Lender), together with any and all successors and assigns of such Person; “Assignees” means the collective reference to all Assignees.

“Assignments of Membership Interests” means the collective reference to each of the pledge, assignment and security agreements dated as of the Closing Date from each of the members of Gemma Power Systems, LLC and Gemma Power Hartford, LLC, for the benefit of Lender, as the same may from time to time be amended, restated, supplemented or otherwise modified in the form of EXHIBIT E attached hereto.

“Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, and any successor Laws.

“Bonded Contract” means any and all contracts of the Acquired Companies now or hereinafter bonded by Travelers or its affiliate companies for the benefit of any Acquired Company; “Bonded Contracts” means the collective reference to all Bonded Contracts.

“Borrower” means each Person defined as a “Borrower” in the preamble of this Agreement and each Additional Borrower; “Borrowers” means the collective reference to all Persons defined as “Borrowers” in the preamble to this Agreement and all Additional Borrowers.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the State are authorized or required to close.

“Capital Adequacy Regulation” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

“Capital Expenditure” means an expenditure (whether payable in cash or other property or accrued as a liability) for Fixed or Capital Assets, including, without limitation, the entering into of a Capital Lease.

4

“Capital Lease” means with respect to any Person any lease of real or personal property, for which the related Lease Obligations have been or should be, in accordance with GAAP consistently applied, capitalized on the balance sheet of that Person.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Cash Equivalents” means (a) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit with maturities of one (1) year or less from the date of acquisition of, or money market accounts maintained with, the Lender, any Affiliate of the Lender, or any other domestic commercial bank having capital and surplus in excess of One Hundred Million Dollars ($100,000,000) or such other domestic financial institutions or domestic brokerage houses to the extent disclosed to, and approved by, the Lender and (c) commercial paper of a domestic issuer rated at least either A-1 by Standard & Poor’s Corporation (or its successor) or P-1 by Moody’s Investors Service, Inc. (or its successor) with maturities of six (6) months or less from the date of acquisition.

“Chattel Paper” means a record or records (including, without limitation, electronic chattel paper) that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, or a lease of specific goods; all Supporting Obligations with respect thereto; any returned, rejected or repossessed goods and software covered by any such record or records and all proceeds (in any form including, without limitation, accounts, contract rights, documents, chattel paper, instruments and general intangibles) of such returned, rejected or repossessed goods; and all Proceeds of the foregoing.

“Closing Date” means the date set forth in the preamble hereof.

“Collateral” means all property of each and every Borrower subject from time to time to the Liens of this Agreement, any of the Security Documents and/or any of the other Financing Documents, together with any and all Proceeds thereof.

“Collateral Account” has the meaning described in Section 2.1.8 (The Collateral Account).

“Collateral Disclosure List” has the meaning described in Section 3.3 (Collateral Disclosure List).

“Collection” means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of the Accounts or otherwise with respect to any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to an Account, and other proceeds of Collateral; and “Collections” means the collective reference to all of the foregoing.

“Commitment” means the Revolving Credit Commitment, the 2006 Term Loan Commitment, the Acquisition Term Loan Commitment or the Letter of Credit Commitment, as the case may be, and “Commitments” means the collective reference to the Revolving Credit Commitment, the 2006 Term Loan Commitment, the Acquisition Term Loan Commitment, the Letter of Credit Commitment and the commitment for any loan, letter of credit, interest rate protection, foreign exchange risk, cash management, and other Credit Facility now or hereafter provided to any of the Borrowers by the Lender whether under this Agreement or otherwise.

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“Committed Amount” means the Revolving Credit Committed Amount, the 2006 Term Loan Committed Amount or the Acquisition Term Loan Committed Amount, as the case may be, and “Committed Amounts” means collectively the Revolving Credit Committed Amount, the 2006 Term Loan Committed Amount or the Acquisition Term Loan Committed Amount.

“Compliance Certificate” means a periodic Compliance Certificate described in Section 6.1.1 (Financial Statements).

“Commonly Controlled Entity” means an entity, whether or not incorporated, which is under common control with any Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue Code.

“Copyrights” means and includes, in each case whether now existing or hereafter arising, all of each Borrower’s rights, title and interest in and to (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, copyright applications, and all renewals of any of the foregoing, including without limitation, those set forth in Schedule 1.1 attached hereto, (b) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past, current or future infringements of any of the foregoing, (c) the right to sue for past, present and future infringements of any of the foregoing, and (d) all rights corresponding to any of the foregoing throughout the world.

“Credit Facility” means the Revolving Credit Facility, the Letter of Credit Facility or either of the Term Loan Facilities as the case may be, and “Credit Facilities” means collectively the Revolving Credit Facility, the Letter of Credit Facility and the Term Loan Facilities and any and all other credit facilities now or hereafter extended under or secured by this Agreement.

“Current Letter of Credit Obligations” has the meaning described in Section 2.3.5 (Payments of Letters of Credit).

“Default” means an event which, with the giving of notice or lapse of time, or both, could or would constitute an Event of Default under the provisions of this Agreement.

“Documents” means all documents of title or receipts, whether now existing or hereafter acquired or created, and all Proceeds of the foregoing.

“EBITDA” means as to the Borrowers and their Subsidiaries on a consolidated basis for any period of determination thereof, the sum of (a) the net profit (or loss) determined in accordance with GAAP consistently applied, plus (b) interest expense for such period, plus (c) income tax provisions for such period, plus (d) depreciation and amortization of assets for such period, plus (e) non-cash stock compensation expense and plus [(f) non-cash impairment of goodwill arising from the acquisition of Vitarich].

“Enforcement Costs” means all expenses, charges, costs and fees whatsoever (including, without limitation, reasonable outside and allocated in-house counsel attorney’s fees and expenses) of any nature whatsoever paid or incurred by or on behalf of the Lender in connection with (a) the enforcement of any or all of the Obligations, this Agreement and/or any of the other Financing Documents and (b) the creation, perfection, collection, maintenance, preservation, defense, protection, realization upon, disposition, sale or enforcement of all or any part of the Collateral, this Agreement or any of the other Financing Documents, including, without limitation, those costs and expenses more specifically enumerated in Section 3.6 (Costs) and/or Section 8.10 (Enforcement Costs), and further including, without limitation, amounts paid to lessors, processors, bailees, warehousemen, sureties, judgment creditors and others in possession of or with a Lien against or claimed against the Collateral.

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“Equipment” means all equipment, machinery, computers, chattels, tools, parts, machine tools, furniture, furnishings, fixtures and supplies of every nature, presently existing or hereafter acquired or created and wherever located, whether or not the same shall be deemed to be affixed to real property and all of such types of property leased by any of the Borrowers and all of the Borrowers’ rights and interests with respect thereto under such leases (including, without limitation, options to purchase), together with all accessions, additions, fittings, accessories, special tools, and improvements thereto and substitutions therefore and all parts and equipment which may be attached to or which are necessary or beneficial for the operation, use and/or disposition of such personal property, all licenses, warranties, franchises and General Intangibles related thereto or necessary or beneficial for the operation, use and/or disposition of the same, together with all Accounts, Chattel Paper, Instruments and other consideration received by any Borrower on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all Proceeds of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Escrow Account”has the meaning described in Section 2.4 (Escrow Reserve).

“Escrow Fund” has the meaning described in Section 2.4 (Escrow Reserve).

“Escrow Pledge and Assignment Agreement” means that certain pledge and assignment agreement from the Borrowers for the benefit of the Lender, as the same may from time to time be amended, restated, supplemented or otherwise modified substantially in the forms attached hereto as EXHIBIT I.

“Escrow Release Condition” has the meaning described in Section 2.4 (Escrow Reserve).

“Event of Default” has the meaning described in ARTICLE VII (Default and Rights and Remedies).

“Excess Cash Flow” means for any annual period of determination, an amount equal to EBITDA, less scheduled principal amortization on all Obligations, less interest expense on all Obligations, less capital expenditures, less cash taxes in each case for the Borrowers and its Subsidiaries on a consolidated basis.

“Excess Cash Flow Application Date” has the meaning described in Section 2.2.4(b) (Mandatory Prepayments of Acquisition Term Loan).

“Facilities” means the collective reference to the loan, letter of credit, interest rate protection, foreign exchange risk, cash management, and other credit facilities now or hereafter provided to any one or more of the Borrowers by the Lender.

“Fees” means the collective reference to each fee payable to the Lender under the terms of this Agreement or under the terms of any of the other Financing Documents.

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“Financing Documents” means at any time collectively this Agreement, the Notes, the Security Documents, the Letter of Credit Documents, and any other instrument, agreement or document previously, simultaneously or hereafter executed and delivered by any Borrower, and/or any other Person, singly or jointly with another Person or Persons, evidencing, securing, guarantying or in connection with this Agreement, any Note, any of the Security Documents, any of the Facilities, and/or any of the Obligations.

“Fixed or Capital Assets” of a Person at any date means all assets which would, in accordance with GAAP consistently applied, be classified on the balance sheet of such Person as property, plant or equipment at such date.

“Fixed Charges” means as to the Borrowers and their Subsidiaries for any period of determination, the sum of all scheduled interest expense excluding the non-cash interest expense associated with the amortization of issuance costs for Subordinated Indebtedness in favor of Kevin Thomas, all principal payments and all Capital Lease payments of the Borrowers and their Subsidiaries made during the twelve (12) months preceding the date such covenant is being tested, all in accordance with GAAP.

“Fixed Charge Coverage Ratio” means, as to the Borrowers and their Subsidiaries for any period of determination thereof, the ratio of (a) EBITDA, minus dividends and distributions to (b) Fixed Charges.

“GAAP” means generally accepted accounting principles in the United States of America in effect from time to time.

“General Intangibles” means all general intangibles of every nature, whether presently existing or hereafter acquired or created, and without implying any limitation of the foregoing, further means all books and records, commercial tort claims, other claims (including without limitation all claims for income tax and other refunds), payment intangibles, Supporting Obligations, choses in action, claims, causes of action in tort or equity, contract rights, judgments, customer lists, software, Patents, Trademarks, licensing agreements, rights in intellectual property, goodwill (including goodwill of any Borrower’s business symbolized by and associated with any and all Trademarks, trademark licenses, Copyrights and/or service marks), royalty payments, licenses, letter-of-credit rights, letters of credit, contractual rights, the right to receive refunds of unearned insurance premiums, rights as lessee under any lease of real or personal property, literary rights, Copyrights, service names, service marks, logos, trade secrets, amounts received as an award in or settlement of a suit in damages, deposit accounts, interests in joint ventures, general or limited partnerships, or limited liability companies or partnerships, rights in applications for any of the foregoing, books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to any or all of the foregoing, all Supporting Obligations with respect to any of the foregoing, and all Equipment and General Intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all Proceeds of the foregoing.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any department, agency or instrumentality thereof.

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“GP” means Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, and its successors and assigns.

“GPH” means Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut, and its successors and assigns.

“GPS” means Gemma Power Systems, LLC, a limited liability company organized under the laws of the State of Connecticut, and its successors and assigns.

“GPSC” means Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and its successors and assigns.

“Hazardous Materials” means (a) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; (c) any substance the presence of which on any property now or hereafter owned, acquired or operated by any of the Borrowers is prohibited by any Law similar to those set forth in this definition; and (d) any other substance which by Law requires special handling in its collection, storage, treatment or disposal.

“Hazardous Materials Contamination” means the contamination (whether presently existing or occurring after the date of this Agreement) by Hazardous Materials of any property owned, operated or controlled by any of the Borrowers or for which any of the Borrowers has responsibility, including, without limitation, improvements, facilities, soil, ground water, air or other elements on, or of, any property now or hereafter owned, acquired or operated by any of the Borrowers, and any other contamination by Hazardous Materials for which any of the Borrowers is, or is claimed to be, responsible.

“Indebtedness” of a Person means at any date the total liabilities of such Person at such time determined in accordance with GAAP consistently applied.

“Indebtedness for Borrowed Money” of a Person means at any time the sum at such time of (a) Indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) any obligations of such Person in respect of letters of credit, banker’s or other acceptances or similar obligations issued or created for the account of such Person, (c) Lease Obligations of such Person with respect to Capital Leases, (d) all liabilities secured by any Lien on any property owned by such Person, to the extent attached to such Person’s interest in such property, even though such Person has not assumed or become personally liable for the payment thereof, (e) obligations of third parties which are being guarantied or indemnified against by such Person or which are secured by the property of such Person; (f) any obligation of such Person under an employee stock ownership plan or other similar employee benefit plan; (g) any obligation of such Person or a Commonly Controlled Entity to a Multi-employer Plan; and (h) any obligations, liabilities or indebtedness, contingent or otherwise, under or in connection with, any Swap Contract; but excluding trade and other accounts payable in the ordinary course of business in accordance with customary trade terms and which are not overdue (as determined in accordance with customary trade practices) or which are being disputed in good faith by such Person and for which adequate reserves are being provided on the books of such Person in accordance with GAAP.

“Indemnified Parties” has the meaning set forth in Section 8.19 (Indemnification).

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“Instrument” means a negotiable instrument or any other writing which evidences a right to payment of a monetary obligation and is not itself a security agreement or lease and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment, and all Supporting Obligations with respect to any of the foregoing and all Proceeds with respect to any of the foregoing.

“Interest Rate Protection Agreement” means any interest rate or currency swap agreements, cap, floor, and collar agreements, currency spot and forward contracts and other similar agreements and arrangements.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time, and the Income Tax Regulations issued and proposed to be issued thereunder.

“Inventory” means all goods of each Borrower and all right, title and interest of each Borrower in and to all of its now owned and hereafter acquired goods and other personal property furnished under any contract of service or intended for sale or lease, including, without limitation, all raw materials, work-in-process, finished goods and materials and supplies of any kind, nature or description which are used or consumed in any Borrower’s business or are or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods and other personal property and all licenses, warranties, franchises, General Intangibles, personal property and all documents of title or documents relating to the same, together with all Accounts, Chattel Paper, Instruments and other consideration received by any Borrower on account of the sale, lease or other disposition of all or any part of the foregoing, and together with all rights under or arising out of present or future Documents and contracts relating to the foregoing and all Proceeds of the foregoing.

“Investment Property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract or commodity account and all Proceeds of, and Supporting Obligations with respect to, the foregoing.

“Item of Payment” means each check, draft, cash, money, instrument, item, and other remittance in payment or on account of payment of the Receivables or otherwise with respect to any Collateral, including, without limitation, cash proceeds of any returned, rejected or repossessed goods, the sale or lease of which gave rise to a Receivable, and other proceeds of Collateral; and “Items of Payment” means the collective reference to all of the foregoing.

“Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs, or decrees of any Governmental Authority.

“Lease Obligations” of a Person means for any period the rental commitments of such Person for such period under leases for real and/or personal property (net of rent from subleases thereof, but including taxes, insurance, maintenance and similar expenses which such Person, as the lessee, is obligated to pay under the terms of said leases, except to the extent that such taxes, insurance, maintenance and similar expenses are payable by sublessees), including rental commitments under Capital Leases.

“Letter of Credit” and “Letters of Credit” shall have the meanings described in Section 2.3.1 (Letters of Credit).

“Letter of Credit Agreement” means the collective reference to each letter of credit application and agreement substantially in the form of Lender’s then standard form of application for letter of credit or such other form as may be approved by Lender, executed and delivered by the Borrowers in connection with the issuance of a Letter of Credit, as the same may from time to time be amended, restated, supplemented or modified and “Letter of Credit Agreements” means all of the foregoing in effect at any time and from time to time.

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“Letter of Credit Cash Collateral” means the cash collateral described in the Pledge and Assignment Agreement, in an amount equal to not less than one hundred percent (100%) of the Outstanding Letter of Credit Obligations.

“Letter of Credit Cash Collateral Account” has the meaning described in Section 2.3.3 (Terms of Letters of Credit).

“Letter of Credit Commitment” means the agreement of the Lender relating to the issuing of a Letter of Credit subject to and in accordance with the provisions of this Agreement.

“Letter of Credit Documents” means any and all drafts under or purporting to be under a Letter of Credit, any Letter of Credit Agreement, and any other instrument, document or agreement executed and/or delivered by any Borrower or any other Person under, pursuant to or in connection with a Letter of Credit or any Letter of Credit Agreement.

“Letter of Credit Facility” means the facility established pursuant to Section 2.3 (Letter of Credit Facility).

“Letter of Credit Fee” and “Letter of Credit Fees” have the meanings described in Section 2.3.2 (Letter of Credit Fees).

“Letter of Credit Obligations” means the collective reference to all Obligations of each Borrower with respect to the Letters of Credit and the Letter of Credit Agreements.

“Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance.

“Liabilities” means at any date all liabilities that in accordance with GAAP consistently applied should be classified as liabilities on a consolidated balance sheet of the Borrowers and their respective Subsidiaries.

“LIBOR Rate” shall mean a daily fluctuating rate equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London, time), on the second preceding business day, as adjusted from time to time in the Lender’s sole discretion for then-applicable reserve requirements, deposits insurance assessment rates and other regulatory costs. If for any reason such rate is not available, the term “LIBOR Rate” shall mean the fluctuating rate of interest equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London Time) on the second preceding business day, as adjusted from time to time for then-applicable reserve requirements, deposit insurance assessment rates and other regulatory costs; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.

“Lien” means any mortgage, deed of trust, deed to secure debt, grant, pledge, security interest, assignment, encumbrance, judgment, lien, financing statement, hypothecation, provision in any instrument or other document for confession of judgment, cognovit or other similar right or other remedy, claim, charge, control over or interest of any kind in real or personal property securing any indebtedness, duties, obligations, and liabilities owed to, or claimed to be owed to, a Person, all whether perfected or unperfected, avoidable or unavoidable, based on the common law, statute or contract or otherwise, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction, excluding the precautionary filing of any financing statement by any lessor in a true lease transaction, by any bailor in a true bailment transaction or by any consignor in a true consignment transaction under the Uniform Commercial Code of any jurisdiction or the agreement to give any financing statement by any lessee in a true lease transaction, by any bailee in a true bailment transaction or by any consignee in a true consignment transaction.

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“Loan” means each of the Revolving Loan, the 2006 Term Loan or the Acquisition Term Loan, as the case may be, and “Loans” means the collective reference to the Revolving Loan, the 2006 Term Loan and the Acquisition Term Loan.

“Loan Notice” has the meaning described in Section 2.1.2 (Procedure for Making Advances).

“Lockbox” has the meaning described in Section 2.1.8 (The Collateral Account).

“Maximum Rate” has the meaning described in Section 2.5.4 (Maximum Interest Rate).

“Membership Interest” any and all interests, rights, participations or other equivalents (however designated) of the members of a limited liability company, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.

“Multi-employer Plan” means a Plan that is a Multi-employer plan as defined in Section 4001(a)(3) of ERISA.

“Net Worth” means the Borrowers’ consolidated shareholders’ equity, defined in accordance with GAAP.

“Note” means the Revolving Credit Note, the 2006 Term Note or the Acquisition Term Note, as the case may be, and “Notes” means collectively the Revolving Credit Note, the 2006 Term Note and the Acquisition Term Note, and any other promissory note which may from time to time evidence all or any portion of the Obligations.

“Obligations” means all present and future indebtedness, duties, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of any one or more of the Borrowers to the Lender under, arising pursuant to, in connection with and/or on account of the provisions of this Agreement, each Note, each Security Document, and/or any of the other Financing Documents, the Loans, any Swap Contract and/or any of the Facilities including, without limitation, the principal of, and interest on, each Note, late charges, the Fees, Enforcement Costs, and prepayment fees (if any), letter of credit reimbursement obligations, letter of credit fees or fees charged with respect to any guaranty of any letter of credit; also means all other present and future indebtedness, duties, obligations, and liabilities, whether now existing or contemplated or hereafter arising, of any one or more of the Borrowers to the Lender or its Affiliates of any nature whatsoever, regardless of whether such indebtedness, duties, obligations, and liabilities be direct, indirect, primary, secondary, joint, several, joint and several, fixed or contingent; and also means any and all renewals, extensions, substitutions, amendments, restatements and rearrangements of any such indebtedness, duties, obligations, and liabilities.

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“Outstanding Letter of Credit Obligations” has the meaning described in Section 2.3.3 (Terms of Letters of Credit).

“Patents” means and includes, in each case whether now existing or hereafter arising, all of each Borrower’s rights, title and interest in and to (a) any and all patents and patent applications, including without limitation, those set forth in Schedule 1.1 attached hereto, (b) any and all inventions and improvements described and claimed in such patents and patent applications, (c) reissues, divisions, continuations, renewals, extensions and continuations-in-part of any patents and patent applications, (d) income, royalties, damages, claims and payments now or hereafter due and/or payable under and with respect to any patents or patent applications, including, without limitation, damages and payments for past and future infringements, (e) rights to sue for past, present and future infringements of patents, and (f) all rights corresponding to any of the foregoing throughout the world.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Permitted Liens” means: (a) Liens for Taxes which are not delinquent or which the Lender has determined in the exercise of its sole and absolute discretion (i) are being diligently contested in good faith and by appropriate proceedings, and such contest operates to suspend collection of the contested Taxes and enforcement of a Lien, (ii) the respective Borrower has the financial ability to pay, with all penalties and interest, at all times without materially and adversely affecting such Borrower, and (iii) are not, and will not be with appropriate filing, the giving of notice and/or the passage of time, entitled to priority over any Lien of the Lender; (b) deposits or pledges to secure obligations under workers’ compensation, social security or similar laws, or under unemployment insurance in the ordinary course of business; (c) Liens securing the Obligations; (d) judgment Liens to the extent the entry of such judgment does not constitute a Default or an Event of Default under the terms of this Agreement or result in the sale or levy of, or execution on, any of the Collateral; (e) purchase money security interests in machinery and equipment securing Indebtedness not in excess of $50,000 in the aggregate per each calendar year; (f) Liens securing Indebtedness permitted by Section 6.2.5(g) and (g) such other Liens, if any, as are set forth on Schedule 4.1.20attached hereto and made a part hereof.

“Permitted Uses” means with respect to the (a) Revolving Loan, the payment of expenses incurred in the ordinary course of any Borrower’s business, (b) Acquisition Loan, to finance a portion of the Acquisition and (c) Letter of Credit to support issuance of bonding to Travelers.

“Person” means and includes an individual, a corporation, a partnership, a joint venture, a limited liability company or partnership, a trust, an unincorporated association, a Governmental Authority, or any other organization or entity.

“Plan” means any pension plan that is covered by Title IV of ERISA and in respect of which any Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3 of ERISA.

“Pledge Agreements” means the collective reference to each of the pledge, assignment and security agreements dated as of the Closing Date from (i) Argan pledging its ownership interests in each of SMC and Vitarich GPS, GP, and GPSC, and (ii) GPS pledging its ownership interests in GPH, in each such case, to and for the benefit of Lender, as the same may from time to time be amended, restated, supplemented or otherwise modified substantially in the forms attached hereto as EXHIBIT D and EXHIBIT E, as the case may be.

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“Pledge and Assignment Agreement” means that certain pledge and assignment agreement from Argan for the benefit of the Lender, as the same may from time to time be amended, restated, supplemented or otherwise modified substantially in the forms attached hereto as EXHIBIT F.

“Post-Default Rate” means with respect to all Obligations, the LIBOR Rate in effect from time to time, plus four percent (4.0%) per annum.

“Prepayment” means a Revolving Loan Optional Prepayment or a Term Loan Optional Prepayment, as the case may be, and “Prepayments” mean collectively all, Revolving Loan Optional Prepayments and Term Loan Optional Prepayments.

“Proceeds” has the meaning described in the Uniform Commercial Code as in effect from time to time.

“Pro-forma Balance Sheet” has the meaning described in Section 4.1.27 (Pro-forma Financial Statements).

“Pro-forma Financial Projections” has the meaning described in Section 4.1.27 (Pro-forma Financial Statements).

“Receivable” means one of each Borrower’s now owned and hereafter owned, acquired or created Accounts, Chattel Paper, General Intangibles and Instruments; and “Receivables” means all of each Borrower’s now or hereafter owned, acquired or created Accounts, Chattel Paper, General Intangibles and Instruments, and all Proceeds thereof.

“Registered Organization” means an organization organized solely under the law of a single state or the United States and as to which the state or the United States must maintain a public record showing the organization to have been organized.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder.

“Responsible Officer” means for: (a) Argan, Rainer Bosselmann, President, Arthur Trudel, Senior Vice President and Chief Financial Officer, (b) SMC, Arthur Trudel, Secretary, Vice President and Treasurer, (c) Vitarich, Rainer Bosselmann, Chairman of the Board, Arthur Trudel, Vice President and Secretary, (d) GPS and GPH, Rainer Bosselmann and Arthur Trudel, President and Chief Financial Officer, respectively, of Argan, and (e) GP and GPSC, Rainer Bosselmann, Chairman of the Board, Arthur Trudel, Vice President, Secretary, Treasurer and Chief Financial Officer.

“Restricted Payments” has the meaning described in Section 6.2.4 (Purchase or Redemption of Securities, Dividend Restrictions).

“Revolving Credit Commitment” means the agreement of the Lender relating to the making of the Revolving Loan and advances thereunder subject to and in accordance with the provisions of this Agreement.

“Revolving Credit Commitment Period” means the period of time from the Closing Date to the Business Day preceding the Revolving Credit Termination Date.

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“Revolving Credit Committed Amount” has the meaning described in Section 2.1.1 (Revolving Credit Facility).

“Revolving Credit Expiration Date” means May 31, 2008.

“Revolving Credit Facility” means the facility established by the Lender pursuant to Section 2.1 (Revolving Credit Facility).

“Revolving Credit Note” has the meaning described in Section 2.1.3 (Revolving Credit Note).

“Revolving Credit Termination Date” means the earlier of (a) the Revolving Credit Expiration Date, or (b) the date on which the Revolving Credit Commitment is terminated pursuant to Section 7.2 (Remedies) or otherwise.

“Revolving Credit Unused Line Fee” and “Revolving Credit Unused Line Fees” have the meanings described in Section 2.1.7 (Revolving Credit Unused Line Fee).

“Revolving Loan” has the meaning described in Section 2.1.1 (Revolving Credit Facility).

“Revolving Loan Account” has the meaning described in Section 2.1.6 (Revolving Loan Account).

“Revolving Loan Optional Prepayment” and “Revolving Loan Optional Prepayments” have the meanings described in Section 2.1.4 (Optional Prepayment of Revolving Loan).

“Roseville Contracts” means those certain Roseville Energy Park Contracts by and between the Acquired Companies and Roseville Energy Park.

“Security Documents” means collectively any assignment, pledge agreement, security agreement, mortgage, deed of trust, deed to secure debt, financing statement and any similar instrument, document or agreement under or pursuant to which a Lien is now or hereafter granted to, or for the benefit of, the Lender on any real or personal property of any Person to secure all or any portion of the Obligations, all as the same may from time to time be amended, restated, supplemented or otherwise modified.

“Senior Funded Debt” means at any date, for each Borrower and its Subsidiaries, whether secured or unsecured, the aggregate of all of the following: (a) Indebtedness of such Person for borrowed money, including the Credit Facilities, or for the deferred purchase price of property or services, (b) any obligations of such Person in respect of letters of credit, banker’s or other acceptances or similar obligations issued or created for the account of such Person, (c) Lease Obligations of such Person with respect to Capital Leases, and (d) all liabilities secured by any Lien on any property owned by such Person, to the extent attached to such Person’s interest in such property, even though such Person has not assumed or become personally liable for the payment thereof, but, (e) excluding all debt held by the Lender that is cash secured (including, the Letter of Credit Obligations, to the extent it continues to be cash secured) and all Subordinated Indebtedness.

“SMC” means Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, and its successors and assigns.

“Solvent” means when used with respect to any Person that at the time of determination:

(a)the assets of such Person, at a fair valuation, are in excess of the total amount of its debts (including, without limitation, contingent liabilities); and

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(b)the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; and

(c)it is then able and expects to be able to pay its debts (including, without limitation, contingent debts and other commitments) as they mature; and

(d)it has capital sufficient to carry on its business as conducted and as proposed to be conducted.

For purposes of determining whether a Person is Solvent, the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“State” means the State of Maryland.

“Subordinated Indebtedness” means all Indebtedness incurred at any time by any one or more of the Borrowers, which is in amounts, subject to repayment terms, and subordinated to the Obligations, as set forth in one or more written agreements, all in form and substance satisfactory to the Lender in its sole and absolute discretion.

“Subsidiary” means any corporation the majority of the voting shares of which at the time are owned directly by any Borrower and/or by one or more Subsidiaries of any Borrower.

“Supporting Obligation” means a Letter-of-credit right, secondary obligation or obligation of a secondary obligor or that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument or investment property.

“Swap Contract” means any document, instrument or agreement between each Borrower and Lender or any affiliate of Lender, now existing or entered into in the future, relating to an interest rate swap transaction, forward rate transaction, interest rate cap, floor or collar transaction, any similar transaction, any option to enter into any of the foregoing, and any combination of the foregoing, which agreement may be oral or in writing, including, without limitation, any master agreement relating to or governing any or all of the foregoing and any related schedule or confirmation, each as amended from time to time.

“Taxes” means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character (including all penalties or interest thereon), which at any time may be assessed, levied, confirmed or imposed by any Governmental Authority on any of the Borrowers or any of its or their properties or assets or any part thereof or in respect of any of its or their franchises, businesses, income or profits.

“Term Loan Facilities” means the facilities for the 2006 Term Loan and the Acquisition Term Loan established by the Lender pursuant to Section 2.2 (Term Loan Facilities).

“Term Loan Optional Prepayment” and “Term Loan Optional Prepayments” have the meanings described in

Section 2.2.4 (Optional Prepayments of Term Loans).

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“Total Funded Debt” means all secured and unsecured Senior Funded Debt and Subordinated Indebtedness.

“Trademarks” means and includes in each case whether now existing or hereafter arising, all of each Borrower’s rights, title and interest in and to (a) any and all trademarks (including service marks), trade names and trade styles, and applications for registration thereof and the goodwill of the business symbolized by any of the foregoing, including without limitation, those set forth in Schedule 1.1 attached hereto, (b) any and all licenses of trademarks, service marks, trade names and/or trade styles, whether as licensor or licensee, (c) any renewals of any and all trademarks, service marks, trade names, trade styles and/or licenses of any of the foregoing, (d) income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, damages, claims, and payments for past, present and future infringements thereof, (e) rights to sue for past, present and future infringements of any of the foregoing, including the right to settle suits involving claims and demands for royalties owing, and (f) all rights corresponding to any of the foregoing throughout the world.

“Travelers” means Travelers Casualty and Surety Company of America.

“Travelers Letter Agreement” means that certain Letter Agreement, dated the date hereof, by and between the Lender and Travelers.

“Uniform Commercial Code” means, unless otherwise provided in this Agreement, the Uniform Commercial Code as adopted by and in effect from time to time in the State or in any other jurisdiction, as applicable.

“Vitarich” means Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, and its successors and assigns.

“Wholly Owned Subsidiary” means any domestic United States corporation, all the shares of stock of all classes of which (other than directors’ qualifying shares) at the time are owned directly or indirectly by a Borrower and/or by one or more Wholly Owned Subsidiaries of a Borrower.

Section 1.2Accounting Terms and Other Definitional Provisions.

Unless otherwise defined herein, as used in this Agreement and in any certificate, report or other document made or delivered pursuant hereto, accounting terms not otherwise defined herein, and accounting terms only partly defined herein, to the extent not defined, shall have the respective meanings given to them under GAAP, as consistently applied to the applicable Person. All terms used herein which are defined by the Uniform Commercial Code shall have the same meanings as assigned to them by the Uniform Commercial Code unless and to the extent varied by this Agreement. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, schedule and exhibit references are references to articles, sections or subsections of, or schedules or exhibits to, as the case may be, this Agreement unless otherwise specified. As used herein, the singular number shall include the plural, the plural the singular and the use of the masculine, feminine or neuter gender shall include all genders, as the context may require. Reference to any one or more of the Financing Documents shall mean the same as the foregoing may from time to time be amended, restated, substituted, extended, renewed, supplemented or otherwise modified. Reference in this Agreement and the other Financing Documents to the “Borrower”, the “Borrowers”, “each Borrower” or otherwise with respect to any one or more of the Borrowers shall mean each and every Borrower and any one or more of the Borrowers, jointly and severally, unless a specific Borrower is expressly identified.

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ARTICLE II

THE CREDIT FACILITIES

Section 2.1The Revolving Credit Facility.

2.1.1Revolving Credit Facility.

Subject to and upon the provisions of this Agreement, the Lender establishes a revolving credit facility in favor of the Borrowers. The aggregate of all advances under the Revolving Credit Facility is sometimes referred to in this Agreement as the “Revolving Loan”.

The principal amount of Four Million Two Hundred Fifty Thousand Dollars ($4,250,000) is the “Revolving Credit Committed Amount”.

During the Revolving Credit Commitment Period, any or all of the Borrowers may request advances under the Revolving Credit Facility in accordance with the provisions of this Agreement; provided that after giving effect to any Borrower’s request the aggregate outstanding principal balance of the Revolving Loan would not exceed the Revolving Credit Committed Amount.

Unless sooner paid, the unpaid Revolving Loan, together with interest accrued and unpaid thereon, and all other Obligations shall be due and payable in full on the Revolving Credit Expiration Date.

2.1.2Procedure for Making Advances Under the Revolving Loan; Lender Protection Loans.

The Borrowers may borrow under the Revolving Credit Facility on any Business Day. Advances under the Revolving Loan shall be deposited to a demand deposit account of a Borrower with the Lender (or an Affiliate of the Lender) or shall be otherwise applied as directed by the Borrowers, which direction the Lender may require to be in writing. No later than 11:00 a.m. (Eastern Time) on the date of the requested borrowing, the Borrowers shall give the Lender oral or written notice (a “Loan Notice”) of the amount and (if requested by the Lender) the purpose of the requested borrowing. Any oral Loan Notice shall be confirmed in writing by the Borrowers within three (3) Business Days after the making of the requested advance under the Revolving Loan. Each Loan Notice shall be irrevocable.

In addition, each of the Borrowers hereby irrevocably authorizes the Lender at any time and from time to time, without further request from or notice to the Borrowers, to make advances under the Revolving Loan, which the Lender, in its sole and absolute discretion, deems necessary or appropriate to protect the interests of the Lender, including, without limitation, advances and reserves under the Revolving Loan made to cover debit balances in the Revolving Loan Account, principal of, and/or interest on, any Loan, the Obligations, and/or Enforcement Costs, prior to, on, or after the termination of other advances under this Agreement, regardless of whether the outstanding principal amount of the Revolving Loan that the Lender may advance or reserve hereunder exceeds the Revolving Credit Committed Amount. Notwithstanding the foregoing, prior to the occurrence of any Default, the Lender will provide notice of any advances made under the Revolving Loan pursuant to this provision.

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2.1.3Revolving Credit Note.

The joint and several obligation of the Borrowers to pay the Revolving Loan, with interest, shall be evidenced by a promissory note (as from time to time extended, amended, restated, supplemented or otherwise modified, the “Revolving Credit Note”) substantially in the form of EXHIBIT B-1 attached hereto and made a part hereof, with appropriate insertions. The Borrowers shall execute and deliver to the Lender on the date hereof the Revolving Credit Note in substitution for and not satisfaction of, the issued and outstanding Revolving Credit Note, and the Revolving Credit Note shall be the “Revolving Credit Note” for all purposes of the Financing Documents. The Note being substituted pursuant to this Agreement shall be marked “Replaced” and returned to the Borrowers after the execution of this Agreement. The Revolving Credit Note shall be dated as of the Closing Date, shall be payable to the order of the Lender at the times provided in the Revolving Credit Note, and shall be in the principal amount of the Revolving Credit Committed Amount. The Revolving Credit Note shall not operate as a novation of any of the Obligations or nullify, discharge, or release any such Obligations under the Existing Financing Agreement or the continuing contractual relationship of the parties hereto in accordance with the provisions of this Agreement.

Each of the Borrowers acknowledges and agrees that, if the outstanding principal balance of the Revolving Loan outstanding from time to time exceeds the face amount of the Revolving Credit Committed Amount, the excess shall bear interest at the Post-Default Rate for the Revolving Loan and shall be payable, with accrued interest, ON DEMAND.

2.1.4Optional Prepayments of Revolving Loan.

The Borrowers shall have the option at any time and from time to time to prepay (each a “Revolving Loan Optional Prepayment” and collectively the “Revolving Loan Optional Prepayments”) the Revolving Loan, in whole or in part without premium or penalty.

2.1.5Treasury Management.

The Borrowers will provide the Lender with a list of all depository and investment accounts now or hereafter maintained with other financial institutions and upon request of the Lender, will obtain blocked account agreements in form and substance satisfactory to the Lender from such institutions; provided, however, that the provisions of this Section 2.1.5 shall not apply to deposit accounts used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrowers’ employees; provided, further, the provisions of this Section 2.1.5 shall not apply to those certain investments of the Acquired Companies held in investment accounts, as set forth in detail and disclosed on the Schedule 2.1.5 attached hereto.

2.1.6Revolving Loan Account.

The Lender will establish and maintain a loan account on its books (the “Revolving Loan Account”) to which the Lender will (a) debit (i) the principal amount of each advance of the Revolving Loan made by the Lender hereunder as of the date made, (ii) the amount of any interest accrued on the Revolving Loan as and when due, and (iii) any other amounts due and payable by the Borrowers to the Lender from time to time under the provisions of this Agreement in connection with the Revolving Loan, including, without limitation, Enforcement Costs, Fees, late charges, and service, collection and audit fees, as and when due and payable, and (b) credit all payments made by the Borrowers to the Lender on account of the Revolving Loan as of the date made. The Lender may debit the Revolving Loan Account for the amount of any Item of Payment that is returned to the Lender unpaid. All credit entries to the Revolving Loan Account are conditional and shall be readjusted as of the date made if final and indefeasible payment is not received by the Lender in cash or solvent credits. Any and all periodic or other statements or reconciliations, and the information contained in those statements or reconciliations, of the Revolving Loan Account shall be final, binding and conclusive upon the Borrowers in all respects, absent manifest error, unless the Lender receives specific written objection thereto from the Borrowers within thirty (30) Business Days after such statement or reconciliation shall have been sent by the Lender.

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2.1.7Revolving Credit Unused Line Fee.

The Borrowers shall pay to the Lender a revolving credit facility fee (collectively, the “Revolving Credit Unused Line Fees” and individually, a “Revolving Credit Unused Line Fee”) in an amount equal to three eighths of one percent (.375%) per annum of the average daily unused and undisbursed portion of the Revolving Credit Committed Amount in effect from time to time accruing during each month. The accrued and unpaid portion of the Revolving Credit Unused Line Fee shall be paid by the Borrowers to the Lender monthly in arrears on the last day of each month, commencing on the first such date following the date hereof, and on the Revolving Credit Termination Date.

2.1.8The Collateral Account.

Upon the occurrence and during the continuance of an Event of Default and if the Lender requests, the Borrowers will deposit, or cause to be deposited, all Items of Payment to a bank account designated by the Lender and from which the Lender alone has power of access and withdrawal (the “Collateral Account”). When a Collateral Account is in existence, each deposit shall be made not later than the next Business Day after the date of receipt of the Items of Payment. The Items of Payment shall be deposited in precisely the form received, except for the endorsements of the Borrowers where necessary to permit the collection of any such Items of Payment, which endorsement the Borrowers hereby agree to make. In the event the Borrowers fail to do so, the Borrowers hereby authorize the Lender to make the endorsement in the name of any or all of the Borrowers. During any period when a Collateral Account is in place, prior to such a deposit, the Borrowers will not commingle any Items of Payment with any of the Borrowers’ other funds or property, but will hold them separate and apart in trust and for the account of the Lender.

In addition, upon the occurrence and during the continuance of an Event of Default, if so directed by the Lender, the Borrowers shall direct the mailing of all Items of Payment from their Account Debtors to one or more post-office boxes designated by the Lender, or to such other additional or replacement post-office boxes pursuant to the request of the Lender from time to time (collectively, the “Lockbox”). The Lender shall have unrestricted and exclusive access to the Lockbox.

After a Collateral Account is established, the Borrowers hereby authorize the Lender to inspect all Items of Payment, endorse all Items of Payment in the name of any or all of the Borrowers, and deposit such Items of Payment in the Collateral Account. The Lender reserves the right, exercised in its sole and absolute discretion from time to time, to provide to the Collateral Account credit prior to final collection of an Item of Payment and to disallow credit for any Item of Payment which is unsatisfactory to the Lender. In the event Items of Payment are returned to the Lender for any reason whatsoever, the Lender may, in the exercise of its discretion from time to time, forward such Items of Payment a second time. Any returned Items of Payment shall be charged back to the Collateral Account, the Revolving Loan Account, or other account, as appropriate.

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The Lender will apply the whole or any part of the collected funds credited to the Collateral Account against the Revolving Loan (or with respect to Items of Payment that are not proceeds of Accounts or Inventory or after an Event of Default, against any of the Obligations) or credit such collected funds to a depository account of any or all of the Borrowers with the Lender (or an Affiliate of the Lender), the order and method of such application to be in the sole discretion of the Lender. On the first day of each month, the Borrowers shall pay the Lender an amount equal to the additional interest which would have accrued on the Revolving Loan during the preceding month if collections in the Collateral Account during the month had been received two (2) Business Days subsequent to their actual receipt; any resulting increase in the amount of interest payable by the Borrowers shall be part of the Obligations.

Section 2.2The Term Loan Facilities.

2.2.1The 2006 Term Loan Facility.

(a)2006 Term Loan Commitment.

The Lender has made a loan (the “2006 Term Loan”) to the Borrowers in the principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the “2006 Term Loan Committed Amount”). The obligation of the Lender to make the 2006 Term Loan is herein called its “2006 Term Loan Commitment”. The 2006 Term Loan has a principal outstanding balance as of November 9, 2006 of One Million Three Hundred Seventy-Four Thousand Nine Hundred Ninety-Six Dollars and Ninety-Nine Cents ($1,374,996.99).

(b)The 2006 Term Note.

The joint and several obligation of the Borrowers to pay the 2006 Term Loan with interest is evidenced by a promissory note dated as of Closing Date (as from time to time extended, amended, restated, supplemented or otherwise modified, the “2006Term Note”) substantially in the form of EXHIBIT B-2 attached hereto and made a part hereof with appropriate insertions. The 2006 Term Note shall remain in full force and effect without setoff, and the Borrowers shall continue to pay the 2006 Term Note in accordance with the terms hereof and thereof.

2.2.2The Acquisition Term Loan Facility.

(a)Acquisition Term Loan Commitment.

Subject to and upon the provisions of this Agreement, including, without limitation, the provisions of Section 5.3 of this Agreement, the Lender agrees to make a loan (the “Acquisition Term Loan”) to the Borrowers on the Closing Date in the principal amount of Eight Million Dollars ($8,000,000) (the “Acquisition Term Loan Committed Amount”). The obligation of the Lender to make the Acquisition Term Loan is herein called its “Acquisition Term Loan Commitment”.

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(b)The Acquisition Term Note.

The joint and several obligation of the Borrowers to pay the Acquisition Term Loan with interest shall be evidenced by a promissory note (as from time to time extended, amended, restated, supplemented or otherwise modified, the “Acquisition Term Note”) substantially in the form of EXHIBIT B-3 attached hereto and made a part hereof with appropriate insertions.

2.2.3Optional Prepayments of Term Loans.

The Borrowers may, at their option, at any time and from time to time, prepay (each a “Term Loan Optional Prepayment” and collectively the “Term Loan Optional Prepayments”) the 2006 Term Loan or the Acquisition Term Loan, in whole or in part, upon five (5) Business Days prior written notice, specifying the date and amount of prepayment. The amount to be so prepaid, together with interest accrued thereon to date of prepayment if the amount is intended as a prepayment of the 2006 Term Loan or the Acquisition Term Loan in whole, shall be paid by the Borrowers to the Lender on the date specified for such prepayment. Partial Term Loan Optional Prepayments shall be in an amount not less than the amount of the next principal installment under the 2006 Term Loan or the Acquisition Term Loan, as applicable, and shall be applied first to all accrued and unpaid interest on the principal of the 2006 Term Note or the Acquisition Term Note, as applicable, then to the balloon payment due at maturity, if any, and then to principal against the principal installments in the inverse order of their maturity.

2.2.4Mandatory Prepayments of Acquisition Term Loan.

Borrowers shall make mandatory prepayments (each an “Acquisition Term Loan Mandatory Prepayment” and collectively the “Acquisition Term Loan Mandatory Prepayments”) as follows:

(a) the Acquisition Term Loan shall be reduced by 100% of all net cash proceeds (i) from sales and other dispositions (including involuntary dispositions) of property and assets of any Borrower and its Subsidiaries (excluding sales of Inventory in the ordinary course of business); provided, that, notwithstanding the foregoing, the Borrowers shall not be required to prepay the Acquisition Term Loan in accordance with this paragraph (a)(i) except to the extent that the net cash proceeds from all assets sales equals or exceeds One Hundred Thousand Dollars ($100,000) in the aggregate during any fiscal year, (ii) from the issuance or incurrence after the Closing Date of additional Indebtedness of the Borrowers or any of its Subsidiaries (excluding any Indebtedness incurred in accordance with Section 6.2.5) and (iii) from the issuance after the Closing Date of additional equity interests in the Borrowers or any of its Subsidiaries (excluding any Indebtedness incurred in accordance with Section 6.2.6.

(b) if, for any fiscal year of the Borrowers, commencing January 31, 2008, the Total Funded Debt to EBITDA ratio as of the last day of such fiscal year is greater than or equal to 1.00 to 1.00, the Borrowers shall, on the relevant Excess Cash Flow Application Date, apply fifty percent (50%) of such Excess Cash Flow toward the prepayment of the Acquisition Term Loan. Each such prepayment shall be made on a date (an “Excess Cash Flow Application Date”) no later than five (5) Business Days after the earlier of (i) the date on which the financial statements of the Borrowers referred to in Section 6.1.1(a) (Financial Statements) for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Lender and (ii) the date such financial statements are actually delivered. Borrower shall also pay to Lender on each Excess Cash Flow Application Date accrued interest to such date on the amount prepaid. Each Acquisition Term Loan Mandatory Prepayment shall be applied to the principal payment due at maturity and then to principal against the principal installments in the inverse order of their maturity.

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(c) if, for any reason, the Borrowers have not satisfied either of the Escrow Release Conditions by

February 1, 2008, the Lender shall without notice apply the full amount of the Escrow Fund toward the prepayment of the Acquisition Term Loan.

2.2.5The Acquisition Term Loan Fee.

In consideration of the Lender making the Acquisition Term Loan, the Borrowers shall pay to the Lender a non-refundable fee of Eighty Thousand Dollars ($80,000) on or before the Closing Date (the “Acquisition Term Loan Fee”).

Section 2.3The Letter of Credit Facility.

2.3.1Letters of Credit.

Subject to and upon the provisions of this Agreement, the Borrowers, upon the prior approval of Lender, may obtain standby letters of credit (as the same may from time to time be amended, supplemented orotherwise modified, each a “Letter of Credit” and collectively, the “Letters of Credit”) from Lender on the Closing Date for the benefit of Travelers, or other similar insurance company. The Borrowers will not be entitled to obtain a Letter of Credit hereunder unless after giving effect to the request, the Letter of Credit Obligations would not exceed Ten Million Dollars ($10,000,000). The obligation of the Lender to issue the Letter of Credit is herein called its “Letter of Credit Commitment”.

2.3.2Letter of Credit Fees.

Prior to or simultaneously with the opening of each Letter of Credit, Borrowers shall pay to Lender, a letter of credit fee (each a “Letter of Credit Fee” and collectively the “Letter of Credit Fees”) in an amount equal to one percent (1%) per annum of the face amount of the Letter of Credit. The Letter of Credit Fees shall be paid upon the opening of each Letter of Credit and upon each anniversary thereof, if any. In addition, Borrowers shall pay to Lender all other reasonable and customary issuance, amendment, negotiation, processing, transfer or other fees to the extent and as and when required by the provisions of any Letter of Credit Agreement. All Letter of Credit Fees and all such other additional fees are included in and are a part of the “Fees” payable by Borrowers under the provisions of this Agreement and are a part of the Obligations.

2.3.3Terms of Letters of Credit.

Each Letter of Credit shall (a) be opened pursuant to a Letter of Credit Agreement substantially in the form attached hereto as Exhibit G, and (b) expire on a date not later than the Business Day preceding the first anniversary of its date of issuance; provided, that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods, subject to the Lender’s right to termination prior to any expiration date.

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All outstanding Letter of Credit Obligations, whether or not due or payable, shall be secured at all times by one or more interest bearing accounts with and in the name of Lender and over which Lender alone shall have exclusive power of access and withdrawal (collectively, the “Letter of Credit Cash Collateral Account”). The Letter of Credit Cash Collateral Account is to be held by Lender as additional collateral and security for any Letter of Credit Obligations. Each Borrower hereby assigns, pledges, grants and sets over to Lender a first priority security interest in, and Lien on, all of the funds on deposit in the Letter of Credit Cash Collateral Account, together with any and all proceeds and products thereof as additional collateral and security for the Letter of Credit Obligations. Each Borrower acknowledges and agrees that Lender shall be entitled to fund any draw or draft on any Letter of Credit Obligations from the monies on deposit in the Letter of Credit Cash Collateral Account without notice to or consent of the Borrowers. The Borrowers further acknowledge and agree that Lender’s election to fund any draw or draft on any Letter of Credit Obligation from the Letter of Credit Cash Collateral Account shall in no way limit, impair, lessen, reduce, release or otherwise adversely affect Borrowers obligation to pay any Letter of Credit Obligations. At such time as all Letter of Credit Obligations have been paid in full, Lender agrees to apply the amount of any remaining funds on deposit in the Letter of Credit Cash Collateral Account to the then unpaid balance of the Obligations under the other Credit Facilities in such order and manner as Lender shall determine in its sole and absolute discretion in accordance with the provisions of this Agreement.

The aggregate face amount of all Letters of Credit at any one time outstanding and issued by Lender pursuant to the provisions of this Agreement, plus the amount of any unpaid Letter of Credit Fees accrued or scheduled to accrue thereon, and less the aggregate amount of all drafts issued under or purporting to have been issued under such Letters of Credit that have been paid by Lender and for which Lender has been reimbursed by the Borrowers in full in accordance with Section 2.3.5 (Payments of Letters of Credit) and the Letter of Credit Agreements, and for which Lender has no further obligation or commitment to restore all or any portion of the amounts drawn and reimbursed, is herein called the “Outstanding Letter of Credit Obligations”.

2.3.4Procedures for Letters of Credit.

The Borrowers shall give Lender written notice at least five (5) Business Days (other than the initial Letter of Credit, which Borrowers shall request in writing, to be issued on the Closing Date) prior to the date on which Borrowers desire Lender to issue a Letter of Credit. Such notice shall be accompanied by a duly executed Letter of Credit Agreement specifying, among other things: (a) the name and address of the intended beneficiary of the Letter of Credit, (b) the requested face amount of the Letter of Credit, (c) whether the Letter of Credit is to be revocable or irrevocable, (d) the Business Day on which the Letter of Credit is to be opened and the date on which the Letter of Credit is to expire, (e) the terms of payment of any draft or drafts which may be drawn under the Letter of Credit, and (f) any other terms or provisions Borrowers desire to be contained in the Letter of Credit. Such notice shall also be accompanied by such other information, certificates, confirmations, and other items as Lender may require to assure that the Letter of Credit is to be issued in accordance with the provisions of this Agreement and a Letter of Credit Agreement. In the event of any conflict between the provisions of this Agreement and the provisions of a Letter of Credit Agreement, the provisions of this Agreement shall prevail and control unless otherwise expressly provided in the Letter of Credit Agreement. Upon (x) receipt of such notice, (y) payment of all Letter of Credit Fees and all other Fees payable in connection with the issuance of such Letter of Credit, and (z) receipt of a duly executed Letter of Credit Agreement, Lender shall process such notice and Letter of Credit Agreement in accordance with its customary procedures and open such Letter of Credit on the Business Day specified in such notice.

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2.3.5Payments of Letters of Credit.

Each Borrower hereby promises to pay to Lender, ON DEMAND and in United States Dollars and authorizes Lender to debit the Letter of Credit Cash Collateral Account, the following which are herein collectively referred to as the “Current Letter of Credit Obligations”:

(a)the amount which Lender has paid or will be required to pay under each draft or draw on a Letter of Credit, whether such demand be in advance of Lender’s payment or for reimbursement for such payment;

(b)any and all reasonable charges and expenses which Lender may pay or incur relative to the Letter of Credit and/or such draws or drafts; and

(c)interest on the amounts described in (a) and (b) not paid by Borrowers as and when due and payable under the provisions of (a) and (b) above from the day the same are due and payable until paid in full at the Post-Default Rate.

(d)unpaid draft or draw amounts by Borrowers described in (a) and (b) shall accrue interest at the same rates as the Acquisition Term Loan.

In addition, each Borrower hereby promises to pay any and all other Letter of Credit Obligations as and when due and payable in accordance with the provisions of this Agreement and the Letter of Credit Agreements. The obligation of each Borrower to pay Current Letter of Credit Obligations and all other Letter of Credit Obligations shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which Borrowers or any other account party may have or have had against the beneficiary of such Letter of Credit, Lender, or any other Person, including, without limitation, any defense based on the failure of any draft or draw to conform to the terms of such Letter of Credit, any draft or other document proving to be forged, fraudulent or invalid, or the legality, validity, regularity or enforceability of such Letter of Credit, any draft or other documents presented with any draft, any Letter of Credit Agreement, this Agreement, or any of the other Financing Documents, all whether or not Lender had actual or constructive knowledge of the same, and irrespective of any Collateral, security or guarantee therefor or right of offset with respect thereto and irrespective of any other circumstances whatsoever which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower for any Letter of Credit Obligations, in bankruptcy or otherwise; provided, however, that any Borrower shall not be obligated to reimburse Lender for any wrongful payment under such Letter of Credit made as a result of Lender’s gross negligence or willful misconduct. The obligation of each Borrower to pay the Letter of Credit Obligations shall not be conditioned or contingent upon the pursuit by Lender or any other Person at any time of any right or remedy against any Person which may be or become liable in respect of all or any part of such obligation or against any Collateral, security or guarantee therefor or right of offset with respect thereto.

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The Letter of Credit Obligations shall continue to be effective, or be reinstated, as the case may be, if at any time payment of all or any portion of the Letter of Credit Obligations is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Person, or upon or as a result of the appointment of a receiver, intervenor, or conservator of, or trustee or similar officer for, any Person, or any substantial part of such Person’s property, all as though such payments had not been made.

2.3.6Change in Law; Increased Cost.

If any change in any law or regulation or in the interpretation thereof by any court or other Governmental Authority charged with the administration thereof shall either (a) impose, modify or deem applicable any reserve, special deposit or similar requirement against Letters of Credit issued by Lender, or (b) impose on Lender any other condition regarding this Agreement or any Letter of Credit, and the result of any event referred to in clauses (a) or (b) above shall be to increase the cost to Lender of issuing, maintaining or extending the Letter of Credit or the cost to Lender of funding any obligation under or in connection with the Letter of Credit (other than a cost relating to net income, franchise or similar taxes), then, upon demand by Lender, Borrowers shall immediately pay to Lender from time to time as specified by Lender, additional amounts which shall be sufficient to compensate Lender for such increased cost, together with interest on each such amount from the date demanded until payment in full thereof at a rate per annum equal to the then highest current rate of interest on the Revolving Loan. A certificate as to such increased cost incurred by Lender, submitted by Lender to Borrowers, shall be conclusive, absent manifest error.

2.3.7General Letter of Credit Provisions.

Borrowers hereby instruct Lender to pay any draft complying with the terms of any Letter of Credit irrespective of any instructions of any Borrower to the contrary. Each Borrower assumes all risks of the acts and omissions of the beneficiary and other users of any Letter of Credit. Lender and its respective branches, Affiliates and/or correspondents shall not be responsible for and each Borrower hereby indemnifies and holds Lender and its respective branches, Affiliates and/or correspondents harmless from and against all liability, loss and expense (including reasonable attorney’s fees and costs) incurred by Lender and/or its branches, Affiliates and/or correspondents relative to and/or as a consequence of (a) any failure by any Borrower to perform the agreements hereunder and under any Letter of Credit Agreement, (b) any Letter of Credit Agreement, this Agreement, any Letter of Credit and any draft, draw and/or acceptance under or purported to be under any Letter of Credit, (c) any action taken or omitted by Lender and/or any of its respective branches, Affiliates and/or correspondents at the request of any Borrower, (d) any failure or inability to perform in accordance with the terms of any Letter of Credit by reason of any control or restriction rightfully or wrongfully exercised by any de facto or de jure Governmental Authority, group or individual asserting or exercising governmental or paramount powers, and/or (e) any consequences arising from causes beyond the control of Lender and/or any of its respective branches, Affiliates and/or correspondents.

Except for gross negligence or willful misconduct, Lender and its respective branches, Affiliates and/or correspondents, shall not be liable or responsible in any respect for any (a) error, omission, interruption or delay in transmission, dispatch or delivery of any one or more messages or advices in connection with any Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise and despite any cipher or code which may be employed, and/or (b) action, inaction or omission which may be taken or suffered by it or them in good faith or through inadvertence in identifying or failing to identify any beneficiary or otherwise in connection with any Letter of Credit.

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Any Letter of Credit may be amended, modified or revoked only upon the receipt by Lender from any Borrower and the beneficiary (including any transferee and/or assignee of the original beneficiary), of a written consent and request therefor.

If any Laws, order of court and/or ruling or regulation of any Governmental Authority of the United States (or any state thereof) and/or any country other than the United States permits a beneficiary under a Letter of Credit to require Lender and/or any of its respective branches, Affiliates and/or correspondents to pay drafts under or purporting to be under a Letter of Credit after the expiration date of the Letter of Credit, Borrowers shall reimburse Lender, as appropriate, for any such payment pursuant to provisions of Section 2.3.6 (Change in Law; Increased Cost).

Except as may otherwise be specifically provided in a Letter of Credit or Letter of Credit Agreement, the laws of the State and the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500 shall govern the Letters of Credit. The Laws, rules, provisions and regulations of the Uniform Customs and Practice for Documentary Credits are hereby incorporated by reference. In the event of a conflict between the Uniform Customs and Practice for Documentary Credits and the laws of the State, the Uniform Customs and Practice for Documentary Credits shall prevail.

Section 2.4Escrow Reserve.

On the Closing Date, the Borrower shall deposit Two Million Dollars ($2,000,000) of the Acquisition Term Loan proceeds (“Escrow Fund”) in an interest bearing account with the Lender (the “Escrow Account”) to be established as of the Closing Date and pledged to the Lender at all times pursuant to the Pledge and Assignment Agreement. Provided, no Default or Event of Default has occurred or is continuing, the Lender will release the Escrow Fund to the Borrowers upon the satisfaction of either (each a “Escrow Release Condition”) (i) the Acquired Companies, on a consolidated basis, will have achieved a twelve (12) month trailing EBITDA of not less than Twelve Million Dollars ($12,000,000), tested as of the twelve (12) month period ending December 31, 2007 or (ii) evidence satisfactory to the Lender, that from inception through the Closing Date, the write down by the Acquired Companies of Two Million Dollars ($2,000,000) under the Roseville Contracts has been collected in its entirety from Roseville Energy Park.

Section 2.5General Financing Provisions.

2.5.1Borrowers’ Representatives.

The Borrowers hereby represent and warrant to the Lender that each of them will derive benefits, directly and indirectly, from each Loan, both in their separate capacity and as a member of the integrated group to which each of the Borrowers belong and because the successful operation of the integrated group is dependent upon the continued successful performance of the functions of the integrated group as a whole, because (a) the terms of the consolidated financing provided under this Agreement are more favorable than would otherwise be obtainable by the Borrowers individually, (b) this financing has enabled a certain purchase agreement transaction and (c) Borrowers’ additional administrative and other costs and reduced flexibility associated with individual financing arrangements which would otherwise be required if obtainable would substantially reduce the value to the Borrowers of the financing. The Borrowers in the discretion of their respective managements are to agree among themselves as to the allocation of proceeds of the Loan, provided, however, that the Borrowers shall be deemed to have represented and warranted to the Lender at the time of allocation that each benefit and use of proceeds is a Permitted Use.

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For administrative convenience, each Borrower hereby irrevocably appoints Argan as each Borrowers attorney-in-fact, with power of substitution (with the prior written consent of the Lender in the exercise of its sole and absolute discretion), in the name of Argan or in the name of any Borrower or otherwise to take any and all actions with respect to the this Agreement, the other Financing Documents, the Obligations and/or the Collateral (including, without limitation, the Proceeds thereof) as Argan may so elect from time to time, including, without limitation, actions to (i) request advances under the Loan and direct the Lender to disburse or credit the proceeds of any Loan directly to an account of Argan any one or more of the Borrowers or otherwise, which direction shall evidence the making of such Loan and shall constitute the acknowledgment by each of the Borrowers of the receipt of the proceeds of such Loan, (ii) enter into, execute, deliver, amend, modify, restate, substitute, extend and/or renew this Agreement, any Additional Borrower Joinder Supplement, any other Financing Documents, security agreements, mortgages, deposit account agreements, instruments, certificates, waivers, letter of credit applications, releases, documents and agreements from time to time, and (iii) endorse any check or other item of payment in the name of any Borrower or in the name of Argan. The foregoing appointment is coupled with an interest, cannot be revoked without the prior written consent of the Lender, and may be exercised from time to time through Argan’s duly authorized officer, officers or other Person or Persons designated by Argan to act from time to time on behalf of Argan.

Each of the Borrowers hereby irrevocably authorizes the Lender to make Loans to any one or more of the Borrowers pursuant to the provisions of this Agreement upon the written, oral or telephone request of any one or more of the Persons who is from time to time a Responsible Officer of a Borrower under the provisions of the most recent certificate of corporate resolutions and/or incumbency of the Borrowers on file with the Lender and also upon the written, oral or telephone request of any one of the Persons who is from time to time a Responsible Officer of Argan under the provisions of the most recent certificate of corporate resolutions and/or incumbency for Argan on file with the Lender.

The Lender assumes no responsibility or liability for any errors, mistakes, and/or discrepancies in the oral, telephonic, written or other transmissions of any instructions, orders, requests and confirmations between the Lender and the Borrowers in connection with the Credit Facilities, any Loan, any Letter of Credit or any other transaction in connection with the provisions of this Agreement. Without implying any limitation on the joint and several nature of the Obligations, the Lender agrees that, notwithstanding any other provision of this Agreement, the Borrowers may create reasonable inter-company indebtedness between or among the Borrowers with respect to the allocation of the benefits and proceeds of the advances and Credit Facilities under this Agreement. The Borrowers agree among themselves, and the Lender consents to that agreement, that each Borrower shall have rights of contribution from all of the other Borrowers to the extent such Borrower incurs Obligations in excess of the proceeds of the Loans received by, or allocated to purposes for the direct benefit of, such Borrower. All such indebtedness and rights shall be, and are hereby agreed by the Borrowers to be, subordinate in priority and payment to the indefeasible repayment in full in cash of the Obligations, and, unless the Lender agrees in writing otherwise, shall not be exercised or repaid in whole or in part until all of the Obligations have been indefeasibly paid in full in cash. The Borrowers agree that all of such inter-company indebtedness and rights of contribution are part of the Collateral and secure the Obligations. Each Borrower hereby waives all rights of counterclaim, recoupment and offset between or among themselves arising on account of that indebtedness and otherwise. Each Borrower shall not evidence the inter-company indebtedness or rights of contribution by note or other instrument, and shall not secure such indebtedness or rights of contribution with any Lien or security. Notwithstanding anything contained in this Agreement to the contrary, the amount covered by each Borrower under the Obligations (including, without limitation, Section 2.5.8 (Guaranty)) shall be limited to an aggregate amount (after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Borrower in respect of the Obligations) which, together with other amounts owing by such Borrowers to the Lender under the Obligations, is equal to the largest amount that would not be subject to avoidance under the Bankruptcy Code or any applicable provisions of any applicable, comparable state or other Laws.

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2.5.2Use of Proceeds of the Loans.

The proceeds of each advance under the Loans shall be used by the Borrowers for Permitted Uses, and for no other purposes except as may otherwise be agreed by the Lender in writing. The Borrowers shall use the proceeds of the Loans promptly.

2.5.3Computation of Interest and Fees.

All applicable Fees and interest shall be calculated on the basis of a year of 360 days for the actual number of days elapsed. Any change in the interest rate on any of the Obligations resulting from a change in the LIBOR Rate shall become effective as of the opening of business on the day on which such change in the LIBOR Rate is announced.

2.5.4Maximum Interest Rate.

In no event shall any interest rate provided for hereunder exceed the maximum rate permissible for corporate borrowers under applicable law for loans of the type provided for hereunder (the “Maximum Rate”). If, in any month, any interest rate, absent such limitation, would have exceeded the Maximum Rate, then the interest rate for that month shall be the Maximum Rate, and, if in future months, that interest rate would otherwise be less than the Maximum Rate, then that interest rate shall remain at the Maximum Rate until such time as the amount of interest paid hereunder equals the amount of interest which would have been paid if the same had not been limited by the Maximum Rate. In the event that, upon payment in full of the Obligations, the total amount of interest paid or accrued under the terms of this Agreement is less than the total amount of interest which would, but for this Section, have been paid or accrued if the interest rates otherwise set forth in this Agreement had at all times been in effect, then the Borrowers shall, to the extent permitted by applicable law, pay the Lender, an amount equal to the excess of (a) the lesser of (i) the amount of interest which would have been charged if the Maximum Rate had, at all times, been in effect or (ii) the amount of interest which would have accrued had the interest rates otherwise set forth in this Agreement, at all times, been in effect over (b) the amount of interest actually paid or accrued under this Agreement. In the event that a court determines that the Lender has received interest and other charges hereunder in excess of the Maximum Rate, such excess shall be deemed received on account of, and shall automatically be applied to reduce, the Obligations other than interest, in the inverse order of maturity, and if there are no Obligations outstanding, the Lender shall refund to the Borrowers such excess.

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2.5.5Payments.

All payments of the Obligations, including, without limitation, principal, interest, Prepayments, and Fees, shall be paid by the Borrowers without setoff, recoupment or counterclaim to the Lender in immediately available funds not later than 12:00 p.m. (Eastern Time) on the due date of such payment. All payments received by the Lender after such time shall be deemed to have been received by the Lender for purposes of computing interest and Fees and otherwise as of the next Business Day. Payments shall not be considered received by the Lender until such payments are paid to the Lender in immediately available funds to the Lender’s principal office in Rockville, Maryland or at such other location as the Lender may at any time and from time to time notify the Borrowers. Alternatively, at its sole discretion, the Lender may charge any deposit account of the Borrowers at the Lender or any Affiliate of the Lender with all or any part of any amount due to the Lender under this Agreement or any of the other Financing Documents to the extent that the Borrowers shall have not otherwise tendered payment to the Lender.

2.5.6Liens; Setoff.

The Borrowers hereby grant to the Lender as additional collateral and security for all of the Obligations, a continuing Lien on any and all monies, Investment Property, and other property of the Borrowers and the proceeds thereof, now or hereafter held or received by or in transit to, the Lender, and/or any Affiliate of the Lender, from or for the account of, the Borrowers, and also upon any and all deposit accounts (general or special) and credits of the Borrowers, if any, with the Lender or any Affiliate of the Lender, at any time existing, excluding any deposit accounts held by the Borrowers in their capacity as trustee for Persons who are not Borrowers or Affiliates of the Borrowers. Without implying any limitation on any other rights the Lender may have under the Financing Documents or applicable Laws, during the continuance of an Event of Default, the Lender is hereby authorized by the Borrowers at any time and from time to time, without notice to the Borrowers, to set off, appropriate and apply any or all items hereinabove referred to against all Obligations then outstanding (whether or not then due), all in such order and manner as shall be determined by the Lender in its sole and absolute discretion.

2.5.7Requirements of Law.

In the event that the Lender shall have determined in good faith that (a) the adoption of any Capital Adequacy Regulation, or (b) any change in any Capital Adequacy Regulation or in the interpretation or application thereof or (c) compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority, does or shall have the effect of reducing the rate of return on the capital of the Lender or any corporation controlling the Lender, as a consequence of the obligations of the Lender hereunder to a level below that which the Lender or any corporation controlling the Lender would have achieved but for such adoption, change or compliance (taking into consideration the policies of the Lender and the corporation controlling the Lender, with respect to capital adequacy) by an amount deemed by the Lender, in its reasonable discretion, to be material, then from time to time, after submission by the Lender to the Borrowers of a written request therefore and a statement of the basis for such determination, the Borrowers shall pay to the Lender such additional amount or amounts in order to compensate the Lender or its controlling corporation for any such reduction.

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2.5.8Guaranty.

(a)Each Borrower hereby unconditionally and irrevocably, guarantees to the Lender:

(i)the due and punctual payment in full (and not merely the collectibility) by the other Borrowers of the Obligations, including unpaid and accrued interest thereon, in each case when due and payable, all according to the terms of this Agreement, the Notes and the other Financing Documents;

(ii)the due and punctual payment in full (and not merely the collectibility) by the other Borrowers of all other sums and charges which may at any time be due and payable in accordance with this Agreement, the Notes or any of the other Financing Documents;

(iii)the due and punctual performance by the other Borrowers of all of the other terms, covenants and conditions contained in the Financing Documents; and

(iv)all the other Obligations of the other Borrowers.

(b)The obligations and liabilities of each Borrower as a guarantor under this Section 2.5.8 shall be absolute and unconditional and joint and several, irrespective of the genuineness, validity, priority, regularity or enforceability of this Agreement, any of the Notes or any of the Financing Documents or any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Borrower in its capacity as a guarantor expressly agrees that the Lender may, in its sole and absolute discretion, without notice to or further assent of such Borrower and without in any way releasing, affecting or in any way impairing the joint and several obligations and liabilities of such Borrower as a guarantor hereunder:

(i)waive compliance with, or any defaults under, or grant any other indulgences under or with respect to any of the Financing Documents;

(ii)modify, amend, change or terminate any provisions of any of the Financing Documents;

(iii)grant extensions or renewals of or with respect to the Credit Facilities, the Notes or any of the other Financing Documents;

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(iv)effect any release, subordination, compromise or settlement in connection with this Agreement, any of the Notes or any of the other Financing Documents;

(v)agree to the substitution, exchange, release or other disposition of the Collateral or any part thereof, or any other collateral for the Loan or to the subordination of any lien or security interest therein;

(vi)make advances for the purpose of performing any term, provision or covenant contained in this Agreement, any of the Notes or any of the other Financing Documents with respect to which the Borrowers shall then be in default;

(vii)make future advances pursuant to this Agreement or any of the other Financing Documents;

(viii)assign, pledge, hypothecate or otherwise transfer the Commitments, the Obligations, the Notes, any of the other Financing Documents or any interest therein, all as and to the extent permitted by the provisions of this Agreement;

(ix)deal in all respects with the other Borrowers as if this Section 2.5.8 were not in effect;

(x)effect any release, compromise or settlement with any of the other Borrowers, whether in their capacity as a Borrower or as a guarantor under this Section 2.5.8, or any other guarantor; and

(xi)provide debtor-in-possession financing or allow use of cash collateral in proceedings under the Bankruptcy Code, it being expressly agreed by all Borrowers that any such financing and/or use would be part of the Obligations.

(c)The obligations and liabilities of each Borrower, as guarantor under this Section 2.5.8, shall be primary, direct and immediate, shall not be subject to any counterclaim, recoupment, set off, reduction or defense based upon any claim that a Borrower may have against any one or more of the other Borrowers, the Lender, and/or any other guarantor and shall not be conditional or contingent upon pursuit or enforcement by the Lender of any remedies it may have against the Borrowers with respect to this Agreement, the Notes or any of the other Financing Documents, whether pursuant to the terms thereof or by operation of law. Without limiting the generality of the foregoing, the Lender shall not be required to make any demand upon any of the Borrowers, or to sell the Collateral or otherwise pursue, enforce or exhaust its remedies against the Borrowers or the 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 each Borrower under this Section 2.5.8, either in the same action, if any, brought against any one or more of the Borrowers 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 any one or more of the Borrowers, 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 any one or more of the Borrowers, in their respective capacities as borrowers and guarantors under this Section 2.5.8, or under any of the Financing Documents shall not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the liability of each Borrower under this Section 2.5.8 in any manner whatsoever, and this Section 2.5.8 shall remain and continue in full force and effect. It is the intent and purpose of this Section 2.5.8 that each Borrower shall and does hereby waive all rights and benefits which might accrue to any other guarantor by reason of any such proceeding, and the Borrowers agree that they shall be liable for the full amount of the obligations and liabilities under this Section 2.5.8, regardless of, and irrespective to, any modification, limitation or discharge of the liability of any one or more of the Borrowers, any other guarantor or any obligor under any of the Financing Documents, that may result from any such proceedings.

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(d)Each Borrower, as guarantor under this Section 2.5.8, hereby unconditionally, jointly and severally, irrevocably and expressly waives:

(i)presentment and demand for payment of the Obligations and protest of non-payment;

(ii)notice of acceptance of this Section 2.5.8 and of presentment, demand and protest thereof;

(iii)notice of any default hereunder or under the Notes or any of the other Financing Documents and notice of all indulgences;

(iv)notice of any increase in the amount of any portion of or all of the indebtedness guaranteed by this Section 2.5.8;

(v)demand for observance, performance or enforcement of any of the terms or provisions of this Section 2.5.8, the Notes or any of the other Financing Documents;

(vi)all errors and omissions in connection with the Lender’s administration of all indebtedness guaranteed by this Section 2.5.8, except errors and omissions resulting from the Lender’s gross negligence or willful misconduct;

(vii)any right or claim of right to cause a marshalling of the assets of any one or more of the other Borrowers;

(viii)any act or omission of the Lender which changes the scope of the risk as guarantor hereunder; and

(ix)all other notices and demands otherwise required by law which the Borrower may lawfully waive.

Within ten (10) days following any request of the Lender so to do, each Borrower 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 Section 2.5.8.

2.5.9ACH Transactions and Swap Contracts.

The Borrowers may request and the Lender or its Affiliates may, in their sole and absolute discretion, provide ACH Transactions and Swap Contracts. In the event the Borrowers request Lender or its Affiliates to procure ACH Transactions or Swap Contracts, then the Borrowers agree to indemnify and hold the Lender or its Affiliates harmless from any and all obligations now or hereafter owing to the Lender or its Affiliates. The Borrowers agree to pay the Lender or its Affiliates all amounts owing to the Lender or its Affiliates pursuant to ACH Transactions and Swap Contracts. In the event the Borrowers shall not have paid to the Lender or its Affiliates such amounts, the Lender may cover such amounts by an advance under the Revolving Loan, which advance shall be deemed to have been requested by the Borrowers. The Borrowers acknowledge and agree that the obtaining of ACH Transactions and Swap Contracts from the Lender or its Affiliates (a) is in the sole and absolute discretion of the Lender or its Affiliates and (b) is subject to all rules and regulations of the Lender or its Affiliates.

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ARTICLE III

THE COLLATERAL

Section 3.1Debt and Obligations Secured.

All property and Liens assigned, pledged or otherwise granted under or in connection with this Agreement (including, without limitation, those under Section 3.2 (Grant of Liens)) or any of the Financing Documents shall secure (a) the payment of all of the Obligations, including, without limitation, any and all Outstanding Letter of Credit Obligations, and (b) the performance, compliance with and observance by the Borrowers of the provisions of this Agreement and all of the other Financing Documents or otherwise under the Obligations.

Section 3.2Grant of Liens.

Each of the Borrowers hereby assigns, pledges and grants to the Lender, and agrees that the Lender shall have a perfected and continuing security interest in, and Lien on, all of the Borrowers’ Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment, Investment Property and General Intangibles and all of the Borrowers’ deposit accounts with any financial institution with which any of the Borrowers maintains deposits, whether now owned or existing or hereafter acquired or arising, all returned, rejected or repossessed goods, the sale or lease of which shall have given or shall give rise to an Account or Chattel Paper, all insurance policies relating to the foregoing, all books and records in whatever media (paper, electronic or otherwise) recorded or stored, with respect to the foregoing and all Equipment and General Intangibles necessary or beneficial to retain, access and/or process the information contained in those books and records, and all Proceeds and products of the foregoing. Each of the Borrowers further agrees that the Lender shall have in respect thereof all of the rights and remedies of a secured party under the Uniform Commercial Code as well as those provided in this Agreement, under each of the other Financing Documents and under applicable Laws.

Without implying any limitation to the foregoing, as additional Collateral and security for the Obligations, Borrower hereby assigns to Lender all of its respective rights, title and interest in, to, and under, the Acquisition Agreement and all of the other Acquisition Documentation, including, without limitation, all of the benefits of any representations and warranties provided by the Acquired Company and any and all rights of Borrower to indemnification from the Acquired Company or any other Person contained therein. Neither the assignment to Lender nor any other provision contained in this Agreement or any of the other Financing Documents shall impose on Lender any obligation or liability of Borrower under the Acquisition Agreement and/or under any of the other Acquisition Documentation. Borrower hereby agrees to indemnify Lender and hold Lender harmless from any and all claims, actions, suits, losses, damages, costs, expenses, fees, obligations and liabilities which may be incurred by or imposed upon Lender by virtue of the assignment of and Lien on Borrower’s rights, title and interest in, to, and under the Acquisition Agreement and the other Acquisition Documentation. Borrower further acknowledges and agrees that following the occurrence of an Event of Default, Lender shall be entitled to enforce any and all rights and remedies available to Borrower under the Acquisition Agreement and/or under any or all of the Acquisition Documentation and/or applicable Laws with respect to the Acquisition.

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Section 3.3Collateral Disclosure List.

On or prior to the Closing Date, each of the Borrowers shall deliver to the Lender a list (the “Collateral Disclosure List”) which shall contain such information with respect to such Borrower’s business and real and personal property as the Lender may require and shall be certified by a Responsible Officer of such Borrower, all in the form provided to the Borrowers by the Lender. Promptly after demand by the Lender, the Borrowers, as appropriate, shall furnish to the Lender an update of the information contained in the Collateral Disclosure List at any time and from time to time as may be requested by the Lender.

Section 3.4Personal Property.

The Borrowers acknowledge and agree that it is the intention of the parties to this Agreement that the Lender shall have a first priority, perfected Lien, in form and substance satisfactory to the Lender and its counsel, on all of the Borrowers’ assets of any kind and nature whatsoever, whether now owned or hereafter acquired, subject only to the Permitted Liens, if any. In furtherance of the foregoing:

3.4.1Investment Property, Chattel Paper, Promissory Notes, etc.

(a)On the Closing Date and without implying any limitation on the scope of Section 3.2 (Grant of Liens), each of the Borrowers shall deliver to the Lender the originals of all of its letters of credit, Investment Property, Chattel Paper, Documents and Instruments and, if the Lender so requires, shall execute and deliver separate pledge, assignment and security agreements in form and content acceptable to the Lender, which pledge, assignment and security agreements shall assign, pledge and grant a Lien to the Lender on all such Borrower’s letters of credit, Investment Property, Chattel Paper, Documents, and Instruments.

(b)In the event that any of the Borrowers shall acquire after the Closing Date any letters of credit, Investment Property, Chattel Paper, Documents, or Instruments, each such Borrower shall promptly so notify the Lender and deliver the originals of all of the foregoing to the Lender promptly and in any event within ten (10) days of each acquisition.

(c)All letters of credit, Investment Property, Chattel Paper, Documents and Instruments shall be delivered to the Lender endorsed and/or assigned as required by any pledge, assignment and security agreement and/or as the Lender may require and, if applicable, shall be accompanied by blank irrevocable and unconditional stock or bond powers and/or notices as the Lender may require.

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Section 3.5Record Searches.

As of the Closing Date and thereafter at the time any Financing Document is executed and delivered by the Borrowers pursuant to this Section, the Lender shall have received, in form and substance satisfactory to the Lender, such Lien or record searches with respect to all of the Borrowers and/or any other Person, as appropriate, and the property covered by such Financing Document showing that the Lien of such Financing Document will be a perfected first priority Lien on the property covered by such Financing Document subject only to Permitted Liens or to such other matters as the Lender may approve.

Section 3.6Costs.

The Borrowers agree to pay, as part of the Enforcement Costs and to the fullest extent permitted by applicable Laws, on demand all costs, fees and expenses incurred by the Lender in connection with the taking, perfection, preservation, protection and/or release of a Lien on the Collateral, including, without limitation:

(a)customary fees and expenses incurred in preparing Financing Documents from time to time (including, without limitation, reasonable attorneys’ fees incurred in connection with preparing the Financing Documents, including, any amendments and supplements thereto);

(b)all filing and/or recording taxes or fees;

(c)all costs of Lien and record searches;

(d)reasonable attorneys’ fees in connection with all legal opinions required; and

(e)all related costs, fees and expenses.

Section 3.7Release.

Upon the indefeasible repayment in full in cash of the Obligations and performance of all Obligations of the Borrowers and all obligations and liabilities of each other Person, other than the Lender, under this Agreement and all other Financing Documents, and the termination and/or expiration of all of the Commitments, upon the Borrowers’ request and at the Borrowers’ sole cost and expense, the Lender shall release and/or terminate any Financing Document but only if and provided that there is no commitment or obligation (whether or not conditional) of the Lender to re-advance amounts which would be secured thereby and/or no commitment or obligation of Lender to issue any Letter of Credit or return or restore any payment of any Current Letter of Credit Obligations.

Section 3.8Inconsistent Provisions.

In the event that the provisions of any Financing Document directly conflict with any provision of this Agreement, the provisions of this Agreement govern.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.1Representations and Warranties.

The Borrowers, for themselves and for each other, represent and warrant to the Lender, as follows:

4.1.1Subsidiaries.

The Borrowers have the Subsidiaries listed on the Collateral Disclosure List and no others. Each of the Subsidiaries is a Wholly Owned Subsidiary except as shown on the Collateral Disclosure List, which correctly indicates the nature and amount of each Borrower’s ownership interests therein.

4.1.2Existence.

Each Borrower (a) is a Registered Organization under the laws of the jurisdiction stated in the Preamble of 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. Each Borrower is organized under the laws of only one (1) jurisdiction.

4.1.3Power and Authority.

Each Borrower has full power and authority to execute and deliver this Agreement and the other Financing Documents and the Acquisition Documentation to which it is a party, to make the borrowings and request Letters of Credit under this Agreement, to close and consummate the Acquisition 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. No consent or approval of owners or any creditors of any Borrower, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of any Borrower, is required as a condition to the execution, delivery, validity or enforceability of this Agreement, or any of the other Financing Documents, or the performance by any Borrower of the Obligations or the closing and the consummation of the Acquisition.

4.1.4Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Borrowers have been properly executed and delivered and constitute the valid and legally binding obligations of the Borrowers and are fully enforceable against each of the Borrowers in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

4.1.5No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by any Borrower nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) any Borrower’s organizational or governing documents, (b) any existing mortgage, indenture, contract or agreement binding on any Borrower or affecting its property, or (c) any Laws.

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4.1.6No Defaults, Violations.

(a)No Default or Event of Default has occurred and is continuing.

(b)None of the Borrowers nor any of their respective Subsidiaries is in default under or with respect to any obligation under any existing mortgage, indenture, contract or agreement binding on it or affecting its property in any respect which could be materially adverse to the business, operations, property or financial condition of any Borrower, or which could materially adversely affect the ability of any Borrower to perform its obligations under this Agreement or the other Financing Documents, to which any Borrower is a party.

4.1.7Compliance with Laws.

None of the Borrowers nor any of their respective Subsidiaries is 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 any Borrower or any of its properties, the violation of which, considered in the aggregate, could materially adversely affect the business, operations or properties of any Borrower and/or any Subsidiaries.

4.1.8Margin Stock.

None of the proceeds of the Loans will be used, directly or indirectly, by any Borrower or any Subsidiary for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any “margin stock” within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System or for any other purpose which might make the transactions contemplated in this Agreement a “purpose credit” within the meaning of Regulation U, or cause this Agreement to violate any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as amended, or any rules or regulations promulgated under any of such statutes.

4.1.9Investment Company Act; Margin Stock.

None of the Borrowers nor any of their respective Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, nor is it, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company within the meaning of said Act. None of the Borrowers nor any of their respective Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System.

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4.1.10Litigation.

EX-10.6

FOURTH AMENDED AND RESTATED REVOLVING CREDIT NOTE

$4,250,000 Rockville, Maryland December 11, 2006

FOR VALUE RECEIVED, ARGAN, INC., a corporation organized under the laws of the State of Delaware (“Argan”), SOUTHERN MARYLAND CABLE, INC., a corporation organized under the laws of the State of Delaware (“SMC”), VITARICH LABORATORIES, INC., a corporation organized under the laws of the State of Delaware (“Vitarich”) GEMMA POWER, INC., a corporation organized under the laws of the State of Connecticut (“GP”), GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized under the laws of the State of California (“GPSC”), GEMMA POWER SYSTEMS, LLC, a limited liability company organized under the laws of the state of Connecticut (“GPS”), and GEMMA POWER HARTFORD, LLC, a limited liability company organized under the laws of the State of Connecticut (“GPH”), jointly and severally (each of Argan, SMC, Vitarich, GP, GPSC, GPS, and GPH, a “Borrower” and collectively, the “Borrowers”); promise to pay to the order of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”), the principal sum of FOUR MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($4,250,000) (the “Principal Sum”), or so much thereof as has been or may be advanced or readvanced to or for the account of the Borrowers pursuant to the terms and conditions of this Fourth Amended and Restated Revolving Credit Note (including all renewals, extensions or modifications hereof, this “Note”), together with interest thereon at the rate or rates hereinafter provided, in accordance with the following:

1.Interest.

Commencing as of the date hereof and continuing until repayment in full of all sums due hereunder, the unpaid Principal Sum shall bear interest at the LIBOR Rate plus three and one quarter percent (3.25%) per annum. For purposes hereof, the “LIBOR Rate” shall mean a daily fluctuating rate equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London, time), on the second preceding business day, as adjusted from time to time in the Lender’s sole discretion for then-applicable reserve requirements, deposits insurance assessment rates and other regulatory costs. If for any reason such rate is not available, the term “LIBOR Rate” shall mean the fluctuating rate of interest equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London Time) on the second preceding business day, as adjusted from time to time for then-applicable reserve requirements, deposit insurance assessment rates and other regulatory costs; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.

The rate of interest charged under this Note shall change immediately and contemporaneously with any change in the LIBOR Rate. All interest payable under the terms of this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

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2.Payments and Maturity.

The unpaid Principal Sum, together with interest thereon at the rate or rates provided above, shall be payable as follows:

(a)Interest only on the unpaid Principal Sum shall be due and payable monthly, commencing December 30, 2006, and on the last day of each month thereafter to maturity; and

(b)Unless sooner paid, the unpaid Principal Sum, together with interest accrued and unpaid thereon, shall be due and payable in full on the Revolving Credit Expiration Date.

The fact that the balance hereunder may be reduced to zero from time to time pursuant to the Financing Agreement will not affect the continuing validity of this Note or the Financing Agreement, and the balance may be increased to the Principal Sum after any such reduction to zero.

Borrower hereby authorizes Lender to automatically deduct from Borrower’s account numbered 003939628068 the amount of each payment of principal (including without limitation the principal payment due on the final maturity date) and/or interest on the dates such payments become due. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate automatic payments as provided in this paragraph.

3.Default Interest.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at the LIBOR Rate plus four percent (4.00%) (the “Post-Default Rate”) until such Event of Default is cured.

4.Late Charges.

If the Borrowers shall fail to make any payment under the terms of this Note within five (5) days after the date such payment is due, the Borrowers shall pay to the Lender on demand a late charge equal to five percent (5%) of such payment.

5.Application and Place of Payments.

All payments, made on account of this Note shall be applied first to the payment of accrued and unpaid interest then due hereunder, and the remainder, if any, shall be applied to the unpaid Principal Sum. All payments on account of this Note shall be paid in lawful money of the United States of America in immediately available funds during regular business hours of the Lender at its principal office in Rockville, Maryland or at such other times and places as the Lender may at any time and from time to time designate in writing to the Borrowers.

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6.Financing Agreement and Other Financing Documents.

This Note is the “Revolving Credit Note” described in the Second Amended and Restated Financing and Security Agreement, dated of even date herewith, by and among the Borrowers and the Lender (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”). This Note amends and restates in its entirety that certain Third Amended and Restated Revolving Credit Note (the “Prior Note”) in the maximum principal sum of Four Million Two Hundred Fifty Thousand Dollars ($4,250,000) dated May 5, 2005 in favor of the Lender. It is expressly agreed that the indebtedness evidenced by the Prior Note has not been extinguished or discharged hereby. Each of the Borrowers and the Lender agree that the execution of this Note is not intended to and shall not cause or result in a novation with respect to the Prior Note. The indebtedness evidenced by this Note is included within the meaning of the term “Obligations” as defined in the Financing Agreement. The term “Financing Documents” as used in this Note shall mean collectively this Note, the 2006 Term Note, the Acquisition Term Note, the Financing Agreement and any other instrument, agreement, or document previously, simultaneously, or hereafter executed and delivered by any Borrower and/or any other Person, singularly or jointly with any other Person, evidencing, securing, guaranteeing, or in connection with the Principal Sum, this Note, the 2006 Term Note, the Acquisition Term Note and/or the Financing Agreement.

7.Security.

This Note is secured as provided in the Financing Agreement.

8.Events of Default.

The occurrence of any one or more of the following events shall constitute an event of default (individually, an “Event of Default” and collectively, the “Events of Default”) under the terms of this Note:

(a)The failure of any Borrower to pay to the Lender within five (5) days of when due any and all amounts payable by any Borrower to the Lender under the terms of this Note; or

(b)The occurrence of an Event of Default (as defined therein) under the terms and conditions of any of the other Financing Documents.

9.Remedies.

Upon the occurrence of an Event of Default, at the option of the Lender, all amounts payable by the Borrowers to the Lender under the terms of this Note shall immediately become due and payable by the Borrowers to the Lender without notice to the Borrowers or any other Person, and the Lender shall have all of the rights, powers, and remedies available under the terms of this Note, any of the other Financing Documents and all applicable laws. The Borrowers and all endorsers, guarantors, and other parties who may now or in the future be primarily or secondarily liable for the payment of the indebtedness evidenced by this Note hereby severally waive presentment, protest and demand, notice of protest, notice of demand and of dishonor and non-payment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of the Borrowers, guarantors and endorsers.

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10.Confessed Judgment.

Upon the occurrence of an Event of Default, each Borrower hereby authorizes any attorney designated by the Lender or any clerk of any court of record to appear for the Borrowers in any court of record and confess judgment without prior hearing against the Borrowers in favor of the Lender for and in the amount of the unpaid Principal Sum, all interest accrued and unpaid thereon, all other amounts payable by any Borrower to the Lender under the terms of this Note or any of the other Financing Documents, costs of suit, and attorneys’ fees of fifteen percent (15%) of the unpaid Principal Sum and interest then due hereunder. By its acceptance of this Note, the Lender agrees that in the event the Lender exercises at any time its right to confess judgment under this Note, the Lender shall use its best efforts to obtain legal counsel who will charge the Lender for its services on an hourly basis, at its customary hourly rates and only for the time and reasonable expenses incurred. In no event shall the Lender enforce the legal fees portion of a confessed judgment award for an amount in excess of the fees and expenses actually charged to the Lender for services rendered by its counsel in connection with such confession of judgment and/or the collection of sums owed to the Lender. In the event the Lender receives, through execution upon a confessed judgment, payments on account of attorneys’ fees in excess of such actual attorneys’ fees and expenses incurred by the Lender, then, after full repayment and satisfaction of all of the obligations under and in connection with this Note, the Financing Agreement and all of the other Financing Documents, the Lender shall refund such excess amount to the Borrowers. Each Borrower hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which any Borrower may otherwise be entitled under the laws of the United States of America or of any state or possession of the United States of America now in force or which may hereafter be enacted. The authority and power to appear for and enter judgment against the Borrowers shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. Such authority may be exercised on one or more occasions or from time to time in the same or different jurisdictions as often as the Lender shall deem necessary or desirable, for all of which this Note shall be a sufficient warrant.

11.Expenses.

Each Borrower promises to pay to the Lender on demand by the Lender all costs and expenses incurred by the Lender in connection with the collection and enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses and all court costs.

12.Notices.

Any notice, request, or demand to or upon the Borrowers or the Lender shall be deemed to have been properly given or made when delivered in accordance with Section 8.1 of the Financing Agreement.

13.Miscellaneous.

Each right, power, and remedy of the Lender as provided for in this Note or any of the other Financing Documents, or now or hereafter existing under any applicable law or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Note or any of the other Financing Documents or now or hereafter existing under any applicable law, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers, or remedies. No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant, or agreement of this Note or any of the other Financing Documents, or to exercise any right, power, or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or agreement or of any such breach, or preclude the Lender from exercising any such right, power, or remedy at a later time or times. By accepting payment after the due date of any amount payable under the terms of this Note, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under the terms of this Note or to declare an Event of Default for the failure to effect such prompt payment of any such other amount. No course of dealing or conduct shall be effective to amend, modify, waive, release, or change any provisions of this Note.

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Until such time as the Lender is not committed to extend further credit to the Borrowers and all Obligations of the Borrowers to the Lender have been indefeasibly paid in full in cash, and subject to and not in limitation of the provisions set forth in the next following paragraph below, no Borrower shall have any right of subrogation (whether contractual, arising under the bankruptcy code or otherwise), reimbursement or contribution from any Borrower or any guarantor, nor any right of recourse to its security for any of the debts and obligations of any Borrower which are the subject of this Note. Except as otherwise expressly permitted by the Financing Agreement, any and all present and future debts and obligations of any Borrower to any other Borrower are hereby subordinated to the full payment and performance of all present and future debts and obligations to the Lender under this Note and the Financing Agreement and the Financing Documents, provided, however, notwithstanding anything set forth in this Note to the contrary, prior to the occurrence of a payment Default, the Borrowers shall be permitted to make payments on account of any of such present and future debts and obligations from time to time in accordance with the terms thereof.

Each Borrower further agrees that, if any payment made by any Borrower or any other person is applied to this Note and is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any property hereafter securing this Note is required to be returned by the Lender to any Borrower, its estate, trustee, receiver or any other party, including, without limitation, such Borrower, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, such Borrower's liability hereunder (and any lien, security interest or other collateral securing such liability) shall be and remain in full force and effect, as fully as if such payment had never been made, or, if prior thereto any such lien, security interest or other collateral hereafter securing such Borrower's liability hereunder shall have been released or terminated by virtue of such cancellation or surrender, this Note (and such lien, security interest or other collateral) shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of such Borrower in respect of the amount of such payment (or any lien, security interest or other collateral securing such obligation).

The JOINT AND SEVERAL obligations of each Borrower under this Note shall be absolute, irrevocable and unconditional and shall remain in full force and effect until the outstanding principal of and interest on this Note and all other Obligations or amounts due hereunder and under the Financing Agreement and the Financing Documents shall have been indefeasibly paid in full in cash in accordance with the terms thereof and this Note shall have been canceled.

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The Borrowers each shall be jointly and severally liable on the payment of the Obligations as and when due and payable in accordance with the provisions of this Note, the Financing Agreement and the other Financing Documents. The term "Borrowers" when used in this Note shall include all of the Borrowers, individually and jointly, and the Lender may (without notice to or consent of any or all of the Borrowers and with or without consideration) release, compromise, settle with, proceed against any or all of the Borrowers without affecting, impairing, lessening or releasing the obligations of the other Borrower hereunder.

14.PartialInvalidity.

In the event any provision of this Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable.

15.Captions.

The captions herein set forth are for convenience only and shall not be deemed to define, limit, or describe the scope or intent of this Note.

16.ApplicableLaw.

Each Borrower acknowledges and agrees that this Note shall be governed by the laws of the State of Maryland, even though for the convenience and at the request of the Borrowers, this Note may be executed elsewhere.

17.Consent to Jurisdiction.

Each Borrower irrevocably submits to the jurisdiction of any state or federal court sitting in the State of Maryland over any suit, action, or proceeding arising out of or relating to this Note or any of the other Financing Documents. Each Borrower irrevocably waives, to the fullest extent permitted by law, any objection that any Borrower may now or hereafter have to the laying of 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 Borrowers and may be enforced in any court in which any Borrower is subject to jurisdiction by a suit upon such judgment, provided that service of process is effected upon the Borrowers as provided in this Note or as otherwise permitted by applicable law.

18.Service of Process.

Each Borrower hereby irrevocably designates and appoints CT Corporation Systems, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as each Borrower’s authorized agent to receive on each Borrower’s behalf service of any and all process that may be served in any suit, action, or proceeding instituted in connection with this Note in any state or federal court sitting in the State of Maryland. If such agent shall cease so to act, the Borrowers shall irrevocably designate and appoint without delay another such agent in the State of Maryland satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

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Each Borrower hereby consents to process being served in any suit, action, or proceeding instituted in connection with this Note by (a) the mailing of a copy thereof by certified mail, postage prepaid, return receipt requested, to each Borrower and (b) serving a copy thereof upon the agent hereinabove designated and appointed by each Borrower as each Borrower’s agent for service of process. Each Borrower irrevocably agrees that such service shall be deemed in every respect effective service of process upon the Borrowers in any such suit, action or proceeding, and shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Borrowers. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Borrowers in the courts of any jurisdiction or jurisdictions.

19.WAIVER OF TRIAL BY JURY.

EACH BORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.

THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH BORROWER, AND EACH BORROWER HEREBY REPRESENTS 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. EACH BORROWER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed under seal by their duly authorized officers as of the date first written above.

WITNESS/ATTEST:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

WITNESS/ATTEST:	SOUTHERN MARYLAND CABLE, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	VITARICH LABORATORIES, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	GEMMA POWER, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	GEMMA POWER SYSTEMS            CALIFORNIA, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

Signature Page to Fourth Amended and Restated Revolving Credit Note

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WITNESS/ATTEST:	GEMMA POWER SYSTEMS, LLC
/s/ Joel M. Canino	By:	/s/ William F. Griffin, Jr.  (Seal)
		Name: William F. Griffin, Jr. Title: Manager

WITNESS/ATTEST:	GEMMA POWER HARTFORD, LLC
/s/ Joel M. Canino	By:	/s/ William F. Griffin, Jr.  (Seal)
		Name: William F. Griffin, Jr. Title: Manager

Signature Page to Fourth Amended and Restated Revolving Credit Note

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EX-10.7

AMENDED AND RESTATED

2006 TERM NOTE

$1,374,996.99 Rockville, Maryland December 11, 2006

FOR VALUE RECEIVED, ARGAN, INC., a corporation organized under the laws of the State of Delaware (“Argan”), SOUTHERN MARYLAND CABLE, INC., a corporation organized under the laws of the State of Delaware (“SMC”), VITARICH LABORATORIES, INC., a corporation organized under the laws of the State of Delaware (“Vitarich”), GEMMA POWER, INC., a corporation organized under the laws of the State of Connecticut (“GP”), GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized under the laws of the State of California (“GPSC”), GEMMA POWER SYSTEMS, LLC, a limited liability company organized under the laws of the state of Connecticut (“GPS”), and GEMMA POWER HARTFORD, LLC, a limited liability company organized under the laws of the State of Connecticut (“GPH”), jointly and severally (each of Argan, SMC, Vitarich, GP, GPSC, GPS, and GPH, a “Borrower” and collectively, the “Borrowers”); promise to pay to the order of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”), the principal sum of ONE MILLION THREE HUNDRED SEVENTY-FOUR THOUSAND NINE HUNDRED NINETY-SIX DOLLARS and NINETY-NINE CENTS($1,374,996.99) (the “Principal Sum”), or so much thereof as has been or may be advanced to or for the account of the Borrowers pursuant to the terms and conditions of the Financing Agreement (as hereinafter defined), together with interest thereon at the rate or rates hereinafter provided, in accordance with the following:

1.Interest.

Commencing as of the date hereof and continuing until repayment in full of all sums due hereunder, the unpaid Principal Sum shall bear interest at the LIBOR Rate, plus three hundred twenty five (325) basis points per annum. For purposes hereof, the “LIBOR Rate” shall mean a daily fluctuating rate equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London, time), on the second preceding business day, as adjusted from time to time in the Lender’s sole discretion for then-applicable reserve requirements, deposits insurance assessment rates and other regulatory costs. If for any reason such rate is not available, the term “LIBORRate” shall mean the fluctuating rate of interest equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London Time) on the second preceding business day, as adjusted from time to time for then-applicable reserve requirements, deposit insurance assessment rates and other regulatory costs; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.

The rate of interest charged under this Note shall change immediately and contemporaneously with any change in the LIBOR Rate. All interest payable under the terms of this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

2.Payments and Maturity.

The unpaid Principal Sum, together with interest thereon at the rate or rates provided above, shall be payable as follows:

(a)The unpaid Principal Sum together with interest shall be due and payable in thirty-two (32) monthly installments of principal each in the amount of Forty-One Thousand Six Hundred Sixty-Seven Dollars and Sixty-Seven Cents ($41,667.67) plus accrued and unpaid interest, commencing December 31, 2006, and on the last day of each month thereafter to maturity;

(b)Unless sooner paid, the unpaid Principal Sum, together with interest accrued and unpaid thereon, shall be due and payable in full on August 31, 2009.

Borrower hereby authorizes Lender to automatically deduct from Borrower’s account numbered 003933340656 the amount of each payment of principal (including without limitation the principal payment due on the final maturity date) and/or interest on the dates such payments become due. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate automatic payments as provided in this paragraph.

3.Default Interest.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at the LIBOR Rate plus four percent (4.00%) (the “Post-Default Rate”) per annum until such Event of Default is cured.

4.Late Charges.

If the Borrowers shall fail to make any payment under the terms of this Note within ten (10) days after the date such payment is due, the Borrowers shall pay to the Lender on demand a late charge equal to five percent (5.00%) of such payment.

5.Application and Place of Payments.

All payments, made on account of this Note shall be applied first to the payment of accrued and unpaid interest then due hereunder, and the remainder, if any, shall be applied to the unpaid Principal Sum. All payments on account of this Note shall be paid in lawful money of the United States of America in immediately available funds during regular business hours of the Lender at its principal office in Rockville, Maryland or at such other times and places as the Lender may at any time and from time to time designate in writing to the Borrowers.

6.Prepayment.

The Borrowers may prepay the Principal Sum in whole or in part upon five (5) days prior written notice to the Lender without premium or penalty.

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7.Financing Agreement and Other Financing Documents.

This Note is the “2006 Term Note” described in the Second Amended and Restated Financing and Security Agreement of even date herewith by and among the Borrowers and the Lender (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”). The indebtedness evidenced by this Note amends and restates in its entirety that certain 2006 Term Note dated May 5, 2006 (the “Prior Note”) in the maximum principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) from Argan, SMC and Vitarich in favor of the Lender. It is expressly agreed that the indebtedness evidenced by the Prior Note has not been extinguished or discharged hereby. Each of the Borrowers and the Lender agree that the execution of this Note is not intended and shall not cause or result in a novation with respect to the Prior Note. The indebtedness evidenced by this Note is included within the meaning of the term “Obligations” as defined in the Financing Agreement. The term “Financing Documents” as used in this Note shall mean collectively this Note, the Revolving Credit Note, the Acquisition Term Note, the Financing Agreement and any other instrument, agreement, or document previously, simultaneously, or hereafter executed and delivered by any Borrower and/or any other Person, singularly or jointly with any other Person, evidencing, securing, guaranteeing, or in connection with the Principal Sum, this Note, the Revolving Note, the Acquisition Term Note and/or the Financing Agreement.

8.Security.

This Note is secured as provided in the Financing Agreement.

9.Events of Default.

The occurrence of any one or more of the following events shall constitute an event of default (individually, an “Event of Default” and collectively, the “Events of Default”) under the terms of this Note:

(a)The failure of any Borrower to pay to the Lender within five (5) days of when due any and all amounts payable by any Borrower to the Lender under the terms of this Note; or

(b)The occurrence of an Event of Default (as defined therein) under the terms and conditions of any of the other Financing Documents.

10.Remedies.

Upon the occurrence of an Event of Default, at the option of the Lender, all amounts payable by the Borrowers to the Lender under the terms of this Note shall immediately become due and payable by the Borrowers to the Lender without notice to the Borrowers or any other Person, and the Lender shall have all of the rights, powers, and remedies available under the terms of this Note, any of the other Financing Documents and all applicable laws. The Borrowers and all endorsers, guarantors, and other parties who may now or in the future be primarily or secondarily liable for the payment of the indebtedness evidenced by this Note hereby severally waive presentment, protest and demand, notice of protest, notice of demand and of dishonor and non-payment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of the Borrowers, guarantors and endorsers.

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11.Confessed Judgment.

Upon the occurrence of an Event of Default, each Borrower hereby authorizes any attorney designated by the Lender or any clerk of any court of record to appear for the Borrowers in any court of record and confess judgment without prior hearing against the Borrowers in favor of the Lender for and in the amount of the unpaid Principal Sum, all interest accrued and unpaid thereon, all other amounts payable by any Borrower to the Lender under the terms of this Note or any of the other Financing Documents, costs of suit, and attorneys’ fees of fifteen percent (15%) of the unpaid Principal Sum and interest then due hereunder. By its acceptance of this Note, the Lender agrees that in the event the Lender exercises at any time its right to confess judgment under this Note, the Lender shall use its best efforts to obtain legal counsel who will charge the Lender for its services on an hourly basis, at its customary hourly rates and only for the time and reasonable expenses incurred. In no event shall the Lender enforce the legal fees portion of a confessed judgment award for an amount in excess of the fees and expenses actually charged to the Lender for services rendered by its counsel in connection with such confession of judgment and/or the collection of sums owed to the Lender. In the event the Lender receives, through execution upon a confessed judgment, payments on account of attorneys’ fees in excess of such actual attorneys’ fees and expenses incurred by the Lender, then, after full repayment and satisfaction of all of the obligations under and in connection with this Note, the Financing Agreement and all of the other Financing Documents, the Lender shall refund such excess amount to the Borrowers. Each Borrower hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which any Borrower may otherwise be entitled under the laws of the United States of America or of any state or possession of the United States of America now in force or which may hereafter be enacted. The authority and power to appear for and enter judgment against the Borrowers shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. Such authority may be exercised on one or more occasions or from time to time in the same or different jurisdictions as often as the Lender shall deem necessary or desirable, for all of which this Note shall be a sufficient warrant.

12.Expenses.

Each Borrower promises to pay to the Lender on demand by the Lender all costs and expenses incurred by the Lender in connection with the collection and enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses and all court costs.

13.Notices.

Any notice, request, or demand to or upon the Borrowers or the Lender shall be deemed to have been properly given or made when delivered in accordance with Section 8.1 of the Financing Agreement.

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14.Miscellaneous.

Each right, power, and remedy of the Lender as provided for in this Note or any of the other Financing Documents, or now or hereafter existing under any applicable law or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Note or any of the other Financing Documents or now or hereafter existing under any applicable law, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers, or remedies. No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant, or agreement of this Note or any of the other Financing Documents, or to exercise any right, power, or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or agreement or of any such breach, or preclude the Lender from exercising any such right, power, or remedy at a later time or times. By accepting payment after the due date of any amount payable under the terms of this Note, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under the terms of this Note or to declare an Event of Default for the failure to effect such prompt payment of any such other amount. No course of dealing or conduct shall be effective to amend, modify, waive, release, or change any provisions of this Note.

Until such time as the Lender is not committed to extend further credit to the Borrowers and all Obligations of the Borrowers to the Lender have been indefeasibly paid in full in cash, and subject to and not in limitation of the provisions set forth in the next following paragraph below, no Borrower shall have any right of subrogation (whether contractual, arising under the bankruptcy code or otherwise), reimbursement or contribution from any Borrower or any guarantor, nor any right of recourse to its security for any of the debts and obligations of any Borrower which are the subject of this Note. Except as otherwise expressly permitted by the Financing Agreement, any and all present and future debts and obligations of any Borrower to any other Borrower are hereby subordinated to the full payment and performance of all present and future debts and obligations to the Lender under this Note and the Financing Agreement and the Financing Documents, provided, however, notwithstanding anything set forth in this Note to the contrary, prior to the occurrence of a payment Default, the Borrowers shall be permitted to make payments on account of any of such present and future debts and obligations from time to time in accordance with the terms thereof.

Each Borrower further agrees that, if any payment made by any Borrower or any other person is applied to this Note and is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any property hereafter securing this Note is required to be returned by the Lender to any Borrower, its estate, trustee, receiver or any other party, including, without limitation, such Borrower, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, such Borrower's liability hereunder (and any lien, security interest or other collateral securing such liability) shall be and remain in full force and effect, as fully as if such payment had never been made, or, if prior thereto any such lien, security interest or other collateral hereafter securing such Borrower's liability hereunder shall have been released or terminated by virtue of such cancellation or surrender, this Note (and such lien, security interest or other collateral) shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of such Borrower in respect of the amount of such payment (or any lien, security interest or other collateral securing such obligation).

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The JOINT AND SEVERAL obligations of each Borrower under this Note shall be absolute, irrevocable and unconditional and shall remain in full force and effect until the outstanding principal of and interest on this Note and all other Obligations or amounts due hereunder and under the Financing Agreement and the Financing Documents shall have been indefeasibly paid in full in cash in accordance with the terms thereof and this Note shall have been canceled.

The Borrowers each shall be jointly and severally liable on the payment of the Obligations as and when due and payable in accordance with the provisions of this Note, the Financing Agreement and the other Financing Documents. The term "Borrowers" when used in this Note shall include all of the Borrowers, individually and jointly, and the Lender may (without notice to or consent of any or all of the Borrowers and with or without consideration) release, compromise, settle with, proceed against any or all of the Borrowers without affecting, impairing, lessening or releasing the obligations of the other Borrower hereunder.

15.PartialInvalidity.

In the event any provision of this Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable.

16.Captions.

The captions herein set forth are for convenience only and shall not be deemed to define, limit, or describe the scope or intent of this Note.

17.ApplicableLaw.

Each Borrower acknowledges and agrees that this Note shall be governed by the laws of the State of Maryland, even though for the convenience and at the request of the Borrowers, this Note may be executed elsewhere.

18.Consent to Jurisdiction.

Each Borrower irrevocably submits to the jurisdiction of any state or federal court sitting in the State of Maryland over any suit, action, or proceeding arising out of or relating to this Note or any of the other Financing Documents. Each Borrower irrevocably waives, to the fullest extent permitted by law, any objection that any Borrower may now or hereafter have to the laying of 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 Borrowers and may be enforced in any court in which any Borrower is subject to jurisdiction by a suit upon such judgment, provided that service of process is effected upon the Borrowers as provided in this Note or as otherwise permitted by applicable law.

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19.Service of Process.

Each Borrower hereby irrevocably designates and appoints CT Corporation, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as each Borrower’s authorized agent to receive on each Borrower’s behalf service of any and all process that may be served in any suit, action, or proceeding instituted in connection with this Note in any state or federal court sitting in the State of Maryland. If such agent shall cease so to act, the Borrowers shall irrevocably designate and appoint without delay another such agent in the State of Maryland satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

Each Borrower hereby consents to process being served in any suit, action, or proceeding instituted in connection with this Note by (a) the mailing of a copy thereof by certified mail, postage prepaid, return receipt requested, to each Borrower and (b) serving a copy thereof upon the agent hereinabove designated and appointed by each Borrower as each Borrower’s agent for service of process. Each Borrower irrevocably agrees that such service shall be deemed in every respect effective service of process upon the Borrowers in any such suit, action or proceeding, and shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Borrowers. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Borrowers in the courts of any jurisdiction or jurisdictions.

20.WAIVER OF TRIAL BY JURY.

EACH BORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.

THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH BORROWER, AND EACH BORROWER HEREBY REPRESENTS 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. EACH BORROWER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed under seal by their duly authorized officers as of the date first written above.

WITNESS/ATTEST:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

WITNESS:	SOUTHERN MARYLAND CABLE, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel  (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	VITARICH LABORATORIES, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	GEMMA POWER, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

WITNESS/ATTEST:	GEMMA POWER SYSTEMS CALIFORNIA, INC.
/s/ Rainer Bosselmann	By:	/s/ Arthur Trudel (Seal)
		Name: Arthur Trudel Title: CFO

Signature Page to Amended And Restated 2006 Term Note

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WITNESS/ATTEST:	GEMMA POWER SYSTEMS, LLC
/s/ Joel M. Canino	By:	/s/ William F. Griffin, Jr. (Seal)
		Name: William F. Griffin, Jr. Title: Manager

WITNESS/ATTEST:	GEMMA POWER HARTFORD, LLC
/s/ Joel M. Canino	By:	/s/ William F. Griffin, Jr. (Seal)
		Name: William F. Griffin, Jr. Title: Manager

Signature Page to Amended And Restated 2006 Term Note

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EX-10.8

ACQUISITION TERM NOTE

$8,000,000	Rockville, Maryland
	December 11, 2006

FOR VALUE RECEIVED, ARGAN, INC., a corporation organized under the laws of the State of Delaware (“Argan”), SOUTHERN MARYLAND CABLE, INC., a corporation organized under the laws of the State of Delaware (“SMC”), VITARICH LABORATORIES, INC., a corporation organized under the laws of the State of Delaware (“Vitarich”), GEMMA POWER, INC., a corporation organized under the laws of the State of Connecticut (“GP”), GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized under the laws of the State of California (“GPSC”), GEMMA POWER SYSTEMS, LLC, a limited liability company organized under the laws of the state of Connecticut (“GPS”), and GEMMA POWER HARTFORD, LLC, a limited liability company organized under the laws of the State of Connecticut (“GPH”), jointly and severally (each of Argan, SMC, Vitarich, GP, GPSC, GPS, and GPH, a “Borrower” and collectively, the “Borrowers”); promise to pay to the order of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”), the principal sum of EIGHT MILLION DOLLARS ($8,000,000) (the “PrincipalSum”), or so much thereof as has been or may be advanced to or for the account of the Borrowers pursuant to the terms and conditions of the Financing Agreement (as hereinafter defined), together with interest thereon at the rate or rates hereinafter provided, in accordance with the following:

1.Interest.

Commencing as of the date hereof and continuing until repayment in full of all sums due hereunder, the unpaid Principal Sum shall bear interest at the LIBOR Rate, plus three hundred twenty five (325) basis points per annum. For purposes hereof, the “LIBOR Rate” shall mean a daily fluctuating rate equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London, time), on the second preceding business day, as adjusted from time to time in the Lender’s sole discretion for then-applicable reserve requirements, deposits insurance assessment rates and other regulatory costs. If for any reason such rate is not available, the term “LIBOR Rate” shall mean the fluctuating rate of interest equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London Time) on the second preceding business day, as adjusted from time to time for then-applicable reserve requirements, deposit insurance assessment rates and other regulatory costs; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.

The rate of interest charged under this Note shall change immediately and contemporaneously with any change in the LIBOR Rate. All interest payable under the terms of this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

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2.Payments and Maturity.

The unpaid Principal Sum, together with interest thereon at the rate or rates provided above, shall be payable as follows:

(a)The unpaid Principal Sum together with interest shall be due and payable in forty-seven (47) monthly installments of principal each in the amount of One Hundred Sixty-Sixty Thousand Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($166,666.67) plus accrued and unpaid interest, commencing January 31, 2007, and on the last day of each month thereafter and one (1) monthly payment at maturity of One Hundred Sixty-Sixty Thousand Six Hundred Sixty-Six Dollars and Fifty-One Cents ($166,666.51) plus accrued and unpaid interest;

(b)Unless sooner paid, the unpaid Principal Sum, together with interest accrued and unpaid thereon, shall be due and payable in full on January 31, 2011.

Borrower hereby authorizes Lender to automatically deduct from Borrower’s account numbered 004467062810 the amount of each payment of principal (including without limitation the principal payment due on the final maturity date) and/or interest on the dates such payments become due. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate automatic payments as provided in this paragraph.

3.Default Interest.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at the LIBOR Rate plus four percent (4.00%) (the “Post-Default Rate”) per annum until such Event of Default is cured.

4.Late Charges.

If the Borrowers shall fail to make any payment under the terms of this Note within ten (10) days after the date such payment is due, the Borrowers shall pay to the Lender on demand a late charge equal to five percent (5.00%) of such payment.

5.Application and Place of Payments.

All payments, made on account of this Note shall be applied first to the payment of accrued and unpaid interest then due hereunder, and the remainder, if any, shall be applied to the unpaid Principal Sum. All payments on account of this Note shall be paid in lawful money of the United States of America in immediately available funds during regular business hours of the Lender at its principal office in Rockville, Maryland or at such other times and places as the Lender may at any time and from time to time designate in writing to the Borrowers.

6.Prepayment.

The Borrowers may prepay the Principal Sum in whole or in part upon five (5) days prior written notice to the Lender without premium or penalty.

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7.Financing Agreement and Other Financing Documents.

This Note is the “Acquisition Term Note” described in the Second Amended and Restated Financing and Security Agreement of even date herewith by and among the Borrowers and the Lender (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”). The indebtedness evidenced by this Note is included within the meaning of the term “Obligations” as defined in the Financing Agreement. The term “Financing Documents” as used in this Note shall mean collectively this Note, the Revolving Credit Note, the 2006 Term Note, the Financing Agreement and any other instrument, agreement, or document previously, simultaneously, or hereafter executed and delivered by any Borrower and/or any other Person, singularly or jointly with any other Person, evidencing, securing, guaranteeing, or in connection with the Principal Sum, this Note, the Revolving Credit Note, the 2006 Term Note, and/or the Financing Agreement.

8.Security.

This Note is secured as provided in the Financing Agreement.

9.Events of Default.

The occurrence of any one or more of the following events shall constitute an event of default (individually, an “Event of Default” and collectively, the “Events of Default”) under the terms of this Note:

(a)The failure of any Borrower to pay to the Lender within five (5) days of when due any and all amounts payable by any Borrower to the Lender under the terms of this Note; or

(b)The occurrence of an Event of Default (as defined therein) under the terms and conditions of any of the other Financing Documents.

10.Remedies.

Upon the occurrence of an Event of Default, at the option of the Lender, all amounts payable by the Borrowers to the Lender under the terms of this Note shall immediately become due and payable by the Borrowers to the Lender without notice to the Borrowers or any other Person, and the Lender shall have all of the rights, powers, and remedies available under the terms of this Note, any of the other Financing Documents and all applicable laws. The Borrowers and all endorsers, guarantors, and other parties who may now or in the future be primarily or secondarily liable for the payment of the indebtedness evidenced by this Note hereby severally waive presentment, protest and demand, notice of protest, notice of demand and of dishonor and non-payment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of the Borrowers, guarantors and endorsers.

11.Confessed Judgment.

Upon the occurrence of an Event of Default, each Borrower hereby authorizes any attorney designated by the Lender or any clerk of any court of record to appear for the Borrowers in any court of record and confess judgment without prior hearing against the Borrowers in favor of the Lender for and in the amount of the unpaid Principal Sum, all interest accrued and unpaid thereon, all other amounts payable by any Borrower to the Lender under the terms of this Note or any of the other Financing Documents, costs of suit, and attorneys’ fees of fifteen percent (15%) of the unpaid Principal Sum and interest then due hereunder. By its acceptance of this Note, the Lender agrees that in the event the Lender exercises at any time its right to confess judgment under this Note, the Lender shall use its best efforts to obtain legal counsel who will charge the Lender for its services on an hourly basis, at its customary hourly rates and only for the time and reasonable expenses incurred. In no event shall the Lender enforce the legal fees portion of a confessed judgment award for an amount in excess of the fees and expenses actually charged to the Lender for services rendered by its counsel in connection with such confession of judgment and/or the collection of sums owed to the Lender. In the event the Lender receives, through execution upon a confessed judgment, payments on account of attorneys’ fees in excess of such actual attorneys’ fees and expenses incurred by the Lender, then, after full repayment and satisfaction of all of the obligations under and in connection with this Note, the Financing Agreement and all of the other Financing Documents, the Lender shall refund such excess amount to the Borrowers. Each Borrower hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which any Borrower may otherwise be entitled under the laws of the United States of America or of any state or possession of the United States of America now in force or which may hereafter be enacted. The authority and power to appear for and enter judgment against the Borrowers shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. Such authority may be exercised on one or more occasions or from time to time in the same or different jurisdictions as often as the Lender shall deem necessary or desirable, for all of which this Note shall be a sufficient warrant.

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12.Expenses.

Each Borrower promises to pay to the Lender on demand by the Lender all costs and expenses incurred by the Lender in connection with the collection and enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses and all court costs.

13.Notices.

Any notice, request, or demand to or upon the Borrowers or the Lender shall be deemed to have been properly given or made when delivered in accordance with Section 8.1 of the Financing Agreement.

14.Miscellaneous.

Each right, power, and remedy of the Lender as provided for in this Note or any of the other Financing Documents, or now or hereafter existing under any applicable law or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Note or any of the other Financing Documents or now or hereafter existing under any applicable law, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers, or remedies. No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant, or agreement of this Note or any of the other Financing Documents, or to exercise any right, power, or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or agreement or of any such breach, or preclude the Lender from exercising any such right, power, or remedy at a later time or times. By accepting payment after the due date of any amount payable under the terms of this Note, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under the terms of this Note or to declare an Event of Default for the failure to effect such prompt payment of any such other amount. No course of dealing or conduct shall be effective to amend, modify, waive, release, or change any provisions of this Note.

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Until such time as the Lender is not committed to extend further credit to the Borrowers and all Obligations of the Borrowers to the Lender have been indefeasibly paid in full in cash, and subject to and not in limitation of the provisions set forth in the next following paragraph below, no Borrower shall have any right of subrogation (whether contractual, arising under the bankruptcy code or otherwise), reimbursement or contribution from any Borrower or any guarantor, nor any right of recourse to its security for any of the debts and obligations of any Borrower which are the subject of this Note. Except as otherwise expressly permitted by the Financing Agreement, any and all present and future debts and obligations of any Borrower to any other Borrower are hereby subordinated to the full payment and performance of all present and future debts and obligations to the Lender under this Note and the Financing Agreement and the Financing Documents, provided, however, notwithstanding anything set forth in this Note to the contrary, prior to the occurrence of a payment Default, the Borrowers shall be permitted to make payments on account of any of such present and future debts and obligations from time to time in accordance with the terms thereof.

Each Borrower further agrees that, if any payment made by any Borrower or any other person is applied to this Note and is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any property hereafter securing this Note is required to be returned by the Lender to any Borrower, its estate, trustee, receiver or any other party, including, without limitation, such Borrower, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, such Borrower's liability hereunder (and any lien, security interest or other collateral securing such liability) shall be and remain in full force and effect, as fully as if such payment had never been made, or, if prior thereto any such lien, security interest or other collateral hereafter securing such Borrower's liability hereunder shall have been released or terminated by virtue of such cancellation or surrender, this Note (and such lien, security interest or other collateral) shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of such Borrower in respect of the amount of such payment (or any lien, security interest or other collateral securing such obligation).

The JOINT AND SEVERAL obligations of each Borrower under this Note shall be absolute, irrevocable and unconditional and shall remain in full force and effect until the outstanding principal of and interest on this Note and all other Obligations or amounts due hereunder and under the Financing Agreement and the Financing Documents shall have been indefeasibly paid in full in cash in accordance with the terms thereof and this Note shall have been canceled.

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The Borrowers each shall be jointly and severally liable on the payment of the Obligations as and when due and payable in accordance with the provisions of this Note, the Financing Agreement and the other Financing Documents. The term "Borrowers" when used in this Note shall include all of the Borrowers, individually and jointly, and the Lender may (without notice to or consent of any or all of the Borrowers and with or without consideration) release, compromise, settle with, proceed against any or all of the Borrowers without affecting, impairing, lessening or releasing the obligations of the other Borrower hereunder.

15.PartialInvalidity.

In the event any provision of this Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable.

16.Captions.

The captions herein set forth are for convenience only and shall not be deemed to define, limit, or describe the scope or intent of this Note.

17.ApplicableLaw.

Each Borrower acknowledges and agrees that this Note shall be governed by the laws of the State of Maryland, even though for the convenience and at the request of the Borrowers, this Note may be executed elsewhere.

18.Consent to Jurisdiction.

Each Borrower irrevocably submits to the jurisdiction of any state or federal court sitting in the State of Maryland over any suit, action, or proceeding arising out of or relating to this Note or any of the other Financing Documents. Each Borrower irrevocably waives, to the fullest extent permitted by law, any objection that any Borrower may now or hereafter have to the laying of 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 Borrowers and may be enforced in any court in which any Borrower is subject to jurisdiction by a suit upon such judgment, provided that service of process is effected upon the Borrowers as provided in this Note or as otherwise permitted by applicable law.

19.Service of Process.

Each Borrower hereby irrevocably designates and appoints CT Corporation, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as each Borrower’s authorized agent to receive on each Borrower’s behalf service of any and all process that may be served in any suit, action, or proceeding instituted in connection with this Note in any state or federal court sitting in the State of Maryland. If such agent shall cease so to act, the Borrowers shall irrevocably designate and appoint without delay another such agent in the State of Maryland satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

6

Each Borrower hereby consents to process being served in any suit, action, or proceeding instituted in connection with this Note by (a) the mailing of a copy thereof by certified mail, postage prepaid, return receipt requested, to each Borrower and (b) serving a copy thereof upon the agent hereinabove designated and appointed by each Borrower as each Borrower’s agent for service of process. Each Borrower irrevocably agrees that such service shall be deemed in every respect effective service of process upon the Borrowers in any such suit, action or proceeding, and shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Borrowers. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Borrowers in the courts of any jurisdiction or jurisdictions.

20.WAIVER OF TRIAL BY JURY.

EACH BORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.

THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH BORROWER, AND EACH BORROWER HEREBY REPRESENTS 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. EACH BORROWER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT EACH HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

7

IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed under seal by their duly authorized officers as of the date first written above. 

WITNESS/ATTEST:	ARGAN, INC.
/s/ Arthur Trudel	By: /s/ Rainer Bosselmann               (SEAL)
	Name: Rainer Bosselmann Title: Chairman and CEO
WITNESS:	SOUTHERN MARYLAND CABLE, INC.
/s/ Rainer Bosselmann	By:  /s/ Arthur Trudel                 (Seal)
	Name: Arthur Trudel Title: CFO
WITNESS/ATTEST:	VITARICH LABORATORIES, INC.
/s/ Rainer Bosselmann	By:  /s/ Arthur Trudel                  (Seal)
	Name: Arthur Trudel Title: CFO
WITNESS/ATTEST:	GEMMA POWER, INC.
/s/ Rainer Bosselmann	By: /s/ Arthur Trudel                 (Seal)
	Name: Arthur Trudel Title: CFO
WITNESS/ATTEST:	GEMMA POWER SYSTEMS CALIFORNIA, INC.
/s/ Rainer Bosselmann	By:  /s/ Arthur Trudel                 (Seal)
	Name: Arthur Trudel Title: CFO

Signature Page to Acquisition Term Note

1

WITNESS/ATTEST:	GEMMA POWER SYSTEMS, LLC
/s/ Joel M. Canino	By: /s/ William F. Griffin, Jr.                   (Seal)
	Name: William F. Griffin, Jr. Title: Manager
WITNESS/ATTEST:	GEMMA POWER HARTFORD, LLC
/s/ Joel M. Canino	By: /s/ William F. Griffin, Jr.                   (Seal)
	Name: William F. Griffin, Jr. Title: Manager

Signature Page to Acquisition Term Note

2

EX-10.9

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Stock Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Stock Collateral”), whether now existing or hereafter created or arising:

(a) 100 shares of the common stock (the “Stock”) of Southern Maryland Cable, Inc., a corporation incorporated under the laws of the State of Delaware (the “Corporation”);

(b)all stock rights, rights to subscribe, rights to distributions, dividends (including, but not limited to, distributions in kind, cash dividends, stock dividends, dividends paid in stock and liquidating dividends) and any other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of or relating to the Corporation;

(c)all other or additional (or less) stock or other securities or property (including cash) paid or distributed in respect of the Stock by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement;

(d)all other or additional stock or other securities or property (including cash) which may be paid or distributed in respect of the Stock by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Stock Collateral.

The Pledgor agrees that with respect to the Stock Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Stock Collateral constitute part of the Stock Collateral, the Pledgor may not dispose of the Stock Collateral or any part thereof.

Section 1.3 Rights of the Pledgor in the Stock Collateral.

Until an Event of Default (as that term is defined in ARTICLE IV (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Corporation requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Stock Collateral and which are not otherwise prohibited by the Financing Documents. Any cash dividend or distribution payable in respect of the Stock Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Stock Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Stock Interests.

The Stock represents one hundred percent (100%) of the equity interests of the Corporation and thereafter the Stock Collateral will continue to represent the same percentage of the equity interest of the Corporation, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Stock Collateral and perform all other obligations required hereunder with respect to the Stock Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Pledgor, the Corporation, or shareholders of the Corporation, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Stock Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any corporate matters as may be represented by the Stock Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Stock Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Stock Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement. The interests assigned as Stock Collateral are subject to no outstanding options, voting trusts, shareholders agreement, or other requirements with respect to such interests.

Section 2.7 Perfection and Priority of Stock Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all Stock Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.2 Delivery of Stock Collateral.

The Pledgor shall deliver immediately to the Lender (a) the certificates representing the shares of the Stock, (b) immediately upon its receipt of any additional (or fewer) shares of stock in the Corporation, the certificates representing such additional shares of stock, (c) all instruments, items of payment and other Stock Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank stock powers substantially in the form attached to this Agreement as Exhibit A for all of the assigned shares of stock. All Stock Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Stock Collateral, and shall defend, at its sole expense, the title to the Stock Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.5 Protection of Stock Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Stock Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Stock Collateral and will take such actions to preserve the Stock Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Stock Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Stock Collateral, the ability of the Pledgor or the Lender to dispose of the Stock Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Stock Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Stock Collateral and such other matters which affect the Stock Collateral; (ii) verify the Stock Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Stock Collateral of the Lender’s interest in the Stock Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Corporation, the Stock Collateral and/or the Pledgor.

Section 3.8 Disposition of Stock Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Stock Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Corporation, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Stock Collateral or dilute the percentage of the ownership interests of the Corporation pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Stock Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Lender and if not previously in the possession of the Lender, the Pledgor shall assist the Lender in the assembly of the Stock Collateral and assist in making it available to the Lender, at a place designated by the Lender. The Lender or its agents may without notice from time to time enter upon the Pledgor’s premises to take possession of the Stock Collateral, to remove it, or otherwise to prepare it for sale, or to sell or otherwise dispose of it.

4.2.2 Sale or Other Disposition of Stock Collateral.

The Lender may sell or redeem the Stock Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Stock Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Stock Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in Section 5.1 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Stock Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Stock Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Stock Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Stock Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Stock Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Stock Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Stock Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Stock Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Stock Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Stock Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Stock Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Stock Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Stock Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Stock Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Stock Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Stock Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:

Pledgor:	Argan, Inc.
	One Church Street, Suite 302
	Rockville, Maryland 20850
	Attention: Arthur F. Trudel
	Chief Financial Officer
with a copy to:	Robinson & Cole LLP
	280 Trumbull Street
	Hartford, Connecticut 06103
	Attention: Eileen P. Baldwin, Esq.
Lender:	Bank of America, N.A.
	1101 Wootton Parkway, 4th Floor
	Rockville, Maryland 20852
	Attention: Michael J. Radcliffe
	Senior Vice President
with a copy to:	Troutman Sanders LLP
	1660 International Drive, Suite 600
	McLean, Virginia 22102
	Attention: Richard M. Pollak, Esq.

By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Stock Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to Section 5.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE PLEDGOR AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE PLEDGOR 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 STOCK COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Stock Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Stock Collateral or other security for the Obligations. By inspecting the Stock Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

EXHIBIT A

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does (do) hereby sell(s), assign(s) and transfer(s) to

Name:

Address:

Social Security or other Identifying Number:____________________________

________ shares of the ___________ stock of _____________________________________ represented by Certificate(s) No(s) ________________________inclusive, standing in the name of_____________________________________________ on the books of said company. The undersigned does (do) hereby irrevocably constitute(s) and appoint(s)___________________________ attorney to transfer the said stock on the books of said company with full power of substitution in the premises.

Dated:________________________________________________________

EX-10.10

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Stock Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Stock Collateral”), whether now existing or hereafter created or arising:

(a)100 shares of the common stock (the “Stock”) of Vitarich Laboratories, Inc., a corporation incorporated under the laws of the State of Delaware (the “Corporation”);

(b)all stock rights, rights to subscribe, rights to distributions, dividends (including, but not limited to, distributions in kind, cash dividends, stock dividends, dividends paid in stock and liquidating dividends) and any other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of or relating to the Corporation;

(c)all other or additional (or less) stock or other securities or property (including cash) paid or distributed in respect of the Stock by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement;

(d)all other or additional stock or other securities or property (including cash) which may be paid or distributed in respect of the Stock by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Stock Collateral.

The Pledgor agrees that with respect to the Stock Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Stock Collateral constitute part of the Stock Collateral, the Pledgor may not dispose of the Stock Collateral or any part thereof.

Section 1.3 Rights of the Pledgor in the Stock Collateral.

Until an Event of Default (as that term is defined in ARTICLE IV (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Corporation requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Stock Collateral and which are not otherwise prohibited by the Financing Documents. Any cash dividend or distribution payable in respect of the Stock Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Stock Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Stock Interests.

The Stock represents one hundred percent (100%) of the equity interests of the Corporation and thereafter the Stock Collateral will continue to represent the same percentage of the equity interest of the Corporation, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Stock Collateral and perform all other obligations required hereunder with respect to the Stock Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Pledgor, the Corporation, or shareholders of the Corporation, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Stock Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any corporate matters as may be represented by the Stock Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Stock Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Stock Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement. The interests assigned as Stock Collateral are subject to no outstanding options, voting trusts, shareholders agreement, or other requirements with respect to such interests.

Section 2.7 Perfection and Priority of Stock Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all Stock Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.2 Delivery of Stock Collateral.

The Pledgor shall deliver immediately to the Lender (a) the certificates representing the shares of the Stock, (b) immediately upon its receipt of any additional (or fewer) shares of stock in the Corporation, the certificates representing such additional shares of stock, (c) all instruments, items of payment and other Stock Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank stock powers substantially in the form attached to this Agreement as Exhibit A for all of the assigned shares of stock. All Stock Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Stock Collateral, and shall defend, at its sole expense, the title to the Stock Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.5 Protection of Stock Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Stock Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Stock Collateral and will take such actions to preserve the Stock Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Stock Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Stock Collateral, the ability of the Pledgor or the Lender to dispose of the Stock Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Stock Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Stock Collateral and such other matters which affect the Stock Collateral; (ii) verify the Stock Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Stock Collateral of the Lender’s interest in the Stock Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Corporation, the Stock Collateral and/or the Pledgor.

Section 3.8 Disposition of Stock Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Stock Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Corporation, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Stock Collateral or dilute the percentage of the ownership interests of the Corporation pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Stock Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Lender and if not previously in the possession of the Lender, the Pledgor shall assist the Lender in the assembly of the Stock Collateral and assist in making it available to the Lender, at a place designated by the Lender. The Lender or its agents may without notice from time to time enter upon the Pledgor’s premises to take possession of the Stock Collateral, to remove it, or otherwise to prepare it for sale, or to sell or otherwise dispose of it.

4.2.2 Sale or Other Disposition of Stock Collateral.

The Lender may sell or redeem the Stock Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Stock Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Stock Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in Section 5.1 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Stock Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Stock Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Stock Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Stock Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Stock Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Stock Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Stock Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Stock Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Stock Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Stock Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Stock Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Stock Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Stock Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Stock Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Stock Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Stock Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:

Pledgor:	Argan, Inc. One Church Street, Suite 302 Rockville, Maryland 20850 Attention: Arthur F. Trudel Chief Financial Officer
with a copy to:	Robinson & Cole LLP 280 Trumbull Street Hartford, Connecticut 06103 Attention: Eileen P. Baldwin, Esq.
Lender:	Bank of America, N.A. 1101 Wootton Parkway, 4th Floor Rockville, Maryland 20852 Attention: Michael J. Radcliffe Senior Vice President
with a copy to:	Troutman Sanders LLP 1660 International Drive, Suite 600 McLean, Virginia 22102 Attention: Richard M. Pollak, Esq.

By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Stock Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to Section 5.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE PLEDGOR AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE PLEDGOR 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 STOCK COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Stock Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Stock Collateral or other security for the Obligations. By inspecting the Stock Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann             (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

EXHIBIT A

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does (do) hereby sell(s), assign(s) and transfer(s) to

Name:

Address:

Social Security or other Identifying Number:____________________________________ shares of the ___________ stock of _____________________________________ represented by Certificate(s) No(s) ________________________inclusive, standing in the name of_____________________________________________ on the books of said company. The undersigned does (do) hereby irrevocably constitute(s) and appoint(s)___________________________ attorney to transfer the said stock on the books of said company with full power of substitution in the premises.

Dated:________________________________________________________

EX-10.11

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Collateral”), whether now existing or hereafter created or arising:

(a)all rights, title and interest in and to the membership interests and any other equity ownership interests (the “LLC Interest”) of Gemma Power Systems, LLC, a limited liability company organized under the laws of the State of Connecticut (the “Company”), as its the sole member, under the operating agreement, as the same may have been or may be amended, supplemented, restated, or otherwise modified at any time and from time to time (the “Operating Agreement”);

(b)all rights to receive any and all cash and non-cash distributions (regardless of how such distributions are classified and including any and all distributions-in-kind and liquidating distributions), profits, losses, income, revenue, returns of capital, repayments of any loans made by Pledgor to the Company (including interest and fees with respect to such loans), and any and all development, management and similar fees payable by the Company to Pledgor of any kind or nature whatsoever, together with any and all other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of, under or relating to the Operating Agreement;

(c)all other or additional equity or debt interests, other securities or property (including cash) paid or distributed in respect of the LLC Interest by way of any spin-off, merger, consolidation, dissolution, combination, reclassification or exchange of equity interests, asset sales, or similar rearrangement or reorganization;

(d)all other or additional equity or debt interests, other securities or property (including cash) which may be paid or distributed in respect of the LLC Interest by reason of any consolidation, merger, exchange of equity of debt interests, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Collateral.

The Pledgor agrees that with respect to the Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Collateral constitute part of the Collateral, the Pledgor may not dispose of the Collateral or any part thereof.

Section 1.3 Registration of Pledge.

If any of the Collateral is or shall become evidenced or represented by an uncertificated security and if and to the extent requested by the Lender, the Pledgor agrees, by Notice of Pledge, substantially in the form attached to this Agreement as Exhibit B, to (i) notify the Company immediately of the pledge, assignment and security agreement under this Agreement and (ii) issue the Initial Transaction Statement, substantially in the form attached to this Agreement as Exhibit C. The Pledgor hereby authorizes and directs the Company to (i) register the Pledgor’s pledge to the Lender of the Collateral on the Company’s books (ii) make, following written notice to do so by the Lender, direct payment to the Lender of any amounts due or to become due to the Pledgor with respect to the Collateral and (iii) comply with all instructions originated by the Lender without further consent by the Pledgor. The Pledgor acknowledges that the Lender has control over the Collateral within the meaning of Section 8-106 of the Uniform Commercial Code.

Section 1.4 Rights of the Pledgor in the Collateral.

Until an Event of Default (as that term is defined in ARTICLE IV (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Company requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Collateral and which are not otherwise prohibited by the Financing Documents. Any cash distribution payable in respect of the Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Percentage Ownership.

The LLC Interest represents one hundred percent (100%) of the membership interests of the Company and thereafter the Collateral will continue to represent the same percentage of the membership interest of the Company, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Collateral and perform all other obligations required hereunder with respect to the Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of the shareholders or any creditors of the Pledgor, the Company, or members of the Company, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any organizational matters as may be represented by the Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement.

Section 2.7 Perfection and Priority of Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all of the Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.

Section 3.2 Delivery of Certificated Collateral.

If any of the Collateral is or shall become evidenced or represented by a certificated security, the Pledgor shall deliver immediately to the Lender (a) the certificates representing the LLC Interests, (b) immediately upon its receipt of any additional (or fewer) LLC Interests in the Company, the certificates representing such additional LLC Interests, (c) all instruments, items of payment and other Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank membership powers, substantially in the form attached to this Agreement as Exhibit A, for all of the assigned LLC Interests. All Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Collateral, and shall defend, at its sole expense, the title to the Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.

Section 3.5 Protection of Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Collateral and will take such actions to preserve the Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Collateral, the ability of the Pledgor or the Lender to dispose of the Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Collateral and such other matters which affect the Collateral; (ii) verify the Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Collateral of the Lender’s interest in the Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Company, the Collateral and/or the Pledgor.

Section 3.8 Disposition of Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Company, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Collateral or dilute the percentage of the ownership interests of the Company pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws.

4.2.2 Sale or Other Disposition of Collateral.

The Lender may sell or redeem the Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in Section 5.1 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows: 

Pledgor:	Argan, Inc.
	One Church Street, Suite 302
	Rockville, Maryland 20850
	Attention: Arthur F. Trudel
	Chief Financial Officer
with a copy to:	Robinson & Cole LLP
	280 Trumbull Street
	Hartford, Connecticut 06103
	Attention: Eileen P. Baldwin, Esq.
Lender:	Bank of America, N.A.
	1101 Wootton Parkway, 4th Floor
	Rockville, Maryland 20852
	Attention: Michael J. Radcliffe
	Senior Vice President
with a copy to:	Troutman Sanders LLP
	1660 International Drive, Suite 600
	McLean, Virginia 22102
	Attention: Richard M. Pollak, Esq.

By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to Section 5.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE BORROWER AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Collateral or other security for the Obligations. By inspecting the Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

EXHIBIT A

LLC POWER

FOR VALUE RECEIVED, the undersigned, ARGAN, INC., a Delaware corporation (“Pledgor”) does hereby sell, assign and transfer to __________________________________* all of its Equity Interests (as hereinafter defined) represented by Certificate No(s). _______* in Gemma Power Systems, LLC, a Connecticut limited liability company (“Issuer”), standing in the name of Pledgor on the books of said Issuer. Pledgor does hereby irrevocably constitute and appoint ________________________________*, as attorney, to transfer the Equity Interest in said Issuer with full power of substitution in the premises. The term “Equity Interest” means any security, share, unit, partnership interest, membership interest, ownership interest, equity interest, option, warrant, participation, “equity security” (as such term is defined in Rule 3(a)11-1 of the General Rules and Regulations of the Securities Exchange Act of 1934, as amended, or any similar statute then in effect, promulgated by the Securities and Exchange Commission and any successor thereto) or analogous interest (regardless of how designated) of or in a corporation, partnership, limited partnership, limited liability company, limited liability partnership, business trust or other entity, of whatever nature, type, series or class, whether voting or nonvoting, certificated or uncertificated, common or preferred, and all rights and privileges incident thereto.

Dated: ________________*	PLEDGOR:
	ARGAN, INC.
	By:
		Name: Title:

*To Remain Blank - Not Completed at Closing.

EXHIBIT B

NOTICE OF PLEDGE

Pledge by Argan, Inc.(the “Pledgor”)

To:Gemma Power Systems, LLC(the “Company”)

Notice is hereby given that, pursuant to a Pledge, Assignment and Security Agreement (a copy of which is attached hereto), dated December __, 2006, (the “Assignment Agreement”) from the Pledgor to Bank of America, N.A. (the “Lender”), the Pledgor has pledged, assigned and granted to the Lender a continuing security interest in, all of its right, title and interest, whether now existing or hereafter arising our acquired, in, to, and under the following (the “Collateral”):

(a)All rights, title and interest in and to the membership interests and any other equity ownership interests (the “LLC Interest”) of the Company, as its the [sole] member, under the operating agreement, as the same may have been or may be amended, supplemented, restated, or otherwise modified at any time and from time to time (the “Operating Agreement”);

(b)all rights to receive any and all cash and non-cash distributions (regardless of how such distributions are classified and including any and all distributions-in-kind and liquidating distributions), profits, losses, income, revenue, returns of capital, repayments of any loans made by Pledgor to the Company (including interest and fees with respect to such loans), and any and all development, management and similar fees payable by the Company to Pledgor of any kind or nature whatsoever, together with any and all other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of, under or relating to the Operating Agreement;

(c)all other or additional equity or debt interests, other securities or property (including cash) paid or distributed in respect of the Company by way of any spin-off, merger, consolidation, dissolution, combination, reclassification or exchange of equity interests, asset sales, or similar rearrangement or reorganization; and

(d)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing..

Pursuant to the Assignment Agreement, the Company is hereby authorized and directed to:

(i)register on the Company’s books the Pledgor’s pledge to the Lender of the Pledgor’s interests in the Company;

(ii)make direct payment to the Lender of any amounts due or to become due to the Pledgor under the Operating Agreement, if so notified by the Lender; and

(iii)comply with all instructions originated by the Lender without further consent by the Pledgor.

The Pledgor hereby requests the Company to indicate the Company’s acceptance of this Notice of Pledge and consent to and confirm its terms and provisions by signing a copy hereof where indicated below and returning the same to the Lender along with an Initial Transaction Statement in the form attached hereto.

Dated as of ____________, 200_

ARGAN, INC.
By:	/s/ Rainer Bosselmann            (SEAL)
	Name: Rainer Bosselmann Title: Chairman and CEO

GEMMA POWER SYSTEMS, LLC
By:	/s/ William F. Griffin, Jr.          (Seal)
	Name: William F. Griffin, Jr. Title: Manager

EXHIBIT C

INITIAL TRANSACTION STATEMENT

(Pledge by Argan, Inc, the “Pledgor”)

To:

Attention:

Re:Member Interests in Gemma Power Systems, LLC, (the “Company”)

1.Registration of Pledge. This is to confirm registration by the Company of the pledge to the Lender of the entire right, title and interest in and to the Company (the “Interest”) owned of record by the Pledgor, the holder of one hundred percent (100%) of the ownership interests in the Company.

Such pledge was registered on _________, _____.

The address of the registered owner of the Interest is:

The registered owner’s Taxpayer I.D. No. is ___________________.

2.Liens, Adverse Claims and Restrictions. The Interest is not subject to any liens or restrictions of the Company or adverse claims.

(a)The Interest is subject to all of the terms of the operating agreement of the Company and of applicable laws.

(b)The Interest may not be transferred without compliance with the provisions of the operating agreement of the Company and compliance with applicable federal and state securities laws.

(c)At the time of registration of the pledge described above, the Interest was not subject to any liens or restrictions of the Company (except as set forth above or in the operating agreement), or any adverse claims as to which the Company has a duty pursuant to applicable state law.

This Initial Transaction Statement is a record of the rights of the Lender as of the time of its issuance, and is neither a negotiable instrument nor a security.

Dated as of ____________, 200_.

GEMMA POWER SYSTEMS, LLC
By:	/s/ William F. Griffin, Jr.        (Seal)
	Name: William F. Griffin, Jr. Title: Manager

EX-10.12

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Stock Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Stock Collateral”), whether now existing or hereafter created or arising:

(a)3,900 shares of the common stock (the “Stock”) of Gemma Power, Inc., a corporation incorporated under the laws of the State of Connecticut (the “Corporation”);

(b)all stock rights, rights to subscribe, rights to distributions, dividends (including, but not limited to, distributions in kind, cash dividends, stock dividends, dividends paid in stock and liquidating dividends) and any other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of or relating to the Corporation;

(c)all other or additional (or less) stock or other securities or property (including cash) paid or distributed in respect of the Stock by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement;

(d)all other or additional stock or other securities or property (including cash) which may be paid or distributed in respect of the Stock by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Stock Collateral.

The Pledgor agrees that with respect to the Stock Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Stock Collateral constitute part of the Stock Collateral, the Pledgor may not dispose of the Stock Collateral or any part thereof.

Section 1.3 Rights of the Pledgor in the Stock Collateral.

Until an Event of Default (as that term is defined in 0 (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Corporation requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Stock Collateral and which are not otherwise prohibited by the Financing Documents. Any cash dividend or distribution payable in respect of the Stock Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Stock Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Stock Interests.

The Stock represents one hundred percent (100%) of the equity interests of the Corporation and thereafter the Stock Collateral will continue to represent the same percentage of the equity interest of the Corporation, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Stock Collateral and perform all other obligations required hereunder with respect to the Stock Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Pledgor, the Corporation, or shareholders of the Corporation, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Stock Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any corporate matters as may be represented by the Stock Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Stock Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Stock Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement. The interests assigned as Stock Collateral are subject to no outstanding options, voting trusts, shareholders agreement, or other requirements with respect to such interests.

Section 2.7 Perfection and Priority of Stock Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all Stock Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.2 Delivery of Stock Collateral.

The Pledgor shall deliver immediately to the Lender (a) the certificates representing the shares of the Stock, (b) immediately upon its receipt of any additional (or fewer) shares of stock in the Corporation, the certificates representing such additional shares of stock, (c) all instruments, items of payment and other Stock Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank stock powers substantially in the form attached to this Agreement as Exhibit A for all of the assigned shares of stock. All Stock Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Stock Collateral, and shall defend, at its sole expense, the title to the Stock Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.5 Protection of Stock Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Stock Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Stock Collateral and will take such actions to preserve the Stock Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Stock Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Stock Collateral, the ability of the Pledgor or the Lender to dispose of the Stock Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Stock Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Stock Collateral and such other matters which affect the Stock Collateral; (ii) verify the Stock Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Stock Collateral of the Lender’s interest in the Stock Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Corporation, the Stock Collateral and/or the Pledgor.

Section 3.8 Disposition of Stock Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Stock Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Corporation, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Stock Collateral or dilute the percentage of the ownership interests of the Corporation pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Stock Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Lender and if not previously in the possession of the Lender, the Pledgor shall assist the Lender in the assembly of the Stock Collateral and assist in making it available to the Lender, at a place designated by the Lender. The Lender or its agents may without notice from time to time enter upon the Pledgor’s premises to take possession of the Stock Collateral, to remove it, or otherwise to prepare it for sale, or to sell or otherwise dispose of it.

4.2.2 Sale or Other Disposition of Stock Collateral.

The Lender may sell or redeem the Stock Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Stock Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Stock Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in 0 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Stock Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Stock Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Stock Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Stock Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Stock Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Stock Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Stock Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Stock Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Stock Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Stock Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Stock Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Stock Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Stock Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Stock Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Stock Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Stock Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:

Pledgor: Argan, Inc. One Church Street, Suite 302 Rockville, Maryland 20850 Attention: Arthur F. Trudel Chief Financial Officer

with a copy to: Robinson & Cole LLP 280 Trumbull Street Hartford, Connecticut 06103 Attention: Eileen P. Baldwin, Esq.

Lender: Bank of America, N.A. 1101 Wootton Parkway, 4^th Floor Rockville, Maryland 20852 Attention: Michael J. Radcliffe Senior Vice President

with a copy to: Troutman Sanders LLP 1660 International Drive, Suite 600 McLean, Virginia 22102 Attention: Richard M. Pollak, Esq.

By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Stock Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to 0 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE PLEDGOR AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE PLEDGOR 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 STOCK COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Stock Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Stock Collateral or other security for the Obligations. By inspecting the Stock Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:		ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

EXHIBIT A

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does (do) hereby sell(s), assign(s) and transfer(s) to

Name:

Address:

Social Security or other Identifying Number:____________________________

________ shares of the ___________ stock of _____________________________________ represented by Certificate(s) No(s) ________________________inclusive, standing in the name of_____________________________________________ on the books of said company. The undersigned does (do) hereby irrevocably constitute(s) and appoint(s)___________________________ attorney to transfer the said stock on the books of said company with full power of substitution in the premises.

Dated:________________________________________________________

EX-10.13

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Stock Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Stock Collateral”), whether now existing or hereafter created or arising:

(a)100 shares of the common stock (the “Stock”) of Gemma Power Systems California, Inc., a corporation incorporated under the laws of the State of California (the “Corporation”);

(b)all stock rights, rights to subscribe, rights to distributions, dividends (including, but not limited to, distributions in kind, cash dividends, stock dividends, dividends paid in stock and liquidating dividends) and any other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of or relating to the Corporation;

(c)all other or additional (or less) stock or other securities or property (including cash) paid or distributed in respect of the Stock by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement;

(d)all other or additional stock or other securities or property (including cash) which may be paid or distributed in respect of the Stock by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Stock Collateral.

The Pledgor agrees that with respect to the Stock Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Stock Collateral constitute part of the Stock Collateral, the Pledgor may not dispose of the Stock Collateral or any part thereof.

Section 1.3 Rights of the Pledgor in the Stock Collateral.

Until an Event of Default (as that term is defined in 0 (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Corporation requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Stock Collateral and which are not otherwise prohibited by the Financing Documents. Any cash dividend or distribution payable in respect of the Stock Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Stock Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Stock Interests.

The Stock represents one hundred percent (100%) of the equity interests of the Corporation and thereafter the Stock Collateral will continue to represent the same percentage of the equity interest of the Corporation, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Stock Collateral and perform all other obligations required hereunder with respect to the Stock Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of shareholders or any creditors of the Pledgor, the Corporation, or shareholders of the Corporation, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Stock Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any corporate matters as may be represented by the Stock Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Stock Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Stock Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement. The interests assigned as Stock Collateral are subject to no outstanding options, voting trusts, shareholders agreement, or other requirements with respect to such interests.

Section 2.7 Perfection and Priority of Stock Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all Stock Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.2 Delivery of Stock Collateral.

The Pledgor shall deliver immediately to the Lender (a) the certificates representing the shares of the Stock, (b) immediately upon its receipt of any additional (or fewer) shares of stock in the Corporation, the certificates representing such additional shares of stock, (c) all instruments, items of payment and other Stock Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank stock powers substantially in the form attached to this Agreement as Exhibit A for all of the assigned shares of stock. All Stock Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Stock Collateral, and shall defend, at its sole expense, the title to the Stock Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Stock Collateral.

Section 3.5 Protection of Stock Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Stock Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Stock Collateral and will take such actions to preserve the Stock Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Stock Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Stock Collateral, the ability of the Pledgor or the Lender to dispose of the Stock Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Stock Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Stock Collateral and such other matters which affect the Stock Collateral; (ii) verify the Stock Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Stock Collateral of the Lender’s interest in the Stock Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Corporation, the Stock Collateral and/or the Pledgor.

Section 3.8 Disposition of Stock Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Stock Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Corporation, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Stock Collateral or dilute the percentage of the ownership interests of the Corporation pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Stock Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws. Upon demand by the Lender and if not previously in the possession of the Lender, the Pledgor shall assist the Lender in the assembly of the Stock Collateral and assist in making it available to the Lender, at a place designated by the Lender. The Lender or its agents may without notice from time to time enter upon the Pledgor’s premises to take possession of the Stock Collateral, to remove it, or otherwise to prepare it for sale, or to sell or otherwise dispose of it.

4.2.2 Sale or Other Disposition of Stock Collateral.

The Lender may sell or redeem the Stock Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Stock Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Stock Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in 0 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Stock Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Stock Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Stock Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Stock Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Stock Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Stock Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Stock Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Stock Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Stock Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Stock Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Stock Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Stock Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Stock Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Stock Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Stock Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Stock Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:

Pledgor:	Argan, Inc. One Church Street, Suite 302 Rockville, Maryland 20850 Attention: Arthur F. Trudel Chief Financial Officer
with a copy to:	Robinson & Cole LLP 280 Trumbull Street Hartford, Connecticut 06103 Attention: Eileen P. Baldwin, Esq.
Lender:	Bank of America, N.A. 1101 Wootton Parkway, 4th Floor Rockville, Maryland 20852 Attention: Michael J. Radcliffe Senior Vice President
with a copy to:	Troutman Sanders LLP 1660 International Drive, Suite 600 McLean, Virginia 22102 Attention: Richard M. Pollak, Esq.

                                   0;     

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.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Stock Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to 0 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE PLEDGOR AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE PLEDGOR 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 STOCK COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Stock Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Stock Collateral or other security for the Obligations. By inspecting the Stock Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann           (SEAL)
		Name: Rainer Bosselmann Title:   Chairman and CEO

EXHIBIT A

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does (do) hereby sell(s), assign(s) and transfer(s) to

Name:

Address:

Social Security or other Identifying Number:____________________________________ shares of the ___________ stock of _____________________________________ represented by Certificate(s) No(s) ________________________inclusive, standing in the name of_____________________________________________ on the books of said company. The undersigned does (do) hereby irrevocably constitute(s) and appoint(s)___________________________ attorney to transfer the said stock on the books of said company with full power of substitution in the premises.

Dated:_________________                                      _______________________________________

EX-10.14

PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT

THIS PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT (this “Agreement”) is made this 11^th day of December, 2006, by GEMMA POWER SYSTEMS, LLC, a Connecticut limited liability company (the “Pledgor”) for the benefit of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “Lender”).

RECITALS

A.The Pledgor, Argan, Inc., a corporation organized under the laws of the State of Delaware, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut(collectively, the “Borrowers”) and the Lender have entered into a Second Amended and Restated Financing and Security Agreement dated the same date as this Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”).

B.It is a condition precedent, among others, to the Lender’s agreement to enter into the Financing Agreement and to make loans and other financial accommodations thereunder that the Pledgor enter into this Agreement in order to secure the full and prompt performance of all of the “Obligations” defined in the Financing Agreement and under all of the other Financing Documents.

C.All defined terms used in this Agreement and not defined in this Agreement shall have the meaning given to such terms in the Financing Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the Lender’s entering into the Financing Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Pledgor hereby agrees as follows:

ARTICLE I

SECURITY

Section 1.1 The Collateral.

As security for the prompt and full performance of the Obligations, and as security for the prompt and full performance of all obligations of the Pledgor under this Agreement, and all of the Obligations of the Pledgor and/or any other Person under the Financing Agreement and all of the other Financing Documents, all of the foregoing, whether now in existence or hereafter created and whether joint, several, or both, primary, secondary, direct, contingent or otherwise, the Pledgor hereby pledges, assigns and grants to the Lender a security interest in the following property of the Pledgor (collectively, the “Collateral”), whether now existing or hereafter created or arising:

(a)all rights, title and interest in and to the membership interests and any other equity ownership interests (the “LLC Interest”) of Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut (the “Company”), as its the sole member, under the operating agreement, as the same may have been or may be amended, supplemented, restated, or otherwise modified at any time and from time to time (the “Operating Agreement”);

(b)all rights to receive any and all cash and non-cash distributions (regardless of how such distributions are classified and including any and all distributions-in-kind and liquidating distributions), profits, losses, income, revenue, returns of capital, repayments of any loans made by Pledgor to the Company (including interest and fees with respect to such loans), and any and all development, management and similar fees payable by the Company to Pledgor of any kind or nature whatsoever, together with any and all other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of, under or relating to the Operating Agreement;

(c)all other or additional equity or debt interests, other securities or property (including cash) paid or distributed in respect of the LLC Interest by way of any spin-off, merger, consolidation, dissolution, combination, reclassification or exchange of equity interests, asset sales, or similar rearrangement or reorganization;

(d)all other or additional equity or debt interests, other securities or property (including cash) which may be paid or distributed in respect of the LLC Interest by reason of any consolidation, merger, exchange of equity of debt interests, conveyance of assets, liquidation or similar corporate reorganization; and

(e)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing.

Section 1.2 Rights of the Lender in the Collateral.

The Pledgor agrees that with respect to the Collateral the Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as well as those provided by law and/or in this Agreement. Notwithstanding the fact that the proceeds of the Collateral constitute part of the Collateral, the Pledgor may not dispose of the Collateral or any part thereof.

Section 1.3 Registration of Pledge.

If any of the Collateral is or shall become evidenced or represented by an uncertificated security and if and to the extent requested by the Lender, the Pledgor agrees, by Notice of Pledge, substantially in the form attached to this Agreement as Exhibit B, to (i) notify the Company immediately of the pledge, assignment and security agreement under this Agreement and (ii) issue the Initial Transaction Statement, substantially in the form attached to this Agreement as Exhibit C. The Pledgor hereby authorizes and directs the Company to (i) register the Pledgor’s pledge to the Lender of the Collateral on the Company’s books (ii) make, following written notice to do so by the Lender, direct payment to the Lender of any amounts due or to become due to the Pledgor with respect to the Collateral and (iii) comply with all instructions originated by the Lender without further consent by the Pledgor. The Pledgor acknowledges that the Lender has control over the Collateral within the meaning of Section 8-106 of the Uniform Commercial Code.

Section 1.4 Rights of the Pledgor in the Collateral.

Until an Event of Default (as that term is defined in ARTICLE IV (Default and Rights and Remedies)) occurs, the Pledgor shall be entitled (a) to vote all ownership or equity interests, (b) to give consents, waivers and ratification to any and all actions of the Company requiring member approval, and (c) to receive all cash and non-cash distributions which may be paid on the Collateral and which are not otherwise prohibited by the Financing Documents. Any cash distribution payable in respect of the Collateral which represents, in whole or in part, a return of capital or a violation of this Agreement or the other Financing Documents shall be received by the Pledgor in trust for the Lender, shall be paid immediately to the Lender and shall be retained by the Lender as part of the Collateral.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

To induce the Lender to advance sums to the Pledgor under the Financing Agreement, the Pledgor represents and warrants to the Lender and shall be deemed to represent and warrant at the time of each request for, and the time of each advance under, the credit facilities described in the Financing Agreement, as follows:

Section 2.1 Percentage Ownership.

The LLC Interest represents one hundred percent (100%) of the membership interests of the Company and thereafter the Collateral will continue to represent the same percentage of the membership interest of the Company, unless otherwise permitted under the Financing Agreement.

Section 2.2 Power and Authority.

The Pledgor has full corporate power and authority to execute and deliver this Agreement and the other Financing Documents to which it is a party, to assign and pledge the Collateral and perform all other obligations required hereunder with respect to the Collateral and interests, and to incur and perform its obligations whether under this Agreement, the other Financing Documents or otherwise, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of the shareholders or any creditors of the Pledgor, the Company, or members of the Company, and no consent, approval, filing or registration with or notice to any Governmental Authority on the part of the Pledgor, is required as a condition to the execution, delivery, validity or enforceability of this Agreement or the other Financing Documents or the performance of the Obligations, including, without limitation, the right of the Lender to dispose of the Collateral following an Event of Default. The Pledgor has full right, power and authority and has all voting rights in any organizational matters as may be represented by the Collateral.

Section 2.3 Binding Agreements.

This Agreement and the other Financing Documents executed and delivered by the Pledgor have been properly executed and delivered and constitute the valid and legally binding obligations of the Pledgor and are fully enforceable against the Pledgor in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties, and general principles of equity regardless of whether applied in a proceeding in equity or at law.

Section 2.4 No Conflicts.

Neither the execution, delivery and performance of the terms of this Agreement or of any of the other Financing Documents executed and delivered by the Pledgor nor the consummation of the transactions contemplated by this Agreement will conflict with, violate or be prevented by (a) the Pledgor’s charter or bylaws, (b) any existing mortgage, indenture, contract or agreement binding on the Pledgor or affecting its property, or (c) any Laws.

Section 2.5 Compliance with Laws.

The Pledgor is not in violation of any applicable Laws (including, without limitation, any Laws relating to employment practices, to environmental, occupational and health standards and controls) or order, writ, injunction, decree or demand of any court, arbitrator, or any Governmental Authority affecting the Pledgor or any of its properties, the violation of which could adversely affect the authority of the Pledgor to enter into, or the ability of the Pledgor to perform under, this Agreement or any of the other Financing Documents executed by the Pledgor.

Section 2.6 Title to Properties.

The Pledgor has good and marketable title to the Collateral. The Pledgor has legal, enforceable and uncontested rights to use freely such property and assets. The Pledgor is the sole owner of all of the Collateral, free and clear of all security interests, pledges, voting trusts, agreements, Liens, claims and encumbrances whatsoever, other than the security interest, assignment and lien granted under this Agreement.

Section 2.7 Perfection and Priority of Collateral.

The Lender has, or upon execution, delivery and recording of this Agreement and the Security Documents will have, and will continue to have as security for the Obligations and the other obligations secured by this Agreement, a valid and perfected Lien on and security interest in all of the Collateral, free of all other Liens, claims and rights of third parties whatsoever.

ARTICLE III

COVENANTS

Until payment in full and the performance of all of the Obligations and all of the obligations of the Pledgor hereunder or secured hereby, the Pledgor covenants and agrees with the Lender as follows:

Section 3.1 Corporate Existence.

The Pledgor shall maintain its corporate existence in good standing in the jurisdiction in which it is incorporated and in each other jurisdiction where it is required to register or qualify to do business if the failure to do so in such other jurisdiction might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement, on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.

Section 3.2 Delivery of Certificated Collateral.

If any of the Collateral is or shall become evidenced or represented by a certificated security, the Pledgor shall deliver immediately to the Lender (a) the certificates representing the LLC Interests, (b) immediately upon its receipt of any additional (or fewer) LLC Interests in the Company, the certificates representing such additional LLC Interests, (c) all instruments, items of payment and other Collateral received by the Pledgor, and (d) executed irrevocable, undated and blank membership powers, substantially in the form attached to this Agreement as Exhibit A, for all of the assigned LLC Interests. All Collateral at any time received or held by the Pledgor shall be received and held by the Pledgor in trust for the benefit of the Lender, and shall be kept separate and apart from, and not commingled with, the Pledgor’s other assets.

Section 3.3 Defense of Title and Further Assurances.

The Pledgor will do or cause to be done all things necessary to preserve and to keep in full force and effect its interests in the Collateral, and shall defend, at its sole expense, the title to the Collateral and any part thereof. The Pledgor hereby authorizes the filing of any financing statement or continuation statement required under the Uniform Commercial Code. Further, the Pledgor shall promptly, upon request by the Lender, execute, acknowledge and deliver any financing statement, endorsement, renewal, affidavit, deed, assignment, continuation statement, security agreement, certificate or other document as the Lender may require in order to perfect, preserve, maintain, protect, continue, realize upon, and/or extend the lien and security interest of the Lender under this Agreement and the priority thereof. The Pledgor shall pay to the Lender upon demand all taxes, costs and expenses (including but not limited to reasonable attorney’s fees) incurred by the Lender in connection with the preparation, execution, recording and filing of any such document or instrument mentioned aforesaid.

Section 3.4 Compliance with Laws.

The Pledgor shall comply with all applicable Laws and observe the valid requirements of Governmental Authorities, the noncompliance with or the nonobservance of which might have a material adverse effect on the ability of the Pledgor to perform its obligations under this Agreement or any of the Financing Documents to which the Pledgor is a party or on the conduct of the Pledgor’s operations, on the Pledgor’s financial condition, or on the value of, or the ability of the Lender to realize upon, the Collateral.

Section 3.5 Protection of Collateral.

The Pledgor agrees that the Lender may at any time take such steps as the Lender deems reasonably necessary to protect the Lender’s interest in, and to preserve the Collateral. The Pledgor agrees to cooperate fully with the Lender’s efforts to preserve the Collateral and will take such actions to preserve the Collateral as the Lender may in good faith direct. All of the Lender’s expenses of preserving the Collateral, including, without limitation, reasonable attorneys’ fees, shall be part of the Enforcement Costs.

Section 3.6 Certain Notices.

The Pledgor will promptly notify the Lender in writing of any Event of Default and of any litigation, regulatory proceeding, or other event which materially and adversely affects the value of the Collateral, the ability of the Pledgor or the Lender to dispose of the Collateral, or the rights and remedies of the Lender in relation thereto.

Section 3.7 Books and Records; Information.

(a)The Pledgor shall maintain proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to the Collateral and which reflect the Lien of the Lender thereon.

(b)The Pledgor agrees that the Lender may from time to time and at its option (i) require the Pledgor to, and the Pledgor shall, periodically deliver to the Lender records and schedules, which show the status of the Collateral and such other matters which affect the Collateral; (ii) verify the Collateral and inspect the books and records of the Pledgor and make copies thereof or extracts therefrom; (iii) notify any prospective buyers or transferees of the Collateral of the Lender’s interest in the Collateral; and (iv) disclose to prospective buyers or transferees from the Lender any and all information regarding the Company, the Collateral and/or the Pledgor.

Section 3.8 Disposition of Collateral.

The Pledgor will not sell, assign, convey, transfer or otherwise dispose of the Collateral or any part thereof.

Section 3.9 Distributions.

The Pledgor shall receive no dividend or distribution or other benefit with respect to the Company, and shall not vote, consent, waive or ratify any action taken, which would violate or be inconsistent with any of the terms and provisions of this Agreement, the Financing Agreement or any of the other Financing Documents or which would materially impair the position or interest of the Lender in the Collateral or dilute the percentage of the ownership interests of the Company pledged to the Lender hereunder, except as expressly permitted by the Financing Agreement.

Section 3.10 Liens.

The Pledgor will not create, incur, assume or suffer to exist any Lien upon any of the Collateral, other than Liens in favor of the Lender.

Section 3.11 Survival.

All representations and warranties contained in or made under or in connection with this Agreement and the other Financing Documents shall survive the making of any advance under the Financing Agreement and the incurring of any other Obligations and the other obligations secured by this Agreement.

ARTICLE IV

DEFAULT AND RIGHTS AND REMEDIES

Section 4.1 Events of Default.

The occurrence of any one or more of the following events shall constitute an “Event of Default” under the provisions of this Agreement:

4.1.1 Default under Financing Agreement.

An Event of Default shall occur under the Financing Agreement.

4.1.2 Default under this Agreement.

If the Pledgor shall fail to duly perform, comply with or observe any of the terms, conditions or covenants of this Agreement.

4.1.3 Breach of Representations and Warranties.

Any representation or warranty made in this Agreement or in any report, statement, schedule, certificate, opinion (including any opinion of counsel for the Pledgor), financial statement or other document furnished by the Pledgor or its agents or representatives in connection with this Agreement, any of the other Financing Documents, or the Obligations or the other obligations secured by this Agreement, shall prove to have been false or misleading when made (or, if applicable, when reaffirmed) in any material respect.

Section 4.2 Remedies.

Upon the occurrence of any Default or Event of Default, the Lender may at any time thereafter exercise any one or more of the following rights, powers or remedies:

4.2.1 Uniform Commercial Code.

The Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code and other applicable Laws.

4.2.2 Sale or Other Disposition of Collateral.

The Lender may sell or redeem the Collateral, or any part thereof, in one or more sales, at public or private sale, conducted by any officer or agent of, or auctioneer or attorney for, the Lender, at the Lender’s place of business or elsewhere, for cash, upon credit or future delivery, and at such price or prices as the Lender shall, in its sole discretion, determine, and the Lender may be the purchaser of any or all of the Collateral so sold. Further, any written notice of the sale, disposition or other intended action by the Lender with respect to the Collateral which is sent by regular mail, postage prepaid, to the Pledgor at the address set forth in Section 5.1 (Notices), or such other address of the Pledgor which may from time to time be shown on the Lender’s records, at least ten (10) days prior to such sale, disposition or other action, shall constitute commercially reasonable notice to the Pledgor. The Lender may alternatively or additionally give such notice in any other commercially reasonable manner. Nothing in this Agreement shall require the Lender to give any notice not required by applicable Laws.

If any consent, approval, or authorization of any Governmental Authority or any Person having any interest therein, should be necessary to effectuate any sale or other disposition of the Collateral, the Pledgor agrees to execute all such applications and other instruments, and to take all other action, as may be required in connection with securing any such consent, approval or authorization.

The Pledgor recognizes that the Lender may be unable to effect a public sale of all or a part of the Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and other applicable federal and state Laws. The Lender may, therefore, in its discretion, take such steps as it may deem appropriate to comply with such Laws and may, for example, at any sale of the Collateral consisting of securities restrict the prospective bidders or purchasers as to their number, nature of business and investment intention, including, without limitation, a requirement that the Persons making such purchases represent and agree to the satisfaction of the Lender that they are purchasing such securities for their account, for investment, and not with a view to the distribution or resale of any thereof. The Pledgor covenants and agrees to do or cause to be done promptly all such acts and things as the Lender may request from time to time and as may be necessary to offer and/or sell the securities or any part thereof in a manner which is valid and binding and in conformance with all applicable Laws.

4.2.3 Specific Rights With Regard to Collateral.

In addition to all other rights and remedies provided hereunder or as shall exist at law or in equity from time to time, the Lender may (but shall be under no obligation to), without notice to the Pledgor, and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor:

(a)compromise, extend or renew any of the Collateral or deal with the same as it may deem advisable;

(b)make exchanges, substitutions or surrenders of all or any part of the Collateral;

(c)copy, transcribe, or remove from any place of business of the Pledgor all books, records, ledger sheets, correspondence, invoices and documents, relating to or evidencing any of the Collateral or without cost or expense to the Lender, make such use of the Pledgor’s places of business as may be reasonably necessary to administer, control and collect the Collateral;

(d)institute and prosecute legal and equitable proceedings to enforce collection of, or realize upon, any of the Collateral;

(e)settle, renew, extend, compromise, compound, exchange or adjust claims in respect of any of the Collateral or any legal proceedings brought in respect thereof;

(f)endorse or sign the name of the Pledgor upon any instruments, securities, powers, documents, or other writing relating to or part of the Collateral; and

(g)take any other action necessary or beneficial to realize upon or dispose of the Collateral.

4.2.4 Application of Proceeds.

Any proceeds of sale or other disposition of the Collateral will be applied by the Lender to the payment of the Enforcement Costs, and any balance of such proceeds will be applied by the Lender to the payment of the balance of the Obligations and the other obligations secured by this Agreement in such order and manner of application as the Lender may from time to time in its sole and absolute discretion determine. If the sale or other disposition of the Collateral fails to fully satisfy the Obligations and the other obligations secured by this Agreement, the Pledgor shall remain liable to the Lender for any deficiency.

4.2.5 Performance by Lender.

If the Pledgor shall fail to perform, observe or comply with any of the conditions, covenants, terms, stipulations or agreements contained in this Agreement or any of the other Financing Documents, the Lender without notice to or demand upon the Pledgor and without waiving or releasing any of the Obligations or any Default or Event of Default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of the Pledgor, and may enter upon the premises of the Pledgor for that purpose and take all such action thereon as the Lender may consider necessary or appropriate for such purpose and the Pledgor hereby irrevocably appoints the Lender as its attorney-in-fact to do so, with power of substitution, in the name of the Lender or in the name of the Pledgor or otherwise, for the use and benefit of the Lender, but at the cost and expense of the Pledgor and without notice to the Pledgor. All sums so paid or advanced by the Lender together with interest thereon from the date of payment, advance or incurring until paid in full at the Post-Default Rate and all costs and expenses, shall be deemed part of the Enforcement Costs, shall be paid by the Pledgor to the Lender on demand, and shall constitute and become a part of the Obligations.

4.2.6 Other Remedies.

The Lender may from time to time proceed to protect or enforce its rights by an action or actions at law or in equity or by any other appropriate proceeding, whether for the specific performance of any of the covenants contained in this Agreement or in any of the other Financing Documents, or for an injunction against the violation of any of the terms of this Agreement or any of the other Financing Documents, or in aid of the exercise or execution of any right, remedy or power granted in this Agreement, the Financing Documents, and/or applicable Laws.

Section 4.3 Costs and Expenses.

The Pledgor shall pay on demand all costs and expenses (including reasonable attorney’s fees), all of which shall be deemed part of the Obligations, incurred by and on behalf of the Lender incident to any collection, servicing, sale, disposition or other action taken by the Lender with respect to the Collateral or any portion thereof.

Section 4.4 Receipt Sufficient Discharge to Purchaser.

Upon any sale or other disposition of the Collateral or any part thereof, the receipt of the Lender or other Person making the sale or disposition shall be a sufficient discharge to the purchaser for the purchase money, and such purchaser shall not be obligated to see to the application thereof.

Section 4.5 Remedies, etc. Cumulative.

Each right, power and remedy of the Lender as provided for in this Agreement or in any of the other Financing Documents or in any related instrument or agreement or now or thereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or in the other Financing Documents or in any related document, instrument or agreement or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Lender of any or all such other rights, powers or remedies.

Section 4.6 No Waiver, etc.

No failure or delay by the Lender to insist upon the strict performance of any term, condition, covenant or agreement of this Agreement or of any of the other Financing Documents or of any related documents, instruments or agreements, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, condition, covenant or agreement or of any such breach, or preclude the Lender from exercising any such right, power or remedy at any later time or times. By accepting payment after the due date of any amount payable under this Agreement or under any of the other Financing Documents or under any related document, instrument or agreement, the Lender shall not be deemed to waive the right either to require prompt payment when due of all other amounts payable under this Agreement or under any other of the Financing Documents, or to declare a default for failure to effect such prompt payment of any such other amount.

ARTICLE V

MISCELLANEOUS

Section 5.1 Notices.

All notices, requests and demands to or upon the parties to this Agreement shall be in writing and shall be deemed to have been given or made when delivered by hand on a Business Day, or two (2) days after the date when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested, or when sent by overnight courier, on the Business Day next following the day on which the notice is delivered to such overnight courier, addressed as follows:

Pledgor:	c/o Argan, Inc.
	One Church Street, Suite 302
	Rockville, Maryland 20850
	Attention: Arthur F. Trudel
	Chief Financial Officer
with a copy to:	Robinson & Cole LLP
	280 Trumbull Street
	Hartford, Connecticut 06103
	Attention: Eileen P. Baldwin, Esq.
Lender:	Bank of America, N.A.
	1101 Wootton Parkway, 4th Floor
	Rockville, Maryland 20852
	Attention: Michael J. Radcliffe
	Senior Vice President
with a copy to:	Troutman Sanders LLP
	1660 International Drive, Suite 600
	McLean, Virginia 22102
	Attention: Richard M. Pollak, Esq.

By written notice, each party to this Agreement may change the address to which notice is given to that party, provided that such changed notice shall include a street address to which notices may be delivered by overnight courier in the ordinary course on any Business Day.

Section 5.2 Amendments; Waivers.

This Agreement and the other Financing Documents may not be amended, modified, or changed in any respect except by an agreement in writing signed by the Lender and the Pledgor. No waiver of any provision of this Agreement or of any of the other Financing Documents, nor consent to any departure by the Pledgor therefrom, shall in any event be effective unless the same shall be in writing. No course of dealing between the Pledgor and the Lender and no act or failure to act from time to time on the part of the Lender shall constitute a waiver, amendment or modification of any provision of this Agreement or any of the other Financing Documents or any right or remedy under this Agreement, under any of the other Financing Documents or under applicable Laws.

Section 5.3 Cumulative Remedies.

The rights, powers and remedies provided in this Agreement and in the other Financing Documents are cumulative, may be exercised concurrently or separately, may be exercised from time to time and in such order as the Lender shall determine and are in addition to, and not exclusive of, rights, powers and remedies provided by existing or future applicable Laws. In order to entitle the Lender to exercise any remedy reserved to it in this Agreement, it shall not be necessary to give any notice, other than such notice as may be expressly required in this Agreement. Without limiting the generality of the foregoing, the Lender may:

(a)proceed against the Pledgor with or without proceeding against any other Person who may be liable for all or any part of the Obligations;

(b)proceed against the Pledgor with or without proceeding under any of the other Financing Documents or against any Collateral or other collateral and security for all or any part of the Obligations;

(c)without notice, release or compromise with any guarantor or other Person liable for all or any part of the Obligations under the Financing Documents or otherwise; and

(d)without reducing or impairing the obligations of the Pledgor and without notice thereof: (i) fail to perfect the Lien in any or all Collateral or to release any or all the Collateral or to accept substitute collateral, (ii) waive any provision of this Agreement or the other Financing Documents, (iii) exercise or fail to exercise rights of set-off or other rights, or (iv) accept partial payments or extend from time to time the maturity of all or any part of the Obligations.

Section 5.4 Severability.

In case one or more provisions, or part thereof, contained in this Agreement or in the other Financing Documents shall be invalid, illegal or unenforceable in any respect under any Law, then without need for any further agreement, notice or action:

(a)the validity, legality and enforceability of the remaining provisions shall remain effective and binding on the parties thereto and shall not be affected or impaired thereby;

(b)the obligation to be fulfilled shall be reduced to the limit of such validity;

(c)if such provision or part thereof pertains to repayment of the Obligations, then, at the sole and absolute discretion of the Lender, all of the Obligations of the Pledgor to the Lender shall become immediately due and payable; and

(d)if affected provision or part thereof does not pertain to repayment of the Obligations, but operates or would prospectively operate to invalidate this Agreement in whole or in material part, then such provision or part thereof only shall be void, and the remainder of this Agreement shall remain operative and in full force and effect.

Section 5.5 Successors and Assigns.

This Agreement and all other Financing Documents shall be binding upon and inure to the benefit of the Pledgor and the Lender and their respective heirs, personal representatives, successors and assigns, except that the Pledgor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

Section 5.6 Applicable Law; Jurisdiction.

5.6.1 Applicable Law.

This Agreement, shall be governed by the Laws of the State, as if each of the Financing Documents and this Agreement had been executed, delivered, administered and performed solely within the State.

5.6.2 Submission to Jurisdiction.

The Pledgor irrevocably submits to the jurisdiction of any state or federal court sitting in the State over any suit, action or proceeding arising out of or relating to this Agreement or any of the other Financing Documents. The Pledgor irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Pledgor and may be enforced in any court in which the Pledgor is subject to jurisdiction, by a suit upon such judgment, provided that service of process is effected upon the Pledgor in one of the manners specified in this Section or as otherwise permitted by applicable Laws.

5.6.3 Appointment of Agent for Service of Process.

The Pledgor hereby irrevocably designates and appoints CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as the Pledgor’s authorized agent to receive on the Pledgor’s behalf service of any and all process that may be served in any suit, action or proceeding of the nature referred to in this Section in any state or federal court sitting in the State. If such agent shall cease so to act, the Pledgor shall irrevocably designate and appoint without delay another such agent in the State satisfactory to the Lender and shall promptly deliver to the Lender evidence in writing of such other agent’s acceptance of such appointment and its agreement that such appointment shall be irrevocable.

5.6.4 Service of Process.

The Pledgor hereby consents to process being served in any suit, action or proceeding of the nature referred to in this Section by (a) the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Pledgor at the Pledgor’s address designated in or pursuant to Section 5.1 (Notices), and (b) serving a copy thereof upon the agent, if any, designated and appointed by the Pledgor as the Pledgor’s agent for service of process by or pursuant to this Section. The Pledgor irrevocably agrees that such service (y) shall be deemed in every respect effective service of process upon the Pledgor in any such suit, action or proceeding, and (z) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon the Pledgor. Nothing in this Section shall affect the right of the Lender to serve process in any manner otherwise permitted by law or limit the right of the Lender otherwise to bring proceedings against the Pledgor in the courts of any jurisdiction or jurisdictions.

Section 5.7 Headings.

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.

Section 5.8 Entire Agreement.

This Agreement is intended by the Lender and the Pledgor to be a complete, exclusive and final expression of the agreements contained herein. Neither the Lender nor the Pledgor shall hereafter have any rights under any prior agreements but shall look solely to this Agreement for definition and determination of all of their respective rights, liabilities and responsibilities under this Agreement.

Section 5.9 Waiver of Trial by Jury.

THE BORROWER AND THE LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER AND THE LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

This waiver is knowingly, willingly and voluntarily made by the Pledgor and the Lender, and the Pledgor and the Lender hereby represent that no representations of fact or opinion have been made by any individual to induce this waiver of trial by jury or to in any way modify or nullify its effect. The Pledgor and the Lender further represent that they have been represented in the signing of this Agreement and in the making of this waiver by independent legal counsel, selected of their own free will, and that they have had the opportunity to discuss this waiver with counsel.

Section 5.10 Liability of the Lender.

The Pledgor hereby agrees that the Lender shall not be chargeable for any negligence, mistake, act or omission of any accountant, examiner, agency or attorney employed by the Lender in making examinations, investigations or collections, the Lender’s failure to preserve or protect any rights of the Pledgor under the Collateral or the Lender’s failure to perfect, maintain, protect or realize upon any lien or security interest or any other interest in the Collateral or other security for the Obligations. By inspecting the Collateral or any other properties of the Pledgor or by accepting or approving anything required to be observed, performed or fulfilled by the Pledgor or to be given to the Lender pursuant to this Agreement or any of the other Financing Documents, the Lender shall not be deemed to have warranted or represented the condition, sufficiency, legality, effectiveness or legal effect of the same, and such acceptance or approval shall not constitute any warranty or representation with respect thereto by the Lender.

[SIGNATURE APPEARS ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the Pledgor has caused this Pledge, Assignment and Security Agreement to be executed, sealed and delivered, as of the day and year first written above.

WITNESS:	ARGAN, INC.
/s/ Arthur Trudel	By:	/s/ Rainer Bosselmann (SEAL)
		Name: Rainer Bosselmann Title: Chairman and CEO

EXHIBIT A

LLC POWER

FOR VALUE RECEIVED, the undersigned, Gemma Power Systems, LLC., a Connecticut limited liability company (“Pledgor”) does hereby sell, assign and transfer to __________________________________* all of its Equity Interests (as hereinafter defined) represented by Certificate No(s). _______* in Gemma Power Hartford, LLC, a Connecticut limited liability company (“Issuer”), standing in the name of Pledgor on the books of said Issuer. Pledgor does hereby irrevocably constitute and appoint ________________________________*, as attorney, to transfer the Equity Interest in said Issuer with full power of substitution in the premises. The term “Equity Interest” means any security, share, unit, partnership interest, membership interest, ownership interest, equity interest, option, warrant, participation, “equity security” (as such term is defined in Rule 3(a)11-1 of the General Rules and Regulations of the Securities Exchange Act of 1934, as amended, or any similar statute then in effect, promulgated by the Securities and Exchange Commission and any successor thereto) or analogous interest (regardless of how designated) of or in a corporation, partnership, limited partnership, limited liability company, limited liability partnership, business trust or other entity, of whatever nature, type, series or class, whether voting or nonvoting, certificated or uncertificated, common or preferred, and all rights and privileges incident thereto.

Dated: ________________*	PLEDGOR:
	ARGAN, INC.
	By:
		Name:
		Title:

*To Remain Blank - Not Completed at Closing.

EXHIBIT B

NOTICE OF PLEDGE

Pledge by Gemma Power Systems, LLC. (the “Pledgor”)

To:Gemma Power Hartford, LLC(the “Company”)

Notice is hereby given that, pursuant to a Pledge, Assignment and Security Agreement (a copy of which is attached hereto), dated December __, 2006, (the “Assignment Agreement”) from the Pledgor to Bank of America, N.A. (the “Lender”), the Pledgor has pledged, assigned and granted to the Lender a continuing security interest in, all of its right, title and interest, whether now existing or hereafter arising our acquired, in, to, and under the following (the “Collateral”):

(a)All rights, title and interest in and to the membership interests and any other equity ownership interests (the “LLC Interest”) of the Company, as its the [sole] member, under the operating agreement, as the same may have been or may be amended, supplemented, restated, or otherwise modified at any time and from time to time (the “Operating Agreement”);

(b)all rights to receive any and all cash and non-cash distributions (regardless of how such distributions are classified and including any and all distributions-in-kind and liquidating distributions), profits, losses, income, revenue, returns of capital, repayments of any loans made by Pledgor to the Company (including interest and fees with respect to such loans), and any and all development, management and similar fees payable by the Company to Pledgor of any kind or nature whatsoever, together with any and all other rights and property interests including, but not limited to, accounts, contract rights, instruments and general intangibles arising out of, under or relating to the Operating Agreement;

(c)all other or additional equity or debt interests, other securities or property (including cash) paid or distributed in respect of the Company by way of any spin-off, merger, consolidation, dissolution, combination, reclassification or exchange of equity interests, asset sales, or similar rearrangement or reorganization; and

(d)all proceeds and products (both cash and non-cash) of the foregoing, whether now or hereafter arising under any of the foregoing..

Pursuant to the Assignment Agreement, the Company is hereby authorized and directed to:

(i)register on the Company’s books the Pledgor’s pledge to the Lender of the Pledgor’s interests in the Company;

(ii)make direct payment to the Lender of any amounts due or to become due to the Pledgor under the Operating Agreement, if so notified by the Lender; and

(iii)comply with all instructions originated by the Lender without further consent by the Pledgor.

The Pledgor hereby requests the Company to indicate the Company’s acceptance of this Notice of Pledge and consent to and confirm its terms and provisions by signing a copy hereof where indicated below and returning the same to the Lender along with an Initial Transaction Statement in the form attached hereto.

Dated as of ____________, 200_

GEMMA POWER SYSTEMS, LLC
By:	/s/ William F. Griffin, Jr. (Seal)
	Name: William F. Griffin, Jr. Title: Manager

GEMMA POWER HARTFORD, LLC
By:	/s/ William F. Griffin, Jr. (Seal)
	Name: William F. Griffin, Jr. Title: Manager

EXHIBIT C

INITIAL TRANSACTION STATEMENT

(Pledge by Gemma Power Systems, LLC, the “Pledgor”)

To:

Attention:

Re:Member Interests in Gemma Power Hartford, LLC, (the “Company”)

1.Registration of Pledge. This is to confirm registration by the Company of the pledge to the Lender of the entire right, title and interest in and to the Company (the “Interest”) owned of record by the Pledgor, the holder of one hundred percent (100%) of the ownership interests in the Company.

Such pledge was registered on _________, _____.

The address of the registered owner of the Interest is:

The registered owner’s Taxpayer I.D. No. is ___________________.

2.Liens, Adverse Claims and Restrictions. The Interest is not subject to any liens or restrictions of the Company or adverse claims.

(a)The Interest is subject to all of the terms of the operating agreement of the Company and of applicable laws.

(b)The Interest may not be transferred without compliance with the provisions of the operating agreement of the Company and compliance with applicable federal and state securities laws.

(c)At the time of registration of the pledge described above, the Interest was not subject to any liens or restrictions of the Company (except as set forth above or in the operating agreement), or any adverse claims as to which the Company has a duty pursuant to applicable state law.

This Initial Transaction Statement is a record of the rights of the Lender as of the time of its issuance, and is neither a negotiable instrument nor a security.

Dated as of ____________, 200_.

GEMMA POWER HARTFORD, LLC
By:	/s/ William F. Griffin, Jr. (Seal)
	Name: William F. Griffin, Jr. Title: Manager

EX-10.15

PLEDGE AND ASSIGNMENT AGREEMENT

THIS PLEDGE AND ASSIGNMENT AGREEMENT (this “Agreement”), dated December 11, 2006, from ARGAN, INC., a corporation organized under the laws of the State of Delaware (the “Pledgor”), to BANK OF AMERICA, N.A., a national banking association (the “Lender”).

PRELIMINARY STATEMENTS:

(1)The Pledgor has opened account No. 003933352877 (such account, and any extension or renewal of such account from time to time, being the “Account”) with the Lender in the aggregate amount of Twelve Million Dollars ($12,000,000) of which (a) Ten Million Dollars ($10,000,000) will secure that certain Standby Letter of Credit #____ issued by the Lender for the benefit of Travelers Casualty and Surety Company of America (as amended, extended and renewed from time to time, the “LC”) and (b) Two Million Dollars ($2,000,000) will be held as an escrow fund (the “Escrow Fund”) pursuant to the Financing Agreement (as hereinafter defined).

(2)Pursuant to that certain Second Amended and Rested Financing and Security Agreement (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “Financing Agreement”), dated as of December 11, 2006, by and among the Pledgor, Southern Maryland Cable, Inc., a corporation organized under the laws of the State of Delaware, Vitarich Laboratories, Inc., a corporation organized under the laws of the State of Delaware, Gemma Power Systems, LLC, a Connecticut limited liability company, Gemma Power, Inc., a corporation organized under the laws of the State of Connecticut, Gemma Power Systems California, Inc., a corporation organized under the laws of the State of California, and Gemma Power Hartford, LLC, a limited liability company organized under the laws of the State of Connecticut (each a “Borrower” and, collectively, the “Borrowers”) and the Lender, the Pledgor agreed to pledge and assign its interests in the Account as set forth in this Agreement. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Financing Agreement.

NOW THEREFORE in consideration of the premises and for other good and valuable consideration, the Pledgor hereby agrees with the Lender as follows:

SECTION 1. Incorporation of Recitals. The Preliminary Statements set forth above are incorporated herein by reference as if fully set forth in the text of this Agreement.

SECTION 2. Pledge and Assignment. The Pledgor hereby pledges and assigns to the Lender, and grants to the Lender a security interest in, the following collateral (the “Collateral”):

(i)the Account, all funds held therein and all certificates and instruments, if any, from time to time representing or evidencing the Account;

(ii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Collateral; and

(iii)all proceeds of any and all of the foregoing Collateral.

SECTION 3. Security for Obligations. This Agreement secures the payment of all obligations of the Borrowers, jointly and severally, now or hereafter existing under Financing Agreement (all such obligations of the Borrowers being called the “Obligations”).

SECTION 4. Maintaining the Account. So long as any Obligations are outstanding:

(a)The Pledgor will maintain the Account.

(b)It shall be a term and condition of the Account, notwithstanding any term or condition to the contrary in any other agreement relating to the Account that no amount (including interest on the Account) shall be paid or released to or for the account of or withdrawn by or for the account of the Pledgor or any other person or entity from the Account.

SECTION 5. Further Assurances. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral.

SECTION 6. Transfers and Other Liens. The Pledgor agrees that it will not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral or (ii) create or permit to exist any lien, security interest option or other charge or encumbrance upon or with respect to any of the Collateral except for the security interest under this Agreement.

SECTION 7. The Lender’s Duties. The powers conferred on the Lender hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Lender shall have no duty as to any collateral, as to ascertaining or taking action with respect to calls, conversions exchanges maturities, tenders or other matters relative to any Collateral, whether or not the Lender or any Bank has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral.

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SECTION 8. Remedies Upon Default. If any Event of Default shall have occurred and be continuing, in addition to the remedies set forth in the Financing Agreement:

(a)The Lender may, without notice to the Pledgor except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Account against the Obligations or any part thereof.

(b)The Lender may also exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State of Maryland at that time (the “Code”) (whether or not the Code applies to the affected Collateral).

SECTION 9. Amendments. Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Pledgor herefrom shall in any event be effective unless the same shall be in writing and signed by the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 10. Continual Security Interest: Assignments under Financing Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Obligations and all other amounts payable under this Agreement, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure to the benefit of, and be enforceable by, the Lender, and its successors, transferees and assigns. Upon the payment in full of the Obligations the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Pledgor. Upon any such termination, the Lender will, at the Pledgor’s expense, return to the Pledgor such of the Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof and execute and deliver to the Pledgor such documents as the Pledgor shall reasonably request to evidence such termination.

SECTION 11. Release of Security Interest. Notwithstanding, anything contained in this Agreement to the contrary, provided, no Event of Default has occurred and is continuing under any of the Financing Documents, the Lender agrees upon written request from Pledgor to promptly release its security interest in (a) Ten Million Dollars ($10,000,000) of the Collateral and interest accrued on such amount, if at such time no Letter of Credit Obligations remain outstanding and Lender has no further obligations to issue any Letters of Credit, and (b) Two Million Dollars ($2,000,000) of the Collateral and interest accrued on such amount, in accordance with the provisions of Sections 2.2.4(c) or 2.4 of the Financing Agreement.

SECTION 12. Governing Law; Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. Unless otherwise defined herein or in the Financing Agreement, terms defined in Article 9 of the Code are used herein as therein defined.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Pledgor has caused this Pledge and Assignment Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

ARGAN, INC.
By:	/s/ Rainer Bosselmann
	Name: Rainer Bosselmann Title: Chairman and CEO

ACCEPTED AND AGREED:

BANK OF AMERICA, N.A.

By: /s/ Michael J. Radcliffe

Name: Michael J. Radcliffe

Title: Senior Vice President

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