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.
 

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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  

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Name: Rainer Bosselmann
Title: Chairman and CEO

ACCEPTED AND AGREED:               BANK OF AMERICA, N.A.               By:
/s/ Michael J. Radcliffe      

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Name: Michael J. Radcliffe
Title: Senior Vice President
   

 
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