SUBSCRIPTION AGREEMENT

                                   ARGAN, INC.

                                  COMMON STOCK


<PAGE>

                                  EXHIBIT 4.1

                             SUBSCRIPTION AGREEMENT

         THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made as of this 28th
day of January, 2005, by and among ARGAN, INC., a Delaware corporation (the
"Company"), and MSR I SBIC, L.P., a Delaware limited partnership (the
"Investor").


                              W I T N E S S E T H:

         WHEREAS, the Investor desires to subscribe for, purchase and acquire
from the Company and the Company desires to sell and issue to the Investor
129,032 shares (the "Shares") of the Company's Common Stock, par value $0.15 per
share (the "Common Stock"), upon the terms and conditions and subject to the
provisions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1. Purchase and Sale of the Shares. Subject to the terms and conditions
of this Agreement, the Investor subscribes for and agrees to purchase and
acquire from the Company and the Company agrees to sell and issue to the
Investor the Shares, in the manner set forth in Section 2 hereof, at a purchase
price of $7.75 per share (the "Share Price"), yielding an aggregate purchase
price of $999,998 (the "Total Purchase Price").

         2. Terms of Purchase and Sale of the Shares. (a) The closing of the
transactions contemplated hereby (the "Closing") shall take place on January 28,
2005, at the offices of Robinson & Cole LLP, or at such other time and place as
the Company and the Investor may agree upon. Contemporaneously with the delivery
of this Agreement, the Investor shall deliver to the Company the Purchase Price
by wire transfer of immediately available funds pursuant to wire transfer
instructions given to the Investor by the Company. At the Closing, the Company
will instruct the Company's transfer agent to deliver to the Investor a
certificate, registered in the name of the Investor, representing the Shares.

         The Investor understands that the Shares will not be registered under
the Securities Act of 1933, as amended (the "Act"), or under the securities laws
of any U.S. state or foreign country. The Investor also understands that, in
order to assure that the sale of the Shares to the Investor will be exempt from
registration under the Act and applicable state securities laws, the Investor
must meet certain financial prerequisites and must have such knowledge and
experience in financial and business matters so as to be able to evaluate the
risks and merits of an investment in the Shares.

         3.       Subsequent Sales.

         The Company shall issue additional shares of Common Stock to the
Investor as follows:


<PAGE>

                  (a) Issuance of Additional Stock below Purchase Price. If the
         Company issues Additional Stock (as defined below) having a purchase
         price of at least $2,500,000 for a consideration per share less than
         the Share Price, the Company shall issue to the Investor an additional
         number of shares of Common Stock as determined in accordance with
         Section 3(b) (the "Bonus Shares").

                  (b) Adjustment Formula. Whenever the Company is required to
         issue Bonus Shares pursuant to Section 3(a), the total number of Bonus
         Shares shall be determined by (i) dividing the Total Purchase Price by
         the average weighted consideration per share received by the Company
         for the Additional Stock and (ii) subtracting therefrom the number of
         Shares.

                  (c) Definition of Additional Stock. For purposes of this
         Section 3, "Additional Stock" means any shares of Common Stock issued
         by the Company in a transaction exempt from registration under the Act
         within 180 days after the Closing, other than:

                           (i) Shares of Common Stock issuable or issued to
                  employees, consultants or directors of the Company pursuant to
                  a stock option plan or restricted stock plan approved by the
                  Board of Directors of the Company;

                           (ii) Capital stock, or options or warrants to
                  purchase capital stock, issued to financial institutions or
                  lessors in connection with commercial credit arrangements,
                  equipment financings or similar transactions, the terms of
                  which are approved by the Board of Directors of the Company,

                           (iii) Shares of Common Stock issuable pursuant to or
                  upon exercise of warrants, options, votes or other rights to
                  acquire securities of the Company outstanding as of the
                  Closing; and

                           (iv) Shares of capital stock issued in connection
                  with stock splits, stock dividends or similar transactions.

                  (d) Failure to Issue Additional Stock. If the Company fails to
         issue, within 180 days after the Closing, Additional Stock having a
         purchase price of at least $2,500,000, as of July 31, 2005 (the
         "Settlement Date") the Company shall issue to the Investor additional
         shares of Common Stock. The additional number of shares of Common Stock
         to be issued to the Investor hereunder shall equal the Total Purchase
         Price divided by the lower of (a) the weighted average price of all
         Additional Stock sold by the Company during the period between the
         Closing Date and the Settlement Date and (b) 90% of the trailing 30-day
         average bid price of the Company's stock at the Settlement Date; and
         then subtracting therefrom the number of Shares.

                  (e) No Fractional Shares. The number of shares to be issued
         pursuant to either subparagraph (a) or (d) hereunder shall be rounded
         down to the nearest whole share.


                                      -2-
<PAGE>

                  (f) Determination of Consideration. In the case of the
         issuance of Additional Stock for cash, the consideration is the amount
         of cash paid therefor before deducting any discounts, commissions or
         placement fees allowed, paid or incurred by the Company for any
         underwriting, placement or similar services in connection with the
         issuance and sale thereof.

         4. Representations and Warranties of the Company. In order to induce
the Investor to enter into this Agreement, the Company represents and warrants
the following:

                  (a) Authority. The Company is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware, and has all requisite right, power and authority to execute,
         deliver and perform this Agreement.

                  (b) Enforceability. The execution, delivery and performance of
         this Agreement by the Company have been duly authorized by all
         requisite corporate action. This Agreement has been duly executed and
         delivered by the Company, and, upon its execution by the Investor,
         constitutes the legal, valid and binding obligation of the Company,
         enforceable in accordance with its terms, except to the extent that its
         enforcement is limited by bankruptcy, insolvency, reorganization or
         other laws relating to or affecting the enforcement of creditors'
         rights generally and by general principles of equity.

                  (c) No Violations. The execution, delivery and performance of
         this Agreement by the Company do not and will not violate or conflict
         with any provision of the Company's Certificate of Incorporation or
         Bylaws and do not and will not, with or without the passage of time or
         the giving of notice, result in the breach of, or constitute a default,
         cause the acceleration of performance, or require any consent under, or
         result in the creation of any lien, charge or encumbrance upon any
         property or assets of the Company pursuant to, any material instrument
         or agreement to which the Company is a party or by which the Company or
         its properties are bound excepts such consents as have been obtained as
         of the date hereof.

                  (d) Capitalization. The authorized capital stock of the
         Company consists of 12,000,000 shares of Common Stock, of which
         2,630,000 shares were issued and outstanding as of December 31, 2004,
         and 500,000 shares of preferred stock, $0.10 par value, of which no
         shares were issued and outstanding as of December 31, 2004. As of
         December 31, 2004, the Company had granted options and stock warrants
         to purchase 302,550 shares of Common Stock. Upon issuance in accordance
         with the terms of this Agreement against payment of the Purchase Price
         therefor, the Shares will be duly and validly authorized and issued,
         fully paid and nonassessable, and, assuming the accuracy of the
         representations and warranties of each Investor, will be issued in
         accordance with a valid exemption from the registration or
         qualification provisions of the Act, and any applicable state
         securities laws (the "State Acts").

                  (e) Exchange Act Filing. All reports and statements required
         to be filed by the Company under the Securities Exchange Act of 1934,
         as amended (the "Exchange Act"), and the rules and regulations
         thereunder, due at or prior to the date of this


                                      -3-
<PAGE>

         Agreement have been made. Such filings, together with all documents
         incorporated by reference therein, are referred to as "Exchange Act
         Documents." Each Exchange Act Document, as amended, conformed in all
         material respects to the requirements of the Exchange Act and the rules
         and regulations thereunder, and no Exchange Act Document, as amended,
         at the time each such document was filed, included any untrue statement
         of a material fact or omitted 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. The
         Company will file all applicable Exchange Act documents required to be
         filed by it pursuant to the transactions contemplated hereby.

                  (f) Company Financial Statements. The audited financial
         statements, together with the related notes of the Company at January
         31, 2004 and 2003, and for the years then ended, and the unaudited
         financial statements of the Company at October 31, 2004, and for the
         nine months then ended, (collectively, the "Company Financial
         Statements") included in the Company's Annual Report on Form 10-KSB for
         the year 2003 and its Quarterly Report on Form 10-QSB dated December
         13, 2004, respectively, fairly present in all material respects, on the
         basis stated therein and on the date thereof, the financial position of
         the Company at the respective dates therein specified and its results
         of operations and cash flows for the periods then ended (subject to, in
         the case of unaudited financial statements, normal year-end
         adjustments). To the knowledge of the Company, such statements and
         related notes have been prepared in accordance with generally accepted
         accounting principles applied on a consistent basis except as expressly
         noted therein.

                  (g) No Material Liabilities. Except for liabilities or
         obligations disclosed in Exchange Act Documents or with respect to the
         agreements with Kevin Thomas, since October 31, 2004, the Company has
         not incurred any material liabilities or obligations, direct or
         contingent, except in the ordinary course of business or except for
         liabilities or obligations reflected or reserved against on the
         Company's balance sheet as October 31, 2004, and there has not been any
         material adverse change in the condition (financial or otherwise),
         business, or results of operations of the Company or any change in the
         capital or increase in the long-term debt of the Company, nor has the
         Company declared, paid, or made any dividend or distribution of any
         kind on its capital stock.

                  (h) No Disputes Against Company. Except as disclosed in the
         Exchange Act Documents there is no material pending or, to the
         knowledge of the Company, threatened (a) action, suit, claim,
         proceeding, or investigation against the Company, at law or in equity,
         or before or by any Federal, state, municipal, or other governmental
         department, commission, board, bureau, agency or instrumentality,
         domestic or foreign, (b) arbitration proceeding against the Company,
         (c) governmental inquiry against the Company, or (d) any action or suit
         by or on behalf of the Company pending or threatened against others.

         5. Representations and Warranties of the Investor. In order to induce
the Company to enter into this Agreement, the Investor represents and warrants
the following:


                                      -4-
<PAGE>

                  (a) Authority. The Investor has all requisite right, power and
         authority to execute, deliver and perform this Agreement.

                  (b) Enforceability. If necessary, the execution, delivery and
         performance of this Agreement by the Investor have been duly authorized
         by all requisite partnership or corporate action, as the case may be.
         This Agreement has been duly executed and delivered by the Investor,
         and, upon its execution by the Company, constitutes the legal, valid
         and binding obligation of the Investor, enforceable in accordance with
         its terms, except to the extent that its enforcement is limited by
         bankruptcy, insolvency, reorganization or other laws relating to or
         affecting the enforcement of creditors' rights generally and by general
         principles of equity.

                  (c) No Violations. The execution, delivery and performance of
         this Agreement by the Investor do not and will not, with or without the
         passage of time or the giving of notice, result in the breach of, or
         constitute a default, cause the acceleration of performance, or require
         any consent under, or result in the creation of any lien, charge or
         encumbrance upon any property or assets of the Investor pursuant to,
         any material instrument or agreement to which the Investor is a party
         or by which the Investor or its properties may be bound or affected,
         and, do not or will not violate or conflict with any provision of the
         articles of incorporation or bylaws, partnership agreement, operating
         agreement, trust agreement or similar organizational or governing
         document of the Investor, as applicable.

                  (d) Knowledge of Investment and its Risks. The Investor has
         knowledge and experience in financial and business matters as to be
         capable of evaluating the merits and risks of Investor's investment in
         the Shares. The Investor understands that an investment in the Company
         represents a high degree of risk and there is no assurance that the
         Company's business or operations will be successful. The Investor has
         considered carefully the risks attendant to an investment in the
         Company, and that, as a consequence of such risks, the Investor could
         lose Investor's entire investment in the Company.

                  (e) Investment Intent. The Investor hereby represents and
         warrants that (i) the Shares are being acquired for investment for the
         Investor's own account, and not as a nominee or agent and not with a
         view to the resale or distribution of all or any part of the Shares,
         and the Investor has no present intention of selling, granting any
         participation in or otherwise distributing any of the Shares within the
         meaning of the Act and (ii) the Investor does not have any contracts,
         understandings, agreements or arrangements with any person or entity to
         sell, transfer or grant participations to such person or entity, with
         respect to any of the Shares.

                  (f) Accredited Investor. The Investor is an "Accredited
         Investor" as that term is defined by Rule 501 of Regulation D
         promulgated under the Act.

                  (g) Disclosure. The Investor has reviewed information provided
         by the Company in connection with the decision to purchase the Shares,
         consisting of the Company's publicly available filings with the
         Securities and Exchange Commission and the information contained
         therein. The Company has provided the Investor with all the


                                      -5-
<PAGE>

         information that the Investor has requested in connection with the
         decision to purchase the Shares. The Investor further represents that
         the Investor has had an opportunity to ask questions and receive
         answers from the Company regarding the business, properties, prospects
         and financial condition of the Company. All such questions have been
         answered to the full satisfaction of the Investor.

                  (h) No Registration. The Investor understands that Investor
         may be required to bear the economic risk of Investor's investment in
         the Company for an indefinite period of time. The Investor further
         understands that (i) neither the offering nor the sale of the Shares
         has been registered under the Act or any applicable State Acts in
         reliance upon exemptions from the registration requirements of such
         laws, (ii) the Shares must be held by the Investor indefinitely unless
         the sale or transfer thereof is subsequently registered under the
         Securities Act and any applicable State Acts, or an exemption from such
         registration requirements is available, (iii) except as set forth in
         the Registration Rights Agreement between the Company and the Investor,
         the Company is under no obligation to register any of the Shares on the
         Investor's behalf or to assist the Investor in complying with any
         exemption from registration, and (iv) the Company will rely upon the
         representations and warranties made by the Investor in this
         Subscription Agreement in order to establish such exemptions from the
         registration requirements of the Act and any applicable State Acts.

                  (i) Transfer Restrictions. The Investor will not transfer any
         of the Shares unless such transfer is registered or exempt from
         registration under the Act and such State Acts, and, if requested by
         the Company in the case of an exempt transaction, the Investor has
         furnished an opinion of counsel reasonably satisfactory to the Company
         that such transfer is so exempt. The Investor understands and agrees
         that (i) the certificates evidencing the Shares will bear appropriate
         legends indicating such transfer restrictions placed upon the Shares,
         (ii) the Company shall have no obligation to honor transfers of any of
         the Shares in violation of such transfer restrictions, and (iii) the
         Company shall be entitled to instruct any transfer agent or agents for
         the securities of the Company to refuse to honor such transfers.

                  (j) Legends. Each Investor understands that the certificates
         representing the Shares will bear any legend required by the "blue sky"
         laws of any state and a restrictive legend in substantially the
         following form until the Shares are registered under the Act as
         contemplated by the Registration Rights Agreement among the Company and
         the Investors:

                  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "ACT"), OR APPLICABLE STATE SECURITIES LAWS. THE SHARES MAY
                  NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN
                  THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
                  SHARES UNDER THE ACT OR (B) AN OPINION OF COUNSEL, IN A FORM
                  REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
                  REQUIRED UNDER THE ACT OR (2) UNLESS SOLD PURSUANT TO RULE 144
                  UNDER THE ACT.


                                      -6-
<PAGE>

                  (k) Principal Address. The Investor's principal executive
         office is set forth on the signature page of this Subscription
         Agreement.

                  (l) Money Laundering. The Investor hereby acknowledges that
         the Company seeks to comply with all applicable laws concerning money
         laundering and similar activities. In furtherance of such efforts, the
         Investor hereby represents and agrees that, to the best of the
         Investor's knowledge based upon appropriate diligence and
         investigation: (i) none of the cash or property that is paid or
         contributed to the Company by the Investor shall be derived from, or
         related to, any activity that is deemed criminal under United States
         law; (ii) no contribution or payment to the Company by the Investor
         shall (to the extent that such matters are within the Investor's
         control) cause the Company to be in violation of the Untied States Bank
         Secrecy Act, the United States Money Laundering Abatement and
         Anti-Terrorist Financing Act of 2001; and (iii) the Investor is not
         engaged in money laundering. Further, the Investor represents and
         warrants to the Company all evidence of identity provided in connection
         with the Investor's acquisition of Common Stock as contemplated herein
         is genuine and all related information furnished is accurate and the
         Investor hereby agrees to provide any information deemed necessary by
         the Company in its sole discretion to comply with the Company's
         anti-money laundering responsibilities and policies.

         6. Further Assurances. The parties will, upon reasonable request,
execute and deliver all such further assignments, endorsements and other
documents as may be necessary in order to perfect the purchase by the Investors
of the Shares.

         7. Registration Rights Agreement. The Investor agrees to be bound by
the terms of and execute the Registration Rights Agreement between the Company
and the Investor.

         8. Entire Agreement; No Oral Modification. This Agreement contains the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings with respect
thereto and may not be amended or modified except in a writing signed by both of
the parties hereto.

         9. Binding Effect; Benefits. This Agreement inures to the benefit of
and is binding upon the parties hereto and their respective heirs, successors
and assigns; however, nothing in this Agreement, expressed or implied, is
intended to confer on any other person other than the parties hereto, or their
respective heirs, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

         The undersigned agrees that the Investor may not cancel, terminate or
revoke this Agreement or any agreement of the Investor made hereunder (except as
otherwise specifically provided herein). This Agreement is not transferable or
assignable by the undersigned except as may be provided herein; provided,
however, that this Agreement survives the death or disability of the Investor
and is binding upon the Investor's heirs, executors, administrators, successors
and permitted assigns.

         10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which is an original and all of which together are one and
the same instrument.


                                      -7-
<PAGE>

         11. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the United States of America and
the State of New York, both substantive and remedial. Any judicial proceeding
brought against either of the parties to this agreement or any dispute arising
out of this Agreement or any matter related hereto may be brought in the courts
of the State of New York or in the United States District Court for the Southern
District of New York and, by its execution and delivery of this agreement, each
party to this Agreement accepts the jurisdiction of such courts.

         12. Prevailing Parties. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party shall be entitled to receive and the
nonprevailing party shall pay upon demand reasonable attorneys' fees in addition
to any other remedy.

         13. Headings. The section headings herein are included for convenience
only and are not to be deemed a part of this Agreement.

         14. Notices. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given to any
party when delivered by hand, when delivered by telecopier or telex and
confirmed, or when mailed, first-class postage pre-paid, (a) if to you, to you
at the address or telecopy number set forth below your signature, or to such
other address or telecopy number as you shall have furnished to the Company in
writing and (b) if to the Company, to it at One Church Street, Suite 302;
Rockville, Maryland 20850 or to such other address or addresses, or telecopy
number or numbers, as the Company shall have furnished to you in writing.

         15. Tax Certification. You certify that (a) the taxpayer identification
provided under your signature is correct and (b) you are not subject to backup
withholding because (i) you have not been notified that you are subject to
backup withholding as a result of failure to report interest and dividends or
(ii) the Internal Revenue Service has not notified you that you are subject to
withholding.


                                      -8-
<PAGE>

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


                                            ARGAN, INC., a Delaware corporation


                                            By:   /s/ Rainer Bosselmann
                                                 -------------------------------
                                            Name: Rainer Bosselmann
                                                 -------------------------------
                                            Its:  Chairman of the Board and
                                                  Chief Executive Officer
                                                 -------------------------------

                                            MSR I SBIC, L.P.


                                            By: /s/ Daniel A. Levinson
                                               ---------------------------------
                                                Daniel A. Levinson
                                               ---------------------------------
                                                        Print Name

                                            8 Wright Street
                                            Westport, CT 06880
                                            Attn: General Partner

                                            Employer Identification Number


                                            ----------------------------------


                                      -9-