Unassociated Document


    SUBSCRIPTION
      AND INVESTMENT AGREEMENT

     

    THIS
      SUBSCRIPTION AND INVESTMENT AGREEMENT (this “Agreement”)
      is
      made as of this 27th
      day of
      June, 2008, by and among ARGAN, INC., a Delaware corporation (the “Company”)
      and
      each of the other signatories to this Agreement, as identified on the signature
      pages attached hereto (each a “Buyer”,
      and
      collectively the “Buyers”).

     

    WHEREAS,
      the Company is offering up to 2,200,000 shares of the Company’s Common Stock,
      $.15 par value (the “Offered
      Common Stock”)
      to a
      limited number of accredited investors in a non-public offering (the
“Offering”);
      and

     

    WHEREAS,
      the
      Company and each Buyer are executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by Section 4(2) of
      the
      Securities Act of 1933, as amended (the ÒSecurities
      ActÓ),
      and
      Rule 506 of Regulation D (ÒRegulation
      DÓ)
      as
      promulgated by the United States Securities and Exchange Commission (the
ÒSECÓ)
      under
      the Securities Act; and

     

    WHEREAS,
      each Buyer desires to purchase that number of shares of Offered Common Stock
      set
      forth on each Buyer’s respective signature page (in each case 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

     

    (a) Subject
      to the terms and conditions contained herein, the Company will issue to each
      Buyer, and each Buyer will purchase from Company, severally and not jointly,
      for
      the purchase price of $12.00 per share, that number of shares of Offered Common
      Stock set forth on each Buyer’s respective signature page. The closing of the
      Offering is conditioned upon committed and fully paid subscriptions of not
      less
      than $21,000,000 in aggregate gross proceeds. The Company will not sell more
      than 2,200,000 Shares pursuant to this Offering. The closing date of this
      Offering shall be July 1, 2008 (the “Closing
      Date”).
      Upon
      receipt by the Company from Buyers of fully executed versions of this Agreement
      representing committed subscriptions of at least $21,000,000 aggregate gross
      proceeds the Company will provide notice to the Buyers that the closing of
      the
      Offering will proceed (the “Closing
      Notice”)
      and
      each Buyer shall send, via wire transfer in immediately available funds, such
      Buyer’s full purchase price to the Company on or before 1:00 p.m. EDT on the
      Closing Date. The Company’s wire information will be provided to each Buyer with
      the Closing Notice.

     

    In
      the
      event that we do not receive fully paid subscriptions of $21,000,000 or more
      on
      or before 5:00 p.m. EDT on July 7, 2008, we will refund each Buyer’s respective
      purchase price without interest. Upon the closing of the transactions
      contemplated hereby, 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
      (or its respective designee or nominee), containing, inter
      alia,
      the
      legend set forth in Section 2 below. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    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.

     

    The
      Company acknowledges and agrees that upon such time as the legend is legally
      permitted to be removed from the certificates, the Company will take such steps
      as required in order to have the legend revised or removed.

     

    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 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 (the “1934
      Act”),
      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, and that each periodic report speaks only as of its respective date.
      The Buyer understands and acknowledges that no person has been authorized to
      give any information or make any representations in connection with the Offering
      other than the information contained in such periodic reports and the
      representations of the Company contained in Section 4 of this Agreement. The
      Buyer understands and acknowledges that, if given or made, other information
      or
      representations must not be relied on as having been made by or on behalf of
      the
      Company or Allen & Company LLC (the “Placement
      Agent”),
      and
      the Buyer represents and warrants that the Buyer’s decision to purchase Shares
      was not based on any information or representations other than as described
      in
      the immediately preceding sentence. The Buyer also acknowledges and understands
      that all information presented in such periodic reports was prepared by the
      Company and that the Placement Agent has not independently verified any such
      information and makes no representation as to accuracy or completeness of any
      such information or any other related disclosure materials or as to the current
      condition or future performance of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)
       The
      Buyer
      has sufficient experience in business, financial and investment matters and,
      in
      particular, investments in businesses similar to the Company, 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
      six months and even then will not be available unless a public market then
      exists for the Offered 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
      SEC with respect to any stock of the Buyer and there is no assurance that any
      registration statement that may be filed with respect to the resale of the
      Shares will be declared effective when expected, or at all, or will remain
      effective for a sufficient time to enable the Buyer to sell any or all of its
      Shares.

     

    (g)
       The
      Buyer
      has consulted the Buyer’s own accountants, legal counsel and investment tax or
      other advisors as the Buyer deemed necessary in connection with the purchase
      of
      the Shares and has relied solely on the advice of such professionals and not
      on
      any information or statements from the Company or the Placement
      Agent.

     

    (h)
       The
      Buyer
      understands that neither the SEC nor any state securities commission or other
      governmental agency has reviewed or passed upon or made any recommendation
      or
      endorsement of the Shares or any investment therein.

     

    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 Delaware. 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. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    (c) Capital
      Stock/Anti-Dilution and Participation Rights.
      The
      Company’s authorized, issued and outstanding capital stock, warrants and options
      are as set forth in the Company’s most recent filings, as of the date of such
      filings, made by the Company pursuant to the 1934 Act. There are no pre-emptive
      rights, rights of first refusal or other participation rights, nor are there
      any
      anti-dilution or other adjustments, that would be triggered or subject to
      exercise by any person as a result of this Offering.

     

      (d) Noncontravention.
      Subject
      to compliance with the applicable requirements of the Securities Act, the 1934
      Act and any applicable state securities laws, neither the execution and delivery
      by the Company of this Agreement, nor the consummation by the Company of the
      transactions contemplated hereby will (i) conflict with or violate any
      provision of the charter or Bylaws of the Company, (ii) 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”),
      (iii) 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 (iv) violate any order, writ, injunction, decree,
      statute, rule or regulation applicable to the Company or any of its properties
      or assets.

     

    (e) SEC
      Documents; Financial Statements. 
      The Company has filed all reports, schedules, forms, statements and other
      documents required to be filed by it with the SEC pursuant to the reporting
      requirements of the 1934 Act (all of the foregoing filed prior to the date
      hereof, and all exhibits included therein and financial statements and schedules
      thereto and documents incorporated by reference therein being hereinafter
      referred to as the “SEC
      Documents”). As
      of their respective dates, the SEC Documents complied in all material respects
      with the requirements of the 1934 Act and the rules and regulations of the
      SEC
      promulgated thereunder applicable to the SEC Documents, and none of the SEC
      Documents, at the time they were filed with the SEC, contained any untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading. 
As
      of
      their respective dates, the financial statements of the Company included in
      the
      SEC Documents complied as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the SEC
      with
      respect thereto.  Such financial statements have been prepared in
      accordance with generally accepted accounting principles, consistently applied,
      during the periods involved (except (i) as may be otherwise indicated in such
      financial statements or the notes thereto, or (ii) in the case of unaudited
      interim statements, to the extent they may exclude footnotes or may be condensed
      or summary statements) and fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments). The
      Company has timely filed all
      periodic reports with the SEC and with the American Stock Exchange (the
      "AMEX")
      and
      has complied with all applicable listing requirements necessary to maintain
      its
      qualification and eligibility on the AMEX. The Company is eligible to use Form
      S-3 in transactions involving secondary offerings.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f) Sarbanes-Oxley
      Act. 
      The Company is in compliance with any and all applicable requirements of the
      Sarbanes-Oxley Act of 2002 that are applicable to the Company and effective
      as
      of the date hereof (as well as any and all applicable rules and regulations
      promulgated by the SEC thereunder that are applicable to the Company and
      effective as of the date hereof) except where such noncompliance would not
      have,
      individually or in the aggregate, a material adverse effect.

    


    (g) Litigation.
      There is
      no action,
      suit, proceeding, claim, arbitration or investigation before any Governmental
      Entity which is pending or, to the knowledge of the Company, 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 the Registration Statement (as defined in Section 6(a)
      below) is declared effective by the SEC and then may be sold in accordance
      with
      the terms provided in the prospectus to the Registration Statement as long
      as
      the Registration Statement remains effective. The Shares will be issued in
      compliance in all material respects with an exemption from the registration
      requirements of the Securities Act, and the registration and qualification
      requirements of the securities laws of the applicable states.

    


    (i) Disclosure. 
      The Company confirms that neither it nor, to its knowledge, any officer,
      director or agent of the Company has provided any of the Buyers or their
      respective agents or counsel with any information that constitutes material,
      nonpublic information (other than the occurrence of the Offering). The
      Company understands and confirms that each of the Buyers will rely on the
      foregoing representations in effecting transactions in securities of the
      Company. All
      disclosure provided to the Buyers regarding the Company, its business and the
      transactions contemplated hereby, including the Schedules to this Agreement,
      furnished by or on behalf of the Company are true and correct and do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading. No
      event
      or circumstance has occurred or information exists with respect to the Company
      or its business, properties, prospects, operations or financial conditions,
      which, under applicable law, rule or regulation, requires public disclosure
      or
      announcement by the Company on or before the date hereof but which has not
      been
      so publicly announced or disclosed (assuming for this purpose that the Company’s
      reports filed under the 1934 Act, as amended, are being incorporated into an
      effective registration statement filed by the Company under the Securities
      Act). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    (j) Form
      D
      and Blue Sky. 
      The Company has conducted the Offering as a private placement in accordance
      with
      Regulation D and agrees to file a Form D with respect to the Securities as
      required under Regulation D and to provide a copy thereof to each Buyer promptly
      after such filing.  The Company shall, on or before the Closing Date, take
      such action as the Company shall reasonably determine is necessary in order
      to
      obtain an exemption for or to qualify the Securities for sale to the Buyers
      at
      the Closing pursuant to this Agreement under applicable securities or ÒBlue SkyÓ
laws of the states of the United States (or to obtain an exemption from such
      qualification), and shall provide evidence of any such action so taken to the
      Buyers on or prior to the Closing Date.  The Company shall make all filings
      and reports relating to the offer and sale of the Securities required under
      applicable securities or ÒBlue SkyÓ laws of the states of the United States
      following the Closing Date.

    


    (k) Same
      Terms.
      All
      Buyers are participating in the Offering on the same terms and conditions.
      There
      exist no alternate, individualized or exclusive agreements or arrangements
      with
      any Buyer in connection with the Offering. 

     

    5. Use
      of
      Proceeds.
      The
      Company expects to use a portion of the proceeds in connection with a planned
      joint venture with Invenergy Wind LLC to perform engineering, procurement and
      construction services for wind energy generating facilities, with the remaining
      proceeds to be used by the Company for general corporate purposes.

    


    6. Registration
      Rights Provisions.
      

    


    (a) The
      Company agrees that it will use its best efforts to, within 30 days following
      the closing of the Offering, prepare and file with the SEC a registration
      statement on 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 all holders thereof are entitled to rely on Rule 144(b) 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. The Company will pay all registration expenses of the registration
      of the Shares pursuant to this Section 6(a). Other than Daniel A. Levinson
      and
      his affiliates, who collectively hold 200,000 shares of the Company’s Common
      Stock (collectively, the “Levinson
      Shares”),
      no
      person has or will have “piggy-back” or other participation rights with respect
      to the Registration Statement, nor will the Company file any other registration
      statement prior to the effectiveness of the Registration Statement. It is,
      however, acknowledged and agreed by Buyers, that the Company may include both
      the Shares and the Levinson Shares in the Registration
      Statement.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (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 the light of the circumstances under 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 any 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.

    


    (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; provided,
      however,
      that
      the liability of such Buyer hereunder shall be limited to the net proceeds
      received by such Buyer from the sale of Shares covered by such Registration
      Statement. 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(b) or (c)
      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(b) or (c) 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 shall 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
      defense 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, which
      shall not be unreasonably withheld or delayed. 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.

     

    (e) In
      the
      event that an indemnifying party does or is not permitted to assume the defense
      of an action pursuant to Section 6(d) or in the case of the expense
      reimbursement obligation set forth in Sections 6(b) and (c), the indemnification
      required by Sections 6(b) and (c) 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. Notwithstanding the foregoing,
      the contribution liability of a Buyer hereunder shall be limited to the net
      proceeds received by such Buyer from the sale of Shares covered by such
      Registration Statement.

    


    (g) The
      Company shall furnish to each Buyer whose Shares are included in any
      registration statement, without charge,  (i) promptly after the same is
      prepared and filed with the SEC, at least one copy of such registration
      statement and any amendment(s) thereto, including financial statements and
      schedules, all documents, including exhibits, incorporated therein by reference,
      if requested by an Investor and not otherwise available on the EDGAR system,
      all
      other exhibits if reasonably requested by the Investor and each preliminary
      prospectus, (ii) upon the effectiveness of any registration statement, a copy
      of
      the prospectus included in such registration statement and all amendments and
      supplements thereto (or such other number of copies as such Buyer may reasonably
      request) and (iii) such other documents, including copies of any preliminary
      or
      final prospectus, as such Buyer may reasonably request from time to time in
      order to facilitate the disposition of the Shares owned by such
      Buyer.

    


    (h) The
      Company will prepare and file with the SEC such amendments and supplements
      to
      the Registration Statement and take such other action, if any, as may be
      necessary to keep the Registration Statement effective until the earlier of
      (i) the date on which the Shares may be resold by the Buyers without
      registration and without regard to any volume limitations by reason of
      Rule 144 under the Securities Act or any other rule of similar effect,
      or (ii) all of the Shares have been sold pursuant to the Registration
      Statement or Rule 144 under the Securities Act or any other rule of
      similar effect.


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. Broker
      Fee

     

    It
      is
      acknowledged and agreed by Buyers that a broker fee, equal to 5% of the
      aggregate purchase price of all of the Shares sold in this Offering (the
“Broker
      Fee”)
      shall
      be payable by the Company to the Placement Agent. The Broker Fee shall be
      payable in full to the Placement Agent upon the closing of the Offering and
      the
      Company will reimburse the Placement Agent for its expenses in connection with
      the Offering.

    


    8. 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, as evidenced by a signed certificate of the Secretary
      of the Company certifying as to such action by the Board.

     

    (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
      8(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 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 Company and by those Buyers who, in the aggregate, hold not less that 75%
      of
      the Shares sold in connection with this Offering.

     

    (h) Disclosure
      of Transactions and Other Material Information. 
      On or before the fourth business day following the date hereof, the Company
      shall file a Current Report on Form 8-K describing the terms of the Offering
      in
      the form required by the 1934 Act, and attaching the required documents as
      exhibits to such filing (including all attachments, the Ò8-K
      FilingÓ). 
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)
       Governing
      Law.
      This
      Agreement and the rights and obligations of the parties hereunder shall be
      enforced, governed and construed in all respects in accordance with the internal
      substantive laws of the State of Delaware (without reference to principles
      of
      conflicts or choice of law that would cause the application of the internal
      laws
      of any other jurisdiction). Each Party hereby irrevocably submits and consents
      to the jurisdiction of Delaware with respect to any dispute, controversy, legal
      action or other proceeding that arises from, concerns or touches this Agreement
      or the purchase of the Shares and acknowledges that he, she or it will accept
      service of process by registered or certified mail or the equivalent directed
      to
      his, her or its address set forth herein or by whatever other means are
      permitted by such courts. Each party hereby acknowledges that said courts have
      jurisdiction over any such dispute, controversy, legal action or other
      proceeding and that he, she or its hereby waives any objection to personal
      jurisdiction or venue in these courts or that such courts are an inconvenient
      forum.

     

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

     

    


     

    [the
      following pages are the signature pages]

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    


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

     

    THE
      COMPANY:

    


    ARGAN,
      INC.

    


    


    ____________________________________

    By:
      

    Its:
      

    


    


     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    
      	
              ENTITY
                BUYERS: 

               

               

                                  

              Name
                of Buyer

               

              BY:

               

                                  

              Name:

              Title:

              EIN:
                    

               

              Number
                of Shares:       

            
	 
	
               

              INDIVIDUAL
                BUYERS: 

               

                                  

              Name:

              Title:

              Address:

               

              SSN:
                    

               

              Number
                of Shares: