Document:

Unassociated Document

    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.

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    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

              	 

      

      
         

        
          
            
            

          

          
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                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

              	 

      

       

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

       

      
        	
                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 Restated Revolving
                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
      1.1 Certain
      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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “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).

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    “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. 

       

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    “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
      1.2 Accounting
      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
      2.1 The
      Revolving Credit Facility.

     

    2.1.1 Revolving
      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.

     

    2.1.2 Procedure
      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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    2.1.3 Revolving
      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. 

     

    2.1.4 Optional
      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.

     

    2.1.5 Treasury
      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. 

     

    2.1.6 Revolving
      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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    2.1.7 Revolving
      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.

     

    2.1.8 The
      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
      2.2 The
      Term Loan Facilities.

     

    2.2.1 The
      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
“2006 Term
      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.

     

    2.2.2 The
      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.

     

    2.2.3 Optional
      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.

     

    2.2.4 Mandatory
      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.

     

    2.2.5 The
      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
      2.3 The
      Letter of Credit Facility.

     

    2.3.1 Letters
      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 or otherwise
      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”.

     

    2.3.2 Letter
      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. 

     

    2.3.3 Terms
      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”.

     

    2.3.4 Procedures
      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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    2.3.5 Payments
      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.

     

    2.3.6 Change
      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.

     

    2.3.7 General
      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
      2.4 Escrow
      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
      2.5 General
      Financing Provisions.

     

    2.5.1 Borrowers’
      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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    2.5.2 Use
      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.

     

    2.5.3 Computation
      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.

     

    2.5.4 Maximum
      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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    2.5.5 Payments.

     

    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.

     

    2.5.6 Liens;
      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.

     

    2.5.7 Requirements
      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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    2.5.8 Guaranty.

     

    (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.

     

    2.5.9 ACH
      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
      3.1 Debt
      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
      3.2 Grant
      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
      3.3 Collateral
      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
      3.4 Personal
      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:

     

    3.4.1 Investment
      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
      3.5 Record
      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
      3.6 Costs.

     

    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
      3.7 Release.

     

    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
      3.8 Inconsistent
      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
      4.1 Representations
      and Warranties.

     

    The
      Borrowers, for themselves and for each other, represent and warrant to the
      Lender, as follows:

     

    4.1.1 Subsidiaries.

     

    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.

     

    4.1.2 Existence.

     

    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.

     

    4.1.3 Power
      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.

     

    4.1.4 Binding
      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.

     

    4.1.5 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 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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    4.1.6 No
      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.

     

    4.1.7 Compliance
      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.

     

    4.1.8 Margin
      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.

     

    4.1.9 Investment
      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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    4.1.10 Litigation.

     

    Except
      as
      otherwise disclosed on Schedule 4.1.10
      attached
      hereto and made a part hereof, there are no proceedings, actions or
      investigations pending or, so far as any Borrower knows, threatened before
      or by
      any court, arbitrator or any Governmental Authority which, in any one case
      or in
      the aggregate, if determined adversely to the interests of any Borrower or
      any
      Subsidiary, would have a material adverse effect on the business, properties,
      condition (financial or otherwise) or operations, present or prospective, of
      any
      Borrower.

     

    4.1.11 Financial
      Condition.

     

    The
      consolidated financial statements of Argan dated January 31, 2006 are complete
      and correct and fairly present the financial position of each of Argan, SMC
      and
      Vitarich and their Subsidiaries and the results of their operations and
      transactions in their surplus accounts as of the date and for the period
      referred to and have been prepared in accordance with GAAP applied on a
      consistent basis throughout the period involved. There are no liabilities,
      direct or indirect, fixed or contingent, of any Borrower or any Subsidiary
      as of
      the date of such financial statements that are not reflected therein or in
      the
      notes thereto. There has been no adverse change in the financial condition
      or
      operations of any Borrower or any Subsidiary since the date of such financial
      statements and to the Borrowers’ knowledge no such adverse change is pending or
      threatened. None of the Borrowers nor any Subsidiary has guaranteed the
      obligations of, or made any investment in or advances to, any Person, except
      as
      disclosed in such financial statements.

     

    4.1.12 Full
      Disclosure.

     

    The
      financial statements referred to in Sections 4.1.11
      (Financial Condition) and 4.1.28 (Pro-forma Financial Statements), the Financing
      Documents (including, without limitation, this Agreement), and the statements,
      reports or certificates furnished by any Borrower in connection with the
      Financing Documents (a) do not contain any untrue statement of a material fact
      and (b) when taken in their entirety, do not omit any material fact necessary
      to
      make the statements contained therein not misleading. There is no fact known
      to
      any Borrower which such Borrower has not disclosed to the Lender in writing
      prior to the date of this Agreement with respect to the transactions
      contemplated by the Financing Documents that materially and adversely affects
      or
      in the future could, in the reasonable opinion of that Borrower materially
      adversely affect the condition, financial or otherwise, results of operations,
      business, or assets of any Borrower or any Subsidiary.

     

    4.1.13 Indebtedness
      for Borrowed Money.

     

    Except
      for the Obligations and except as set forth in Schedule
      4.1.13
      attached
      hereto and made a part hereof, the Borrowers have no Indebtedness for Borrowed
      Money. The Lender has received photocopies of all promissory notes evidencing
      any Indebtedness for Borrowed Money set forth in Schedule
      4.1.13,
      together with any and all subordination agreements, other agreements, documents,
      or instruments securing, evidencing, guarantying or otherwise executed and
      delivered in connection therewith.

     

    4.1.14 Taxes.

     

    Each
      of
      the Borrowers and its Subsidiaries has filed all returns, reports and forms
      for
      Taxes that, to the knowledge of the Borrowers, are required to be filed, and
      has
      paid all Taxes as shown on such returns or on any assessment received by it,
      to
      the extent that such Taxes have become due, unless and to the extent only that
      such Taxes, assessments and governmental charges are currently contested in
      good
      faith and by appropriate proceedings by a Borrower, such Taxes are not the
      subject of any Liens other than Permitted Liens, and adequate reserves therefore
      have been established as required under GAAP. All tax liabilities of the
      Borrowers were as of the date of audited financial statements referred to in
      Section 4.1.11
      (Financial Condition), and are now, adequately provided for on the books of
      the
      Borrowers and their Subsidiaries, as appropriate. No tax liability has been
      asserted by the Internal Revenue Service or any state or local authority against
      any Borrower for Taxes in excess of those already paid.

     

    
      
        
        

      

      
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    4.1.15 ERISA.

     

    With
      respect to any Plan that is maintained or contributed to by any Borrower and/or
      by any Commonly Controlled Entity or as to which any Borrower retains material
      liability: (a) no “accumulated funding deficiency” as defined in Code §412 or
      ERISA §302 has occurred, whether or not that accumulated funding deficiency has
      been waived; (b) no Reportable Event has occurred other than events for which
      reporting has been waived; (c) no termination of any plan subject to Title
      IV of
      ERISA has occurred; (d) neither the Borrower nor any Commonly Controlled Entity
      has incurred a “complete withdrawal” within the meaning of ERISA §4203 from any
      Multi-employer Plan; (e) neither the Borrower nor any Commonly Controlled Entity
      has incurred a “partial withdrawal” within the meaning of ERISA §4205 with
      respect to any Multi-employer Plan; (f) no Multi-employer Plan to which the
      Borrower or any Commonly Controlled Entity has an obligation to contribute
      is in
“reorganization” within the meaning of ERISA §4241 nor has notice been received
      by the Borrower or any Commonly Controlled Entity that such a Multi-employer
      Plan will be placed in “reorganization”.

     

    4.1.16 Title
      to Properties.

     

    The
      Borrowers have good and marketable title to all of their respective properties,
      including, without limitation, the Collateral and the properties and assets
      reflected in the balance sheets described in Section 4.1.11
      (Financial Condition). The Borrowers have legal, enforceable and uncontested
      rights to use freely such property and assets. All of such properties,
      including, without limitation, the Collateral that were purchased, were
      purchased for fair consideration and reasonably equivalent value in the ordinary
      course of business of both the seller and the Borrowers and not, by way of
      example only, as part of a bulk sale.

     

    4.1.17 Patents,
      Trademarks, Etc.

     

    Each
      of
      the Borrowers and its Subsidiaries owns, possesses, or has the right to use
      all
      necessary Patents, licenses, Trademarks, Copyrights, permits and franchises
      to
      own its properties and to conduct its business as now conducted, without known
      conflict with the rights of any other Person. Any and all obligations to pay
      royalties or other charges with respect to such properties and assets are
      properly reflected on the financial statements described in
      Section 4.1.11
      (Financial Condition).

     

    4.1.18 Employee
      Relations.

     

    Except
      as
      disclosed on Schedule 4.1.18 attached
      hereto and made a part hereof, (a) no Borrower nor any Subsidiary thereof nor
      any of the Borrower’s or Subsidiary’s employees is subject to any collective
      bargaining agreement, (b) no petition for certification or union election is
      pending with respect to the employees of any Borrower or any Subsidiary and
      no
      union or collective bargaining unit has sought such certification or recognition
      with respect to the employees of a Borrower, (c) there are no strikes,
      slowdowns, work stoppages or controversies pending or, to the best knowledge
      of
      the Borrowers after due inquiry, threatened between any Borrower and its
      employees, and (d) no Borrower nor any Subsidiaries is subject to an employment
      contract, severance agreement, commission contract, consulting agreement or
      bonus agreement. Hours worked and payments made to the employees of any one
      or
      more of the Borrowers have not been in violation of the Fair Labor Standards
      Act
      or any other applicable law dealing with such matters. All payments due from
      any
      one or more of the Borrowers or for which any claim may be made against a
      Borrower, on account of wages and employee and retiree health and welfare
      insurance and other benefits have been paid or accrued as a liability on its
      books. The consummation of the transactions contemplated by the Financing
      Agreement or any of the other Financing Documents or by the Acquisition
      Agreement or any of the other Acquisition Documentation will not give rise
      to a
      right of termination or right of re-negotiation on the part of any union under
      any collective bargaining agreement to which any Borrower is a party or by
      which
      it is bound.

     

    
      
        
        

      

      
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    4.1.19 Presence
      of Hazardous Materials or Hazardous Materials Contamination.

     

    To
      the
      best of each Borrower’s knowledge, (a) no Hazardous Materials are located on any
      real property owned, controlled or operated by any of the Borrowers or for
      which
      any Borrower is, or is claimed to be, responsible, except for reasonable
      quantities of necessary supplies for use by a Borrower in the ordinary course
      of
      its current line of business and stored, used and disposed in accordance with
      applicable Laws; and (b) no property owned, controlled or operated by any
      Borrower or for which any Borrower has, or is claimed to have, responsibility
      has ever been used as a manufacturing, storage, or dump site for Hazardous
      Materials nor is affected by Hazardous Materials Contamination at any other
      property.

     

    4.1.20 Perfection
      and Priority of Collateral.

     

    The
      Lender has, or upon execution and recording of this Agreement and the Security
      Documents will have, and will continue to have as security for the Obligations,
      a valid and perfected Lien on and security interest in all Collateral, free
      of
      all other Liens, claims and rights of third parties whatsoever except Permitted
      Liens, including, without limitation, those described on Schedule 4.1.20
      attached
      hereto and made a part hereof.

     

    4.1.21 Collateral
      Disclosure List.

     

    The
      information contained in the Collateral Disclosure List of each Borrower is
      complete and correct. Each Collateral Disclosure List completely and accurately
      identifies (a) the type of entity, the state of organization and the chief
      executive office of the applicable Borrower (b) each other place of business
      of
      such Borrower, (c) the location of all books and records pertaining to the
      Collateral, and (d) each location, other than the foregoing, where any of the
      Collateral is located.

     

    4.1.22 Business
      Names and Addresses.

     

    In
      the
      five (5) years preceding the date hereof, no Borrower has changed its name,
      identity or corporate structure, has conducted business under any name other
      than its current name, and has conducted its business in any jurisdiction other
      than those disclosed on the Collateral Disclosure List.

     

    
      
        
        

      

      
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    4.1.23 Equipment.

     

    All
      Equipment is personalty and is not and will not be affixed to real estate in
      such manner as to become a fixture or part of such real estate. No equipment
      is
      held by any Borrower on a sale on approval basis.

     

    4.1.24 Inventory.

     

    The
      Inventory of the Borrowers is (a) of good and merchantable quality, free from
      defects, (b) not stored with a bailee, warehouseman, carrier, or similar party,
      (c) not on consignment, sale on approval, or sale or return, and (d) located
      at
      the places of business set forth on the Collateral Disclosure List. No goods
      offered for sale by any Borrower are consigned to or held on sale or return
      terms by that Borrower.

     

    4.1.25 Accounts.

     

    With
      respect to all Accounts and to the best of the Borrowers’ knowledge (a) they are
      genuine, and in all respects what they purport to be, and are not evidenced
      by a
      judgment, an Instrument, or Chattel Paper (unless such judgment has been
      assigned and such Instrument or Chattel Paper has been endorsed and delivered
      to
      the Lender); (b) they represent bona fide transactions completed in accordance
      with the terms and provisions contained in the invoices, purchase orders and
      other contracts relating thereto, and the underlying transaction therefore
      is in
      accordance with all applicable Laws; (c) the amounts shown on the respective
      Borrower’s books and records, with respect thereto are actually and absolutely
      owing to that Borrower and are not contingent or subject to reduction for any
      reason other than regular discounts, credits or adjustments allowed by that
      Borrower in the ordinary course of its business; (d) all Account Debtors thereon
      have the capacity to contract; and (e) the goods sold, leased or transferred
      or
      the services furnished giving rise thereto are not subject to any Liens except
      the security interest granted to the Lender by this Agreement and Permitted
      Liens.

     

    4.1.26 Solvency

     

    Each
      of
      the Borrowers is Solvent prior to and after giving effect to the Acquisition
      and
      the making of the Loans.

     

    4.1.27 Pro-forma
      Financial Statements.

     

    Borrowers
      have furnished to Lender a Pro-forma consolidated balance sheet of Borrowers
      and
      its Subsidiaries as of immediately after consummation of Acquisition and the
      transactions incident thereto (the “Pro-forma
      Balance Sheet”)
      together with Pro-forma financial projections for the fiscal year period
      subsequent to the Acquisition (the “Pro-forma
      Financial Projections”).
      A
      copy of the Pro-forma Balance Sheet and the Pro-forma Financial Projections
      are
      attached hereto as EXHIBITS
      H-1
      and
H-2,
      respectively. The Pro-forma Balance Sheet has been prepared based on the best
      information available to the Borrowers as of the date of delivery thereof,
      and
      present fairly on a pro-forma basis the estimated financial position of the
      Borrowers for the fiscal year period subsequent to the Acquisition, assuming
      that the events specified in the first sentence of this paragraph had actually
      occurred at such date or at the beginning of such period, as the case may be.
      The Pro-forma Financial Projections represent Borrowers best estimate of the
      future operations of each Borrower and are based on reasonable and conservative
      assumptions.

     

    
      
        
        

      

      
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    4.1.28 Acquisition
      Agreement.

     

    Lender
      has received true and correct photocopies of the Acquisition Agreement and
      each
      of the other Acquisition Documentation, executed, delivered and/or furnished
      on
      or before the Closing Date in connection with the Acquisition. Neither the
      Acquisition Agreement nor any of the other Acquisition Documentation have been
      modified, changed, supplemented, canceled, amended or otherwise altered or
      affected, except as otherwise disclosed to Lender in writing on or before the
      Closing Date. The Acquisition has been effected, closed and consummated pursuant
      to, and in accordance with, the terms and conditions of the Acquisition
      Agreement and with all applicable Laws.

     

    4.1.29 Certain
      Documents.

     

    The
      Borrowers have delivered to the Lender a complete and correct copy of the
      Acquisition Documentation, including any amendments, supplements or
      modifications with respect thereto.

     

    Section
      4.2 Survival;
      Updates of Representations and Warranties.

     

    All
      representations and warranties contained in or made under or in connection
      with
      this Agreement and the other Financing Documents shall survive the Closing
      Date,
      the making of any advance under the Loans and extension of credit made
      hereunder, and the incurring of any other Obligations and shall be deemed to
      have been made at the time of each request for, and again at the time of the
      making of, each advance under the Loans or the issuance of each Letter of
      Credit, except that the representations and warranties which relate to the
      financial statements which are referred to in Section 4.1.11
      (Financial Condition), shall also be deemed to cover financial statements
      furnished from time to time to the Lender pursuant to Section 6.1.1
      (Financial Statements).

     

    ARTICLE
      V

    CONDITIONS
      PRECEDENT

     

    Section
      5.1 Conditions
      to the Initial Advance and Letter of Credit.

     

    The
      making of the initial advance under the Loans and the issuance of the Letter
      of
      Credit is subject to the fulfillment on or before the Closing Date of the
      following conditions precedent in a manner satisfactory in form and substance
      to
      the Lender and its counsel:

     

    5.1.1 Organizational
      Documents - Borrowers.

     

    The
      Lender shall have received for each Borrower:

     

    (a) a
      certificate of good standing certified by the Secretary of State, or other
      appropriate Governmental Authority, of the state of formation of the
      Borrower;

     

    (b) a
      certified copy from the appropriate Governmental Authority under which the
      Borrower is organized, of the Borrower’s organizational documents and all
      recorded amendments thereto;

     

    (c) a
      certificate of qualification to do business certified by the Secretary of State
      or other Governmental Authority of each jurisdiction in which the Borrower
      conducts business; 

     

    
      
        
        

      

      
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    (d) a
      certificate dated as of the Closing Date by the Secretary or an Assistant
      Secretary of the Borrower covering:

     

    (i) true
      and
      complete copies of the Borrower’s organizational and governing documents and all
      amendments thereto;

     

    (ii) true
      and
      complete copies of the resolutions of its Board of Directors authorizing (A)
      the
      execution, delivery and performance of the Financing Documents and the
      Acquisition Documentation to which it is a party, (B) the borrowings hereunder,
      and (C) the granting of the Liens contemplated by this Agreement and the
      Financing Documents to which Borrower is a party, and (D) the Acquisition if
      and
      to the extent Borrower is a party;

     

    (iii) the
      incumbency, authority and signatures of the officers of the Borrower authorized
      to sign this Agreement and the other Financing Documents to which the Borrower
      is a party; and

     

    (iv) the
      identity of the Borrower’s current directors, common stock holders and other
      equity holders who, to the knowledge of any Borrower, own more than twenty
      percent (20%) of the outstanding common stock, as well as their respective
      percentage ownership interests.

     

    5.1.2 Opinion
      of Borrowers’ Counsel.

     

    The
      Lender shall have received the favorable opinion of counsel for the Borrowers
      addressed to the Lender.

     

    5.1.3 Consents,
      Licenses, Approvals, Etc.

     

    The
      Lender shall have received copies of all consents, licenses and approvals,
      required in connection with the execution, delivery, performance, validity
      and
      enforceability of the Financing Documents and the Acquisition Documents, and
      such consents, licenses and approvals shall be in full force and
      effect.

     

    5.1.4 Notes.

     

    The
      Lender shall have received the 2006 Term Note, the Revolving Credit Note, and
      the Acquisition Note, each conforming to the requirements hereof and executed
      by
      a Responsible Officer of each Borrower and attested by a duly authorized
      representative of each Borrower.

     

    5.1.5 Financing
      Documents and Collateral.

     

    Each
      Borrower shall have executed and delivered the Financing Documents and the
      Travelers Letter Agreement each to be executed by it, and shall have delivered
      original Chattel Paper, Instruments, Investment Property, and related Collateral
      and all opinions, title insurance, and other documents contemplated
      by ARTICLE III (The
      Collateral).

     

    5.1.6 Other
      Documents, Etc.

     

    The
      Lender shall have received such other certificates, opinions, documents and
      instruments confirmatory of or otherwise relating to the transactions
      contemplated hereby as may have been reasonably requested by the
      Lender.

     

    
      
        
        

      

      
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    5.1.7 Payment
      of Fees.

     

    The
      Lender shall have received payment of any Fees due on or before the Closing
      Date
      including, without limitation, the Acquisition Term Loan Fee.

     

    5.1.8 Collateral
      Disclosure List.

     

    Each
      Borrower shall have delivered the Collateral Disclosure List required under
      the
      provisions of Section 3.3 (Collateral
      Disclosure List) duly executed by a Responsible Officer of each
      Borrower.

     

    5.1.9 Recordings
      and Filings.

     

    Each
      Borrower shall have: (a) executed and delivered all Financing Documents required
      to be filed, registered or recorded in order to create, in favor of the Lender,
      a perfected Lien in the Collateral (subject only to the Permitted Liens) in
      form
      and in sufficient number for filing, registration, and recording in each office
      in each jurisdiction in which such filings, registrations and recordations
      are
      required, and (b) delivered such evidence as the Lender deems satisfactory
      that
      all necessary filing fees and all recording and other similar fees, and all
      Taxes and other expenses related to such filings, registrations and recordings
      will be or have been paid in full.

     

    5.1.10 Insurance
      Certificate.

     

    The
      Lender shall have received an insurance certificate in accordance with the
      provisions of Section 6.1.8
      (Insurance).

     

    5.1.11 Pro-forma
      Balance Sheet and Projections.

     

    Lender
      shall have received and approved Borrowers Pro-forma Balance Sheet and Pro-forma
      Financial Projections, which Pro-forma Balance Sheet and Pro-forma Financial
      Projections must be in form and content acceptable to Lender in its sole and
      absolute discretion.

     

    5.1.12 Adverse
      Change.

     

    No
      material adverse change shall have occurred in the condition (financial or
      otherwise), operations or business of any Borrower that would, in the good
      faith
      judgment of the Lender, materially impair the ability of that Borrower to pay
      or
      perform any of the Obligations since July 31, 2006.

     

    Section
      5.2 Conditions
      to all Extensions of Credit.

     

    The
      making of all advances under the Loans is subject to the fulfillment of the
      following conditions precedent in a manner satisfactory in form and substance
      to
      the Lender and its counsel:

     

    5.2.1 Compliance.

     

    Each
      Borrower shall have complied and shall then be in compliance with all terms,
      covenants, conditions and provisions of this Agreement and the other Financing
      Documents that are binding upon it.

     

    5.2.2 Default.

     

    There
      shall exist no Event of Default or Default hereunder.

     

    
      
        
        

      

      
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    5.2.3 Representations
      and Warranties.

     

    The
      representations and warranties of each of the Borrowers contained among the
      provisions of this Agreement shall be true and with the same effect as though
      such representations and warranties had been made at the time of the making
      of,
      and of the request for, each advance under the Loans or the issuance of the
      Letter of Credit, except that the representations and warranties which relate
      to
      financial statements which are referred to in Section 4.1.11
      (Financial Condition), shall also be deemed to cover financial statements
      furnished from time to time to the Lender pursuant to Section 6.1.1
      (Financial Statements).

     

    5.2.4 Adverse
      Change.

     

    No
      adverse change shall have occurred in the condition (financial or otherwise),
      operations or business of any Borrower that would, in the good faith judgment
      of
      the Lender, materially impair the ability of that Borrower to pay or perform
      any
      of the Obligations.

     

    5.2.5 Legal
      Matters.

     

    All
      legal
      documents incident to each advance under the Loans shall be reasonably
      satisfactory to counsel for the Lender.

     

    Section
      5.3 Conditions
      to Acquisition Term Loan and Letter of Credit.

     

    In
      addition to the satisfaction of the conditions set forth in Sections 5.1 and
      5.2, the making of the Acquisition Term Loan and Letter of Credit is subject
      to
      the fulfillment of the following conditions precedent in a manner satisfactory
      in form and substance to the Lender and its counsel:

     

    5.3.1 Acquisition
      Term Note.

     

    The
      Lender shall have received the Acquisition Term Note conforming to the
      requirements hereof and executed by a Responsible Officer of each Borrower
      and
      attested by a duly authorized representative of each Borrower.

     

    5.3.2 Acquisition.

     

    (a) Argan
      and
      each Acquired Company shall have complied in all material respects with all
      covenants and satisfied in all material respects all conditions set forth in
      the
      Acquisition Documentation and concurrent with the initial funding hereunder,
      Argan shall have acquired all of the outstanding Capital Stock and Membership
      Interest of each Acquired Company in accordance with the terms and conditions
      of
      the Acquisition Documentation and applicable Laws (the “Acquisition”).
      After
      giving effect to the consummation of the Acquisition, Argan shall own 100%
      of
      the fully diluted Capital Stock and Membership Interest of each Acquired
      Company. The Lender shall have received satisfactory evidence that satisfactory
      arrangements shall have been made for the termination of all Liens granted
      in
      connection with any credit facilities of the Acquired Companies.

     

    (b) Lender
      shall have received photocopies of all Acquisition Documentation executed,
      delivered and/or furnished in connection with the Acquisition, together with
      a
      certificate signed by a Responsible Officer of each Borrower certifying that
      (i)
      the Acquisition Agreement and the other Acquisition Documentation furnished
      to
      Lender are true, correct, in full force and effect and the provisions thereof
      have not been in any way modified, amended or waived, and (ii) the Acquisition
      has been closed and completed in accordance with the Acquisition Agreement
      and
      the other Acquisition Documentation furnished to Lender and in accordance with
      all applicable Laws. 

     

    
      
        
        

      

      
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    (c) Lender
      shall have received satisfactory evidence that, concurrent with the initial
      funding hereunder, (i) the secured credit facility entered between GPS and
      Sovereign Bank shall have been terminated and all amounts thereunder shall
      have
      been paid in full and (ii) satisfactory arrangements shall have been made for
      the termination of all Liens granted in connection with such credit facility.
      

     

    (d) Lender
      shall have received a reliance letter in form and substance acceptable to Lender
      in its sole and absolute discretion, executed and delivered by each Acquired
      Company, which reliance letter shall grant to Lender the benefit of all of
      the
      rights, warranties, and indemnifications benefiting Argan under and in
      connection with the Acquisition Agreement, the other Acquisition Documentation
      and the Acquisition. In addition, Lender shall have received all opinions of
      counsel for the Acquired Companies and Argan required under or in connection
      with the Acquisition Agreement, the other Acquisition Documentation and the
      Acquisition, which opinions must be addressed to Lender and in form and content
      reasonably acceptable to Lender and its counsel and which permit Lender to
      rely
      on the opinions expressed therein.

     

    5.3.3 Lien
      Searches.

     

    The
      Lender shall have received the results of a recent lien search in each of the
      jurisdictions where assets of each Borrower and its Subsidiaries are located,
      and such search shall reveal no liens on any of the assets of each Acquired
      Company or any of its Subsidiaries except for Permitted Liens or Liens
      discharged on or prior to the Closing Date pursuant to documentation
      satisfactory to the Lender.

     

    
      
        5.3.4
          Pledged
          Equity and Membership Interests; Stock Powers; Pledged
          Notes.

      

    

     

    Lender
      shall have received, to the extent applicable, (i) all originals of the
      certificates representing the shares of Capital Stock of GP and GPSC pledged
      pursuant to each of the Pledge Agreements, together with an undated stock power
      or other power of transfer for each such certificate executed in blank by a
      duly
      authorized officer of the pledgor thereof, and (ii) all originals of the
      certificates representing the membership interests, if any, of the GPS and
      GPH
      pledged pursuant to each of the Assignments of Membership Interests, together
      with an undated power of transfer, if certificated, for each such certificate
      executed in blank by a duly authorized officer of the pledgor
      thereof.

     

    5.3.5 Financial
      Covenants.

     

    (a) Senior
      Funded Debt to EBITDA.
      As of
      the Closing Date, the Borrowers ratio of Senior Funded Debt to EBITDA based
      on
      the actual adjusted year-to-date performance agreed to by Lender, on a
      consolidated basis, tested as of the last day of the Borrowers’ fiscal quarter
      commencing October 31, 2006 shall not exceed 1.75 to 1.00. 

     

    (b) Liquidity.
      As of
      the Closing Date, after giving effect to the closing of the Acquisition, the
      Borrowers shall have at least Twenty Million Dollars ($20,000,000) of
      unrestricted and unencumbered liquidity.

     

    
      
        
        

      

      
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    5.3.6 Default.

     

    There
      shall exist no Event of Default or Default hereunder.

     

    5.3.7 Interest
      Rate Protection Agreement. 

     

    The
      Lender shall have received an executed Interest Rate Protection Agreement in
      accordance with Section 6.2.19.

     

    5.3.8 Compliance. 

     

    The
      Lender shall have received pro-forma financial statements in form and detail
      satisfactory to the Lender for the most recent month then ended, that
      demonstrate that, after making the Acquisition Term Loan, Borrowers will be
      in
      compliance with all the financial covenants set forth in Section 6.1.14 based
      on
      a trailing twelve (12) month test. 

     

    5.3.9 Other
      Documents, Etc.

     

    The
      Lender shall have received such other certificates, opinions, documents and
      instruments confirmatory of or otherwise relating to the Acquisition Term Loan
      as may have been reasonably requested by the Lender.

     

    5.3.10 Legal
      Matters.

     

    All
      legal
      documents incident to the Acquisition Term Loan shall be reasonably satisfactory
      to counsel for the Lender.

     

    ARTICLE
      VI 

    COVENANTS
      OF THE BORROWERS

     

    Section
      6.1 Affirmative
      Covenants.

     

    So
      long
      as any of the Obligations (or any the Commitments therefore) shall be
      outstanding hereunder, the Borrowers agree jointly and severally with the Lender
      as follows:

     

    6.1.1 Financial
      Statements.

     

    The
      Borrowers shall furnish to the Lender:

     

    (a) Annual
      Statements and Certificates.
      The
      Borrowers shall furnish to the Lender as soon as available, but in no event
      more
      than one hundred twenty (120) days after the close of the Borrowers’ fiscal
      years, (i) a copy of the annual financial statement in reasonable detail
      satisfactory to the Lender relating to the Borrowers and their Subsidiaries,
      prepared in accordance with GAAP and examined and certified by independent
      certified public accountants satisfactory to the Lender, which financial
      statement shall include a consolidated and consolidating balance sheet of the
      Borrowers and their Subsidiaries as of the end of such fiscal year and
      consolidated and consolidating statements of income, cash flows and changes
      in
      shareholders equity of the Borrowers and their Subsidiaries for such fiscal
      year, (ii) a Compliance Certificate, in substantially the form attached to
      this
      Agreement as EXHIBIT
      C,
      as may
      be amended by the Lender from time to time, containing a detailed computation
      of
      each financial covenant in this Agreement which is applicable for the period
      reported, a certification that no change has occurred to the information
      contained in the Collateral Disclosure List (except as set forth in a schedule
      attached to the certification), each prepared by a Responsible Officer of the
      Borrowers in a format acceptable to the Lender and (iii) a management letter
      in
      the form prepared by the Borrowers’ independent certified public
      accountants.

     

    
      
        
        

      

      
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    (b) Quarterly
      Statements and Certificates.
      The
      Borrowers shall furnish to the Lender as soon as available, but in no event
      more
      than forty five (45) days after the close of the Borrowers’ fiscal quarters,
      consolidated and consolidating balance sheets of the Borrowers and their
      Subsidiaries as of the close of such period, consolidated and consolidating
      income, cash flows and changes in shareholders equity statements for such period
      and a Compliance Certificate, in substantially the form attached to this
      Agreement as EXHIBIT
      C,
      containing a detailed computation of each financial covenant in this Agreement
      which is applicable for the period reported, a certification that no change
      has
      occurred to the information contained in the Collateral Disclosure List (except
      as set forth on a schedule attached to the certification), each prepared by
      a
      Responsible Officer of or on behalf of each Borrower in a format acceptable
      to
      the Lender, all as prepared and certified by a Responsible Officer of the
      Borrowers and accompanied by a certificate of that officer stating whether
      any
      event has occurred which constitutes a Default or an Event of Default hereunder,
      and, if so, stating the facts with respect thereto. 

     

    (c) Annual
      Budget and Projections.
      The
      Borrowers shall furnish to the Lender as soon as available, but in no event
      later than thirty (30) days before the end of each fiscal year a consolidated
      and consolidating budget and pro forma financial statements on a quarterly
      basis
      for the following fiscal year.

     

    (d) Additional
      Reports and Information.
      The
      Borrowers shall furnish to the Lender promptly, such additional information,
      reports or statements as the Lender may from time to time reasonably request,
      including but not limited to, no later than five Business Days prior to the
      effectiveness thereof, copies of substantially final drafts of any proposed
      amendment, supplement, waiver or other modification with respect to the
      Acquisition Documentation.

     

    6.1.2 Reports
      to SEC and to Stockholders.

     

    The
      Borrowers will furnish to the Lender, promptly upon the filing or making
      thereof, at least one (l) copy of all financial statements, reports, notices
      and
      proxy statements sent by any Borrower to its stockholders, and of all regular
      and other reports filed by any Borrower with any securities exchange or with
      the
      Securities and Exchange Commission.

     

    6.1.3 Recordkeeping,
      Rights of Inspection, Field Examination, Etc.

     

    (a) Each
      of
      the Borrowers shall, and shall cause each of its Subsidiaries to, maintain
      (i) a
      standard system of accounting in accordance with GAAP, and (ii) proper books
      of
      record and account in which full, true and correct entries are made of all
      dealings and transactions in relation to its properties, business and
      activities.

     

    (b) Each
      of
      the Borrowers shall, and shall cause each of its Subsidiaries to, permit
      authorized representatives of the Lender to visit and inspect the properties
      of
      the Borrowers and their Subsidiaries, to review, audit, check and inspect the
      Collateral at any time with or without notice, to review, audit, check and
      inspect the Borrowers’ other books of record at any time with or without notice
      and to make abstracts and photocopies thereof, and to discuss the affairs,
      finances and accounts of the Borrowers and their Subsidiaries, with the
      officers, directors, employees and other representatives of the Borrowers and
      their Subsidiaries and their respective accountants, all at such times during
      normal business hours and other reasonable times and as often as the Lender
      may
      reasonably request.

     

    
      
        
        

      

      
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    (c) Each
      of
      the Borrowers hereby irrevocably authorizes and directs all accountants and
      auditors employed by any of the Borrowers and/or any of their Subsidiaries
      at
      any time prior to the repayment in full of the Obligations to exhibit and
      deliver to the Lender copies of any and all of the financial statements, trial
      balances, management letters, or other accounting records of any nature of
      any
      or all of the Borrowers and/or any or all of their respective Subsidiaries
      in
      the accountant’s or auditor’s possession, and to disclose to the Lender any
      information they may have concerning the financial status and business
      operations of any or all of the Borrowers and/or any or all of their respective
      Subsidiaries. Further, each of the Borrowers hereby authorizes all Governmental
      Authorities to furnish to the Lender copies of reports or examinations relating
      to any and all of the Borrowers and/or any or all Subsidiaries, whether made
      by
      the Borrowers or otherwise. The Lender agrees that prior to the occurrence
      of a
      Default to give the Borrowers five (5) days prior notice before requesting
      any
      such information from any such accountants, auditors or Governmental
      Authorities.

     

    (d) Any
      and
      all costs and expenses incurred by, or on behalf of, the Lender in connection
      with the conduct of any of the foregoing, including, without limitation, travel,
      lodging, meals, and other expenses for inspections of the Collateral and the
      Borrowers’ operations for each auditor employed by the Lender for inspections of
      the Collateral and the Borrowers’ operations, shall be part of the Enforcement
      Costs and shall be payable to the Lender upon demand. Prior to the occurrence
      of
      an Event of Default, the Borrowers shall not be responsible for the cost of
      more
      than two (2) field examinations in any twelve (12) month period. The Borrowers
      acknowledge and agree that such expenses may include, but shall not be limited
      to, any and all reasonable out-of-pocket costs and expenses of the Lender’s
      employees and agents in, and when, traveling to any of the Borrowers’
facilities.

     

    6.1.4 Existence.

     

    Each
      of
      the Borrowers shall (a) maintain, and cause each of its Subsidiaries to
      maintain, its existence in good standing in the jurisdiction in which it is
      organized and in each other jurisdiction where it is required to register or
      qualify to do business if the failure to do so in such other jurisdiction might
      have a material adverse effect on the ability of the Borrower to perform the
      Obligations, on the conduct of the Borrower’s operations, on the Borrower’s
      financial condition, or on the value of, or the ability of the Lender to realize
      upon, the Collateral and (b) remain a Registered Organization under the laws
      of
      the jurisdiction stated in the Preamble of this Agreement.

     

    6.1.5 Compliance
      with Laws.

     

    Each
      of
      the Borrowers shall comply, and cause each of its Subsidiaries to comply, with
      all applicable Laws and observe the valid requirements of Governmental
      Authorities, the noncompliance with or the non-observance of which might have
      a
      material adverse effect on the ability of the Borrowers to perform the
      Obligations, on the conduct of the Borrowers’ operations, on the Borrowers’
consolidated financial condition, or on the value of, or the ability of the
      Lender to realize upon, the Collateral.

     

    
      
        
        

      

      
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    6.1.6 Preservation
      of Properties.

     

    Each
      of
      the Borrowers will, and will cause each of its Subsidiaries to, at all times
      (a)
      maintain, preserve, protect and keep its properties, whether owned or leased,
      in
      good operating condition, working order and repair (ordinary wear and tear
      excepted), and from time to time will make all proper repairs, maintenance,
      replacements, additions and improvements thereto needed to maintain such
      properties in good operating condition, working order and repair, and (b) do
      or
      cause to be done all things necessary to preserve and to keep in full force
      and
      effect its material franchises, leases of real and personal property, trade
      names, Patents, Trademarks, Copyrights and permits which are necessary for
      the
      orderly continuance of its business.

     

    6.1.7 Line
      of Business.

     

    Each
      of
      the Borrowers will continue to engage substantially in the businesses of the
      marketing and manufacture of filtration related products and providing
      infrastructure services to the government and the telecommunications and utility
      industries.

     

    6.1.8 Insurance.

     

    Each
      of
      the Borrowers will, and will cause each of its Subsidiaries to, at all times
      maintain with “A” or better rated insurance companies such insurance as is
      required by applicable Laws and such other insurance, in such amounts, of such
      types and against such risks, hazards, liabilities, casualties and contingencies
      as are usually insured against in the same geographic areas by business entities
      engaged in the same or similar business. Without limiting the generality of
      the
      foregoing, each of the Borrowers will, and will cause each of its Subsidiaries
      to, keep adequately insured all of its property against loss or damage resulting
      from fire or other risks insured against by extended coverage and maintain
      public liability insurance against claims for personal injury, death or property
      damage occurring upon, in or about any properties occupied or controlled by
      it,
      or arising in any manner out of the businesses carried on by it, all in such
      amounts not less than the Lender shall reasonably determine from time to time.
      Each of the Borrowers shall deliver to the Lender on the Closing Date (and
      thereafter on each date there is a material change in the insurance coverage)
      an
      insurance certificate containing a detailed list of the insurance then in effect
      and stating the names of the insurance companies, the types, the amounts and
      rates of the insurance, dates of the expiration thereof and the properties
      and
      risks covered thereby. Within thirty (30) days after notice in writing from
      the
      Lender, the Borrowers will obtain such additional insurance as the Lender may
      reasonably request.

     

    6.1.9 Taxes.

     

    Except
      to
      the extent that the validity or amount thereof is being contested in good faith
      and by appropriate proceedings, each of the Borrowers will, and will cause
      each
      of its Subsidiaries, to pay and discharge all Taxes prior to the date when
      any
      interest or penalty would accrue for the nonpayment thereof. Each of the
      Borrowers shall furnish to the Lender at such times as the Lender may require
      proof satisfactory to the Lender of the making of payments or deposits required
      by applicable Laws including, without limitation, payments or deposits with
      respect to amounts withheld by any of the Borrowers from wages and salaries
      of
      employees and amounts contributed by any of the Borrowers on account of federal
      and other income or wage taxes and amounts due under the Federal Insurance
      Contributions Act, as amended.

     

    
      
        
        

      

      
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    6.1.10 ERISA.

     

    Each
      Borrower will, and will cause each of its Commonly Controlled Entities to,
      comply with the funding requirements of ERISA with respect to Plans for its
      respective employees. No Borrower will permit with respect to any Plan (a)
      any
      prohibited transaction or transactions under ERISA or the Internal Revenue
      Code,
      which results, or may result, in any material liability of any Borrower, or
      (b)
      any Reportable Event if, upon termination of the plan or plans with respect
      to
      which one or more such Reportable Events shall have occurred, there is or would
      be any material liability of the Borrower to the PBGC. Upon the Lender’s
      request, each Borrower will deliver to the Lender a copy of the most recent
      actuarial report, financial statements and annual report completed with respect
      to any Plan.

     

    6.1.11 Notification
      of Events of Default and Adverse Developments.

     

    Each
      of
      the Borrowers shall promptly notify the Lender upon obtaining knowledge of
      the
      occurrence of:

     

    (a) any
      Event
      of Default;

     

    (b) any
      Default;

     

    (c) any
      litigation instituted or threatened against any of the Borrowers or any of
      their
      Subsidiaries and of the entry of any judgment or Lien (other than any Permitted
      Liens) against any of the assets or properties of any of the Borrowers or any
      Subsidiary where the claims against any Borrower or any Subsidiary exceed One
      Hundred Thousand Dollars ($100,000) and are not covered by
      insurance;

     

    (d) any
      event, development or circumstance whereby the financial statements furnished
      hereunder fail in any material respect to present fairly, in accordance with
      GAAP, the financial condition and operational results of any of the Borrowers
      or
      any of their respective Subsidiaries;

     

    (e) any
      judicial, administrative or arbitral proceeding pending against any of the
      Borrowers or any of their respective Subsidiaries and any judicial or
      administrative proceeding known by any of the Borrowers to be threatened against
      any Borrower or any Subsidiary that, if adversely decided, could materially
      adversely affect the financial condition or operations (present or prospective)
      of any Borrower or any Subsidiary;

     

    (f) the
      receipt by any of the Borrowers or any Subsidiary of any notice, claim or demand
      from any Governmental Authority which alleges that any of the Borrowers or
      any
      Subsidiary is in violation of any of the terms of, or has failed to comply
      with
      any applicable Laws regulating its operation and business, including, but not
      limited to, the Occupational Safety and Health Act and the Environmental
      Protection Act; and 

     

    (g) any
      other
      development in the business or affairs of any of the Borrowers or any of their
      respective Subsidiaries that may be materially adverse; 

     

    in
      each
      case describing in detail satisfactory to the Lender the nature thereof and
      the
      action the Borrowers propose to take with respect thereto.

     

    
      
        
        

      

      
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    6.1.12 Hazardous
      Materials; Contamination.

     

    Each
      of
      the Borrowers agrees to:

     

    (a) give
      notice to the Lender immediately upon acquiring knowledge of the presence of
      any
      Hazardous Materials or any Hazardous Materials Contamination on any property
      owned, operated or controlled by any Borrower or for which any Borrower is,
      or
      is claimed to be, responsible (provided that such notice shall not be required
      for Hazardous Materials placed or stored on such property in accordance with
      applicable Laws in the ordinary course (including, without limitation, quantity)
      of a Borrower’s line of business expressly described in this Agreement), with a
      full description thereof;

     

    (b) promptly
      comply with any Laws requiring the removal, treatment or disposal of Hazardous
      Materials or Hazardous Materials Contamination and provide the Lender with
      satisfactory evidence of such compliance;

     

    (c) provide
      the Lender, within thirty (30) days after a demand by the Lender, with a bond,
      letter of credit or similar financial assurance evidencing to the Lender’s
      satisfaction that the necessary funds are available to pay the cost of removing,
      treating, and disposing of such Hazardous Materials or Hazardous Materials
      Contamination and discharging any Lien which may be established as a result
      thereof on any property owned, operated or controlled by any Borrower or for
      which any Borrower is, or is claimed to be, responsible; and

     

    (d) as
      part
      of the Obligations, defend, indemnify and hold harmless the Lender and its
      agents, employees, trustees, successors and assigns from any and all claims
      which may now or in the future (whether before or after the termination of
      this
      Agreement) be asserted as a result of the presence of any Hazardous Materials
      or
      any Hazardous Materials Contamination on any property owned, operated or
      controlled by any Borrower or for which any Borrower is, or is claimed to be,
      responsible. Each Borrower acknowledges and agrees that this indemnification
      shall survive the termination of this Agreement and the Commitments and the
      payment and performance of all of the other Obligations.

     

    6.1.13 Disclosure
      of Significant Transactions.

     

    Each
      of
      the Borrowers shall deliver to the Lender a written notice describing in detail
      each transaction by it involving the purchase, sale, lease, or other acquisition
      or loss or casualty to or disposition of an interest in Fixed or Capital Assets
      which exceeds One Hundred Fifty Thousand Dollars ($150,000), said notices to
      be
      delivered to the Lender within thirty (30) days of the occurrence of each such
      transaction.

     

    6.1.14 Financial
      Covenants.

     

    (a) Total
      Funded Debt to EBITDA.
      The
      Borrowers, on a consolidated basis, will not permit the ratio of Total
      Funded Debt to EBITDA,
      tested
      as of the last day of each of the Borrowers’ fiscal quarters commencing January
      31, 2007, for the rolling four (4) quarter period then ending, to
      be
      greater than (i) 2.25 to 1.00 for the quarter ending January 31, 2007 and (ii)
      2.00 to 1.00 for the quarter ending April 30, 2007 and each quarter
      thereafter. 

     

    
      
        
        

      

      
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    (b) Fixed
      Charge Coverage Ratio.
      The
      Borrowers will maintain, on
      a
      consolidated basis and tested as of the last day of each of the Borrowers’
fiscal quarters commencing January 31, 2007, and thereafter, for the rolling
      four (4) quarter period then ending,
      a Fixed
      Charge Coverage Ratio of not less than 1.25 to 1.00. 

     

    (c) Senior
      Funded Debt to EBITDA.
      The
      Borrowers, on a consolidated basis, will not permit the ratio of Senior Funded
      Debt to EBITDA, tested as of the last day of each of the Borrowers’ fiscal
      quarters commencing January 31, 2007, and thereafter, for the rolling four
      (4)
      quarter period then ending, to be greater than (i) 1.75 to 1.00 for the quarter
      ending January 31, 2007 and (ii) 1.50 to 1.00 for the quarter ending April
      30,
      2007 and each quarter thereafter.

     

    6.1.15 Collection
      of Receivables.

     

    Until
      the
      occurrence of a Default, the Borrowers and their Subsidiaries shall at their
      own
      expense have the privilege for the account of, and in trust for, the Lender
      of
      collecting their Receivables and receiving in respect thereto all Items of
      Payment and shall otherwise completely service all of the Receivables including
      (a) the billing, posting and maintaining of complete records applicable thereto,
      (b) the taking of such action with respect to the Receivables as the Lender
      may
      request or in the absence of such request, as each of the Borrowers and each
      of
      the Subsidiaries may deem advisable; and (c) the granting, in the ordinary
      course of business, to any Account Debtor, any rebate, refund or adjustment
      to
      which the Account Debtor may be lawfully entitled, and may accept, in connection
      therewith, the return of goods, the sale or lease of which shall have given
      rise
      to a Receivable and may take such other actions relating to the settling of
      any
      Account Debtor’s claim as may be commercially reasonable. The Lender may, at its
      option, at any time or from time to time after and during the continuance of
      an
      Event of Default hereunder, revoke the collection privilege given in this
      Agreement to any one or more of the Borrowers and each of the Subsidiaries
      by
      either giving notice of its assignment of, and Lien on the Collateral to the
      Account Debtors or giving notice of such revocation to the Borrowers. The Lender
      shall not have any duty to, and the Borrowers hereby release the Lender from
      all
      claims of loss or damage caused by the delay or failure to collect or enforce
      any of the Receivables or to preserve any rights against any other party with
      an
      interest in the Collateral. The Lender shall be entitled at any time and from
      time to time after written notice to the Borrowers to confirm and verify
      Receivables.

     

    6.1.16 Assignments
      of Receivables.

     

    Each
      Borrower will promptly, upon request, execute and deliver to the Lender written
      assignments, in form and content acceptable to the Lender, of specific
      Receivables or groups of Receivables; provided, however, the Lien and/or
      security interest granted to the Lender under this Agreement shall not be
      limited in any way to or by the inclusion or exclusion of Receivables within
      such assignments. Receivables so assigned shall secure payment of the
      Obligations and are not sold to the Lender whether or not any assignment
      thereof, which is separate from this Agreement, is in form absolute. The
      Borrowers agree that neither any assignment to the Lender nor any other
      provision contained in this Agreement or any of the other Financing Documents
      shall impose on the Lender any obligation or liability of any of the Borrowers
      with respect to that which is assigned and the Borrowers hereby agree jointly
      and severally to indemnify the Lender and hold the 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 the Lender by virtue
      of
      the assignment of and Lien on any Borrower’s rights, title and interest in, to,
      and under the Collateral.

     

    
      
        
        

      

      
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    6.1.17 Government
      Accounts.

     

    The
      Borrowers will immediately notify the Lender if any of the Receivables in excess
      of One Hundred Thousand Dollars ($100,000) and having a remaining term in excess
      of six (6) months arise out of contracts with the United States or with any
      other Governmental Authority, and, as appropriate, execute any documents and
      take any steps required by the Lender in order that all moneys due and to become
      due under such contracts shall be assigned to the Lender and notice thereof
      given to the Governmental Authority under the Federal Assignment of Claims
      Act
      or any other applicable Laws.

     

    6.1.18 Inventory.

     

    With
      respect to the Inventory, the Borrowers and their Subsidiaries will: (a) keep
      correct and accurate records itemizing and describing the kind, type, quality
      and quantity of Inventory, the Borrowers’ and Subsidiaries’ cost therefore and
      the selling price thereof, all of which records shall be available to the
      officers, employees or agents of the Lender upon demand for inspection and
      copying thereof; (b) not store any Inventory with a bailee, warehouseman or
      similar Person without the Lender’s prior written consent, which consent may be
      conditioned on, among other things, delivery by the bailee, warehouseman or
      similar Person to the Lender of warehouse receipts, in form acceptable to the
      Lender, in the name of the Lender evidencing the storage of Inventory and the
      interests of the Lender therein; and (c) permit the Lender and its agents or
      representatives to inspect and examine the Inventory and to check and test
      the
      same as to quality, quantity, value and condition upon prior notice at any
      time
      or times hereafter during the Borrowers’ and Subsidiaries’ usual business hours
      or at other reasonable times. The Borrowers and their Subsidiaries shall be
      permitted to sell their Inventory in the ordinary course of business until
      the
      occurrence of an Event of Default.

     

    6.1.19 Maintenance
      of the Collateral.

     

    The
      Borrowers will maintain the Collateral in good working order, saving and
      excepting ordinary wear and tear, and will not permit anything to be done to
      the
      Collateral that may materially impair the value thereof. The Lender shall not
      have any duty to, and the Borrowers hereby release the Lender from all claims
      of
      loss or damage caused by the delay or failure to collect or enforce any of
      the
      Receivables or to, preserve any rights against any other party with an interest
      in the Collateral.

     

    6.1.20 Equipment.

     

    The
      Borrowers shall (a) maintain all Equipment as personalty, (b) not affix any
      Equipment to any real estate in such manner as to become a fixture or part
      of
      such real estate, and (c) shall hold no Equipment on a sale on approval basis.
      The Borrowers hereby declare their intent that, notwithstanding the means of
      attachment, no goods of the Borrowers hereafter attached to any realty shall
      be
      deemed a fixture, which declaration shall be irrevocable, without the Lender’s
      consent, until all of the Obligations have been paid in full and all of the
      Commitments and Letters of Credit have been terminated or have
      expired.

     

    
      
        
        

      

      
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    6.1.21 Defense
      of Title and Further Assurances.

     

    At
      their
      expense, the Borrowers will defend the title to the Collateral (and any part
      thereof), and will immediately execute, acknowledge and deliver any renewal,
      affidavit, deed, assignment, security agreement, certificate or other document
      which the Lender may require in order to perfect, preserve, maintain, continue,
      protect and/or extend the Lien granted to the Lender under this Agreement or
      under any of the other Financing Documents and the first priority of that Lien,
      subject only to the Permitted Liens. The Borrowers hereby authorize the filing
      of any financing statement or continuation statement required under the Uniform
      Commercial Code. The Borrowers will from time to time do whatever the Lender
      may
      require by way of obtaining, executing, delivering, and/or filing landlords’ or
      mortgagees’ waivers, notices of assignment and other notices and amendments and
      renewals thereof and the Borrowers will take any and all steps and observe
      such
      formalities as the Lender may require, in order to create and maintain a valid
      Lien upon, pledge of, or paramount security interest in, the Collateral, subject
      to the Permitted Liens. The Borrowers shall pay to the Lender on demand all
      taxes, costs and expenses incurred by the Lender in connection with the
      preparation, execution, recording and filing of any such document or instrument.
      To the extent that the proceeds of any of the Accounts or Receivables of the
      Borrowers are expected to become subject to the control of, or in the possession
      of, a party other than the Borrowers, the Borrowers shall cause all such parties
      to execute and deliver on the Closing Date security documents or other documents
      as requested by the Lender and as may be necessary to evidence and/or perfect
      the security interest of the Lender in those proceeds. Each Borrower hereby
      irrevocably appoints the Lender as the Borrower’s attorney-in-fact, with power
      of substitution, in the name of the Lender or in the name of the Borrower or
      otherwise, for the use and benefit of the Lender, but at the cost and expense
      of
      the Borrowers and without notice to the Borrowers, to execute and deliver any
      and all of the instruments and other documents and take any action which the
      Lender may require pursuant the foregoing provisions of this Section
      6.1.21.

     

    6.1.22 Business
      Names; Locations.

     

    Each
      of
      the Borrowers will notify and cause each of their Subsidiaries to notify the
      Lender not less than thirty (30) days prior to (a) any change in the name under
      which the Borrower or the applicable Subsidiary conducts its business, (b)
      any
      change of the location of the chief executive office of the applicable Borrower
      or the applicable Subsidiary, and (c) the opening of any new place of business
      or the closing of any existing place of business, and (d) any change in the
      location of the places where the Collateral, or any part thereof, or the books
      and records, or any part thereof, are kept.

     

    6.1.23 Use
      of
      Premises and Equipment.

     

    The
      Borrowers agree that until the Obligations are fully paid and all of the
      Commitments and the Letters of Credit have been terminated or have expired,
      the
      Lender (a) after and during the continuance of an Event of Default, may use
      any
      of the Borrowers’ owned or leased lifts, hoists, trucks and other facilities or
      equipment for handling or removing the Collateral; and (b) shall have, and
      is
      hereby granted, a right of ingress and egress to the places where the Collateral
      is located, and may proceed over and through any of the Borrowers’ owned or
      leased property.

     

    
      
        
        

      

      
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    6.1.24 Protection
      of Collateral.

     

    The
      Borrowers agree that the Lender may at any time following an Event of Default
      take such steps as the Lender deems reasonably necessary to protect the interest
      of the Lender in, and to preserve the Collateral, including, the hiring of
      such
      security guards or the placing of other security protection measures as the
      Lender deems appropriate, may employ and maintain at any of the Borrowers’
premises a custodian who shall have full authority to do all acts necessary
      to
      protect the interests of the Lender in the Collateral and may lease warehouse
      facilities to which the Lender may move all or any part of the Collateral to
      the
      extent commercially reasonable. The Borrowers agree 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 reasonably direct. All of the Lender’s
      expenses of preserving the Collateral, including any reasonable expenses
      relating to the compensation and bonding of a custodian, shall be part of the
      Enforcement Costs.

     

    6.1.25 Appraisals.

     

    Whenever
      a Default or an Event of Default exists, the Borrowers shall, at their expense,
      provide the Lender with appraisals or updates thereof of any or all of the
      Collateral from an appraiser and in form in all respects satisfactory to the
      Lender.

     

    Section
      6.2 Negative
      Covenants.

     

    So
      long
      as any of the Obligations or the Commitments shall be outstanding hereunder,
      the
      Borrowers agree with the Lender as follows:

     

    6.2.1 Capital
      Structure, Merger, Acquisition or Sale of Assets.

     

    None
      of
      the Borrowers will alter or amend its capital structure, authorize any
      additional class of equity, issue any stock or equity of any class, enter into
      any merger or consolidation or amalgamation, windup or dissolve itself (or
      suffer any liquidation or dissolution) or acquire all or substantially all
      the
      assets of any Person, or sell, lease or otherwise dispose of any of its assets
      (except Inventory disposed of in the ordinary course of business prior to an
      Event of Default), provided, that, not withstanding the foregoing, Argan may
      grant stock options pursuant to a stock option plan approved by its Board of
      Directors. Any consent of the Lender to the disposition of any assets may be
      conditioned on a specified use of the proceeds of disposition. Notwithstanding
      anything set forth in this Section to the contrary, the Lender agrees that
      it
      will not unreasonably withhold its consent to one or more of the Borrowers
      creating one or more wholly owned operating Subsidiaries (collectively, the
      “Operating
      Subsidiary”)
      and
      transferring substantially all of its assets to the Operating Subsidiary,
      provided, that at the time of such transfer and after giving effect thereto,
      each of the following conditions is met: (a) no Default or Event of Default
      has
      occurred and is continuing or would occur as a result of such event; (b) the
      Lender shall have received and reviewed the pro forma projections of the
      Borrowers (in form and detail satisfactory to the Lender in its reasonable
      discretion) taking into effect the Operating Subsidiary, which pro forma
      projections demonstrate the Borrowers’ continued compliance with all of the
      material terms of this Agreement throughout the term hereof; (c) the Lender
      shall have received a written summary of the revised capital structure of the
      Borrowers and the Operating Subsidiary; (d) Argan shall own one hundred percent
      (100%) of the outstanding stock of the Operating Subsidiary; (e) the Lender
      shall have received copies of all organizational documents for the Operating
      Subsidiary, including without limitation an incumbency certificate and
      resolution; (f) the Borrowers shall at the Borrowers’ expense cause the
      Operating Subsidiary to be added as a co-obligor on this Agreement and the
      Financing Documents pursuant to an Additional Borrower Joinder Supplement and
      deliver such additional Financing Documents, instruments, and opinions as the
      Lender may reasonably require to cause all of the assets of the Operating
      Subsidiary to be subject to a first Lien security interest in favor of the
      Lender. 

     

    
      
        
        

      

      
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    6.2.2 Subsidiaries.

     

    None
      of
      the Borrowers will create or acquire any Subsidiaries other than the
      Subsidiaries identified on the Collateral Disclosure List, without the prior
      written consent of the Lender.

     

    6.2.3 Issuance
      of Stock.

     

    Except
      as
      set forth on Schedule
      6.2.3
      attached
      hereto, none of the Borrowers will issue, or grant any option or right to
      purchase, any of its capital stock.

     

    6.2.4 Purchase
      or Redemption of Securities, Dividend Restrictions.

     

    None
      of
      the Borrowers will purchase, redeem or otherwise acquire any shares of its
      capital stock or warrants now or hereafter outstanding, declare or pay any
      dividends thereon (other than stock dividends), apply any of its property or
      assets to the purchase, redemption or other retirement of, set apart any sum
      for
      the payment of any dividends on, or for the purchase, redemption, or other
      retirement of, make any distribution by reduction of capital or otherwise in
      respect of, any shares of any class of capital stock of any Borrower, or any
      warrants, permit any Subsidiary to purchase or acquire any shares of any class
      of capital stock of, or warrants issued by, any Borrower, make any distribution
      to stockholders or set aside any funds for any such purpose, and not prepay,
      purchase or redeem any Indebtedness for Borrowed Money other than the
      Obligations (collectively, “Restricted
      Payments”),
      except that, so long as at the time and after giving effect to any Restricted
      Payment, no Default shall have occurred or would result therefrom, each of
      SMC,
      Vitarich, GPS, GP, GPSC and GPH may make Restricted Payments to
      Argan.

     

    6.2.5 Indebtedness.

     

    None
      of
      the Borrowers will create, incur, assume or suffer to exist any Indebtedness
      for
      Borrowed Money or permit any Subsidiary to do so, except:

     

    (a) the
      Obligations;

     

    (b) current
      accounts payable arising in the ordinary course;

     

    (c) Indebtedness
      secured by Permitted Liens;

     

    (d) Subordinated
      Indebtedness; 

     

    (e) Indebtedness
      resulting from endorsement of negotiable instruments for collection in the
      ordinary course of business; 

     

    (f) Indebtedness
      of the Borrowers existing on the date hereof and reflected on the financial
      statements furnished pursuant to Section 4.1.11
      (Financial Condition); 

     

    
      
        
        

      

      
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    (g) Assumed
      Indebtedness of the Acquired Companies incurred pursuant to the Acquisition
      and
      Indebtedness of the Acquired Companies incurred after the Closing Date in the
      ordinary course of business, in each such case, owed to Travelers;
      and

     

    (h) Any
      extensions, renewals or replacements of Indebtedness described in clauses (c)
      and (e) above, which do not increase the amount of such
      Indebtedness.

     

    6.2.6 Investments,
      Loans and Other Transactions.

     

    Except
      as
      otherwise provided in this Agreement, none of the Borrowers will, or will permit
      any of its Subsidiaries to, (a) make, assume, acquire or continue to hold any
      investment in any real property (unless used in connection with its business
      and
      treated as a Fixed or Capital Asset of any Borrower or any Subsidiary) or any
      Person, whether by stock purchase, capital contribution, acquisition of
      indebtedness of such Person or otherwise (including, without limitation,
      investments in any joint venture or partnership), (b) guaranty or otherwise
      become contingently liable for the Indebtedness or obligations of any Person,
      or
      (c) make any loans or advances, or otherwise extend credit to any Person,
      except:

     

    (i) any
      loan
      or advance to an officer or employee of any Borrower or any Subsidiary, provided
      that the aggregate amount of all such loans advances by all of the Borrowers
      and
      their Subsidiaries (taken as a whole) outstanding at any time shall not exceed
      Twenty Five Thousand Dollars ($25,000);

     

    (ii) the
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business;

     

    (iii) any
      investment in Cash Equivalents, which are pledged to the Lender as collateral
      and security for the Obligations; 

     

    (iv) trade
      credit extended to customers in the ordinary course of business; 

     

    (v) investments
      of the Acquired Companies held in investment accounts, as set forth in detail
      and disclosed on the Schedule
      2.1.5
      attached
      hereto; and

     

    (vi) investments
      in the Acquired Companies under the Acquisition Documentation.

     

    6.2.7 Stock
      of Subsidiaries.

     

    None
      of
      the Borrowers will sell or otherwise dispose of any shares of capital stock
      of
      any Subsidiary (except in connection with a merger or consolidation of a Wholly
      Owned Subsidiary into any of the Borrowers or another Wholly Owned Subsidiary
      of
      any of the Borrowers or with the dissolution of any Subsidiary) or permit any
      Subsidiary to issue any additional shares of its capital stock except
pro rata
      to its
      stockholders.

     

    6.2.8 Subordinated
      Indebtedness.

     

    None
      of
      the Borrowers will, nor will permit any Subsidiary to make:

     

    (a) any
      payment of principal of, or interest on, any of the Subordinated Indebtedness,
      if a Default or an Event of Default then exists hereunder or would result from
      such payment;

     

    
      
        
        

      

      
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    (b) any
      payment of the principal or interest due on the Subordinated Indebtedness as
      a
      result of acceleration thereunder or a mandatory prepayment
      thereunder;

     

    (c) any
      amendment or modification of or supplement to the documents evidencing or
      securing the Subordinated Indebtedness; or

     

    (d) payment
      of principal or interest on the Subordinated Indebtedness other than when due
      (without giving effect to any acceleration of maturity or mandatory
      prepayment).

     

    6.2.9 Liens;
      Confessed Judgment.

     

    Each
      Borrower agrees that it (a) will not create, incur, assume or suffer to exist
      any Lien upon any of its properties or assets, whether now owned or hereafter
      acquired, or permit any Subsidiary so to do, except for Liens securing the
      Obligations and Permitted Liens, (b) will not agree to, assume or suffer to
      exist any provision in any instrument or other document for confession of
      judgment, cognovit or other similar right or remedy, (c) will not enter into
      any
      contracts for the consignment of goods, will not execute or suffer the filing
      of
      any financing statements or the posting of any signs giving notice of
      consignments, and will not, as a material part of its business, engage in the
      sale of goods belonging to others, and (d) will not allow or suffer to exist
      the
      failure of any Lien described in the Security Documents to attach to, and/or
      remain at all times perfected on, any of the property described in the Security
      Documents.

     

    6.2.10 Transactions
      with Affiliates.

     

    None
      of
      the Borrowers nor any of their Subsidiaries will enter into or participate
      in
      any transaction with any Affiliate other than transactions in the ordinary
      course of business on fair and reasonable terms no less favorable to the
      Borrowers than would be obtained in a comparable arm’s length transaction with a
      Person not an Affiliate, with the officers, directors, employees and other
      representatives of any Borrower and/or any Subsidiary.

     

    6.2.11 Other
      Businesses.

     

    None
      of
      the Borrowers nor any of their Subsidiaries will engage directly or indirectly
      in any business other than its current line of business described elsewhere
      in
      this Agreement.

     

    6.2.12 ERISA
      Compliance.

     

    None
      of
      the Borrowers nor any Commonly Controlled Entity shall: (a) engage in or permit
      any “prohibited transaction” (as defined in ERISA); (b) cause any “accumulated
      funding deficiency” as defined in ERISA and/or the Internal Revenue Code; (c)
      terminate any pension plan in a manner which could result in the imposition
      of a
      lien on the property of any Borrower pursuant to ERISA; (d) terminate or consent
      to the termination of any Multi-employer Plan; or (e) incur a complete or
      partial withdrawal with respect to any Multi-employer Plan.

     

    
      
        
        

      

      
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    6.2.13 Prohibition
      on Hazardous Materials.

     

    None
      of
      the Borrowers shall place, manufacture or store or permit to be placed,
      manufactured or stored any Hazardous Materials on any property owned, operated
      or controlled by any Borrower or for which any Borrower is responsible other
      than Hazardous Materials placed or stored on such property in accordance with
      applicable Laws in the ordinary course of a Borrower’s business expressly
      described in this Agreement.

     

    6.2.14 Method
      of Accounting; Fiscal Year.

     

    Each
      Borrower agrees that:

     

    (a) it
      shall
      not change the method of accounting employed in the preparation of any financial
      statements furnished to the Lender under the provisions of
      Section 6.1.1
      (Financial Statements), unless required to conform to GAAP and on the condition
      that the Borrowers’ accountants shall furnish such information as the Lender may
      request to reconcile the changes with the Borrowers’ prior financial
      statements

     

    (b) it
      will
      not change its fiscal year from a year ending on January 31.

     

    6.2.15 Compensation.

     

    None
      of
      the Borrowers nor any Subsidiary will pay any bonuses, fees, compensation,
      commissions, salaries, drawing accounts, or other payments (cash and non-cash),
      whether direct or indirect, to any stockholders, Subsidiary, or any Affiliate,
      other than reasonable compensation (including bonuses) for actual services
      rendered by stockholders in their capacity as officers or employees of each
      Borrower or Subsidiary.

     

    6.2.16 Transfer
      of Collateral.

     

    Except
      as
      set forth on Schedule
      6.2.16,
      none of
      the Borrowers nor any of their Subsidiaries will transfer, or permit the
      transfer, of the Collateral or the books and records related to any of the
      Collateral to a location not disclosed on the Collateral Disclosure List, except
      for “mobile goods” and vehicles being operated in the ordinary course of
      business.

     

    6.2.17 Sale
      and Leaseback.

     

    None
      of
      the Borrowers nor any of their Subsidiaries will directly or indirectly enter
      into any arrangement to sell or transfer all or any substantial part of its
      fixed assets and thereupon or within one (1) year thereafter rent or lease
      the
      assets so sold or transferred.

     

    6.2.18 Disposition
      of Collateral.

     

    None
      of
      the Borrowers will sell, discount, allow credits or allowances, transfer,
      assign, extend the time for payment on, convey, lease, assign, transfer or
      otherwise dispose of the Collateral, except, prior to an Event of Default,
      dispositions expressly permitted elsewhere in this Agreement, the sale of
      Inventory in the ordinary course of business, and the sale of unnecessary or
      obsolete Equipment.

     

    
      
        
        

      

      
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    6.2.19 Interest
      Rate Protection Agreements. 

     

    On
      or
      prior to the date upon which the Lender makes the 2006 Term Loan and the
      Acquisition Term Loan, the Borrowers will obtain and at all times thereafter
      maintain in full force and effect one or more Interest Rate Protection
      Agreements with the Lender (and/or with a bank or other financial institution
      having capital, surplus and undivided profits of at least Five Hundred Million
      Dollars ($500,000,000), which effectively enables Borrowers (in a manner
      satisfactory to the Lender), as of any date, to protect themselves against
      fluctuations of interest rates as to a notional principal amount at least equal
      to (i) Seventy-Five Percent (75%) of the original principal amount of the 2006
      Term Loan and (ii) Fifty Percent (50%) of the original principal amount of
      the
      Acquisition Term Loan; provided, however, that the Interest Rate Protection
      Agreement with respect to the Acquisition Term Loan shall only be required
      to be
      maintained for a period of thirty-six (36) months from the Closing Date. The
      Borrowers will not enter into or permit to exist or acquire any Interest Rate
      Protection Agreement except in the ordinary course of business to mitigate
      fluctuations of interest rates in respect of outstanding
      Indebtedness.

     

    6.2.20 Amendments
      to Acquisition Documents

     

    (a)
      Amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the
      terms and conditions of the indemnities and licenses furnished to the Borrowers
      or any of its Subsidiaries pursuant to the Acquisition Documentation or any
      other document delivered in connection therewith such that after giving effect
      thereto such indemnities or licenses shall, in the reasonable determination
      of
      the Lender, be materially less favorable to the interests of the Borrowers
      or
      the Lender with respect thereto or (b) otherwise amend, supplement or otherwise
      modify the terms and conditions of the Acquisition Documentation or any such
      other documents except for any such amendment, supplement or modification that
      (i) becomes effective after the Closing Date and (ii) could not reasonably
      be
      expected to have a material adverse effect.

     

    6.2.21 Bonded
      Contracts

     

    Each
      of
      Argan, SMC and Vitarich and any Subsidiary, now or hereinafter created, owned
      or
      acquired, other than the Acquired Companies, agrees that it will not purchase
      or
      hold goods purchased for use in a project that is the subject of any Bonded
      Contract, including, inventory, materials, supplies, tools, plant and equipment
      purchased for, installed in, used or acquired for use in the performance of
      any
      such Bonded Contracts and any related subcontracts.

     

    ARTICLE
      VII 

    DEFAULT
      AND RIGHTS AND REMEDIES

     

    Section
      7.1 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:

     

    7.1.1 Failure
      to Pay.

    

      The
        failure of the Borrowers to pay any of the Obligations within five (5) days
        of
        when due and payable in accordance with the provisions of this Agreement,
        the
        Notes and/or any of the other Financing Documents.

       

    

    
      
        
        

      

      
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    7.1.2 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
      Borrowers), financial statement or other document furnished in connection with
      this Agreement, any of the other Financing Documents, or the Obligations, shall
      prove to have been false or misleading when made (or, if applicable, when
      reaffirmed) in any material respect, provided, however, if any representation
      or
      warranty referred to in this Section 7.1.2, made solely with respect to any
      Acquisition Company, shall prove to have been false or misleading when made
      in
      any material respect, so long as no Default shall have occurred or be continuing
      hereunder (irrespective of such events referred to in this Section 7.1.2
      immediately preceding this proviso), the Borrowers shall not be in breach of
      this Section 7.1.2, if such misrepresentation or false warranty could not
      reasonably be expected to have a material adverse effect on (i) the ability
      of
      the Borrowers to perform the Obligations, (ii) the conduct of the Borrowers’
operations, (iii) the Borrowers’ consolidated financial condition, or (iii) the
      value of, or the ability of the Lender to realize upon, the
      Collateral.

     

    7.1.3 Failure
      to Comply with Covenants.

     

    Default
      shall be made by the Borrower in the due observance and performance of any
      covenant, condition or agreement contained in Sections 6.1.1 or 6.1.14 hereof
      or
      in Section 6.2 hereof.

     

    7.1.4 Other
      Defaults. 

     

    Default
      shall be made by the Borrower in the due observance or performance of any other
      term, covenant or agreement herein contained (other than as set forth in Section
      7.1.3 above), which default shall remain unremedied for thirty (30) days after
      written notice thereof to the Borrower by the Lender.

     

    7.1.5 Default
      Under Other Financing Documents or Obligations.

     

    A
      default
      shall occur under any of the other Financing Documents or under any other
      Obligations, and such default is not cured within any applicable grace period
      provided therein.

     

    7.1.6 Receiver;
      Bankruptcy.

     

    Any
      Borrower or any Subsidiary shall (a) apply for or consent to the appointment
      of
      a receiver, trustee or liquidator of itself or any of its property, (b) admit
      in
      writing its inability to pay its debts as they mature, (c) make a general
      assignment for the benefit of creditors, (d) be adjudicated a bankrupt or
      insolvent, (e) file a voluntary petition in bankruptcy or a petition or an
      answer seeking or consenting to reorganization or an arrangement with creditors
      or to take advantage of any bankruptcy, reorganization, insolvency, readjustment
      of debt, dissolution or liquidation law or statute, or an answer admitting
      the
      material allegations of a petition filed against it in any proceeding under
      any
      such law, or take corporate action for the purposes of effecting any of the
      foregoing, (f) by any act indicate its consent to, approval of or acquiescence
      in any such proceeding or the appointment of any receiver of or trustee for
      any
      of its property, or suffer any such receivership, trusteeship or proceeding
      to
      continue undischarged for a period of sixty (60) days, or (g) by any act
      indicate its consent to, approval of or acquiescence in any order, judgment
      or
      decree by any court of competent jurisdiction or any Governmental Authority
      enjoining or otherwise prohibiting the operation of a material portion of any
      Borrower’s or any Subsidiary’s business or the use or disposition of a material
      portion of any Borrower’s or any Subsidiary’s assets.

     

    
      
        
        

      

      
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    7.1.7 Involuntary
      Bankruptcy, etc.

     

    (a)
      An
      order for relief shall be entered in any involuntary case brought against any
      Borrower or any Subsidiary under the Bankruptcy Code, or (b) any such case
      shall
      be commenced against any Borrower or any Subsidiary and shall not be dismissed
      within sixty (60) days after the filing of the petition, or (c) an order,
      judgment or decree under any other Law is entered by any court of competent
      jurisdiction or by any other Governmental Authority on the application of a
      Governmental Authority or of a Person other than any Borrower or any Subsidiary
      (i) adjudicating any Borrower, or any Subsidiary bankrupt or insolvent, or
      (ii)
      appointing a receiver, trustee or liquidator of any Borrower or of any
      Subsidiary, or of a material portion of any Borrower’s or any Subsidiary’s
      assets, or (iii) enjoining, prohibiting or otherwise limiting the operation
      of a
      material portion of any Borrower’s or any Subsidiary’s business or the use or
      disposition of a material portion of any Borrower’s or any Subsidiary’s assets,
      and such order, judgment or decree continues unstayed and in effect for a period
      of thirty (30) days from the date entered.

     

    7.1.8 Judgment.

     

    Unless
      adequately insured in the opinion of the Lender, the entry of a final judgment
      for the payment of money involving more than One Hundred Thousand Dollars
      ($100,000) against any Borrower or any Subsidiary, and the failure by such
      Borrower or such Subsidiary to discharge the same, or cause it to be discharged,
      within thirty (30) days from the date of the order, decree or process under
      which or pursuant to which such judgment was entered, or to secure a stay of
      execution pending appeal of such judgment.

     

    7.1.9 Execution;
      Attachment.

     

    Any
      execution or attachment shall be levied against the Collateral, or any part
      thereof, and such execution or attachment shall not be set aside, discharged
      or
      stayed within thirty (30) days after the same shall have been
      levied.

     

    7.1.10 Default
      Under Other Borrowings.

     

    Default
      shall be made with respect to any Indebtedness
      for Borrowed Money of
      any of
      the Borrowers (other than the Loans) if the default is a failure to pay at
      maturity or if the effect of such default is to accelerate the maturity of
      such
      Indebtedness for Borrowed Money or to permit the holder or obligee thereof
      or
      other party thereto to cause such Indebtedness for Borrowed Money to become
      due
      prior to its stated maturity.

     

    7.1.11 Challenge
      to Agreements.

     

    Any
      Borrower shall challenge the validity and binding effect of any provision of
      any
      of the Financing Documents or shall state its intention to make such a challenge
      of any of the Financing Documents or any of the Financing Documents shall for
      any reason (except to the extent permitted by its express terms) cease to be
      effective or to create a valid and perfected first priority Lien (except for
      Permitted Liens) on, or security interest in, any of the Collateral purported
      to
      be covered thereby.

     

    
      
        
        

      

      
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    7.1.12 Material
      Adverse Change.

     

    The
      Lender, in its sole discretion, determines in good faith that a material adverse
      change has occurred in the financial condition of any of the
      Borrowers.

     

    7.1.13 Impairment
      of Position.

     

    The
      Lender, in its sole discretion, determines in good faith that an event has
      occurred which impairs in any material respect the prospect of payment of any
      of
      the Obligations and/or the value of the Collateral.

     

    7.1.14 Liquidation,
      Termination, Dissolution, Change in Responsible Officers.

     

    Any
      Borrower shall liquidate, dissolve or terminate its existence or shall suspend
      or terminate a substantial portion of its business operations or if Rainer
      Bosselmann or Arthur Trudel at any time cease to be actively involved in the
      daily management of any Borrower without the prior written consent of the
      Lender.

     

    7.1.15 Swap
      Default.

     

    An
      event
      occurs which gives the Lender the right or option to terminate any Swap Contract
      which is secured by the Collateral.

     

    7.1.16 Travelers
      Default.

     

    Any
      Borrower shall receive from Travelers any notice of the occurrence of a default
      under the Travelers
      Letter Agreement.

     

    Section
      7.2 Remedies.

     

    Upon
      the
      occurrence of any Event of Default, the Lender may, in the exercise of its
      sole
      and absolute discretion from time to time, at any time thereafter exercise
      any
      one or more of the following rights, powers or remedies:

     

    7.2.1 Acceleration.

     

    The
      Lender may declare any or all of the Obligations to be immediately due and
      payable, notwithstanding anything contained in this Agreement or in any of
      the
      other Financing Documents to the contrary, without presentment, demand, protest,
      notice of protest or of dishonor, or other notice of any kind, all of which
      the
      Borrowers hereby waive.

     

    7.2.2 Further
      Advances.

     

    The
      Lender may from time to time without notice to the Borrowers suspend, terminate
      or limit any further advances, loans or other extensions of credit under the
      Commitments, under this Agreement and/or under any of the other Financing
      Documents. Further, upon the occurrence of an Event of Default or Default
      specified in Section 7.1.6
      (Receiver; Bankruptcy) or Section 7.1.7
      (Involuntary Bankruptcy, etc.), the Revolving Credit Commitment and any
      agreement in any of the Financing Documents to provide additional credit and/or
      to issue Letters of Credit shall immediately and automatically terminate and
      the
      unpaid principal amount of the Notes (with accrued interest thereon) and all
      other Obligations then outstanding, shall immediately become due and payable
      without further action of any kind and without presentment, demand, protest
      or
      notice of any kind, all of which are hereby expressly waived by the
      Borrowers.

     

    
      
        
        

      

      
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    7.2.3 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, the Borrowers shall assemble the Collateral and make 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 any Borrower’s premises to take
      possession of the Collateral, to remove it, to render it unusable, to process
      it
      or otherwise prepare it for sale, or to sell or otherwise dispose of
      it.

     

    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 Borrowers at the address set forth in Section 8.1 (Notices),
      or such other address of the Borrowers 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 Borrowers.
      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 state, municipal or other
      Governmental Authority or of any other Person or of any Person having any
      interest therein, should be necessary to effectuate any sale or other
      disposition of the Collateral, the Borrowers agree 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
      Borrowers recognize that the Lender may be unable to effect a public sale of
      all
      or a part of the Collateral consisting of Investment Property 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 Borrowers covenant and agree 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. Upon
      any
      such sale or disposition, the Lender shall have the right to deliver, assign
      and
      transfer to the purchaser thereof the Collateral consisting of securities so
      sold.

     

    7.2.4 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), at any time after the occurrence of an Event of Default, without
      notice to any of the Borrowers, and each Borrower hereby irrevocably appoints
      the Lender as its attorney-in-fact, with power of substitution, in the name
      of
      the Lender and/or in the name of any or all of the Borrowers or otherwise,
      for
      the use and benefit of the Lender, but at the cost and expense of the Borrowers
      and without notice to the Borrowers:

     

    (a) request
      any Account Debtor obligated on any of the Accounts to make payments thereon
      directly to the Lender, with the Lender taking control of the Proceeds
      thereof;

     

    
      
        
        

      

      
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    (b) compromise,
      extend or renew any of the Collateral or deal with the same as it may deem
      advisable;

     

    (c) make
      exchanges, substitutions or surrenders of all or any part of the
      Collateral;

     

    (d) copy,
      transcribe, or remove from any place of business of any Borrower or any
      Subsidiary 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 any Borrower’s or any Subsidiary’s
      place(s) of business as may be reasonably necessary to administer, control
      and
      collect the Collateral;

     

    (e) repair,
      alter or supply goods if necessary to fulfill in whole or in part the purchase
      order of any Account Debtor;

     

    (f) demand,
      collect, receipt for and give renewals, extensions, discharges and releases
      of
      any of the Collateral;

     

    (g) institute
      and prosecute legal and equitable proceedings to enforce collection of, or
      realize upon, any of the Collateral;

     

    (h) settle,
      renew, extend, compromise, compound, exchange or adjust claims in respect of
      any
      of the Collateral or any legal proceedings brought in respect
      thereof;

     

    (i) endorse
      or sign the name of any Borrower upon any Items of Payment, certificates of
      title, Instruments, Investment Property, stock powers, documents, documents
      of
      title, financing statements, assignments, notices or other writing relating
      to
      or part of the Collateral and on any proof of claim in bankruptcy against an
      Account Debtor;

     

    (j) notify
      the Post Office authorities to change the address for the delivery of mail
      to
      the Borrowers to such address or Post Office Box as the Lender may designate
      and
      receive and open all mail addressed to any of the Borrowers; and

     

    (k) take
      any
      other action necessary or beneficial to realize upon or dispose of the
      Collateral or to carry out the terms of this Agreement.

     

    7.2.5 Application
      of Proceeds.

     

    Any
      proceeds of sale or other disposition of the Collateral will be applied by
      the
      Lender to the payment first of any and all Enforcement Costs, and any balance
      of
      such proceeds will be applied to the Obligations in such order and manner as
      the
      Lender shall determine. If the sale or other disposition of the Collateral
      fails
      to fully satisfy the Obligations, the Borrowers shall remain liable to the
      Lender for any deficiency.

     

    
      
        
        

      

      
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    7.2.6 Performance
      by Lender.

     

    The
      Lender without notice to or demand upon the Borrowers 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 after any Default or Event of
      Default make such payment or perform such act for the account and at the expense
      of the Borrowers, and may enter upon the premises of the Borrowers for that
      purpose and take all such action thereon as the Lender may consider necessary
      or
      appropriate for such purpose and each of the Borrowers hereby irrevocably
      appoints the Lender as its attorney-in-fact to do so, with power of
      substitution, in the name of the Lender, in the name of any or all of the
      Borrowers or otherwise, for the use and benefit of the Lender, but at the cost
      and expense of the Borrowers and without notice to the Borrowers. 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 Borrowers to the Lender on demand, and shall constitute and become
      a
      part of the Obligations.

     

    7.2.7 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. The Lender is authorized to offset and apply to all or any part of the
      Obligations all moneys, credits and other property of any nature whatsoever
      of
      any or all of the Borrowers now or at any time hereafter in the possession
      of,
      in transit to or from, under the control or custody of, or on deposit with,
      the
      Lender or any Affiliate of the Lender.

     

    
      
        
        

      

      
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    ARTICLE
      VIII 

    MISCELLANEOUS

     

    Section
      8.1 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:

     

    
      
        	
                Borrowers:

              	
                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

              
	 	
                Harford,
                  CT 06103

              
	 	
                Attention:
                  Eileen P. Baldwin, Esq.

              
	 	 
	
                Lender:

              	
                Bank
                  of America, N.A.

              
	 	
                1101
                  Wootton Parkway, 4th Floor

              
	 	
                Rockville,
                  Maryland 20852

              
	 	
                Attention:
                  Michael J. Radcliffe, SVP

              
	 	 
	
                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
      8.2 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 Borrowers. No waiver of any provision of this Agreement or of any of
      the
      other Financing Documents, nor consent to any departure by the Borrowers
      therefrom, shall in any event be effective unless the same shall be in writing
      signed by the Lender. No course of dealing between the Borrowers 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.

     

    Without
      implying any limitation on the foregoing:

     

    (a) Any
      waiver or consent shall be effective only in the specific instance, for the
      terms and purpose for which given, subject to such conditions as the Lender
      may
      specify in any such instrument.

     

    (b) No
      waiver
      of any Default or Event of Default shall extend to any subsequent or other
      Default or Event of Default, or impair any right consequent
      thereto.

     

    (c) No
      notice
      to or demand on the Borrowers in any case shall entitle the Borrowers to any
      other or further notice or demand in the same, similar or other
      circumstance.

     

    
      
        
        

      

      
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    (d) 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 to exercise any right, power or remedy consequent upon
      a
      breach thereof, shall constitute a waiver, amendment or modification 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 time or
      times.

     

    (e) By
      accepting payment after the due date of any amount payable under this Agreement
      or under any of the other Financing Documents, 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 of the other Financing Documents,
      or
      to declare a default for failure to effect such prompt payment of any such
      other
      amount.

     

    Section
      8.3 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, subject to the provisions of this Agreement, 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 and subject to the terms of this
      Agreement, the Lender may:

     

    (a) proceed
      against any one or more of the Borrowers with or without proceeding against
      any
      other Person (who may be liable (by endorsement, guaranty, indemnity or
      otherwise) for all or any part of the Obligations;

     

    (b) proceed
      against any one or more of the Borrowers 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
      reducing or impairing the obligation of the Borrowers and 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;

     

    (d) without
      reducing or impairing the obligations of the Borrowers 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) approve
      the making of advances under the Revolving Loan under this
      Agreement;

     

    (iii) waive
      any
      provision of this Agreement or the other Financing Documents;

     

    
      
        
        

      

      
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    (iv) exercise
      or fail to exercise rights of set-off or other rights; or

     

    (v) accept
      partial payments or extend from time to time the maturity of all or any part
      of
      the Obligations.

     

    Section
      8.4 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
      Borrowers to the Lender shall become immediately due and payable;
      and

     

    (d) if
      the
      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 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
      8.5 Assignments
      by Lender.

     

    The
      Lender may, without notice to or consent of the Borrowers, assign to any Person
      (each an “Assignee”
and
      collectively, the “Assignees”)
      all or
      a portion of the Lender’s Commitments. The Lender and its Assignee shall notify
      the Borrowers in writing of the date on which the assignment is to be effective
      (the
      “Adjustment
      Date”).
      On or
      before the Adjustment Date, the Lender, the Borrowers and the Assignee shall
      execute and deliver a written assignment agreement in a form acceptable to
      the
      Lender, which shall constitute an amendment to this Agreement to the extent
      necessary to reflect such assignment. Upon the request of the Lender following
      an assignment made in accordance with this Section 8.5,
      the
      Borrowers shall issue new Notes to the Lender and its Assignee reflecting such
      assignment, in exchange for the existing Notes held by the Lender, provided
      the
      Lender shall have used good faith efforts to obtain a confidentiality agreement
      from any such Assignee.

     

    In
      addition, notwithstanding the foregoing, the Lender may at any time pledge
      all
      or any portion of the Lender’s rights under this Agreement, any of the
      Commitments or any of the Obligations to a Federal Reserve Bank.

     

    Section
      8.6 Participations
      by Lender.

     

    The
      Lender may at any time sell to one or more financial institutions participating
      interests in any of the Lender’s Obligations or Commitments; provided, however,
      that (a) no such participation shall relieve the Lender from its obligations
      under this Agreement or under any of the other Financing Documents to which
      it
      is a party, (b) the Lender shall remain solely responsible for the performance
      of its obligations under this Agreement and under all of the other Financing
      Documents to which it is a party, and (c) the Borrowers shall continue to deal
      solely and directly with the Lender in connection with the Lender’s rights and
      obligations under this Agreement and the other Financing Documents.

     

    
      
        
        

      

      
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    Section
      8.7 Disclosure
      of Information by Lender.

     

    In
      connection with any sale, transfer, assignment or participation by the Lender
      in
      accordance with Section 8.5 (Assignments
      by Lender) or Section
      8.6
      (Participations by Lender), the Lender shall have the right to disclose to
      any
      actual or potential purchaser, assignee, transferee or participant all financial
      records, information, reports, financial statements and documents obtained
      in
      connection with this Agreement and/or any of the other Financing Documents
      or
      otherwise.

     

    Section
      8.8 Successors
      and Assigns.

     

    This
      Agreement and all other Financing Documents shall be binding upon and inure
      to
      the benefit of the Borrowers and the Lender and their respective successors
      and
      assigns, except that the Borrowers shall not have the right to assign their
      rights hereunder or any interest herein without the prior written consent of
      the
      Lender.

     

    Section
      8.9 Continuing
      Agreements.

     

    All
      covenants, agreements, representations and warranties made by the Borrowers
      in
      this Agreement, in any of the other Financing Documents, and in any certificate
      delivered pursuant hereto or thereto shall survive the making by the Lender
      of
      the Loans, the issuance of Letters of Credit and the execution and delivery
      of
      the Notes, shall be binding upon the Borrowers regardless of how long before
      or
      after the date hereof any of the Obligations were or are incurred, and shall
      continue in full force and effect so long as any of the Obligations are
      outstanding and unpaid. From time to time upon the Lender’s request, and as a
      condition of the release of any one or more of the Security Documents, the
      Borrowers and other Persons obligated with respect to the Obligations shall
      provide the Lender with such acknowledgments and agreements as the Lender may
      require to the effect that there exists no defenses, rights of setoff or
      recoupment, claims, counterclaims, actions or causes of action of any kind
      or
      nature whatsoever against the Lender and/or any of its agents and others, or
      to
      the extent there are, the same are waived and released.

     

    Section
      8.10 Enforcement
      Costs.

     

    The
      Borrowers agree to pay to the Lender on demand all Enforcement Costs, together
      with interest thereon from the date incurred or advanced until paid in full
      at a
      per annum rate of interest equal at all times to the Post-Default Rate.
      Enforcement Costs shall be immediately due and payable at the time advanced
      or
      incurred, whichever is earlier. Without implying any limitation on the
      foregoing, the Borrowers agree, as part of the Enforcement Costs, to pay upon
      demand any and all stamp and other Taxes and fees payable or determined to
      be
      payable in connection with the execution and delivery of this Agreement and
      the
      other Financing Documents and to save the Lender harmless from and against
      any
      and all liabilities with respect to or resulting from any delay in paying or
      omission to pay any Taxes or fees referred to in this Section. The provisions
      of
      this Section shall survive the execution and delivery of this Agreement, the
      repayment of the other Obligations and shall survive the termination of this
      Agreement.

     

    
      
        
        

      

      
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    Section
      8.11 Applicable
      Law; Jurisdiction.

     

    8.11.1 Applicable
      Law.

     

    Borrowers
      acknowledge and agree that the Financing Documents, including, this Agreement,
      shall be governed by the Laws of the State, as if each of the Financing
      Documents and this Agreement had each been executed, delivered, administered
      and
      performed solely within the State even though for the convenience and at the
      request of the Borrowers, one or more of the Financing Documents may be executed
      elsewhere. The Lender acknowledges, however, that remedies under certain of
      the
      Financing Documents that relate to property outside the State may be subject
      to
      the laws of the state in which the property is located.

     

    8.11.2 Submission
      to Jurisdiction.

     

    The
      Borrowers irrevocably submit 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. Each of
      the
      Borrowers 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 Borrowers
      and
      may be enforced in any court in which the Borrowers are subject to jurisdiction,
      by a suit upon such judgment, provided that service of process is effected
      upon
      the Borrowers in one of the manners specified in this Section or as otherwise
      permitted by applicable Laws.

     

    8.11.3 Appointment
      of Agent for Service of Process.

     

    The
      Borrowers hereby irrevocably designate and appoint CT Corporation System,
      Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as
      the
      Borrowers’ authorized agent to receive on the Borrowers’ 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 Borrowers 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.

     

    8.11.4 Service
      of Process.

     

    Each
      of
      the Borrowers 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 Borrower at the Borrower’s address designated in or pursuant
      to Section
      8.1 
      (Notices), and (b) serving a copy thereof upon the agent, if any, designated
      and
      appointed by the Borrower as the Borrower’s agent for service of process by or
      pursuant to this Section. The Borrowers irrevocably agree that such service
      (y)
      shall be deemed in every respect effective service of process upon the Borrowers
      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
      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.

     

    
      
        
        

      

      
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    Section
      8.12 Duplicate
      Originals and Counterparts.

     

    This
      Agreement may be executed in any number of duplicate originals or counterparts,
      each of such duplicate originals or counterparts shall be deemed to be an
      original and all taken together shall constitute but one and the same
      instrument.

     

    Section
      8.13 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
      8.14 No
      Agency.

     

    Nothing
      herein contained shall be construed to constitute the Borrowers as the agent
      of
      the Lender for any purpose whatsoever or to permit the Borrowers to pledge
      any
      of the credit of the Lender. The Lender shall not be responsible or liable
      for
      any shortage, discrepancy, damage, loss or destruction of any part of the
      Collateral wherever the same may be located and regardless of the cause thereof.
      The Lender shall not, by anything herein or in any of the Financing Documents
      or
      otherwise, assume any of the Borrowers’ obligations under any contract or
      agreement assigned to the Lender, and the Lender shall not be responsible in
      any
      way for the performance by the Borrowers of any of the terms and conditions
      thereof, except for losses which are the direct result of the Lender’s gross
      negligence or willful misconduct.

     

    Section
      8.15 Date
      of Payment.

     

    Should
      the principal of or interest on the Notes become due and payable on other than
      a
      Business Day, the maturity thereof shall be extended to the next succeeding
      Business Day and in the case of principal, interest shall be payable thereon
      at
      the rate per annum specified in the Notes during such extension.

     

    Section
      8.16 Entire
      Agreement.

     

    This
      Agreement is intended by the Lender and the Borrowers to be a complete,
      exclusive and final expression of the agreements contained herein. Neither
      the
      Lender nor the Borrowers shall hereafter have any rights under any prior
      agreements pertaining to the matters addressed by this Agreement but shall
      look
      solely to this Agreement for definition and determination of all of their
      respective rights, liabilities and responsibilities under this
      Agreement.

     

    Section
      8.17 Waiver
      of Trial by Jury.

     

    THE
      BORROWERS 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.

     

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

     

    This
      waiver is knowingly, willingly and voluntarily made by the Borrowers and the
      Lender, and the Borrowers 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
      Borrowers 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
      8.18 Liability
      of the Lender.

     

    The
      Borrowers hereby agree that the Lender shall not be chargeable for any
      negligence, mistake, act or omission of any accountant, examiner, agency or
      attorney employed by the Lender in making examinations, investigations or
      collections, or otherwise in perfecting, maintaining, protecting or realizing
      upon any lien or security interest or any other interest in the Collateral
      or
      other security for the Obligations.

     

    By
      inspecting the Collateral or any other properties of the Borrowers or by
      accepting or approving anything required to be observed, performed or fulfilled
      by the Borrowers 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.

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

     

    Section
      8.19 Indemnification.

     

    The
      Borrowers agree to indemnify and hold harmless, Lender, the Lender’s parent and
      Affiliates and the Lender’s parent’s and Affiliates’ officers, directors,
      shareholders, employees and agents (each an “Indemnified
      Party,”
and
      collectively, the “Indemnified
      Parties”),
      from
      and against any and all claims, liabilities, losses, damages, costs and expenses
      (whether or not such Indemnified Party is a party to any litigation), including
      without limitation, reasonable attorney’s fees and costs and costs of
      investigation, document production, attendance at depositions or other
      discovery, incurred by any Indemnified Party with respect to, arising out of
      or
      as a consequence of (a) this Agreement or any of the other Financing Documents,
      including without limitation, any failure of the Borrowers to pay when due
      (at
      maturity, by acceleration or otherwise) any principal, interest, fee or any
      other amount due under this Agreement or the other Financing Documents, or
      any
      other Event of Default; (b) the use by the Borrowers of any proceeds advanced
      hereunder; (c) the transactions contemplated hereunder; or (d) any claim,
      demand, action or cause of action being asserted against (i) the Borrowers
      or
      any of their Affiliates by any other Person, or (ii) any Indemnified Party
      by
      the Borrowers in connection with the transactions contemplated hereunder.
      Notwithstanding anything herein or elsewhere to the contrary, the Borrowers
      shall not be obligated to indemnify or hold harmless any Indemnified Party
      from
      any liability, loss or damage resulting from the gross negligence, willful
      misconduct or unlawful actions of such Indemnified Party. Any amount payable
      to
      the Lender under this Section will bear interest at the Post- Default Rate
      from
      the due date until paid.

     

    [SIGNATURES
      APPEAR ON THE FOLLOWING PAGE]

     

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, each of the parties hereto have executed and delivered this
      Agreement under their respective seals as of the day and year first written
      above.

     

    
      	 	 	 
	 	
              Borrowers:

            
	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

                      

                    

                  

                

              

      

    

    
      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	 	 	 
	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

                            

                          

                        

                      

                    

                  

          

        

      

    

    
      
        
          
             

            
              	 	 	 
	
                       

                      WITNESS:

                    	
                      
                        Lender:

                        BANK
                          OF AMERICA, N.A. 

                      

                    
	
                    	 
 	 
 
	
                    	By:  	/s/
                      Michael J. Radcliffe    (Seal)
	
                      
 	
                      

                      
                        
                          
                            
                              
                                
                                  Name:
                                    Michael J. Radcliffe

                                  Title:
                                    Senior Vice
                                    PresidentFOURTH
      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.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    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. Partial Invalidity.

     

    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. Applicable Law.

     

    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.

     

    
      
        
        

      

      
        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.

     

    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]

     

    
      
        
        

      

      
        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/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

    

     

    
      
        
        

      

      
        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 Fourth Amended and Restated Revolving Credit Note

         

      

    

    
      
        
        

      

      
        2

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