Document:

Stock
      Purchase Agreement

     

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

     

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

     

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

     

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

     

    1. Issuance
      of Shares

     

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

     

    2. Restrictive
      Legends

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Investment
      Representations

     

    Each
      Buyer represents, warrants and covenants as follows:

     

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

     

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

     

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

     

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

     

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

     

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

     

    4. Company
      Representations

     

    The
      Company represents and warrants as follows:

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

    6. Registration.
      

    

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

    

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

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

    

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

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

    

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

    

    7. Miscellaneous

     

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

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    [NEXT
      PAGE IS SIGNATURE PAGE]

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	THE
              COMPANY:

ARGAN, INC.
	 
 	 
 	 
 
	 	 	/s/ Rainer
              Bosselmann
	 	
              

              By:
                Rainer Bosselmann

              Its:
                President

            

    

     

    
      	 	 	BUYERS:
              
               

              ALLEN SBH INVESTMENTS, LLC

            
	 
 	 
 	 
 
	 	  	/s/ Kim
              M.
              Wieland
	 	
              

              By:
                Kim M. Wieland

              Its:
                CFO 

            

    
      	 	 	ALLEN
&
              COMPANY, LLC
	 
 	 
 	 
 
	 	 	/s/ Kim
              M.
              Wieland
	 	
              

              By:
                Kim M. Wieland

              Its:
                Managing Director and CFO 

            
	 	 
	 	 
	 	/s/ Bruce Allen
	 	
              
Bruce
              Allen
	 	 
	 	/s/ James Quinn
	 	
              
James
              Quinn
	 	 
	 	 
	 	/s/ John Simon
	 	
              
John
              Simon

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 
	 	 	/s/ Mark
              Levy
	 	
              
Mark
              Levy
	 	 
	 	 
	 	/s/ Stephen J. Adler
	 	
              
Stephen
              J. Adler
	 	 
	 	 
	 	WHITNEY GREEN RIVER MANAGEMENT
CO., LLC
	 	 
	 	 
	 	/s/
              John Hockin
	 	
              
By:
              John Hockin
	 	
              Its:
                

              
                

              

            
	 	 
	 	PERENNIAL PARTNERS LP
	 	 
	 	 
	 	/s/ Paul Fino
	 	
              
By:
              Paul Fino
              Its:
                Principal

            
	 	 
	 	 
	 	WESTWIND EQUITY PARTNERS, LLC
	 	 
	 	 
	 	/s/ Beth Maxwell
	 	
              
By:
              Beth Maxwell
              Its:
                Executive Director

            
	 	 
	 	MSR I SBIC, L.P.
	 	 
	 	By: MSR I SBIC Partners, LLC (its General
              Partner)
	 	 
	 	By: MSR Advisors, Inc. (its Manager)
	 	 
	 	 
	 	/s/ Daniel A. Levinson
	 	
              

              By:
                Daniel A. Levinson

              Its:
                President

            
	 	 
	 	 
	 	MSR FUND II, L.P.
	 	 
	 	MSR Fund II GP, LLC (its General Partner)
	 	 
	 	By: MSR Advisors, Inc. (its Manager)
	 	 
	 	 
	 	/s/ Daniel A. Levinson
	 	
              

              By:
                Daniel A. Levinson

              Its:
                President

            

    

    

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    Schedule
      A

     

    Buyers
      of Restricted Stock

     

    
      	
              Buyer

            	 	
              Number
                of Shares

            	 	
              Purchase
                Price

            	 
	
              Allen
                SBH Investments, LLC

            	 	 	
              266,667

            	 	
              $

            	
              1,000,000.00

            	 
	
              Perennial
                Partners LP

            	 	 	
              266,667

            	 	
              $

            	
              1,000,000.00

            	 
	
              Whitney
                Green River Management Co., LLC

            	 	 	
              266,667

            	 	
              $

            	
              1,000,000.00

            	 
	
              Westwind
                Equity Partners, LLC

            	 	 	
              266,667

            	 	
              $

            	
              1,000,000.00

            	 
	
              MSR
                I SBIC, L.P.

            	 	 	
              92,793

            	 	
              $

            	
              347,974.00

            	 
	
              MSR
                Fund II, L.P.

            	 	 	
              440,540

            	 	
              $

            	
              1,652,025.00

            	 
	
              Allen
&
Company
                LLC 

            	 	 	
              80,000

            	 	
              $

            	
              300,000.00

            	 
	
              Bruce
                Allen 

            	 	 	
              53,333

            	 	
              $

            	
              200,000.00

            	 
	
              John
                Simon 

            	 	 	
              80,000

            	 	
              $

            	
              300,000.00

            	 
	
              James
                Quinn 

            	 	 	
              26,667

            	 	
              $

            	
              100,000.00

            	 
	
              Mark
                Levy 

            	 	 	
              6,667

            	 	
              $

            	
              25,000.00

            	 
	
              Stephen
                J. Adler

            	 	 	
              6,667

            	 	
              $

            	
              25,000.00

            	 

    

     

    
      
        
        

      

      
        10Stock
      Purchase Agreement

     

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

     

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

     

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

     

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

     

    1. Issuance
      of Shares

     

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

     

    2. Restrictive
      Legends

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Investment
      Representations

     

    Each
      Buyer represents, warrants and covenants as follows:

     

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

     

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

     

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

     

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

     

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

     

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

     

    4. Company
      Representations

     

    The
      Company represents and warrants as follows:

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    6. Deliveries.
      

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

    7. Miscellaneous

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    [NEXT
      PAGE IS SIGNATURE PAGE]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

       

      
        	 	 	 	THE
                COMPANY:
	 	 	 	 
	 	 	 	ARGAN, INC.
	 	 	 	
                 

                 

              
	 	 	 	/s/ Rainer
                Bosselmann
	
              	 	 	
                

                By:
                  Rainer Bosselmann

                Its:
                  President

              

      

       

    

    
      	 	 	 	BUYERS:
              
	 	 	 	 
	 	 	 	Argan Investments
              LLC
	 	 	 	
               

               

            
	 	 	 	/s/ Robert
              Averick
	
            	 	 	
              

              
                By:
                  Robert Averick

                Its:
                  Member 

              

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Schedule
      A

     

    Buyers
      of Restricted Stock

    

      
        	
                Buyer

              	 	
                Number
                  of Shares

              	 	
                Purchase
                  Price

              
	 	 	 	 	 
	
                Argan
                  Investments LLC

              	 	
                1,000,000

              	 	
                $3,750,000.00

              

      

    

    

    
      
        
        

      

      
        8

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