Document:

REGISTRATION
      RIGHTS AGREEMENT

     

    THIS
      REGISTRATION RIGHTS AGREEMENT
      (this
“Agreement”)
      is
      made as of December 8, 2006, by and among ARGAN,
      INC.,
      a
      Delaware corporation (the “Company”);
      and
WILLIAM
      F. GRIFFIN, Jr. and JOEL M. CANINO (each,
      a
“Holder”
and
      together, the “Holders”).

    

    RECITALS:
      

    

    WHEREAS,
      on the
      date hereof, the Company is acquiring, among other things, all of the membership
      interests in Gemma Power Systems, LLC, a Connecticut limited liability company
      (“GPS”),
      and
      all of the issued and outstanding shares of capital stock of Gemma Power, Inc.,
      a Connecticut corporation (“GPS-Connecticut”),
      and
      Gemma Power Systems, Inc., a California corporation (“GPS-California”)
      pursuant to the Acquisition Agreements (the “Acquisition”),
      and
      pursuant thereto the Holders will receive shares of common stock of the Company
      (the “Common
      Stock”);
      and

    

    WHEREAS,
      in
      connection with the issuance by the Company of the shares of Common Stock,
      and
      as an inducement to consummate the transactions contemplated by the Acquisition
      Agreements, the Company has agreed to file a registration statement with the
      Commission in compliance with the Securities Act in respect to the Common Stock
      issued in connection with the Acquisition.

    

    NOW,
      THEREFORE,
      in
      consideration of the foregoing and the agreements set forth below, the parties
      hereby agree with each other as follows:

     

    1. Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings: 

     

    “Acquisition
      Agreements”
shall
      mean the Membership Interest Purchase Agreement and that certain a Stock
      Purchase Agreement dated as of December 8, 2006, by and among the Company and
      GPS-Connecticut, GPS-California, and the Holders.

    

    “Acquisition
      Shares”
shall
      mean shares of: (a) Common Stock issued in connection with the Acquisition
      in
      accordance with the terms of the Acquisition Agreements; and (b) any securities
      of the Company issued as (or issuable upon the conversion or exercise of any
      warrant, right, or other security which is issued as) a dividend or other
      distribution with respect to, or in exchange for or in replacement of, such
      above-described securities. 

    

    “Closing”
shall
      have the meaning as set forth in the Acquisition Agreements. 

    

    “Commission”
shall
      mean the Securities and Exchange Commission, or any other federal agency at
      the
      time administering the Securities Act. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Common
      Stock”
shall
      mean the Company’s Common Stock, $0.15 par value, as constituted as of the date
      of this Agreement. 

    

    “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, or any similar federal
      statute, and the rules and regulations of the Commission thereunder, all as
      the
      same shall be in effect at the time. 

    

    “Membership
      Interest Purchase Agreement”
shall
      mean that certain Membership Interest Purchase Agreement dated as of December
      8,
      2006, by and among the Company, and GPS, GPS-Connecticut, GPS-California, and
      the Holders.

    

    “Registration
      Expenses”
shall
      mean the expenses so described in Section 5. 

    

    “Restricted
      Stock”
shall
      mean the Acquisition Shares, excluding Acquisition Shares which have been:
      (a)
      registered under the Securities Act pursuant to an effective registration
      statement filed thereunder and disposed of in accordance with the registration
      statement covering them; or (b) publicly sold pursuant to Rule 144 under the
      Securities Act. 

    

    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, or any similar federal statute,
      and
      the rules and regulations of the Commission thereunder, all as the same shall
      be
      in effect at the time. 

    

    “Selling
      Expenses”
shall
      mean the expenses so described in Section 5. 

    

    2. Restrictive
      Legend. Each certificate representing Acquisition Shares shall, except as
      otherwise provided in this Section 2, be stamped or otherwise imprinted with
      a
      legend substantially in the following form: 

     

    “THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
      SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
      IT
      HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR AN EXEMPTION
      FROM REGISTRATION IS AVAILABLE.” 

    

    A
      certificate shall not bear such legend if: (a) the Acquisition Shares
      represented by such certificate have been registered under the Securities Act;
      or (b) in the opinion of counsel satisfactory to the Company the securities
      represented thereby may be publicly sold without registration under the
      Securities Act and any applicable state securities laws. 

    

    3. Required
      Registration.
      The
      Company shall use its best efforts to effect the registration under the
      Securities Act of all of the shares of Restricted Stock held by the Holder,
      or
      his assigns, pursuant to the terms of this Agreement. 

     

    4. Registration
      Procedures.
      Whenever the Company is required by the provisions of Section 3 to use its
      best
      efforts to effect the registration of any shares of Restricted Stock under
      the
      Securities Act, the Company will, as expeditiously as possible: 

     

    
      
        
        

      

      
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    (a) prepare
      and file with the Commission, as soon as practicable following Holders delivery
      of the Closing Date Balance Sheet (as defined in the Membership Interest
      Purchase Agreement), a registration statement with respect to such securities
      and use its best efforts to cause such registration statement to become and
      remain effective for the period of the distribution contemplated thereby
      (determined as hereinafter provided) or until the Restricted Stock held by
      the
      Holder can be publicly sold pursuant to Rule 144 under the Securities
      Act; 

     

    (b) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective for the period specified
      in subsection (a) above and comply with the provisions of the Securities Act
      with respect to the disposition of all Restricted Stock covered by such
      registration statement in accordance with the sellers’ intended method of
      disposition set forth in such registration statement for such period;

     

    (c) furnish
      to each seller of Restricted Stock, and to each underwriter if applicable,
      such
      number of copies of the registration statement and the prospectus included
      therein (including each preliminary prospectus) as such persons reasonably
      may
      request in order to facilitate the public sale or other disposition of the
      Restricted Stock covered by such registration statement; 

     

    (d) use
      its
      best efforts to register or qualify the Restricted Stock covered by such
      registration statement under the securities or “blue sky” laws of such
      jurisdictions as the sellers of Restricted Stock or, in the case of an
      underwritten offering, the managing underwriter reasonably shall request;
provided,
      however,
      that
      the Company shall not for any such purpose be required to qualify generally
      to
      transact business as a foreign corporation in any jurisdiction where it is
      not
      so qualified or to consent to general service of process in any such
      jurisdiction; 

     

    (e) use
      its
      best efforts to list the Restricted Stock covered by such registration statement
      with any securities exchange or stock market on which the Common Stock of the
      Company is then listed; 

     

    (f) immediately
      notify each seller of Restricted Stock and each underwriter, if applicable,
      at
      any time when a prospectus relating thereto is required to be delivered under
      the Securities Act, of the happening of any event of which the Company has
      knowledge as a result of which the prospectus contained in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in light of the circumstances then
      existing; 

     

    (g) if
      the
      offering is underwritten and at the request of any seller of Restricted Stock,
      use its best efforts to furnish on the date that Restricted Stock is delivered
      to the underwriters for sale pursuant to such registration: (i) an opinion
      dated
      such date of counsel representing the Company for the purposes of such
      registration, addressed to the underwriters and to such seller, stating that
      such registration statement has become effective under the Securities Act and
      that (A) to the best knowledge of such counsel, no stop order suspending the
      effectiveness thereof has been issued and no proceedings for that purpose have
      been instituted or are pending or contemplated under the Securities Act; (B)
      the
      registration statement, the related prospectus and each amendment or supplement
      thereof comply as to form in all material respects with the requirements of
      the
      Securities Act (except that such counsel need not express any opinion as to
      financial statements contained therein); and (C) to such other effects as
      reasonably may be requested by counsel for the underwriters or by such seller
      or
      its counsel; and (ii) a letter dated such date from the independent public
      accountants retained by the Company, addressed to the underwriters and to such
      seller, stating that they are independent public accountants within the meaning
      of the Securities Act and that, in the opinion of such accountants, the
      financial statements of the Company included in the registration statement
      or
      the prospectus, or any amendment or supplement thereof, comply as to form in
      all
      material respects with the applicable accounting requirements of the Securities
      Act, and such letter shall additionally cover such other financial matters
      (including information as to the period ending no more than five business days
      prior to the date of such letter) with respect to such registration as such
      underwriters reasonably may request; 

     

    
      
        
        

      

      
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    (h) make
      available for inspection by each seller of Restricted Stock, any underwriter
      participating in any distribution pursuant to such registration statement,
      and
      any attorney, accountant or other agent retained by such seller or underwriter,
      all financial and other records, pertinent corporate documents and properties
      of
      the Company, and cause the Company’s officers, directors and employees to supply
      all information reasonably requested by any such seller, underwriter, attorney,
      accountant or representative or agent in connection with such registration
      statement; and

     

    (i) if
      at
      such time as the Company files a registration statement pursuant to the
      requirements of Section 3 it is a registrant entitled to use Form S-3 or any
      successor thereto to register the Restricted Stock, use its best efforts to
      register the Restricted Stock under the Securities Act on Form S-3 or any
      successor thereto, for public sale in the manner specified by the holders
      thereof.

     

    In
      connection with any registration pursuant to Section 3 that is underwritten,
      the
      Company and each seller agree to enter into a written agreement with the
      managing underwriter selected by the sellers in such form and containing such
      provisions as are customary in the securities business for such an arrangement
      between such underwriter and companies of the Company’s size and investment
      stature. 

     

    For
      purposes of Sections 4(a) and 4(b), the period of distribution of Restricted
      Stock in any registration statement shall be deemed to extend until the earlier
      of the sale of all Restricted Stock covered thereby and 180 days after the
      effective date of such registration statement. 

    

    In
      connection with each registration hereunder, the sellers of Restricted Stock
      will furnish to the Company in writing such information with respect to
      themselves and the proposed distribution by them as reasonably shall be
      necessary in order to assure compliance with federal and applicable state
      securities laws. 

    

    5. Expenses.
      

     

    (a) All
      expenses incurred by the Company in complying with Sections 3 and 4, including,
      without limitation, all registration and filing fees, printing expenses, fees
      and disbursements of counsel and independent public accountants for the Company,
      fees and expenses (including counsel fees) incurred in connection with complying
      with state securities or “blue sky” laws, fees of the National Association of
      Securities Dealers, Inc., transfer taxes, fees of transfer agents and
      registrars, and costs of insurance, but excluding any Selling Expenses, are
      called “Registration
      Expenses.”
All
      underwriting discounts and selling commissions applicable to the sale of
      Restricted Stock are called “Selling
      Expenses.”
      

     

    
      
        
        

      

      
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    (b) The
      Company will pay all Registration Expenses in connection with each registration
      statement under Section 3. All Selling Expenses in connection with each
      registration statement under Section 3 shall be borne by the participating
      sellers in proportion to the number of shares sold by each, or by such
      participating sellers other than the Company (except to the extent the Company
      shall be a seller) as they may agree. 

     

    6. Indemnification
      and Contribution.
      

     

    (a) Upon
      the
      registration of any of the Restricted Stock under the Securities Act pursuant
      to
      Section 3, the Company will indemnify and hold harmless each seller of such
      Restricted Stock thereunder, each underwriter, if applicable, of such Restricted
      Stock thereunder and each other person, if any, who controls such seller or
      underwriter within the meaning of the Securities Act, along with the partners,
      members, directors, and officers of each such seller, underwriter or controlling
      person, against any losses, claims, damages or liabilities, joint or several,
      to
      which such seller, underwriter or controlling person may become subject under
      the Securities Act, the Exchange Act or otherwise, insofar as such losses,
      claims, damages or liabilities (or actions 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 Restricted Stock
      was registered under the Securities Act pursuant to Section 3, any preliminary
      prospectus or final prospectus contained therein, or any amendment or supplement
      thereof, or arise out of or are based upon the omission or alleged omission
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein not misleading, and will reimburse each such seller,
      each
      such underwriter and each such controlling person, along with the partners,
      members, directors, and officers of each such seller, underwriter or controlling
      person, for any legal or other expenses reasonably incurred by them in
      connection with investigating or defending any such loss, claim, damage,
      liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by any such seller, any such underwriter
      or any such controlling person in writing specifically for use in such
      registration statement or prospectus or supplement thereof. 

     

    (b) In
      the
      event of a registration of any of the Restricted Stock under the Securities
      Act
      pursuant to Section 3, each seller of such Restricted Stock thereunder,
      severally and not jointly, will indemnify and hold harmless the Company, each
      person, if any, who controls the Company within the meaning of the Securities
      Act, each officer of the Company who signs the registration statement, each
      director of the Company, each underwriter and each person who controls any
      underwriter within the meaning of the Securities Act, against all losses,
      claims, damages or liabilities, joint or several, to which the Company or such
      officer, director, underwriter or controlling person may become subject under
      the Securities Act or otherwise, insofar as such losses, claims, damages or
      liabilities (or actions in respect thereof) arise out of or are based upon
      any
      untrue statement or alleged untrue statement of any material fact contained
      in
      the registration statement under which such Restricted Stock was registered
      under the Securities Act pursuant to Section 3, any preliminary prospectus
      or
      final prospectus contained therein, or any amendment or supplement thereof,
      or
      arise out of or are based upon the omission or alleged omission to state therein
      a material fact required to be stated therein or necessary to make the
      statements therein not misleading, and will reimburse the Company and each
      such
      officer, director, underwriter and controlling person for any legal or other
      expenses reasonably incurred by them in connection with investigating or
      defending any such loss, claim, damage, liability or action; provided,
      however,
      that
      such seller will be liable hereunder in any such case if and only to the extent
      that any such loss, claim, damage or liability arises out of or is based upon
      an
      untrue statement or alleged untrue statement or omission or alleged omission
      made in reliance upon and in conformity with information pertaining to such
      seller, as such, furnished in writing to the Company by such seller specifically
      for use in such registration statement or prospectus or supplement thereof,
      and;
provided,
      further,
      however,
      that
      the liability of each seller hereunder shall be limited to the proportion of
      any
      such loss, claim, damage, liability or expense that is equal to the proportion
      that the public offering price of the shares sold by such seller under such
      registration statement bears to the total public offering price of all
      securities sold thereunder, but not in any event to exceed the net proceeds
      received by such seller from the sale of Restricted Stock covered by such
      registration statement. 

     

    
      
        
        

      

      
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    (c) The
      Company hereby agrees to indemnify and hold harmless each holder of Restricted
      Stock against and in respect of: (i) any loss, claim, liability, obligation,
      or
      damage which such holder may suffer or incur resulting from or arising in
      connection with any misrepresentation, breach of warranty or non-fulfillment
      of
      any covenant or agreement on the part of the Company contained in Section 9;
      and
      (ii) all actions, suits, proceedings, demands, assessments, judgments,
      reasonable attorneys’ fees, costs and expenses incident to the
      forgoing.

     

    (d) Promptly
      after receipt by an indemnified party hereunder of notice of the commencement
      of
      any action, such indemnified party shall, if a claim in respect thereof is
      to be
      made against the indemnifying party hereunder, notify the indemnifying party
      in
      writing thereof. The omission so to notify the indemnifying party shall not
      relieve it from any liability that it may have to such indemnified party other
      than under this Section 6 and shall only relieve it from any liability that
      it
      may have to such indemnified party under this Section 6 if and to the extent
      the
      indemnifying party is prejudiced by such omission. In case any such action
      shall
      be brought against any indemnified party and it shall notify the indemnifying
      party of the commencement thereof, the indemnifying party shall be entitled
      to
      participate in and, to the extent it shall wish, to assume and undertake the
      defense thereof with counsel satisfactory to such indemnified party, and, after
      notice from the indemnifying party to such indemnified party of its election
      so
      to assume and undertake the defense thereof, the indemnifying party shall not
      be
      liable to such indemnified party under this Section 6 for any legal expenses
      subsequently incurred by such indemnified party in connection with the defense
      thereof other than reasonable costs of investigation and of liaison with counsel
      so selected; provided,
      however,
      that,
      if the defendants in any such action include both the indemnified party and
      the
      indemnifying party and the indemnified party shall have reasonably concluded
      that there may be reasonable defenses available to it which are different from
      or additional to those available to the indemnifying party or if the interests
      of the indemnified party reasonably may be deemed to conflict with the interests
      of the indemnifying party, the indemnified party shall have the right to select
      a separate counsel and to assume such legal defenses and otherwise to
      participate in the defense of such action, with the expenses and fees of such
      separate counsel and other expenses related to such participation to be
      reimbursed by the indemnifying party as incurred. 

     

    
      
        
        

      

      
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    (e) In
      order
      to provide for just and equitable contribution to joint liability under the
      Securities Act in any case in which either: (i) any holder of Restricted Stock
      exercising rights under this Agreement, or any controlling person of any such
      holder, makes a claim for indemnification pursuant to this Section 6 but it
      is
      judicially determined (by the entry of a final judgment or decree by a court
      of
      competent jurisdiction and the expiration of time to appeal or the denial of
      the
      last right of appeal) that such indemnification may not be enforced in such
      case
      notwithstanding the fact that this Section 6 provides for indemnification in
      such case; or (ii) contribution under the Securities Act may be required on
      the
      part of any such selling holder or any such controlling person in circumstances
      for which indemnification is provided under this Section 6; then, and in each
      such case, the Company and such holder will contribute to the aggregate losses,
      claims, damages or liabilities to which they may be subject (after contribution
      from others) in such proportion so that such holder is responsible for the
      portion represented by the percentage that the public offering price of its
      Restricted Stock offered by the registration statement bears to the public
      offering price of all securities offered by such registration statement, and
      the
      Company shall be responsible for the remaining portion; provided,
      however,
      that,
      in any such case: (A) no such holder will be required to contribute any amount
      in excess of the net proceeds received by such seller from the sale of
      Restricted Stock covered by such registration statement; and (B) no person
      or
      entity guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) will be entitled to contribution from any person
      or
      entity who was not guilty of such fraudulent misrepresentation. 

     

    7. Changes
      in Common Stock.
      If, and
      as often as, there is any change in the Common Stock by way of a stock split,
      stock dividend, combination or reclassification, or through a merger,
      consolidation, reorganization or recapitalization, or by any other means,
      appropriate adjustment shall be made in the provisions hereof so that the rights
      and privileges granted hereby shall continue with respect to the Common Stock
      as
      so changed. 

     

    8. Rule
      144 Reporting.
      With a
      view to making available the benefits of certain rules and regulations of the
      Commission, which may at any time permit the sale of the Restricted Stock to
      the
      public without registration, at all times after 180 days after any registration
      statement covering a public offering of securities of the Company under the
      Securities Act shall have become effective, the Company agrees to: 

     

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 under the Securities Act; 

     

    (b) use
      its
      best efforts to file with the Commission in a timely manner all reports and
      other documents required of the Company under the Securities Act and the
      Exchange Act; and 

     

    (c) furnish
      to each holder of Restricted Stock forthwith upon request a written statement
      by
      the Company as to its compliance with the reporting requirements of Rule 144
      and
      of the Securities Act and the Exchange Act, a copy of the most recent annual
      or
      quarterly report of the Company, and such other reports and documents so filed
      by the Company as such holder may reasonably request in availing itself of
      any
      rule or regulation of the Commission allowing such holder to sell any Restricted
      Stock without registration. 

     

    
      
        
        

      

      
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    9. Representations
      and Warranties of the Company.
      The
      Company represents, warrants and covenants to the Holders and any other holder
      of Restricted Stock as follows: 

     

    (a) the
      execution, delivery and performance of this Agreement by the Company have been
      duly authorized by all requisite corporate action and will not violate any
      provision of law, any order of any court or other agency of government, the
      Charter or By-laws of the Company; 

     

    (b) this
      Agreement has been duly executed and delivered by the Company and constitutes
      the legal, valid and binding obligation of the Company, enforceable in
      accordance with its terms; 

     

    (c) that
      it
      will not file with the Commission a registration statement with respect to
      any
      shares of its capital stock other than the Restricted Stock prior to ninety
      (90)
      days after the effective date of the registration statement registering the
      shares of Restricted Stock to be issued at Closing; and 

     

    (d) that
      it
      will not include any shares of its capital stock other than Restricted Stock
      in
      any registration statement filed with the Commission with respect to any
      Restricted Stock, without the prior written consent of the holders of Restricted
      Stock.

     

    10. Miscellaneous.
      

     

    (a) An
      original copy of this Agreement shall be kept by the Secretary of the
      Company.

     

    (b) All
      covenants and agreements contained in this Agreement by or on behalf of any
      of
      the parties hereto shall bind and inure to the benefit of the respective
      successors and assigns of the parties hereto (including without limitation
      transferees of any Restricted Stock), whether so expressed or not. 

     

    (c) All
      notices, requests, consents and other communications hereunder shall be in
      writing and shall be delivered in person, mailed by certified or registered
      mail, return receipt requested, or sent by telecopier or telex, addressed as
      follows: 

     

    (i)
      if to
      the Company or any other party hereto, at the address of such party set forth
      in
      the Acquisition Agreements; 

    

    (ii)
      if
      to any subsequent holder of Restricted Stock, to it at such address as may
      have
      been furnished to the Company in writing by such holder; 

    

    or,
      in
      any case, at such other address or addresses as shall have been furnished in
      writing to the Company (in the case of a holder of Restricted Stock) or to
      the
      holders of Restricted Stock (in the case of the Company) in accordance with
      the
      provisions of this paragraph. 

    

    
      
        
        

      

      
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    (d) This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware without regard to principles of conflicts of law.

     

    (e) This
      Agreement may not be amended or modified, and no provision hereof may be waived,
      without the written consent of the Company and the holders of at least a
      majority of the Restricted Stock. 

     

    (f) This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. 

     

    (g) The
      Company shall not grant to any third party any registration rights more
      favorable than or inconsistent with any of those contained herein, so long
      as
      any of the registration rights under this Agreement remain in effect.

     

    (h) If
      any
      provision of this Agreement shall be held to be illegal, invalid or
      unenforceable, such illegality, invalidity or unenforceability shall attach
      only
      to such provision and shall not in any manner affect or render illegal, invalid
      or unenforceable any other provision of this Agreement, and this Agreement
      shall
      be carried out as if any such illegal, invalid or unenforceable provision were
      not contained herein. 

     

    (i) This
      Agreement constitutes the entire agreement of the parties with respect to the
      subject matter hereof.

     

    [Signatures
      on following page]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Registration Rights Agreement as of the day
      and year first written above.

     

    
      	 	 	 COMPANY:

ARGAN,
              INC.
	 
 	 
 	 
 
	 	 	By:  /s/
              Rainer Bosselmann 
	 	
              
                

              

              Title:
                Chairman and CEO

            
	 	 
	 	 
	 	HOLDERS:
	 	 
	 	 
	 	/s/ William F. Griffin, Jr.
	 	
              
                

              

              WILLIAM
                F. GRIFFIN, JR.

            
	 	 
	 	 
	 	/s/ Joel M. Canino
	 	
              
                

              

              JOEL
                M. CANINO

            

    

    

    
      
        
        

      

      
        10ESCROW
      AGREEMENT

    

    This
      ESCROW AGREEMENT (this “Escrow Agreement”), is made and entered into as of the
      8th
      day of
      December, 2006, by and among (i) ARGAN, INC., a Delaware corporation
      (“Purchaser”), (ii) WILLIAM F. GRIFFIN, JR. (“Griffin”), and JOEL M. CANINO
      (“Canino,” and together with Griffin sometimes hereinafter referred to together
      as, the “Sellers”); (iii) MICHAEL PRICE (“Price”); and (iv) CURTIN LAW ROBERSON
      DUNIGAN & SALANS, P.C., a District of Columbia professional corporation
      (“Escrow Agent”).

    

    WHEREAS,
      Purchaser, the Sellers, and Gemma Power Systems, LLC, a Connecticut limited
      liability company (“GPS”), Gemma Power, Inc., a Connecticut corporation
      (“GPS-Connecticut”), and Gemma Power Systems California, Inc., a California
      corporation (“GPS-California”), entered into that certain Membership Interest
      Purchase Agreement dated December 8, 2006 (the “MIPA”), pursuant to which
      Purchaser acquired, on the date hereof, all of the membership interests of
      GPS;
      and

    

    WHEREAS,
      Purchaser, the Sellers and GPS-Connecticut and GPS-California entered into
      that
      certain Stock Purchase Agreement dated December 8, 2006 (the “SPA”), pursuant to
      which Purchaser acquired, on the date hereof, all of the issued and outstanding
      shares of capital stock of GPS-Connecticut and GPS-California (the acquisition
      of all of said membership interests of GPS under the MIPA and of all of said
      shares of capital stock of GPS-Connecticut and GPS-California under the SPA
      sometimes hereinafter referred to together as, the “Acquisition”);
      and

    

    WHEREAS,
      all definitions of terms used in the MIPA shall have the same meaning when
      those
      terms are used in this Escrow Agreement; and

    

    WHEREAS,
      as a result of the Acquisition, the Sellers are entitled to, among other things,
      the Stock Consideration; provided, however, that, in accordance with the terms
      and conditions of the MIPA, Purchaser has retained from the Stock Consideration
      the Escrowed Stock Consideration and is depositing same in escrow with the
      Escrow Agent to be held subject to the terms and conditions of this Escrow
      Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual promises herein contained, and other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, and intending to be legally bound hereby, the parties hereto
      covenant and agree as follows:

    

    1.
      Establishment
      of Escrow.

    

    1.1 Pursuant
      to Section 2.2(b) of the MIPA, Purchaser hereby deposits with Escrow Agent
      the
      Escrowed Stock Consideration, consisting of three (3) stock certificates
      evidencing the issuance to each of the Sellers of 325,000 shares of Argan Common
      Stock, and, at the direction of Sellers, the issuance to Price of 16,667 shares
      of Argan Common Stock, together having an aggregate value (valued at the Argan
      Per Share Value) of Two Million Five Hundred Thousand Dollars ($2,500,000),
      together with three (3) stock powers attached to each of said stock certificates
      executed by each of the Sellers, and by Price, as the case may be, in blank,
      which will be held subject to the terms and conditions of this Escrow Agreement.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1.2 Purchaser
      and the Sellers and Price hereby acknowledge and agree that the Escrowed Stock
      Consideration is to secure the Sellers’ obligation to indemnify, defend,
      protect, and hold harmless each Buyer Indemnitee pursuant to Section 10 of
      the
      MIPA.

    

    1.3
       Escrow
      Agent hereby acknowledges receipt of the Escrowed Stock Consideration and agrees
      to hold the Escrowed Stock Consideration in accordance with the terms and
      conditions of this Escrow Agreement.

    

    2. Term;
      Claims for Indemnification.

    

    2.1 The
      term
      of this Escrow Agreement shall commence on the date hereof and shall expire
      one
      (1) year from the Closing Date (the “Escrow Release Date”), unless a claim for
      indemnification under Section 10 of the MIPA is made on or before the Escrow
      Release Date, in which event this Escrow Agreement shall continue in effect
      in
      accordance the following provisions. 

    

    2.2 Escrow
      Agent shall hold and release the Escrowed Stock Consideration as
      follows:

     

    (a) In
      the
      event that Purchaser makes a claim for indemnification under Section
      10 of
      the
      MIPA (which Purchaser may do on one or more occasions during the term of this
      Escrow Agreement), it shall notify the Escrow Agent and the Sellers and Price
      of
      such claim and the amount thereof in writing (the “Indemnification Claim
      Notice”) no later than the Escrow Release Date. Upon the giving of the
      Indemnification Claim Notice, the Sellers shall have the right to dispute such
      claim by giving notice of dispute to the Escrow Agent and Purchaser and Price
      in
      writing (the “Dispute Notice”) within five (5) business days of Purchaser’s
      giving of the Indemnification Claim Notice. Purchaser and the Sellers thereafter
      shall attempt to agree in writing on the dollar amount owed by the Sellers
      pursuant to such claim. If the parties are unable to agree in writing to such
      dollar amount, the matter shall be resolved in accordance with Paragraph 2.3
      below.

     

    (b) Upon
      receipt by the Escrow Agent of joint written instructions from Purchaser and
      the
      Sellers setting forth the agreed amount of any claim for indemnification, or
      of
      a copy of a final decision by an arbitrator or arbitrators in accordance with
      Section 2.3 below, or in the event that the Sellers do not timely dispute
      Purchaser’s claim for indemnification, in accordance with Paragraph 2.2(a)
      above, then the Escrow Agent shall release to Purchaser the amount claimed
      by
      Purchaser in the Indemnification Claim Notice (if the Sellers do not timely
      dispute such claim) or the amount set forth in the joint written instructions
      of
      Purchaser and the Sellers or as set forth in a final decision by an arbitrator
      or arbitrators (if the Sellers do timely dispute such claim) (such amount as
      determined in any of such cases hereinafter referred to as the “Indemnification
      Amount”), by completing stock powers indicating thereon the number of shares of
      the Escrowed Stock Consideration to be transferred to Purchaser, which number
      shall be prorata among the Sellers and Price in accordance with their respective
      ownership of the Escrowed Stock Consideration. Thereafter the Escrow Agent
      shall
      continue to hold the remaining balance of the Escrowed Stock Consideration,
      if
      any, in accordance with the terms and conditions of this Escrow Agreement;
      provided, however, that if pending resolution of any dispute the Escrow Release
      Date has passed, then (i) this Escrow Agreement shall continue in effect, but
      only with respect to one hundred twenty percent (120%) of the amount of the
      Escrowed Stock Consideration sufficient to meet the amount of the then pending
      claim(s) and the remainder of the Escrowed Stock Consideration shall be released
      to the Sellers and to Price prorata in accordance with their respective
      ownership of the Escrowed Stock Consideration, and (ii) upon receipt by the
      Escrow Agent of joint written instructions from Purchaser and the Sellers,
      or of
      a copy of a final decision by an arbitrator or arbitrators, setting forth the
      Indemnification Amount with respect to such pending claim(s), the Escrow Agent
      shall release to Purchaser the Indemnification
      Amount by completing stock powers indicating thereon the number of shares of
      the
      Escrowed Stock Consideration to be transferred to Purchaser, which number shall
      be prorata among the Sellers and Price in accordance with their respective
      ownership of the Escrowed Stock Consideration, and shall release to the Sellers
      and Price (prorata among them in accordance with their respective ownership
      of
      the Escrowed Stock Consideration) the balance of
      the
      Escrowed Stock Consideration.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c) Whenever
      the Escrow Agent is required to release less than all of the Escrowed Stock
      Consideration to Purchaser or to the Sellers pursuant to the terms of this
      Escrow Agreement, then the Escrow Agent shall exchange each of the stock
      certificates held by it as part of the Escrowed Stock Consideration hereunder
      (each, an “Original Stock Certificate”) for two (2) stock certificates, the
      first for the number of shares of Argan Common Stock having a value equal to
      the
      issuee’s pro rata share of the applicable Indemnification Amount (as set forth
      above), and the second for the balance of the shares represented by said
      Original Stock Certificate. For purposes of determining the number of shares
      of
      Argan Common Stock to be released hereunder in payment of an Indemnification
      Amount, the value per share shall be equal to the trailing thirty (30) day
      average trading price per share of Argan Common Stock (that is, the average
      trading price per share of Argan Common Stock occurring during the thirty (30)
      day period ending on date of the release), if any trades occurred during such
      thirty (30) day period, or halfway between the weighted average bid and ask
      prices per share of Argan Common Stock during such thirty (30) day period,
      if no
      trades occurred during such thirty (30) day period.

     

    2.3 Any
      dispute between the parties arising out of this Escrow Agreement shall be
      resolved by binding arbitration in accordance with the rules of the American
      Arbitration Association in Rockville, Maryland. Any final decision by the
      arbitrator(s) in any such proceeding may be entered as a judgment in accordance
      with the rules of the Circuit Court of Maryland for Montgomery County or the
      rules of the Superior Court of the State of Connecticut for the Judicial
      District of Hartford. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3. Termination
      of Escrow.

     

    3.1 Subject
      to the provisions of Paragraph 2.2 above, on the Escrow Release Date, this
      Escrow Agreement shall terminate and the Escrow Agent shall deliver the Escrowed
      Stock Consideration, or the remaining amount thereof, to the Sellers and to
      Price pro rata in accordance with their ownership of the Escrowed Stock
      Consideration.

    

    3.2 Notwithstanding
      anything contained in this Escrow Agreement to the contrary, this Escrow
      Agreement may be terminated by the written agreement of the Purchaser and the
      Sellers delivered to the Escrow Agent, which agreement shall include
      instructions to the Escrow Agent as to the disposition of the Escrowed Stock
      Consideration. 

     

    3.3 It
      is
      understood and agreed that the termination of this Escrow Agreement and the
      disbursement of the Escrowed Stock Consideration shall not terminate, limit
      or
      otherwise affect in any way the Sellers’ continuing obligations to indemnify,
      defend, protect and hold harmless each Buyer Indemnitee under Section 10 of
      the
      MIPA with respect to (i) Income Tax Matters, (ii) title matters, and (iii)
      actual fraud or intentional non-disclosure by the Sellers, which obligations
      shall expire as set forth in Section 10 of the MIPA.

    

    4. Escrow
      Agent.

    

    4.1 Each
      of
      Purchaser and the Sellers and
      Price recognizes
      and acknowledges that the Escrow Agent is serving solely as an accommodation
      to
      the parties hereto, and each of them agrees that the Escrow Agent shall not
      be
      liable to any of the parties for any error of judgment, mistake, or act or
      omission hereunder, or any matter or thing arising out of its conduct hereunder,
      except for the Escrow Agent's willful misfeasance or gross negligence. The
      Escrow Agent shall be entitled to rely upon the authenticity of any signature
      and the genuineness and/or validity of any writing received by the Escrow Agent
      pursuant to or otherwise relating to this Escrow Agreement.

    

    4.2 The
      Escrow Agent is acting, and may continue to act, as counsel to Purchaser in
      connection with the subject transaction, whether or not the Escrowed Stock
      Consideration is being held by the Escrow Agent or has been delivered to a
      court
      of appropriate jurisdiction pursuant to Section 4.5 hereof.

    

    4.3 For
      services rendered hereunder, Purchaser and the Sellers shall each pay the Escrow
      Agent one-half of the fees and expenses it may bill for its services hereunder
      at its regular hourly rates, payable within thirty (30) days of invoice
      therefor. In no event shall this Section 4.3 apply to any fees, charges, or
      disbursements incurred by the Escrow Agent in its capacity as counsel to
      Purchaser.

    

    4.4 Each
      of
      Purchaser and the Sellers jointly and severally agrees to indemnify and hold
      harmless the Escrow Agent from and against any and all costs, claims, damages,
      or expenses (including, without limitation, reasonable attorneys’ fees and
      disbursements), that may be incurred by the Escrow Agent acting under this
      Escrow Agreement (including, without limitation, any costs incurred by the
      Escrow Agent pursuant to Section 4.5 hereof) or to which the Escrow Agent may
      be
      put in connection with the Escrow Agent acting under this Escrow Agreement,
      except for costs, claims, or damages arising out of the Escrow Agent’s willful
      misfeasance or gross negligence.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

       

    4.5 In
      the
      event that: (a) the Escrow Agent shall receive contrary instructions from
      Purchaser and the Sellers; or (b) any dispute shall arise as to any matter
      arising under this Escrow Agreement; or (c) there shall be any uncertainty
      as to
      the meaning or applicability of any of the provisions hereof, or the Escrow
      Agent’s duties, rights or responsibilities hereunder, or any written
      instructions received by the Escrow Agent pursuant hereto, the Escrow Agent
      shall not itself determine such dispute, controversy or uncertainty, but shall
      either (i) continue to hold the Escrowed Stock Consideration until otherwise
      directed in writing by joint instruction of Purchaser and the Sellers, or by
      a
      final non-appealable court order, or (ii) at its option, at any time that such
      dispute, controversy or uncertainty continues, deposit the Escrowed Stock
      Consideration into any court having appropriate jurisdiction. Upon the Escrow
      Agent’s disposition of the Escrowed Stock Consideration in accordance with
      clause (i) or clause (ii) of the immediately preceding sentence, the Escrow
      Agent shall, thereupon, be relieved of, and discharged and released from, any
      and all liability hereunder and with respect to the Escrowed Stock
      Consideration. 

     

    4.6 Upon
      the
      delivery of the Escrowed Stock Consideration in accordance with the other
      provisions of this Escrow Agreement, the Escrow Agent shall, thereupon, be
      relieved of, and discharged and released from, any and all liability hereunder
      and with respect to the Escrowed Stock Consideration.

     

    5. Miscellaneous.

    

    5.1 Each
      of
      the recitals set forth in the introductory paragraphs of this Escrow Agreement
      is hereby incorporated into the body hereof.

    

    5.2 Any
      consent required by any party hereto, by way of any document or notice requiring
      mutual agreement, or otherwise, shall not be unreasonably withheld.

    

    5.3 This
      Agreement shall be governed by the laws and construed, interpreted and enforced
      in the courts of the State of Maryland.

    

    5.4
       This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    5.5
       All
      notices, requests, instructions, or other communications required or permitted
      hereunder shall be deemed to have been given or made when delivered by (i)
      U.S.
      registered or certified mail, return receipt requested, postage prepaid, (ii)
      messenger, or (iii) overnight delivery service, or when delivery is refused,
      to:

    

      
        	
                If
                  Purchaser then:

              	 	
                Argan,
                  Inc.

              
	 	 	
                One
                  Church Street, Suite 401

              
	 	 	
                Rockville,
                  Maryland 20950

              
	 	 	
                Attn:
                  Arthur F. Trudel

              
	 	 	
                Fax:
                  (301) 315-0064

              
	 	 	 
	
                With
                  a copy to:

              	 	
                David
                  B. Law

              
	 	 	
                Curtin
                  Law Roberson Dunigan

              
	 	 	
                &
                  Salans, PC

              
	 	 	
                1900
                  M Street, N.W.

              
	 	 	
                Suite
                  600

              
	 	 	
                Washington,
                  D.C. 20036

              
	 	 	
                Fax:
                  202/530-4411

              
	 	 	 
	
                If
                  Griffin then:

              	 	
                Mr.
                  William F. Griffin, Jr.

              
	 	 	
                c/o
                  Gemma Power Systems, LLC 

              
	 	 	
                2461
                  Main Street 

              
	 	 	
                Glastonbury,
                  Connecticut 06033

              
	 	 	
                Fax:
                  (860) 659-0607

              
	 	 	 
	
                If
                  Canino then:

              	 	
                Mr.
                  Joel M. Canino

              
	 	 	
                c/o
                  Gemma Power Systems, LLC 

              
	 	 	
                2461
                  Main Street 

              
	 	 	
                Glastonbury,
                  Connecticut 06033

              
	 	 	
                Fax:
                  (860) 659-0607

              
	 	 	 
	
                With
                  a copy to:

              	 	
                John
                  W. Beck

              
	 	 	
                Siegel,
                  O’Connor, O’Donnell & Beck, P.C.

              
	 	 	
                150
                  Trumbull Street

              
	 	 	
                Hartford,
                  Connecticut 06103

              
	 	 	
                Fax:
                  (860) 724-3550

              
	 	 	 
	
                If
                  Price then:

              	 	
                Michael
                  Price

              
	 	 	
                ______________________

              
	 	 	
                ______________________

              
	 	 	
                ______________________

              
	 	 	 
	 	 	 
	
                If
                  to Escrow Agent then:

              	 	
                Curtin
                  Law Roberson Dunigan

              
	 	 	
                &
                  Salans, PC

              
	 	 	
                1900
                  M Street, N.W.

              
	 	 	
                Suite
                  600

              
	 	 	
                Washington,
                  D.C. 20036

              
	 	 	
                Attention:
                  David B. Law, Esq.

              

      

    

    

    Any
      party
      may from time to time give the others written notice of a change in the address
      to which notices are to be sent and of any successors in interest.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    4.6 Nothing
      in this Escrow Agreement, expressed or implied, shall give or be construed
      to
      give any person, firm or corporation, other than the parties hereto and their
      successors and assigns, any legal claim under any covenant, condition or
      provision hereof, all the covenants, conditions and provisions contained in
      this
      Escrow Agreement being for the sole benefit of the parties hereto and their
      successors and assigns. No party may assign any of its rights or obligations
      under this Escrow Agreement without the written consent of all the other
      parties, which consent be may withheld in the sole discretion of the party
      whose
      consent is sought.

    

    4.7 This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same instrument.

     

    4.8 This
      Agreement constitutes the entire agreement among the parties hereto pertaining
      to the subject matter hereof, and supersedes all prior agreements and
      understandings pertaining thereto. No covenant, representation, or condition
      not
      expressed in this Escrow Agreement shall affect or be deemed to interpret,
      change or restrict the express provisions hereof and no amendments hereto shall
      be valid unless made in writing and signed by all parties hereto.

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on
      the
      day and year first above written.

     

    
      	 	 	 
	 	PURCHASER:
	 	 
	 	ARGAN,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Rainer
              Bosselmann 
	 	
              
Title:
              Chairman and CEO

    

     

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      continue on following page]

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	 	 	 	THE SELLERS:
	 	 	 	
               

               

            
	 	 	 	/s/ William
              F. Griffin, Jr.
	
            	 	 	
              
WILLIAM
              F. GRIFFIN, JR.
	 	 	 	 
	 	 	 	 
	 	 	 	/s/ Joel
              M.
              Canino
	 	 	 	
              

              JOEL
                M. CANINO

            

    

    

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      continue on following page]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 	PRICE:
	 	 	 	
               

               

            
	 	 	 	/s/ Michael
              Price 
	
            	 	 	
              
MICHAEL
              PRICE

    

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      continue on following page]

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	ESCROW
              AGENT:
	 	 
	 	
              CURTIN LAW ROBERSON DUNIGAN &

              SALANS, P.C.

            
	 
 	 
 	 
 
	 	By:  	/s/ David
              B. Law
	 	
              
David
              B. Law, Vice President

    

     

    
      
        
        

      

      
        10

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