ARGAN INC — Major Shareholding Notification 2007

Nov 7, 2007

SC 13D/A 1 g10443a2sc13dza.htm ARGAN, INC. Argan, Inc. PAGEBREAK

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934 (Amendment No. 2 )*

Argan, Inc.

(Name of Issuer)

Common Stock, $.15 par value

(Title of Class of Securities)

746375107

(CUSIP Number)

Jeffrey S. Buschman, Esq. Boult Cummings Conners & Berry, PLC 1600 Division Street, Suite 700 Nashville, Tennessee 37203 (615) 252-2388

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 29, 2007

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

• The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

PAGEBREAK

CUSIP No. 746375107

1	NAMES OF REPORTING PERSONS: Richard L. Scott
	I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
	(a) o
	(b) o
3	SEC USE ONLY:
4	SOURCE OF FUNDS (SEE INSTRUCTIONS):
	PF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):
	o
6	CITIZENSHIP OR PLACE OF ORGANIZATION:
	United States
	7	SOLE VOTING POWER:
NUMBER OF		1,950,000
SHARES	8	SHARED VOTING POWER:
BENEFICIALLY
OWNED BY		-0-
EACH	9	SOLE DISPOSITIVE POWER:
REPORTING
PERSON		1,950,000
WITH	10	SHARED DISPOSITIVE POWER:
		-0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
	1,950,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):
	o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
	17.6%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
	IN

PAGEBREAK

This Amendment No. 2 amends the Schedule 13D filed by Richard L. Scott (“Reporting Person”) on December 18, 2006 (the “Schedule 13D), as amended June 8, 2007, with respect to shares of the Common Stock, $.15 par value (“Common Stock”), of Argan, Inc., a Delaware corporation (the “Issuer”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Schedule 13D.

The following Items are hereby amended and restated in their entirety to read as follows:

Item 3. Source and Amount of Funds or Other Consideration

The Reporting Person has used personal funds of approximately $7,425,000 to acquire 1,550,000 shares of Common Stock and options to purchase 400,000 shares of Common Stock (the “Options”) in private transactions. The Common Stock and the Options were purchased by a limited liability company controlled by the Reporting Person.

Item 5. Interest in Securities of the Issuer

The 1,550,000 shares of the Common Stock and the Options to purchase an additional 400,000 shares of Common Stock owned by the Reporting Person constitute 17.6% of the outstanding Common Stock of the Issuer.

The Reporting Person has sole voting and dispositive power with respect to the Common Stock.

The Reporting Person purchased the following shares of the Common Stock of the Issuer in a private transaction:

Purchase Date	No. of Shares	Price Per Share	Aggregate — Consideration
10/29/2007	200,000	$ 9.50	$ 1,900,000

The Common Stock was purchased by Argan Investments, LLC, a member managed limited liability company of which Reporting Person is the controlling member.

The Reporting Person has not purchased or sold any other shares of Common Stock of the Issuer during the past 60 days.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

On December 8, 2006, an entity controlled by Reporting Person entered into a Stock Purchase Agreement with the Issuer whereby the Reporting Person purchased 1,000,000 newly issued shares of Issuer Common Stock. In addition, the parties entered into a Registration Rights Agreement whereby the Issuer is required to register the shares within 120 days of the purchase.

Folio 3 /Folio

PAGEBREAK

On October 18, 2007, an entity controlled by the Reporting Person entered into a Common Stock Purchase and Option Agreement with Joel M. Canino whereby the Reporting Person purchased 100,000 shares of Common Stock and an option to purchase another 200,000 shares of Common Stock. The Agreement is attached as an exhibit hereto.

On October 18, 2007, an entity controlled by the Reporting Person entered into a Common Stock Purchase and Option Agreement with William F. Griffin, Jr. Grantor Retained Annuity Trust whereby the Reporting Person purchased 100,000 shares of Common Stock and an option to purchase another 200,000 shares of Common Stock. The Agreement is attached as an exhibit hereto.

Other than as set forth above, the Reporting Person does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

Item 7. Material to be Filed As Exhibits

| Exhibit 1 | Common Stock Purchase and Option Agreement dated as of October 18, 2007, between Argan
Investments, LLC and Joel M. Canino |
| --- | --- |
| Exhibit 2 | Common Stock Purchase and Option Agreement dated as of October 18, 2007, between Argan
Investments, LLC and William F. Griffin, Jr. Grantor Retained Annuity Trust |

Folio 4 /Folio

PAGEBREAK

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

DATED: November 7, 2007
Richard L. Scott

Folio 5 /Folio

PAGEBREAK

Exhibit 1

COMMON STOCK PURCHASE AND OPTION AGREEMENT

This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is dated October ___, 2007 (“Agreement Date”) by and between Argan Investments, LLC (the “Purchaser”), and Joel M. Canino (“Seller”).

RECITALS

A. The Seller is the owner of not less than 300,000 shares of the common stock, par value $.15 per share (the “Shares”), of Argan, Inc., a Delaware corporation (the “Company”).

B. The Purchaser wishes to purchase and the Seller wishes to sell 100,000 Shares (the “Purchased Shares”) on the terms and conditions set forth in this Agreement.

C. The Seller wishes to grant options to purchase an additional 200,000 Shares (the “Option Shares”) on the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the mutual premises contained herein, the parties agree as follows:

1. Purchase and Sale . The Seller hereby agrees to sell, transfer, assign, grant and convey the Purchased Shares to the Purchaser and the Purchaser hereby agrees to purchase and acquire the Purchased Shares, represented by Certificate(s) Number , for consideration of Nine Dollars and Fifty Cents ($9.50) per Purchased Share or an aggregate of Nine Hundred Fifty Thousand Dollars ($950,000) (the “Purchase Price”). The Purchase Price shall be paid by the Purchaser by wiring such amount, in immediately available funds, in accordance with the instructions in Annex I hereto, upon execution hereof against delivery of the Certificate(s) Number ___ to the Purchaser’s accounts at Fidelity.

2. Option to Purchase Shares .

| a. | Subject to the terms and conditions of this Agreement, the
Seller hereby grants to Purchaser, and Purchaser hereby accepts, the right and
option to purchase from Seller an aggregate of 200,000 Option Shares
(“Option”) separated into two tranches. |
| --- | --- |
| b. | The first tranche of Option Shares shall consist of 100,000
Option Shares (“Tranche 1 Option”). The purchase price to be paid by
Purchaser to the Seller for the purchase of the Option Shares subject to the
Tranche 1 Option, free and clear of all liens, encumbrances, charges and
restrictions of any kind whatsoever, shall be Twelve Dollars and Fifty Cents
($12.50) per Option Share (“Tranche 1 Option Price”). If not exercised in
full prior to such date, the Tranche 1 Option shall expire on the first (1st)
anniversary of the date of this Agreement. |

Folio /Folio

PAGEBREAK

| c. | The second tranche of Option Shares shall consist of 100,000
Option Shares (“Tranche 2 Option”). The purchase price to be paid by
Purchaser to the Seller for the purchase of the Option Shares subject to the
Tranche 2 Option, free and clear of all liens, encumbrances, charges and
restrictions of any kind whatsoever, shall be Fifteen Dollars ($15.00) per
Option Share (“Tranche 2 Option Price”). If not exercised in full prior to
such date, the Tranche 2 Option shall expire on the second (2nd) anniversary
of the date of this Agreement. |
| --- | --- |
| d. | If Purchaser exercises an Option to acquire the Option Shares
granted hereunder, at each Closing, Purchaser shall deliver to the Seller the
Tranche 1 Option Price and/or the Tranche 2 Option Price, as applicable, by
wiring such amount, in immediately available funds, in accordance with the
instructions in Annex I hereto. |
| e. | The Purchaser may exercise the Tranche 1 Option and the
Tranche 2 Option in whole or in part, at any time, and from time to time, in
one or more transactions, from the date of this Agreement until the expiration
of such Option. |
| f. | The consummation of the exercise of an Option (the “Closing”)
shall take place three (3) days after the Purchaser delivers to Seller written
notice of exercise of any or all of the Option at the address set forth on the
signature page hereto, or at such other date, time and place as the parties
shall mutually agree. |
| g. | At each Closing, the Seller shall execute and/or deliver or
cause to be delivered to Purchaser (i) duly issued certificate(s) for all of
the Option Shares being purchased at such Closing, duly endorsed in blank or
with blank powers attached; (ii) a certificate from the Seller confirming that
the representations and warranties set forth in this Agreement remain true and
correct as of the date of such Closing except to the extent they relate to a
specified date, in which case they remain true and correct as of such
specified date. |
| h. | At each Closing, Purchaser shall deliver to Seller the
Tranche 1 Option Price and/or the Tranche 2 Option Price, as applicable, for
the Option Shares being purchased at such Closing as provided in this
Agreement. |

1. Representations and Warranties of the Seller . In order to induce the Purchaser to purchase the Shares, Seller represents and warrants that:

a. Seller has full power and authority to execute, deliver and perform its obligations under this Agreement.

Folio -2- /Folio

PAGEBREAK

| b. | Seller’s execution, delivery, and performance of this
Agreement has not resulted and will not result in a breach or violation of any
provision of (i) such Seller’s organizational documents, (ii) any statute,
law, writ, order, rule or regulation of any governmental authority applicable
to such Seller, (iii) any judgment, injunction, decree or determination
applicable to such Seller or (iv) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement, document or instrument to which
such Seller may be a party, by which such Seller may be bound or to which any
of the assets of such Seller is subject. |
| --- | --- |
| c. | (i) This Agreement (A) has been duly and validly authorized,
executed and delivered by such Seller and (B) is the legal, valid and binding
obligation of such Seller, enforceable against such Seller in accordance with
its terms, except that such enforceability against such Seller may be limited
by bankruptcy, insolvency, or other similar laws of general applicability
affecting the enforcement of creditors’ rights generally and by the court’s
discretion in relation to equitable remedies; and |
| | (ii) No notice to, registration with, consent or approval of or any other
action by any relevant governmental authority or other entity is, will be,
or was on the Agreement Date, required for Seller to execute, deliver, and
perform its obligations under this Agreement. |
| d. | Seller is the sole legal and beneficial owner of and has good
title to the Shares, free and clear of any mortgage, pledge, lien, security
interest, charge, hypothecation, security agreement, security arrangement or
encumbrance or other adverse claim against title of any kind (“Encumbrance”).
The Shares are not subject to any prior sale, transfer, assignment or
participation by Seller or any agreement by Seller to assign, convey, transfer
or participate, in whole or in part. |
| e. | No proceedings are pending against Seller or to Seller’s
knowledge, threatened against such Seller before any relevant governmental
authority that, in the aggregate, will materially and adversely affect (i) the
Shares or (ii) any action taken or to be taken by Seller under this Agreement. |
| f. | Seller has not engaged in any acts or conduct or made any
omissions that will result in Purchaser receiving proportionately less in
payments or distributions under, or less favorable treatment (including the
timing of payments or distributions) for, the Shares |

Folio -3- /Folio

PAGEBREAK

than is received by other holders holding Shares of the same tranche, class or type as the Shares.

| g. | No broker, finder or other entity acting under Seller’s
authority is entitled to any broker’s commission or other fee in connection
with the transactions contemplated by this Agreement for which Purchaser could
be responsible. |
| --- | --- |
| h. | Seller acknowledges that the consideration given for the
purchase by the Purchaser of the Shares may differ both in kind and in amount
from any payments or distributions which the Purchaser may ultimately receive
with respect to the Shares, and the Seller shall not have any recourse to the
Purchaser for any deficiency. |
| i. | Seller (i) is a sophisticated seller with respect to the sale
of the Shares, (ii) has adequate information concerning the business and
financial condition of the Company to make an informed decision regarding the
sale of the Shares and (iii) has independently and without reliance upon
Purchaser, and based on such information as such Seller has deemed
appropriate, made its own analysis and decision to enter into this Agreement.
Seller acknowledges that Purchaser has not given such Seller any investment
advice, credit information, or opinion on whether the sale of the Shares is
prudent. |
| j. | Seller acknowledges that (i) Purchaser currently may have,
and later may come into possession of, information with respect to the Shares,
the Company or any of its affiliates that is not known to such Seller and that
may be material to a decision to sell the Shares (“Seller Excluded
Information”), (ii) Seller has determined to sell the Shares notwithstanding
its lack of knowledge of the Seller Excluded Information and (iii) Purchaser
shall have no liability to Seller, and Seller waives and releases any claims
that it might have against Purchaser whether under applicable securities laws
or otherwise, with respect to the nondisclosure of the Seller Excluded
Information in connection with the transactions contemplated by this
Agreement; provided , however , that the Seller Excluded
Information shall not and does not affect the truth or accuracy of Purchaser
representations or warranties in this Agreement. |
| k. | No restrictions exist under the Securities Act of 1933, as
amended (the “Act”) or otherwise which prevent or limit the sale of the Shares
in accordance with the terms of this Agreement. Seller has not made any
offers to sell, or solicitations of any offers to buy, all or any portion of
the Shares in violation of any applicable securities laws. |

Folio -4- /Folio

PAGEBREAK

| l. | Seller is not a party to, or bound by, any document or
agreement that could materially and adversely affect the Shares or Purchaser
rights and remedies under this Agreement. |
| --- | --- |
| m. | To the best of Seller’s knowledge, neither Seller nor anyone
acting on its behalf has taken any action which could subject the sale of the
Shares to Section 5 of the Act. |
| n. | Seller is fully aware that, with regard to the sale of the
Shares, the Purchaser is relying upon the truth and accuracy of these
representations and warranties. |
| o. | The Shares transferred to Purchaser hereunder are being
delivered pursuant to an effective registration statement on Form S-3 (the
“Registration Statement”) and Seller has complied with all prospectus delivery
and other requirements set forth in the Registration Statement required to
deliver to Seller unrestricted and freely tradable Shares. |

1. Purchaser Representations and Warranties . Purchaser makes the following representations and warranties to the Seller in connection with its purchase of the Shares:

| a. | The Purchaser has all necessary corporate or other power and
authority to enter into this Agreement and to purchase the Shares; |
| --- | --- |
| b. | The Purchaser is a sophisticated institutional investor that
is an “accredited investor” within the meaning of Rule 501 under the Act and
has knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of its investment in the Shares and is able
to bear the economic risk of such investment. |
| c. | The Purchaser is acquiring the Shares for its own accounts,
and not with a present view to, or for sale in connection with any,
distribution thereof, provided that the disposition of the Purchaser property
shall at all times be and remain within its control. |
| d. | The Shares were not offered or sold to Purchaser by any form
of general solicitation or general advertising. |
| e. | Purchaser acknowledges that it has conducted, to the extent
it deemed necessary, an independent investigation of such matters, and has had
the opportunity to receive such information as, in its judgment, is necessary
for it to make an informed investment decision, and has not relied upon the
Seller for any investigation or assessment to evaluate the transaction
contemplated hereby. |

Folio -5- /Folio

PAGEBREAK

f. The Purchaser is fully aware that, with regard to the sale of the Shares, the Seller is relying upon the truth and accuracy of these representations and warranties.

1. Indemnification .

| a. | Seller agrees to indemnify and hold the Purchaser harmless
against and in respect of any and all damages, losses, liabilities,
obligations, costs and expenses (including reasonable attorney’s fees)
(collectively “Damages”) that the Purchaser may suffer or incur as a result of
a breach of any of the representations, warranties or agreements by the Seller
set forth herein (notwithstanding any investigation or verifications made by
or on behalf of the Purchaser). |
| --- | --- |
| b. | Purchaser agrees to indemnify and hold the Seller harmless
against and in respect of any and all Damages that the Seller may suffer or
incur as a result of a breach of any of the representations, warranties or
agreements by the Purchaser set forth herein (notwithstanding any
investigation or verifications made by or on behalf of the Seller). |

1. Miscellaneous .

| a. | Expenses . Each party shall bear the costs and expenses
(including, without limitation, attorney’s fees) incurred by such party in
connection with the transactions contemplated by this Agreement. |
| --- | --- |
| b. | Further Assurances . From time to time, at the request of
Purchaser and without further consideration, Seller shall execute and deliver
to Purchaser such other documents, and take such other action, as Purchaser
may reasonably request in order to consummate or evidence more effectively the
transactions contemplated hereby and to vest in Purchaser good, valid, and
marketable title to the Shares. |
| c. | Entire Agreement . This Agreement, including any other
documents or writings referred to herein or delivered pursuant hereto, all of
which form a part hereof, contains the entire understanding of the parties
with respect to its subject matter. There are no agreements, promises,
warranties, covenants, or undertakings other than those expressly set forth
herein or therein. This Agreement merges with and supersedes all prior and
contemporaneous agreements and understandings between the parties with respect
to its subject matter. |

Folio -6- /Folio

PAGEBREAK

| d. | Governing Law . This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to its principles of conflicts of laws. |
| --- | --- |
| e. | Successors and Assigns . This Agreement shall be binding
upon, and shall inure to the benefit of, the successors, assigns and heirs of
the Purchaser and Seller. The Tranche 1 Option and the Tranche 2 Option and
the rights and obligations conferred by this Agreement related thereto may be
assigned by Purchaser without consent of Seller. |
| f. | Amendment and Waiver . No provision of this Agreement may be
amended or waived or otherwise modified except by a written instrument signed
by the Seller and the Purchaser or its respective heirs, successors, assigns,
or legal representatives. |
| g. | Severability . If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances shall continue in full force and
effect and in no way be affected, impaired or invalidated. |
| h. | No Waiver . The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions. |
| i. | Counterparts . This Agreement may be executed in any number
of counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof. |
| j. | Time is of the Essence . Time is of the essence in the
performance of this Agreement. |

Signature Page Follows

Folio -7- /Folio

PAGEBREAK

IN WITNESS WHEREOF, the Seller and the Purchaser has executed this Agreement as of the day and year first above written.

SELLER:	PURCHASER:
	Argan Investments, LLC
	By:
Joel M. Canino	Name:
	Title:
Address:

Folio -8- /Folio

PAGEBREAK

Exhibit 2

COMMON STOCK PURCHASE AND OPTION AGREEMENT

This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is dated October ___, 2007 (“Agreement Date”) by and between Argan Investments, LLC (the “Purchaser”), and William F. Griffin, Jr. Grantor Retained Annuity Trust (“Seller”).

RECITALS

A. The Seller is the owner of not less than 300,000 shares of the common stock, par value $.15 per share (the “Shares”), of Argan, Inc., a Delaware corporation (the “Company”).

B. The Purchaser wishes to purchase and the Seller wishes to sell 100,000 Shares (the “Purchased Shares”) on the terms and conditions set forth in this Agreement.

C. The Seller wishes to grant options to purchase an additional 200,000 Shares (the “Option Shares”) on the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the mutual premises contained herein, the parties agree as follows:

1. Purchase and Sale . The Seller hereby agrees to sell, transfer, assign, grant and convey the Purchased Shares to the Purchaser and the Purchaser hereby agrees to purchase and acquire the Purchased Shares, represented by Certificate(s) Number ___, for consideration of Nine Dollars and Fifty Cents ($9.50) per Purchased Share or an aggregate of Nine Hundred Fifty Thousand Dollars ($950,000) (the “Purchase Price”). The Purchase Price shall be paid by the Purchaser by wiring such amount, in immediately available funds, in accordance with the instructions in Annex I hereto, upon execution hereof against delivery of the Certificate(s) Number ___ to the Purchaser’s accounts at Fidelity.

2. Option to Purchase Shares .

| a. | Subject to the terms and conditions of this Agreement, the
Seller hereby grants to Purchaser, and Purchaser hereby accepts, the right and
option to purchase from Seller an aggregate of 200,000 Option Shares
(“Option”) separated into two tranches. |
| --- | --- |
| b. | The first tranche of Option Shares shall consist of 100,000
Option Shares (“Tranche 1 Option”). The purchase price to be paid by
Purchaser to the Seller for the purchase of the Option Shares subject to the
Tranche 1 Option, free and clear of all liens, encumbrances, charges and
restrictions of any kind whatsoever, shall be Twelve Dollars and Fifty Cents
($12.50) per Option Share (“Tranche 1 Option Price”). If not exercised in
full prior to such date, the Tranche 1 Option shall expire on the first (1st)
anniversary of the date of this Agreement. |

Folio /Folio

PAGEBREAK

| c. | The second tranche of Option Shares shall consist of 100,000
Option Shares (“Tranche 2 Option”). The purchase price to be paid by
Purchaser to the Seller for the purchase of the Option Shares subject to the
Tranche 2 Option, free and clear of all liens, encumbrances, charges and
restrictions of any kind whatsoever, shall be Fifteen Dollars ($15.00) per
Option Share (“Tranche 2 Option Price”). If not exercised in full prior to
such date, the Tranche 2 Option shall expire on the second (2nd) anniversary
of the date of this Agreement. |
| --- | --- |
| d. | If Purchaser exercises an Option to acquire the Option Shares
granted hereunder, at each Closing, Purchaser shall deliver to the Seller the
Tranche 1 Option Price and/or the Tranche 2 Option Price, as applicable, by
wiring such amount, in immediately available funds, in accordance with the
instructions in Annex I hereto. |
| e. | The Purchaser may exercise the Tranche 1 Option and the
Tranche 2 Option in whole or in part, at any time, and from time to time, in
one or more transactions, from the date of this Agreement until the expiration
of such Option. |
| f. | The consummation of the exercise of an Option (the “Closing”)
shall take place three (3) days after the Purchaser delivers to Seller written
notice of exercise of any or all of the Option at the address set forth on the
signature page hereto, or at such other date, time and place as the parties
shall mutually agree. |
| g. | At each Closing, the Seller shall execute and/or deliver or
cause to be delivered to Purchaser (i) duly issued certificate(s) for all of
the Option Shares being purchased at such Closing, duly endorsed in blank or
with blank powers attached; (ii) a certificate from the Seller confirming that
the representations and warranties set forth in this Agreement remain true and
correct as of the date of such Closing except to the extent they relate to a
specified date, in which case they remain true and correct as of such
specified date. |
| h. | At each Closing, Purchaser shall deliver to Seller the
Tranche 1 Option Price and/or the Tranche 2 Option Price, as applicable, for
the Option Shares being purchased at such Closing as provided in this
Agreement. |

1. Representations and Warranties of the Seller . In order to induce the Purchaser to purchase the Shares, Seller represents and warrants that:

a. Seller has full power and authority to execute, deliver and perform its obligations under this Agreement.

Folio -2- /Folio

PAGEBREAK

| b. | Seller’s execution, delivery, and performance of this
Agreement has not resulted and will not result in a breach or violation of any
provision of (i) such Seller’s organizational documents, (ii) any statute,
law, writ, order, rule or regulation of any governmental authority applicable
to such Seller, (iii) any judgment, injunction, decree or determination
applicable to such Seller or (iv) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement, document or instrument to which
such Seller may be a party, by which such Seller may be bound or to which any
of the assets of such Seller is subject. |
| --- | --- |
| c. | (i) This Agreement (A) has been duly and validly authorized,
executed and delivered by such Seller and (B) is the legal, valid and binding
obligation of such Seller, enforceable against such Seller in accordance with
its terms, except that such enforceability against such Seller may be limited
by bankruptcy, insolvency, or other similar laws of general applicability
affecting the enforcement of creditors’ rights generally and by the court’s
discretion in relation to equitable remedies; and |
| | (ii) No notice to, registration with, consent or approval of or any other
action by any relevant governmental authority or other entity is, will be,
or was on the Agreement Date, required for Seller to execute, deliver, and
perform its obligations under this Agreement. |
| d. | Seller is the sole legal and beneficial owner of and has good
title to the Shares, free and clear of any mortgage, pledge, lien, security
interest, charge, hypothecation, security agreement, security arrangement or
encumbrance or other adverse claim against title of any kind (“Encumbrance”).
The Shares are not subject to any prior sale, transfer, assignment or
participation by Seller or any agreement by Seller to assign, convey, transfer
or participate, in whole or in part. |
| e. | No proceedings are pending against Seller or to Seller’s
knowledge, threatened against such Seller before any relevant governmental
authority that, in the aggregate, will materially and adversely affect (i) the
Shares or (ii) any action taken or to be taken by Seller under this Agreement. |
| f. | Seller has not engaged in any acts or conduct or made any
omissions that will result in Purchaser receiving proportionately less in
payments or distributions under, or less favorable treatment for, the Shares
than is received by other holders holding Shares of the same tranche, class or
type as the Shares. |

Folio -3- /Folio

PAGEBREAK

| g. | No broker, finder or other entity acting under Seller’s
authority is entitled to any broker’s commission or other fee in connection
with the transactions contemplated by this Agreement for which Purchaser could
be responsible. |
| --- | --- |
| h. | Seller acknowledges that the consideration given for the
purchase by the Purchaser of the Shares may differ both in kind and in amount
from any payments or distributions which the Purchaser may ultimately receive
with respect to the Shares, and the Seller shall not have any recourse to the
Purchaser for any deficiency. |
| i. | Seller (i) is a sophisticated seller with respect to the sale
of the Shares, (ii) has adequate information concerning the business and
financial condition of the Company to make an informed decision regarding the
sale of the Shares and (iii) has independently and without reliance upon
Purchaser, and based on such information as such Seller has deemed
appropriate, made its own analysis and decision to enter into this Agreement.
Seller acknowledges that Purchaser has not given such Seller any investment
advice, credit information, or opinion on whether the sale of the Shares is
prudent. |
| j. | Seller acknowledges that (i) Purchaser currently may have,
and later may come into possession of, information with respect to the Shares,
the Company or any of its affiliates that is not known to such Seller and that
may be material to a decision to sell the Shares (“Seller Excluded
Information”), (ii) Seller has determined to sell the Shares notwithstanding
its lack of knowledge of the Seller Excluded Information and (iii) Purchaser
shall have no liability to Seller, and Seller waives and releases any claims
that it might have against Purchaser whether under applicable securities laws
or otherwise, with respect to the nondisclosure of the Seller Excluded
Information in connection with the transactions contemplated by this
Agreement; provided , however , that the Seller Excluded
Information shall not and does not affect the truth or accuracy of Purchaser
representations or warranties in this Agreement. |
| k. | No restrictions exist under the Securities Act of 1933, as
amended (the “Act”) or otherwise which prevent or limit the sale of the Shares
in accordance with the terms of this Agreement. Seller has not made any
offers to sell, or solicitations of any offers to buy, all or any portion of
the Shares in violation of any applicable securities laws. |

Folio -4- /Folio

PAGEBREAK

| l. | Seller is not a party to, or bound by, any document or
agreement that could materially and adversely affect the Shares or Purchaser
rights and remedies under this Agreement. |
| --- | --- |
| m. | To the best of Seller’s knowledge, neither Seller nor anyone
acting on its behalf has taken any action which could subject the sale of the
Shares to Section 5 of the Act. |
| n. | Seller is fully aware that, with regard to the sale of the
Shares, the Purchaser is relying upon the truth and accuracy of these
representations and warranties. |
| o. | The Shares transferred to Purchaser hereunder are being
delivered pursuant to an effective registration statement on Form S-3 (the
“Registration Statement”) and Seller has complied with all prospectus delivery
and other requirements set forth in the Registration Statement required to
deliver to Seller unrestricted and freely tradable Shares. |

1. Purchaser Representations and Warranties . Purchaser makes the following representations and warranties to the Seller in connection with its purchase of the Shares:

| a. | The Purchaser has all necessary corporate or other power and
authority to enter into this Agreement and to purchase the Shares; |
| --- | --- |
| b. | The Purchaser is a sophisticated institutional investor that
is an “accredited investor” within the meaning of Rule 501 under the Act and
has knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of its investment in the Shares and is able
to bear the economic risk of such investment. |
| c. | The Purchaser is acquiring the Shares for its own accounts,
and not with a present view to, or for sale in connection with any,
distribution thereof, provided that the disposition of the Purchaser property
shall at all times be and remain within its control. |
| d. | The Shares were not offered or sold to Purchaser by any form
of general solicitation or general advertising. |
| e. | Purchaser acknowledges that it has conducted, to the extent
it deemed necessary, an independent investigation of such matters, and has had
the opportunity to receive such information as, in its judgment, is necessary
for it to make an informed investment decision, and has not relied upon the
Seller for any investigation or assessment to evaluate the transaction
contemplated hereby. |

Folio -5- /Folio

PAGEBREAK

f. The Purchaser is fully aware that, with regard to the sale of the Shares, the Seller is relying upon the truth and accuracy of these representations and warranties.

1. Indemnification .

| a. | Seller agrees to indemnify and hold the Purchaser harmless
against and in respect of any and all damages, losses, liabilities,
obligations, costs and expenses (including reasonable attorney’s fees)
(collectively “Damages”) that the Purchaser may suffer or incur as a result of
a breach of any of the representations, warranties or agreements by the Seller
set forth herein (notwithstanding any investigation or verifications made by
or on behalf of the Purchaser). |
| --- | --- |
| b. | Purchaser agrees to indemnify and hold the Seller harmless
against and in respect of any and all Damages that the Seller may suffer or
incur as a result of a breach of any of the representations, warranties or
agreements by the Purchaser set forth herein (notwithstanding any
investigation or verifications made by or on behalf of the Seller). |

1. Miscellaneous .

| a. | Expenses . Each party shall bear the costs and expenses
(including, without limitation, attorney’s fees) incurred by such party in
connection with the transactions contemplated by this Agreement. |
| --- | --- |
| b. | Further Assurances . From time to time, at the request of
Purchaser and without further consideration, Seller shall execute and deliver
to Purchaser such other documents, and take such other action, as Purchaser
may reasonably request in order to consummate or evidence more effectively the
transactions contemplated hereby and to vest in Purchaser good, valid, and
marketable title to the Shares. |
| c. | Entire Agreement . This Agreement, including any other
documents or writings referred to herein or delivered pursuant hereto, all of
which form a part hereof, contains the entire understanding of the parties
with respect to its subject matter. There are no agreements, promises,
warranties, covenants, or undertakings other than those expressly set forth
herein or therein. This Agreement merges with and supersedes all prior and
contemporaneous agreements and understandings between the parties with respect
to its subject matter. |

Folio -6- /Folio

PAGEBREAK

| d. | Governing Law . This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to its principles of conflicts of laws. |
| --- | --- |
| e. | Successors and Assigns . This Agreement shall be binding
upon, and shall inure to the benefit of, the successors, assigns and heirs of
the Purchaser and Seller. The Tranche 1 Option and the Tranche 2 Option and
the rights and obligations conferred by this Agreement related thereto may be
assigned by Purchaser without consent of Seller. |
| f. | Amendment and Waiver . No provision of this Agreement may be
amended or waived or otherwise modified except by a written instrument signed
by the Seller and the Purchaser or its respective heirs, successors, assigns,
or legal representatives. |
| g. | Severability . If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances shall continue in full force and
effect and in no way be affected, impaired or invalidated. |
| h. | No Waiver . The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions. |
| i. | Counterparts . This Agreement may be executed in any number
of counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof. |
| j. | Time is of the Essence . Time is of the essence in the
performance of this Agreement. |

Signature Page Follows

Folio -7- /Folio

PAGEBREAK

IN WITNESS WHEREOF, the Seller and the Purchaser has executed this Agreement as of the day and year first above written.

SELLER:	PURCHASER:
William F. Griffin, Jr. Grantor	Argan Investments, LLC
Retained Annuity Trust
By:	By:
Name:	Name:
Title:	Title:
Address:

Folio -8- /Folio