ACQUISITION TERM NOTE

FOR VALUE RECEIVED, ARGAN, INC., a corporation organized under the laws of the State of Delaware (“ Argan ”), SOUTHERN MARYLAND CABLE, INC., a corporation organized under the laws of the State of Delaware (“ SMC ”), VITARICH LABORATORIES, INC., a corporation organized under the laws of the State of Delaware (“ Vitarich ”), GEMMA POWER, INC., a corporation organized under the laws of the State of Connecticut (“ GP ”), GEMMA POWER SYSTEMS CALIFORNIA, INC., a corporation organized under the laws of the State of California (“ GPSC ”), GEMMA POWER SYSTEMS, LLC, a limited liability company organized under the laws of the state of Connecticut (“ GPS ”), and GEMMA POWER HARTFORD, LLC, a limited liability company organized under the laws of the State of Connecticut (“ GPH ”), jointly and severally (each of Argan, SMC, Vitarich, GP, GPSC, GPS, and GPH, a “ Borrower ” and collectively, the “ Borrowers ”); promise to pay to the order of BANK OF AMERICA, N.A., a national banking association, its successors and assigns (the “ Lender ”), the principal sum of EIGHT MILLION DOLLARS ($8,000,000) (the “ Principal   Sum ”), or so much thereof as has been or may be advanced to or for the account of the Borrowers pursuant to the terms and conditions of the Financing Agreement (as hereinafter defined), together with interest thereon at the rate or rates hereinafter provided, in accordance with the following:

1.   Interest .

Commencing as of the date hereof and continuing until repayment in full of all sums due hereunder, the unpaid Principal Sum shall bear interest at the LIBOR Rate, plus three hundred twenty five (325) basis points per annum. For purposes hereof, the “ LIBOR Rate ” shall mean a daily fluctuating rate equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London, time), on the second preceding business day, as adjusted from time to time in the Lender’s sole discretion for then-applicable reserve requirements, deposits insurance assessment rates and other regulatory costs. If for any reason such rate is not available, the term “ LIBOR Rate ” shall mean the fluctuating rate of interest equal to the one (1) month rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one (1) month London interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London Time) on the second preceding business day, as adjusted from time to time for then-applicable reserve requirements, deposit insurance assessment rates and other regulatory costs; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.

The rate of interest charged under this Note shall change immediately and contemporaneously with any change in the LIBOR Rate. All interest payable under the terms of this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.

2.   Payments and Maturity.

The unpaid Principal Sum, together with interest thereon at the rate or rates provided above, shall be payable as follows:

(a)   The unpaid Principal Sum together with interest shall be due and payable in forty-seven (47) monthly installments of principal each in the amount of One Hundred Sixty-Sixty Thousand Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($166,666.67) plus accrued and unpaid interest, commencing January 31, 2007, and on the last day of each month thereafter and one (1) monthly payment at maturity of One Hundred Sixty-Sixty Thousand Six Hundred Sixty-Six Dollars and Fifty-One Cents ($166,666.51) plus accrued and unpaid interest;

(b)   Unless sooner paid, the unpaid Principal Sum, together with interest accrued and unpaid thereon, shall be due and payable in full on January 31, 2011.

Borrower hereby authorizes Lender to automatically deduct from Borrower’s account numbered 004467062810 the amount of each payment of principal (including without limitation the principal payment due on the final maturity date) and/or interest on the dates such payments become due. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate automatic payments as provided in this paragraph.

3.   Default Interest.

Upon the occurrence of an Event of Default (as hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at the LIBOR Rate plus four percent (4.00%) (the “ Post-Default Rate ”) per annum until such Event of Default is cured.

4.   Late Charges.

If the Borrowers shall fail to make any payment under the terms of this Note within ten (10) days after the date such payment is due, the Borrowers shall pay to the Lender on demand a late charge equal to five percent (5.00%) of such payment.

5.   Application and Place of Payments.

All payments, made on account of this Note shall be applied first to the payment of accrued and unpaid interest then due hereunder, and the remainder, if any, shall be applied to the unpaid Principal Sum. All payments on account of this Note shall be paid in lawful money of the United States of America in immediately available funds during regular business hours of the Lender at its principal office in Rockville, Maryland or at such other times and places as the Lender may at any time and from time to time designate in writing to the Borrowers.

6.   Prepayment.

The Borrowers may prepay the Principal Sum in whole or in part upon five (5) days prior written notice to the Lender without premium or penalty.

7.   Financing Agreement and Other Financing Documents.

This Note is the “ Acquisition Term Note ” described in the Second Amended and Restated Financing and Security Agreement of even date herewith by and among the Borrowers and the Lender (as amended, modified, restated, substituted, extended and renewed at any time and from time to time, the “ Financing Agreement ”). The indebtedness evidenced by this Note is included within the meaning of the term “ Obligations ” as defined in the Financing Agreement. The term “ Financing Documents ” as used in this Note shall mean collectively this Note, the Revolving Credit Note, the 2006 Term Note, the Financing Agreement and any other instrument, agreement, or document previously, simultaneously, or hereafter executed and delivered by any Borrower and/or any other Person, singularly or jointly with any other Person, evidencing, securing, guaranteeing, or in connection with the Principal Sum, this Note, the Revolving Credit Note, the 2006 Term Note, and/or the Financing Agreement.

8.   Security.

This Note is secured as provided in the Financing Agreement.

9.   Events of Default.

The occurrence of any one or more of the following events shall constitute an event of default (individually, an “ Event of Default ” and collectively, the “ Events of Default ”) under the terms of this Note:

(a)   The failure of any Borrower to pay to the Lender within five (5) days of when due any and all amounts payable by any Borrower to the Lender under the terms of this Note; or

(b)   The occurrence of an Event of Default (as defined therein) under the terms and conditions of any of the other Financing Documents.

10.   Remedies.

Upon the occurrence of an Event of Default, at the option of the Lender, all amounts payable by the Borrowers to the Lender under the terms of this Note shall immediately become due and payable by the Borrowers to the Lender without notice to the Borrowers or any other Person, and the Lender shall have all of the rights, powers, and remedies available under the terms of this Note, any of the other Financing Documents and all applicable laws. The Borrowers and all endorsers, guarantors, and other parties who may now or in the future be primarily or secondarily liable for the payment of the indebtedness evidenced by this Note hereby severally waive presentment, protest and demand, notice of protest, notice of demand and of dishonor and non-payment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of the Borrowers, guarantors and endorsers.

11.   Confessed Judgment.

Upon the occurrence of an Event of Default, each Borrower hereby authorizes any attorney designated by the Lender or any clerk of any court of record to appear for the Borrowers in any court of record and confess judgment without prior hearing against the Borrowers in favor of the Lender for and in the amount of the unpaid Principal Sum, all interest accrued and unpaid thereon, all other amounts payable by any Borrower to the Lender under the terms of this Note or any of the other Financing Documents, costs of suit, and attorneys’ fees of fifteen percent (15%) of the unpaid Principal Sum and interest then due hereunder. By its acceptance of this Note, the Lender agrees that in the event the Lender exercises at any time its right to confess judgment under this Note, the Lender shall use its best efforts to obtain legal counsel who will charge th