Document:

MEMBERSHIP
      INTEREST PURCHASE AGREEMENT 

     

    By
      and
      Among

     

    ARGAN,
      INC.

     

    and

     

    GEMMA
      POWER SYSTEMS, LLC

    

    and

    

    GEMMA
      POWER, INC., and 

    GEMMA
      POWER SYSTEMS CALIFORNIA, INC.

    

    and

     

    WILLIAM
      F. GRIFFIN, JR. and JOEL M. CANINO

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Table
      of
      Contents

    

      
        	 	 	 	 	
                Page

              	 
	
                INTRODUCTORY
                  STATEMENT

              	 	 	
                1

              	 
	 	 	 	 	 
	
                DEFINITIONS

              	 	 	
                1

              	 
	 	 	 	 	 
	
                SECTION
                  1 - ACQUISITION OF MEMBERSHIP INTERESTS 

              	 	
                6

              	 
	
                1.1

              	 	 	
                Acquisition
                  of Membership Interests

              	 	 	
                6

              	 
	
                1.2

              	
                 

              	 	
                Organizational
                  Documents, Management

              	 	 	
                7

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  2 - CONSIDERATION

              	 	 	
                7

              	 
	
                2.1

              	 	 	
                Consideration

              	 	 	
                7

              	 
	
                2.2

              	 	 	
                Payment
                  of Consideration; Adjustment of Consideration

              	 	 	
                7

              	 
	
                2.3

              	 	 	
                Consideration
                  Allocation

              	 	 	
                9

              	 
	
                2.4

              	 	 	
                Registration

              	 	 	
                9

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  3 - CLOSING

              	 	 	
                9

              	 
	
                3.1

              	 	 	
                Closing,
                  Deliveries into Escrow

              	 	 	
                9

              	 
	
                3.2

              	 	 	
                Deliveries
                  by Escrow Agent

              	 	 	
                10

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  4 - REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF THE SELLERS
                  AND
                  THE COMPANIES

              	 	 	
                10

              	 
	
                4.1

              	 	 	
                Organization,
                  Qualifications and Company or Corporate Power

              	 	 	
                10

              	 
	
                4.2

              	 	 	
                Authorization
                  of Agreement

              	 	 	
                11

              	 
	
                4.3

              	 	 	
                Membership
                  Interests; Capital Stock

              	 	 	
                12

              	 
	
                4.4

              	 	 	
                Financial
                  Statements

              	 	 	
                12

              	 
	
                4.5

              	 	 	
                Absence
                  of Changes

              	 	 	
                13

              	 
	
                4.6

              	 	 	
                Legal
                  Actions

              	 	 	
                14

              	 
	
                4.7

              	 	 	
                Business
                  Property Rights

              	 	 	
                14

              	 
	
                4.8

              	 	 	
                Liabilities

              	 	 	
                14

              	 
	
                4.9

              	 	 	
                Ownership
                  of Assets and Leases

              	 	 	
                15

              	 
	
                4.10

              	 	 	
                Taxes

              	 	 	
                16

              	 
	
                4.11

              	 	 	
                Contracts,
                  Other Agreements

              	 	 	
                16

              	 
	
                4.12

              	 	 	
                Governmental
                  Approvals

              	 	 	
                18

              	 
	
                4.13

              	 	 	
                Lack
                  of Defaults, Compliance with Law

              	 	 	
                18

              	 
	
                4.14

              	 	 	
                Employees
                  and Employee Benefit Plans

              	 	 	
                19

              	 
	
                4.15

              	 	 	
                Insurance;
                  Bonds

              	 	 	
                20

              	 
	
                4.16

              	 	 	
                Labor
                  and Employment Matters

              	 	 	
                20

              	 
	
                4.17

              	 	 	
                Brokers
                  and Finders

              	 	 	
                20

              	 
	
                4.18

              	 	 	
                Accounts
                  Receivable

              	 	 	
                21

              	 

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                4.19
                  

              	 	 	
                Conflicts
                  of Interests

              	 	 	
                21

              	 
	
                4.20

              	 	 	
                Environmental
                  Compliance

              	 	 	
                21

              	 
	
                4.21

              	 	 	
                Ownership
                  of the Ownership Interests

              	 	 	
                22

              	 
	
                4.22

              	 	 	
                Absence
                  of Sensitive Payments

              	 	 	
                22

              	 
	
                4.23

              	 	 	
                Approval
                  of Transactions; Related Matters

              	 	 	
                23

              	 
	
                4.24

              	 	 	
                Withholding

              	 	 	
                23

              	 
	
                4.25

              	 	 	
                Amounts
                  Due From Sellers

              	 	 	
                23

              	 
	 	 	 	
                 

              	 	 	 	 
	
                SECTION
                  5 - REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS OF
                  PURCHASER

              	 	 	
                23

              	 
	
                5.1

              	 	 	
                Organization,
                  Standing, etc

              	 	 	
                23

              	 
	
                5.2

              	 	 	
                Authorization,
                  etc

              	 	 	
                24

              	 
	
                5.3

              	 	 	
                No
                  Breach or Defaults Caused by Agreement

              	 	 	
                24

              	 
	
                5.4

              	 	 	
                Governmental
                  Approvals

              	 	 	
                24

              	 
	
                5.5

              	 	 	
                Brokers
                  Fees

              	 	 	
                24

              	 
	
                5.6

              	 	 	
                Authorized
                  Shares of Stock

              	 	 	
                24

              	 
	
                5.7

              	 	 	
                Capitalization

              	 	 	
                24

              	 
	
                5.8

              	 	 	
                Voting
                  Stock

              	 	 	
                24

              	 
	
                5.9

              	 	 	
                No
                  Audit

              	 	 	
                24

              	 
	
                5.10

              	 	 	
                Net
                  Worth of Purchaser

              	 	 	
                25

              	 
	
                5.11
                  

              	 	 	
                Private
                  Offering

              	 	 	
                25

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  6 - CONDITIONS TO CLOSING FOR PURCHASER

              	 	 	
                25

              	 
	
                6.1

              	 	 	
                Performance
                  of Agreements

              	 	 	
                25

              	 
	
                6.2

              	 	 	
                Lack
                  of Material Liabilities

              	 	 	
                25

              	 
	
                6.3

              	 	 	
                Financial
                  Statements

              	 	 	
                25

              	 
	
                6.4

              	 	 	
                Lack
                  of Defaults

              	 	 	
                25

              	 
	
                6.5

              	 	 	
                Material
                  Adverse Change

              	 	 	
                25

              	 
	
                6.6

              	 	 	
                Employment
                  Agreements

              	 	 	
                26

              	 
	
                6.7

              	 	 	
                Opinion
                  of Counsel

              	 	 	
                26

              	 
	
                6.8

              	 	 	
                Compliance
                  Certificate

              	 	 	
                26

              	 
	
                6.9

              	 	 	
                Term
                  Life Insurance

              	 	 	
                26

              	 
	
                6.10

              	 	 	
                Registration
                  Rights Agreement

              	 	 	
                26

              	 
	
                6.11

              	 	 	
                [Intentionally
                  omitted.

              	
                 

              	 	
                26

              	 
	
                6.12

              	 	 	
                Release
                  from the Sellers; Payment of Amounts Owed by the Seller]

              	 	 	
                26

              	 
	
                6.13

              	 	 	
                Certificates;
                  Organizational Documents

              	 	 	
                27

              	 
	
                6.14

              	 	 	
                Corporate
                  Filings

              	 	 	
                27

              	 
	
                6.15

              	 	 	
                [Intentionally
                  omitted.]

              	
                 

              	 	
                27

              	 
	
                6.16

              	 	 	
                Release
                  of Buy-Sell Rights

              	 	 	
                27

              	 
	
                6.17

              	 	 	
                Third-Party
                  Consents or Approvals

              	 	 	
                28

              	 
	
                6.18

              	 	 	
                Escrow
                  Agreement

              	 	 	
                28

              	 
	
                6.19

              	 	 	
                Termination
                  of Operating Agreement

              	 	 	
                28

              	 

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  7 - CONDITIONS TO CLOSING FOR THE SELLERS

              	 	
                28

              	 
	
                7.1

              	 	 	
                Performance
                  of Agreements

              	 	 	
                28

              	 
	
                7.2

              	 	 	
                Compliance
                  Certificate

              	 	 	
                28

              	 
	
                7.3

              	 	 	
                Registration
                  Rights Agreement

              	 	 	
                28

              	 
	
                7.4

              	 	 	
                Employment
                  Agreements

              	 	 	
                29

              	 
	
                7.5

              	 	 	
                Term
                  Life Insurance

              	 	 	
                29

              	 
	
                7.6

              	 	 	
                Employee
                  Stock Options

              	 	 	
                29

              	 
	
                7.7

              	 	 	
                Escrow
                  Agreement

              	 	 	
                29

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  8 - TRANSACTIONS PRIOR TO CLOSING

              	 	 	
                29

              	 
	
                8.1

              	 	 	
                Taxes

              	 	 	
                29

              	 
	
                8.2

              	 	 	
                Books
                  of Record and Account; Inspection

              	 	 	
                29

              	 
	
                8.3

              	 	 	
                Insurance

              	 	 	
                29

              	 
	
                8.4

              	 	 	
                Entity
                  Existence

              	 	 	
                29

              	 
	
                8.5

              	 	 	
                Maintenance
                  of Properties

              	 	 	
                30

              	 
	
                8.6

              	 	 	
                Organizational
                  Documents

              	 	 	
                30

              	 
	
                8.7

              	 	 	
                Issuances
                  of Ownership Interests

              	 	 	
                30

              	 
	
                8.8

              	 	 	
                Declaration
                  of Distributions, etc

              	 	 	
                30

              	 
	
                8.9

              	
                 

              	 	
                Material
                  Contracts

              	 	 	
                30

              	 
	 	 	 	
                 

              	 	 	 	 
	
                SECTION
                  9 - RESTRICTIVE COVENANTS

              	 	 	
                30

              	 
	
                9.1

              	 	 	
                Covenant
                  Not to Compete

              	 	 	
                30

              	 
	
                9.2

              	 	 	
                Confidentiality

              	 	 	
                31

              	 
	
                9.3

              	 	 	
                Non-Solicitation

              	 	 	
                31

              	 
	
                9.4

              	 	 	
                Acknowledgment
                  by the Sellers

              	 	 	
                32

              	 
	
                9.5

              	 	 	
                Reformation
                  by Court

              	 	 	
                32

              	 
	
                9.6

              	 	 	
                Extension
                  of Time

              	 	 	
                32

              	 
	
                9.7

              	 	 	
                Injunction

              	 	 	
                32

              	 
	
                9.8

              	 	 	
                Survival

              	 	 	
                33

              	 
	 	 	 	
                 

              	 	 	 	 
	
                SECTION
                  10 - INDEMNIFICATION

              	 	 	
                33

              	 
	
                10.1

              	 	 	
                Indemnification
                  by the Sellers

              	 	 	
                33

              	 
	
                10.2

              	 	 	
                No
                  Circular Recovery

              	 	 	
                35

              	 
	
                10.3

              	 	 	
                Sellers’
                  Indemnification Threshold; Cap

              	 	 	
                35

              	 
	
                10.4

              	 	 	
                Release
                  of Excess Escrowed Stock

              	 	 	
                36

              	 
	 	 	 	
                 

              	 	 	 	 
	
                SECTION
                  11 - TERMINATION

              	 	 	
                36

              	 
	
                11.1

              	 	 	
                Termination
                  by Purchaser

              	 	 	
                36

              	 
	
                11.2

              	 	 	
                Termination
                  by Sellers

              	 	 	
                36

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  12 - DEFAULT

              	 	 	
                36

              	 
	
                12.1

              	 	 	
                Events
                  of Default

              	 	 	
                36

              	 
	
                12.2

              	 	 	
                Termination
                  by Reason of Event of Default or Failure of a Condition
                  Precedent

              	 	 	
                37

              	 
	
                12.3

              	 	 	
                Waiver
                  by Purchaser

              	 	 	
                37

              	 

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  13 - MISCELLANEOUS

              	 	 	
                37

              	 
	
                13.1

              	 	 	
                Costs

              	 	 	
                37

              	 
	
                13.2

              	 	 	
                Attorneys
                  Fees

              	 	 	
                37

              	 
	
                13.3

              	 	 	
                Relationships
                  to Other Agreements

              	 	 	
                37

              	 
	
                13.4

              	 	 	
                Titles
                  and Captions

              	 	 	
                37

              	 
	
                13.5

              	 	 	
                Exhibits

              	 	 	
                38

              	 
	
                13.6

              	 	 	
                Applicable
                  Law

              	 	 	
                38

              	 
	
                13.7

              	 	 	
                Binding
                  Effect and Assignment

              	 	 	
                38

              	 
	
                13.8

              	 	 	
                Notices

              	 	 	
                38

              	 
	
                13.9

              	 	 	
                Severability

              	 	 	
                39

              	 
	
                13.10

              	 	 	
                Acceptance
                  or Approval

              	 	 	
                39

              	 
	
                13.11

              	 	 	
                Survival

              	 	 	
                39

              	 
	
                13.12

              	 	 	
                Entire
                  Agreement

              	 	 	
                39

              	 
	
                13.13

              	 	 	
                Counterparts

              	 	 	
                40

              	 
	
                13.14

              	 	 	
                Securities
                  Matters

              	 	 	
                40

              	 
	
                13.15

              	 	 	
                Preparation
                  and Filing of SEC Documents

              	 	 	
                40

              	 
	
                13.16

              	 	 	
                Further
                  Assurances

              	 	 	
                40

              	 
	
                13.17

              	 	 	
                Tag
                  Along Rights

              	 	 	
                40

              	 
	
                13.18

              	 	 	
                Access
                  to Company Records

              	 	 	
                41

              	 
	
                13.19
                  

              	 	 	
                Non-Reliance

              	 	 	
                41

              	 
	
                13.20
                  

              	 	 	
                Disclaimer

              	 	 	
                41

              	 
	 	 	 	 	 	 	 	 
	
                SECTION
                  14 - ESCROW PROVISIONS

              	 	 	
                42

              	 

      

    

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    MEMBERSHIP
      INTEREST PURCHASE AGREEMENT

     

    THIS
      MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and entered
      into as of this 8th
      day of
      December, 2006, by and among (i) ARGAN, INC., a Delaware corporation
      (“Purchaser”), (ii) GEMMA POWER SYSTEMS, LLC, a Connecticut limited liability
      company (“GPS”), (iii) GEMMA POWER, INC., a Connecticut corporation
      (“GPS-Connecticut”), (iv) GEMMA POWER SYSTEMS CALIFORNIA, INC., a California
      corporation (“GPS-California”), and (v) WILLIAM F. GRIFFIN, JR. (“Griffin”), and
      (vi) JOEL M. CANINO (“Canino,” and together with Griffin sometimes hereinafter
      referred to together as, the “Sellers”). 

    

    INTRODUCTORY
      STATEMENT

     

    A. The
      Sellers own all of the membership interests of GPS (the “GPS Membership
      Interests”).

    

    B. GPS
      is
      engaged in the engineering and construction of power energy systems and also
      provides consulting, owner’s representative, operating, and maintenance services
      to the energy market.

    

    C. GPS-Connecticut
      and GPS-California are affiliates of GPS and are also engaged in the engineering
      and construction of power energy systems and also provide consulting, owner’s
      representative, operating, and maintenance services to the energy
      market.

    

    D. The
      Board
      of Directors of Purchaser and the managers and members of GPS have approved
      the
      acquisition of GPS by Purchaser by acquisition from the Sellers of all of the
      GPS Membership Interests, upon the terms and subject to the conditions set
      forth
      herein. 

    

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual
      representations, warranties, covenants and agreements herein contained and
      other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties do agree as follows:

    

    DEFINITIONS

     

    The
      following terms when used in this Agreement shall have the following
      meanings:

    

    “Accounts
      Receivable”
means
      accounts receivable, Note due from all sources of the Company, and credits
      for
      returned or damaged merchandise.

    

    “Act”
shall
      mean the Securities Act of 1933, as the same has been and shall be amended
      from
      time to time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Adjusted
      EBITDA of the Companies”
shall
      have the meaning set forth in Section 2.2(d)(iii) hereof. 

    

    “Adverse
      Consequences”
means
      all material actions, suits, proceedings, hearings, investigations, charges,
      complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
      damages, dues, penalties, fines, costs, liabilities, obligations, taxes, liens,
      losses, expenses, and fees, including court costs and attorneys' fees and
      expenses, net of all tax savings and insurance proceeds actually received by
      an
      Indemnitee with respect to any of the foregoing, but not for any punitive,
      indirect or consequential damages.

    

    “Argan”
shall
      mean Purchaser, Argan, Inc., a Delaware corporation, with its principal offices
      located at One Church Street, Suite 401, Rockville, Maryland 20850, and its
      successors and assigns.

    

    “Argan
      Per Share Value”
shall
      mean Three and 75/100 Dollars ($3.75) per share, being the same price per
      share as that paid by investors for Argan Common Stock in connection with the
      Private Offering. 

    

    “Argan
      Common Stock”
shall
      mean the authorized voting common stock of Argan.

    

    “Business
      Day”
shall
      mean shall mean any day of the week other than Saturday, Sunday or a day on
      which banking institutions in either New York, New York, or Washington, D.C.,
      are obligated or authorized by law to close.

    

    “Canino”
shall
      mean Joel M. Canino, a member and manager of GPS and a stockholder, officer
      and director of GPS-Connecticut and of GPS-California, and a signatory to this
      Agreement.

    

    “Canino
      Employment Agreement”
shall
      mean the employment agreement to be entered into by Canino and the Company
      pursuant to Section 6.6 below.

     

    “Cash
      Consideration”
shall
      have the meaning set forth in Section 2.2(a) hereof. 

    

    “Closing”
means
      the transfer of the Ownership Interests to Purchaser and the payment of the
      Consideration to the Sellers pursuant to this Agreement.

    

    “Closing
      Date”
means
      the date of Closing, established under Section 3 of this Agreement.

     

    “Closing
      Date Balance Sheet”
means
      the audited combining and combined balance sheet of the Companies, as at the
      close of business on the Closing Date, presented on an accrual basis, prepared
      in accordance with GAAP by the Companies’ Regular CPA.

    

    “Closing
      Date Financial Statements”
shall
      mean the Closing Date Balance Sheet, together with the related audited combining
      and combined statement of operations and changes in financial position of the
      Companies for the period from January 1, 2006 through
      the close of business on the Closing Date, prepared in accordance with GAAP
      by
      the Companies’ Regular CPA, after making all appropriate adjustments required to
      present same on an accrual basis, using the same accounting methods, historical
      policies, practices, principles and procedures with consistent classifications,
      judgments and estimation methodologies as were used in the preparation of the
      Interim Financial Statements. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

    

    “Companies”
means
      Gemma Power Systems, LLC, Gemma Power, Inc., and Gemma Power Systems California,
      Inc. and all of their respective subsidiaries and affiliates (unless the context
      clearly indicates otherwise). Each of Gemma Power Systems, LLC, Gemma Power,
      Inc., and Gemma Power Systems California, Inc. (and all of their respective
      subsidiaries and affiliates, unless the context clearly indicates otherwise)
      is
      sometimes referred to as “a Company.”

    

    “Companies’
      Regular CPA”
means
      the accounting firm of Kostin, Ruffkess & Company, LLC, Certified Public
      Accountants, the Companies’ regular independent certified public
      accountant.

     

    “Confidential
      Information” has
      the
      meaning set forth in Section 9.2 below.

    

    “Consideration”
means
      the aggregate consideration set forth in Section 2 hereof.

    

    “Contingent
      Cash Consideration”
shall
      have the meaning set forth in Section 2.2(d)(iii) hereof.

    

    “Contract”
means
      any contract, agreement, obligation, promise or undertaking (whether written
      or
      oral and whether express or implied) that is legally binding, under which any
      Company has or may acquire any rights, or has or may become subject to any
      obligation or liability, or by which any Company or any of the assets owned
      or
      used by it is or may become bound.

    

    “December
      31, 2007 Financial Statements”
shall
      mean the consolidated balance sheets of the Companies as at December 31, 2007,
      and the related consolidated statements of income, changes in equity, and cash
      flow for the twelve month period then ended, prepared by the accounting firm
      of
      Grant Thornton (or such other accounting firm as is then regularly engaged
      by
      Purchaser),
      together
      with the report thereon of said accounting firm, including the notes thereto,
      prepared in accordance with GAAP, using, to the extent discernable by Grant
      Thornton or such other accounting firm, the same accounting methods, historical
      policies, practices, principles and procedures with consistent classifications,
      judgments and estimation methodologies as were used in the preparation of the
      Interim Financial Statements.

    

    “Delivery
      Date” has
      the
      meaning set forth in Section 3.1 below.

     

    “Environmental,
      Health, and Safety Laws”
means
      the United States federal Comprehensive Environmental Response, Compensation
      and
      Liability Act of 1990, the Resource Conservation and Recovery Act of 1976,
      and
      the Occupational Safety and Health Act of 1970, each as amended, together with
      all other laws (including rules, regulations, codes, and judicial decisions
      thereunder of federal, state, local, and foreign governments and all agencies
      thereof) concerning pollution or protection of the environment, public health
      and safety, or employee health and safety, including laws relating to emissions,
      discharges, releases, or threatened releases of Hazardous Materials into ambient
      air, surface water, ground water, or lands or otherwise relating to the
      manufacture, processing, distribution, use, treatment, storage, disposal,
      transport, or handling of Hazardous Materials.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Escrow
      Agent”
shall
      mean Curtin Law Roberson Dunigan & Salans, P.C.

    

    “Escrow
      Agreement”
shall
      mean the escrow agreement in the form of the escrow agreement attached hereto
      as
Exhibit
      2.2(b).

    

    “Escrowed
      Stock Consideration”
shall
      have the meaning set forth in Section 2.2(b) hereof.

    

    “Extremely
      Hazardous Substance”
has
      the
      meaning set forth in Section 401 of the Emergency Planning and Community
      Right-to-Know Act of 1996, as amended.

    

    “Financial
      Statements”
means
      collectively (i) the audited balance sheets of the Companies as at December
      31
      in each of the years 2002 through 2005, and the related audited statements
      of
      income, changes in equity, and cash flow for each of the fiscal years then
      ended, prepared by the Companies’ Regular CPA, together with the report thereon
      of the Companies’ Regular CPA, (ii) the Interim Financial Statements, and (iii)
      the Closing Date Financial Statements, including in all cases the notes thereto;
      all of which have been prepared in accordance with GAAP. 

    

    “GAAP”
shall
      mean in accordance with generally accepted accounting principles, consistently
      applied. 

    

    “GDI”
shall
      have the meaning set forth in Section 4.1(g).

    

    “GPS-California
      Stock”
shall
      have the meaning set forth in Section 4.21.

    

    “GPS-Connecticut
      Stock”
shall
      have the meaning set forth in Section 4.21.

    

    “GPS-Hartford”
shall
      mean Gemma Power Hartford, LLC, a Connecticut limited liability company
      wholly-owned by GPS.

    

    “GPS
      Membership Interests”
has
      the
      meaning set forth in the introductory statement.

    

    “GPS
      Stock Purchase Agreement”
shall
      mean that certain Stock Purchase Agreement by and among Purchaser,
      GPS-Connecticut, GPS-California, Griffin and Canino to be executed
      contemporaneously with this Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    “Griffin”
shall
      mean William F. Griffin, Jr., a member and manager of GPS and a
      stockholder, officer
      and director of GPS-Connecticut and of GPS-California, and a signatory to this
      Agreement. 

    

    “Griffin
      Employment Agreement”
shall
      mean the employment agreement to be entered into by Griffin and the Company
      pursuant to Section 6.6 below.

    

    “Hazardous
      Materials”
shall
      include, without limitation, any pollutants or other toxic or hazardous
      substances or any solid, liquid, gaseous or thermal irritant or contaminant,
      including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste
      (including materials to be recycled, reconditioned or reclaimed), oil or
      petroleum flammable materials, explosives, radioactive materials, hazardous
      waste, hazardous or toxic substances, or related materials, asbestos requiring
      treatment as a matter of law, or any other substance or materials defined as
      hazardous or harmful, or requiring special treatment or special handling by
      any
      federal, state or local environmental law, ordinance, rule or regulation
      including, without limitation, the Comprehensive Environmental Response,
      Compensation and Liability Act of 1990, as amended (42 U.S.C. Sections 9601,
      et
      seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section
      1901, et seq.), the Resource Conservation and Recovery Act, as amended (42
      U.S.C. Sections 6901 et seq.), the Occupational Safety and Health Act of 1970
      and the regulations adopted and publications promulgated pursuant
      thereto.

     

    “Interim
      Financial Statements”
means
      the internally generated combining and combined balance sheet of the Companies
      as at September 30, 2006, and the related internally generated combining and
      combined statements of income, changes in equity, and cash flow for the nine
      (9)
      month period then ended, prepared in accordance with GAAP, after making all
      appropriate adjustments required to present same on an accrual
      basis.

    

    “Main
      Facility Lease”
shall
      have the meaning set forth in Section 4.9(b) hereof.

     

    “Material
      Adverse Change”
shall
      mean any change that is materially adverse to the current business, operations,
      properties, prospects, assets, or financial condition of any of the Companies,
      taken as a whole. 

     

    “Minimum
      Net Worth”
shall
      have the meaning set forth in Section 2.2(c) hereof.

     

    “Net
      Worth”
shall
      mean the total assets of the Companies less the total liabilities of the
      Companies as those terms are shown on the Closing Date Balance
      Sheet.

    

    “Organizational
      Documents”
shall
      mean (a) the articles or certificate of incorporation and the bylaws of a
      corporation; (b) the articles of organization and the operating agreement of
      any
      limited liability company; (c) the partnership agreement and any statement
      of
      partnership of a general partnership; (d) the limited partnership agreement
      and
      the certificate of limited partnership of a limited partnership; (e) any charter
      or similar document adopted or filed in connection with the creation, formation,
      or organization of any entity; and (f) any amendment to any of the
      foregoing.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    “Other
      Stockholders”
shall
      mean the stockholders of GPS-Connecticut other than the Sellers.

     

    “Ownership
      Interests”
shall
      mean all of the outstanding membership interests of GPS and all of the
      authorized issued and outstanding capital stock of GPS-Connecticut and
      GPS-California, including all warrants, options, convertible securities or
      other
      rights (contingent or otherwise) to purchase or acquire membership interests
      or
      stock of the any of the Companies.

    

    “Private
      Offering”
shall
      mean the private offering of up to 2,900,000 shares of Argan Common Stock to
      a
      limited number of sophisticated investors pursuant to Private Offering Stock
      Purchase Agreement and the Private Offering Escrow Agreement.

    

    “Private
      Offering Stock Purchase Agreement”
shall
      have the meaning set forth in Section 5.11 hereof. 

    

    “Private
      Offering Escrow Agreement”
shall
      have the meaning set forth in Section 5.11 hereof. 

    

    “Project
      Contract”
shall
      mean any contract entered into by a Company for the engineering and construction
      of a power energy system.

    

     “Project
      Site”
shall
      mean the physical site of projects under the management or control of any of
      the
      Companies pursuant to any Project Contract. 

    

    “Registration
      Rights Agreement”
      shall
      mean the Registration Rights Agreement executed by the Sellers and Purchaser
      pursuant to Section 2.4 hereof.

     

    “SEC”
shall
      have the meaning set forth in Section 2.4.

    

    “Sellers”
has
      the
      meaning set forth in the preface above.

    

    “Sellers’
      Indemnification Threshold”
shall
      have the meaning set forth in Section 10.3.

     

    “Stock
      Consideration”
shall
      have the meaning set forth in Section 2.2(a) hereof.

     

    SECTION
      1

    

    ACQUISITION
      OF MEMBERSHIP INTERESTS

    

    1.1 Acquisition
      of Membership Interests.
      On the
      Closing Date (as defined in Section 3), and subject to and upon the fulfillment
      or waiver of the terms and conditions of this Agreement, Purchaser
      shall acquire
      from the Sellers all of the GPS Membership Interests. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    1.2 Organizational
      Documents, Management.

    

    (a) Organizational
      Documents.
      At
      Closing, the Organizational Documents of GPS, and of its wholly-owned
      subsidiary, GPS-Hartford, shall be amended in the manner determined by
      Purchaser, as sole member of GPS.

    

    (b) Management.
      At
      Closing, Purchaser, as sole member of GPS, shall take all appropriate action
      to
      elect or appoint the person(s) designated on Schedule 1.2(b) as the manager(s)
      of GPS, and of its wholly-owned subsidiary, GPS-Hartford, until their respective
      successors are duly elected or appointed and qualified.

    

    SECTION
      2

    

    CONSIDERATION

    

    2.1 Consideration.
       The
      total
      consideration to be paid by Purchaser to the Sellers (the “Consideration”) shall
      be an amount equal to Twenty Million One Hundred Twenty-Five Thousand Dollars
      ($20,125,000), comprised of Eleven Million Two Hundred Fifty Thousand Dollars
      ($11,250,000) in cash (the “Cash Consideration”) and Eight Million Eight Hundred
      Seventy-Five Thousand Dollars ($8,875,000) in Argan Common Stock (the “Stock
      Consideration”), subject to adjustment in accordance with Section 2.2(c). The
      Consideration shall be determined and paid in accordance with Section
      2.2.

    

    2.2 Payment
      of Consideration; Adjustment of Consideration.
       

     

    (a) Subject
      to Section 2.2(c), and except as set forth in Section 2.2(d) below, the
      Consideration shall be paid at Closing in cash, wire transfer or certified
      funds
      in the amount of the Cash Consideration, and through issuance of the number
      of
      shares of Argan Common Stock equal in value to the Stock Consideration, such
      shares valued at the Argan Per Share Value; provided, however, that Purchaser
      shall retain from the Stock Consideration and not deliver to the Sellers at
      Closing Argan Common Stock having an aggregate value (valued at the Argan Per
      Share Value) of Two Million Five Hundred Thousand Dollars ($2,500,000) (the
      “Escrowed Stock Consideration”), but instead at Closing deposit the Escrowed
      Stock Consideration in escrow with the Escrow Agent to be held pursuant to
      the
      Escrow Agreement described in Section 2.2(b) below. At Closing, the Sellers
      shall receive their respective pro rata shares of the Cash Consideration and
      the
      Stock Consideration (less the Escrowed Stock Consideration) as set forth in
      Schedule 2.2(a).  

     

    (b) At
      Closing, Purchaser shall deliver the Escrowed Stock Consideration to the Escrow
      Agent to be held and/or released pursuant to the terms and conditions of the
      Escrow Agreement, substantially in form and substance as set forth in Exhibit
      2.2(b). 

    

    (c) Notwithstanding
      anything to the contrary contained in Section 2.2(a), (i) in the event that
      the
      Net Worth of the Companies as of the Closing Date, as set forth on the Closing
      Date Balance Sheet, is less than Four Million One Hundred Thousand Dollars
      ($4,100,000) (the “Minimum Net Worth”), then such deficiency shall reduce,
      dollar for dollar, the Cash Consideration paid to the Sellers pursuant to
      Section 2.2(a) hereof; and (ii) in the event that the Net Worth of the Companies
      as of the Closing Date, as set forth on the Closing Date Balance Sheet, is
      greater than the Minimum Net Worth, as set forth on the Closing Date Balance
      Sheet, then the Cash Consideration paid to Sellers pursuant to Section 2.2(a)
      hereof shall be increased by the amount by which the Net Worth of the Companies
      as of the Closing Date, as set forth on the Closing Date Balance Sheet, exceeds
      the Minimum Net Worth. To enable all parties to determine the Net Worth of
      the
      Companies as of the Closing Date, the Sellers shall cause the Closing Date
      Financial Statements to be delivered to Purchaser on or before January 15,
      2007.
      The Closing Date Financial Statements shall be subject to the Sellers’ and
      Purchaser’s review. In the event that there is any adjustment to the Cash
      Consideration pursuant to this Section 2.2(c), the amount by which the Cash
      Consideration has been reduced, if any, shall be repaid by Sellers to Purchaser,
      and the amount by which the Cash Consideration has been increased, if any,
      shall
      be paid by Purchaser to the Sellers, in either case within two (2) Business
      Days
      following the determination of such adjustment. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) Notwithstanding
      anything to the contrary contained in Section 2.2(a), Two Million Nine Hundred
      Thousand Dollars ($2,900,000) of the Cash Consideration shall not be paid at
      Closing, but rather shall be paid as follows:

    

    (i) Eight
      Hundred Ten Thousand Dollars ($810,000) of the Cash Consideration shall be
      paid
      on or before January 10, 2007;

    

    (ii) Ninety
      Thousand Dollars ($90,000) of the Cash Consideration shall be paid on or before
      April 10, 2007; and 

    

    (iii) Two
      Million Dollars ($2,000,000) of the Cash Consideration (the “Contingent Cash
      Consideration”) shall be paid if and only if the Adjusted EBITDA of the
      Companies, as reflected on the December 31, 2007 Financial Statements, is
      greater than Twelve Million Dollars ($12,000,000), any such amount to be paid
      at
      the earlier of: (i) March 31, 2008, or (ii) Purchaser’s receipt of the Escrow
      Funds following satisfaction of the Escrow Release Conditions, as said terms
      are
      defined in and pursuant to the terms and conditions of that certain Second
      Amended and Restated Financing and Security Agreement, dated December ___,
      2006,
      by and among Purchaser, Bank of America, N.A. and the other parties named
      therein. Purchaser will not be obligated to pay, and the Sellers will not be
      entitled to payment of, any portion of the Contingent Cash Consideration if
      the
      Adjusted EBITDA of the Companies, as reflected on the December 31, 2007
      Financial Statements, is equal to or less than Twelve Million Dollars
      ($12,000,000). For purposes of this Section 2.2(d)(iii), the “Adjusted EBITDA of
      the Companies” shall mean earnings of the Companies for the designated period
      determined in accordance with GAAP, adjusted by adding back all deductions
      taken
      in determining such number, if any, for (A) interest expense, (B) income taxes,
      (C) depreciation, (D) amortization, and (E) corporate overhead of Purchaser
      allocated to the Companies by Purchaser in the regular course of business.
      It is
      understood and agreed that Adjusted EBITDA shall include interest income of
      the
      Companies for the designated period. 

    

    (e) In
      the
      event that any payment or repayment, as the case may be, of the applicable
      portion of the Cash Consideration payable under Sections 2.2(c) and 2.2(d)
      above
      is not timely made, then the party obligated to pay shall also be liable to
      the
      party entitled to payment for interest thereon from the date that such payment
      was due, in accordance with Section 2.2(c) or Section 2.2(d), as the case may
      be, until paid at an annual rate equal to the sum of (i) the Prime Rate as
      published in the Money Rates section of The Wall Street Journal on the Business
      Day prior to the date such payment was due, and (ii) five percent (5%); and
      for
      all costs to enforce payments under said Sections 2.2(c) or 2.2(d), as the
      case
      may be, including reasonable attorneys’ fees.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    2.3 Consideration
      Allocation.
      Before
      the Closing, Purchaser and the Sellers shall negotiate in good faith to
      determine that portion of the Consideration and other relevant amounts allocable
      to the Sellers’ covenant not to compete in Section 9.1. 
      The
      parties shall prepare and file their respective tax returns consistent with
      the
      reporting requirements of Sections 1060. The
      parties shall take no positions contrary thereto in any tax return, tax contest
      or other tax filing or proceeding.
      If any
      tax authority challenges such allocation, the party receiving notice of such
      challenge shall give the other prompt written notice thereof and the parties
      shall cooperate in order to preserve the effectiveness of such allocation.
      

    

    2.4 Registration.
      Purchaser shall prepare and file a registration statement or similar document
      in
      compliance with the Act with respect to Stock Consideration (and the
      GPS-Connecticut Stock Consideration and the GPS-California Stock Consideration,
      as said terms are defined in the GPS Stock Purchase Agreement) as soon as
      practicable following Sellers’ delivery of the Closing Date Balance Sheet.
      Thereafter, Purchaser shall use its commercially reasonable efforts to obtain
      from United States Securities and Exchange Commission (the “SEC”) the
      declaration or ordering of effectiveness of such registration statement or
      document. Such registration will permit the Sellers, as holders of Argan Common
      Stock, to sell shares of Argan Common Stock at their discretion, subject to
      applicable law. Stock certificates issued as part of the Consideration shall
      be
      accompanied by any documents necessary to permit the transfer agent to transfer
      shares of Argan Common Stock as directed by the Sellers. At the Closing
      Purchaser shall execute and deliver to the Sellers a Registration Rights
      Agreement in the form attached hereto as Exhibit 2.4. 

     

    SECTION
      3

     

    CLOSING

     

    3.1 Closing;
      Deliveries into Escrow .
      The
      closing of the acquisition of the GPS Membership Interests (the “Closing”) shall
      take place on a date designated by Purchaser in a notice given to the Sellers
      that shall be not earlier than one (1) Business Day nor later than five (5)
      Business Days following the execution of this Agreement, the Stock Purchase
      Agreement, and of all documents contemplated under this Agreement and under
      the
      Stock Purchase Agreement, and placement thereof, together with all other
      documents or items to be delivered by the parties at Closing under this
      Agreement and under the Stock Purchase Agreement (including those items
      described in Sections 3.2 and 3.3 below) into escrow with the Escrow Agent
      (the
“Delivery Date”) (subject to satisfaction or waiver by the parties of their
      respective conditions to Closing set forth in Sections 5 and 6, other than
      such
      conditions that by their nature must be satisfied with the Closing), or at
      such
      other time, date and place as Purchaser and the Sellers may agree (the “Closing
      Date”). 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    3.2 Deliveries
      by Escrow Agent.
      At or
      before 2:00 p.m. on the Closing Date, Purchaser shall initiate a wire transfer
      of immediately available funds in an amount equal to the Cash Consideration
      (other than the portion thereof to be paid following Closing in accordance
      with
      Section 2.2(d)) to an account or accounts to be designated by the Sellers,
      such
      designation to be made no later than the Delivery Date. Upon confirmation from
      either of the parties that said wire transfer of funds has been effected, the
      Escrow Agent shall be authorized, and hereby agrees, to date as of the Closing
      Date all documents held by it in escrow which, in accordance with the terms
      of
      this Agreement, are to be dated as of the Closing Date and to deliver, and
      the
      Escrow Agent shall release from escrow and deliver, (i) to the Sellers stock
      certificates representing the Stock Consideration described in Section 2, the
      Registration Rights Agreement, and all other documents and instruments received
      by it which, in accordance with the terms of this Agreement, are to be delivered
      by Purchaser to the Sellers at Closing, and (ii) to Purchaser duly
      endorsed certificates or other evidences of ownership representing all of
      the GPS Membership Interests together with such other customary documents as
      may
      be required to transfer same, and all other documents and instruments received
      by it which, in accordance with the terms of this Agreement, are to be delivered
      by Purchaser to Sellers at the Closing. 

    

    SECTION
      4

     

    REPRESENTATIONS,
      WARRANTIES AND CERTAIN

    COVENANTS
      OF THE SELLERS AND THE COMPANIES

     

    As
      a
      material inducement to induce Purchaser to consummate the transactions
      contemplated under this Agreement and under the GPS Stock Purchase Agreement,
      but subject to the limitations set forth in Section 10 below, each of the
      Sellers and the Companies represent and warrant that each of the matters set
      forth in this Section 4 is true and correct as of the date hereof (or, in the
      case of the Closing Date Financial Statements to be provided hereafter in
      accordance with the following provisions of this Section 4 below, will be true
      and correct as of the Closing Date), and
      acknowledge that Purchaser’s entry into this Agreement and the GPS Stock
      Purchase Agreement and the performance of its obligations hereunder and
      thereunder are made in reliance upon the completeness and accuracy of each
      of
      the matters set forth herein. The representations and warranties being made
      by
      the Companies shall survive up and until the Closing Date. The representations
      and warranties being made by the Sellers shall survive as set forth in Section
      13.11 below.

    

    4.1 Organization,
      Qualifications and Company or Corporate Power.

     

    (a) GPS
      is a
      limited liability company duly organized, validly existing and in good standing
      under the laws of the State of Connecticut. Attached as Schedule 4.1(a) is
      a
      list of all states in which GPS is qualified to do business. GPS is duly
      qualified as a foreign limited liability company in each other jurisdiction
      in
      which qualification is required.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    (b) GPS-Connecticut
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of the State of Connecticut. Attached as Schedule 4.1(b) is a list
      of
      all states in which GPS-Connecticut is qualified to do business. GPS-Connecticut
      is duly qualified as a foreign corporation in each other jurisdiction in which
      qualification is required. On or before the Closing Date GPS-Connecticut will
      file IRS Form 2553 “Election by a Small Business Corporation” in which it elects
      to be treated as an S corporation pursuant to applicable provisions of the
      Code.

    

    (c) Gemma
      Power Hartford, LLC (“GPS-Hartford”) is a limited liability company duly
      organized, validly existing and in good standing under the laws of the State
      of
      Connecticut. Attached as Schedule 4.1(c) is a list of all states in which
      GPS-Hartford is qualified to do business. GPS-Hartford is duly qualified as
      a
      foreign limited liability company in each other jurisdiction in which
      qualification is required. All of the membership interests of GPS-Hartford
      are
      owned by GPS.

    

    (d) GPS-California
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of the State of California. Attached as Schedule 4.1(d) is a list
      of
      all states in which GPS-California is qualified to do business. GPS-California
      is duly qualified as a foreign corporation in each other jurisdiction in which
      qualification is required. GPS-California has duly elected status, and qualifies
      as of the date of this Agreement, as an S corporation pursuant to applicable
      provisions of the Code.

    

    (e) Each
      of
      GPS and GPS-Hartford has the limited liability company power and authority,
      and
      each of GPS-Connecticut and GPS-California has the corporate power and
      authority, to own and hold its properties and to conduct its businesses as
      currently conducted and as proposed to be conducted, and to execute, deliver
      and
      perform this Agreement, the GPS Stock Purchase Agreement, and all other
      agreements and instruments related hereto or contemplated hereby to which such
      Company is a signatory.

    

    (f) Except
      as
      set forth on Schedule 4.1(f), none of the Companies owns of record or
      beneficially, directly or indirectly, (i) any shares of outstanding capital
      stock or securities convertible into capital stock of any other corporation,
      or
      (ii) any participating interest in any partnership, joint venture, limited
      liability company, or other non-corporate business enterprise.

    

    (g) Gemma
      Development, Inc. (“GDI”) is a corporation duly incorporated, validly existing
      and in good standing under the laws of the State of Delaware. 

    

    4.2 Authorization
      of Agreement. The
      execution, delivery and performance by each of the Companies of this Agreement,
      the GPS Stock Purchase Agreement, and any other instruments or documents
      required to be executed and delivered hereby, have been duly authorized by
      all
      requisite limited liability company or corporate action, as the case may be,
      and
      will not (a) violate any applicable provision of law, any order, writ,
      injunction, decree, judgment, or ruling of any court or other agency of
      government, the Articles of Organization or the Operating Agreement of GPS
      or
      GPS-Hartford, the Articles of Incorporation or Bylaws of GPS-Connecticut or
      GPS-California, or any provision of any indenture, agreement, insurance policy,
      bond or other instrument by which any of the Companies, or any of their
      respective properties or assets, are bound or affected, (b) conflict with,
      result in a material breach of or constitute (with due notice or lapse of time
      or both) a default under any such indenture, insurance policy, bond, agreement
      or other instrument, (c) result in being declared void, voidable or
      without further
      binding effect any license, governmental permit or certification, employee
      plan,
      note, bond, mortgage, indenture, deed of trust, franchise, lease, contract,
      agreement, or other instrument or commitment or obligation to which any of
      the
      Companies is a party, or by which any of the Companies, or any of their
      respective assets, may be bound, subject or affected, or (d) except as otherwise
      provided in this Agreement, result in the creation or imposition of any lien,
      charge or encumbrance of any nature whatsoever not arising in the ordinary
      course of business upon any of the properties or assets of any of the
      Companies.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    4.3 Membership
      Interests; Capital Stock.
      The
      membership interests of GPS and GPS-Hartford and the authorized capital stock
      of
      GPS-Connecticut and GPS-California and the holders of the issued and outstanding
      shares of such capital stock are set forth in Schedule 4.3 hereto. Except as
      disclosed in Schedule 4.3, there is no (i) subscription, warrant, option,
      convertible security or other right (contingent or otherwise) to purchase or
      acquire any membership interests or shares of any class of capital stock of
      any
      of the Companies, which is authorized or outstanding, (ii) none of the Companies
      has any commitment to issue any membership interests, shares, warrants, options
      or other such rights or to distribute to holders of any membership interests
      or
      any class of its capital stock any evidence of indebtedness or assets, (iii)
      none of the Companies has any obligation (contingent or otherwise) to purchase,
      redeem or otherwise acquire any membership interests or shares of its capital
      stock or any interest therein or to pay any
      dividend or make any other distribution in respect thereof, and (iv) none of
      the
      Companies has any obligation or commitment to register under the Act any
      securities issued or to be issued by it. All of the outstanding membership
      interests and all of the issued and outstanding shares of the capital stock
      of
      the Companies, as the case may be, have been validly issued in compliance with
      all federal and state securities laws and are fully paid and non-assessable.
      

    

    4.4 Financial
      Statements.
      The
      Companies have delivered the Financial Statements to Purchaser (or with respect
      to the Closing Date Financial Statements will timely deliver same to Purchaser
      in accordance with the terms of this Agreement). Subject to the provisions
      of
      the Disclaimer set forth in Section 13.20 of this Agreement, the Financial
      Statements are, or will
      be,
      as the case may be, true, complete and correct, have been, or will be, as the
      case may be, prepared in accordance with GAAP and fairly present the financial
      condition of the Companies as of such respective dates and
      the
      results of operations for the respective periods then ended after
      making, with respect to the Interim Financial Statements and the Closing Date
      Financial Statements, all appropriate adjustments required to present such
      Financial Statements on an accrual basis. Except as or as will be set forth
      in
      such Financial Statements, or
      as
      incurred in the ordinary course of business, to the knowledge of the Sellers
      and
      the Companies, the Companies have no material obligation or liability, absolute,
      accrued or contingent, except contingent liabilities as set forth in the
      Contracts disclosed pursuant to Section 4.11 below, and obligations and
      liabilities which do not adversely affect the business, property or assets
      of
      the Companies.  

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    4.5 Absence
      of Changes.
      Except
      as listed in Schedule 4.5 and since the time period covered by the Interim
      Financial Statements, none of the Companies has:

    

    (a) Transferred,
      assigned, conveyed or liquidated any of its assets or entered into any
      transaction or incurred any liability or obligation which affects the assets
      or
      the conduct of its business, other than in the ordinary course of
      business;

    

    (b) Incurred
      any Material Adverse Change, or become aware of any fact, circumstance,
      occurrence or event which could reasonably be expected to result in a Material
      Adverse Change; 

     

    (c) Suffered
      any material destruction, damage or loss relating to its assets or the conduct
      of its business whether or not covered by insurance;

    

    (d) Suffered,
      permitted or incurred other than in the ordinary course of business the
      imposition of any lien, charge, encumbrance (which as used herein includes,
      without limitation, any mortgage, deed of trust, conveyance to secure debt
      or
      security interest) whether or not contingent in nature, or claim upon any of
      its
      assets, except for any current year lien with respect to personal or real
      property taxes not yet due and payable;

    

    (e) Committed,
      suffered, permitted or incurred any default in any liability or obligation
      of
      the Company;

    

    (f) Made
      or
      agreed to any change in the terms of any contract or instrument to which it
      is a
      party, other than change orders as occur in the regular course of business
      in
      connection with any Project Contract;

    

    (g) Knowingly
      waived, canceled, sold or otherwise disposed of, other than in the ordinary
      course of business, for less than the face amount thereof, any claim or right
      relating to its assets or the conduct of its business, which it has against
      others;

    

    (h) Declared,
      promised or made any distribution from its assets or other payment from the
      assets to its members or shareholders, as the case may be (other than reasonable
      compensation for services actually rendered and pre-closing distributions of
      cash to Griffin and/or Canino in their capacity as the sole members of GPS,
      provided same does not result in the failure of the Companies to meet the
      Minimum Net Worth requirement as set forth in Section 2.2(c)), or issued any
      additional membership interests, shares or rights, options or calls with respect
      to its membership interests or shares of capital stock, or redeemed, purchased
      or otherwise acquired any of its membership interests or shares, or made any
      change whatsoever in its capital structure;

    

    (i) Paid,
      agreed to pay or incurred any obligation for any payment for, any contribution
      or other amount to, or with respect to, any employee benefit plan, or paid
      or
      agreed to pay any bonus or salary increase to its executive officers or
      directors, or made any increase in the pension, retirement or other benefits
      of
      its managers, directors or executive officers other than in the ordinary course
      of business;  

     

    
      
        
        

      

      
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    (j) Committed,
      suffered, permitted, incurred or entered into any transaction or event other
      than in the normal course of business which would increase its liability for
      any
      prior taxable year;

    

    (k) Incurred
      any other liability or obligation or entered into any transaction other than
      in
      the ordinary course of business; or

    

    (l) Received
      any notices of, or has reason to believe, that any of its customers or clients
      have taken or contemplate any steps which could disrupt its business
      relationship with said customer or client or could result in the diminution
      in
      the value of the business of the Company as a going concern.

    

    4.6 Legal
      Actions.
      Except
      as listed on Schedule 4.6, there is no action, suit, investigation, or
      proceeding pending or, to the knowledge of the Companies or the Sellers,
      threatened against or affecting the Sellers, any of the Companies, or any of
      their respective properties or rights, before any court or by or before any
      governmental body or arbitration board or tribunal and no basis exists for
      any
      such action, suit, investigation or proceeding which will result in any material
      liability or affirmative or negative injunction being imposed on any of the
      Companies or the Sellers. The foregoing includes, without limiting its
      generality, actions pending or threatened involving the prior employment of
      any
      employees or prospective employees of any of the Companies, or their use, in
      connection with their respective businesses, of any information or techniques
      which might be alleged to be proprietary to its former employer(s). In addition,
      no action, suit, investigation or proceeding has been brought against any of
      the
      Companies or the Sellers relating to any claims relating to the presence or
      effect of Hazardous Materials in any design or construction project or other
      matter in which any of the Companies or the Sellers have been
      involved.

    

    4.7 Business
      Property Rights.
      To the
      best of each of the Companies’ or each of the Seller’s knowledge, no person or
      entity has made or threatened to make any claims that the operations of the
      businesses of the Companies are or will be in violation of or infringe on any
      technology, patents, copyrights, trademarks, trade names, service marks (and
      any
      application for any of the foregoing), licenses, proprietary information,
      know-how, or trade secrets (“Business Property Rights”). To the best of each of
      the Companies’ or each of the Seller’s knowledge, no third party is infringing
      upon or violating any of the Companies’ Business Property Rights and each of the
      Companies has the exclusive right to use the same. None of the employees,
      directors, officers, members or shareholders of any of the Companies has any
      valid claim whatsoever (whether direct, indirect or contingent) of right, title
      or interest in or to any of the Companies’ Business Property
      Rights.

    

    4.8 Liabilities.
      Except
      as listed in Schedule 4.8, to the knowledge of the Sellers and the Companies,
      none of the Companies has any liabilities or obligations, whether accrued,
      absolute, contingent or otherwise (individually or in the aggregate), which
      are
      of a nature required to be reflected in financial statements prepared in
      accordance with GAAP, including without limitation any liability which might
      result from an audit of its tax returns by any appropriate authority, except
      (i)
      the liabilities and obligations set forth in the Financial Statements delivered
      or to be delivered in accordance with Section 4.4, and (ii) liabilities and
      obligations incurred for the purpose of enabling the Companies to conduct their
      normal business (in each case in normal amounts and incurred only in the
      ordinary course of business). Except as disclosed in the Financial Statements
      (or to be disclosed in the Closing Date Financial Statements), to the knowledge
      of the Sellers and the Companies, none of the Companies is in default with
      respect to any liabilities or obligations and all such liabilities or
      obligations are shown and reflected in the Financial Statements (or will be
      shown and reflected in the Closing Date Financial Statements), and such
      liabilities incurred or accrued subsequent to the Companies’ incorporation, have
      been, or are being, paid or discharged as they become due, and all such
      liabilities and obligations were incurred in the ordinary course of
      business.

     

    
      
        
        

      

      
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    4.9 Ownership
      of Assets and Leases.

     

    (a) Attached
      hereto as Schedule 4.9(a) is a complete and correct list and brief description,
      as of the date of this Agreement, of all real property and material items of
      personal property owned by the Companies and all of the long term capital leases
      and other agreements relating to any real, personal or intangible property
      owned, used, licensed or leased (other than term leases of equipment entered
      into in connection with any Project Contract) by the Companies or any of them.
      Each of the Companies has good and marketable title to all of its assets,
      including those listed on Schedule 4.9(a), and any income or revenue generated
      therefrom, in each case free and clear of any liens, claims, charges, options,
      rights of tenants or other encumbrances, except (i) as disclosed and reserved
      against in the Financial Statements (to the extent and in the amounts so
      disclosed and reserved against), (ii) for liens arising from current taxes
      not
      yet due and payable, and (iii) as separately and specifically set forth on
      Schedule 4.9(a). Each of the aforementioned leases and agreements of the
      Companies is in full force and effect and constitutes a legal, valid and binding
      obligation of the Company and the other respective parties thereto, enforceable
      in accordance with its terms, except as enforceability may be limited by
      applicable equitable principles or by bankruptcy, insolvency, reorganization,
      moratorium, or similar laws from time to time in effect affecting the
      enforcement of creditors’ rights generally, and there is not under any of such
      leases or agreements existing any default of any of the Companies or, to the
      best of the Companies’ or each Seller’s
      knowledge, of any other parties thereto (or event or condition which, with
      notice or lapse of time, or both, would constitute a default). None of the
      Companies has received any notice of violation of any applicable regulation,
      ordinance or other law with respect to its operations or assets and, to the
      best
      of the Companies’ and the Sellers’ knowledge, there is not any such violation or
      grounds therefor which could adversely affect any of the Company’s assets or the
      conduct of its business. None of the Companies is a party to any contract or
      obligation whereby an absolute or contingent right to purchase, obtain or
      acquire any rights in any of the assets has been granted to anyone. There does
      not exist and will not exist by virtue of the transactions contemplated by
      this
      Agreement any claim or right of third persons which may be legally asserted
      against any asset of the Companies.

    

    (b) GPS’s
      main facility, located at 2461 Main Street, Glastonbury, Connecticut 06033
      (the
“Main Facility”), is leased by GPS pursuant to that certain Lease dated October
      5, 1999 by and between Glastonbury Bank and Trust Company, as Lessor, and Gemma
      Power Systems, LLC, as Lessee, which lease was amended pursuant to an Amendment
      to Lease dated as of the ____ day of July, 2000, a Second Amendment to Lease,
      effective April 1, 2004, and a Third Amendment to Lease, effective November
      1,
      2005, a true, correct and complete copy of which lease, and all amendments
      and
      modifications thereof (the “Main Facility Lease”), has been provided by the
      Sellers to Purchaser. 

     

    
      
        
        

      

      
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    4.10 Taxes.
      The
      Companies have paid, or made provisions for the payment of, all taxes due,
      assessed and owed by them, if any, as reflected on their respective tax returns
      and have timely filed all federal, state, local and other tax returns which
      were
      required to be filed and which were due prior to the Closing Date, except for
      those taxes set forth on Schedule 4.10(a). All federal, state, local, and other
      taxes of the Companies accruable since the filing of such returns have been
      properly accrued on the respective books of each of the Companies. No federal
      income tax returns for any of the Companies have ever been audited by the
      Internal Revenue Service or any state or local taxing authority, except as
      described in Schedule 4.10(b). No other proceedings or other actions which
      are
      still pending or open have been
      taken for the assessment or collection of additional taxes of any kind from
      any
      of the Companies for any period for which returns have been filed, and to the
      Companies’ and the Sellers’ knowledge, no other examination by the Internal
      Revenue Service or any other taxing authority affecting any of the Companies
      is
      now pending. Except for those taxes set forth on Schedule 4.10(a), taxes which
      any of the Companies were required by law to withhold or collect subsequent
      to
      the formation or incorporation of the Companies have been withheld or collected
      and have been paid over to the proper governmental authorities or are properly
      held by the Companies for such payment and are so withheld, collected and paid
      over as of the date hereof. No waivers of statutes of limitations with respect
      to any tax returns of any of the Companies, nor extensions of time for the
      assessment of any tax, have been given by any current employees of any of the
      Companies. There are not, and there will not be, any liabilities for federal,
      state or local income, sales, use, excise or other taxes arising out of, or
      attributable to, or affecting either the assets or the conduct of the business
      of any of the Companies through the
      close
      of business on the Closing Date for which Purchaser will have any liability
      for
      payment. After the Closing, there does not and will not exist any liability
      for
      taxes resulting from the conduct of the business of any of the Companies
      through the
      close
      of business on the Closing Date, which may be asserted by any taxing authority
      against the assets of any of the Companies, or the operation of any of their
      businesses (which liability is not reimbursable pursuant to “pass-throughs”
under the Companies’ existing Project Contracts), including without limitation
      any liability arising from disallowance of any S corporation election by any
      of
      the Companies, and no lien or other encumbrance for taxes will attach to such
      assets or the operation of their businesses. The Sellers agree to give Purchaser
      immediate notice of any claim or assertion by the Internal Revenue Service,
      or
      any other taxing authority, of any such disallowance.

    

    4.11 Contracts,
      Other Agreements.
      

    

    (a) Attached
      hereto as Schedule 4.11(a) is a complete and accurate list, and Sellers have
      delivered to Purchaser true and complete copies, of:

    

    (i)
       each
      Contract that involves performance of services or delivery of goods or materials
      by or to one or more of the Companies of an amount or value in excess of
      $5,000,000, including without limitation Project Contracts and other contracts,
      subcontracts and agreements for the provision or prospective provision by any
      Company of engineering, design, procurement, construction, consulting,
      operation, maintenance or other services; 

     

    
      
        
        

      

      
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    (ii)
       each
      Contract that was not entered into in the ordinary course of business and that
      involves expenditures or receipts of one or more Companies in excess of
      $500,000;

    

    (iii)
       each
      employment agreement, consulting agreement, or agreement providing for severance
      payments that obligates or could obligate one or more Companies to make payments
      in excess of $100,000 per annum;

    

    (iv)
       each
      joint venture, partnership, and other Contract (however named) involving a
      sharing of profits, losses, costs, or liabilities by any Company with any other
      person or entity;

    

    (v) each
      Contract containing covenants that in any way purport to restrict the business
      activity of any Company or any affiliate of a Company or limit the freedom
      of
      any Company or any affiliate of a Company to engage in any line of business
      or
      to compete with any person or entity; and

    

    (vi)
       each
      Contract providing for payments to or by any person or entity based on sales,
      purchases, or profits, other than direct payments for goods.

     

    (b) Except
      as
      set forth in Schedule 4.11(a), each Contract identified or required to be
      identified in Schedule 4.11(a) is in full force and effect and is valid and
      enforceable in accordance with its terms.

    

    (c) Except
      as
      set forth in Schedule 4.11(a), no Contract identified or required to be
      identified in Schedule 4.11(a), including without limitation the Main Facility
      Lease, will be materially breached or violated as a result of the sale of
      membership interests or stock contemplated hereunder and under the GPS Stock
      Purchase Agreement, nor will consummation of such transactions result in a
      default thereunder or give any party thereto the right to terminate such
      Contract or any provision thereof, nor will consummation of such transactions
      require the consent or approval of any other party to such Contract or any
      other
      person or entity.

    

    (d) Except
      as
      set forth in Schedule 4.11(a),

    

    (i) each
      Company is in full compliance with all applicable terms and requirements of
      each
      Contract, including without limitation the maintenance of all insurance required
      to be maintained by such Company thereunder;

    

    (ii)
       to
      the
      best of the Companies’ or each Seller’s knowledge, each other party to any
      Contract is in full compliance with all applicable terms and requirements of
      such Contract;

     

    
      
        
        

      

      
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    (iii) 
      no event
      has occurred or circumstance exists that (with or without notice or lapse of
      time) may contravene, conflict with, or result in a violation or breach of,
      or
      give any Company or other person or entity the right to declare a default or
      exercise any remedy under, or to accelerate the maturity or performance of,
      or
      to cancel, terminate, or modify, any Contract; 

    

    (iv) 
      no
      Company has given to or received from any other person or entity any notice
      or
      other communication regarding any actual, alleged, possible, or potential
      violation or breach of, or default under, any Contract identified or required
      to
      be identified in Schedule 4.11(a); and

     

    (e) To
      the
      extent applicable to any Contract identified or required to be identified in
      Schedule 4.11(a), the Company has satisfied any performance criteria that it
      has
      been required to satisfy through the date of this Agreement, and does not know
      of any fact or circumstance that would prevent the Company from satisfying
      any
      performance criteria that it may be required to satisfy after the date of this
      Agreement.

    

    (f) There
      are
      no renegotiations of, attempts to renegotiate, or outstanding rights to
      renegotiate any material amounts paid or payable to any Company under current
      or
      completed Contracts and no other party to any Contract has made written demand
      for such renegotiation. For purposes of this Section 4.11(f), “material amounts”
shall mean any amounts in excess of $2,000,000.

    

    (g) Attached
      hereto as Schedule 4.11(g) is a complete and accurate list of (i) each Contract
      under which any Company has a current warranty obligation, (ii) the remaining
      period of each such warranty obligation, and (iii) any claim that has been
      made
      and remains outstanding under such warranty obligation. Except as set forth
      on
      Schedule 4.11(g), no Company has received notice of any warranty claim and,
      to
      the knowledge of the Sellers and the Companies, no warranty claim is threatened
      and no event has occurred or circumstance exists that (with or without notice
      or
      lapse of time) could reasonably be anticipated to result in a warranty
      claim.

    

    4.12 Governmental
      Approvals.
      Except
      as set forth on Schedule 4.12, no registration or filing with, or consent or
      approval of, or other action by, any federal, state or other governmental agency
      or instrumentality is or will be necessary for the valid execution, delivery
      and
      performance of this Agreement or the GPS Stock Purchase Agreement by any of
      the
      Companies, or the continuation of the business of the Companies following the
      transactions contemplated by this Agreement and the GPS Stock Purchase
      Agreement.

     

    4.13 Lack
      of Defaults; Compliance with Law.
      No
      default has occurred or exists in performance of any obligation, covenant or
      condition contained in any note, debenture, mortgage or other contract or
      agreement of any nature or kind to which any of the Companies or any of the
      Sellers is a party, nor has any default occurred, nor does any default exist,
      with respect to any order, writ, injunction or decree of any court, governmental
      authority or arbitration board or tribunal to which any of the Companies or
      any
      of the Sellers is a party. The Companies and the Sellers know of no violation
      of
      any law, ordinance, governmental rule or regulation to which any of the
      Companies or any of the Sellers is subject, nor has any of the Companies or
      any
      of the Sellers failed to obtain any licenses, permits, franchises or other
      governmental authorizations necessary for the ownership of their properties,
      or
      to the conduct of their business, or for the legal sale of their products.
      Each
      of the Companies has conducted and will conduct its business and operations
      in
      substantial compliance with all federal, state, county and municipal laws,
      statutes, ordinances and regulations, including without limitation the rules,
      regulations and requirements of the Federal Trade Commission (including all
      such
      rules, regulations and requirements relating to truth in advertising), and
      is in
      substantial compliance with all applicable requirements of all federal, state,
      county and municipal regulatory authorities.  

     

    
      
        
        

      

      
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    4.14 Employees
      and Employee Benefit Plans.

     

    (a) Schedule
      4.14
      annexed
      hereto lists all of the Companies’ Plans. For the purposes of this Agreement,
“Plan” means any “employee benefit plan” (as defined in Section 3(3) of the
      Employee Retirement Income Security Act of 1974 or any successor law, and rules
      and regulations issued pursuant to such Act or any successor law (“ERISA”)) and
      each other plan, arrangement or policy (other than employment agreements with
      individuals employed by any of the Companies) relating to stock options, stock
      purchases, compensation, deferred compensation, severance, fringe benefits
      or
      other employee benefits, in each case maintained or contributed to, or required
      to be maintained or contributed to, by any of the Companies for the benefit
      of
      any present or former employees of any of the Companies. All of the Plans listed
      on Schedule 4.14 which are employee benefit plans within the meaning of
      Section 3(3) of ERISA are in material compliance with the applicable provisions
      of ERISA, the Code, and the rules and regulations thereunder, except where
      the
      failure to do so would not, individually or in the aggregate, reasonably be
      expected to result in a material adverse effect on any of the Companies. There
      are no claims (except claims for benefits payable in the normal operation of
      the
      Plans), suits, proceedings, and, to the Sellers’ or the Companies’ knowledge,
      investigations by any governmental agency against or involving any Plan or
      asserting any rights to or claims for benefits or reimbursements under any
      Plan.
      All contributions to the Plans required to be made by any of the Companies
      in
      accordance with the terms of the Plans have been timely made and all such
      contributions have been adequate to ensure that such Plans are fully funded.
      No
      event has occurred and, to the Sellers’ and the Companies’ knowledge, no
      circumstances exist that could adversely affect the tax-qualification of any
      Plan that is intended to be a tax-qualified plan. To the Sellers’ and the
      Companies’ knowledge, no event has occurred and no circumstances exist that
      could adversely affect the tax-qualification of each Plan that is intended
      to be
      a tax-qualified plan. None of the Companies has, nor have any of their ERISA
      Affiliates, ever maintained, contributed to or otherwise had any liability
      with
      respect to an employee benefit plan subject to Title IV of ERISA, Section 401
      of
      ERISA or Section 412 of the Code. For purposes of this Section, “ERISA
      Affiliate” shall mean any person (as defined in Section 3(9) of ERISA) that is
      or has been a member of any group of persons described in Section 414(b), (c),
      (m), or (o) of the Code including any of the Companies. The transactions
      contemplated by this Agreement and by the GPS Stock Purchase Agreement will
      not
      alone entitle any such employee to any additional payments or benefits or any
      acceleration of the time of payment or vesting of any benefits under any
      employee benefit or executive compensation plan, arrangement or agreement
      maintained by or entered into with any of the Companies. Any amount to be
      received (whether in cash or property or the vesting of property) as a result
      of
      any of the transactions contemplated by this Agreement and by the GPS Stock
      Purchase Agreement by any employee of any of the Companies under any employment,
      severance or termination agreement, other compensation arrangement or benefit
      plan would not be characterized as an “excess parachute payment” (as such term
      is defined in Section 280G(b)(1) of the Code). To the Sellers’ and the
      Companies’ knowledge, each of the Companies and its Plans has materially
      complied with all required tax filings. 

     

    
      
        
        

      

      
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    (b) Attached
      hereto as Schedule 4.14(b) are the names, citizenship and immigration status
      (with respect to any non-U.S. citizen), of all salaried employees employed
      by
      any of the Companies as of the date hereof, and at Closing the Companies will
      provide an updated list of all such employees as of the Closing Date, such
      updated list to be initialed by both parties at Closing. To the best of the
      Companies’ and the Sellers’ knowledge, no employee of any of the Companies is a
      party to or bound by any contract, or subject to any restrictions (including,
      without limitation, any non-competition restriction), that would restrict the
      right of such person to be employed by or to participate in the affairs of
      the
      Companies following the transactions contemplated under this Agreement and
      under
      the GPS Stock Purchase Agreement. 

     

    4.15 Insurance;
      Bonds.
      Attached hereto as Schedule 4.15 is a complete and correct list and description
      of all of the policies of liability, property, workers’ compensation and other
      forms of insurance or bonds carried by the Companies for the benefit of or
      in
      connection with their assets and businesses. All of such policies or bonds
      are
      in full force and effect and there are no overdue premiums or other payments
      due
      on such policies or bonds and the Companies have not received any notice of
      cancellation or termination of any of said policies or bonds. Neither the
      Sellers nor the Companies have knowledge of any change or proposed change to
      any
      of the rates set forth in the policies or bonds listed on Schedule 4.15 other
      than as set out therein. No insurance policy, bond or other instrument to which
      any of the Companies is a party or which has been issued to or for the benefit
      of any of the Companies, will be materially breached or violated as a result
      of
      the transaction contemplated hereunder and under the GPS Stock Purchase
      Agreement, nor will consummation of such transactions result in a default
      thereunder or give any party thereto the right to terminate such policy, bond,
      commitment or arrangement or any provision thereof, or if any consent to or
      approval of the transaction contemplated hereunder and under the GPS Stock
      Purchase Agreement is required thereunder, such consent or approval has been
      obtained. 

    

    4.16 Labor
      and Employment Matters.
      No
      labor dispute, strike, work stoppage, employee collective action or labor
      relations problem of any kind which has materially adversely affected or may
      so
      affect any of the Companies or any of their businesses or operations, is pending
      or, to the best knowledge of the Companies or the Sellers, is threatened. The
      Companies have complied in all material respects with the reporting and
      withholding provisions of the Code and the Federal Insurance Contribution Act
      and all similar state and local laws, and with the federal, state, and local
      laws, ordinances, rules and regulations with respect to employment and
      employment practices, terms and conditions of employment and of the workplace,
      wages and hours and equal employment opportunity.

    

    4.17 Brokers
      and Finders.
      Except
      as listed on Schedule 4.17, neither the Sellers nor any of the Companies have
      incurred or become liable for any commission, fee or other similar payment
      to
      any broker, finder, agent or other intermediary in connection with the
      negotiation or execution of this Agreement or of the GPS Stock Purchase
      Agreement or the consummation of the transactions contemplated hereby and
      thereby. Each of the Sellers agrees to be responsible for paying all broker
      fees, commissions or other compensation incurred by the Sellers or any of the
      Companies as a result of the transactions contemplated by this Agreement and
      by
      the GPS Stock Purchase Agreement.  

     

    
      
        
        

      

      
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    4.18 Accounts
      Receivable.

    

    (a) All
      accounts receivable of the Companies shown on the Financial Statements reflect
      (and, in the case of the Closing Date Balance Sheet, will reflect) actual
      transactions, have (or will have as of the Closing Date) arisen in the ordinary
      course of business and have been collected or are now (or will be as of the
      Closing Date) in the process of collection without recourse to any judicial
      proceedings in the ordinary course of business in the aggregate recorded amounts
      thereof, less the applicable allowances reflected on the Financial
      Statements.

    

    (b) Except
      as
      set forth on Schedule 4.18(b), the Sellers and the Companies have no knowledge
      as to any of the accounts receivable of any of the Companies being subject
      to
      any lien or claim
      of
      offset, set
      off
      or counterclaim not provided for by the Companies’ allowance for doubtful
      accounts as of the date of execution hereof. 

     

    4.19
       Conflicts
      of Interests.
      Except
      as described in Schedule 4.19, no officer, director, stockholder, manager of
      member of any of the Companies was or is, directly or indirectly, a joint
      investor or co-venturer with, or owner, lessor, lessee, licensor or licensee
      of
      any real or personal property, tangible or intangible, owned or used by, or
      a
      lender to or debtor of, any of the Companies and none of the Companies has
      any
      commitment or obligation as a result of any such transactions prior to the
      date
      hereof. Except as described in Schedule 4.19, and except for directly or
      indirectly holding less than five percent (5%) of the outstanding shares of
      stock in a company which is publicly traded, none of such officers, directors,
      stockholders, managers or members currently own, directly or indirectly,
      individually or collectively, an interest in any entity which is a competitor,
      customer or supplier of (or has any existing contractual relationship with)
      any
      of the Companies. 

    

    4.20 Environmental
      Compliance.
      

    

    (a) No
      Environmental Claims.
      Except
      as set forth on Schedule 4.20(a) attached hereto, (i) there are no claims,
      liabilities, judgments or orders, or investigations, litigation or
      administrative proceedings relating to any Hazardous Materials (collectively
      called “Environmental
      Claims”), now pending or, to the knowledge of the Sellers and the Companies,
      threatened against any of the Companies or relating to any Project Site, and,
      to
      the knowledge of the Sellers and the Companies, there are no Environmental
      Claims now pending or threatened relating to any former Project Site; (ii)
      neither the Sellers nor any of the Companies have caused or permitted any
      Hazardous Material to be used, generated, reclaimed, transported, released,
      treated, stored or disposed of in a manner which could reasonably be expected
      to
      result in liability under Environmental Laws (as hereinafter defined) against
      any of the Companies or any subsequent owner or operator of a Project Site;
      and
      (iii) neither the Sellers nor any of the Companies have assumed (by contract
      or
      by operation of law) any liability of any person for cleanup, remediation,
      compliance or required capital expenditures in connection with any Environmental
      Claim. 

     

    
      
        
        

      

      
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    (b) [Intentionally
      omitted.]

    

    (c) Compliance
      with Environmental Laws.
      Each of
      the Companies has been and is currently in compliance in all material respects
      with and has received no notice or other communication concerning a claim
      related to disposal of Hazardous Materials or an alleged violation of any and
      all applicable Environmental Laws, including obtaining and maintaining in effect
      all permits, licenses and other authorizations required by applicable
      Environmental Laws.
      As used
      herein, the term “Environmental Laws” shall mean any federal, state or local
      law, rule, regulation or order relating to pollution, waste disposal, industrial
      hygiene, land use or the protection of human health or safety, plant life or
      animal life, natural resources or the environment. 

    

    4.21 Ownership
      of the Ownership Interests.
      The
      Sellers (together with the Other Stockholders with respect to ownership of
      the
      GPS-Connecticut Stock) own all of the Ownership Interests beneficially and
      of
      record, free and clear of all liens, restrictions, encumbrances, charges, and
      adverse claims and the Ownership Interests to be purchased hereunder constitute
      one hundred percent (100%) of issued and outstanding membership interests and
      capital stock, as the case may be, of the Companies. The names, addresses and
      percentages of GPS Membership Interests, the issued and outstanding shares
      of
      capital stock of GPS-Connecticut (the “GPS-Connecticut Stock”), and the issued
      and outstanding shares
      of
      capital stock of GPS-California (the “GPS-Connecticut Stock”), held by each of
      the Sellers and each of the Other Stockholders, as the case may be, is set
      forth
      on Schedule 4.21.

    

    4.22 Absence
      of Sensitive Payments.
      Neither
      the Sellers nor, to the knowledge of the Sellers and the Companies, any of
      the
      directors, officers, stockholders, managers or members of any of the
      Companies:

    

    (a) has
      made
      or has agreed to make any contributions, payments or gifts of funds or property
      to any governmental official, employee or agent where either the payment or
      the
      purpose of such contribution, payment or gift was or is illegal under the laws
      of the United States, any state thereof, or any other jurisdiction (foreign
      or
      domestic);

    

    (b) has
      established or maintained any unrecorded fund or asset for any purpose, or
      has
      made any false or artificial entries on any of its books or records for any
      reason; or 

    

    (c)
       has
      made
      or has agreed to make any contribution or expenditure, or has reimbursed any
      political gift or contribution or expenditure made by any other person, to
      candidates for public office, whether federal, state or local foreign or
      domestic, where such contributions were or would be a violation of applicable
      law.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    4.23 Approval
      of Transactions; Related Matters.
      Each of
      the Sellers represents and warrants that such Seller, in his capacity as a
      member or shareholder of the Companies, and each of the Other Stockholders,
      in
      his or her capacity as a stockholder of GPS-Connecticut, (i) approves of and
      consents to the transactions contemplated under this Agreement and under the
      GPS
      Stock Purchase Agreement as set forth herein and therein, (ii) waives any notice
      of a member or shareholder meeting or similar company or corporate formality
      in
      connection with the approval of the transactions described herein and therein,
      (iii) waives any rights to protest or object to the transactions contemplated
      under this Agreement or under the GPS Stock Purchase Agreement or to the
      exercise of any statutory remedy of appraisal as to the Ownership Interests
      owned by such Seller, or by such Other Stockholder, as the case may be, as
      provided by applicable law, (iv) has received a copy of resolutions approving
      the transactions contemplated under this Agreement and under the GPS Stock
      Purchase Agreement in accordance with applicable law, and (v) to the extent
      such
      Seller or Other Stockholder owes any amounts to any of the Companies pursuant
      to
      any promissory note issued by such Seller or such Other Stockholder to the
      Company, consents to the use of a portion of the Consideration payable to such
      Seller or such Other Stockholder, as the case may be, to pay off each such
      promissory note at Closing.

    

    4.24 Withholding.
      Neither
      Companies nor either of the Sellers, nor any of the Other Stockholders, is
      a
      foreign person or entity, or has other status, such that Purchaser would be
      required to deduct and withhold from the Consideration otherwise payable
      pursuant to this Agreement or pursuant to the GPS Stock Purchase Agreement
      to
      any holder of the Ownership Interests any amounts under the Code, or any
      provision of state, local or foreign tax law. 

    

    4.25 Amounts
      Due From Sellers.
      All
      amounts due from the Sellers, or either of them, or from the Other Stockholders,
      or any of them, to any of the Companies have been paid in full.

     

    SECTION
      5

     

    REPRESENTATIONS,
      WARRANTIES AND CERTAIN

    COVENANTS
      OF PURCHASER

     

    As
      a
      material inducement to induce the Sellers to consummate the transactions
      contemplated by this Agreement and by the GPS Stock Purchase Agreement,
      Purchaser represents and warrants that each of the matters set forth in this
      Section 5 is true and correct as of the date hereof, and acknowledges that
      the
      Sellers’ entry into this Agreement and the GPS Stock Purchase Agreement and the
      performance of their obligations hereunder and thereunder are made in reliance
      upon the completeness and accuracy of each of the matters set forth herein.
      The
      representations and warranties being made by Purchaser shall survive as set
      forth in Section 13.11 herein.

    

    5.1 Organization,
      Standing, etc.
      Purchaser is duly organized, validly existing and in good standing under the
      laws of the jurisdiction of its organization.

     

    
      
        
        

      

      
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    5.2 Authorization,
      etc.
      The
      execution and delivery of this Agreement, the GPS Stock Purchase Agreement
      and
      any other instruments or documents required to be executed and delivered hereby
      and thereby, and the purchase of the Ownership Interests contemplated hereby
      and
      thereby, have been authorized by such authorities or by such court of competent
      jurisdiction, if any, as may be required by applicable law and constitute valid
      and binding obligations of Purchaser, enforceable against it in accordance
      with
      the terms of this Agreement and the GPS Stock Purchase Agreement,
      respectively.

    

    5.3 No
      Breach or Defaults Caused by Agreement.
      The
      making and execution, delivery, and performance by Purchaser of this Agreement
      and the GPS Stock Purchase Agreement does and will not breach or constitute
      (with due notice or lapse of time or both) any default in any articles, by-laws,
      agreements, or instruments of any kind or character to which Purchaser is a
      signatory or a party, or by which it may be bound, subject to, or affected,
      now
      or in the future.

    

    5.4 Governmental
      Approvals.
      Except
      as set forth on Schedule 4.12, with respect to which Purchaser is relying on
      the
      representations and warranties of the Sellers, no registration or filing with,
      or consent or approval of, or other action by, any federal, state, or other
      governmental agency or instrumentality, which has not been made or obtained
      prior to the execution of this Agreement by Purchaser, is or will be necessary
      for the valid execution, delivery and performance of this Agreement and the
      GPS
      Stock Purchase Agreement by Purchaser, and the continuation of the business
      of
      the Companies following the acquisition of the Ownership Interests.  

    

    5.5 Brokers
      Fees.
      Purchaser represents that there are no brokers involved in this transaction
      on
      its behalf. 

    

    5.6 Authorized
      Shares of Stock.
      There
      exists sufficient authorized, but unissued, shares of Argan Common Stock
      necessary to enable Purchaser to satisfy any obligation of it to issue shares
      of
      Argan Common Stock pursuant to the transactions contemplated under this
      Agreement and under the GPS Stock Purchase Agreement.

    

    5.7 Capitalization.
      Purchaser’s authorized and issued and outstanding shares of stock as of the date
      hereof and as of the Closing are set forth in Schedule 5.7(a) hereof. Said
      list
      will include, as of the date of Closing, the shares sold pursuant to the Private
      Offering. Purchaser has no intention of issuing any additional shares of its
      stock in anticipation of Closing hereunder. Attached hereto as Schedule 5.7(b)
      is a list of stock options which the Company has outstanding, the recipients
      of
      said options, and the exercise price for each of said stock options. Neither
      Purchaser nor any subsidiary thereof has any unfunded pension plan or retirement
      plan liability. 

    

    5.8 Voting
      Stock.
      The
      Stock Consideration to be paid to the Sellers under this Agreement and under
      the
      GPS Stock Purchase Agreement shall constitute stock of the Purchaser which
      qualifies as voting stock pursuant to IRC §368(a)(1)(B).

    

    5.9 No
      Audit.
      Neither
      Purchaser nor any subsidiary thereof is under audit by any state or federal
      taxing authority, and to the knowledge of Purchaser, no such audit is
      threatened.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    5.10 Net
      Worth of Purchaser.
      To the
      knowledge of Purchaser, no facts or circumstances exist, which are not reflected
      or referenced on Purchaser’s most recent Form 10-QSB, that would cause
      Purchaser’s liabilities to exceed its assets. 

    

    5.11
      Private
      Offering.
      True
      and complete copies of that certain Stock
      Purchase Agreement dated as of December 7, 2006, by and among Argan and the
      Buyers identified therein (the “Private Offering Stock Purchase Agreement”), and
      of that certain Escrow Agreement dated as of December 7, 2006, by and among
      Argan, the Buyers identified therein and the escrow agent identified therein
      (the “Private Offering Escrow Agreement”), entered into in connection with the
      Private Offering have been provided to Sellers by Purchaser. The Private
      Offering Stock Purchase Agreement and the Private Offering Escrow Agreement
      constitute the only material documents entered into by Purchaser in connection
      with the Private Offering.

     

    SECTION
      6

     

    CONDITIONS
      TO CLOSING FOR PURCHASER

     

    Purchaser’s
      obligation to consummate the transactions contemplated under this Agreement
      and
      under the
      GPS
      Stock Purchase Agreement (notwithstanding anything to the contrary contained
      therein) shall
      be
      subject to fulfillment of all of the following conditions on or prior to the
      Closing, any of which may be waived in writing by Purchaser:

    

    6.1 Performance
      of Agreements.
      The
      Sellers and the Companies shall have performed all agreements contained herein
      and in the
      GPS
      Stock Purchase Agreement
      and
      required to be performed by them prior to or at Closing and all of the
      representations and warranties made by them in this Agreement shall be true
      and
      correct as of the Closing Date.

    

    6.2 Lack
      of Material Liabilities.
      None of
      the Companies shall have incurred any material liability, direct or contingent
      (as that term is ordinarily used), other than in the ordinary course of
      business, not reflected on the Interim Financial Statements; including, but
      not
      limited to, any tax liability resulting from the transactions contemplated
      hereby, or by the Companies’ compliance with any of the terms and conditions
      hereof. 

    

    6.3 Financial
      Statements.
      Purchaser shall have received the Financial Statements other than the Closing
      Date Financial Statements and Purchaser shall have accepted the Interim
      Financial Statements. 

    

    6.4 Lack
      of Defaults.
      No
      Event of Default (as defined in Section 12 hereof) and no event or condition
      which, with notice or the lapse of time, or both, would constitute an Event
      of
      Default, shall exist.

    

    6.5 Material
      Adverse Change.
      No
      Material Adverse Change, and no event or circumstance that may result in a
      Material Adverse Change shall have occurred between the date hereof and the
      Closing Date or exist as of the Closing Date.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    6.6 Employment
      Agreements.
      Griffin
      and Canino and the Companies shall have executed those certain Employment
      Agreements, copies of which are attached hereto as Exhibits 6.6(a) and 6.6(b).
      

    

    6.7 Opinion
      of Counsel.
      Purchaser shall have received an opinion of counsel from the attorneys for
      the
      Companies, dated as of the Closing Date, in form and substance substantially
      similar to that attached hereto as Exhibit 6.7.

    

    6.8 Compliance
      Certificate.
      The
      Sellers and the Companies shall have delivered to Purchaser the certificates,
      attached hereto as Exhibit 6.8, executed by the Sellers and the respective
      managers or Presidents, as the case may be, of the Companies dated as of the
      Closing Date, certifying the fulfillment of the conditions specified in this
      Section 6 and the accuracy of the representations and warranties contained
      in
      Section 4 hereof.

    

    6.9 Term
      Life Insurance.
      The
      Companies shall continue to have in place term life insurance policies on the
      lives of each of Griffin and Canino, each of such policies (a) to name Purchaser
      as sole beneficiary (or, to the extent either of such policies do not name
      Purchaser as owner and as sole beneficiary at the Closing Date, Sellers or
      the
      Companies shall produce at Closing completed Transfer of Ownership and Change
      of
      Beneficiary forms, on the insurer’s standard form, signed by the owners of said
      policies, and ready to be delivered to the insurer), (b) to be in form and
      substance satisfactory to Purchaser, including having terms that expire in
      2010,
      and (c) to be in the amount of not less than Five Million Dollars ($5,000,000).
      The existing policy on the life of Canino shall remain in full force and effect
      for the duration of employment by the Companies, or any of them, of Canino,
      or
      until the expiration of the term of said policy, if sooner. The existing policy
      on the life of Griffin shall remain in full force and effect for the duration
      of
      employment by the Companies, or any of them, of Griffin, or until the expiration
      of the term of said policy, if sooner. Each of Griffin and Canino agrees to
      take
      whatever action is reasonably required by the insurer to maintain the policy
      on
      his life in full force and effect for such time. During the term of employment
      of Canino the Companies shall pay the premium on policy insuring Canino’s life;
      and during the term of employment of Griffin the Companies shall pay the premium
      on the policy insuring Griffin’s life. Upon the termination of Canino’s
      employment, each of the Companies shall assign to Canino any and all rights
      which it may have in and to policy insuring his life for the value of the
      prepaid unearned premium thereof. Upon the termination of Griffin’s employment,
      each of the Companies shall assign to Griffin any and all rights which it may
      have in and to policy insuring his life for the value of the prepaid unearned
      premium thereof.

    

    6.10 Registration
      Rights Agreement.
      The
      Sellers and Purchaser shall have executed the Registration Rights Agreement,
      a
      copy of which is attached hereto as Exhibit 2.3. 

    

    6.11 [Intentionally
      omitted.]

    

    6.12 Release
      from the Sellers; Payment of Amounts Owed by the Sellers.
      The
      Sellers shall execute and deliver to Purchaser, in a form satisfactory to
      Purchaser’s counsel, a release of any claim that they, or either of them, may
      have against any of the Companies for the repayment of any loan, claim for
      unpaid compensation (except for accrued and unpaid compensation due to the
      Sellers in the regular course of business in the event Closing occurs before
      the
      close of any regular pay period), claim for indemnification, claim for
      management fee (except for any accrued and unpaid fee for management services,
      or portion thereof, due to GDI under the Operating Agreement referenced in
      Section 6.19 below relating to the period prior to Closing and payable in the
      regular course of business), or otherwise. All amounts due to any of the
      Companies from the Sellers, or either of them, shall have been paid in full.
      

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

    6.13 Certificates;
      Organizational Documents.
      Purchaser shall have received copies of the following documents:

    

    (a) a
      certificate of the Manager or the President of each of the Companies, as the
      case may be, dated the Closing Date and certifying (i) that attached thereto
      is
      a true and complete copy of the Organizational Documents of the Company as
      in
      effect on the date of such certification; and (ii) that attached thereto are
      true and complete copies of resolutions adopted by the members or the Board
      of
      Directors of the Company, as the case may be, authorizing the execution,
      delivery and performance of this Agreement and of the
      GPS
      Stock Purchase Agreement,
      and
      that all such resolutions are still in full force and effect and are all the
      resolutions adopted in connection with the transactions contemplated by this
      Agreement and by the
      GPS
      Stock Purchase Agreement;
      

    

    (b) a
      certificate of the President of GDI dated the Closing Date and certifying (i)
      that attached thereto is a true and complete copy of the Organizational
      Documents of GDI as in effect on the date of such certification and (ii)
      certifying to the incumbent officers of GDI; and

    

    (c)
      such
      additional supporting documents and other information with respect to the
      operations and affairs of the Companies as Purchaser may reasonably
      request.

    

    All
      such
      documents described in (a), (b) and (c) shall be satisfactory in form and
      substance to Purchaser and its counsel.

    

    6.14 Corporate
      Filings.
      All
      relevant documents required be filed with the appropriate governmental agencies
      in connection with the transactions contemplated under this Agreement and under
      the
      GPS
      Stock Purchase Agreement
      shall be
      filed and copies thereof shall be attached hereto as Exhibit 6.14.

    

    6.15 [Intentionally
      omitted.] 

    

    6.16 Release
      of Buy-Sell Rights.
      The
      Sellers shall deliver to Purchaser a waiver and/or release of any rights that
      they may have under any and all operating, stockholder or other agreements
      by
      and among the Sellers and/or any of the Companies which would in any way affect
      the transactions contemplated by this Agreement and by the
      GPS
      Stock Purchase Agreement.
      True
      and complete copies of all such agreements are attached hereto as Exhibit
      6.16.

     

    
      
        
        

      

      
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    6.17 Third-Party
      Consents or Approvals.
      Except
      for any necessary third-party consents or approvals not obtained as of the
      Closing Date, as disclosed on Schedule 6.17, the Sellers shall deliver to
      Purchaser copies of all consents or approvals of, and evidence reasonably
      satisfactory to Purchaser of all actions by, any third-party necessary for
      the
      valid execution, delivery and performance of this Agreement and of the
      GPS
      Stock Purchase Agreement
      by any
      of the Companies, including without limitation the consent of any party required
      under any of the
      Contracts listed or required to be listed on Schedule 4.11(a).

    

    6.18 Escrow
      Agreement.
      The
      Sellers, the Companies, Purchaser and all other parties thereto shall have
      executed the Escrow Agreement, a copy of which is attached hereto as Exhibit
      2.2(b).

    

    6.19 Termination
      of Operating Agreement.
      That
      certain Operating Agreement dated as of January 1, 2001, by and between GPS
      and
      GDI, providing for, among other things, the payment to GDI of a fee for
      management services as described therein, will be terminated effective as of
      Closing; any and all amounts payable thereunder, including without limitation
      the fee for management services, will be paid and satisfied in full; and GDI
      will release any claims it may have against GPS, including without limitation
      any claims for indemnification under said Operating Agreement, all pursuant
      to a
      Termination Agreement in the form attached hereto as Exhibit 6.19.

     

    SECTION
      7

     

    CONDITIONS
      TO CLOSING FOR THE SELLERS

     

    The
      Sellers’ obligations to consummate the transactions contemplated under this
      Agreement and under the
      GPS
      Stock Purchase Agreement (notwithstanding
      anything to the contrary contained therein) shall
      be
      subject to fulfillment of all of the following conditions on or prior to
      Closing, any of which may be waived in writing by Sellers: 

    

    7.1 Performance
      of Agreements.
      Purchaser shall have performed all agreements contained herein and in
the
      GPS
      Stock Purchase Agreement
      and
      required to be performed by it prior to or at Closing, and all of the
      representations and warranties made by Purchaser in this Agreement shall be
      true
      and correct as of the Closing Date.

    

    7.2 Compliance
      Certificate.
      Purchaser shall have delivered to the Sellers the certificate, attached hereto
      as Exhibit 7.2, executed by its duly authorized officer, dated as of the Closing
      Date, certifying the fulfillment of the conditions specified in this Section
      7
      and the accuracy of the representations and warranties contained in Section
      5
      hereof.

    

    7.3 Registration
      Rights Agreement.
      The
      Sellers and Purchaser shall have executed the Registration Rights Agreement,
      a
      copy of which is attached hereto as Exhibit 2.4. 

     

    
      
        
        

      

      
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    7.4 Employment
      Agreements.
      The
      Companies, Griffin and Canino shall have executed the Employment Agreements,
      copies of which are attached hereto as Exhibits 6.6(a) and 6.6(b).

    

    7.5 Term
      Life Insurance.
      Purchaser shall have assumed responsibility for payment of premiums of each
      of
      the life insurance policies described in Section 6.9 above up to the face value
      of $5,000,000.

    

    7.6 Employee
      Stock Options.
      Purchaser shall have resolved to take any and all actions necessary to grant
      up
      to 40,000 qualified or unqualified stock options to the employees listed, and
      in
      the amounts designated, in Schedule 7.6. All such stock options shall be granted
      no later than at the first regularly scheduled meeting of the board of directors
      of Purchaser after Closing, with the strike price of such options being Argan’s
      stock price at the time of grant, but no lower than $4.50 per
      share.

     

    7.7 Escrow
      Agreement.
      Purchaser, the Sellers, the Companies, and all other parties thereto shall
      have
      executed the Escrow Agreement, a copy of which is attached hereto as Exhibit
      2.2(b).

     

    SECTION
      8

     

    TRANSACTIONS
      PRIOR TO CLOSING

     

    Between
      the date of this Agreement and Closing, the managers, executive officers and
      Board of Directors, as the case may be, of the Companies shall retain full
      control of the management and business of the Companies. To enable Purchaser
      to
      prepare for settlement at Closing, Purchaser, the Sellers and the Companies
      agree that between the date hereof and Closing:

    

    8.1 Taxes.
      The
      Companies will promptly pay and discharge, or cause to be paid and discharged,
      all federal, state and other governmental taxes, assessments, fees and charges
      imposed upon it or on any of its property or assets and timely file any returns
      and reports in connection with the foregoing.

    

    8.2 Books
      of Record and Account; Inspection.
      Each of
      the Companies will maintain at all times proper books of record and account
      in
      accordance with GAAP.

    

    8.3 Insurance.
      The
      Companies will maintain in effect liability insurance, property insurance,
      workers’ compensation insurance, and extended coverage insurance on their
      personal property referenced in Section 4.15 above, and will cause the term
      life
      insurance policies on the lives of Griffin and Canino referenced in Section
      6.9
      above to remain in effect.  

    

    8.4 Entity
      Existence.
      Each of
      the Companies shall at all times cause to be done every act necessary to
      maintain and preserve its existence, rights, franchises, and certifications
      in
      the jurisdictions of its organization or incorporation and to remain qualified
      as foreign limited liability company or corporation, as the case may be, in
      every jurisdiction in which qualification is required. 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    

    8.5 Maintenance
      of Properties.
      Each of
      the Companies shall maintain or cause to be maintained in good repair, working
      order and condition all tangible properties required for its
      business.

    

    8.6 Organizational
      Documents.
      None of
      the Companies will amend its Organizational Documents.

    

    8.7 Issuances
      of Ownership Interests.
      Except
      for the issuance of shares of common stock of GPS-Connecticut to the Other
      Stockholders, none of the Companies will issue any of its Ownership Interests
      to
      any person or entity or grant any person or entity an option, warrant,
      convertible security or any other right or agreement to acquire any membership
      interests or shares of its capital stock, as the case may be, without the prior
      written consent of Purchaser.

    

    8.8 Declaration
      of Distributions, etc.
      None of
      the Companies will (i) make, pay or declare any distributions or dividends
      of
      cash or property with respect to its issued Ownership Interests (except for
      pre-closing distributions of cash to Griffin and Canino in their capacity as
      the
      sole members of GPS, provided same does not result in the failure of the
      Companies to meet the Minimum Net Worth requirement as set forth in Section
      2.2(c)); (ii) directly or indirectly redeem, repurchase or otherwise reacquire
      any of its Ownership Interests; (iii) increase the salary or pay any bonuses
      to
      any management employees, officers, directors, managers or members of the
      Company, if such action decreases the Net Worth of the Companies below the
      Minimum Net Worth set forth in Section 2.2(c). 

    

    8.9 Material
      Contracts.
      None of
      the Companies shall enter into, assume, renew or permit to be renewed (including
      by not giving a permitted notice of termination) any contract, lease or
      obligation outside the ordinary course of business. Except as expressly set
      forth therein, none of the Companies shall modify, amend, terminate, waive
      or
      release any benefit or right under any employment agreement, or any other
      material agreement to which any of the Companies is a party, without the prior
      written consent of Purchaser, other than amendments or modifications to
      agreements made in the regular course of business (e.g., change orders in
      connection with any Project Contract).

     

    SECTION
      9

     

    RESTRICTIVE
      COVENANTS

     

    9.1 Covenant
      Not to Compete.
       Except
      as
      authorized by Purchaser or by the terms of this Agreement, at all times during
      the period of five (5) years from the Closing Date (the “Restrictive
      Period”),
      neither Griffin nor Canino shall, directly or indirectly, alone or with others,
      engage in any competition with, or have any financial or ownership interest
      in
      any sole proprietorship, corporation, company, partnership, association, venture
      or business or any other person or entity (whether as an employee, officer,
      director, partner, manager, member, agent, security holder, creditor, consultant
      or otherwise) that directly or indirectly (or through any affiliated entity)
      competes with the business of the Companies; provided that such provision shall
      not apply to (i) Griffin’s or Canino’s ownership of Argan Common Stock, (ii)
      Griffin’s or Canino’s ownership of interests in entities which may develop, own
      and operate (but not design or build) power plants, or (iii) or the acquisition
      by Griffin or Canino, solely as an investment, of securities of any issuer
      that
      is registered under Section 12(b) or 12(g) of the Securities Exchange Act of
      1934, as amended, and that are listed or admitted for trading on any United
      States national securities exchange or that are quoted on the Nasdaq Stock
      Market, or any similar system or automated dissemination of quotations of
      securities prices in common use, so long as neither Griffin nor Canino controls,
      acquires a controlling interest in or becomes a member of a group which
      exercises direct or indirect control of, more than five percent (5%) of any
      class of capital stock or other indicia of ownership of such issuer. For
      purposes of clause (ii) of this Section 9.1 above, and for clause (b) of Section
      9.3 below, “develop” or “development of” power plants shall mean the usual and
      customary actions taken by an owner or potential owner of a power plant to
      obtain licenses, permits or other governmental approvals required in order
      to
      own and operate a power plant, but not the designing or constructing of a
      power plant. 

     

    
      
        
        

      

      
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    9.2 Confidentiality.
      The
      Sellers shall not divulge, communicate, use to the detriment of the Companies
      or
      Purchaser, or for the benefit of any other person or persons, or misuse in
      any
      way, any Confidential Information (as hereinafter defined) pertaining to the
      business of the Companies or Purchaser. Any Confidential Information or data
      now
      or hereafter acquired by the Sellers with respect to the business of the
      Companies or Purchaser (which shall include, but not be limited to, information
      concerning the Companies’ or Purchaser’s financial condition, prospects,
      technology (including Business Property Rights), personnel information,
      customers, suppliers, sources of leads and methods of doing business) shall
      be
      deemed a valuable, special and unique asset of the Companies or Purchaser,
      as
      the case may be, that is received by each of the Sellers in confidence and
      as a
      fiduciary, and each of the Sellers shall remain a fiduciary to Purchaser with
      respect to all of such information. For purposes of this Agreement,
“Confidential
      Information”
means
      all trade secrets and information disclosed to the Sellers or known by the
      Sellers as a consequence of or through the unique position of their employment
      with any of the Companies or otherwise (including information conceived,
      originated, discovered or developed by either of the Sellers and information
      acquired by any of the Companies from others) prior to or after the date hereof,
      and not generally or publicly known (other than as a result of unauthorized
      disclosure by the Sellers), about any of the Companies, Purchaser or their
      respective businesses. Notwithstanding the foregoing, nothing herein shall be
      deemed to restrict Griffin from disclosing Confidential Information as required
      to perform his duties under the Griffin Employment Agreement, or to restrict
      Canino from disclosing Confidential Information as required to perform his
      duties under the Canino Employment Agreement, or to the extent required by
      law.

    

    9.3 Non-Solicitation.
      At all
      times during the Restrictive Period, the Sellers shall not, directly or
      indirectly, for themselves or for any other person, firm, corporation, company,
      partnership, association, venture or business or any other person or entity:
      (a) solicit for employment, employ or attempt to employ or enter into any
      contractual arrangement with any employee or former employee of any of the
      Companies or Purchaser (other than Raymond J. Bednarz and Fred Kresse); and/or
      (b) call on or solicit any of the actual or targeted prospective customers
      or clients, or any actual independent contractors, subcontractors, distributors
      or suppliers, of any of the Companies (except in connection with the Sellers’
development, ownership and operation (but not the designing or building) of
      power plants) or Purchaser on behalf of themselves or on behalf of any person
      or
      entity in connection with any business that competes with the business of the
      Companies, nor shall either of the Sellers make known the names or addresses
      or
      other contact information of such actual or prospective customers or clients,
      or
      any such actual independent contractors, subcontractors, distributors or
      suppliers, or any information relating in any manner to the Companies’ trade or
      business relationships with such actual or prospective customers or clients,
      or
      any such actual independent contractors, subcontractors, distributors or
      suppliers, other than in connection with the performance by Griffin of his
      duties under the Griffin Employment Agreement and the performance by Canino
      of
      his duties under the Canino Employment Agreement.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    9.4 Acknowledgment
      by the Sellers.
      Each of
      the Sellers acknowledges and confirms that the restrictive covenants contained
      in this Article 9 (including without limitation the length of the term of the
      provisions of this Article 9) are required by Purchaser as an inducement in
      enter into this Agreement and the
      GPS
      Stock Purchase Agreement
      and to
      complete the transactions contemplated hereby and thereby, are reasonably
      necessary to protect the value of the Ownership Interests Purchaser is to
      acquire under this Agreement and under the
      GPS
      Stock Purchase Agreement
      and the
      legitimate business interests of the Companies and Purchaser, and are not
      overbroad, overlong, or unfair and are not the result of overreaching, duress
      or
      coercion of any kind. Each of the Sellers further acknowledges that the
      restrictions contained in this Article 9 are intended to be, and shall be,
      for
      the benefit of and shall be enforceable by, Purchaser and its successors and
      assigns. Each of the Sellers expressly agrees that upon any breach or violation
      of the provisions of this Article 9, Purchaser shall be entitled, as a matter
      of
      right, in addition to any other rights or remedies it may have, to: (a)
      temporary and/or permanent injunctive relief in any court of competent
      jurisdiction as described in Section 9.7 hereof; and (b) such damages as are
      provided at law or in equity. The existence of any claim or cause of action
      against any of the Companies or Purchaser or their respective affiliates,
      whether predicated upon this Agreement, the
      GPS
      Stock Purchase Agreement
      or
      otherwise, shall not constitute a defense to the enforcement of the restrictions
      contained in this Article 9.

    

    9.5 Reformation
      by Court.
      In the
      event that a court of competent jurisdiction shall determine that any provision
      of this Article 9 is invalid or more restrictive than permitted under the
      governing law of such jurisdiction, then only as to enforcement of this Article
      9 within the jurisdiction of such court, such provision shall be interpreted
      or
      reformed and enforced as if it provided for the maximum restriction permitted
      under such governing law.

    

    9.6 Extension
      of Time.
      If
      either of the Sellers shall be in violation of any provision of this Article
      9,
      then each time limitation set forth in this Article 9 shall be extended for
      a
      period of time equal to the period of time during which such violation or
      violations occur. If Purchaser seeks injunctive relief from such violation
      in
      any court, then the covenants set forth in this Article 9 shall be extended
      for
      a period of time equal to the pendency of such proceeding including all appeals
      by either of the Sellers.

    

    9.7 Injunction.
      It is
      recognized and hereby acknowledged by the parties hereto that a breach by either
      of the Sellers of any of the covenants contained in Article 9 of this Agreement
      will cause irreparable harm and damage to the Companies or Purchaser, as the
      case may be, the monetary amount of which may be virtually impossible to
      ascertain. As a result, each of the Sellers recognizes and hereby acknowledges
      that the Companies or Purchaser shall be entitled to an injunction from any
      court of competent jurisdiction enjoining and restraining any violation of
      any
      or all of the covenants contained in Article 9 of this Agreement by either
      of
      the Sellers or any of his affiliates, associates, partners or agents, either
      directly or indirectly, and that such right to injunction shall be cumulative
      and in addition to whatever other remedies the Companies or Purchaser may
      possess.

     

    
      
        
        

      

      
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    9.8 Survival.
      The
      provisions of this Article 9 shall survive the Closing.

    

    SECTION
      10

     

    INDEMNIFICATION
      

     

    Subject
      to the conditions, limitations and terms as set forth in this Section 10
      (including without limitation the Sellers’ Indemnification Threshold, the
      Sellers’ Indemnification Cap, and the time limitations hereinafter set forth),
      each of the
      Sellers shall indemnify, defend (with counsel acceptable to the indemnified
      party) and hold harmless Purchaser and its subsidiaries and affiliates, and
      their respective directors, officers, shareholders, members, managers, agents,
      employees, representatives, successors and assigns (each in its capacity as
      an
      indemnified party, a “Buyer
      Indemnitee”)
      from
      and against and in respect to the following (in addition to any losses otherwise
      specifically indemnified against in this Agreement):

    

    10.1 Indemnification
      by the Sellers.

    

    (a)  Breach.
      Subject
      to the provisions of this Section 10 and except as otherwise more specifically
      set forth herein, each of the Sellers hereby covenants and agrees to indemnify,
      defend, protect, and hold harmless each Buyer Indemnitee at all times from
      and
      after the date of this Agreement from and against all Adverse Consequences
      suffered or incurred by such Buyer Indemnitee (i) as a result of or incident
      to
      any material breach of any representation or warranty of the Companies or the
      Sellers set forth in Section 4 of this Agreement (including without limitation
      representations or warranties with respect to income and other tax matters
      as
      set forth in Section 4.10), (ii) as a result of or incident to any material
      breach or nonfulfillment by the Companies or the Sellers of, or any
      noncompliance by any of the Companies or either of the Sellers with, any
      covenant, agreement, or obligation contained herein or in any certificate
      delivered in connection herewith, or (iii) resulting directly from the material
      inaccuracy of any list, certificate or other instrument delivered by or on
      behalf of the Sellers or the Companies in connection herewith.

    

    (b) Environmental
      Indemnification.
      The
      Sellers hereby covenants and agrees to indemnify and defend each Buyer
      Indemnitee and hold each Buyer Indemnitee harmless from and against any and
      all
      damages, losses, liabilities, costs and expenses of removal, relocation,
      elimination, remediation or encapsulation of any Hazardous Materials,
      obligations, penalties, fines, impositions, fees, levies, lien removal or
      bonding costs, claims, actions, causes of action, injuries, administrative
      orders, consent agreements and orders, litigation, demands, defenses, judgments,
      suits, proceedings, disbursements or expenses (including without limitation,
      attorney’s and experts’ reasonable fees and disbursements) of any kind and
      nature whatsoever resulting from the operation of the Companies business as
      of
      the Closing Date: (i) which (A) is imposed upon, or incurred by, a Buyer
      Indemnitee by reason of, relating to or arising out of the violation by any
      of
      the Companies prior to the Closing of any Environmental, Health, and Safety
      Laws, (B) arises out of the discharge, dispersal, release, storage, treatment,
      generation, disposal or escape of any Hazardous Materials, on or from any
      Project Site as of the Closing Date, or (C) arises out of the use,
      specification, or inclusion of any product, material or process containing
      Hazardous Materials, or the failure to detect the existence or proportion of
      Hazardous Materials in the soil, air, surface water or groundwater, or the
      performance or failure to perform the abatement of any Hazardous Materials
      source as of the Closing Date or the replacement or removal of any soil, water,
      surface water, or groundwater containing Hazardous Materials; and/or (ii) is
      imposed upon, or incurred by, a Buyer Indemnitee by reason of or relating to
      any
      material breach, act, omission or misrepresentation contained in Section 4.20.
      

     

    
      
        
        

      

      
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    (c) Income
      Tax Matters.
      Canino
      and Griffin severally, but not jointly, shall indemnify, defend and hold
      harmless each Buyer Indemnitee from and against all Adverse Consequences
      incurred by any Buyer Indemnitee as a result of or incident to any income taxes
      imposed on any Buyer Indemnitee or for which any Buyer Indemnitee may otherwise
      be liable by law or regulation (including, without limitation, the provisions
      of
      Treasury Regulation Section 1.1502-6) or contract, for any taxable year or
      period that ends on or before the Closing Date. The Sellers and the Companies
      agree that the Companies will take all actions, including making appropriate
      elections under the Code, to terminate the Companies’ tax years as of the
      Closing Date and to report and make all allocations of tax items based upon
      such
      short tax years. 

    

    (i) The
      Sellers shall furnish to Purchaser copies of the federal, state, and local
      tax
      returns of each of the Companies for the period ending on the Closing Date
      not
      later than ten (10) Business Days prior to the due date(s) of the filing of
      such
      returns, and shall obtain the consent of Purchaser before filing such returns,
      which consent shall not be unreasonably withheld or delayed beyond the earlier
      of (i) ten (10) Business Days after Purchaser’s receipt of said copies, or (ii)
      said due date(s).

     

    (ii) The
      Sellers shall have the sole right to represent the interests of any Buyer
      Indemnitee in any tax audit or administrative or court proceeding relating
      to
      any taxable period ending on or before the Closing Date, and to compromise,
      settle, or contest any tax claims in connection therewith in their sole
      discretion, provided that the Sellers shall provide Purchaser with written
      notice of their intent to exercise their rights hereunder. Purchaser shall
      have
      the right, at its expense, to join the Sellers in any such defense.

    

    (iii) The
      Sellers shall provide Purchaser with written notice of any claim or assertion
      by
      the Internal Revenue Service, or any other taxing authority, of any disallowance
      of any S corporation election by any of the Companies relating to any period
      prior to the Closing Date immediately upon learning of any such claim or
      assertion. 

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    

    (d) Broker
      Fee.
      The
      Sellers hereby covenant and agree to indemnify each Buyer Indemnitee from any
      claim made by a broker, finder, agent or other intermediary against any Buyer
      Indemnitee or any of the Companies after Closing in connection with the
      negotiation or execution of this Agreement or of the
      GPS
      Stock Purchase Agreement
      or the
      consummation of the transactions contemplated hereby or thereby.

    

    (e) Costs
      and Expenses.
      Except
      as otherwise provided in this Agreement, all amounts indemnified pursuant to
      this Section 10 shall include all reasonable costs and expenses of the Buyer
      Indemnitee, including, but not limited to, the reasonable costs of any actions,
      reasonable attorneys’ fees, and other reasonable expenses necessary for Buyer
      Indemnitees to enforce their rights to indemnification granted hereunder,
      provided they are the prevailing party in any such enforcement
      actions.

    

    (f) Termination
      of the Sellers’ Obligations.
      The
      Sellers’ obligations to indemnify any Buyer Indemnitee, or to contribute to any
      party indemnifying any Buyer Indemnitee, pursuant to this Section 10, shall
      expire one
      (1)
      year from the Closing Date, except as to those involving (i) income tax matters,
      but only with respect to federal, state and local income tax (“Income Tax
      Matters”), which obligations shall expire sixty (60) days after the expiration
      date of the applicable statute of limitations for any such income tax claim,
      (ii) any claim for breach of the Sellers’ representations in Sections 4.3 and
      4.21 (“title matters”), which obligations shall expire sixty (60) days after the
      expiration date of the applicable statute of limitations for any such claim,
      and
      (iii) actual fraud or intentional non-disclosure by the Sellers, which
      obligations shall expire sixty (60) days after the expiration date of the
      applicable statute of limitations for any such claim under Delaware law;
      provided, however, that if a claim is asserted prior to the expiration of any
      of
      such indemnification periods, then the obligation to indemnify or to contribute
      shall be extended until the final disposition or termination of such claim.
      

    

    10.2 No
      Circular Recovery.
      Each of
      the Sellers hereby agrees that he will not make any claim for indemnification
      against Purchaser by reason of the fact that said Seller was a director,
      officer, employee, agent or other representative of any of the Companies or
      any
      of its subsidiaries (whether such claim is for Adverse Consequences of any
      kind
      or otherwise and whether such claim is pursuant to any statute, charter, by-law,
      contractual obligation or otherwise) with respect to any claim for
      indemnification brought by Purchaser, or its subsidiaries and affiliates,
      against said Seller.

    

    10.3 Sellers’
      Indemnification Threshold; Cap.
      Notwithstanding anything in this Agreement to the contrary, (a) the Sellers
      shall not have any indemnification payment obligations hereunder unless and
      until all Adverse Consequences suffered or incurred by any or all of the Buyer
      Indemnities resulting from any untrue representation, breach of warranty,
      nonfulfillment of any covenants, or other indemnified matter exceed the Sellers’
Indemnification Threshold (as defined hereinafter), at which point all amounts
      to be paid hereunder (including amounts under the Sellers’ Indemnification
      Threshold) shall be due and owing; and (b) the maximum aggregate liability
      of
      the Sellers to the Buyer Indemnitees under this Agreement (the “Sellers’
Indemnification Cap”) shall be the Escrowed Stock Consideration. For purposes of
      this Section 10.3, the “Sellers’ Indemnification Threshold” shall mean One
      Hundred Fifty Thousand Dollars ($150,000) in the aggregate. The foregoing
      limitations shall not apply to indemnification obligations arising from (i)
      claims relating to Income Tax Matters; (ii) claims relating to title matters;
      or
      (iv) subject to the Disclaimer set forth in Section 13.20 of this Agreement,
      actual fraud or intentional non-disclosure by the Sellers.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    10.4 Release
      of Excess Escrowed Stock.
      In the
      event that, as of the expiration of the period during which the Escrowed Stock
      Consideration is to be held in escrow pursuant to the Escrow Agreement, there
      is
      a dispute as to a matter for which the Buyer Indemnities seek indemnification,
      and the amount in dispute is more than the Sellers’ Indemnification Threshold,
      but less than the maximum aggregate liability of the Sellers as set forth in
      Section 10.3 hereof, then, in accordance with the terms of the Escrow Agreement,
      the Escrow Agent shall release from escrow and deliver to the Sellers that
      amount of the Escrowed Stock Consideration which is in excess of one hundred
      twenty percent (120%) of the Buyer Indemnities’ indemnification
      claim.

    

    SECTION
      11

     

    TERMINATION

    

    11.1 Termination
      by Purchaser.
      This
      Agreement and the GPS Stock Purchase Agreement (notwithstanding anything to
      the
      contrary contained therein) may be terminated by Purchaser, on or before the
      Closing Date, upon the occurrence of the following:

    

    (a) If
      any of
      the material conditions specified in Section 6 shall not have been met prior
      to
      the Closing Date.

      

    (b) If
      an
      Event of Default, as defined in Section 12, has occurred, and has not been
      cured
      during any applicable cure period.

    

    11.2 Termination
      by Sellers.
      This
      Agreement and the GPS Stock Purchase Agreement (notwithstanding anything to
      the
      contrary contained therein) may be terminated by the Sellers, on or before
      the
      Closing Date, if any of the conditions specified in Section 5 shall not have
      been met prior to Closing.

    

    SECTION
      12

     

    DEFAULT

     

    12.1 Events
      of Default.
      It
      shall be considered an Event of Default if any one or more of the following
      events shall occur:

    

    (a) If
      any
      statement, certificate, report, representation or warranty of a material nature
      made or furnished by the Sellers or any of the Companies under this Agreement
      or
      under the
      GPS
      Stock Purchase Agreement
      shall
      prove to have been false or erroneous in any material respect.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

    (b) The
      occurrence of any event of default under any contract, financing agreement,
      note, lease, mortgage, security agreement, factoring agreement or any other
      obligation of any of the Companies the result of which will have a material
      adverse effect on the Company, unless any such event of default shall be timely
      cured under any applicable cure provision or waived by the person to whom or
      to
      which the Company is obligated or indebted.

    

    12.2 Termination
      by Reason of Event of Default or Failure of a Condition
      Precedent.
      In the
      event that prior to Closing an Event of Default shall occur by the Sellers
      or
      Purchaser, or if any of the representations or warranties of the parties, as
      set
      forth in Sections 4 or 5 above, are breached, and such breach is not waived
      by
      the appropriate party, or if any of the conditions precedent to Closing as
      set
      forth in Sections 6 or 7 above, are not met and the same are not waived by
      the
      appropriate party, then the non-breaching party’s sole remedy shall be to
      terminate this Agreement and the
      GPS
      Stock Purchase Agreement,
      in
      which case no party shall be liable to any other party for any claims or
      damages.

    

    12.3 Waiver
      by Purchaser.
      Any
      failure by Purchaser to insist upon strict performance by the Sellers or any
      of
      the Companies of any of the terms and provisions of this Agreement or of
the
      GPS
      Stock Purchase Agreement
      shall
      not be deemed to be a waiver of any of the terms and conditions hereof or
      thereof and Purchaser shall have the right thereafter to insist upon strict
      performance thereof by the Sellers or the Companies.

     

    SECTION
      13

     

    MISCELLANEOUS

     

    13.1 Costs.
      Each
      party shall pay its own expenses incident to the transaction contemplated
      hereby, including fees and expenses of their attorneys, accountants, appraisers
      or consultants, whether or not those transactions are consummated at Closing,
      subject to the indemnification and termination provisions hereof. 

    

    13.2 Attorneys
      Fees.
      If any
      party initiates any litigation against any other party involving this Agreement,
      the prevailing party in such action shall be entitled to receive reimbursement
      from the other party for all reasonable attorneys’ fees and other costs and
      expenses incurred by the prevailing party in respect of that litigation,
      including any appeal, and such reimbursement may be included in the judgment
      or
      final order issued in that proceeding. 

     

    13.3 Relationships
      to Other Agreements.
      In the
      event of a conflict between any of the provisions of this Agreement and any
      other agreement relating to this transaction between the Sellers, the Companies
      and Purchaser, including without limitation the GPS Stock Purchase Agreement,
      the provisions of this Agreement shall control.

    

    13.4 Titles
      and Captions.
      All
      articles or section titles or captions in this Agreement are for convenience
      of
      reference and shall in no way define, limit, extend or describe the scope or
      intent of provisions herein.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    13.5 Exhibits.
      The
      Exhibits and Schedules referred to herein are hereby made a part
      hereof.

    

    13.6 Applicable
      Law.
      This
      Agreement is to be governed by, and construed, interpreted, and enforced in
      accordance with, the laws of the State of Delaware.

    

    13.7 Binding
      Effect and Assignment.
      This
      Agreement shall be binding on and inure to the benefit of the parties hereto
      and
      their respective heirs, personal representative, affiliates, successors and
      assigns. Notwithstanding the foregoing, neither the Companies nor Purchaser
      shall have any right to assign any of its or their rights or obligations under
      this Agreement without the prior written consent of the other parties hereto;
      provided, however, that Purchaser shall be permitted to assign to Bank of
      America, N.A. (together with its successors and assigns, the "Bank"), all of
      Purchaser's rights, title and interest in, to and under this Agreement,
      including all rights of Purchaser to indemnification from the Sellers, as
      collateral security for the obligations of Purchaser to the Bank.

    

    13.8 Notices.
      All
      notices, consents, waivers, and other communications under this Agreement must
      be in writing and will be deemed to have been duly given when (a) delivered
      by hand (with written confirmation of receipt), (b) sent by facsimile (with
      written confirmation of receipt), provided that a copy is mailed by registered
      mail, return receipt requested, or (c) when received by the addressee, if
      sent by a nationally recognized overnight delivery service (receipt requested),
      in each case to the appropriate addresses and facsimile numbers set forth below
      (or to such other addresses and facsimile numbers as a party may designate
      by
      notice to the other parties):

     

    
      
        	
                If
                  the Companies then:

              	
                Gemma
                  Power Systems, LLC

              
	 	
                2461
                  Main Street 

              
	 	
                Glastonbury,
                  Connecticut 06033

              
	 	
                Attention:
                  Mr. William F. Griffin, Jr. and

              
	 	
                Joel
                  M. Canino

              
	 	
                Fax:
                  (860) 659-0607

              
	 	 
	
                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

              

      

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      
        	
                Counsel
                  for the Companies, Griffin and

              
	
                Canino:

              	
                John
                  W. Beck

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

              
	 	
                150
                  Trumbull Street

              
	 	
                Hartford,
                  Connecticut 06103

              
	 	
                Fax:
                  (860) 724-3550

              
	 	 
	
                If
                  Purchaser then:

              	
                Argan,
                  Inc.

              
	 	
                One
                  Church Street, Suite 401

              
	 	
                Rockville,
                  Maryland 20950

              
	 	
                Attn:
                  Arthur Trudel

              
	 	
                Fax:
                  (301) 315-0064

              
	 	 
	
                Counsel
                  for Purchaser:

              	
                David
                  B. Law

              
	 	
                Curtin
                  Law Roberson Dunigan

              
	 	
                &
                  Salans, PC

              
	 	
                1900
                  M Street, N.W.

              
	 	
                Suite
                  600

              
	 	
                Washington,
                  D.C. 20036

              
	 	
                Fax:
                  202/530-4411

              

      

    

    

    13.9 Severability.
      Inapplicability or unenforceability of any provision of this Agreement shall
      not
      impair the operation or validity of any other provision hereof. If any provision
      shall be declared inapplicable or unenforceable, there shall be added
      automatically as part of this Agreement a provision as similar in terms to
      such
      inapplicable or unenforceable provision as may be possible and be legal, valid
      and enforceable.

    

    13.10 Acceptance
      or Approval.
      By
      accepting all or approving anything required to be observed, performed, or
      fulfilled, or to be given to Purchaser pursuant to this Agreement, including,
      but not limited to, any certificate, balance sheet, statement of profit or
      loss
      or other financial statement, or insurance policy, Purchaser shall not be deemed
      to have accepted or approved the sufficiency, legality, effectiveness or legal
      effect of the same, or of any term, provision, or condition thereof as to third
      parties.

    

    13.11 Survival.
      All
      covenants, representations, and warranties made by the Sellers and Purchaser
      in
      this Agreement shall survive the Closing hereunder for a period of one (1)
      year,
      except as otherwise specifically provided in this Agreement.

    

    13.12 Entire
      Agreement.
      This
      Agreement, including all Exhibits and Schedules, 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 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.

     

    
      
        
        

      

      
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    13.13 Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which together
      shall constitute one instrument.

    

    13.14 Securities
      Matters.
      By
      executing this Agreement, Purchaser acknowledges that: (i) Purchaser has been
      advised that the GPS Membership Interests have not been and will not have been
      registered under the Act or the applicable securities laws of any state, that
      the Sellers in transferring such interests to Purchaser will be relying, if
      applicable, upon the exemption from such registration requirements contained
      in
      Section 4(1) or 4(2) of the Act as a transaction by a person other than an
      issuer, underwriter or dealer and the applicable state exemption; (ii) the
      GPS
      Membership Interests may be “restricted” as that term is used in Rule 144 under
      the Act as a consequence of which Purchaser may not be able to sell the
      interests unless such interests are first registered under the Act and any
      applicable state securities laws or unless an exemption from such registration
      is, in the opinion of counsel, available; (iii) the GPS Membership Interests
      will be acquired by Purchaser for purposes other than “distribution” as that
      term is used in Section 2(11) of the Act, and (iv) Purchaser will execute,
      if
      Sellers so request, an appropriate letter affirming that its intention with
      respect to the proposed acquisition of the GPS Membership Interests is that
      such
      acquisition be for investment purposes only and not with a view toward resale
      or
      distribution thereof.  

    

    13.15 Preparation
      and Filing of SEC Documents.
      If and
      whenever, as a result of the transaction contemplated hereunder, Purchaser
      is
      under an obligation to provide financial information to, or prepare a filing
      of
      any kind with, the SEC, the Sellers shall assist Purchaser in preparing any
      audited financial statements required by the SEC for this purpose. The cost
      of
      preparing any such financial statements shall be borne by
      Purchaser.

    

    13.16 Further
      Assurances.
      From
      time to time at or after the Closing, upon request, the parties each will
      execute and deliver such other instruments of conveyance, assignment, transfer
      and delivery and take such actions as the other party reasonably may request
      in
      order to consummate, complete and carry out the purposes of the transactions
      contemplated hereby.

    

    13.17 Tag
      Along Rights.
      

    

    13.17.1
      In the event that one or more holders (the "Tag Along Holders") of common stock
      of Purchaser (including any successor thereof) shall transfer (or agree to
      transfer) more than fifty percent (50%) of the outstanding common stock of
      Purchaser, then Purchaser shall use commercially reasonable efforts to include
      the Sellers (including any assignees or successors thereof), to the extent
      that
      they then hold shares of common stock of Purchaser, in said sale upon the same
      terms and subject to the same conditions as apply to the Tag Along Holders.
      

    

    13.17.2
      In addition, in the event Purchaser proposes any underwritten secondary offering
      of its common stock, Purchaser will give prior written notice thereof to each
      Seller offering them the opportunity to include in any such offering such number
      of shares as they may request in writing not later than ten (10) days before
      such filing. Upon receipt by Purchaser of any such request, Purchaser shall
      use
      reasonable efforts to cause the managing underwriter to include such shares
      in
      such secondary offering. 

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    13.18 Access
      to Company Records.
      From
      and after the Closing, Purchaser shall allow Griffin, Canino, and their
      respective authorized agents, access to the Companies’ books and records in the
      event that the same is necessary in connection with any tax audits or other
      indemnifiable claims, which audit or indemnifiable claim arose with respect
      to
      the Sellers’ period of ownership of the GPS Membership Interests prior to the
      Closing Date. 

    

    13.19
      Non-Reliance.
      Purchaser warrants and represents that it has consulted with its attorneys
      regarding the effect of the Indemnification limitations and the Disclaimer
      set
      forth in Article X and Section 13.20, respectively, and that Purchaser has
      executed this Agreement fully aware of their content, purpose and effect, based
      upon its sole judgment, belief and knowledge, and after consulting with its
      own
      attorneys, and that Purchaser is not relying on any representations or
      statements made by any other party to this Agreement, or by anyone representing
      any other party to this Agreement. Purchaser acknowledges that neither the
      Sellers, nor any agent or attorney of the Sellers, has made any promise,
      representation or warranty whatsoever, express or implied, not contained herein
      concerning the subject matters hereof to induce Purchaser to execute this
      Agreement, and acknowledges that Purchaser has not executed this Agreement
      in
      reliance upon any such promise, representation or warranty. Purchaser further
      acknowledges and agrees that it has been represented by independent counsel
      of
      its own choice throughout all negotiations which have preceded this Agreement,
      and that it has entered into and executed this Agreement after consultation
      with
      said independent counsel. This Agreement is executed voluntarily by Purchaser
      without any duress or undue influence.

    

    13.20
      Disclaimer.
      In
      connection with Purchaser’s investigation of the Companies, Purchaser may have
      received from or on behalf of the Sellers certain projections, including
      projected statements of operating revenues, income and estimates of percentage
      of completion from operations of the Companies, which projections are included
      in the Interim Financial Statements and will be included in the Closing Date
      Financial Statements. These statements include the costs incurred to the date
      (as set forth in said statements), the total costs estimated by management
      as
      necessary to complete each of said construction jobs, management’s estimate of
      the contract value and the profit margin based upon those assumptions. Purchaser
      acknowledges that there are uncertainties inherent in attempting to make such
      estimates, projections and other forecasts and plans, that Purchaser is familiar
      with such uncertainties, that Purchaser is taking full responsibility for making
      its own evaluation of the adequacy and accuracy of all estimates, projections
      and other forecasts and plans so furnished to it (including the reasonableness
      of the assumptions underlying them), and that Purchaser has received no
      representation or warranty from any of the Sellers with respect to such
      estimates, projections and other forecasts and plans (including the
      reasonableness of the assumptions underlying them). All projections of financial
      or operating results are based on estimates made by the Sellers and there can
      be
      no assurance that such results will be realized. Each of the Sellers expressly
      disclaims any and all liability that may be based upon errors in management’s
      judgment, and Purchaser agrees not to pursue any action, claim or cause of
      action against Sellers (including any claim for indemnification or claim based
      upon fraud) which is based wholly or partially upon the inaccuracy or inadequacy
      of said estimates, projections and/or forecasts (including the reasonableness
      of
      management’s assumptions underlying them).

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    SECTION
      14

    

    ESCROW
      PROVISIONS

    

    14.1 Each
      of
      the parties to this Agreement recognizes and acknowledges that the Escrow Agent
      is serving solely as an accommodation to the parties, 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
      Agreement.

    

    14.2 The
      Escrow Agent is acting, and may continue to act, as counsel to Purchaser in
      connection with the transactions contemplated by this Agreement.

    

    14.3 Each
      of
      the parties 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,
      whether paid to retained attorneys or representing the fair value of legal
      services rendered to itself) that may be incurred by the Escrow Agent acting
      under this Agreement (including, without limitation, any costs incurred by
      the
      Escrow Agent pursuant to Section 14.4 hereof) or to which the Escrow Agent
      may
      be put in connection with the Escrow Agent acting under this Agreement, except
      for costs, claims, or damages arising out of the Escrow Agent’s willful
      misfeasance or gross negligence.

    

    14.4 In
      the
      event that: (a) the Escrow Agent shall receive contrary instructions from the
      parties; or (b) any dispute shall arise as to any matter arising under this
      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 documents and other items placed with it pursuant to the terms of this
      Agreement until otherwise directed in writing by joint instruction of the
      parties, or by a final non-appealable court order, or (ii) at its option, at
      any
      time that such dispute, controversy or uncertainty continues, deposit said
      documents and other items into any court having appropriate jurisdiction.

    

    14.5 Upon
      the
      delivery or disposition of the documents and other items placed with it in
      accordance with the provisions of this Agreement, the Escrow Agent shall
      thereupon be relieved of, and discharged and released from, any and all
      liability hereunder and with respect to said documents and other items and
      Escrow Agent’s obligations under this Agreement shall be deemed to have been
      completed. 

    

    [Signatures
      on following pages]

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

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

     

    
      	ATTEST: 	 	
                     
                ARGAN, INC.

            
	 	 	 	 
	 	 	 	 
	/s/ Sherolyn Nanson 	 	
                 
  By:

            	/s/ Arthur Trudel
	
              
 	 	 	
              

              Name:
                Arthur Trudel

              Title:
                CFO

            
	
            	 	 	
              
              

            
	 	 	 	 
	ATTEST: 	 	           GEMMA
              POWER SYSTEMS, LLC
	 	 	 	 
	 	 	 	 
	 	 	
                  
 By:

            	/s/
              William F. Griffin, Jr.
	
              

            	 	 	
              
William
              F. Griffin, Jr., Manager
	 	 	 	 
	 	 	 	 
	ATTEST: 	 	           GEMMA
              POWER, INC.
	 	 	 	 
	 	 	       
By:	/s/
              William F. Griffin, Jr.
	
              
 	 	 	
              

              William
                F. Griffin, Jr., President

            
	 	 	 	 
	 	 	 	 
	ATTEST: 	 	           GEMMA
              POWER SYSTEMS 
                        
                CALIFORNIA, INC.

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

              William
                F. Griffin, Jr., President

            

    

     

    [Signatures
      continue on following page]

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

       

    

    
      	
              WITNESS: 

            	 	 	 
	 	 	 	 
	
            	 	
                       
                By:

            	/s/
              William F. Griffin, Jr.
	
              
 	 	 	
              
WILLIAM
              F. GRIFFIN, JR.
	 	 	 	 
	 	 	 	 
	WITNESS: 	 	 	 
	 	 	 	 
	 	 	 	/s/
              Joel M. Canino
	
              
 	 	 	
              
JOEL
              M. CANINO

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    Escrow
      Agent hereby executes the foregoing Agreement for the sole purpose of agreeing
      to the provisions of Section 3.2 thereof, subject to the provisions of Section
      14 thereof.

     

    ESCROW
      AGENT:

    

    CURTIN
      LAW ROBERSON DUNIGAN & SALANS, P.C.

     

     

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

    

    

    
      
        
        

      

      
        45STOCK
      PURCHASE AGREEMENT 

     

    By
      and
      Among

     

    ARGAN,
      INC.

     

    and

     

    GEMMA
      POWER, INC., and 

    GEMMA
      POWER SYSTEMS CALIFORNIA, INC.

    

    and

     

    WILLIAM
      F. GRIFFIN, JR. and JOEL M. CANINO

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this
      8th
      day of
      December, 2006, by and among (i) ARGAN, INC., a Delaware corporation
      (“Purchaser”), (ii) GEMMA POWER, INC., a Connecticut corporation
      (“GPS-Connecticut”), (iii) GEMMA POWER SYSTEMS CALIFORNIA, INC., a California
      corporation (“GPS-California,” and, together with GPS-Connecticut, the
“Corporations”), and (iv) WILLIAM F. GRIFFIN, JR. (“Griffin”), and (v) JOEL M.
      CANINO (“Canino,” and together with Griffin sometimes hereinafter referred to
      together as, the “Sellers”). 

    

    INTRODUCTORY
      STATEMENT

     

    A. The
      Sellers own a majority of the issued and outstanding shares
      of
      capital stock of GPS-Connecticut, and all of the issued and
      outstanding shares
      of
      capital stock of GPS-California.

    

    B. GPS-Connecticut
      and GPS-California are engaged in the engineering and construction of power
      energy systems and also provide consulting, owner’s representative, operating,
      and maintenance services to the energy market.

    

    C. The
      Boards of Directors of Purchaser and of GPS-Connecticut and GPS-California
      have
      approved the acquisition of the Corporations by Purchaser by acquisition (i)
      from the Sellers and the Other Stockholders of all of the GPS-Connecticut Stock,
      and from the Sellers of all of the GPS-California Stock, upon the terms and
      subject to the conditions set forth herein. 

    

    D. For
      federal income tax purposes, it is intended that the acquisition of
      GPS-Connecticut and GPS-California shall qualify as a tax-free reorganization
      within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of
      1986,
      as amended (the “Code”), and for such purpose the parties have adopted the Plan
      of Reorganization in the form of the Plan of Reorganization attached hereto
      as
      Exhibit D.

    

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual
      representations, warranties, covenants and agreements herein contained and
      other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties do agree as follows:

    

    DEFINITIONS

     

    The
      following terms when used in this Agreement shall have the following
      meanings:

    

    “Act”
shall
      mean the Securities Act of 1933, as the same has been and shall be amended
      from
      time to time. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “Argan
      Per Share Value”
shall
      mean Three and 75/100 Dollars ($3.75) per share, being the same price per
      share as that paid by investors for Argan Common Stock in connection with that
      certain private offering of up to 2,900,000 shares of Argan Common Stock to
      a
      limited number of sophisticated investors pursuant to that
      certain Stock
      Purchase Agreement dated as of December 7, 2006, by and among Argan and the
      Buyers identified therein, and that certain Escrow Agreement dated as of
      December 7, 2006, by and among Argan, the Buyers identified therein and the
      escrow agent identified therein.

    

    “Argan
      Common Stock”
shall
      mean the authorized voting common stock of Argan.

    

    “Business
      Day”
shall
      mean shall mean any day of the week other than Saturday, Sunday or a day on
      which banking institutions in either New York, New York, or Washington, D.C.,
      are obligated or authorized by law to close.

    

    “Canino”
shall
      mean Joel M. Canino, a stockholder, officer
      and director of GPS-Connecticut and of GPS-California, and a signatory to this
      Agreement.

     

    “Closing”
means
      the transfer of the GPS-Connecticut Stock and the GPS-California Stock to
      Purchaser and the payment of the Consideration to the Sellers pursuant to this
      Agreement.

    

    “Closing
      Date”
means
      the date of Closing, established under Section 3 of this Agreement.

     

    “Code”
has
      the
      meaning set forth in the introductory statement.

    

    “Corporations”
means
      GPS-Connecticut and GPS-California and all of their respective subsidiaries
      and
      affiliates (unless the context clearly indicates otherwise). Each of
      GPS-Connecticut and GPS-California (and all of their respective subsidiaries
      and
      affiliates, unless the context clearly indicates otherwise) is sometimes
      referred to as “a Corporation.”

    

    “Consideration”
means
      the aggregate consideration set forth in Section 2 hereof.

    

    “Delivery
      Date” has
      the
      meaning set forth in Section 3.1 below.

    

    “Escrow
      Agent”
shall
      mean Curtin Law Roberson Dunigan & Salans, P.C.

    

    “GPS-California
      Stock”
have
      the meaning set forth in Section 1.1.

    

    “GPS-Connecticut
      Stock”
shall
      have the meaning set forth in Section 1.1. 

    

    “Griffin”
shall
      mean William F. Griffin, Jr., a stockholder, officer
      and director of GPS-Connecticut and of GPS-California, and a signatory to this
      Agreement.

    

    “Membership
      Interest Purchase Agreement”
shall
      mean that certain Membership Interest Purchase Agreement by and among Purchaser,
      Gemma Power Systems, LLC (a Connecticut limited liability company),
      GPS-Connecticut, GPS-California, Griffin and Canino to be executed
      contemporaneously with this Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    “Organizational
      Documents”
shall
      mean (a) the articles or certificate of incorporation and the bylaws of a
      corporation; (b) the articles of organization and the operating agreement of
      any
      limited liability company; (c) the partnership agreement and any statement
      of
      partnership of a general partnership; (d) the limited partnership agreement
      and
      the certificate of limited partnership of a limited partnership; (e) any charter
      or similar document adopted or filed in connection with the creation, formation,
      or organization of any entity; and (f) any amendment to any of the
      foregoing.

    

    “Other
      Stockholders”
shall
      have the meaning set forth in Section 1.1.

    

    “Plan
      of Reorganization”
shall
      mean the Plan of Reorganization adopted and approved by the Boards of Directors
      of Purchaser, GPS-Connecticut and GPS-California and by the managers of GPS
      in
      the form of the Plan of Reorganization attached hereto as Exhibit
      D.

     

    “SEC”
shall
      have the meaning set forth in Section 4.12.

    

    “Sellers”
has
      the
      meaning set forth in the preface above.

     

    SECTION
      1

    

    ACQUISITION
      OF STOCK

    

    1.1 Acquisition
      of Stock.
      On the
      Closing Date (as defined in Section 3), and subject to and upon the fulfillment
      or waiver of the terms and conditions of this Agreement and of the Membership
      Interest Purchase Agreement, Purchaser shall acquire
      (i) from the Sellers and the other stockholders of GPS-Connecticut (the “Other
      Stockholders”) all of the authorized issued and outstanding capital stock of
      GPS-Connecticut, including all warrants, options, convertible securities or
      other rights (contingent or otherwise) to purchase or acquire stock of
      GPS-Connecticut (the “GPS-Connecticut Stock”), and (ii) from the Sellers all of
      the authorized issued and outstanding capital stock of GPS-California, including
      all warrants, options, convertible securities or other rights (contingent or
      otherwise) to purchase or acquire stock of GPS-California (the “GPS-California
      Stock”). Purchaser’s acquisition of all of the GPS-Connecticut Stock and all of
      the GPS-California Stock shall be by means of a tax-free reorganization under
      Section 368(a)(1)(B) of the Code. The names, addresses and numbers of shares
      of
      GPS-Connecticut Stock and of GPS-California Stock held by each of the Sellers
      and each of the Other Stockholders is set forth on Schedule 1.1. 

    

    1.2 Organizational
      Documents, Management.

    

    (a) Organizational
      Documents.
      At
      Closing, the Organizational Documents of the Corporations shall be amended
      in
      the manner determined by Purchaser, as sole stockholder of GPS-Connecticut
      and
      of GPS-California.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    (b) Management.
      At
      Closing, Purchaser, as sole stockholder of GPS-Connecticut and of
      GPS-California, shall take all appropriate action to elect the persons
      designated on Schedule 1.2(b) as the directors and the officers of
      GPS-Connecticut and of GPS-California, respectively, until their respective
      successors are duly elected or appointed and qualified.

    

    SECTION
      2

    

    CONSIDERATION

    

    2.1 Consideration.
       The
      total
      consideration to be paid by Purchaser to the Sellers and to the Other
      Stockholders (the “Consideration”) shall be an amount equal to Four Million
      Eight Hundred Seventy-Five Thousand Dollars ($4,875,000) in Argan Common Stock.
      The Consideration shall be allocated Two Million Forty-Seven Thousand Five
      Hundred Dollars ($2,047,500) for all of the GPS-Connecticut Stock, and Two
      Million Eight Hundred Twenty-Seven Thousand Five Hundred Dollars ($2,827,500)
      for all of the GPS-California Stock, and shall be determined and paid in
      accordance with Section 2.2.

    

    2.2 Payment
      of Consideration .
       The
      Consideration shall be paid at Closing:.

     

    (a)
      for
      the shares of GPS-Connecticut Stock, through issuance of the number of shares
      of
      Argan Common Stock equal in value to Two Million Forty-Seven Thousand Five
      Hundred Dollars ($2,047,500), valued at the Argan Per Share Value (the
“GPS-Connecticut Stock Consideration”). At Closing, the Sellers and the Other
      Stockholders shall receive their respective pro rata shares of the
      GPS-Connecticut Stock Consideration as set forth in Schedule 2.2;
      and

    

    (b) for
      the
      shares of GPS-California Stock, through issuance of the number of shares of
      Argan Common Stock equal in value to Two Million Eight Hundred Twenty-Seven
      Thousand Five Hundred Dollars ($2,827,500), valued at the Argan Per Share Value
      (the “GPS-California Stock Consideration”). At Closing, the Sellers shall
      receive their respective pro rata shares of the GPS-California Stock
      Consideration as set forth in Schedule 2.2.   

     

    SECTION
      3

     

    CLOSING

     

    3.1 Closing;
      Deliveries into Escrow.
      The
      closing of the acquisition of the GPS-Connecticut Stock and the GPS-California
      Stock (the “Closing”) shall take place on a date designated by Purchaser in a
      notice given to the Sellers that shall be not earlier than one (1) Business
      Day
      nor later than five (5) Business Days following the execution of this Agreement,
      the Membership Interest Purchase Agreement, and of all documents contemplated
      under this Agreement and under the Membership Interest Purchase Agreement,
      and
      placement thereof, together with all other documents or items to be delivered
      by
      the parties at Closing under this Agreement and under the Membership Interest
      Purchase Agreement into escrow with the Escrow Agent (the “Delivery Date”), or
      at such other time, date and place as Purchaser and the Sellers may agree (the
      “Closing Date”). In satisfying their obligations hereunder, the Sellers shall
      cause the Other Stockholders to transfer to the Escrow Agent, to be held in
      escrow pursuant to this Section 3, duly endorsed stock certificates
      representing all of the outstanding shares owned by the Other Stockholders
      of
      GPS-Connecticut Stock together with such other customary documents as may be
      required to transfer same.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    3.2 Deliveries
      by Escrow Agent.
      Upon
      confirmation from either Purchaser or the Sellers that the wire transfer of
      funds described in Section 3.2 of the Membership Interest Purchase Agreement
      has
      been effected, the Escrow Agent shall be authorized, and hereby agrees, to
      date
      as of the Closing Date all documents held by it in escrow which, in accordance
      with the terms of this Agreement, are to be dated as of the Closing Date and
      to
      deliver, and the Escrow Agent shall release from escrow and deliver, (i) to
      the
      Sellers, and to the Other Stockholders, as the case may be, stock certificates
      representing the Consideration described in Section 2, and (ii) to Purchaser
      (A)
      duly endorsed stock certificates representing all of the outstanding shares
      of GPS-Connecticut Stock together with such other customary documents as may
      be
      required to transfer same, (B) duly endorsed stock certificates
      representing all of the outstanding shares of GPS-California Stock together
      with
      such other customary documents as may be required to transfer same.

    

    SECTION
      4

     

    MISCELLANEOUS

     

    4.1 Costs.
      Each
      party shall pay its own expenses incident to the transaction contemplated
      hereby, including fees and expenses of their attorneys, accountants, appraisers
      or consultants, whether or not those transactions are consummated at Closing.
      

    

    4.2 Attorneys
      Fees.
      If any
      party initiates any litigation against any other party involving this Agreement,
      the prevailing party in such action shall be entitled to receive reimbursement
      from the other party for all reasonable attorneys’ fees and other costs and
      expenses incurred by the prevailing party in respect of that litigation,
      including any appeal, and such reimbursement may be included in the judgment
      or
      final order issued in that proceeding. 

     

    4.3 Titles
      and Captions.
      All
      articles or section titles or captions in this Agreement are for convenience
      of
      reference and shall in no way define, limit, extend or describe the scope or
      intent of provisions herein.

    

    4.4 Applicable
      Law.
      This
      Agreement is to be governed by, and construed, interpreted, and enforced in
      accordance with, the laws of the State of Delaware.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    4.5 Binding
      Effect and Assignment.
      This
      Agreement shall be binding on and inure to the benefit of the parties hereto
      and
      their respective heirs, personal representative, affiliates, successors and
      assigns. Notwithstanding the foregoing, neither the Corporations nor Purchaser
      shall have any right to assign any of its or their rights or obligations under
      this Agreement without the prior written consent of the other parties
      hereto.

    

    4.6 Notices.
      All
      notices, consents, waivers, and other communications under this Agreement must
      be in writing and will be deemed to have been duly given when (a) delivered
      by hand (with written confirmation of receipt), (b) sent by facsimile (with
      written confirmation of receipt), provided that a copy is mailed by registered
      mail, return receipt requested, or (c) when received by the addressee, if
      sent by a nationally recognized overnight delivery service (receipt requested),
      in each case to the appropriate addresses and facsimile numbers set forth below
      (or to such other addresses and facsimile numbers as a party may designate
      by
      notice to the other parties):

    

      
        	
                If
                  the Corporations then:

              	 	
                Gemma
                  Power, Inc. and 

              
	 	 	
                Gemma
                  Power Systems of California, Inc.

              
	 	 	
                2461
                  Main Street 

              
	 	 	
                Glastonbury,
                  Connecticut 06033

              
	 	 	
                Attention:
                  Mr. William F. Griffin, Jr. and Joel M. Canino

              
	 	 	
                Fax:
                  (860) 659-0607

              
	 	 	 
	
                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

              
	 	 	 
	
                
                  Counsel
                    for the Corporations, Griffin and 

                  Canino:

                

              	 	
                John
                  W. Beck

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

              
	 	 	
                150
                  Trumbull Street

              
	 	 	
                Hartford,
                  Connecticut 06103

              
	 	 	
                Fax:
                  (860) 724-3550

              
	 	 	 
	
                If
                  Purchaser then:

              	 	
                Argan,
                  Inc.

              
	 	 	
                One
                  Church Street, Suite 401

              
	 	 	
                Rockville,
                  Maryland 20950

              
	 	 	
                Attn:
                  Arthur Trudel

              
	 	 	
                Fax:
                  (301) 315-0064

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                Counsel
                  for Purchaser:

              	 	
                David
                  B. Law

              
	 	 	
                Curtin
                  Law Roberson Dunigan

              
	 	 	
                &
                  Salans, PC

              
	 	 	
                1900
                  M Street, N.W.

              
	 	 	
                Suite
                  600

              
	 	 	
                Washington,
                  D.C. 20036

              
	 	 	
                Fax:
                  202/530-4411

              

      

    

    

    4.7 Severability.
      Inapplicability or unenforceability of any provision of this Agreement shall
      not
      impair the operation or validity of any other provision hereof. If any provision
      shall be declared inapplicable or unenforceable, there shall be added
      automatically as part of this Agreement a provision as similar in terms to
      such
      inapplicable or unenforceable provision as may be possible and be legal, valid
      and enforceable.

    

    4.8 Acceptance
      or Approval.
      By
      accepting all or approving anything required to be observed, performed, or
      fulfilled, or to be given to Purchaser pursuant to this Agreement, Purchaser
      shall not be deemed to have accepted or approved the sufficiency, legality,
      effectiveness or legal effect of the same, or of any term, provision, or
      condition thereof as to third parties.

    

    4.9 Entire
      Agreement.
      This
      Agreement, including all Exhibits and Schedules, 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 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.

    

    4.10 Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which together
      shall constitute one instrument.

    

    4.11 Securities
      Matters.
      By
      executing this Agreement, Purchaser acknowledges that: (i) Purchaser has been
      advised that the GPS-Connecticut Stock and the GPS-California Stock has not
      been
      and will not have been registered under the Act or the applicable securities
      laws of any state, that the Sellers in transferring such stock to Purchaser
      will
      be relying, if applicable, upon the exemption from such registration
      requirements contained in Section 4(1) or 4(2) of the Act as a transaction
      by a
      person other than an issuer, underwriter or dealer and the applicable state
      exemption; (ii) the GPS-Connecticut Stock and the GPS-California Stock may
      be
“restricted” as that term is used in Rule 144 under the Act as a consequence of
      which Purchaser may not be able to sell the interests unless such stock is
      first
      registered under the Act and any applicable state securities laws or unless
      an
      exemption from such registration is, in the opinion of counsel, available;
      (iii)
      the GPS-Connecticut Stock and the GPS-California Stock will be acquired by
      Purchaser for purposes other than “distribution” as that term is used in Section
      2(11) of the Act, and (iv) Purchaser will execute, if Sellers so request, an
      appropriate letter affirming that its intention with respect to the proposed
      acquisition of the GPS-Connecticut Stock and the GPS-California Stock is that
      such acquisition be for investment purposes only and not with a view toward
      resale or distribution thereof.  

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    4.12 Preparation
      and Filing of SEC Documents.
      If and
      whenever, as a result of the transaction contemplated hereunder, Purchaser
      is
      under an obligation to provide financial information to, or prepare a filing
      of
      any kind with, the United States Securities and Exchange Commission (the “SEC”),
      the Sellers shall assist Purchaser in preparing any audited financial statements
      required by the SEC for this purpose. The cost of preparing any such financial
      statements shall be borne by Purchaser.

    

    4.13 Further
      Assurances.
      From
      time to time at or after the Closing, upon request, the parties each will
      execute and deliver such other instruments of conveyance, assignment, transfer
      and delivery and take such actions as the other party reasonably may request
      in
      order to consummate, complete and carry out the purposes of the transactions
      contemplated hereby.

    

    4.14 Tag
      Along Rights.
      

    

    4.14.1
      In
      the event that one or more holders (the "Tag Along Holders") of common stock
      of
      Purchaser (including any successor thereof) shall transfer (or agree to
      transfer) more than fifty percent (50%) of the outstanding common stock of
      Purchaser, then Purchaser shall use commercially reasonable efforts to include
      the Sellers and the Other Stockholders (including any assignees or successors
      thereof), to the extent that they then hold shares of common stock of Purchaser,
      in said sale upon the same terms and subject to the same conditions as apply
      to
      the Tag Along Holders. 

    

    4.14.2
      In
      addition, in the event Purchaser proposes any underwritten secondary offering
      of
      its common stock, Purchaser will give prior written notice thereof to each
      Seller and the Other Stockholders offering them the opportunity to include
      in
      any such offering such number of shares as they may request in writing not
      later
      than ten (10) days before such filing. Upon receipt by Purchaser of any such
      request, Purchaser shall use reasonable efforts to cause the managing
      underwriter to include such shares in such secondary offering. 

     

    4.15 Access
      to Corporate Records.
      From
      and after the Closing, Purchaser shall allow Griffin, Canino, and their
      respective authorized agents, access to the Corporations’ books and records in
      the event that the same is necessary in connection with any tax audits or other
      indemnifiable claims, which audit or indemnifiable claim arose with respect
      to
      the Sellers’ period of ownership of the GPS-Connecticut Stock and the
      GPS-California Stock prior to the Closing Date. 

    

    SECTION
      5

    

    ESCROW
      PROVISIONS

    

    5.1 Each
      of
      the parties to this Agreement recognizes and acknowledges that the Escrow Agent
      is serving solely as an accommodation to the parties, 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
      Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    5.2 The
      Escrow Agent is acting, and may continue to act, as counsel to Purchaser in
      connection with the transactions contemplated by this Agreement.

    

    5.3 Each
      of
      the parties 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,
      whether paid to retained attorneys or representing the fair value of legal
      services rendered to itself) that may be incurred by the Escrow Agent acting
      under this Agreement (including, without limitation, any costs incurred by
      the
      Escrow Agent pursuant to Section 5.4 hereof) or to which the Escrow Agent may
      be
      put in connection with the Escrow Agent acting under this Agreement, except
      for
      costs, claims, or damages arising out of the Escrow Agent’s willful misfeasance
      or gross negligence.

    

    5.4 In
      the
      event that: (a) the Escrow Agent shall receive contrary instructions from the
      parties; or (b) any dispute shall arise as to any matter arising under this
      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 documents and other items placed with it pursuant to the terms of this
      Agreement until otherwise directed in writing by joint instruction of the
      parties, or by a final non-appealable court order, or (ii) at its option, at
      any
      time that such dispute, controversy or uncertainty continues, deposit said
      documents and other items into any court having appropriate jurisdiction.

    

    5.5 Upon
      the
      delivery or disposition of the documents and other items placed with it in
      accordance with the provisions of this Agreement, the Escrow Agent shall
      thereupon be relieved of, and discharged and released from, any and all
      liability hereunder and with respect to said documents and other items and
      Escrow Agent’s obligations under this Agreement shall be deemed to have been
      completed. 

     

    [Signatures
      on following pages]

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

    
      	ATTEST: 	 	 	ARGAN, INC.
	
               

               

            	 	 	 
	/s/ Arthur
              Trudel	 	
               By:

            	/s/ Rainer
              Bosselmann
	
              

            	 	 	
              

              Name:
                Rainer Bosselmann

              Title:
                Chairman and CEO

            

    

    

    
      	ATTEST: 	 	
               

            	GEMMA POWER, INC.
	
               

               

            	 	 	 
	 	 	
               By:

            	/s/ William
              F. Griffin, Jr.
	
              

            	 	 	
              

              William
                F. Griffin, Jr., President

            

    
      	ATTEST: 	 	 	GEMMA
              POWER
              SYSTEMS 
              CALIFORNIA,
                INC.

            
	
               

               

            	 	 	 
	 	 	
               By:

            	/s/ William
              F. Griffin, Jr.
	
              

            	 	 	
              

              William
                F. Griffin, Jr., President

            

    

    

    
      	WITNESS: 	 	 	 
	
               

               

            	 	 	 
	 	 	
               By:

            	/s/ William
              F. Griffin, Jr.
	
              

            	 	 	
              

              WILLIAM
                F. GRIFFIN, JR.

            

    

    
      

      
        	WITNESS: 	 	 	 
	
                 

                 

              	 	 	 
	 	 	
                 

              	/s/ Joel
                M.
                Canino
	
                

              	 	 	
                

                JOEL
                  M. CANINO

              

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Escrow
      Agent hereby executes the foregoing Agreement for the sole purpose of agreeing
      to the provisions of Section 3.2 thereof, subject to the provisions of Section
      5
      thereof.

    

    ESCROW
      AGENT:

     

    
      	 	
              CURTIN
                LAW ROBERSON DUNIGAN & SALANS, P.C.

            	 	 	 
	 	
               

               

            	 	 	 
	 By:	/s/ David
              B. Law	 	 	 
	 	
              

              David
                B. Law, Vice President

            	 	 	
            

    

    

    
      
        
        

      

      
        11

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