<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>v021225_ex10-3.txt
<TEXT>

                                                                    Exhibit 10.3


                             SUBORDINATED TERM NOTE


            THIS SUBORDINATED  TERM NOTE AND INDEBTEDNESS  EVIDENCED
            HEREBY  ARE  AND  SHALL  AT  ALL  TIMES  BE  AND  REMAIN
            SUBORDINATED  IN RIGHT OF  PAYMENT  TO THE EXTENT AND IN
            THE  MANNER  SET  FORTH  IN  THAT  CERTAIN  AMENDED  AND
            RESTATED DEBT SUBORDINATION  AGREEMENT,  EFFECTIVE AS OF
            JUNE 30,  2005,  BY AND  AMONG  BANK OF  AMERICA,  N.A.,
            ARGAN, INC., A DELAWARE CORPORATION AND KEVIN J. THOMAS,
            AN  INDIVIDUAL,  TO THE  PRIOR  PAYMENT  IN  FULL OF ALL
            SUPERIOR DEBT (AS DEFINED THEREIN).

$2,698,131.00                                                As of June 30, 2005

      FOR VALUE RECEIVED,  the undersigned,  ARGAN, INC., a Delaware corporation
(the  "Maker"),  hereby  promises  to pay to the order of KEVIN J.  THOMAS  (the
"Creditor"),  at 6620 Daniels Road, Naples,  Florida 34104, the principal sum of
TWO MILLION SIX HUNDRED  NINETY EIGHT  THOUSAND  ONE HUNDRED  THIRTY ONE DOLLARS
($2,698,131.00) (the "Principal  Amount"),  in lawful money of the United States
of  America  in  immediately  available  funds,  without  deduction,  set-off or
counterclaim,  and to pay interest from the date hereof on the principal  amount
hereof from time to time  outstanding,  in like funds, at a rate per annum equal
to ten percent (10%). Interest hereunder shall be due and payable on a quarterly
basis  commencing  on  October 1, 2005 and  continuing  on the first day of each
October,  January,  April and July  thereafter.  Unless  otherwise  prepaid as a
Mandatory  Prepayments as provided below, the Principal Amount together with all
accrued and unpaid interest  thereon shall be due and payable in one installment
on August 1, 2006.

      Notwithstanding  the forgoing,  in the event that the Maker receives gross
cash consideration (prior to the payment of any fees, discounts, costs, expenses
or  commissions)  in  connection  with one or more public  offerings  or private
placements  of the Maker's  capital stock during the period from the date hereof
to August  1,  2006  which is in excess  of  $1,000,000  in the  aggregate  (the
"Aggregate  Consideration"),  the Maker shall prepay the Principal  Amount by an
amount equal to that portion of the Aggregate  Consideration  which is in excess
of $1,000,000 (a "Mandatory Prepayment") so that all capital raised by the Maker
which is in excess of  $1,000,000  shall be paid over to the  Holder  until such
time as the Principal  Amount and all other sums due hereunder have been paid in
full.

      In  addition,  Maker  agrees  that it  shall  not  close  any  transaction
involving the  acquisition by Maker of all or  substantially  all of the capital
stock,  equity  interests  or assets of any  corporation,  partnership,  limited
liability company or any other organization or entity (an "Acquisition")  unless
on or before the closing of any such Acquisition all amounts due hereunder shall
have  been  paid in full  (the  "Additional  Mandatory  Prepayment");  provided,
however, that,  notwithstanding the forgoing, the Maker shall not be required to
make the Additional  Mandatory  Prepayment in connection with any acquisition by
the Maker of any assets,  capital stock or other equity  interests of any of its
subsidiaries  or  affiliates  whether  as a result  of a merger or for any other
reason.

<PAGE>

      Interest  on the  outstanding  Principal  Amount  shall be computed on the
basis of the actual number of days elapsed over a 365 day year.

      The Maker hereby waives diligence, presentment, demand, protest and notice
of any kind  whatsoever.  The  non-exercise  by the  holder of any of its rights
hereunder in any  particular  instance  shall not constitute a waiver thereof in
that or any subsequent instance.

      THIS  SUBORDINATED  TERM NOTE SHALL BE  CONSTRUED IN  ACCORDANCE  WITH AND
GOVERNED BY THE LAWS OF THE STATE OF  CONNECTICUT,  WITHOUT  REGARD TO CHOICE OF
LAW DOCTRINE, AND ANY APPLICABLE LAWS OF THE UNTED STATES OF AMERICA.

      This  Subordinated  Term  Note  is  being  issued  in  full  and  complete
satisfaction  of all  obligations  of the  Maker  to  pay  to the  Creditor  the
Additional  Cash  Consideration  (as defined in and to be paid  pursuant to that
certain  Agreement and Plan of Merger among the Maker,  the  Creditor,  Vitarich
Laboratories,  Inc., a Florida  corporation and Vitarich  Laboratories,  Inc., a
Delaware  corporation  (formerly  known  as  AGAX/VLI  Acquisition  Corporation)
("Vitarich")   dated  as  of  August  31,   2004);   provided,   however,   that
notwithstanding the forgoing,  the Maker and the Creditor agree and acknowledge,
that the obligation of Argan to pay the Reduced  Earn-back Amount (as defined in
that  certain  Letter  Agreement  among the Maker,  the  Creditor  and  Vitarich
effective  as of June 30,  2005 (the  "Letter  Agreement"))  and the  Additional
Earn-back Amount (as defined in the Letter Agreement),  as applicable,  shall be
evidenced by and paid in accordance with the terms of said Letter  Agreement and
related Subordinated Term Note (Earn-back Obligations).

                                       ARGAN, INC.

                                       By: /s/ Haywood Miller
                                           ------------------------
                                           Name: Haywood Miller
                                           Title: EVP

</TEXT>
</DOCUMENT>
