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<SEC-DOCUMENT>0001144204-05-020931.txt : 20050707
<SEC-HEADER>0001144204-05-020931.hdr.sgml : 20050707
<ACCEPTANCE-DATETIME>20050707164822
ACCESSION NUMBER:		0001144204-05-020931
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20050705
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050707
DATE AS OF CHANGE:		20050707

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARGAN INC
		CENTRAL INDEX KEY:			0000100591
		STANDARD INDUSTRIAL CLASSIFICATION:	MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833]
		IRS NUMBER:				131947195
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31756
		FILM NUMBER:		05943857

	BUSINESS ADDRESS:	
		STREET 1:		ONE CHURCH STREET
		STREET 2:		SUITE 302
		CITY:			ROCKVILLE
		STATE:			MD
		ZIP:			20850
		BUSINESS PHONE:		301 315-0027

	MAIL ADDRESS:	
		STREET 1:		ONE CHURCH STREET
		STREET 2:		SUITE 302
		CITY:			ROCKVILLE
		STATE:			MD
		ZIP:			20850

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PUROFLOW INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ULTRA DYNAMICS CORP
		DATE OF NAME CHANGE:	19830522
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v021225_8-k.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                -----------------

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         Date of report (Date of earliest event reported): July 5, 2005

                                   ARGAN, INC.
             (Exact Name of Registrant as Specified in its Charter)

         Delaware                       001-31756               13-1947195
(State or Other Jurisdiction          (Commission             (IRS Employer
      of Incorporation)               File Number)           Identification No.)

One Church Street, Suite 302, Rockville, MD                       20850
   (Address of Principal Executive Offices)                     (Zip Code)

Registrant's telephone number, including area code: (301) 315-0027


                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)


         Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))


<PAGE>


Item 1.01  Entry into a Material Agreement.

Background

      By way of background, Argan, Inc. (the "Company") and Southern Maryland
Cable, Inc., a wholly-owned subsidiary of the Company ("SMC," and together with
the Company, the "Debtor") entered into a certain Financing and Security
Agreement dated as of August 19, 2003, as amended, with Bank of America, N.A.
("Lender"), whereby Lender extended to Debtor certain loans. On August 31, 2004,
with the consent of Lender, the Debtor entered into an Agreement and Plan of
Merger, as amended on January 28, 2005 and as amended herein (the "Merger
Agreement") with AGAX/VLI Acquisition Corporation, a subsidiary of the Company
("AGAX"), Vitarich Laboratories, Inc. ("Vitarich") and Kevin J. Thomas, who was
a shareholder of Vitarich ("Thomas"), whereby Vitarich merged into AGAX.
Pursuant to the Merger Agreement, Thomas is entitled to receive from Debtor,
subject to certain conditions, certain additional cash consideration as provided
in the Merger Agreement ("Additional Cash Consideration").

      On January 31, 2005, the Debtor entered into a Debt Subordination
Agreement (the "Original Subordination Agreement") with Thomas and Lender to
reconstitute the Additional Cash Consideration that Debtor will owe to Thomas as
subordinated debt. The transaction contemplated by the Original Agreement was
filed with the Securities and Exchange Commission on Form 8-K on February 4,
2005.

Current Transaction

      On July 5, 2005, the Company entered into a letter agreement (the "Letter
Agreement") with Vitarich and Thomas to further amend the Merger Agreement with
respect to the calculation and payment of the Additional Cash Consideration.
Pursuant to the Letter Agreement, (i) the Additional Cash Consideration was
reduced by an amount of $1,452,000 (the "Earn-back Amount") as a result of a
write-down of the value of Vitarich's inventory, (ii) the Company agreed to pay
Thomas an additional amount equal to the Earn-back Amount less $264,000 (the
"Reduced Earn-back Amount"), and (iii) subject to certain conditions, Thomas was
given the opportunity to earn back $264,000 (the "Additional Earn-back Amount")
as provided in the Letter Agreement (collectively, the "Transaction"). In
furtherance of the Transaction, the Company has agreed to execute and deliver a
certain "Subordinated Term Note (Earn-back Obligations)" within the time period
specified in the Letter Agreement for payment of 50% of the Reduced Earn-back
Amount and the Additional Earn-back Amount, if applicable. The remaining 50% of
the Reduced Earn-back Amount and the Additional Earn-back Amount, if applicable,
shall be payable by the Company to Thomas through the issuance of capital stock
of the Company (valued at $7.75 per share).

      In connection with the Transaction, the Company has simultaneously
executed and delivered to Thomas a Subordinated Term Note, effective as of June
30, 2005, ("Term Note") in an amount equal to $2,698,131.00, plus interest at a
rate equal to 10% per annum, which interest 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 prepaid, the principal

<PAGE>

amount and all accrued interest thereon is due and payable on August 1, 2006.
Under the Term Note, the Company is required to prepay a certain amount of the
principal amount of the Term Note as provided therein in the event that the
Company receives gross cash consideration in connection with one or more public
offerings or private placements of the Company's capital stock during the period
from June 30, 2005 to August 1, 2006. In addition, the Company shall not close
any transaction involving the acquisition by the Company 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
(excluding any its subsidiaries or affiliates) unless on or before the closing
of any such acquisition all amounts due under the Term Note have been paid in
full.

      In addition, on July 5, 2005, the parties to the Original Subordination
Agreement have agreed to amend and restate the Original Subordination Agreement
pursuant to an Amended and Restated Debt Subordination Agreement, effective as
of June 30, 2005, (the "Subordination Agreement") by and among Debtor, Thomas
and the Lender, to reconstitute the Additional Cash Consideration (exclusive of
the Reduced Earn-back Amount and the Additional Earn-back Amount) as
subordinated debt. Each of the Term Note and the Subordinated Term Note
(Earn-back Obligations) and the respective indebtedness evidenced thereby shall
be subject to the Subordination Agreement. Under the Subordination Agreement,
(i) all of the present and future indebtedness of Debtor to Thomas ("Junior
Debt", as defined in greater detail in the Subordination Agreement) to the full
and final payment of all the present and future indebtedness of Debtor to Lender
("Superior Debt", as defined in greater detail in the Subordination Agreement)
to the extent provided in the Subordination Agreement, (ii) Thomas transferred
and assigned to Lender all of his rights, title and interest in and to, and
granted to Lender a security interest in, the Junior Debt and (iii) Thomas
appointed Lender as his attorney-in-fact for the purposes provided in the
Subordination Agreement for as long as any of the Superior Debt remains
outstanding. Except as otherwise provided in the Subordination Agreement and
until such time that the Superior Debt is satisfied in full, Debtor shall not,
among other things, directly or indirectly, in any way, satisfy any part of the
Junior Debt, nor shall Thomas, among other things, enforce any part of the
Junior Debt or accept payment from Debtor or any other person for the Junior
Debt or give any subordination in respect of the Junior Debt.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.

      The information described above under Item 1.01 is hereby incorporated
herein by reference.


<PAGE>


Item 9.01. Financial Statements and Exhibits.

(c)   Exhibits.

      Exhibit No.       Description
      -----------       -----------
      2.1               Agreement and Plan of Merger, dated as of August 31,
                        2004, by and between Kevin J. Thomas, Vitarich
                        Laboratories, Inc., Argan, Inc. and AGAX/VLI
                        Acquisition Corporation (Incorporated by reference to
                        Exhibit 2.1 to the Company's Current Report on Form
                        8-K filed with the Securities and Exchange Commission
                        on September 7, 2004)

      10.1              Letter Agreement dated July 5, 2005 by and among
                        Argan, Inc., Vitarich Laboratories, Inc. and Kevin J.
                        Thomas.

      10.2              Form of Subordinated Term Note (Earn-back
                        Obligations) to be issued by Argan, Inc. to Kevin J.
                        Thomas.

      10.3              Subordinated Term Note, effective as of June 30,
                        2005, issued by Argan, Inc. to Kevin J. Thomas.

      10.4              Amended and Restated Debt Subordination Agreement,
                        effective as of June 30, 2005, by and among Argan,
                        Inc., Kevin J. Thomas, Southern Maryland Cable, Inc.
                        and Bank of America, N.A.

      10.5              Debt Subordination Agreement dated as of January 31,
                        2005 by and among Argan, Inc., Kevin J. Thomas,
                        Southern Maryland Cable, Inc. and Bank of America,
                        N.A. (includes as Exhibit A, a Form of Subordinated
                        Term Note) (Incorporated by reference to Exhibit 10.1
                        to the Company's Current Report on Form 8-K filed
                        with the Securities and Exchange Commission on
                        February 4, 2005)

      10.6              Financing and Security Agreement dated as of August
                        19, 2003 among Puroflow Incorporated Southern
                        Maryland Cable, Inc. and Bank of America, N.A.
                        (Incorporated by reference to Exhibit 10.7 to the
                        Company's Form 10-QSB filed with the Securities and
                        Exchange Commission on December 15, 2003)

<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   ARGAN, INC.

Date: July 7, 2005                 By: /s/ Rainer Bosselmann
                                       ---------------------
                                   Rainer Bosselmann
                                   Chairman of the Board and
                                   Chief Executive Officer


<PAGE>


                                  EXHIBIT INDEX

      Exhibit No.       Description
      -----------       -----------
      2.1               Agreement and Plan of Merger, dated as of August 31,
                        2004, by and between Kevin J. Thomas, Vitarich
                        Laboratories, Inc., Argan, Inc. and AGAX/VLI
                        Acquisition Corporation (Incorporated by reference to
                        Exhibit 2.1 to the Company's Current Report on Form
                        8-K filed with the Securities and Exchange Commission
                        on September 7, 2004)

      10.1              Letter Agreement dated July 5, 2005 by and among
                        Argan, Inc., Vitarich Laboratories, Inc. and Kevin J.
                        Thomas.

      10.2              Form of Subordinated Term Note (Earn-back
                        Obligations) to be issued by Argan, Inc. to Kevin J.
                        Thomas.

      10.3              Subordinated Term Note, effective as of June 30,
                        2005, issued by Argan, Inc. to Kevin J. Thomas.

      10.4              Amended and Restated Debt Subordination Agreement,
                        effective as of June 30, 2005, by and among Argan,
                        Inc., Kevin J. Thomas, Southern Maryland Cable, Inc.
                        and Bank of America, N.A.

      10.5              Debt Subordination Agreement dated as of January 31,
                        2005 by and among Argan, Inc., Kevin J. Thomas,
                        Southern Maryland Cable, Inc. and Bank of America,
                        N.A. (includes as Exhibit A, a Form of Subordinated
                        Term Note) (Incorporated by reference to Exhibit 10.1
                        to the Company's Current Report on Form 8-K filed
                        with the Securities and Exchange Commission on
                        February 4, 2005)

      10.6              Financing and Security Agreement dated as of August
                        19, 2003 among Puroflow Incorporated Southern
                        Maryland Cable, Inc. and Bank of America, N.A.
                        (Incorporated by reference to Exhibit 10.7 to the
                        Company's Form 10-QSB filed with the Securities and
                        Exchange Commission on December 15, 2003)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v021225_ex10-1.txt
<TEXT>

                                                                    Exhibit 10.1

                                                      July 5, 2005

Mr. Kevin J. Thomas
c/o Vitarich Laboratories, Inc.
4365 Arnold Avenue
Naples, Florida 34104

      Re:   Agreement and Plan of Merger dated as of August 31, 2004 by and
            among Kevin J. Thomas ("you"), Vitarich Laboratories, Inc., a
            Florida corporation, Argan, Inc. ("Parent"), and Vitarich
            Laboratories, Inc., a Delaware corporation (formerly known as
            AGAX/VLI Acquisition Corporation) ("Vitarich"), as amended by
            that certain letter agreement dated January 28, 2005 (the
            "January 28, 2005 Letter Agreement") by and among you, Argan and
            Vitarich (said Agreement and Plan of Merger, as amended by the
            January 28, 2005 Letter Agreement, is hereinafter referred to as
            the "Merger Agreement")

Dear Kevin:

      This letter shall memorialize our agreement concerning the calculation and
payment of the Additional Consideration (as such term and all other capitalized
terms used and not specifically defined herein are defined in the Merger
Agreement).

      We understand, acknowledge and agree that:

      A. The value of Vitarich's inventory of certain products produced,
marketed and sold by Vitarich, as more particularly described on Schedule A
attached hereto (hereinafter referred to as "Adaptogens"), on the Closing
Balance Sheet was written down by the amount of $264,000 (the "Write-down");

      B. As a result of the Write-down, the Adjusted EBITDA of the Company based
on the February 28, 2005 Financial Statements was reduced by a like amount,
which had the effect of reducing the amount of the Additional Consideration
payable to you under Section 2.4 of the Merger Agreement; and

      C. Parent, Vitarich and you (together, the "parties") agree that, in order
to provide for fairness and to further the ongoing business relationship of the
parties, the parties have established a mechanism by which you have earned back
all but $264,000 of the total amount by which the Additional Consideration
payable to you was reduced as a result of the Write-down and may earn back the
$264,000 (the "Additional Earn-back Amount").

      Now, therefore, in consideration of the above and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

<PAGE>

Mr. Kevin J. Thomas
July 5, 2005
Page 2


      1. The recitals set forth above are hereby incorporated into this letter
agreement as if fully set forth herein.

      2. The Additional Consideration has been computed in accordance with the
terms and conditions of Section 2.4 of the Merger Agreement, as set forth on
Schedule B, attached hereto, to which computation the parties stipulate and
agree; provided, however, that such amount shall be paid upon the full execution
and delivery of this letter agreement as follows: (a) in cash in the amount of
$275,000, (b) by delivery of a subordinated term note in the principal amount of
the Additional Cash Consideration, as contemplated by the January 28, 2005
Letter Agreement (but after taking account of the cash payment described in
clause (a), such principal amount being $2,698,131), and (c) through issuance of
Argan Stock in the amount of the Additional Stock Consideration (but after
taking account of the cash payment described in clause (a), such amount being
348,146 shares of Argan Stock). The parties acknowledge and agree that, as a
result of the Write-down, the Additional Consideration so payable to you was
reduced by the amount of $1,452,000 (i.e., $264,000 times 5.5, which amount is
hereinafter referred to as the "Earn-back Amount").

      3. Notwithstanding anything to the contrary contained in the Merger
Agreement or this letter agreement, the parties hereby agree that you are
entitled to an amount equal to the Earn-back Amount less $264,000 (the "Reduced
Earn-back Amount"), which will be deemed to be an additional component of the
Additional Consideration, and will be paid to you by Parent in accordance with
Paragraph 5 below. Additionally, notwithstanding anything to the contrary
contained in the Merger Agreement or this letter agreement, if the amount of
inventory of Adaptogens on hand as of the Earn-back Date (as defined in
Paragraph 7 below) is equal to or less than 14,000 liters, then you will be
entitled to the Additional Earn-back Amount, which will be deemed to be an
additional component of the Additional Consideration, and will be paid to you by
Parent in accordance with Paragraph 5 below.

      4. For purposes of this letter agreement, the "Earn-back Date" shall mean
November 30, 2005, or, at your option, any date between September 1, 2005 and
November 30, 2005. Any such option to fix the Earn-back Date as of a date before
November 30, 2005 shall be exercised by you, if at all, by giving written notice
thereof to Parent within ten (10) days following the date so chosen by you. In
the event that you do not exercise your option to so fix the Earn-back Date as
of a date before November 30, 2005, then the Earn-back Date shall be November
30, 2005.

      5. Parent will pay you the Reduced Earn-back Amount and the Additional
Earn-back Amount, if applicable, in full without any deduction, defense,
counterclaim, holdback, chargeback, offset or setoff of any kind or nature,
fifty percent (50%) through the issuance by Parent of a subordinated promissory
note in the form of Exhibit 1 attached hereto (the "Subordinated Promissory
Note"), and fifty percent (50%) through the issuance of Argan Stock. Parent
shall deliver the Subordinated Promissory Note and said Argan Stock on or before

<PAGE>

Mr. Kevin J. Thomas
July 5, 2005
Page 3

the date that is thirty (30) days following the receipt by Vitarich of the full
amount of the purchase price payable for all Adaptogens sold by Vitarich from
February 1, 2005 through the Earn-back Date; provided, however, that interest on
the principal amount of the Subordinated Promissory Note shall begin to accrue
as of the Earn-back Date. Notwithstanding anything to the contrary contained in
the Merger Agreement, for purposes of determining the number of shares of Argan
Stock to be issued to you as a part of the Reduced Earn-back Amount and the
Additional Earn-back Amount, if applicable, pursuant to this letter agreement,
the value of each share of Argan Stock shall be deemed to be Seven and 75/100
Dollars ($7.75).

      6. It is understood and agreed that the Subordinated Promissory Note shall
constitute subordinated debt of Parent, and in furtherance thereof, you agree to
execute and deliver, contemporaneously with the execution and delivery by Parent
of the Subordinated Promissory Note, an Amended and Restated Debt Subordination
Agreement by and among you, Parent and Bank of America, N.A., in the form of
Exhibit 2 attached hereto.

      7. For purposes of this letter agreement, (a) "the amount of inventory of
Adaptogens on hand as of the Earn-back Date" shall mean liters of Adaptogens
physically stored at the Main Facility and the Ancillary Facilities as of the
Earn-back Date, which were included in the inventory conducted as of January 31,
2005, and (b) all sales of Adaptogens referenced in Paragraph 3 above shall mean
and refer only to sales of Adaptogens without extraordinary discounts in price
or payment terms. Notwithstanding anything to the contrary contained in this
letter agreement, any purchase of additional inventory of Adaptogens by Vitarich
during the period starting on the date of this letter agreement and ending on
the Earn-back Date shall require the prior written consent of both you and
Parent.

      Except as specifically set forth hereinabove, all of the terms, covenants
and conditions of the Merger Agreement shall remain in full force and effect.

      If the above accurately reflects our understanding, please so indicate by
signing both copies of this letter agreement where indicated below, keep one
fully-executed copy for your files, and return the other fully-executed copy to
me.

                                       Sincerely yours,

                                       ARGAN, INC.

                                       By: /s/ Haywood Miller
                                           -------------------------
                                           Haywood Miller
                                           Executive Vice President

                   [Signatures continue on following page]


<PAGE>


Mr. Kevin J. Thomas
July 5, 2005
Page 4
                                       VITARICH LABORATORIES, INC.
                                       a Delaware corporation


                                          By: /s/ Haywood Miller
                                              ------------------------
                                          Haywood Miller
                                          Vice President and Secretary


SEEN AND AGREED:


/s/ Kevin J. Thomas
- -------------------
KEVIN J. THOMAS



cc:    David B. Law, Esq.
       Jeffery A. Bahnsen, Esq.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v021225_ex10-2.txt
<TEXT>

                                                                    Exhibit 10.2

                     (Form of Subordinated Promissory Note)

                                    [FORM OF]

                             SUBORDINATED TERM NOTE
                             (EARN-BACK OBLIGATIONS)


            THIS SUBORDINATED TERM NOTE (EARN-BACK  OBLIGATIONS) 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).

$___________________                         As of [INSERT EARN-BACK DATE], 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
_______________________________________________DOLLARS   ($______________)  (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
January 1, 2006 and continuing on the first day of each April, July, October and
January  thereafter.  Unless otherwise  prepaid as a Mandatory  Prepayment or an
Additional Mandatory Prepayment 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.

<PAGE>

      In addition,  Maker agrees that it shall not close any  transaction  after
the  Earn-back  Date (as that term is defined in that certain  Letter  Agreement
among the Maker,  the  Creditor  and  Vitarich  Laboratories,  Inc.,  a Delaware
corporation  effective as of June 30, 2005 (the "Letter  Agreement"))  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.

      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  (EARN-BACK  OBLIGATIONS)  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 (Earn-back  Obligations) is being issued in full and
complete satisfaction of all obligations of the Maker to pay to the Creditor the
Reduced  Earn-back  Amount (as defined in and calculated  pursuant to the Letter
Agreement)  and the  Additional  Earn-back  Amount (as defined in and calculated
pursuant to the Letter Agreement), as applicable.

                                       ARGAN, INC.


                                       By: _____________________________________
                                           Name:  ____________________
                                           Title:  _________________

</TEXT>
</DOCUMENT>
<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>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>v021225_ex10-4.txt
<TEXT>

                                                                    Exhibit 10.4

               AMENDED AND RESTATED DEBT SUBORDINATION AGREEMENT


      THIS  AGREEMENT  effective as of the 30th day of June,  2005, by and among
KEVIN J.  THOMAS,  an  individual  (the  "Creditor"),  ARGAN,  INC.,  a Delaware
corporation  ("Argan"),  SOUTHERN MARYLAND CABLE,  INC., a Maryland  corporation
("SMC" and  together  with Argan,  the  "Debtor")  and BANK OF AMERICA,  N.A., a
national banking association (the "Lender").

      WHEREAS,  reference  is  made  to  that  certain  Financing  and  Security
Agreement  among the Debtor and the Lender  dated as of August 19,  2003 (as the
same may be  amended,  supplemented  or modified  from time to time,  the "FSA")
pursuant to which the Lender has  extended to the Debtor  certain  loans as more
particularly described therein (collectively, the "Loans"); and

      WHEREAS,  Thomas,  the  Debtor,  Vitarich  Laboratories,  Inc.,  a Florida
corporation  ("Vitarich-Florida")  and Vitarich  Laboratories,  Inc., a Delaware
corporation  (formerly known as AGAX/VLI Acquisition  Corporation,  and a wholly
owned subsidiary of the Debtor  ("Vitarich")  entered into an Agreement and Plan
of Merger dated as of August 31, 2004 (the "Merger Agreement") pursuant to which
Vitarich-Florida merged into Vitarich (the "Merger"); and

      WHEREAS, prior to the Merger, Thomas was a shareholder of Vitarich; and

      WHEREAS,  the Lender  consented  to the Merger on the terms set forth in
the Merger Agreement; and

      WHEREAS, pursuant to the Merger Agreement, Thomas is to receive the Merger
Consideration  (as that term is  defined in the  Merger  Agreement),  including,
without  limitation,  certain  Additional Cash  Consideration (as defined in the
Merger  Agreement,   and  hereinafter  referred  to  as,  the  "Additional  Cash
Consideration")  which  Additional Cash  Consideration is due and payable thirty
(30) days  following  completion of (i) the Argan January 2005 Audit (as defined
in the Merger  Agreement),  and (ii) the February 28, 2005 Financial  Statements
(as defined in the Merger Agreement); and

      WHEREAS, the Debtor and the Creditor agreed to reconstitute the Additional
Cash Consideration as subordinated debt (the "Restructuring") and in furtherance
thereof the Debtor  will  execute  and  deliver to the  Creditor a  Subordinated
Promissory  Note in the form of Exhibit A  attached  hereto  (the  "Subordinated
Note"); and

      WHEREAS,  the principal  amount of the  Subordinated  Note will equal that
amount  that  would  otherwise  be  due  to  the  Creditor  as  Additional  Cash
Consideration  under the Merger  Agreement  (exclusive of the Reduced  Earn-back
Amount or the  Additional  Earn-back  Amount (as those terms are defined  below)
which,  if due and  owing,  shall  be paid in  accordance  with  the  terms  and
conditions of the Earn-back Subordinated Note (as defined below); and

      WHEREAS, in connection with the Restructuring,  which was agreed to by the
Lender,  the Debtor,  the  Creditor  and the Lender  entered into a certain Debt
Subordination  Agreement  dated as of  January  31,  2005  (the  "Existing  Debt
Subordination Agreement"); and

      WHEREAS, the amount of Additional  Consideration (as defined in the Merger
Agreement and hereinafter referred to as the "Additional Consideration") payable
to the  Creditor  under the Merger  Agreement  was  reduced by  $1,452,000  (the
"Earn-back Amount") as a result of a write-down of the value of certain Vitarich
inventory (the "Write-Down"); and

      WHEREAS,  in  connection  with the  Write-Down,  the  Creditor,  Argan and
Vitarich  entered into a certain  letter  agreement  dated as of the date hereof
(the "Letter Agreement"); and

      WHEREAS,  subject  to the terms and  conditions  set forth in such  Letter
Agreement,  it was agreed  that the  Creditor  was  entitled  to an amount  (the
"Reduced  Earn-back  Amount") equal to the Earn-back  Amount less $264,000,  and
that  Creditor  will be given the  opportunity  to earn back the  $264,000  (the
"Additional  Earn-back  Amount"),  which  amounts  would then be deemed to be an
additional   component  of  the   Additional   Consideration   (the   "Earn-back
Transaction"); and

<PAGE>

      WHEREAS,  the  Creditor  has  agreed  that any  right of the  Creditor  to
receive,  and any obligation of Argan to pay, the Reduced  Earn-back  Amount and
any  Additional  Earn-back  Amount shall  constitute  subordinated  debt and, in
furtherance  thereof,  Argan has agreed that it will  execute and deliver to the
Creditor a Subordinated Promissory Note (Earn-back Obligations) on the Earn-back
Date (as defined in the Letter  Agreement)  in the form of Exhibit B hereto (the
"Earn-back Subordinated Note"); and

      WHEREAS,  the principal amount of the Earn-back  Subordinated Note will be
that amount  equal to: (i) 50% of the Reduced  Earn-back  Amount (with the other
50% of the Reduced  Earn-back  Amount to be paid  through the  issuance of Argan
capital  stock);  and (ii) 50% of the Additional  Earn-back  Amount,  if earned,
pursuant  to the  terms of the  Letter  Agreement  (with  the  other  50% of the
Additional  Earn-back  Amount,  if any, to be paid through the issuance of Argan
capital stock); and

      WHEREAS,  the  Debtor  has  requested  the  Lender:  (a) to  agree  to the
Earn-back  Transaction and to the issuance of the Earn-back  Subordinated  Note;
and (b) to amend and  restate  the  Existing  Debt  Subordination  Agreement  to
reflect the  addition of the  Earn-back  Subordinated  Note as "Junior  Debt" as
defined therein; and

      WHEREAS, the Lender has so agreed to such Earn-back Transaction;  issuance
of the  Earn-back  Subordinated  Note;  and  amendment  and  restatement  of the
Existing Debt  Subordination  Agreement subject to the execution and delivery by
the Debtor and the Creditor of this Agreement; and

      WHEREAS,  capitalized  terms used herein and not defined herein shall have
the meanings assigned to such terms in the FSA; and

<PAGE>

      NOW,  THEREFORE,  for value  received and in  consideration  of the mutual
benefits to be derived from this Agreement, the parties hereto agree as follows:

      1. Definitions.

            (a) "Junior  Debt" means all of the present and future  indebtedness
(principal,  interest  (including,  without  limitation,  default  interest  and
interest  accruing  after the  commencement  of a  bankruptcy  proceeding  by or
against the  Debtor),  fees,  charges,  collection  and other costs  (including,
without   limitation,   attorney's   fees)  and  expenses  and  other  amounts),
liabilities and obligations of the Debtor to the Creditor,  all whether fixed or
contingent,  matured or unmatured,  and liquidated or  unliquidated  and whether
arising under contract, in tort or otherwise,  including without limitation, the
indebtedness arising under the Subordinated Note and the Earn-back  Subordinated
Note, and all increases, extensions,  modifications,  refinancings,  assignments
and renewals thereof.

            (b) "Superior Debt" means all of the present and future indebtedness
(principal,  interest  (including,  without  limitation,  default  interest  and
interest  accruing  after the  commencement  of a  bankruptcy  proceeding  by or
against the  Debtor),  fees,  charges,  collection  and other costs  (including,
without   limitation,   attorney's   fees)  and  expenses  and  other  amounts),
liabilities and obligations  (including,  without  limitation,  letter of credit
reimbursement  obligations,  protective advances permitted under the FSA and the
other  Financing  Documents  for  unpaid  taxes,  insurance,   etc.,  and  yield
maintenance  and other  indemnification  amounts)  of the  Debtor to the  Lender
including  any such  indebtedness  under the FSA or any of the  other  Financing
Documents, all whether fixed or contingent, matured or unmatured,  liquidated or
unliquidated,  and whether arising under contract, in tort or otherwise, and all
increases, extensions, modifications,  refinancings, assignments and/or renewals
thereof.

<PAGE>

      2. Subordination.

            (a) Creditor  hereby  postpones and  subordinates  all of the Junior
Debt to the full and final payment of all of the Superior Debt to the extent and
in the manner set forth herein, provided that so long as (i) no Default or Event
of Default has occurred and is continuing under or within the meaning of the FSA
or any of the other Financing  Documents and after giving effect to such payment
no Default or Event of Default would occur (including,  without limitation,  any
default  of any  financial  covenant  set  forth in the FSA or any of the  other
Financing  Documents),  and (ii) no event or condition has occurred  which would
constitute  such a Default or Event of  Default  but for the giving of notice or
passage of time, or both (including,  without limitation, any event or condition
that would cause a default of any financial covenant set forth in the FSA or any
of the other  Financing  Documents),  Lender agrees that for purposes of the FSA
and the other  Financing  Agreement  Debtor is permitted  to, and may make,  and
Creditor is permitted to, and may accept:  (A) regularly  scheduled  payments of
principal  and interest  under the Junior Debt;  and (B)  mandatory and optional
prepayments  of the Junior Debt  including,  without  limitation,  any Mandatory
Prepayment, the Additional Mandatory Prepayment or any other optional prepayment
allowed under the Junior Debt,  but only to the extent such  prepayments  do not
otherwise violate the prohibitions in clauses (i) and (ii) above.

            (b) Creditor agrees that so long as Debtor is indebted to the Lender
under or in connection with the FSA and the other Financing Documents,  Creditor
shall promptly provide Lender (or its successors or assigns, as the case may be)
with a copy of all notices  which the Creditor  from time to time may serve upon
Debtor in connection with the Junior Debt.

      3.  Collateral  for  Superior  Debt.  In  furtherance  of and for the sole
purposes of  enforcing,  exercising  and securing the rights of the Lender under
Section  7  herein  relating  to the  Lender's  authority  to act as  Creditor's
attorney-in-fact  in connection with a bankruptcy or similar  proceeding against
the Creditor,  Creditor hereby  transfers and assigns to Lender,  its successors
and assigns,  all of its right,  title and interest in and to, and grants to the
Lender,  its  successors  and assign,  a security  interest in, the Junior Debt.
Creditor agrees to execute and deliver to Lender any additional  assignments and
instruments  deemed necessary by Lender to effect or confirm such assignment and
transfer and to effect  collection of any and all payments  which may be made at
any time on account of the Junior Debt.

      4.  Warranties and  Representations  of Creditor and Debtor.  Creditor and
Debtor hereby  represent and warrant:  (a) that Creditor has not relied and will
not rely on any  representation or information of any nature made by or received
from Lender  relative to the Debtor in deciding to execute this  Agreement or to
permit it to  continue  in effect;  (b) that  Creditor  is or will be the lawful
owner of the Junior Debt and no part thereof is subject to any  defense,  offset
or  counterclaim;  (c) that Creditor has not heretofore  assigned or transferred
any  Junior  Debt  or any  interest  therein;  and  (d)  that  Creditor  has not
heretofore given any subordination in respect of the Junior Debt.

<PAGE>

      5. Negative  Covenants.  Except to the extent  otherwise  permitted  under
Section 2 hereof, until all of the Superior Debt has been fully and finally paid
and any obligations of the Lender to extend further Superior Debt is terminated:
(a) Debtor shall not, directly or indirectly, make any payment on account of the
Junior Debt and shall not grant any  security  interest  in,  mortgage,  pledge,
assign or transfer  any of their  respective  assets to secure or satisfy all or
any part of the Junior Debt; (b) Creditor shall not demand or accept from Debtor
or any other person any such payment of, or collateral  for the Junior Debt, nor
shall  Creditor  enforce any part of the Junior  Debt;  (c)  Creditor  shall not
hereafter give any  subordination  in respect of the Junior Debt, or transfer or
assign any of the Junior Debt to any person  other than the  Lender;  (d) Debtor
will not hereafter  issue any instrument,  security or other writing  evidencing
any part of the Junior  Debt,  and Creditor  will not receive any such  writing,
except upon the prior written approval of the Lender or at the request of and in
the manner requested by the Lender;  (e) Creditor will not commence or join with
any other creditors of the Debtor in commencing any bankruptcy,  reorganization,
receivership  or  insolvency  proceeding  against  the  Debtor;  and (f) neither
Creditor nor Debtor shall otherwise take or permit any action  prejudicial to or
inconsistent with the provisions of this Agreement.

      6. Turnover of Prohibited  Transfers.  If any payment on account of or any
collateral  for any part of the Junior Debt is received by Creditor in violation
of the terms of this  Agreement,  such payment or collateral  shall be delivered
within  one (1)  business  day by  Creditor  to Lender  for  application  to the
Superior Debt, in the form received,  except for the addition of any endorsement
or  assignment  necessary to effect a transfer of all rights  therein to Lender.
Lender  is  irrevocably   authorized  to  supply  any  required  endorsement  or
assignment which may have been omitted. Until so delivered,  any such payment or
collateral  shall be held by  Creditor  in trust  for  Lender  and  shall not be
commingled with other funds or property of Creditor.

      7. Authority to Act for Creditor.  For so long as any of the Superior Debt
shall  remain  unpaid,  Lender  shall  have  the  right  to  act  as  Creditor's
attorney-in-fact   for  the  purposes   specified  herein  and  Creditor  hereby
irrevocably  appoints  Lender its true and lawful  attorney,  with full power of
substitution,  in the name of Creditor or in the name of Lender, for the use and
benefit  of Lender,  without  notice to  Creditor  or any of its  successors  or
assigns,  to perform the following acts, at Lender's  option,  at any meeting of
creditors  of  Debtor  or in  connection  with any case or  proceeding,  whether
voluntary or involuntary,  for the distribution,  division or application of the
assets of Debtor or the  proceeds  thereof,  regardless  of whether such case or
proceeding  is  for  the  liquidation,   dissolution,  winding  up  of  affairs,
reorganization or arrangement of Debtor, or for the composition of the creditors
of Debtor,  in  bankruptcy  or in connection  with a  receivership,  or under an
assignment for the benefit of creditors of Debtor or otherwise:

            (a) To enforce claims  comprising the Junior Debt, either in its own
name or in the name of  Creditor,  by proof of  debt,  proof of  claim,  suit or
otherwise;

            (b) To collect any assets of Debtor distributed,  divided or applied
by way of dividend or payment on account of the Junior Debt,  or any  securities
issued on account of the Junior Debt and to apply the same,  or the  proceeds of
any realization upon the same that Lender in its discretion elects to effect, to
the Superior Debt until all of the Superior Debt (including, without limitation,
all  interest  accruing  on the  Superior  Debt  after the  commencement  of any
bankruptcy case) has been paid in full, rendering any surplus to the Creditor if
and to the extent permitted by law;

<PAGE>

            (c) To vote  claims  comprising  the Junior Debt to accept or reject
any  plan of  partial  or  complete  liquidation,  reorganization,  arrangement,
composition or extension; and

            (d) To take  generally  any  action  in  connection  with  any  such
meeting,  case or proceeding  that Creditor  would be authorized to take but for
this Agreement.

      In no event shall  Lender be liable to  Creditor  for any failure to prove
the Junior Debt,  to exercise  any right with respect  thereto or to collect any
sums payable thereon.

      8. Waivers, Etc.

            (a)  Creditor  and  Debtor  hereby  waive any  defense  based on the
adequacy  of a remedy at law which  might be  asserted as a bar to the remedy of
specific performance of this Agreement in any action brought therefor by Lender.
To the fullest extent permitted by law,  Creditor and Debtor each hereby further
waives:  presentment,  demand,  protest, notice of protest, notice of default or
dishonor,  notice of payment or  nonpayment  and any and all other  notices  and
demands of any kind in connection  with  instruments,  documents and  agreements
evidencing,  securing  or  relating  in any  way to  all or any  portion  of the
Superior Debt or the Junior Debt to which the Creditor or Debtor may be a party;
notice of the acceptance of this Agreement by Lender;  notice of any loans made,
extensions granted or other action taken by Lender in reliance hereon, including
without  limitation:  (i) granting  time or other  indulgences  to Debtor,  (ii)
renewing,  extending,  modifying or compromising any of the Superior Debt, (iii)
possessing, substituting, modifying, waiving or releasing any collateral held as
security for any of the Superior  Debt,  or (iv) adding or releasing  any person
primarily or secondarily  liable  thereon;  and all other demands and notices of
every kind in connection with this Agreement,  the Superior Debt or Junior Debt,
and no such  action  taken by Lender  shall  affect the  subordination  or other
provisions herein in any manner.

            (b) In the  event  of any  sale,  assignment,  disposition  or other
transfer of the Junior  Debt,  Creditor  shall cause the  transferee  thereof to
execute and deliver to Lender an agreement  (substantially  identical  with this
Agreement or otherwise in form and substance  satisfactory to Lender)  providing
for the  continued  subordination  of the Junior  Debt to the  Superior  Debt as
provided herein and for the continued effectiveness of all of the rights arising
under this Agreement.

      9. Indulgences Not Waivers.  Neither the failure nor any delay on the part
of the Lender to exercise any right,  remedy,  power or  privilege  hereunder or
under any  instruments,  documents or  agreements  evidencing or relating to the
Superior Debt shall operate as a waiver thereof or give rise to an estoppel, nor
be construed as an  agreement to modify the terms of this  Agreement,  nor shall
any single or partial  exercise of any right,  remedy,  power or privilege  with
respect to any occurrence be construed as a waiver of such right,  remedy, power
or  privilege  with respect to any other  occurrence.  No consent or waiver by a
party  hereunder  shall be  effective  unless it is in writing and signed by the
party  making such consent or waiver,  and then only to the extent  specifically
stated in such writing.

<PAGE>

      10. Duration and Termination. This Agreement shall constitute a continuing
agreement  of  subordination  and shall  terminate  only upon the full and final
payment of the Superior Debt and  termination of any obligation of the Lender to
extend any further Superior Debt.  Neither the dissolution nor the bankruptcy of
Creditor shall effect a termination hereof.

      11.  Administration by Lender. In the administration of the Superior Debt,
either  before or after a demand or default,  Creditor  acknowledges  and agrees
that Lender may proceed in its sole discretion,  including  without  limitation,
raising or lowering loan advances,  interest rates or fees,  charging additional
fees,  declining to make further advances,  extending  additional loans or other
financing  accommodations  to Debtor,  increasing the dollar amounts of Debtor's
credit limits,  extending credit terms and maturities,  compromising  claims and
exchanging and releasing  collateral or obligors;  all with no duty to Creditor,
and no such action shall affect the  subordination or other provisions herein in
any manner.

      12.  Notices.  All  notices,  requests,  demands and other  communications
required or  permitted  under this  Agreement  or by law shall be in writing and
shall be deemed to have been duly given,  made and received only when  delivered
against  receipt or when deposited in the United States mails,  certified  mail,
return receipt requested, postage prepaid, or when delivered by next day express
delivery service, addressed as set forth below:

            (a)   If to Lender:           Bank of America, N.A.
                                          1101 Wootton Parkway
                                          4th Floor
                                          Rockville, Maryland 20852
                                          Attn: Michael Radcliffe
                                                Senior Vice President

            (b)   If to  Creditor:        Kevin J. Thomas
                                          6620 Daniels Road
                                          Naples, Florida 34104

            (c)   If to Debtor:           Argan, Inc.
                                          One Church Street
                                          Suite 302
                                          Rockville, Maryland 20850
                                          Attn: Arthur Trudel
                                                Senior Vice President and CFO

      Any addressee may alter the address to which communications are to be sent
by giving notice of such change of address in conformity  with the provisions of
this Paragraph 12 for the giving of notice.

<PAGE>

      13.  Lender's  Duties  Limited.  The  rights  granted  to  Lender  in this
Agreement are solely for its protection and nothing herein contained  imposes on
Lender  any  duties  with  respect  to any  property  of  Creditor  or of Debtor
heretofore  or  hereafter  received  by Lender.  Lender has no duty to  preserve
rights  against prior parties on any  instrument or chattel paper  received from
the Debtor as collateral security for the Superior Debt or any portion thereof.

      14.  Effect on Creditor and Debtor.  This  Agreement is being entered into
solely  for the  benefit of  Lender,  its  successors  and  assigns,  and is not
intended to give any rights, benefits or privileges to the Creditor or Debtor.

      15.  Authority.  Creditor and Debtor  represent and warrant that they have
the legal power,  capacity and  authority to enter into this  Agreement and that
the person  signing for the Creditor and Debtor is authorized and directed to do
so.

      16. Entire Agreement,  Amendment. This Agreement constitutes and expresses
the entire understanding  between the parties hereto with respect to the subject
matter  hereof,  and  supersedes  all prior and  contemporaneous  agreements and
understandings,  inducements or conditions,  whether express or implied, oral or
written.  Neither  this  Agreement  nor any portion or  provision  hereof may be
amended  orally or in any manner other than by an agreement in writing signed by
Lender, Creditor and Debtor.

      17.  Additional  Documentation.  Each of the Creditor and the Debtor shall
execute  and  deliver to Lender  such  further  instruments  and shall take such
further  action as Lender may at any time or times request in order to carry out
the provisions and intent of this Agreement.

      18.  Successors and Assigns.  This Agreement shall inure to the benefit of
Lender,  its successors and assigns,  and shall be binding upon the Creditor and
Debtor and their  respective  heirs,  personal  representatives,  successors and
assigns.

      19. Defects Waived. This Agreement is effective notwithstanding any defect
in the validity or enforceability  of any instrument or document  evidencing the
Superior Debt.

      20.  Governing  Law. The validity,  construction  and  enforcement of this
Agreement shall be governed by the internal laws of the State of Connecticut.

      21. Severability.  The provisions of this Agreement are independent of and
separable from each other. If any provision  hereof shall for any reason be held
invalid or  unenforceable,  it is the intent of the parties that such invalidity
or unenforceability shall not affect the validity or enforceability of any other
provision hereof,  and that this Agreement shall be construed as if such invalid
or unenforceable provision had never been contained herein.

      22. Amendment and Restatement. This Agreement amends, restates, supercedes
and replaces in its entirety the Existing Debt Subordination Agreement.

                        THE NEXT PAGE IS A SIGNATURE PAGE

<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
signed,  sealed and delivered,  as of the 5th day of July, 2005, effective as of
the 30th day of June, 2005.

WITNESSES:


/s/ Bill Boutcher                      /s/ Kevin J. Thomas
- ------------------------------------   ---------------------------
                                       Kevin J. Thomas
/s/ Jennifer Hite
- ------------------------------------


                                       BANK OF AMERICA, N.A.


                                       By /s/ Michael J. Radcliffe
                                          -------------------------------
                                          Its  Senior Vice President


                                       ARGAN, INC.

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


                                       SOUTHERN MARYLAND CABLE, INC.

                                       By /s/ Arthur Trudel
                                          -------------------------------
                                          Name: Arthur Trudel
                                          Title: VP/CFO




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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