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): January 31, 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))
Item 1.01 Entry into a Material Agreement.
On January 31, 2005, Argan, Inc. (the "Company") entered into a Debt
Subordination Agreement ("Agreement") with Kevin J. Thomas ("Thomas"), Southern
Maryland Cable, Inc., a wholly-owned subsidiary of the Company ("SMC," and
together with the Company, the "Debtor") and Bank of America, N.A. ("Lender") to
reconstitute certain cash consideration that Debtor will owe to Thomas as
subordinated debt.
Debtor entered into a certain Financing and Security Agreement dated as of
August 19, 2003, as amended, with 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 (the "Merger Agreement") with
AGAX/VLI Acquisition Corporation, a subsidiary of the Company ("AGAX"), Vitarich
Laboratories, Inc. ("Vitarich") and Thomas (who was a shareholder of Vitarich),
whereby Vitarich merged into AGAX. Pursuant to the Merger Agreement, Thomas is
entitled to receive, subject to certain conditions, from Debtor certain
additional cash consideration as provided in the Merger Agreement ("Cash
Consideration").
Pursuant to the Agreement, Debtor and Thomas have agreed to reconstitute
the Cash Consideration as subordinated debt and in furtherance thereof, the
Company has agreed to execute and deliver to Thomas a Subordinated Promissory
Note in an amount equal to the amount that would otherwise be due Thomas as Cash
Consideration under the Merger Agreement. Accordingly, under the Agreement,
Debtor subordinated all of the Junior Debt (as such term is defined in the
Agreement) to the full and final payment of all the Superior Debt (as such term
is defined in the Agreement) to the extent provided in the Agreement, and Thomas
transferred and assigned to Lender all of his rights, title and interest in the
Junior Debt and appointed Lender as his attorney-in-fact for the purposes
provided in the Agreement for as long as any of the Superior Debt remains
outstanding. Except as otherwise provided in the 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 Creditor, 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 with regard to the
Agreement is hereby incorporated herein by reference.
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 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)
10.2 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)
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: February 4, 2005 By: /s/ Rainer Bosselmann
----------------------------
Rainer Bosselmann
Chairman of the Board and
Chief Executive Officer
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 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)
10.2 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)