<PAGE>
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): August 22, 1997
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AgriBioTech, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 0-19352 85-0325742
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(State or Other Jurisdiction (Commission File Number) (IRS Employer Ident. No.)
of Incorporation)
2700 Sunset Road, Suite C-25, Las Vegas, Nevada 89120
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(Address of Principal Executive Offices) (Zip Code)
(702) 798-1969
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Registrant's telephone number, including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets.
------------------------------------
On August 22, 1997, AgriBioTech, Inc., a Nevada corporation (the
"Registrant"), completed the acquisition of all of the outstanding capital stock
of Olsen Fennell Seeds, Inc., an Oregon corporation ("OFI") pursuant to a Stock
Purchase Agreement, dated August 22, 1997 (the "Purchase Agreement"), by and
among the Registrant, OFI, Greg S. Fennell and James E. Olsen (such individuals,
collectively, the "Sellers"). The aggregate purchase price (the "Purchase
Price") was $15,200,000, payable in cash and shares of common stock of the
Registrant, together with options to purchase 210,000 shares of Registrant
common stock granted to each Seller. The parties agreed that the effective date
of the acquisition, for accounting purposes, shall be prior to the opening of
business on June 1, 1997.
OFI's business primarily consists of growing, marketing and conditioning
forage and turf grasses, including nine proprietary varieties.
At the closing, the Sellers entered into Employment and Non-Competition
Agreements for which they each received $200,000 in immediately available funds
(part of the Purchase Price) as consideration for the non-compete provisions in
such Agreements and options to purchase 100,000 shares of Registrant's common
stock. The term of employment for each Seller is five years, while the non-
compete provisions run through the later of (a) June 30, 2002 or (b) the three-
year period after such Seller ceases employment with the Registrant or OFI.
The Registrant funded the Purchase Price through working capital and the
issuance of shares of its common stock.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial Statements of Business Acquired.
It is impracticable for the Registrant to file the financial information of
the business acquired hereunder at this time, and such information will be filed
by amendment to this Form 8-K within sixty days from the due date of this Form
8-K.
(b) Pro-forma financial information.
It is impracticable for the Registrant to file the pro-forma financial
information required hereunder at this time, and such information will be filed
by amendment to this Form 8-K within sixty days from the due date of this Form
8-K.
(c) Exhibits.
2.1 Purchase Agreement.
2.2 Omitted Schedules and Exhibits to the Purchase Agreement.
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<PAGE>
SIGNATURE
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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 thereunto duly authorized.
AGRIBIOTECH, INC.
(Registrant)
Date: September 5, 1997 /s/ Henry A. Ingalls
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Henry A. Ingalls,
Vice President
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<PAGE>
EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
2.1 Purchase Agreement.
2.2 Omitted Schedules and Exhibits to the Purchase Agreement.
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<PAGE>
EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
- --------------------------------------------------------------------------------
By and among
AGRIBIOTECH, INC.,
as the Buyer,
and
Greg S. Fennell and James E. Olsen,
as the Sellers,
and
OLSEN FENNELL SEEDS, INC.
an Oregon Corporation
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August 22, 1997
- --------------------------------------------------------------------------------
<PAGE>
STOCK PURCHASE AGREEMENT
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TABLE OF CONTENTS
Page
----
1. Sale and Purchase of the Stock...................................... 1
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2. Closing............................................................. 1
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3. Description of Components of Purchase Price
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and Other Payments.................................................. 2
------------------
4. Representations and Warranties of the
-------------------------------------
Sellers and the Corporation......................................... 5
---------------------------
5. Representations and Warranties of the Buyer......................... 17
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6. Survival of Representations and Warranties;
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Indemnification..................................................... 20
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7. Covenants of the Sellers and the Corporation........................ 20
--------------------------------------------
8. Covenants of the Buyer.............................................. 21
----------------------
9. Conditions Precedent to the Buyer's Obligations..................... 22
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10. Conditions Precedent to the Sellers' and
----------------------------------------
the Corporation's Obligations....................................... 23
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11. Conditions Precedent to Obligations of the
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Sellers and the Buyer............................................... 24
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12. Termination......................................................... 25
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13. The Buyer's Obligations at Closing.................................. 25
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14. The Sellers' Obligations at Closing................................. 25
-----------------------------------
15. Subsequent Events................................................... 25
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16. Parties in Interest................................................. 26
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<PAGE>
STOCK PURCHASE AGREEMENT
------------------------
TABLE OF CONTENTS
Page
----
17. Entire Agreement.................................................... 26
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18. Governing Law....................................................... 27
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19. Expenses............................................................ 27
--------
20. Mediation; Arbitration; Consent to Jurisdiction..................... 27
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21. Severability........................................................ 28
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22. Notices............................................................. 28
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23. Non-Waivers......................................................... 30
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24. Assignment.......................................................... 30
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25. Disclosure.......................................................... 30
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26. Miscellaneous....................................................... 30
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<PAGE>
Exhibits Description
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Exhibit 3(a)(i) Form of Lock-Up Agreement
Exhibit 3(a)(ii) Form of Guaranty Agreement
Exhibit 3(a)(iii) Form of Trust Deed
Exhibit 3(e) Form of Employment and Non-Competition Agreement
Exhibit 3(f) Form of Stock Option Agreement
Exhibit 4(g) Financial Statements
Exhibit 4(k) Leases of Real Property
Exhibit 9(g) Opinion of Counsel to Sellers and the Corporation
Exhibit 10(d) Opinion of Counsel to Buyer
Schedules
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Schedule 4(b)(i) Consents of Other Persons
Schedule 4(b)(ii) Interest in Other Entities
Schedule 4(c)(i) Legal Proceedings, Seller and/or Corporation as Party
Schedule 4(c)(ii) Complaints, Claims, etc. from Customers, Purchasers, etc.
Schedule 4(c)(iii) Claims Related to Products or Services
Schedule 4(d) Encumbrances
Schedule 4(e) Trademarks, Trade Names
Schedule 4(f) Patents, PVPA Certificates, etc.
Schedule 4(h) Material Adverse Changes
Schedule 4(k) Real Property Owned or Leased; Personal Property Leased
Schedule 4(l) Material Contracts
Schedule 4(p) Pension & Profit Sharing Plan
Schedule 4(q) Insurance Policies
Schedule 4(r) Rights of Third Parties
Schedule 4(s) Powers of Attorney
Schedule 4(w) Compensation Plans
Schedule 4(x) Governmental Licenses
Schedule 4(aa) Guarantees by Sellers of Obligations of the Corporation
Schedule 4(bb) Benefits
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<PAGE>
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT dated August 22, 1997, by and among Olsen Fennell
Seeds, Inc., an Oregon corporation (the "Corporation"), Greg S. Fennell and
James E. Olsen (collectively, the "Sellers") and AgriBioTech, Inc., a Nevada
corporation ("ABT" or the "Buyer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Sellers own an aggregate of 100 shares of common stock, no par
value per share, of the Corporation (the "Stock"), which constitutes all of the
issued and outstanding shares of capital stock of the Corporation; and
WHEREAS, the Sellers wish to sell and the Buyer wishes to purchase the
Stock, on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the terms,
conditions, representations, warranties and covenants appearing in this
Agreement, the parties hereto agree as follows:
SECTION 1. SALE AND PURCHASE OF THE STOCK.
-------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (as hereinafter defined), the Sellers shall sell,
transfer and deliver to the Buyer, and the Buyer shall purchase from the
Sellers, the Stock, which constitutes one hundred percent (100%) of the issued
and outstanding shares of capital stock of the Corporation, free and clear of
all liens, mortgages, deeds of trust, security interests, pledges, charges,
encumbrances, liabilities and claims of every kind.
(b) The purchase price of FIFTEEN MILLION TWO HUNDRED THOUSAND AND 00/100
($15,200,000) DOLLARS (the "Purchase Price"), payable by the Buyer to the
Sellers for the Stock, together with stock options and other payments to be made
on the Closing Date (as hereinafter defined), shall be paid as described in and
subject to adjustment as set forth in Section 3 below.
SECTION 2. CLOSING.
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The closing of the sale and purchase of the Stock provided for in Section 1
of this Agreement (the "Closing") shall take place at the offices of Clark,
Lindauer, McClinton, Salem, Oregon, at 10:00 a.m. on or before August 22, 1997,
(the "Closing Date") or at such later date, time or location as may be agreed to
by the parties.
<PAGE>
SECTION 3. DESCRIPTION OF COMPONENTS OF PURCHASE PRICE AND OTHER PAYMENTS.
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(a) Payment of Purchase Price to the Sellers at Closing. Upon the
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completion by the parties of their respective closing conditions under this
Agreement, the Buyer shall pay to the Sellers the Purchase Price, in exchange
for delivery of the Stock at the Closing, as follows:
(i) THREE MILLION EIGHT HUNDRED THOUSAND AND 00/00 DOLLARS
($3,800,000.00) in immediately available funds by Fedwire or other method
reasonably acceptable to Sellers, one-half of such amount to be made payable to
James E. Olsen and one-half of such amount to be made payable to Greg S.
Fennell;
(ii) SEVEN MILLION NINE HUNDRED THOUSAND AND 00/100 ($7,900,000)
DOLLARS, payable in an aggregate of 777,500 registered shares of Common Stock of
ABT (the "ABT Shares"). One-half of the ABT Shares shall be issued to James E.
Olsen and one-half of the ABT Shares shall be issued to Greg S. Fennell. The
resale of the ABT Shares shall be made subject to the terms of a Lock-Up
Agreement, in the form of EXHIBIT 3(a)(i)attached hereto (the "Lock-Up"). The
net proceeds from the sale of the ABT Shares ($7,900,000) shall be guaranteed
pursuant to a Guaranty Agreement, in the form of EXHIBIT 3(a)(ii) attached
hereto (the "Guaranty"). Until the Sellers have received the net proceeds from
the sale of the ABT Shares, they shall be secured by a lien on certain assets of
the Corporation pursuant to a Stevens-Ness No. 881 Oregon Trust Deed in the form
of EXHIBIT 3(a)(iii) attached hereto (the "Trust Deed").
(iii) THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 ($3,500,000)
DOLLARS to be paid in cash to Sellers, one-half of such amount to be made
payable to James B. Olsen and one-half of such amount to be made payable to Greg
S. Fennell, as follows: (A) the sum of One Million Dollars ($1,000,000) on or
before September 30, 1997; (B) the sum of Four Hundred Thousand Dollars
($400,000) on or before December 31, 1997; and (C) the sum of Two Million One
Hundred Thousand Dollars ($2,100,000) on or before the earliest to occur of (1)
the Buyer's request pursuant to Section 15(c) hereof that Sellers execute and
deliver an election under Section 338(h)(10) of the Internal Revenue Code of
1986 or (2) April 14, 1998.
The Sellers agree that concurrently with receiving the full amount of these
payments they will irrevocably make the election required by Section 338(h)(10).
To the extent the payment under subsection (C) above is made prior to April 14,
1998, the amount of the payment under Subsection (C) shall be deposited in an
interest bearing account acceptable to both the Buyer and Seller with
irrevocable instructions to (a) distribute the principal amount of such funds to
the Sellers on April 14, 1998 and (b) distribute any income earned to the Buyer.
(b) Portion of Purchase Price to be Held in Escrow. At the Closing, the
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Sellers shall set-aside One Hundred Fifty Thousand and 00/100 ($150,000) Dollars
from the Purchase Price for the benefit of the Buyer as described below (the
"Escrow Funds"). The Escrow Funds shall either be (1) placed in an
interest-bearing account with a bank or other financial institution or (2)
invested in United States Government securities, short term certificates of
deposit, money market securities, investment grade commercial paper or other
short-term interest-bearing investment-grade securities.
2
<PAGE>
The Escrow Funds shall be made available to the Buyer in the event of
any Claims arising pursuant to Section 6(b) hereof for which Buyer is entitled
to payment, subject to the $50,000 threshold set forth in Section 6(d) hereof.
The Escrow Funds shall be reduced to the levels set forth in the
following schedule:
<TABLE>
<CAPTION>
DATE ESCROW FUNDS
<S> <C>
CLOSING $150,000
FIRST ANNIVERSARY OF CLOSING DATE $ 50,000
SECOND ANNIVERSARY OF CLOSING DATE $ 0
</TABLE>
Any interest accrued on the Escrow Funds shall inure to the benefit of the
Sellers.
(c) Lock-Up of ABT Shares and Guaranty.
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(i)The ABT Shares, when sold pursuant to the Lock-Up, shall have the
Net Proceeds (defined as gross sales price less customary sales commissions and
any applicable stock transfer and sales taxes) guaranteed by ABT ("Guaranteed
Price/Share") pursuant to the following schedule:
<TABLE>
<CAPTION>
GUARANTEED
NUMBER GUARANTEED NET
PERIOD SALE PERIOD OF SHARES PRICE/ SHARE PROCEEDS
- ------ ----------- --------- ------------ --------
<C> <S> <C> <C> <C>
1 Sept. 1 - Dec. 31, 1997 137,500 8.00/share $1,100,000
2 Jan. 1 - March 31, 1998 100,000 9.00/share 900,000
3 April 1 - June 30, 1998 140,000 10.00/share 1,400,000
4 July 1 - Sept. 30, 1998 100,000 10.50/share 1,050,000
5 Oct. 1 - Dec. 31, 1998 100,000 11.00/share 1,100,000
6 Jan. 1 - March 31, 1999 100,000 11.50/share 1,150,000
7 April 1 - June 30, 1999 100,000 12.00/share 1,200,000
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777,500 $7,900,000
</TABLE>
(ii) During period 1 above, the ABT Shares sold shall not exceed
35,000 per month, 9,000 per week or 5,000 per day. During period 3 above, the
ABT Shares sold shall not exceed 50,000 per month, 12,500 per week or 6,500 per
day. During periods 2, 4, 5, 6 and 7 above, the ABT Shares sold shall not exceed
34,000 per month, 9,000 per week or 5,000 per day. Sales of
3
<PAGE>
shares in excess of these numbers shall constitute an event of default under the
Guaranty and all Net Proceeds above $7,900,000 (the "Guaranteed Net Proceeds")
shall be paid to Buyer.
(iii) In accordance with the terms of the Guaranty, Buyer shall pay to
the Sellers cash for any deficits in Guaranteed Net Proceeds on the last
business day of the month following the end of a quarter. Deficits shall be
calculated as provided in the Guaranty.
(iv) Any ABT Shares that Sellers elect not to sell during their
allocated quarters set forth in subsection (c) above shall be eligible for sale
after June 30, 1999 in such quantities as Sellers desire. The Guaranty shall not
apply to the Net Proceeds received from the sale of such Shares.
(v) The Buyer reserves the right to waive the lock-up limitations
and/or resale limitations set forth in the Lock-Up Agreement, in whole or in
part.
(vi) Sellers shall forward to the Buyer all customary documentation
reflecting any sale of ABT Shares within ten (10) business days of receipt by
Sellers.
(d) Allocation of Net Proceeds. Sellers shall keep 100% of Net Proceeds on
--------------------------
sales of ABT Shares up to $14.00 per share, as described below.
Buyer and Sellers shall share the excess amount above the Guaranteed
Net Proceeds (but no amount below the Guaranteed Net Proceeds) on sales of ABT
Shares according to the following table:
<TABLE>
<CAPTION>
SELLERS'
NET PROCEEDS INCREMENTAL BUYER'S INCREMENTAL
$/SHARE SHARE SHARE
------- ----- -----
<S> <C> <C>
To the extent the Net Proceeds are less than or equal to $14 100% 0%
To the extent the Net Proceeds are greater than $14 and less than or equal to 17 75% 25%
To the extent the Net Proceeds are greater than $17 and less than or equal to 20 25% 75%
To the extent the Net Proceeds are greater than $20 0% 100%
</TABLE>
(e) Employment and Non-Competition Agreement. In addition to the purchase
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and sale of the Stock as described above, at the Closing, each of the Sellers
hereby agrees to enter into Employment and Non-Competition Agreements with the
Buyer in the form annexed hereto as EXHIBIT 3(e).
(f) Stock Options. At the Closing, each Seller shall be granted options to
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purchase 210,000 shares of Common Stock of ABT in accordance with the schedule
set forth in the Stock Option Agreement with the Buyer in the form annexed
hereto as EXHIBIT 3(f). The options granted pursuant to this Section are in
addition to the options granted
4
<PAGE>
pursuant to the Employment and Non-Competition Agreement annexed hereto as
Exhibit 3(e).
(g) Effective Date of the Sale. In the event that the Closing is
--------------------------
consummated, the parties hereto agree that the purchase and sale of the Stock
shall be accounted for as if such transactions had occurred prior to the opening
of business on June 1, 1997 (the "Effective Date"), regardless of when the
Closing in fact occurs. In the event that the Closing is consummated, the Buyer
shall realize any operating profit or loss from the operation of the business of
the Corporation after the Effective Date. Accordingly, the Sellers agree to
consult the Buyer on any material issues or contracts which relate to a period
of time beyond the Effective Date. Furthermore, the Sellers agree not to enter
into any new capital obligations or capital expenditures which relate to the
Corporation prior to the Closing.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE
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CORPORATION. The Sellers and the Corporation, jointly and severally, warrant
- -----------
and represent to the Buyer as follows (as used herein, "Sellers' best knowledge"
or "to the best knowledge of the Sellers" shall mean information actually known
by the Sellers without due inquiry):
(a) Ownership of Shares. The Sellers are the owners, beneficially and of
-------------------
record, of the Stock, which constitutes one hundred percent (100%) of the issued
and outstanding shares of capital stock of the Corporation. The Stock is the
sole voting stock of the Corporation and is duly authorized, validly issued,
fully paid and non-assessable. The Stock has not been pledged, mortgaged or
otherwise encumbered in any way and there is no lien, mortgage, charge, claim,
liability, security interest or encumbrance of any nature against the Stock.
There are no options, warrants, rights of subscription or conversion, calls,
commitments, agreements, arrangements, understandings, plans, contracts,
proxies, voting trusts, voting agreements or instruments of any kind or
character, oral or written, to which the Sellers or the Corporation is a party,
or by which the Sellers or the Corporation is bound, relating to the issuance,
voting or sale of the Stock or any authorized but unissued shares of capital
stock of the Corporation or of any securities representing the right to purchase
or otherwise receive any such shares of capital stock. The Sellers have, and at
the Closing shall have, good and marketable title to the Stock and full right to
transfer title to the Stock, subject to any restrictions imposed by state or
federal securities laws, free and clear of all liens, mortgages, charges,
liabilities, claims, security interests or encumbrances of every type
whatsoever. The sale, conveyance, transfer and delivery of the Stock by the
Sellers to the Buyer pursuant to this Agreement will transfer full legal and
equitable right, title and interest in the Stock to the Buyer, free and clear of
all liens, mortgages, charges, claims, liabilities, security interests and
encumbrances of any nature whatsoever.
(b) Capacity; Organization; Standing; Capitalization. The Sellers have
------------------------------------------------
full capacity to enter into and perform under this Agreement and all other
agreements and instruments to be entered into in connection with the
transactions contemplated hereby, and to consummate such transactions, and,
except as set forth in SCHEDULE 4(b)(i) of this Agreement, no other consent or
joinder of any other persons or corporations is required to consummate such
transactions. The Corporation has no subsidiaries. Except as set forth on
Schedule 4(b)(ii) of this Agreement, neither the Sellers nor the Corporation
have any interest in any entity other than the Corporation engaged, directly or
5
<PAGE>
indirectly, in businesses competitive with those of the Corporation or ABT. This
Agreement has been, and each of the other agreements and instruments executed
hereunder (the "Other Agreements") will at the Closing, be duly executed and
delivered by the Sellers. This Agreement constitutes, and each of the Other
Agreements will constitute, the legal, valid and binding obligation of the
Sellers enforceable in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights generally or by general
equitable principles. The Corporation is duly organized and validly existing
under the laws of the State of Oregon, has full corporate power and authority to
conduct its business as it is now being conducted and is duly qualified to do
business in each jurisdiction where the nature of the property owned or leased,
or the nature of the business conducted by the Corporation requires such
qualification. The Certificate of Incorporation of the Corporation and all
amendments certified by the Secretary of State of Oregon and the By-laws, as
amended to the date of this Agreement, certified by the Secretary of the
Corporation and the minutes and stock records of the Corporation delivered to
the Buyer are complete and correct. The Corporation has all necessary licenses
and authority to operate its business as now being conducted and as will be
conducted after the Closing assuming such business is conducted as now operated.
The authorized capital stock of the Corporation consists of 1,000 shares of
voting common stock, no par value, of which 100 shares are issued and
outstanding. All of the issued and outstanding shares of the Corporation are
owned by the Sellers and are duly and validly issued, fully paid and
non-assessable.
(c) Legal Proceedings.
-----------------
(i) Except as set forth in SCHEDULE 4(c)(i) of this Agreement, neither
the Sellers in their capacity as stockholders and/or as officers or directors of
the Corporation, nor the Corporation is a party to any pending litigation,
arbitration or administrative proceeding or, to the best of Sellers' knowledge,
to any investigation, and no such litigation, arbitration or administrative
proceeding or investigation that might result in any material adverse change in
the financial condition, business or properties of the Corporation or of the
Sellers is threatened.
(ii) Except as disclosed in SCHEDULE 4(c)(ii) to this Agreement, the
Sellers and the Corporation have no knowledge of and have not received notice of
any complaints, claims or threats, plans or intentions to discontinue commercial
relations or transactions from any customer of the Corporation, any purchaser of
goods or services from the Corporation, any employee or independent contractor
significant to the conduct or operation of the Corporation or its businesses or
any party to any agreement to which the Corporation is a party.
(iii) Except as disclosed in SCHEDULE 4(c)(iii), to the best of
Sellers' knowledge, there is no claim (whether based on statute, negligence,
breach of warranty, strict liability or any other theory) relating directly or
indirectly to any product manufactured or sold, or any services performed by the
Corporation.
(iv) To the best of Sellers' knowledge, the Corporation is under no
obligation with respect to the return of goods in the possession of customers.
6
<PAGE>
(d) Encumbrances. Except as disclosed in SCHEDULE 4(d), there are no
------------
liens, mortgages, deeds of trust, claims, charges, security interests or other
encumbrances or liabilities of any type whatsoever to which any of the assets of
the Corporation are subject.
(e) Trade Names, etc. The Corporation owns the trade names, trademarks,
-----------------
service marks, assumed names, copyrights and registrations therefor, if any
(collectively "Trademarks") specified in SCHEDULE 4(e). The Trademarks have been
duly issued and have not been canceled, abandoned or otherwise terminated except
as otherwise indicated in SCHEDULE 4(e). The Corporation is not in default under
any of the licenses or agreements relating to the Trademarks as listed in
SCHEDULE 4(e) and all of such licenses and agreements are in effect. The
Corporation has not granted, and will not grant prior to the Closing, licenses
or other rights to use such Trademarks. No other Trademarks are either owned or
used by the Corporation. To the best of Sellers' knowledge, the operation of the
Corporation's business does not infringe on the Trademarks of any third party.
No claim has been made that there is any such infringement. To the best of the
Sellers' and the Corporation's knowledge, no Trademark of any other person
infringes the Trademarks of the Corporation.
(f) Patents, etc. The Corporation owns the inventions, letters patent,
------------
applications for letters patent and patent license rights, inventions,
processes, designs, formulas, trade secrets, Plant Variety Protection Act
("PVPA") Certificates, know-how and other industrial property rights
(collectively "Patents") necessary for the conduct of its business, specified as
belonging to it in SCHEDULE 4(f). The Patents have been duly issued and have not
been canceled, abandoned or otherwise terminated except as otherwise indicated
in SCHEDULE 4(f). The Corporation is not in default under any of the licenses or
agreements relating to the Patents as listed in SCHEDULE 4(f) and all of such
licenses and agreements are in effect. The Corporation has not granted, and will
not grant prior to the Closing, licenses or other rights to use such Patents. No
other Patents are owned or used by the Corporation. To the best of Sellers'
knowledge, the operation of the Corporation's business does not infringe on the
Patent rights of any third party. No claim has been made that there is any such
infringement. To the best of the Sellers' and the Corporation's knowledge, no
Patent of any person infringes the Patents of the Corporation.
(g) Financial Statements.
--------------------
(i) The unaudited financial statements (the "Financials") of the
Corporation as of and for the periods ended May 31, 1997, December 31, 1996 and
December 31, 1995, together with the related notes and schedules, true, correct
and complete copies of which are attached hereto as EXHIBIT 4(g), (A) are in
accordance with the books of account and records of the Corporation; (B) present
fairly, and are true, correct and complete statements of the financial condition
and the results of operations of the Corporation as at and for the periods
therein specified; and (C) do not include or omit to state any fact which
renders the Financials misleading.
(ii) Except as and to the extent shown or provided for in the
Financials or the notes and schedules thereto or as disclosed in any of the
Schedules to this Agreement or such current liabilities as may have been
incurred since May 31, 1997 in the ordinary course of business, the
7
<PAGE>
Corporation has no liabilities or obligations (whether accrued, absolute,
contingent or otherwise) which might be or become a charge against the assets or
liabilities of the Corporation; as of May 31, 1997, there was no asset used by
the Corporation in its operations that has not been reflected in the Financials,
and, except as set forth in the Financials, no assets have been acquired by the
Corporation since such date except in the ordinary course of business.
(iii) Except as disclosed in the Financials, there has been no
decrease in stockholders' equity as compared with the amount shown for such
stockholders' equity as at May 31, 1997, and no material adverse changes in the
financial position of the Corporation since May 31, 1997.
(iv) The Financials do not include any assets, liabilities, income or
expenses of any entity other than the Corporation. All transactions in the years
1995-1997 between the Corporation and any other entity in which either of the
Sellers is an officer, director or has an equity interest have been at prices no
less favorable to the Corporation than could have been obtained from any
independent third party.
(h) Absence of Certain Changes. Except as disclosed on SCHEDULE 4(h),
--------------------------
since May 31, 1997, there has not been any material adverse change in the
condition (financial or otherwise), operations, assets, liabilities, earnings,
business, prospects or results of operations of the Corporation.
(i) Tax Matters.
-----------
(i) The Corporation has had in effect, for at least the past three (3)
years, an election under Subchapter S of the Internal Revenue Code and has
timely filed all federal, state and local income tax returns and has timely
filed with all other appropriate governmental agencies all sales, ad valorem,
franchise and other tax, license, gross receipts and other similar returns and
reports required to be filed by the Corporation. The Corporation has reported
all taxable income and losses on those returns on which such information is
required to be reported, and paid or provided for the payment of all taxes due
and payable by the Corporation on said returns or taxes due pursuant to any
assessment received by it, including without limitation, any taxes required by
law to be withheld and/or paid in connection with any officer's or employee's
compensation or due pursuant to any assessment received by it. There are no
agreements for the extension of time for the assessment or payment of any
amounts of tax. The Sellers have made available to the Buyer for inspection
copies of income tax returns that are true and complete copies of the federal
and applicable state, local or other income tax returns filed by the Corporation
for the taxable years ended December 31, 1996, December 31, 1995, December 31,
1994 and any other open tax periods. The Corporation shall bear all expenses and
responsibilities for the filing of federal and applicable state, local or other
income tax returns and reports of the Corporation for the taxable year ended
December 31, 1996 and for that portion of 1997 for which any short period
returns may be filed, but the Buyer and the Corporation hereby covenant and
agree that the Corporation will not file an amended form 1120X without first
notifying the Sellers. All tax liabilities of the Corporation arising through
the end of the taxable year ended December 31, 1996 have been paid. All tax
liabilities of the Corporation arising after
8
<PAGE>
December 31, 1996 have been paid or adequately disclosed and properly reserved
for on the books and records and financial statements of the Corporation.
Sellers are responsible for the payment of all taxes for all periods through May
31, 1997. No federal or applicable state, local or other tax return of the
Sellers or the Corporation for any period has been or is currently under audit
by the Internal Revenue Service or any state, local or other tax authorities. No
claim has been made by federal, state, local or other authorities relating to
any such returns or any audit. For purposes of this Section 4(i), the word
"timely" shall mean that such returns were filed within the time prescribed by
law for the filing thereof, including the time permitted under any applicable
extensions. The Sellers and the Corporation are not aware of any facts which
they believe would constitute the basis for the proposal of any tax deficiencies
for any unexamined year. All taxes which the Corporation is required by law to
withhold and collect have been duly withheld and collected, and has been timely
paid over to the proper authorities to the extent due and payable.
(j) (i) Accounts Receivable. The accounts receivable of the Corporation
-------------------
reflected in the Financials as at May 31, 1997, and the accounts receivable
acquired by the Corporation since such date are valid subsisting claims for the
aggregate amounts thereof reflected in the Financials net of the reserves or
allowances for doubtful receivables reflected in the Financials or thereafter in
the Corporation's books and records uniformly maintained in accordance with the
financial statements, accounted for in accordance with generally accepted
accounting principles, and the Sellers know of no reason that would make such
accounts receivable, net of such amounts as the Corporation has reserved on its
books as of May 31, 1997, taken as a whole, not collectible. The Buyer and
Seller acknowledge that the collectibility of the receivable from Westar Seeds
International, Inc. may be affected by an agreement to be reached regarding the
disposition of Sellers' affiliates' investment in that entity and, therefore,
Sellers do not make any representation regarding the collectibility of the
receivable from Westar Seeds International, Inc. but agree to use their best
efforts to collect the receivable from Westar Seeds International, Inc.
(ii) Inventory. The inventory of the Corporation reflected in the
---------
Financials as at May 31, 1997, and the inventory acquired by the Corporation
since such date (a) has been purchased in the ordinary course of business, (b)
has been fully paid for unless otherwise reflected in the Financials, (c) is
marketable or adequate provision for obsolescence has been provided and (d)
Sellers know of no reason that would make such inventory, net of such amounts as
the Corporation has reserved on its books as of May 31, 1997, taken as a whole,
not marketable.
(k) Title and Condition of Properties. The Corporation does not own any
---------------------------------
real property, except as disclosed on SCHEDULE 4(k). Except as disclosed on
SCHEDULE 4(K), the Corporation has good and marketable title to all properties
and assets, real and personal, tangible and intangible, reflected in the
Financials and all properties acquired subsequent to May 31, 1997, which have
not been disposed of in the ordinary course of business since May 31, 1997,
which property is subject to no mortgage, lien, deed of trust, claim, security
interest, liability, conditional sales agreement, easement, right-of-way or any
other encumbrance except as disclosed on SCHEDULE 4(k).
9
<PAGE>
SCHEDULE 4(k) contains an accurate list of all leases and other
agreements under which the Corporation is lessee of any personal property. Each
of the real property and personal property leases and agreements is in full
force and effect and constitutes the legal, valid and binding obligation of the
parties thereto.
All personal property, machinery and equipment which are material to
the business, operations or condition (financial or otherwise) of the
Corporation is in operating condition and, subject to routine maintenance and
ordinary wear and tear, have been maintained in accordance with reasonable
industry standards and is suitable for the purpose for which it is used. Except
as disclosed in SCHEDULE 4(k), neither the Sellers nor the Corporation is aware
of or have received notice of, the violation of any applicable zoning
regulation, ordinance or other law, order, regulation or requirement in force on
the date hereof relating to the Corporation's business or its owned or leased
real or personal properties, with which the Corporation has not complied.
(l) Description of Material Contracts. SCHEDULE 4(l) contains a complete
---------------------------------
and correct list as of the date hereof of all agreements, contracts and
commitments, obligations and understandings which are not set forth in any other
Schedule delivered hereunder, of the following types, written or, oral, to which
the Corporation is a party, under which it has any rights or by which it or any
of its properties is bound, as of the date hereof: (a) mortgages, indentures,
security agreements and other agreements and instruments relating to the
borrowing of money or extension of credit; (b) employment and consulting
agreements with annual compensation in excess of $40,000; (c) collective
bargaining agreements; (d) bonus, profit-sharing, compensation, stock option,
pension, retirement, deferred compensation or other plans, agreements, trusts,
funds or arrangements for the benefit of employees (whether or not legally
binding); (e) sales agency, manufacturer's representative or distributorship
agreements; (f) agreements, orders or commitments for the purchase by the
Corporation of materials, supplies or finished products exceeding $5,000 in the
aggregate from any one person; (g) agreements, orders or commitments for the
sale by the Corporation of its products or services exceeding $5,000; (h)
agreements or commitments for capital expenditures in excess of $5,000 for any
single project (it being warranted that the commitment for all undisclosed
contracts for such agreements or commitments does not exceed $5,000 in the
aggregate); (i) agreements relating to research; (j) agreements relating to PVPA
Certificates or licenses or other rights to use PVPA Certificates; (k)
agreements relating to the payment of royalties; (l) seed purchase contracts or
other contracts with growers; (m) brokerage or finder's agreements; (n) joint
venture agreements; and (o) other agreements, contracts and commitments which
individually or in the aggregate for any one party involve any expenditure by
the Corporation of more than $5,000.
The Corporation has made available to the Buyer complete and correct
copies of all written agreements, contracts, commitments, obligations and
undertakings, together with all amendments thereto, listed on the Schedules
hereto, and such Schedules contain accurate descriptions of all oral agreements
listed on such Schedules. To the best of Sellers' knowledge, all such
agreements, contracts, commitments, obligations and undertakings are in full
force and effect and, except as disclosed in SCHEDULE 4(l), all parties to, or
otherwise bound by, such agreements, contracts, commitments, obligations and
undertakings have performed all obligations required to be
10
<PAGE>
performed by them to date and the Corporation is not in default and no event,
occurrence, condition or act exists which gives rise to (or which with notice or
the lapse of time, or both, could result in) a default or right of cancellation,
acceleration or loss of contractual benefits under, any such contract,
agreement, commitment, obligation or undertaking. There has been no threatened
cancellations thereof, and there are no outstanding disputes under any such
contract, agreement, commitment, obligation or undertaking. Except as set forth
in SCHEDULE 4(1), no consent of any party is required under any such contract,
agreement, commitment, obligation or undertaking which would make such
agreements not binding and in full force and effect as of the Closing Date. Any
contracts, agreements, leases or commitments held in the name of any of the
Sellers and set forth in the Schedules hereto shall be assigned to either the
Buyer or the Corporation prior to the Closing Date.
Except as otherwise set forth in SCHEDULE 4(l), to the best of
Seller's knowledge, each contract, lease, instrument and commitment required to
be described in the Schedules hereto is, on the date hereof, and will be at the
Closing, in full force and effect and is and will constitute a valid and binding
obligation of the Corporation and the respective parties to such agreements, and
there is not, under any such contract, lease, instrument or commitment, any
existing default by the Corporation or such other parties or any event that,
with notice, lapse of time or both, would constitute a default by the
Corporation or such other parties in respect of which adequate steps have not
been taken to cure such default or to prevent a default from occurring or
continuing. Any contracts, leases or commitments held in the names of any of the
Sellers and listed on the Schedules shall be assigned either to the Buyer or the
Corporation prior to the Closing Date.
No agreement, contract, commitment, obligation or undertaking listed
on the Schedules hereto which the Corporation is a party or by which it or any
of its properties is bound, except as specifically set forth in SCHEDULE 4(l),
contains any provision which materially adversely affects or in the future may
(so far as the Sellers and the Corporation can reasonably now foresee)
materially adversely affect the condition, properties, assets, liabilities,
business, operations or prospects of the Corporation following the date hereof
and upon the Closing Date. Furthermore, to the best of the Sellers' knowledge,
the material suppliers, customers and clients of the Corporation will continue
to supply and purchase from the Corporation after the Closing.
(m) Default; Violations or Restrictions. The execution, delivery and
-----------------------------------
performance of this Agreement and of any agreement to be executed and delivered
by the Corporation in connection with the transactions contemplated hereby and
the consummation of any of the transactions contemplated hereby or thereby will
not (or with the giving of notice or the lapse of time or both would) result in
the breach of any term or provision of the Certificate of Incorporation or
by-laws of the Corporation or violate any provision of or result in the breach
of, modification of, acceleration of the maturity of obligations under, or
constitute a default, or give rise to any right of termination, cancellation,
acceleration or otherwise be in conflict with or result in a loss of contractual
benefits to the Corporation, under any law, order, writ, injunction, decree,
statute, rule or regulation of any court, governmental agency or arbitration
tribunal or any of the terms, conditions or provisions of any contract, lease,
note, bond, mortgage, deed of trust, indenture, license, security agreement,
agreement or other instrument or obligation by which the Corporation or the
Sellers is a party or by which either
11
<PAGE>
of them may be bound, or require any consent, approval or notice under any law,
rule or decree or any such document or instrument; or result in the creation or
imposition of any lien, claim, restriction, charge or encumbrance upon the
Corporation's assets or interfere with or otherwise adversely affect the ability
to carry on the business of the Corporation after the Closing Date on
substantially the same basis as it is now conducted by the Corporation.
(n) Court Orders and Decrees. The Corporation has not received written or
------------------------
oral notice that there is outstanding, pending, or threatened any order, writ,
injunction or decree of any court, governmental agency or arbitration tribunal
against or affecting the Corporation, the Stock or any of the Corporation's
assets. To the best of Seller's knowledge, the Corporation is in compliance in
all material respects with all applicable Federal, state, county, municipal (or
of any subdivision thereof) laws, regulations and administrative orders in force
at any applicable time to which the Corporation may be subject.
(o) Books and Records. The books and records of the Corporation are, in
-----------------
all material respects, complete and correct and have been maintained in
accordance with good business practice. True and complete copies of the
Certificate of Incorporation and By-laws of the Corporation and all amendments
thereto and true and complete copies of all minutes, resolutions, stock
certificates and stock transfer records of the Corporation are contained in the
minute books and stock transfer books that have been delivered to the Buyer for
inspection and will be delivered to the Buyer at the Closing. The minute books,
stock certificate books, stock transfer records and such other books and records
as may be requested by the Buyer, as exhibited to the Buyer and its
representatives, are complete and correct in all material respects.
(p) Pension and Welfare Plans.
-------------------------
(i) Pension and Profit Sharing Plans. Except as disclosed in SCHEDULE
--------------------------------
4(P), the Corporation does not have in effect any pension, profit sharing or
other employee benefit plan described under Section 3(2)(A) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). All benefits
payable under any terminated employee pension benefit plan (as such term is
defined in Section 3(2)(A) of ERISA) previously maintained by the Corporation or
to which it has previously contributed have been paid in full and/or that the
Corporation does not have any material unfunded liability in respect of any such
plan to the Pension Benefit Guaranty Corporation or to the participants in such
plan or to the beneficiaries of such participants. Each such terminated plan was
terminated substantially in accordance with the applicable provisions of law or
any agreement or contract relating to any such plan and has been terminated
without liability to the Corporation.
(ii) Welfare Plans. For each plan, fund, or arrangement of the
-------------
Corporation which is an employee welfare benefit plan, whether or not currently
maintained (within the meaning of ERISA Section 3(1)) (a "Welfare Plan"), the
following is true:
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<PAGE>
(A) each such Welfare Plan intended to meet the requirements for tax-
favored treatment under Subchapter B of Chapter 1 of the Code meets such
requirements;
(B) there is no voluntary employees' beneficiary association (within
the meaning of Section 501(c)(9) of the Code) maintained with respect to any
such Welfare Plan;
(C) there is no disqualified benefit (as such term is defined in Code
Section 4976(b)) which would subject the Corporation or the Buyer to a tax under
Code Section 4976(a);
(D) each such Welfare Plan which is a group health plan complies and
has complied with the applicable requirements of Code Section 4980B, and would
comply with Sections 9801 through 9806 if such provisions were now in effect,
Title XXII of the Public Health Service Act, and the applicable provisions of
the Social Security Act and is not and has not been a nonconforming group health
plan under Section 5000(c) of the Code;
(E) each such Welfare Plan (including any such plan covering former
employees of the Corporation) may be amended or terminated by the Corporation or
the Buyer, on or at anytime after, the Closing Date and after any advance notice
to participants or similar measures required by law which are non-waivable under
the Welfare Plan;
(F) no such Welfare Plan provides for continuing benefits or coverage
for any participant (including past, present or future retirees) or such
participant's beneficiary after termination of employment except as required by
the Consolidated Omnibus Reconciliation Act of 1985 ("COBRA") or any other state
or Federal law; and
(G) no claims have been made and no other events have occurred that
might form the basis of a claim which has substantially increased or based on
customary insurance industry practice might substantially increase, the premiums
or other charges of the Corporation under any Welfare Plan.
(q) Insurance. SCHEDULE 4(q) contains a correct and complete description
---------
of all policies of insurance by or on behalf of the Corporation in which the
Corporation is named as an insured party, beneficiary or loss payable payee. The
Corporation has at all times prior to the date hereof maintained and will at all
times prior to the Closing Date maintain insurance coverage with respect to its
properties, in respect of liabilities and risks prudently insured against. The
policies described in SCHEDULE 4(q) are outstanding and in force as of the date
hereof, cover risks normally insured against and are in amounts normally carried
and there is no default notice of cancellation or non-renewal with respect to
any material provision contained in any such policy.
SCHEDULE 4(q) contains a correct and complete description of all such
policies of insurance held by or on behalf of the Corporation, premiums paid for
such insurance during the last three years and all outstanding insurance claims
in excess of $5,000 made by or against the Corporation for damage to or loss of
property or income which have been referred to insurers or
13
<PAGE>
which the Sellers believe to be covered by commercial insurance. SCHEDULE 4(q)
also contains a list of all general comprehensive liability policies carried by
the Corporation for the past three years, including excess liability policies
and any agreements, arrangements or commitments under which the Corporation
indemnifies any other person or is required to carry insurance for the benefit
of any other person.
(r) Right's of Third Parties. Other than as disclosed in SCHEDULE 4(r)
------------------------
attached, or specifically provided for in this Agreement, the Corporation has
not entered into any leases, licenses, easements or other agreements, recorded
or unrecorded, granting rights to third parties in any real or personal property
of the Corporation, and no person or other corporation has any right to
possession, use or occupancy of any of the property of the Corporation.
(s) Powers of Attorney. Except as disclosed in SCHEDULE 4(s), there are no
------------------
persons, firms, associations, corporations or business organizations holding
general or special powers of attorney from the Corporation.
(t) Labor Matters. The Corporation is not a party to any collective
-------------
bargaining agreement with any labor union or association. There are no
discussions, negotiations, demands or proposals that are pending or have been
conducted or made with or by any labor union or association, and there are not
pending or threatened any labor disputes, strikes or work stoppages that may
have a material adverse effect upon the continued business or operation of the
Corporation. To the best of Seller's knowledge, the Corporation (i) is in
compliance with all federal and state laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and (ii) is
not engaged in any unfair labor practices.
(u) Relationships with Vendors and Customers. The Corporation and the
----------------------------------------
Sellers have no knowledge of any present or future conditions or state of facts
or circumstances which would materially adversely affect the Corporation after
the Closing Date. The Corporation's relationships with its customers, clients
and vendors are satisfactory, and the Corporation and the Sellers have no
knowledge of any facts or circumstances which might materially alter, negate,
impair or in any way materially adversely affect the continuity of any such
relationships. The Corporation and the Sellers have no knowledge of any material
outstanding claims of any of its customers or clients presently outstanding,
pending or threatened against the Corporation. The Corporation and the Sellers
have no knowledge of any present or future condition or state of facts or
circumstances which would prevent the business of the Corporation from being
carried on by the Buyer after the Closing Date in essentially the same manner as
it is presently being carried on.
(v) Approvals and Authorizations. The Corporation has obtained all
----------------------------
necessary consents, approvals and authorizations in connection with the
transactions contemplated hereby which are required by law or otherwise in order
for the Corporation to continue all of its present business following the
Closing Date.
14
<PAGE>
(w) Compensation Plans. SCHEDULE 4(w) contains a correct and complete
------------------
description of all compensation plans and arrangements; bonus and incentive
plans and arrangements; deferred compensation plans and arrangements; stock
purchase and stock option plans and arrangements; hospitalization and other
life, health or disability insurance or reimbursement programs; holiday, sick
leave, severance, vacation, tuition reimbursement, personal loan and product
purchase discount policies and arrangements, policy manuals and any other plans
or arrangements providing for benefits for employees of the Corporation.
(x) Governmental Licenses. SCHEDULE 4(x) contains a correct and complete
---------------------
list of all material governmental and administrative consents, permits,
appointments, approvals, licenses, certificates and franchises which are (i)
necessary for the operation of the Corporation, and (ii) required in connection
with Sellers' execution, delivery or performance of this Agreement, all of which
have been obtained by the Corporation and are in full force and effect.
(y) Brokers. No agent, broker, investment banker, person, or firm acting
-------
on behalf of any of the Sellers, the Corporation or any firm or corporation
affiliated with any of them, or under its authority, is or will be entitled to a
financial advisory fee, brokerage commission, finder's fee or other like payment
in connection with the transactions contemplated hereby.
(z) Compliance With Laws.
--------------------
(i) The operations and activities of the Corporation have previously
and continue to comply in all material respects with all applicable Federal,
state and local laws, statutes, codes, ordinances, rules, regulations, permits,
judgments, orders, writs, awards, decrees or injunctions (collectively, the
"Laws"), as in effect on or before the date of this Agreement, including,
without limitation, all Laws relating to seed labeling and all rules and
regulations of the Occupational Safety and Health Administration. To the best of
Seller's knowledge, neither the ownership of the Corporation nor the conduct of
the business of the Corporation as presently conducted conflicts with the rights
of any other person, firm or corporation or violates, or with or without the
giving of notice or the passage of time, or both, will violate, conflict with or
result in a default, right to accelerate or loss of rights under, any terms or
provisions of its Certificate of Incorporation or By-laws as presently in
effect, or any lien, encumbrance, mortgage, deed of trust, lease, license,
agreement, understanding, or Laws to which the Corporation is a party or by
which it may be bound or affected. The Corporation has received no notice of
communication from any third party asserting a failure to comply with any Laws,
nor has the Corporation received any notice that any authority or third party
intends to seek enforcement against the Corporation to compel compliance with
any such Laws.
(ii) There are no existing claims or to the best of Seller's
knowledge, potential claims which may exist against the Corporation, for, with
respect to, or as direct or indirect result of, the presence on or under, or the
escape, seepage, leakage, spillage, discharge, or emission discharging, from the
real property of the Corporation of any "Hazardous Material," including, without
limitation, any losses, liabilities, damages, injuries, costs, expenses,
reasonable fees of counsel or claims asserted or arising under the Comprehensive
Environmental Response, Compensation and
15
<PAGE>
Liabilities Act ("CERCLA"), any so-called "Super Fund" or "Super Lien" law or
any other applicable federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree now or at any time hereafter in effect,
regulating, relating to or imposing liability or standards of conduct concerning
any Hazardous Material.
(iii) Since the date first acquired or leased by the Sellers or the
Corporation, Sellers and Corporation have not placed any "Hazardous Material" on
or under the real property owned or leased by the Corporation and, to the best
of Sellers' knowledge, there has been no "Hazardous Material" on or under the
real property owned or leased by the Corporation.
(iv) Neither the Corporation nor the Sellers, nor to the best
knowledge and belief of the Sellers, any officer, employee or agent of the
Corporation acting on its behalf, nor any other person acting on its behalf,
has, directly or indirectly, within the past three (3) years given or agreed to
give any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the
Corporation (or assist the Corporation in connection with any actual or proposed
transaction) which (i) might subject the Corporation to any damage or penalty in
any civil, criminal or governmental litigation or proceeding, (ii) if not given
in the past might have had an adverse effect on the assets, business or
operation of the Corporation, or (iii) if not continued in the future, might
adversely affect the assets, the business or the operations or prospects of the
Corporation, or which might subject the Corporation to suit or penalty in any
private or governmental litigation or proceeding.
(aa) Guarantees. Except as disclosed in SCHEDULE 4(aa), the Sellers have
----------
not personally guaranteed any of the obligations of the business of the
Corporation.
(bb) Benefits. All accrued holiday, vacation, sick or other compensation
--------
or benefits to which employees of the Corporation are entitled to receive from
the Corporation is set forth on SCHEDULE 4(bb). The Corporation has an employee
manual which sets forth the Corporation's policies with respect to its
employees, and there are no policies other than as set forth in SCHEDULE 4(bb).
(cc) Schedules. The Sellers and the Corporation have delivered to the
---------
Buyer complete and correct schedules (the "Schedules"), in form and substance
reasonably acceptable to the Buyer, as of the date of this Agreement, specifying
with respect to the business, properties, assets and obligations of the
Corporation each and every item in the categories listed as Schedules hereunder,
and complete and correct copies of the documents and other material from which
such Schedules were compiled.
(dd) Accuracy. No representation, warranty, covenant or statement by the
--------
Sellers or the Corporation in this Agreement, including the Schedules and
Exhibits attached hereto and the certificates furnished or to be furnished to
the Buyer pursuant hereto, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact required to be
stated
16
<PAGE>
herein or therein or necessary to make the statements contained herein or
therein in light of the circumstances under which they were made, not false or
materially misleading.
There are no stockholders agreements, preemptive rights or other
agreements, arrangements, groups, commitments or understandings, oral or
written, that have not been disclosed to the Buyer, relating to the voting,
issuance, acquisition or disposition of shares of the Corporation or the conduct
or management of the Corporation by its Board of Directors.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BUYER The Buyer warrants
-------------------------------------------
and represents to the Sellers as follows:
(a) Legal Proceedings. Neither the Buyer nor any of its executive officers
-----------------
or directors is a party to or affected by any pending litigation, arbitration or
any governmental proceeding or investigation that would in any manner affect its
entering into this Agreement or performing the transactions contemplated hereby
or that might result in any material adverse change in the financial condition,
business or properties of the Buyer, and to the best of Buyer's knowledge, no
such litigation, arbitration, proceeding or investigation is threatened.
(b) Capacity. The Buyer has full right, power and capacity to execute,
--------
deliver and perform its obligations under this Agreement and the other documents
required to be executed by the Buyer in connection herewith and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated by
this Agreement will not, constitute a breach of any term or provision of the
Certificate of Incorporation or By-laws of the Buyer or constitute a default
under any material law, rule, regulation, indenture, instrument, mortgage, deed
of trust, or other agreement or instrument to which the Buyer is a party or by
which it is bound.
(c) Organization. The Buyer is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Nevada, and the
Buyer has corporate power and authority to carry on its business as now
conducted and to own, lease or operate the properties and assets now used by it
in connection therewith. The Buyer is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties make such qualification necessary.
(d) Consents and Approvals. No governmental license, permit or
----------------------
authorization, and no registration or filing with any court, governmental
authority or regulatory agency, is required in connection with the Buyer's
execution, delivery or performance of this Agreement. The Buyer shall execute,
deliver and perform its obligations under this Agreement, and no consent or
other approval of any other party is required to be obtained by the Buyer in
connection with the transactions contemplated hereby.
(e) Binding Obligation. This Agreement has been duly executed and
------------------
delivered by the Buyer and constitutes the legal, valid and binding obligation
of the Buyer, enforceable against the
17
<PAGE>
Buyer in accordance with its terms, except to the extent that such
enforceability may be limited by general principles of equity or bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally. All action of the Board of Directors of the Buyer and all other
corporate action necessary to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
has been duly and validly taken.
(f) Brokers; Finders. No agent, broker, investment banker, person or firm
----------------
acting on behalf of the Buyer or any firm or corporation affiliated with the
Buyer or under its authority is or will be entitled to any brokers' or finders'
fee or any other commission or similar fee in connection with any of the
transactions contemplated hereby other than that the Buyer shall be responsible
for any fees due Jim Carnes in connection with the transactions contemplated
hereby.
(g) Accuracy. No representation, warranty, covenant or statement by the
--------
Buyer in this Agreement, including the Schedules and Exhibits attached hereto
and the certificates furnished or to be furnished to the Sellers pursuant
hereto, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact required to be stated herein or
therein or necessary to make the statements contained herein or therein in light
of the circumstances under which they were made, not false or materially
misleading.
SECTION 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
-----------------------------------------------------------
(a) Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made by the Sellers or the Buyer in this Agreement, including without
limitation all representations and warranties made in any Exhibit or Schedule
hereto or certificate delivered hereunder, shall survive the Closing until the
second anniversary of the Closing Date (the "Survival Date"); provided, however,
that all representations and warranties made by the Sellers in Sections 4(i),
4(p) and 4(z) hereof shall survive the Closing until and through one (1) year
after the expiration of the applicable statute of limitations (the "Extended
Survival Date").
(b) Indemnity by Sellers. Provided that the transaction contemplated by
--------------------
this Agreement is closed, the Sellers hereby agree to indemnify, defend and hold
harmless the Buyer from and against all liabilities, losses, costs or damages
whatsoever (including expenses and reasonable fees of legal counsel) ("Claims")
arising out of or relating to Claims made prior to the Survival Date or the
Extended Survival Date, if applicable, in the event that it is determined that
such Claims arise out of or from or are based upon (i) the inaccuracy in any
material respect of any representation or warranty contained in Section 4 made
by the Sellers (except to the extent of any inaccuracy disclosed in writing to
the Buyer prior to the Closing Date); and (ii) the non-performance by the
Sellers in any material respect of any covenant, agreement or obligation to be
performed by the Sellers under this Agreement.
(c) Indemnification by Buyer. Provided that the transaction contemplated
------------------------
by this Agreement is closed, the Buyer hereby agrees to indemnify, defend and
hold harmless the Sellers from and against all Claims arising out of or from or
based upon (i) the inaccuracy in any material respect
18
<PAGE>
of any representation or warranty contained in Section 5 by the Buyer; (ii) the
non-performance by the Buyer in any material respect of any covenant, agreement
or obligation to be performed by the Buyer under this Agreement; and (iii) any
liabilities arising out of the operation of the business of the Corporation by
Buyer after the Closing Date.
In the event that the Closing is consummated, the Buyers agree to
indemnify Sellers against all costs and expenses with respect to their state and
federal income tax liability for income tax items allocated to them as
shareholders of the Corporation with respect to the period June 1, 1997 through
the Closing Date or the termination of the Corporation's Subchapter S status,
whichever last occurs.
(d) Defense of Claims. Whenever any Claim shall arise for indemnification
-----------------
hereunder, the party entitled to indemnification (the "Indemnitee") shall notify
the indemnifying party (the "Indemnitor") in writing within 30 days after the
Indemnitee has actual knowledge that it is entitled to indemnification of such
Claim constituting the basis for such Claim (the "Notice of Claim"). The Notice
of Claim shall specify all facts known to the Indemnitee giving rise to such
indemnification claim and the amount or an estimate of the amount of the
liability arising therefrom.
If the facts giving rise to any such indemnification shall involve any
actual, threatened or possible claim or demand by any person against the
Indemnitee, the Indemnitor shall be entitled (without prejudice to the right of
the Indemnitee to participate at its expense through co-counsel of its own
choosing) to contest or defend such claim at his expense and through counsel of
his own choosing if he gives written notice of his intention to do so to the
Indemnitee within 10 days after receipt of the Notice of Claim; provided that
Indemnitor diligently prosecutes or defends such claim.
The Indemnitee shall not settle any claim which would give rise to
liability on the part of the Indemnitor under the indemnity contained in this
Section without the written consent of the Indemnitor, which consent shall not
unreasonably be withheld. If a firm offer is made to settle a claim or
litigation defended by the Indemnitee and the Indemnitor refuses to accept such
offer within 20 days after receipt of written notice from the Indemnitee of the
terms of such offer, then, in such event, the Indemnitee shall continue to
contest or defend such claim and shall be indemnified pursuant to the terms
hereof. Provided, however, that in the event the Indemnitor refuses to accept
such offer to settle a claim as described above and the Indemnitee continues to
contest or defend such claim, the indemnification provided for herein shall be
deemed to include the value of management's time spent in connection with the
defense of such claim. If a firm offer is made to settle a claim or litigation
and the Indemnitor notifies the Indemnitee in writing that the Indemnitor
desires to accept and agree to such settlement, but the Indemnitee elects not to
accept or agree to it, the Indemnitee may continue to contest or defend such
claim or litigation and, in such event, the total maximum liability of the
Indemnitor to indemnify or otherwise reimburse the Indemnitee hereunder with
respect to such claim or litigation shall be limited to and shall not exceed the
amount of such settlement offer, plus reasonable out-of-pocket costs and
expenses (including reasonable attorneys' fees and disbursements) to the date of
notice that the Indemnitor desires to accept such settlement.
19
<PAGE>
Notwithstanding any provision of this Agreement to the contrary, no
claim for indemnification pursuant to this Section 6, by the Indemnitee shall be
asserted or claimed except to the extent any Claim exceeds, in the aggregate,
the sum of $50,000.
Notwithstanding any provision of this Agreement to the contrary,
neither Sellers' nor Buyer's maximum liability for indemnification shall exceed
the Purchase Price.
SECTION 7. COVENANTS OF THE SELLERS AND THE CORPORATION. The Sellers hereby
--------------------------------------------
covenant and agree:
(a) Further Assurances. The Sellers hereby agree that, from time to time
------------------
at the reasonable request of the Buyer, and without further consideration, they
shall execute and deliver such additional instruments and take such other action
as the Buyer may reasonably require to convey, assign, transfer and deliver the
Stock and otherwise to carry out the terms of this Agreement.
(b) Access to the Corporation; Confidentiality.
------------------------------------------
(i) Subsequent to the date hereof and prior to the Closing Date, the
Sellers will continue to give to the Buyer, their counsel, accountants, and
other representatives, full and free access to all properties, books, contracts,
commitments and records of the Corporation so that the Buyer may have full
opportunity to make such investigation as it shall desire.
(ii) From and after the date of this Agreement until the Closing or
the termination of this Agreement, the Sellers and the Corporation and their
representatives will maintain the confidentiality of all documents and
information of a confidential nature disclosed to the other party in the course
of their negotiations and the Buyer's due diligence review and will in no event
use any confidential information for any purpose other than for the evaluation
of the transactions contemplated herein and in the event of termination of this
Agreement will destroy all copies of documentation which each party may have
delivered to the other party and will not use any confidential information from
the Buyer for their own benefit.
(c) Conduct of Business Pending Closing. From the date of this Agreement
-----------------------------------
to the Closing Date, except as expressly disclosed in the Schedules to this
Agreement, the Corporation shall conduct its operations as engaged in at the
date of this Agreement according to its ordinary course of business, shall
maintain its records and books of account in a manner that fairly and currently
reflects its financial condition and results of operations and shall not engage
in any transactions other than as contemplated by this Agreement.
(d) Closing Documents. Provided that the Buyer has fully performed its
-----------------
obligations and Sellers' conditions have been satisfied, the Sellers and the
Corporation shall execute and deliver all instruments and documents required as
a condition precedent to the Closing under Section 9 hereof and take all action
required to carry out the terms of this Agreement and to consummate the
transactions contemplated hereby.
20
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SECTION 8. COVENANTS OF THE BUYER. The Buyer hereby covenants and warrants
----------------------
as follows:
(a) Closing Documents. The Buyer shall execute and deliver all instruments
-----------------
and documents required as a condition precedent to Closing under Section 10
hereof and take all action required to carry out the terms of this Agreement and
to consummate the transactions contemplated hereby.
(b) Noninterference. The Buyer shall not take or omit to take any
---------------
action that (i) if taken or omitted on or before the date of this Agreement,
would make untrue any of the representations and warranties contained in Section
5 of this Agreement, or (ii) would interfere with the Buyer's ability to perform
or would prevent performance of any of its obligations under this Agreement or
any of the other agreements or instruments provided for herein.
(c) Confidentiality. From and after the date of this Agreement until
---------------
the Closing or the termination of this Agreement, the Buyer and their
representatives will maintain the confidentiality of all documents and
information of a confidential nature disclosed by the Sellers in the course of
their negotiations and the Buyer's due diligence review and will in no event use
any confidential information for any purpose other than for the evaluation of
the transactions contemplated herein and the financing of this transaction. In
the event this Agreement is terminated, the Buyer will destroy all copies of
documentation which it received from Sellers and will not use any confidential
information for its own benefit.
(d) Rothwell Purchase. Buyer acknowledges that Sellers desire to close
-----------------
the transactions contemplated by this Agreement simultaneously with the closing
of the sale of Sellers' interest in Rothwell Seeds International Company
("Rothwell") to the Buyer. In the event that the closing of Rothwell to Buyer
does not occur on or before September 30, 1997, then Buyer shall pay to Sellers
the sum of $500,000 payable by delivery to Sellers 62,500 registered ABT Shares
(the "Additional Shares") and period 1 of the Guaranty shall be amended to
include the Additional Shares and the Lock Up shall be amended to increase the
limits on sales proportionately for the period of time between Sellers' receipt
of the Additional Shares and the remaining time left in period 1. In the event
that the closing of the sale of Rothwell to Buyer occurs subsequent to the
issuance of the Additional Shares, no additional consideration will be due to
the Sellers. If the Buyer is unable to purchase Rothwell, as contemplated, the
Buyer and Sellers will work together to achieve the sale through an alternative
structure. If the sale cannot be achieved through an alternative structure, the
Sellers and Buyer will work together to sell Rothwell to another party with all
proceeds of the sale to be for the benefit of the Buyer. In the event the
closing of the sale of Rothwell to Buyer does not occur, Section 4(j)(i) shall
be deemed amended to include a qualification for the Rothwell account receivable
in the same manner as provided for the Westar Seeds International, Inc. account
receivable and the provisions of Section 5.01 of the Employment Agreement
attached as Exhibit 3(e) shall be deemed amended to include an exclusion for the
ownership interest in Rothwell in the same manner as provided for the ownership
interest in Westar Seeds International, Inc.
21
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SECTION 9. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS. The obligations
-----------------------------------------------
of the Buyer under this Agreement are subject to the following conditions:
(a) There shall not have been any breach of the representations,
warranties, covenants and agreements of the Sellers or the Corporation contained
in this Agreement or the Schedules and Exhibits hereto, and all such
representations and warranties shall be true at all times on and before the
Closing as if given at such times, except to the extent that any such
representation or warranty is expressly stated to be true as of some other time.
(b) The Sellers and the Corporation shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by them prior to or at the
Closing Date. All documents and instruments required in connection with this
Agreement shall be reasonably satisfactory in form and substance to Snow Becker
Krauss P.C., counsel for the Buyer.
(c) The Buyer shall have received certificates dated the Closing Date and
signed by the Sellers and the Corporation, certifying that there has been no
material adverse change in the condition (financial or otherwise), business,
assets, liabilities or earnings of the Corporation.
(d) The Buyer shall have received certificates dated the Closing Date and
signed by the Sellers and the Corporation, certifying that the conditions
specified in subsections (a), (b) and (c) above have been fulfilled except to
the extent that any nonfulfillment was disclosed in writing to the Buyer prior
to the Closing Date.
(e) The Corporation and the Sellers shall have obtained and delivered to
the Buyer any required consents or approvals of any third parties whose consent
is required to the transactions contemplated hereunder.
(f) The Buyer shall have received originals or certified copies, reasonably
satisfactory in form and substance to the Buyer, of all such corporate documents
of the Corporation as the Buyer shall reasonably require, including without
limitation the following:
(i) the Certificate of Incorporation of the Corporation and all
amendments thereto and restatements thereof certified as of a recent date by the
Secretary of State of Oregon;
(ii) the By-laws of the Corporation and all amendments thereto and
restatements thereof certified as of the Closing Date by an officer of the
Corporation;
(iii) certificate of existence of the Secretary of State of Oregon,
certifying as of a recent date that the Corporation is in existence under the
laws of that State;
(iv) copies of the minutes and resolutions of the Board of Directors
and stockholders of the Corporation showing the authorization and approval by
such Boards of the
22
<PAGE>
execution and delivery by the Corporation to the Buyer of this Agreement and of
the agreements and instruments provided for herein and of the performance of the
obligations of the Corporation under this Agreement and such other instruments
and agreements, certified as of a recent date by the Secretary or another
officer of the Corporation; and
(v) a certificate of incumbency identifying the officers and directors
of the Corporation immediately before Closing.
(g) The Buyer shall have received a written opinion of counsel for the
Sellers and the Corporation dated as of the Closing Date, in the form of
EXHIBIT 9(g) hereto.
(h) The Corporation and the Sellers shall have executed and delivered to
the Buyer an assignment or consent to all of the leases described in SCHEDULE
4(k).
(i) The Sellers shall have executed and delivered to the Buyer the
assignment or endorsement in favor of the Buyer of coverage under the insurance
policies maintained by the Sellers covering the Corporation described to in
SCHEDULE 4(q) to this Agreement.
(j) The Buyer shall have received from each of the Sellers the Employment
and Non-Competition Agreement in the form of EXHIBIT 3(e) attached hereto. Such
agreement shall be reasonably satisfactory in form and substance to counsel for
the Buyer.
(k) The Buyer shall have entered into employment agreements or otherwise
made arrangements that they deem satisfactory with such "key personnel" of the
Sellers as Buyer deems necessary.
SECTION 10. CONDITIONS PRECEDENT TO THE SELLERS' AND THE CORPORATION'S
----------------------------------------------------------
OBLIGATIONS. The obligations of the Sellers and the Corporation under this
- -----------
Agreement are subject to the following conditions:
(a) There shall not have been any breach of the representations,
warranties, covenants and agreements of the Buyer contained in this Agreement,
and all such representations and warranties shall be true at all times at and
before the Closing, except to the extent that any such representation or
warranty is expressly stated to be true as of some other time.
(b) The Buyer shall have performed and complied in all material respects
with all agreements and conditions required by this Agreement to be performed or
complied with by it. All documents and instruments required in connection with
this Agreement shall be reasonably satisfactory in form and substance to Clark,
Lindauer, McClinton, Fetherston, Edmonds and Lippold, counsel for the Sellers.
(c) The Sellers shall have received a certificate dated the Closing Date
and signed by the Buyer, certifying that the conditions specified in Paragraphs
10(a) and 10(b) above have been fulfilled.
23
<PAGE>
(d) The Sellers shall have received a written opinion of Snow Becker Krauss
P.C., counsel for the Buyer, dated as of the Closing Date, in the form of
EXHIBIT 10(d) hereto.
(e) The Sellers shall have received originals or certified copies,
reasonably satisfactory in form and substance to the Sellers, of the following
corporate documents of the Buyer:
(i) a certificate of existence certifying as of a recent date that the
Buyer is a corporation in good standing under the laws of its state of
incorporation;
(ii) copies of the minutes and resolutions of the Board of Directors
of the Buyer showing the authorization and approval by such Board of the
execution and delivery by the Buyer to the Sellers of this Agreement and the
agreements and instruments provided for herein and of the performance of the
obligations of the Buyer under this Agreement and such other instruments and
agreements, certified as of a recent date by the Secretary or another officer of
the Buyer; and
(iii) a certificate of incumbency identifying the officers and
directors of the Buyer immediately before Closing.
SECTION 11. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS AND THE BUYER.
----------------------------------------------------------------
The obligations of both the Sellers and the Buyer to complete this transaction
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) Due Diligence. The Sellers and the Buyer shall each have been afforded
-------------
the opportunity to complete their due diligence and conduct a review of the
business and prospects of the other, and shall be reasonably satisfied as to
such business and prospects.
(b) No Injunctions. No action or proceeding shall have been instituted or
--------------
threatened by any public authority or private person prior to the Closing before
any court or administrative body to restrain, enjoin or otherwise prevent the
consummation of this transaction or to recover any damages or obtain other
relief as a result of this transaction.
(c) Consents. Any consent to the transaction considered by the Sellers or
--------
the Buyer to be necessary or advisable under any agreement or contract, the
withholding of which might have, in the judgment of the Sellers or the Buyer, a
material adverse effect on the financial condition of the other party, shall
have been obtained.
(d) Corporate Proceedings. All corporate and other proceedings in
---------------------
connection with the transactions contemplated by this Agreement, and all
documents and instruments incident thereto, shall be reasonably satisfactory in
substance and form to the Sellers and the Buyer and their counsel, and the
Sellers and the Buyer and their counsel shall have received all certificates,
documents and instruments, or copies thereof, certified if requested, as may be
reasonably requested.
24
<PAGE>
SECTION 12. TERMINATION. This Agreement may be terminated at any time prior
-----------
to the Closing Date:
(a) By mutual written consent of the Sellers, the Buyer and the Corporation
properly authorized by their respective Boards of Directors.
(b) By either the Buyer or the Sellers if this transaction is not completed
by September 1, 1997, unless extended by mutual consent.
(c) By the Buyer if since May 31, 1997, there has been a material adverse
change in the condition (financial or otherwise), business, assets, liabilities
or earnings of the Corporation.
SECTION 13. THE BUYER'S OBLIGATIONS AT CLOSING.
----------------------------------
At the Closing, in addition to fulfilling the conditions to closing
appearing in this Agreement, the Buyer shall deliver to the Sellers the Purchase
Price as more specifically described in Section 3 hereof, together with all
other documents and agreements required to be delivered by it hereunder.
SECTION 14. THE SELLERS' OBLIGATIONS AT CLOSING. At the Closing, in addition
-----------------------------------
to fulfilling the conditions to closing appearing herein, the Sellers shall
deliver to the Buyer:
(a) stock certificate(s) representing the Stock free of all liens, claims
and encumbrances properly endorsed, or with stock powers executed in blank, and
with any and all transfer, stamp or similar taxes upon the transfer of the
shares to the Buyer paid in full by the Sellers ;
(b) all original minute books, stock books, stock transfer ledger, canceled
stock certificates, corporate seals and financial records and statements of the
Corporation.
SECTION 15. SUBSEQUENT EVENTS.
-----------------
(a) The Buyer will receive, at its own expense, audited financial
statements, of the Corporation ("Audited Financial Statements"), certified by
KPMG Peat Marwick LLP, independent certified public accountants, for all periods
required of the Buyer under the rules and regulations of the Securities and
Exchange Commission (the "Rules"). The Corporation and the Sellers hereby agree
to provide the Buyer and their accountants with full and free access to the
books and records of the Corporation and to cooperate fully with all such
representatives of the Buyer so that the Audited Financial Statements may be
prepared on a timely basis.
(b) Each of the respective Sellers shall be entitled to purchase from the
Corporation any policy of key person life insurance on their life owned by the
Corporation. Each of the respective Sellers may make a written election to
purchase such policy and remit the purchase price to the Corporation at any time
within thirty (30) days following the Closing Date. The purchase price shall
25
<PAGE>
be equal to the cash value of the policy plus any unearned premiums at the
Closing Date less any policy loans, and shall be payable in cash.
(c) The Sellers agree that at the Buyer's request and upon the Buyer's
making the cash payment contemplated by Section 3(a)(iii)(C) the Sellers will
make the irrevocable election specified in Section 3(a)(iii) required under
Section 338(h)(10) of the Internal Revenue Code.
(d) If Sellers do not receive the cash payments required by Section
3(a)(iii), sellers shall promptly notify the Buyer of such non-receipt. If the
Buyer does not make the required cash payment within 3 days of receiving such
notice, the Buyer will issue additional shares of ABT common stock as follows:
(i) if Buyer does not make the payment required by Section 3(a)(iii)(A), Buyer
will issue the Sellers 350,000 registered shares of ABT common stock in lieu of
that payment and all remaining payments required by Section 3(a)(iii); or (ii)
if Buyer does not make the payment required by Section 3(a)(iii)(B), Buyer will
issue the Sellers 250,000 registered shares of ABT common stock in lieu of that
payment and the remaining payment required by Section 3(a)(iii)(C); or (iii) if
Buyer does not make the payment required by Section 3(a)(iii)(C), Buyer will
issue the Sellers 210,000 registered shares of ABT common stock in lieu of that
payment. If additional shares of ABT common stock are issued pursuant to this
provision, (i) the Lock-Up and Guaranty will be adjusted pro-rata over the
remaining terms of those agreements; and (ii) Sellers will not be required to
make the election under Section 338(h)(10) of the Internal Revenue Code.
SECTION 16. PARTIES IN INTEREST. This Agreement shall be binding upon and
-------------------
shall inure to the benefit of the parties and their successors and assigns.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or to give any person, firm, or corporation other than the parties hereto
any rights or remedies under or by reason hereof.
SECTION 17. ENTIRE AGREEMENT. This Agreement, including the Schedules and
----------------
Exhibits hereto, contains the entire agreement and understanding among the
parties hereto with respect to the subject matter hereof and shall not be
modified or affected by any offer, proposal, statement or representation, oral
or written, made by or for any party in connection with the negotiation of the
terms hereof. All references herein to this Agreement shall specifically
include, incorporate and refer to the Schedules and Exhibits attached hereto
which are hereby made a part hereof. There are no representations, promises,
warranties, covenants, undertakings or assurances (express or implied) other
than those expressly set forth or provided for herein and in the other documents
referred to herein. This Agreement may not be modified or amended orally, but
only by a writing signed by all the parties hereto.
SECTION 18. GOVERNING LAW. This Agreement and all rights and obligations
-------------
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Nevada, applicable to agreements made and to be performed wholly
within said State, without regard to the conflicts of laws principles of such
State.
26
<PAGE>
SECTION 19. EXPENSES. The Buyer and the Sellers shall each pay their own
--------
expenses incidental to the preparation of this Agreement, the carrying out of
the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 20. MEDIATION; ARBITRATION; CONSENT TO JURISDICTION. Notwithstanding
-----------------------------------------------
any other provision in this Agreement to the contrary, controversies between
Buyer and Sellers shall be resolved, to the extent possible, by informal
meetings and discussions in good faith between the parties. Such meetings and
discussions shall, upon commencement, occur daily and for at least two hours
each day.
(a) Mediation. If a dispute between the parties cannot be resolved by
---------
informal meetings and discussions within five days after commencement thereof,
either party to this Agreement may elect to exercise its right to require
mediation of the dispute. During mediation, the parties agree to negotiate in
good faith as to the matter submitted to mediation. In such event, the parties
shall either: (i) appoint a single mediator; or (ii) if the parties cannot agree
on a single mediator, each appoint one mediator, and the two mediators shall
appoint a third mediator. No mediator shall be an employee, officer, Board
member, consultant, supplier or customer, or otherwise affiliated with a party
to this Agreement and shall be reasonably qualified to act as a mediator with
respect to the negotiation of agreements similar to this Agreement. Each party
shall share equally in the out-of-pocket costs for mediation; provided that the
mediators shall be empowered to require one party to pay more than one-half of
the expenses if the mediators determine that such party is not negotiating in
good faith in the mediation process. The location of the mediation and specific
procedures relating to the mediation shall be determined by the mediator(s), and
each party agrees to comply with all decisions, directions, instructions and
procedures made or established in good faith by the mediator(s). Any mediated
resolution between the parties shall be as consistent as is practical with the
existing agreements between the parties and shall not serve to modify, amend or
otherwise change their respective rights and obligations under such existing
agreements.
(b) Arbitration. If the parties are unable to resolve a controversy
-----------
within fifteen (15) days after commencement thereof, (a) in the case of
controversies involving amounts of two hundred thousand dollars ($200,000.00) or
less, the dispute shall be settled by binding arbitration, and a corresponding
judgment may be entered in a court of competent jurisdiction; (b) in the case of
controversies involving amounts greater than two hundred thousand dollars
($200,000.00), the dispute may be settled by binding arbitration or by either
party initiating an action in a court of competent jurisdiction. Arbitration of
any dispute may be initiated by one party by sending a written demand for
arbitration to the other party. This demand will specify the matter in dispute
and request the appointment of an arbitration panel. The arbitration panel will
consist of one arbitrator named by Buyer, one arbitrator named by Sellers and a
third arbitrator named by the two arbitrators so chosen. The arbitration hearing
will be conducted in accordance with the procedural rules set forth in the
commercial arbitration rules of the American Arbitration Association. The situs
of the arbitration will be Portland, Oregon. The arbitrators shall not be
empowered to award punitive or exemplary damages to either party.
27
<PAGE>
(c) Consent to Jurisdiction. In the event that litigation of a dispute is
-----------------------
initiated by either of the parties hereto, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of the Courts of the
State of Oregon or the United States District Court for the District of Oregon
to the extent that such court would have subject matter jurisdiction with
respect to such dispute; (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction or venue by motion or other request for leave from
any such court; (iii) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any Court
other than such courts; (iv) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
a party at its address set forth in Section 22 or at such other address of which
a party shall have been notified pursuant thereto; and (v) agrees that nothing
herein shall affect the right to effect service of process in any other manner
permitted by law.
SECTION 21. SEVERABILITY. If any part of this Agreement is held to be
------------
unenforceable or invalid under, or in conflict with, the applicable law of any
jurisdiction, the unenforceable, invalid or conflicting part shall, to the
extent permitted by applicable law, be narrowed or replaced, to the extent
possible, with a judicial construction in such jurisdiction that effectuates the
intent of the parties regarding this Agreement and such unenforceable, invalid
or conflicting part. To the extent permitted by applicable law, notwithstanding
the unenforceability, invalidity or conflict with applicable law of any part of
this Agreement, the remaining parts shall be valid, enforceable and binding on
the parties.
SECTION 22. NOTICES.
-------
(a) All notices, requests, consents and demands by the parties hereunder
shall be delivered by hand, by recognized national overnight courier or by
deposit in the United States mail,
28
<PAGE>
postage prepaid, by registered or certified mail, return receipt requested,
addressed to the party to be notified at the addresses set forth below:
(i) (a) if to the Corporation to:
Olsen Fennell Seeds, Inc.
2065 Madrona Avenue
P.O. Box 15028
Salem, Oregon 97302
Attention: Greg S. Fennell and James E. Olsen
Telecopier No.: (503) 399-7119
(b) if to the Sellers to:
Greg S. Fennell
5702 Charles Circle
Lake Oswego, OR 97034
Telecopier No.: (503) 624-1179
James E. Olsen
3372 Concomly S.E.
Salem, OR 97306
Telecopier No.: (503) 399-7119
with a copy to:
Clark, Lindauer, McClinton, Fetherston,
Edmonds and Lippold
880 Liberty Street N.E.
P.O. Box 2206
Salem, Oregon 97301
Attention: Ben Fetherston, Esq.
Telecopier No.: (503) 585-3978
(ii) if to the Buyer to:
AgriBioTech, Inc.
2700 Sunset Road, Suite C-25
Las Vegas, Nevada 89120
Attention: Johnny R. Thomas, President
Telecopier No.: (702) 798-8808
29
<PAGE>
with a copy to:
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Attention: Elliot H. Lutzker, Esq.
Telecopier No.: (212) 949-7052
(b) Notices given by mail shall be deemed effective on the earlier of the
date shown on the proof of receipt of such mail or, unless the recipient proves
that the notice was received later or not received, three (3) days after the
date of mailing thereof. Other notices shall be deemed given on the date of
receipt. Any party hereto may change the address specified herein by written
notice to the other parties hereto.
SECTION 23. NON-WAIVERS. Neither any failure nor any delay on the part of
-----------
any party to this Agreement in exercising any right, power or privilege
hereunder shall operate as a waiver of any rights of such party, unless such
waiver is made by a writing executed by the party and delivered to the other
parties hereto; nor shall a single or partial exercise of any right preclude any
other or further exercise of any other right, power or privilege accorded to any
party hereto.
SECTION 24. ASSIGNMENT. This Agreement may not be assigned by any party
----------
without the prior consent of the other parties.
SECTION 25. DISCLOSURE. From and after the date of this Agreement until the
----------
Closing or the termination of this Agreement, the Sellers will not (i) solicit
or encourage inquiries or proposals with respect to, or furnish any information
relating to, or participate in any negotiations or discussions concerning the
sale of the Stock or the sale of all or a substantial portion of the assets of
the Corporation with anyone other than the Buyer; or (ii) discuss the sale of
the Stock with anyone other than the Buyer and other officers, directors and
shareholders of the Corporation and the Sellers' advisors and (iii) unless
otherwise required by law or the requirements of any applicable stock exchange,
make any public announcement without prior approval of the language of such
announcement by the Buyer.
SECTION 26. MISCELLANEOUS.
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(a) Further Assurances: Each of the parties hereto shall use its best
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efforts to take or cause to be taken, and to cooperate with the other party
hereto to the extent necessary with respect to, all action, and to do, or cause
to be done, consistent with applicable law, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, the Sellers and
Buyer shall cooperate with and provide assistance to the other in connection
with the preparation and filing of all federal, state, local and foreign income
tax returns which relate to the Corporation and relate to pre-Closing periods
but which are not required to be filed until after the Closing, and shall also
cooperate with
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and provide assistance to the other or the Corporation with respect to any audit
of any tax returns filed prior to the Closing; provided, however, that the Buyer
and the Corporation hereby covenant and agree that the Corporation will not file
an amended form 1120X without first notifying the Sellers.
(b) Headings. The headings contained herein are for reference purposes
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only and shall not affect the meaning or interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed and delivered in multiple
------------
counterpart copies, each of which shall be an original and all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.
/s/Greg S. Fennell
----------------------------
Greg S. Fennell, Seller
(50 Shares)
/s/James E. Olsen
----------------------------
James E. Olsen, Seller
(50 Shares)
OLSEN FENNELL SEEDS, INC.
By: /s/James E. Olsen
------------------------
AGRIBIOTECH, INC.
By: /s/Kathleen L. Gillespie
------------------------
Kathleen L. Gillespie
Vice President
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<PAGE>
EXHIBIT 2.2
-----------
OMITTED EXHIBITS AND SCHEDULES TO THE STOCK PURCHASE AGREEMENT AMONG GREG S.
FENNELL, JAMES E. OLSEN, OLSEN FENNELL SEEDS, INC. AND AGRIBIOTECH, INC.
Exhibits Description
- -------- -----------
Exhibit 3(a)(i) Form of Lock-Up Agreement
Exhibit 3(a)(ii) Form of Guaranty Agreement
Exhibit 3(a)(iii) Form of Trust Deed
Exhibit 3(e) Form of Employment and Non-Competition Agreement
Exhibit 3(f) Form of Stock Option Agreement
Exhibit 4(g) Financial Statements
Exhibit 4(k) Leases of Real Property
Exhibit 9(g) Opinion of Counsel to Sellers and the Corporation
Exhibit 10(d) Opinion of Counsel to Buyer
Schedules
- ---------
Schedule 4(b)(i) Consents of Other Persons
Schedule 4(b)(ii) Interest in Other Entities
Schedule 4(c)(i) Legal Proceedings, Seller and/or Corporation as Party
Schedule 4(c)(ii) Complaints, Claims, etc. from Customers, Purchasers, etc.
Schedule 4(c)(iii) Claims Related to Products or Services
Schedule 4(d) Encumbrances
Schedule 4(e) Trademarks, Trade Names
Schedule 4(f) Patents, PVPA Certificates, etc.
Schedule 4(h) Material Adverse Changes
Schedule 4(k) Real Property Owned or Leased; Personal Property Leased
Schedule 4(l) Material Contracts
Schedule 4(p) Pension & Profit Sharing Plan
Schedule 4(q) Insurance Policies
Schedule 4(r) Rights of Third Parties
Schedule 4(s) Powers of Attorney
Schedule 4(w) Compensation Plans
Schedule 4(x) Governmental Licenses
Schedule 4(aa) Guarantees by Sellers of Obligations of the Corporation
Schedule 4(bb) Benefits
Registrant will furnish to the Securities and Exchange Commission a copy of any
Exhibit or Schedule listed above upon request.
