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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 23, 1998
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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)
120 Corporate Park Drive, Henderson, Nevada 89014
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(Address of Principal Executive Offices) (Zip Code)
(702) 566-2440
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Registrant's telephone number, including area code
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Item 5. Other Events.
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The Company has entered into a $15,000,000 over advance facility (the
"Facility") pursuant to an agreement dated as of August 14, 1998 (the "Loan
Amendment") amending the Loan and Security Agreement dated as of June 23, 1998,
(the "Loan Agreement") with BankAmerica Business Credit, Inc. ("BABC") agent and
Deutsche Financial Services Corporation, as administrative agent. The Facility
matures on December 31, 1998 and consists of a fixed rate loan. The interest
rate is fixed at eighteen (18%) per annum.
(c) Exhibits.
1 Loan Agreement.
2 Omitted Schedules and Exhibits to the Loan Agreement.
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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: August 28, 1998 /s/ Henry A. Ingalls
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Henry A. Ingalls,
Vice President
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EXHIBIT INDEX
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Exhibit No. Description
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1 Loan Agreement.
2 Omitted Schedules and Exhibits to the Loan Agreement.
Exhibit 2
OMITTED SCHEDULES AND EXHIBITS
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Registrant will furnish to the Securities and Exchange Commission a copy of
any Schedule or Exhibit listed above upon request.
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AMENDMENT NO. 2 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 2 dated as of August 14, 1998 (this "Amendment") to LOAN AND
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SECURITY AGREEMENT, dated as of June 23, 1998 (as amended from time to time, the
"Agreement"), by and between AGRIBIOTECH, INC., a Nevada corporation, together
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with all other entities who are or may become Borrowers thereunder (the
"Borrowers"), and the financial institutions listed on the signature pages
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thereof (together with their respective successors and assigns, the "Lenders"),
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BANKAMERICA BUSINESS CREDIT, INC. (the "Agent") and DEUTSCHE FINANCIAL SERVICES
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CORPORATION (the "Administrative Agent"). Terms with initial capital letters
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used herein without definition shall have the meanings set forth in the
Agreement.
WHEREAS, the Borrowers request that Lenders amend the Agreement (i) to make
certain changes to accommodate a $15,000,000 overadvance facility being provided
by the Lenders to provide additional financing for certain acquisitions being
completed by the Borrowers, and (ii) to make eligible certain additional
Collateral for borrowing purposes;
WHEREAS, the Lenders have agreed to make the amendments to the Agreement as
set forth herein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers, the Agent, the Administrative Agent and the Lenders
agree as follows:
ARTICLE I
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Amendments
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1.01 Amendments to the Agreement. The following sections of the Agreement
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are, effective as of the date hereof, hereby amended as follows:
(a) Section 1.1 is amended by adding the following definitions:
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"Eligible Farmer-Held Inventory" means Farmer-Held Inventory
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which would otherwise be Eligible Inventory except for the fact that no
acceptable processing agreement has been entered into between Agent and
such processor, but only to the extent the Agent has established a reserve
against the Availability with respect to the trade payable arising out of
the purchase of such Inventory.
"Farmer-Held Inventory" means Inventory purchased by any Borrower
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from a grower where the grower retains temporary possession of such
Inventory for processing and storage purposes.
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"Overadvance Amount" means $15,000,000.
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"Overadvance Facility" means the Revolving Loans then outstanding
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in an amount not to exceed the Overadvance Amount from August 14, 1998
until the Overadvance Facility Termination Date.
"Overadvance Facility Termination Date" means the earlier to
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occur of: (i) the date of the funding of any Financing in an amount
of at least $40,000,000; or (ii) the date that ABT gives Agent written
notice of Borrowers' election to terminate the Overadvance Facility;
or (iii) December 31, 1998.
(b) Section 1.1 is amended by amending and restating the following
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definitions:
"Availability" means, at any time,
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(a) the lesser of
(i) the Maximum Revolver Amount, or
(ii) the sum of (A) eighty-five percent (85%) of the
Net Amount of Eligible Accounts other than the Cargill
Account plus sixty-five percent (65%) of the Cargill Account
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(both rates being referred to herein jointly as the
"Accounts Advance Rate"), so long as the "Dilution
Percentage", as hereinafter defined, does not exceed eight
percent (8%) plus (B) sixty-five percent (65%) of the value
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of Eligible Inventory other than Eligible Farmer-Held
Inventory, plus fifty percent (50%) of Eligible Farmer-Held
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Inventory (both rates being referred to herein jointly as
the "Inventory Advance Rate"); provided, that at no time
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shall the sum of outstanding Revolving Loans and Letters of
Credit based upon the value of Eligible Inventory including
Eligible Farmer-Held Inventory exceed $70,000,000 ("Maximum
Inventory Loan"), plus (C) until the Overadvance Facility
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Termination Date, the Overadvance Amount;
minus
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(b) the sum of (i) the Aggregate Revolver Outstandings, (ii)
reserves for accrued interest on the Obligations, (iii) one
hundred percent (100%) of the aggregate undrawn face amount of
all outstanding Letters of Credit; (iv) the Environmental
Compliance Reserve, (v) the ACH Settlement Risk Reserve, if any,
(vi) the Ag Lien Reserve, (vii) the Rent Reserves, and (viii) all
other reserves which the Agent deems necessary in the exercise of
its
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reasonable credit judgment to maintain with respect to the
Borrowers' account, including, without limitation, reserves for
any amounts which the Agent or any Lender may be obligated to pay
in the future for the account of any Borrower. The reserves in
clauses (ii), (iv), (v), and (viii) will initially be zero and
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Agent will give Borrowers reasonable notice prior to any changes
in such reserves. If the Dilution Percentage exceeds eight
percent (8%) (the "Excess Dilution Percentage"), the Accounts
Advance Rate shall be reduced by two (2) percentage points for
each one percent (1%) of Excess Dilution Percentage.
"Cargill Account" means the Account in the aggregate maximum
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amount of $4,500,000 owed by Cargill of Argentina to ABT as of
the Closing Date, which Account is due and owing no later than
December 15, 1998.
(c) Section 2.3 is hereby amended in its entirety to read as follows:
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"2.3. Overadvance Facility. Subject to all of the terms and
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conditions of this Agreement, the Lenders agree to provide to
Borrowers the Overadvance Facility."
(d) Section 3.1 is hereby amended in its entirety to read as follows:
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"3.1 Interest.
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(a) Interest Rates. Revolving Loans under the Overadvance
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Facility shall bear interest at a fixed rate of 18% per annum.
Except for the Overadvance Facility, all outstanding Obligations
shall bear interest on the unpaid principal amount thereof
(including, to the extent permitted by law, on interest thereon
not paid when due) from the date made until paid in full in cash
at a rate determined by reference to the Base Rate or the LIBOR
Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to
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exceed the Maximum Rate described in Section 3.3. During the
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term of the Overadvance Facility, for the purpose of calculating
interest, the Overadvance Facility shall be considered the first
dollars of Revolving Loans advanced and the last dollars of
Revolving Loans repaid. Subject to the provisions of Section
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3.2, any of the Loans (other than Loans made under the
Overadvance Facility) may be converted into, or continued as,
Base Rate Loans or LIBOR Rate Loans in the manner provided in
Section 3.2. If at any time Loans (other than Loans made under
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the Overadvance Facility) are outstanding with respect to which
notice has not been delivered to the Agent in accordance with the
terms of this Agreement specifying the basis for determining the
interest rate applicable thereto, then those Loans shall be Base
Rate Loans and shall bear interest at a rate determined by
reference to the Base Rate until notice to the contrary
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has been given to the Agent in accordance with this Agreement and
such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as
follows:
(i) For all Base Rate Revolving Loans and other
Obligations (other than LIBOR Rate Loans and Loans under the
Overadvance Facility) at a fluctuating per annum rate equal
to the Base Rate plus the Applicable Margin;
(ii) For all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin; and
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(iii) For all Loans under the Overadvance Facility
at a fixed rate of eighteen percent (18%) per annum.
Each change in the Base Rate shall be reflected in the
interest rate described in clause (i) above as of the
effective date of such change. All interest charges shall be
computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest accrued
on all Loans will be payable in arrears on the first day of
each month hereafter.
(b) Default Rate. If any Default or Event of Default
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occurs and is continuing and the Majority Lenders in their
discretion so elect, then, while any such Default or Event of
Default is outstanding, all of the Obligations shall bear
interest at the Default Rate applicable thereto."
(e) A new Section 3.7 is hereby added to the Agreement and reads as
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follows:
"3.7 Success Fees. The Borrowers agree to pay to the Agent, for
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the ratable account of the Lenders, the following fees (the "Success
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Fees"):
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(i) $150,000 on October 31, 1998 if the Overadvance
Facility Termination Date has not occurred; and
(ii) an additional $150,000 on November 30, 1998 if the
Overadvance Facility Termination Date has not occurred.
The Borrowers and Lenders agree that up to fifty percent (50%) of
each Lender's pro rata share of each Success Fee may be used by such
Lender, upon mutual agreement between such Lender and the Borrowers,
to purchase
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warrants/options for the purchase of shares of ABT's common stock,
each such warrant/option having a 5-year maturity date and containing
antidilution provisions, "piggyback rights", and other rights typical
of such warrants/options."
ARTICLE II
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Ratifications, Representations and Warranties
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Section 2.01. Ratifications. The terms and provisions set forth in this
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Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and, except as expressly modified and superseded by
this Amendment, the terms and provisions of the Loan Agreement, including,
without limitation, all financial covenants contained therein, are ratified and
confirmed and shall continue in full force and effect. Agent, Lenders and each
Borrower agree that the Loan Agreement as amended hereby shall continue to be
legal, valid, binding and enforceable in accordance with its terms.
Section 2.02. Representations and Warranties. Each Borrower hereby
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represents and warrants to Agent and Lenders that the execution, delivery and
performance of this Amendment and all other loan, amendment or security
documents to which any Borrower is or is to be a party hereunder (hereinafter
referred to collectively as the "Loan Documents") executed and/or delivered in
connection herewith, have been authorized by all requisite corporate action on
the part of such Borrower and will not violate the Articles of Incorporation or
Bylaws of such Borrower.
ARTICLE III
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Conditions Precedent
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Section 3.01. Conditions. The effectiveness of this Amendment is subject
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to the satisfaction of the following conditions precedent (unless specifically
waived in writing by the Lenders):
(a) Agent shall have received all of the following, each dated (unless
otherwise indicated) as of the date of this Amendment, in form and
substance satisfactory to Lender in its sole discretion:
(i) Company Certificate. A certificate executed by the Secretary
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or Assistant Secretary of each Borrower certifying (A) that Borrower's
Board of Directors has met and adopted, approved, consented to and
ratified the resolutions attached thereto which authorize the
execution, delivery and performance by Borrower of the Amendment and
the Loan Documents, (B) the names of the officers of Borrower
authorized to sign this Amendment and each of the Loan Documents to
which Borrower is to be a party hereunder, (C) the specimen signatures
of such
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officers, and (D) that neither the Articles of Incorporation nor
Bylaws of Borrower have been amended since the date of the Agreement;
(ii) Arrangement Fee. Agent shall have received the
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"Arrangement Fee".
(iii) Other Documents. Each Borrower shall have executed and
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delivered such other documents and instruments as well as required
record searches as Agent may require.
(b) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments
and other legal matters incident thereto shall be satisfactory to the
Lenders and their legal counsel.
ARTICLE IV
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Miscellaneous
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Section 4.01. Survival of Representations and Warranties. All
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representations and warranties made in the Loan Agreement or any other document
or documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Agent or any Lender or any closing shall affect the representations and
warranties or the right of Agent and each Lender to rely thereon.
Section 4.02. Reference to Loan Agreement. The Loan Agreement, each of
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the Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Loan Agreement as amended hereby, are hereby amended so that
any reference therein to the Loan Agreement shall mean a reference to the Loan
Agreement as amended hereby.
Section 4.03. Severability. Any provision of this Amendment held by a
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court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 4.04. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
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EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
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Section 4.05. Successors and Assigns. This Amendment is binding upon and
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shall inure to the benefit of Agent, Lenders and each Borrower and their
respective successors and assigns; provided, however, that no Borrower may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Agent. Agent and each Lender may assign any or all of their
rights or obligations hereunder without the prior consent of any Borrower.
Section 4.06. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 4.07. Effect of Waiver. No consent or waiver, express or implied,
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by Agent or any Lender to or of any breach of or deviation from any covenant or
condition of the Agreement or duty shall be deemed a consent or waiver to or of
any other breach of or deviation from the same or any other covenant, condition
or duty. No failure on the part of Agent or any Lender to exercise and no delay
in exercising, and no course of dealing with respect to, any right, power, or
privilege under this Amendment, the Loan Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Amendment, the Loan Agreement or any
other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided for in the Loan Agreement and the other Loan Documents are cumulative
and not exclusive of any rights and remedies provided by law.
Section 4.08. Headings. The headings, captions and arrangements used in
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this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 4.09. Expenses of Lender. ABT agrees to pay on demand (i) all
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costs and expenses reasonably incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all subsequent amendments,
modifications, and supplements hereto or thereto, including, without limitation,
the reasonable costs and fees of Agent's legal counsel and the allocated cost of
staff counsel and (ii) all costs and expenses reasonably incurred by Agent in
connection with the enforcement or preservation of any rights under the Loan
Agreement, this Amendment and/or other Loan Documents, including, without
limitation, the costs and fees of Agent's legal counsel and the allocated cost
of staff counsel.
Section 4.10. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER
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LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN AGENT, THE
LENDERS AND BORROWERS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN AGENT, THE LENDERS AND BORROWERS.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
"BORROWERS"
AGRIBIOTECH, INC.
ARNOLD-THOMAS SEED SERVICE, INC.
CLARK SEEDS, INC.
DISCOUNT FARM CENTER, INC.
E.F. BURLINGHAM & SONS
GERMAIN'S SEEDS, INC.
GREEN SCA CORP.
G.W. BURLINGHAM'S, INC.
HALSEY SEED COMPANY
KINDER SEED, INC.
LACROSSE SEED COMPANY, INC.
LAS VEGAS FERTILIZER CO., INC.
LOFTS SEED COMPANY, INC.
THE OHIO SEED COMPANY
OLSEN-FENNELL SEEDS, INC.
PETERSON EXPORTS, INC.
PETERSON SEED COMPANY, INC.
PREMIUM SEED COMPANY, INC.
SCOTT SEED COMPANY
SEED CORPORATION OF AMERICA
SEED RESOURCE, INC.
SEXAUER SEED CO.
WILBER'S SEED, INC.
W-L RESEARCH, INC.
ZAJAC PERFORMANCE SEEDS, INC.
ZAJAC PERFORMANCE SEEDS OREGON, LLC
GREEN SEED COMPANY LIMITED PARTNERSHIP
By: GREEN SCA CORP, its general partner
FINE LAWN RESEARCH, INC.
GEO. W. HILL & CO., INC.
W-D SEED GROWERS IDAHO, INC.
ARROWHEAD ENTERPRISES, INC.
GEO. W. HILL OF INDIANA, INC.
/s./ Henry A. Ingalls
By: ____________________________________________
Name: Henry A. Ingalls
Title: Vice President acting on behalf of each of the
above
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"AGENT"
BANKAMERICA BUSINESS CREDIT, INC., as the
Agent
/s/ Victor Alfirevic
By: _______________________________________
Name: Victor Alfirevic
Title: Vice President
"ADMINISTRATIVE AGENT"
DEUTSCHE FINANCIAL SERVICES
CORPORATION
/s/ Pamela D. Petrick
By: _______________________________________
Name: Pamela D. Petrick
Title: Vice President
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"LENDERS"
Commitment: $60,000,000 BANKAMERICA BUSINESS CREDIT, INC., as a
Lender
/s/ Victor Alfirevic
By: ______________________________________
Name: Victor Alfirevic
Title: Vice President
Commitment: $25,000,000 DEUTSCHE FINANCIAL SERVICES
CORPORATION
/s/ Pamela D. Petrick
By: ______________________________________
Name: Pamela D. Petrick
Title: Vice President
Commitment: $15,000,000 BRANCH BANKING AND TRUST COMPANY
/s/ Jodie Hughes
By: ______________________________________
Jodie Hughes
Name: ____________________________________
Vice President
Title: ___________________________________
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CONSENTS AND REAFFIRMATIONS
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The undersigned hereby acknowledges the execution of, and consents to, the
terms and conditions of that certain Amendment No. 2 to Loan and Security
Agreement dated as of August 14, 1998, by and between AGRIBIOTECH, INC., a
Nevada corporation, together with all other entities who are or may become
Borrowers thereunder (the "Borrowers"), and the financial institutions listed on
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the signature pages thereof (together with their respective successors and
assigns, the "Lenders"), BANKAMERICA BUSINESS CREDIT, INC. (the "Agent") and
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DEUTSCHE FINANCIAL SERVICES CORPORATION (the "Administrative Agent") and
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reaffirms its obligations under that certain Guaranty (the "Guaranty") dated as
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of June 23, 1998, made by the undersigned in favor of the Agent and Lenders, and
acknowledges and agrees that the Guaranty remains in full force and effect and
the Guaranty is hereby ratified and confirmed.
Dated as of August 14, 1998.
ROTHWELL SEEDS INTERNATIONAL COMPANY
/s/ Henry A. Ingalls
By: ______________________________________
Henry A. Ingalls
Vice President
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