ASSET PURCHASE AGREEMENT
BY AND AMONG
AGRIBIOTECH, INC.,
SCOTT SEED COMPANY,
a wholly-owned Nevada subsidiary of AgriBioTech, Inc.,
as Buyer,
and
L.G. SEEDS, INC.,
as Seller
March 30, 1995
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement") dated March 30,
1995 (hereinafter referred to as the "Signing Date" or the
"Signing") by and among L.G. Seeds, Inc., a Delaware corporation
(the "Seller"), Scott Seed Company, a Nevada corporation (the
"Buyer") and AgriBioTech, Inc. ("ABT"), a Nevada corporation.
W I T N E S S E T H:
WHEREAS, the Buyer is a wholly-owned subsidiary of ABT;
WHEREAS, the Seller has been engaged in the retail farm seed
business in the States of Kentucky and Indiana under the name of
and through its division, the "Scott Seed Company" (the "Division")
and all combinations and forms thereof (the "Division's Business")
which business shall cease as currently organized and be
reconstituted as a new business of the Buyer; and
WHEREAS, the Seller wishes to sell and the Buyer wishes to
purchase certain tangible and intangible assets associated with the
Division's Business (the "Assets").
NOW, THEREFORE, in consideration of the foregoing and the
terms, conditions, representations, warranties and mutual covenants
appearing in this Agreement, the parties hereto hereby agree as
follows:
Section 1. Sale and Purchase of Assets. Upon the terms and
subject to the conditions set forth in this Agreement, at the
Closing (as hereinafter defined) effective as of the Effective Date
(as hereinafter defined), the Seller shall sell, assign, transfer
and deliver to the Buyer, and the Buyer shall purchase, acquire,
accept and take possession of all of the Seller's right, title and
interest in and to the following assets of the Seller (all of which
are hereinafter sometimes referred to as the "Assets," which shall
be defined as those assets set forth in Sections 1(a) through 1(m)
as of the Effective Date adjusted for the deletions and additions
thereto in the ordinary course of business for the period after the
Effective Date through the Closing Date):
(a) The Seller's marketable inventory which related to the
Division's Business (the "Inventory"), as set forth on Schedule
1(a) attached hereto.
(b) The Seller's real property which related to the
Division's Business, including the land, buildings, leases and
improvements thereto, as set forth on Schedule 1(b) attached
hereto.
(c) The Seller's equipment which related to the Division's
Business, as set forth on Schedule 1(c) attached hereto.
(d) The Seller's office furniture and fixtures which related
to the Division's Business, as set forth on Schedule 1(d) attached
hereto.
(e) The Seller's automobiles, trucks and other vehicles which
relate to the Division's Business, as set forth on Schedule 1(e)
attached hereto.
(f) The Seller's trade names which related to the Division's
Business, as set forth on Schedule 1(f) attached hereto.
(g) The Seller's trademarks which related to the Division's
Business, if any, as set forth on Schedule 1(g) attached hereto.
(h) The Division's Assets set forth in subsections (b)
through (g) above are sometimes referred to herein as the "Fixed
Assets."
(i) The Division's accounts receivable which relate to the
Division's Business, as set forth on Schedule 1(i) attached hereto.
(j) The customer list of the Seller which relates to the
Division's Business (the "Customer List"), as set forth on Schedule
1(j) attached hereto.
(k) The Seller's pre-paid assets which relate to the
Division's Business, as set forth on Schedule 1(k) attached hereto.
(l) The Seller's suspense items which relate to the
Division's Business, as set forth on Schedule 1(l) attached hereto.
(m) The Assets shall be conveyed free and clear of all
liabilities, obligations, liens, security interests and
encumbrances of any character whatsoever, excepting only those
liabilities and obligations, if any, which are expressly to be
assumed by the Buyer hereunder, including, but not limited to, the
Assumed Agreements (the "Assumed Liabilities"), as set forth on
Schedule 1(m)(i) attached hereto. The Buyer hereby assumes
Seller's industrial bond obligation (the "IRB") to the City of New
Albany, Indiana as part of the Assumed Liabilities (as set forth on
Schedule 1(m)(ii)), and the Purchase Price shall be adjusted as set
forth in Section 2(A)(a) below. In the event that the IRB
obligation cannot be assigned to Buyer, Buyer hereby agrees to make
all payments on the IRB to Seller at the time the payments are due
by Seller to the City of New Albany, Indiana, and, as described in
Section 2(b) below, Seller would then retain a first lien on the
Real Property set forth in Section 1(b) above.
In the event that the IRB is accelerated because of the change
in ownership of the property, or for any other reason, Buyer hereby
agrees to make all payments to Seller which Seller may then be
obligated to make.
Except for the Assumed Liabilities, Buyer shall not assume nor
be responsible for any liabilities or obligations which relate in
any way to the operation of the Division's Business prior to the
Effective Date.
Section 2.
(A) Purchase Price. In full consideration for the sale,
transfer, conveyance, assignment and delivery of the Assets by the
Seller to the Buyer and in reliance upon the representations and
warranties made herein by the Seller and for other consideration
set forth herein, the Buyer hereby agrees to pay to the Seller at
the Signing a net purchase price (the "Purchase Price") One Million
Four Hundred Eighty Two Thousand Four Hundred Eleven and 11/xx
Dollars ($1,482,411.11) consisting of the following:
(a) In full consideration for the Inventory of the Division
as of February 28, 1995, the Buyer hereby agrees to pay to the
Seller at the Signing a payment in cash equal to One Million, Two
Hundred Eighty Five Thousand Eight Hundred Fifty Four and 02/100
($1,285,854.02) dollars, as set forth on Schedule 2(a) attached
hereto.
(b)(i) In full consideration for the sale of the Fixed
Assets, the Buyer hereby agrees to pay to the Seller at the Closing
Four Hundred Seventy-Four Thousand Dollars ($474,000) payable by
the issuance of 158,000 registered, freely-transferable shares of
Common Stock of ABT (the "ABT Shares"), with an agreed upon value
of $3.00 per share, the sale of such ABT Shares shall be made
pursuant to the Lock-Up Agreement, in the form attached hereto as
Exhibit 12(h).
(b)(ii) Buyer and ABT shall guarantee that the net cash
received by Seller from the sale of the ABT Shares shall equal or
exceed $474,000 (the "Price Guarantee") when the shares are sold in
accordance with the terms of the Lock-Up Agreement. During the
period commencing three months from the Closing and ending nine
months (the "Termination Date") from the Closing (the "Lock-Up
Period"), the Seller shall attempt to sell the ABT Shares and, in
the event Seller does not receive at least $474,000 of Net Proceeds
(as defined hereunder) from the sale of 158,000 shares of ABT
Common Stock, the deficit, if any, shall be paid by ABT in cash in
two equal quarterly payments 90 days and 120 days, respectively,
from the earlier of (i) the Termination Date and (ii) the day the
last of such ABT Shares are sold. For purposes of this Section
2(A)(b), the term "Net Proceeds" shall mean the proceeds received
from the sale of ABT Shares, net of any brokerage or other sales
commissions. During the Lock-Up Period, the Seller may not sell
more than 3,500 shares per day and no more than 7,000 shares per
week. In the event that Seller is unable to publicly sell the
shares during the Lock-Up Period, it shall use its best efforts to
privately sell the shares, with Buyer and ABT otherwise remaining
liable on the Price Guarantee. Any Net Proceeds in excess of
$474,000 from the sale of the ABT Shares shall be retained by the
Seller. In the event that Seller materially breaches any term or
condition of the Lock-Up Agreement, including, but not limited to,
when and how many Shares it may sell, the Price Guarantee is
forfeited in its entirety; ABT shall not owe Seller any monies on
the Price Guarantee and Seller hereby agrees to remit to Buyer upon
demand all Net Proceeds in excess of $474,00 received by Seller.
(b)(iii) ABT 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. In such event, Seller agrees to
use its best efforts to sell its ABT Shares as rapidly as possible,
in accordance with those limitations and restrictions, as waived or
modified. In the event that the Seller elects not to sell any of
the 158,000 shares during the Lock-Up Period, when permitted to
sell, then the above-stated Price Guarantee of ABT is forfeited by
Seller only concerning those shares. In the event that ABT elects
any such waiver and so notifies Seller in writing that it may sell
a specified number of shares for a specified time period and Seller
does not sell any or all of such shares which it is permitted to
sell, then the above-stated Price Guarantee of ABT is forfeited by
Seller only concerning those shares.
(b)(iv) Until such time as the Seller has received the net
proceeds of $474,000 from the sale of the Shares and the IRB
obligation assumed by the Buyer has been satisfied, the Seller
shall have a first lien on the Seller's real property included in
Section 1(b) above.
(c) In full consideration for the Accounts Receivable of the
Division as of February 28, 1995, the Buyer hereby agrees to pay to
the Seller at the Signing a payment in cash equal to One Million
Thirty Six Thousand Nine Hundred Thirty Eight and 45/100
($1,036,938.45) dollars.
Seller hereby confirms Buyer's ownership of and sole right and
authority to collect for its own account all accounts and accounts
receivable transferred to it under this subsection, to endorse the
name of Seller, without recourse to Seller, any checks or other
instruments received on account of such accounts and accounts
receivable and to give notice, in Buyer's name, to the various
customers and others owing monies to the Buyer in respect of any
accounts and accounts receivable, advising such customers and
others, among other things, that they should make payment of the
foregoing directly to the Buyer. Seller shall transfer or deliver
to Buyer from time to time, promptly upon receipt thereof by
Seller, all cash or other property due Buyer that Seller may
receive in respect of any accounts or accounts receivable
transferred to Buyer as contemplated by this Agreement, or as
otherwise due to Buyer.
(d) The Buyer shall assume the accounts payable of Six
Hundred Eighty Thousand Two Hundred Fifty Eight and 49/100
($680,258.49) dollars as of February 28, 1995, which related to the
Division's Business, as set forth on Schedule 2(d) attached hereto,
effective at Signing (the "Accounts Payable").
(e) In full consideration for the prepaid assets and the
suspense items listed on Schedules 1(k) and 1(1), respectively,
Buyer hereby agrees to pay to Seller at the Signing a payment in
cash of Twenty Five Thousand Six Hundred Forth Three Dollars
($25,643.00).
(f) In addition to the purchase and sale of the Assets as
described above, at the Signing, the Seller and J.C. Gouache hereby
agree to (i) sell to the Buyer the Customer List and the goodwill
which relates to the Division's Business and (ii) enter into
five-year non-competition agreement(s) with the Buyer in the form
annexed hereto as Exhibit 2(f) as more fully described in Section
11(k) below, for the sum of $10.00 payable in cash at the Signing.
(g) The aggregate $2,348,445.47 owed to the Seller pursuant
to Subsections (a), (c) and (e) above shall be reduced by: (i)
$680,258.49 the amount of the Accounts Payable, pursuant to
subsection (d) above; (ii) $71,098.46 the aggregate amount of the
IRB obligation (principal and interest) to the City of New Albany,
Indiana included in the Assumed Liabilities; (iii) Assumed
Liabilities in the amount of Seventy Nine Thousand Four Hundred
Eighty Five and 72/100 ($79,485.72) set forth on Schedule 1(j)
attached hereto; (iv) Assumed tax liabilities in the amount of
Twenty Five Thousand One Hundred Eighty One and 69/100
($25,181.69), set forth on Schedule 1(m) attached hereto; (v) a
lease loss proration of Ten Thousand ($10,000) dollars; and (vi) by
any adjustments described in the second paragraph of subsection (h)
below. The net cash payment to Seller from Buyer at Signing shall
be $1,482,411.11.
(h) The parties hereto agree that the purchase and sale of
the Assets and the assumption of the Assumed Liabilities, shall be
accounted for as if such transactions had occurred as of the close
of business on February 28, 1995 (the "Effective Date"), regardless
of when the Closing in fact occurs. The Buyer shall realize any
operation profit or loss from the operation of the Business after
the Effective Date. Accordingly, the Seller agrees to consult ABT
on any material issues or contracts which relate to a period of
time beyond March 1, 1995. Furthermore, the Seller agrees not to
enter into any new capital obligations or capital expenditures
which relate to the Division's Business prior to the Closing.
Notwithstanding the foregoing, the cash portion of the
Purchase Price due to Seller at the Signing pursuant to Subsections
2(a), (c) and (e) above, as reduced pursuant to Subsection 2(g)
above, shall be adjusted at Closing (as hereinafter defined) as
follows: Seller will pay Buyer for March business according to the
following formula: Accounts Receivable collected during March less
Accounts Payable paid in March less agreed upon March operating
expenses paid by Seller. If such formula results in a negative
dollar amount, then Buyer will pay such amount to Seller.
(B) Escrow. Upon the execution of this Agreement, Buyer
shall deliver to the Seller's counsel, Shook, Hardy & Bacon P.C.,
with offices at One Kansas City Place, 1200 Main Street, Kansas
City, MO 64105, the Escrow Agent hereunder, a portion of the cash
payment of the Purchase Price payable to Seller pursuant to Section
2A(g) hereunder, in the amount of two hundred thousand ($200,000)
dollars (the "Escrow Funds"). Upon the satisfaction of the
conditions provided for in Sections 11, 12 and 13 below and the
Closing occurring, the Escrow Funds shall be released from escrow
to the Seller in accordance with the terms and conditions of the
Escrow Agreement, in the form attached hereto as Exhibit 2(B). In
the event that this Agreement is terminated and the Closing does
not occur, the Escrow Funds shall be returned to Buyer without
setoff or deduction in accordance with the terms and conditions of
the Escrow Agreement.
Section 3. Excluded Assets. Seller shall retain ownership of
all of the assets of the Division's Business, except for those
assets transferred to Buyer pursuant to this Agreement, including,
but not limited to, the corporate records (but not the business
records) of the Division relating to the Division's Business, those
assets more specifically listed on Schedule 3(a) attached hereto,
the goodwill of the Division's Business, all trade names and
trademarks not specifically listed on Schedules 1(f) and 1(g),
respectively, attached hereto (the "Excluded Assets").
Section 4. Non-Assumption of Liabilities. It is understood
and agreed by the parties hereto that the Assets will be sold,
conveyed, transferred and assigned to the Buyer at the Closing free
and clear of all liens, charges and encumbrances whatsoever, and it
is further understood and agreed by the parties hereto that the
Buyer does not assume, accept or undertake any obligations,
commitments, duties, debts or liabilities of any kind whatsoever
(the "Obligations"), except for the Obligations assumed by Buyer
pursuant to this Agreement.
Section 5. Closing. The closing of the sale and purchase of
the Assets provided for in Section 1 of this Agreement (the
"Closing") shall take place at the offices of counsel to the
Seller, Shook, Hardy & Bacon P.C., One Kansas City Place, 1200 Main
Street, Kansas City, Missouri 64105-2118, on the __th day of April
1995, or such other time and place as the parties may agree. The
day on which the Closing occurs is sometimes hereinafter referred
to as the "Closing Date."
Section 6. Representations and Warranties of the Seller. The
Seller warrants and represents to the Buyer and ABT as follows:
(a) Title. Except as set forth in Schedule 6(a) of this
Agreement, the Seller owns, and at Closing shall have, good, valid
and marketable title to the Assets and full right to transfer title
to the Assets free and clear of all liens, mortgages, charges,
liabilities, claims, security interests or encumbrances of every
type whatsoever.
(b) Capacity; Organization; Standing. The Seller has full
capacity to enter into and perform under this Agreement, and all
other agreements to be entered into in connection with the
transactions contemplated hereby, (the "Other Agreements") and to
consummate such transactions; and no other consent or joinder of
any other persons or corporations is required. This Agreement has
been, and each of the Other Agreements executed hereunder will at
the Closing, be duly authorized, executed and delivered by the
Seller. This Agreement constitutes, and each of the Other
Agreements will constitute, the legal, valid and binding
obligations of the Seller enforceable in accordance with their
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 Seller is duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Seller
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 Seller requires such
qualification. The Seller has all necessary licenses and authority
to operate its business as now being conducted in the States of
Indiana and Kentucky.
(c) Legal Proceedings. Except as set forth in Schedule 6(c)
of this Agreement, the Seller is not a party to any pending
litigation, arbitration or administrative proceeding or
investigation, with respect to or relating to the Assets and, to
the Seller's best knowledge and belief, no litigation, arbitration
or administrative proceeding or investigation that would have a
material adverse effect on the Assets is threatened.
(d) Trade Names and Trademarks, etc. With respect to the
Division's Business, the Seller owns the trade names and trademarks
as set forth on Schedules 1(f) and 1(g). The Seller has not
granted, and will not grant prior to the Closing, licenses or other
rights to use such trade names and trademarks. Except as disclosed
in Schedules 1(f) and 1(g), no other trade names or trademarks are
owned or used by the Division in relation to the Division's
Business. To The Seller's best knowledge and belief, the operation
of the Division's Business does not infringe on the trade names,
trademarks or any other intellectual property rights of any third
party. No claim has been made that there is any such infringement.
To the Seller's best knowledge and belief, no trade name or
trademarks of any person infringes the trade names or trademarks
which relate to the Division's Business.
(e) Description of Material Contracts. Schedule 6(e)
contains a complete and correct list as of the date hereof of all
agreements, contracts and commitments, obligations and
understandings (the "Assigned Agreements") which are not set forth
in any other Schedule delivered hereunder, of the following types,
written or oral, which related to the Division's Business and that
the Seller is a party or by which it or any of its properties are
bound as of the date hereof. The Assigned Agreements constitute
all of the material contracts, leases and other agreements related
to the operation of the Division's Business. To the Seller's best
knowledge and belief, all of the Assigned Agreements constitute
valid and legally binding obligations of the parties thereto,
enforceable in accordance with their 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, are in full
force and effect and, except as otherwise specified in Schedule
6(e), are validly assignable to Buyer without the consent of any
party so that, after the assignment thereof to Buyer pursuant
hereto, Buyer will be entitled to the full benefits thereof. To
the Seller's best knowledge and belief, there is not thereunder any
existing default, or event which after notice or lapse of time, or
both, would constitute a default or result in a right to accelerate
or loss of rights, and none of such contracts, agreements, leases,
licenses or commitments is unduly burdensome, onerous or materially
adverse to the Assets or the Division's Business. Seller has not
received any notice of termination of any Assigned Agreement. True
and complete copies of all of the Assigned Agreements have been
delivered to Buyer.
To the Seller's best knowledge and belief, no agreement,
contract commitment, obligation or undertaking listed on Schedule
6(e) to which the Seller is a party or by which any of its
properties is bound, except as specifically set forth in Schedule
6(e), contains any provision which materially adversely affects or
in the future may (so far as the Seller can now foresee) materially
adversely affect the Assets.
(f) Default; Violations of Restrictions. The Seller is not
in default under, nor has any event occurred which, with the lapse
of time or action by a third party, could result in a default under
any outstanding note, indenture, mortgage, contract or agreement to
which it is bound, relating to the Assets. Except as declared in
Schedule 6(f), the execution, delivery and performance of this
Agreement and of any agreement to be executed and delivered by; the
Seller pursuant hereto, 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) 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 or
acceleration or otherwise be in conflict with or result in a loss
of contractual benefits to the Seller, as such relates to the
Assets, 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 Seller is a party or by which it may be
bound, or require any consent, approval or notice under the laws of
any such document or instrument; or result in the creation or
imposition of any lien, claim, restriction, charge or encumbrance
upon the Assets.
(g) Court Orders and Decrees. Except as set forth on
Schedule 6(g), the officers of Seller have 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 Assets.
(h) Approvals and Authorizations. The Seller has obtained
all necessary consents, approvals or authorizations in connection
with the transactions contemplated hereby, which are required by
law or otherwise in order to make this Agreement binding upon the
Seller.
(i) Governmental Licenses. Schedule 6(i) attached hereto
contains a correct and complete list of all governmental and
administrative consents, permits, appointments, approvals,
licenses, certificates and franchises which are required in
connection with Seller's execution, delivery or performance of this
Agreement, all of which have been obtained and are in full force
and effect. Seller has not received any notice of any material
violation with respect to any such consents, permits, licenses or
other regulatory orders and which remain unabated. Except as set
forth on Schedule 6(i), Seller, to its best knowledge, is in
material compliance with all Laws and Environmental Laws now or
hereafter applicable to the Division's Business, its properties or
operations as presently conducted.
(j) Hazardous Material and Nuisance. To The Seller's best
knowledge and belief, except as disclosed on Schedule 6(j) attached
hereto, there are no known claims or potential claims which may
exist against the Seller relating to the Division's Business and/or
the Assets, 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 Seller 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 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.
(k) Employee Benefit Plans. Except as disclosed on Schedule
6(k) attached hereto, there is not now nor, since Seller has owned
the Division's Business, has there ever been any "Employee Benefit
Plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), or any other profit
sharing, deferred compensation, bonus, stock option, stock
purchase, pension or other compensation plan, or any other plan or
arrangement to benefit employees maintained or contributed to by
the Seller or any person, firm or corporation (an "Affiliate")
under "common control" (within the meaning of Section 401(b) of
ERISA) with the Seller and in which any of the employees of the
Seller or any Affiliate participates or is eligible to participate.
No funding deficiency exists or has existed with respect to any
Employee Benefit Plan covering any present or former employee of
the Seller or any Affiliate which may cause or result in a lien
upon any of the Assets.
(l) Absence of Certain Business Practices. Neither the
Seller, nor to the best knowledge and belief of Seller, any
officer, employee or agent of the Seller 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
Division's Business (or assist the Seller in connection with any
actual or proposed transaction) which (i) might subject the Seller
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
Division, or (iii) if not continued in the future, might adversely
affect the Assets, the Division's Business or its operations or
prospects, or which might subject the Seller to suit or penalty in
any private or governmental litigation or proceeding.
(m) Brokers. Seller has not entered into and will not enter
into any agreement, arrangement or understanding with any person or
firm which will result in an obligation of Buyer or ABT to pay any
finder's fee, brokerage commission, or similar payment in
connection with the transactions contemplated by this Agreement.
(n) Financial Statements. Seller has delivered to Buyer
during the process of Buyer's due diligence investigation copies of
all financial statements requested by Buyer (hereinafter
collectively called the "Division's Financial Statements") and
which are attached hereto as Exhibit 6(n). The Division's
unaudited Financial Statements were prepared by Management of the
Seller in the ordinary course of business for periods through and
including the month ending February 28, 1995 (the "Balance Sheet
Date") and are complete and correct, have been prepared from the
books and records of the Division and fairly present the financial
condition of the Division as at their respective dates and the
results of the Division's operations for the periods covered
thereby, and are true and correct statements of the financial
condition of the Division's Business at such Balance Sheet Date,
and do not include or omit to state any fact which renders such
Division's Financial Statements false or misleading.
(o) Absence of Undisclosed Liabilities and Conditions.
Except as and to the extent reflected or reserved against on the
face of the Division's Financial Statements, or as set forth on
Schedule 6(o) attached hereto, as of the Closing Date, the
Division, to Seller's best knowledge and belief, had no material
debts, liabilities or obligations (whether due or to become due,
absolute, accrued, contingent or otherwise) of any nature
whatsoever, including, without limitation, any foreign or domestic
tax liabilities or deferred tax liabilities incurred in respect of
or measured by the Division's income, or its period prior to the
Closing or any other material debts, liabilities or obligations
relating to or arising out of any act, transaction, circumstance or
state of facts which occurred or existed on or before the Closing
Date, whether or not then known, due or payable. The Division's
Financial Statements do not include any assets or liabilities of
any entity other than the Division's Business nor any expense of
any entity other than the Division's Business. Seller does not
know of any currently existing facts that materially adversely
affect or are likely in the future to materially adversely affect
the Assets.
(p) Compliance with Laws. Except as disclosed on Schedule
6(p), the operations and activities of the Division concerning the
Assets 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 and belief, neither the ownership nor use of the Assets
nor the conduct of the Division's Business 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, except with respect to the IRB, will violate,
conflict with or result in a default, rights to accelerate or loss
of rights under, any terms or provisions of its Certificate of
Incorporation or Bylaws as presently in effect, or any lien,
encumbrance, mortgage, deed of trust, lease, license, agreement,
understanding (hereinafter collectively referred to as "Liens"), or
Laws to which Seller is a party or by which it or the Assets may be
bound or affected. Seller has received no notice of communication
from any third party asserting a failure to comply with any Laws,
nor has Seller received any notice that any authority or third
party intends to seek enforcement against Seller to compel
compliance with any such Laws.
(q) Taxes. To Seller's best knowledge, all taxes, including,
without limitation, income, property, sales, use, franchise, added
value, employees' income withholding and social security taxes,
imposed by any governmental entity whatsoever, which are due or
payable by Seller in connection with Division's Business, and all
Interest and penalties thereon, have been paid in full, all tax
returns required to be filed in connection therewith have been
timely filed and all deposits required by law to be made by Seller
with respect to employee's withholding taxes have been duly made.
Seller has not been delinquent in the payment of any tax,
assessment or governmental charge or deposit and, to its best
knowledge, has no tax deficiency or claim outstanding, proposed or
assessed against it. Except for amounts accrued, but not payable
which are assumed by Buyer, as of the Effective Date, (i) Seller is
not liable for the payment of any taxes relating to the Assets or
the operation of the Division's Business, and (ii) Buyer shall have
no liability for any taxes related to the ownership or operation of
the Assets or the Division's Business prior to the Effective Date.
Seller does not know of any tax deficiency or claim outstanding,
proposed, or assessed against it with respect to any taxes,
including, without limitation, income, property, sales, use,
franchise, value-added, employees' income withholding, and social
security taxes imposed by the United States or by any foreign
country or by any state, municipality, subdivision, or
instrumentality of the United States or of any foreign country, or
by any other taxing authority that could have a material effect on
Buyer, the Assets, or the Division's Business, or result in the
imposition of a tax lien upon any of the Assets.
(r) Absence of Changes or Events. Without limiting the
foregoing, since the Balance Sheet Date and through the Signing
Date, to the best of Seller's knowledge and belief, there has been
no material adverse change in the Division's Business. Except as
set forth in Schedule 6(r) attached hereto, since the Balance Sheet
Date, Seller has conducted its business only in the ordinary course
and, to the best of its knowledge, has not:
[i] Incurred any obligation or liability, except current
liabilities for trade or business obligations incurred in the
ordinary course of business and consistent with its prior practice,
none of which liabilities materially and adversely affects the
Assets or the Division's Business;
[ii] Mortgaged, pledged or subjected to lien, charge,
security interest or any other encumbrance or restriction on any of
the Assets;
[iii] Except for the sale of Inventory and the
collection of Accounts Receivable, in the ordinary course of
business, sold, transferred, leased to others or otherwise disposed
of any of the Assets;
[iv] Received any notice of termination of any agreement
or suffered any damage, destruction or loss which has had or, with
the passage of time, could have a materially adverse effect on the
Assets or Division's Business;
[v] Made any change in its pricing, advertising or
personnel practices inconsistent with its prior practice and
prudent business practices prevailing in the industry;
[vi] Suffered any change, event or condition which, has
had or may have a materially adverse effect on the Assets,
Division's Business or the operations or prospects thereof;
[vii] Entered into any transaction, contract or
commitment other than in the ordinary course of business; or
[viii] Instituted, settled or agreed to settle any
litigation, action or proceeding before any court or governmental
body relating to the Division, the Assets or the Division's
Business (except collection actions on Seller's accounts
receivable).
(s) Real Property. Schedule 1(b) sets forth a true and
complete list of all real property used in connection with the
Division's Business and all interests therein of Seller including,
but not limited to, all fees, leaseholds, liens, licenses,
easements and rights of way. Seller has all easements, rights of
way, licenses and rights of ingress, egress and for utilities and
services and other rights of any nature necessary for all
operations presently conducted by it. To the best of Seller's
knowledge and belief, and except to the extent of the Permitted
Encumbrances or as set forth in any other schedule hereto, there
are no existing claims or disputes with persons owning or occupying
land adjoining or near any of the Real Property regarding the
location of boundary lines or encroachments. Seller has received
no notice or communication with respect to any pending or
threatened change of any zoning, land use, environmental or other
law or regulation affecting the Real Property, nor has Seller
received any notice of any pending or threatened condemnation of
such property.
(t) Inventories. All Inventory consists of items purchased
in the ordinary course of the Division's Business. All Inventory
has been fully paid for or accrued by Seller, except as set forth
on Schedule 1(a) attached hereto.
(u) Labor Relations. The Seller in connection with the
Division's Business is not (i) a party to any collective bargaining
agreement relating to any of the employees and has not recognized
and is not required to recognize and has not received a demand for
recognition by any collective bargaining representative, (ii) a
party to any contract with and had no liability to, any of its
employees, agents, consultants, officers, sales representatives,
distributors or dealers that is not cancelable by Seller without
penalty on not more than thirty (30) days' prior notice, except as
set forth on Schedule 6(v) attached hereto, (iii) subject to any
strike or work stoppage in effect or threatened against the
Division's Business nor has any strike or work stoppage been
organized by any order, writ, injunction or decree of any court or
federal, state, municipal or other governmental agency or
instrumentality.
(v) Customer Lists. All agreements, arrangements or
commitments with or respecting any customer of the Seller to which
the Seller, in connection with the Division's Business, is a party
or is bound have been described in Schedule 1(j) attached hereto
except for those not involving a consideration less than $100 per
annum.
(w) Schedules. The Seller has delivered to the Buyer
complete and correct schedules, in form and substance reasonably
acceptable to the Buyer, as of the date of this Agreement, and
complete and correct copies of the documents and other material
from which such schedules were complied.
(x) Accuracy. No representation, warranty, covenant or
statement by the Seller in this Agreement, the Schedules attached
hereto and the certificates or other documents 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 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 7. Representations and Warranties of the Buyer and
ABT. Each of the Buyer and ABT, jointly and severally, warrants
and represents to the Seller as follows:
(a) Capacity. The Buyer and ABT have full right, power and
capacity to execute, deliver and perform their respective
obligations under this Agreement and the other documents required
to be executed by; the Buyer or ABT 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 ABT 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
or ABT is a party or by which they are bound.
(b) Organization.
(i) 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 and
will be duly qualified and in good standing in the States of
Indiana and Kentucky prior to the Closing Date.
(ii) ABT 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. ABT
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.
(c) 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 and ABT's execution, delivery or
performance of this Agreement. The Buyer and ABT shall execute,
deliver and perform its obligations under this Agreement and no
consent or other approval or any other party is required to be
obtained by the Buyer or ABT in connection with the transactions
contemplated hereby.
(d) Capitalization. The ABT Common Stock to be issued at
Closing to the Seller pursuant to Section 1(b) above will, when
issued, be duly authorized, validly issued, fully paid and
non-assessable and registered with the Securities and Exchange
Commission. The authorized capital stock of ABT consists of
10,000,000 shares of Preferred Stock, $.01 par value per share, of
which no shares have been issued or are outstanding as of the date
hereof and of 30,000,000 shares of Common Stock, $.001 par value
per share, of which 7,138,000 have been issued or are outstanding
as of March 28, 1995. There are 122,000 Class A Warrants
outstanding Common Stock, 1,600,000 Class B Warrants outstanding
and 2,200,000 Class C warrants to purchase 122,000, 1,600,000 and
2,200,000 shares of Common Stock, respectively.
(e) Legal Proceedings. Neither ABT nor the Buyer 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 and adverse change in the financial condition, business or
properties of the Buyer or ABT and to the best of their respective
knowledge no such litigation, arbitration, proceeding or
investigation is threatened.
(f) Misrepresentations and Omissions. No representation,
warranty, covenant or statement by the Buyer or ABT in this
Agreement, any Exhibit attached hereto, the Schedules attached
hereto and the certificates or other documents furnished or to be
furnished to the Seller pursuant hereto (including the Schedules,
if any, provided for in this Section 7 and Exhibits thereto),
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.
(g) Binding Obligation. This Agreement, and any other
agreement required to be delivered by Buyer or ABT pursuant to this
Agreement, has been duly executed and delivered by the Buyer and
ABT and constitutes the legal, valid and binding obligation of the
Buyer and ABT, enforceable against the Buyer and ABT 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 ABT 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.
(h) Financial Statements. ABT has delivered to Seller a copy
of its most recent Form 10-KSB, as amended, and Form 10-QSB filed
by ABT with the Securities and Exchange Commission (collectively,
the "ABT Financial Statement"), which fairly present the
consolidated financial condition of ABT as of September 30, 1994
and December 31, 1994, respectively. Except as disclosed on
Schedule 7(h), Buyer has no material debts, liabilities or
obligations of any nature whatsoever relating to or arising out of
any act, transaction, circumstance or state of facts which occurred
or existed on or before the date of the ABT Financial Statement,
whether or not then known, due or payable. To the best of the
knowledge and belief of Buyer and ABT, there has been no material
adverse change in financial condition of ABT since the ABT
Financial Statement.
(i) Brokers; Finders. No agent, broker, investment banker,
person or firm acting on behalf of the Buyer or ABT or any firm or
corporation affiliated with the Buyer or ABT or under their
authority is or will be entitled to any brokers' or finders' fee or
any other commission or similar fee directly or indirectly from the
Seller or any entity affiliated with the Seller in connection with
any of the transactions contemplated hereby.
(j) ABT Shares. The ABT Shares, when held by the Seller
pursuant to Section 2(A)(b) above, shall be: (i) validly issued,
fully paid and non-assessable; (ii) validly and irrevocably
transferred to Seller by the previous beneficial owner thereof for
full and valid consideration; (iii) except for the restrictions on
transfer expressly provided for in the Lock-Up Agreement, fully
transferable without restriction or limitation, including, but not
limited to, without restriction pursuant to Rule 144 promulgated
pursuant to the Securities Act of 1933 (the "Act") or any other
rules promulgated under the Act; (iv) the transfer of the ABT
Shares to the Seller pursuant to Section 2(A(b) of the Agreement
and the resale of the ABT Shares by the Seller in the manner
contemplated by the Agreement and the Lock-Up Agreement shall be
exempt from the registration requirements of the Act and any
applicable state securities laws; and (v) ABT will continue to use
its best efforts to have its ABT Common Stock qualified for trading
on the Nasdaq SmallCap Market.
(k) Section 13(d) Filing. The ABT Shares issued to Seller
pursuant to Section 2(b) of this Agreement constitute less than
five percent (5%) of the issued and outstanding shares of ABT
Common Stock.
(l) Hart-Scott-Rodino Filing. With respect to the
consummation of the transactions contemplated by this Agreement, no
filing is required to be made with the Federal Trade Commission or
the United States Department of Justice pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Section 8. Survival of Representations and Warranties;
Indemnification.
(a) Survival of Representations and Warranties. All
representations and warranties made by the Seller or the Buyer and
ABT 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 and through the first anniversary of the Closing Date
(the "Survival Date").
(b) Indemnity on Outstanding Obligations. The Seller hereby
agrees to indemnify, defend and hold harmless the Buyer and ABT
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, in the event that it is determined after the date
hereof that 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 6 made by the Seller; (ii) the
non-performance by the Seller in any material respect of any
covenant, agreement or obligation to be performed by the Seller
under this Agreement (except for any such covenant, agreement or
obligation which survives the Closing); or (iii) Seller and Buyer
hereby waive compliance with the provisions of applicable bulk
transfer laws, if any, in connection with the sale of the Assets to
Buyer. With regard to all Assumed Liabilities set forth on
Schedule 1(m), Seller agrees to (i) bear all costs and expenses
associated with any and all claims, losses, liabilities, costs and
expenses that Seller or Buyer may incur as a consequence of any
such laws and (ii) indemnify Buyer and hold Buyer harmless against
any financial liability incurred by Buyer arising out of or
relating to any such matter. Buyer shall give Seller prompt
written notice of any claims of which it is aware made against the
Assets under any applicable bulk transfer law, and shall not settle
any such claim without Seller's written consent.
The Buyer and ABT, jointly and severally, hereby agree to
indemnify, defend and hold harmless the Seller from and against all
Claims arising out or relating to claims made prior to the Survival
Date, in the event it is determined after the date hereof that
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 7 made by the Buyer or ABT, (ii) the non-performance by the
Buyer or ABT in any material respect of any covenant, agreement or
obligation to be performed by the Buyer or ABT under this Agreement
(except for any such covenant, agreement or obligation which
survives the Closing), or (iii) any and all liabilities and
obligations relating to the Division's Business that accrue, arise
or are based upon events occurring after the Effective Date.
Whenever any claim shall arise for indemnification hereunder,
the party seeking indemnification (the "Indemnitee") shall notify
the indemnifying party (the "Indemnitor") in writing within 20 days
after the Indemnitee has actual knowledge of the facts 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 its expense and through counsel of its own
choosing if the Indemnitor gives written notice of its intention to
do so to the Indemnitee within 30 days after receipt of the Notice
of Claim.
Notwithstanding anything to the contrary contained herein, (i)
if there is a reasonable probability that the Claim may materially
and adversely affect the Indemnitee other than as a result of money
damages or other money payments, the Indemnitee shall have the
right to defend, compromise or settle the Claim; PROVIDED, HOWEVER,
in such event, if the Indemnitee shall compromise or settle such
Claim without the approval of the Indemnitor, the Indemnitor shall
not be bound by such compromise or settlement, and (ii) the
Indemnitor shall not, without the Indemnitee's written consent,
settle or compromise the Claim or consent to entry of any judgment
that does not include as an unconditional term thereof the release
by the claimant or the plaintiff of the Indemnitee from all
liability in respect of the Claim.
Notwithstanding any provision of this Agreement to the
contrary, no claim for indemnification, pursuant to this Section 8,
by any of the parties hereto shall be asserted or claimed except to
the extent of damages exceeding, in the aggregate, the sum of
$15,000. Seller's liability to Buyer and ABT pursuant to this
Section 8, shall not exceed the Purchase Price calculated pursuant
to Section 2.
Section 9. Covenants of the Seller. The Seller hereby
covenants and agrees:
(a) Further Assurances. The Seller hereby agrees that from
time to time at the reasonable request of the Buyer or ABT, and
without further consideration, to execute and deliver such
additional instruments and to take such other action as the Buyer
or ABT may reasonably requires to convey, assign, transfer and
deliver the Assets and otherwise to carry out the terms of this
Agreement.
(b) Access to Information. Subsequent to the date hereof and
prior to the Closing Date, the Seller will continue to give to the
Buyer, ABT, their counsel, accountants, and other representatives,
full and free access to all properties, books, contracts,
commitments and records of the Seller relating to the Assets so
that the Buyer and ABT may have full opportunity to make such
investigation as it shall desire. No information or knowledge
obtained either independently or as a result of investigation of
the Seller shall diminish or otherwise affect the representations
and warranties of the Seller, In the event that this transaction
is not completed for any reason, the Buyer, ABT and their
representatives agree to keep confidential and not disclose any
matters relating to the Division's Business.
(c) The Seller shall execute and deliver all instruments and
documents required under Section 11 as a condition precedent to the
Closing under Section 11 hereof and take all action required to
carry out the terms of this Agreement and to consummate the
transactions countersigned hereby.
(d) From the date of this Agreement to the Signing Date,
except as expressly disclosed in the Schedules to this Agreement,
Seller 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.
Section 10. Covenants of Buyer and ABT. The Buyer and ABT
hereby covenant and warrant as follows:
(a) Noninterference. The Buyer and ABT 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 7 of this
Agreement, or (ii) would interfere with the Buyer's or ABT'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.
(b) Closing Documents. The Buyer and ABT shall execute and
deliver all instruments and documents required under Section 12 as
a condition precedent to the Closing hereof and take all action
required to carry out the terms of this Agreement and to consummate
the transactions contemplated hereby.
(c) Payment of Sales and Personal Property Taxes. The Buyer
will pay all taxes (exclusive of Seller's income taxes) payable in
connection with the sale, assignments, transfers, conveyances and
deliveries hereunder including all applicable sales tax with
respect to the sale of the Assets exclusive of income taxes of the
Seller, Notwithstanding the foregoing, in the event that any of
the Assets are deemed to be tangible assets by any federal, state,
local or other taxing authority for which sales taxes are required
to be paid, then and only then shall the Buyer and the Seller each
pay one-half of all such sales taxes due.
(d) Access. Buyer agrees to preserve and provide Seller and
its representatives with access to all such business records that
are provided by Seller to Buyer in connection with this transaction
at all times for all reasonable purposes for a period of seven (7)
years following the closing.
(e) Section 13(d) Filing. For so long as Seller continues to
hold ABT Shares pursuant to the Lock-Up Agreement, such ABT Shares
shall constitute less than five percent (5%) of the issued and
outstanding shares of ABT Common Stock.
(f) Employment.
(A) All employees of the Division employed in connection
with the Division's Business will be terminated effective as of the
Signing Date. Seller shall pay all such employees, on or before
five (5) business days after the Signing Date, all compensation
earned by them through the Signing Date, and Buyer shall reimburse
Seller for such payments pursuant to the last paragraph of Section
2(A). Buyer agrees to use its best efforts to hire all such
employees terminated by Seller. Buyer shall allow all continuing
employees to take their respective accrued vacation leaves. No
severance pay will be due or owing to any employee. Seller agrees
to use its best efforts to assist Buyer in hiring any of such
employees as Buyer determines in its sole discretion.
(B) (i) Buyer agrees to provide a medical insurance
plan for Division employees who continue to work for Buyer to be
effective as of the Closing Date of this Agreement and will make a
good faith effort for that plan to be without a pre-existing
condition provision.
(ii) Seller shall be responsible for all covered
health benefit services provided to Division employees through
February 28, 1995. Buyer agrees to reimburse Seller for the net
expense of medical benefit coverage provided to Division employees
after February 28, 1995 through March 31, 1995.
(iii) In the event Buyer needs additional time to
establish a medical insurance plan without a pre-existing condition
provision which both Buyer and Seller agree is in everyone's best
interest, Seller agrees to continue to provide medical benefits to
Division employees under Seller's medical insurance plan through
April 10, 1995, and Buyer agrees to reimburse Seller for the
expense of any medical benefit services provided to Division
employees during this extended period.
(iv) Seller will not continue life insurance or
long term disability insurance after the Closing Date, but Buyer
agrees to reimburse Seller for such costs from March 1, 1995
through the Closing Date pursuant to the last paragraph of Section
2(A) of this Agreement.
Section 11. Conditions Precedent to the Buyer's Obligations.
The obligations of the Buyer under this Agreement are subject to
the following conditions (any of which may be waived in writing in
whole or in part by the Buyer):
(a) There shall not have been any material breach of the
representations, warranties, covenants and agreements of the Seller
contained in this Agreement or the Schedules hereto and all such
representations and warranties shall be true at all times on or
before the Closing as if given at such time, except to the extent
that any such representation or warranty is expressly stated to be
true as of some other time.
(b) The Seller 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 it
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 a certificate dated the
date of the Closing and signed by the Seller, certifying that the
conditions specified in subsections (a) and (b) above have been
fulfilled.
(d) The Buyer shall have received a certificate dated the
date of the Signing and signed by the Seller, certifying that there
has been no material adverse change in the Assets.
(e) The Seller shall have obtained and delivered to the Buyer
any required consents or approvals of any other third parties whose
consent is required to the transactions contemplated hereunder.
(f) The Buyer shall have received a written opinion of
counsel for the Seller dated as of the Closing Date, in the form of
Exhibit 11(f) hereto.
(g) The Buyer shall have received a bill of sale or bills of
sale and documentation and such other good and sufficient
instruments of transfer and conveyance as, in the reasonable
opinion of counsel to Buyer, shall be effective to vest in the
Buyer good and valid title to the Assets, as herein provided.
(h) The Buyer shall have received the Assets sold to Buyer
hereunder as described in Section 1 hereof.
(i) The Buyer shall have received Certified resolutions of
the Seller's Board of Directors authorizing the transactions
contemplated by this Agreement.
(j) The Buyer shall have received at the Closing a
satisfactory title opinion, or title insurance with regard to the
real property interests transferred to Buyer.
(k) The Buyer shall have received from the Seller pursuant to
Section 2(e) above, agreements in the form of Exhibit 2(e) attached
hereto, whereby the Seller and certain of its executive officers
listed on Schedule 2(e) attached hereto agree, for a period of five
years from the Closing Date, not to compete with the Buyer or ABT
in selling any products to current customers of the Division's
Business as existing on the Closing Date. Such agreement shall be
reasonably satisfactory in form and substance to counsel for the
Buyer.
The Non-Competition Agreement shall not prohibit Seller from
continuing or expanding to sell its separate hybrid seed corn or
soybean products to customers, including such customers who are
customers of Division's Business as existing on the Closing Date.
(l) The Buyer shall have completed its due diligence review
to its satisfaction and, among other things; (i) determined that a
satisfactory percentage of customers of Division's Business will
continue to do business with Buyer following the Signing; and (ii)
agreed with Seller upon a value of all Assets.
(m) The Buyer shall have received and reviewed the copy of
the last environmental audit performed on Division's Business
attached hereto as Exhibit 11(m), which does not include any
adverse information which would have a materially adverse effect on
the Assets.
(n) The Buyer shall have received assumption and assignment
agreements for each agreement as set forth on Schedule 11(0)
attached hereto, requiring such agreement to be executed in order
to be assigned and such other good and sufficient instruments of
conveyance, assignment and transfer, in form and substance
satisfactory to buyer, as shall be effective to vest in Buyer good
and marketable to the Assets to put Buyer in actual possession and
operating control thereof and to assist Buyer in exercising all
rights with respect thereto.
(o) All persons mutually agreed to between Seller and Buyer
shall have entered into employment agreements with Buyer.
(p) The Seller shall have entered into a Lock-Up Agreement
with Buyer and ABT in the form of Exhibit 12(h) attached hereto,
providing for the orderly liquidation of the 158,000 ABT Shares
issued as part of the Purchase Price.
(q) Since the Balance Sheet Date and through the Signing
Date, there shall not have occurred any material change in the
Assets or the condition (financial or otherwise) of the Division's
Business, its properties or prospects.
(r) The Buyer shall have received all contracts, customer
files and business records relating to the Assets, but excluding,
lists, corporate records and any other Excluded Assets.
(s) The Buyer shall have received all documents required to
be delivered to Buyer under any other provision of this Agreement.
(t) The Buyer shall have received a Certificate of Incumbency
identifying the officers and directors of the Seller immediately
before closing.
Section 12. Conditions Precedent to the Seller's Obligations.
The obligations of the Seller under this Agreement are subject to
the following conditions (any of which may be waived in writing in
whole or in part by the Seller):
(a) There shall not have been any material breach of the
representations, warranties, covenants and agreements of the Buyer
or ABT 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 and ABT 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
Shook, Hardy & Bacon P.C., counsel for the Seller.
(c) The Seller shall have received a certificate dated the
date of the Closing and signed by the Buyer and ABT, certifying
that the conditions specified in subsections (a) and (b) above have
been fulfilled.
(d) The Seller shall have received a written opinion of
counsel for the Buyer and ABT, dated as of the date of Closing, in
the form of Exhibit 12(d) attached hereto.
(e) At the Signing, the Seller shall have received a
certified or bank cashier's check, payable to the order of the
Seller in the amount of the Cash portion of the Purchase Price as
set forth in Section 2(A) above, of $1,482,411.11 subject to
adjustment as set forth on Schedule 2(A)(h) attached hereto.
(f) The Seller shall have received certificates evidencing
158,000 shares of registered Common Stock of ABT registered in such
names and denominations designated by Seller, issued as part of the
Purchase Price pursuant to Section 2(b) above.
(g) The Seller shall have received copies of the minutes and
resolutions of the Board of Directors of the Buyer and ABT showing
the authorization and approval by such Boards of the execution and
delivery by the Buyer and ABT to the Seller of this Agreement and
the agreements and instruments provided for herein and of the
performance of the obligations of the Buyer and ABT under this
Agreement and such other instruments and agreements, certified as
of a recent date by each Secretary or another officer of the Buyer
and ABT.
(h) Seller shall have received a certificate of incumbency
identifying the officers and directors of the Buyer and ABT
immediately before Closing.
(i) Seller shall have received an officer's certificate of
Buyer and ABT evidencing its authority to execute this Agreement
and to consummate the transactions contemplated hereby.
(j) Seller shall have received evidence that Buyer has
obtained health insurance coverage for any employees of Seller who
continue to work for Buyer following the Closing Date.
(k) Seller shall have received all documents required to be
delivered to Seller under any other provision of this Agreement.
Section 13. Conditions Precedent to Obligations of Both
Seller and Buyer. The obligations of both the Seller 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) 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.
(b) Due Diligence. Seller and 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.
(c) Consents. Any consent to the transaction considered by
Seller or Buyer to be necessary or advisable under any agreement or
contract, the withholding of which might have, in the judgment of
Seller or 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 Seller
and Buyer and their counsel, and Seller and Buyer and their counsel
shall have received all certified resolutions of the Boards of
Directors of the Seller and the Buyer authorizing the transactions
contemplated by this Agreement, and such other certificates,
documents and instruments, or copies thereof, certified if
requested, as may be reasonably requested.
Section 14. Subsequent Events. The Buyer will receive, at
its own expense, audited financial statements, of the Division's
Business ("Audited Financial Statements"), certified by KPMG Peat
Marwick LLP, independent certified public accountants, for all
periods required of ABT under the rules and regulations of the
Securities and Exchange Commission (the "Rules"). The Seller
hereby agrees to provide Buyer, ABT and their accountants with full
and free access to the books and records of the Division's Business
and to cooperate fully with all such representatives of Buyer so
that the Audited Financial Statements may be prepared on a timely
basis. The Audited Financial Statements shall have been prepared
in accordance with generally accepted accounting principles applied
consistently during the period covered thereto and in accordance
with the Rules and present fairly the financial condition of the
Division's Business in connection with the operation of the
Division's Business on the date of such statements and the results
of operations for the periods covered thereby, and will include all
statements, schedules and information required by the Rules.
Section 15. Termination. (A) This Agreement may be
terminated at any time prior to the Closing Date:
(a) By mutual written consent of Seller and Buyer.
(b) By Buyer or Seller if this transaction is not completed
by April 15, 1995; provided, however, if one party is in compliance
with the terms and conditions of this Agreement and is ready to
close then that party will provide the other party with notice of
its intent to close and provide such non-compliant party with ten
days in order to close the transaction, unless extended by mutual
agreement between Buyer and Seller.
(c) By Buyer or Seller, if any court of competent
jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise
prohibiting the other party from undertaking the transactions
contemplated by this Agreement and such order, decree, ruling or
other action shall not have been withdrawn by 30 days after the
date on which such order, decree, ruling or other action was first
issued or taken.
(d) By Seller or Buyer if a proceeding in bankruptcy or
reorganization of Buyer, ABT, or the Seller or the readjustment or
any of its debts under the Bankruptcy Act, as amended, or any part
thereof, or under any other laws, whether state or federal, for the
relief of debtors now or hereafter existing, shall be commenced by
or against Buyer or the Seller.
(e) By Buyer if Seller has materially breached any of its
representations, warranties or covenants under this Agreement; or
(f) By Seller if Buyer or ABT have materially breached any of
their representations, warranties or comments under this Agreement;
or
(B) In the event of termination of this Agreement, Sections
20, 21 and 27 of this Agreement shall survive any such termination.
Section 16. Bulk Sale Act. The Seller agrees to comply with
the Kentucky and Indiana Bulk Sales Acts or will indemnify and hold
harmless the Buyer for any losses or expenses incurred by; the
Buyer as a result of non-compliance with the Kentucky and Indiana
Bulk Sales Acts.
Section 17. Orderly Transfer. The Seller shall, and hereby
agrees to, cooperate with the Buyer in all reasonable ways, at no
direct or indirect cost to the Seller, in effecting any orderly
transfer to the Buyer of the Assets to be acquired by the Buyer
hereunder.
Section 18. 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 19. Entire Agreement. This instrument, 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 20. Governing Law; Consent to Jurisdiction. This
Agreement and all rights and obligations hereunder shall be
governed by, and construed in accordance with, the laws of the
State of New York, applicable to agreements made and to be
performed wholly within such State, without regard to the conflicts
of laws principles of such State.
Section 21. Expenses. Each party hereto shall pay its 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 22. 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 23. Notices.
(a) All notices, requests consents and demands by the parties
hereunder shall be delivered by hand, or telecopier at the
applicable telecopier numbers designated below (with confirmation
received) by recognized national overnight courier or by deposit in
the United States mail, postage prepaid, by registered or certified
mail, return receipt requested, addressed to the party to be
notified at the addresses set forth below:
(i) if to the Seller to:
L.G. Seeds, Inc.
4001 North War Memorial Drive
Suite 200
Peoria, Illinois 61614
Attention: Mr. J.C. Gouache, President
Telecopier No.: (309) 681-0366
with a copy to:
Shook, Hardy & Bacon, P.C.
One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105-2118
Attention: William W. Mahood, Esq.
Telecopier No.: (816) 421-5547
(ii) if to the Buyer to:
AgriBioTech, Inc.
Quail Park West, Suite 25
2700 Sunset Road
Las Vegas, Nevada 89120
Attention: Johnny Thomas, President
Telecopier No.: (702) 798-8808
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 in Section 23(a) by
written notice to the other parties hereto.
Section 24. Amendment; Non-Waivers. Any provisions of this
Agreement may be amended, if and only if, such amendment is written
and signed by each party to this Agreement. 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 25. Assignment. This Agreement may not be assigned
by any party without the prior written consent of the other
parties.
Section 26. Disclosure. From and after the date of this
Agreement until the Closing or the termination of this Agreement,
the Seller 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 Assets with anyone other than the Buyer; or (ii) unless
otherwise required by law, neither party shall make any public
announcement without prior approval of the language of such
announcement by the other, and in any event, prior to Closing, the
identity of the Seller shall no be disclosed by Buyer.
Section 27. Confidentiality. From and after the date of this
Agreement until the Closing or the termination of this Agreement,
the Buyer and its employees and representatives and the Seller and
its 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 the financing of this
transaction 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.
Section 28. Miscellaneous. Each of the parties hereto shall
use its best 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.
Section 29. Headings. The headings contained herein are for
reference purposes only and shall not affect the meaning of
interpretation of this Agreement.
Section 30. 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.
L.G. SEEDS, INC. (SELLER)
By: /s/ J.C. Gouache
J.C. Gouache, President
SCOTT SEED COMPANY
(Nevada)
By: /s/ Johnny R. Thomas
Johnny R. Thomas, President
AGRIBIOTECH, INC.
By: /s/ Johnny R. Thomas
Johnny R. Thomas, President
SCHEDULES TO THE ASSET PURCHASE AGREEMENT
AMONG L.G. SEEDS, INC., SCOTT SEED COMPANY AND
AGRIBIOTECH, INC.
SCHEDULE NO. DESCRIPTION
1(a) Seller's Inventory
1(b) Seller's real property
1(c) Seller's equipment
1(d) Seller's office furniture and fixtures
1(e) Seller's autos, trucks and other vehicles
1(f) Seller's trade names
1(g) Seller's trademarks
1(i) Seller's accounts receivable
1(j) Customer list
1(k) Pre-paid assets
1(l) Suspense items
1(m)(i) Assumed liabilities
1(m)(ii) Industrial bond obligation
2(a) Purchase price
2(d) Accounts payable
2(f) Signatories to non-competition agreement
2A(h) Adjusted purchase price
3(a) Excluded assets
6(a) Exceptions to title
6(c) Legal Proceedings
6(e) Material agreements, contracts,
commitments,
obligations and understandings
6(f) Violations of restrictions
6(g) Court orders and decrees
6(i) Governmental licenses, permits, etc.
6(j) Environmental claims
6(k) Employee Benefit Plan
6(o) Seller's Undisclosed Liabilities and
Conditions
6(p) Compliance with laws
6(r) Changes outside of ordinary course
6(u) Non-cancelable labor contracts
EXHIBITS TO THE ASSET PURCHASE AGREEMENT
AMONG L.G. SEEDS, INC., SCOTT SEED COMPANY AND
AGRIBIOTECH, INC.
EXHIBIT NO. DESCRIPTION
2(b) Form of Escrow Agreement
2(f) Form of Non-Competition Agreement
6(n) Management Financial Statements
11(f) Form of Seller's Counsel's Opinion Letter
11(m) Environmental Audit
12(d) Form of Buyer's Counsel's Opinion Letter
12(h) Form of Lock-Up Agreement