Document:

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                                                                   EXHIBIT 10.23

                            STOCK PURCHASE AGREEMENT

                             DATED FEBRUARY 14, 2000

                                     BETWEEN

                           EPOCH PHARMACEUTICALS, INC.

                                       AND

                             THE INVESTORS LISTED ON

                                SCHEDULE A HERETO

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                           EPOCH PHARMACEUTICALS, INC.

                            STOCK PURCHASE AGREEMENT

        THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 14th
day of February, 2000, by and between Epoch Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and the persons or entities listed on Schedule A
attached hereto (individually, an "Investor" and collectively, the "Investors").

        WHEREAS, the Company and Investors wish to enter into this Agreement to
set forth the terms of Investors' purchase of securities from the Company.

        NOW THEREFORE, BE IT RESOLVED, that the parties hereto, intending to be
legally bound, hereby agree as follows:

        1. PURCHASE AND SALE OF COMMON STOCK.

               1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, each Investor agrees to purchase, and the Company
agrees to sell and issue to each Investor, at the Closing (as defined in Section
1.2 below), that number of shares of the Company's common stock, $0.01 par value
("Common Stock") set forth opposite such Investor's name on Schedule A (the
"Shares") for the purchase price set forth thereon, which shall not be less than
$7.00 per share.

               1.2 CLOSING.

                    (a) Subject to the satisfaction or waiver of the conditions
set forth in Sections 4 and 5 hereof, the purchase and sale of the Shares to the
Investors shall take place at the offices of Stradling Yocca Carlson & Rauth, a
Professional Corporation, 660 Newport Center Drive, Suite 1600, Newport Beach,
California, at 10:00 a.m., on February 14, 2000, or at such other time and place
as the Company and Investors mutually agree upon, either orally or in writing
(which time and place is designated as the "Closing").

                    (b) Subject to the terms of this Agreement, at the Closing,
the Company shall deliver to each Investor a certificate representing that
number of Shares set forth opposite such Investor's name on Schedule A, against
payment to the Company of the purchase price therefor by wire transfer in the
amount set forth on Schedule A.

        2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

        Except as disclosed in the Schedules attached hereto by reference to the
specific Section or Sections hereof to which the disclosure pertains, the
Company represents and warrants to the Investors as follows:

               2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted. The Company is duly qualified and

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authorized to transact business and is in good standing as a foreign corporation
in each jurisdiction where the nature of its activities and of its properties
makes such qualification necessary, except where failure to so qualify would not
have a material adverse effect upon the Company.

               2.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, $.01 par value ("Preferred Stock"). As of December 31, 1999, there were
issued and outstanding 19,382,410 shares of Common Stock and no shares of
Preferred Stock. Immediately following the Closing all issued and outstanding
shares of the Company's capital stock will have been duly authorized, validly
issued, fully paid and non-assessable and issued in compliance with federal and
state securities laws. The Company has reserved (a) an aggregate of 1,301,812
shares of Common Stock for issuance upon the exercise of certain warrants at an
exercise price of $2.50 per share (the "Exchange Warrants"), (b) an aggregate of
2,500,000 shares of Common Stock for issuance upon the exercise of certain other
warrants at an exercise price of $2.50 per share (the "Private Placement
Warrants"), (c) an aggregate of 1,633,098 shares of Common Stock for issuance
upon the exercise of certain other warrants at an exercise price ranging from
$.30 to $2.50 per share (the "Other Warrants"), and (d) an aggregate of
1,584,243 shares of Common Stock for issuance pursuant to the Company's
Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase
Plans, of which 1,500,370 shares are subject to currently outstanding options.

               From January 1, 2000 through February 9, 2000, approximately
347,400 of the Exchange Warrants and approximately 698,500 of the Private
Placement Warrants were exercised resulting in the issuance of approximately
1,045,900 shares of Common Stock.

               Except as set forth in the immediately preceding sentence, none
of the Common Stock is subject to any preemptive or subscription right, any
voting trust agreement or other contract, agreement, arrangement, option,
warrant, call, commitment or other right of any character obligating or
entitling the Company to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into or
exercisable or exchangeable for Common Stock. Except as set forth on Schedule
2.2 attached hereto, there are no agreements or arrangements pursuant to which
the Company is or could be required to register shares of the Company's capital
stock or other securities under the Securities Act of 1933, as amended (the
"Securities Act"), or other agreements or arrangements (including voting
agreements) with or, to the knowledge of the Company, among any security holders
of the Company with respect to any securities of the Company.

               2.3 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of the
Company's obligations hereunder and the authorization, issuance, sale and
delivery of the Shares has been taken or will be taken prior to the Closing.
This Agreement when executed and delivered by the Company, shall constitute a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (b) as limited
by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies, or (c) to the extent the indemnification provisions
in Section 6.5 below may be limited by applicable federal or state securities
law.

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               2.4 VALID ISSUANCE; COMPLIANCE WITH SECURITIES LAWS. When issued,
sold and delivered in compliance with the provisions of this Agreement and the
Company's certificate of incorporation, the Shares will be duly and validly
issued, fully paid and nonassessable and will be free of any liens,
encumbrances, and restrictions on transfer other than restrictions on transfer
under this Agreement and applicable state and federal securities laws. Assuming
the accuracy of the representations and warranties of the Investors set forth in
this Agreement, the offer, sale and issuance of the Shares as contemplated by
this Agreement are exempt from the registration requirements of the Securities
Act, and have been registered or qualified (or are exempt from registration or
qualification) under the registration, permit, or qualification requirements
under all applicable state securities laws.

               2.5 GOVERNMENTAL CONSENTS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and federal securities commissions after the Closing, which notices will be
filed by the Company on a timely basis.

               2.6 SEC FILINGS. The Company has filed with the Securities and
Exchange Commission (the "SEC") all reports, schedules, forms, statements and
other documents required pursuant to the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), since January 1, 1998
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC Documents"). As of their
respective dates, the SEC Documents complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such SEC Documents. As of their respective dates, (i) none of the SEC
Documents (including any and all financial statements included therein) filed
pursuant to the Securities Act or any rule or regulation thereunder contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, and (ii) none of the SEC Documents (including any and
all financial statements included therein) filed pursuant to the Exchange Act or
any rule or regulation thereunder contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any SEC Document has been revised or superseded by
a later filed SEC Document, none of the SEC Documents (including any and all
financial statements included therein) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in all SEC Documents filed since January 1,
1998 (the "SEC Financial Statements") comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited quarterly
statements, as permitted by Form 10-QSB of the SEC), applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto). The SEC Financial Statements fairly present the financial position of
the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal recurring audit adjustments). The Company does not have
any liabilities or

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obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to be recognized or
disclosed on a balance sheet of the Company or in the notes thereto, except (i)
liabilities reflected in the unaudited balance sheet of the Company as of
December 31, 1998 or the notes thereto (subject to ordinary year-end
adjustments), (ii) liabilities disclosed in any SEC Documents filed by the
Company prior to the date of this Agreement with respect to any period ending,
or date occurring, after December 31, 1998, and (iii) liabilities incurred since
December 31, 1998 in the ordinary course of business consistent with past
practice.

               2.7 FULL DISCLOSURE. The Company has provided Investors with all
the information that Investors have requested for deciding whether to purchase
the Shares. Neither this Agreement nor the representations and warranties
contained herein, nor any other written statements or certificates made or
delivered in connection herewith, when read together, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading.

               2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed on
Schedule 2.8 attached hereto, since December 31, 1998, the Company has conducted
its business only in the ordinary course consistent with past practice, and
there is not and has not been: (i) since December 31, 1998, any condition, event
or occurrence which has had a material adverse effect on the business,
properties, financial condition or results of operations of the Company (a
"Material Adverse Effect"); (ii) since December 31, 1998, any condition, event
or occurrence which as of the date of this Agreement, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect with
respect to the Company; or (iii) since December 31, 1998, any condition, event
or occurrence which, individually or in the aggregate, could reasonably be
expected to prevent or materially delay the ability of the Company to consummate
the transactions contemplated by this Agreement or perform its obligations
hereunder.

               2.9 LITIGATION. Except as disclosed on Schedule 2.9 attached
hereto, there is (a) no suit, action, arbitration or proceeding pending, and (b)
to the knowledge of the Company, no suit, action, arbitration or proceeding
threatened against or investigation pending with respect to the Company that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect with respect to the Company or prevent or materially
delay the ability of the Company to consummate the transactions contemplated by
this Agreement or to perform its obligations hereunder, nor is there any
judgment, decree, citation, injunction, rule or order of any court or
administrative or governmental body or agency (a "Governmental Entity") or
arbitrator outstanding against the Company which, individually or in the
aggregate, has or could reasonably be expected to have, any such effect.

               2.10 NO CONFLICTS OR DEFAULTS. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby do not and will not (a) contravene the certificate of incorporation or
by-laws of the Company or (b) with or without the giving of notice or the
passage of time, (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which the Company is a party
or by which the Company or any of its assets is bound, or any judgment, order or
decree, or any law, rule or regulation to which the Company or any of its assets
is subject, or (ii) result in the creation of, or give any party the right to
create, any lien, charge, security interest, encumbrance or any other right or
adverse interest upon any of the capital stock or assets of the Company.

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               2.11 COMPLIANCE WITH LAWS. The Company holds all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
entities which are material to the operation of the businesses of the Company
(the "Company Permits"). The Company is in compliance with the terms of the
Company Permits, except where the failure so to comply, individually or in the
aggregate, would not have a Material Adverse Effect with respect to the Company.
The businesses of the Company are not being conducted in violation of any law
(domestic or foreign), ordinance or regulation of any Governmental Entity,
except for possible violations which, individually or in the aggregate, do not
and could not reasonably be expected to have a Material Adverse Effect with
respect to the Company.

        3. REPRESENTATIONS AND WARRANTIES OF INVESTORS.

        Each Investor, severally and not jointly, hereby represents and warrants
to the Company as follows:

               3.1 LEGAL POWER. Investor has the power and authority to enter
into this Agreement, to purchase the Shares hereunder and to carry out and
perform its obligations under the terms of this Agreement.

               3.2 DUE EXECUTION. This Agreement has been duly authorized,
executed and delivered by Investor, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding obligation of Investor,
enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (b) as limited
by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies, or (c) to the extent the indemnification provisions
in Section 6.5 below may be limited by applicable federal or state securities
law.

               3.3 INFORMATION. Investor believes that it, or its
representatives, have received all information Investor considers necessary for
evaluating the risks and merits of acquiring the Shares. Investor further
represents that Investor has had the opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the Shares and
the business, properties, prospects and financial condition of the Company. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of Investor to rely
thereon.

               3.4 INVESTMENT REPRESENTATIONS.

                    (a) Investor is acquiring the Shares for its own account,
not as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act .

                    (b) Investor understands that (i) the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
that the securities are "restricted securities" and the Investor must hold the
Shares indefinitely, and that it must, therefore, bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration; (ii) each
certificate representing the Shares will be endorsed with the following legend:

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               "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
               REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
               "1933 ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
               HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
               STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF THE
               COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
               SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
               SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
               THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933
               ACT."

and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no such opinion of counsel shall
be necessary if the sale, transfer or assignment is made pursuant to SEC Rule
144 and the Investor provides the Company with evidence reasonably satisfactory
to the Company and its counsel that the proposed transaction satisfies the
requirements of Rule 144. The Company agrees to remove the foregoing legend from
any securities if the requirements of SEC Rule 144(k) (or any successor rule or
regulation) apply with respect to such securities and the Company and its
counsel are provided with reasonably satisfactory evidence that the requirements
of Rule 144(k) apply.

                    (c) Investor has not been offered the Shares by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by such media.

                    (d) Investor acknowledges that it is able to fend for
itself, can bear the economic risk of its investment and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of acquisition of the Shares and of making an informed
investment decision with respect thereto.

                    (e) Investor's principal place of business or address is as
set forth on the signature page hereto, and, if it is an individual, it does not
reside in any state of the United States other than the state, if any, specified
in its address on the signature page.

                    (f) Investor acknowledges that an investment in the Shares
is speculative and involves a high degree of risk of loss of all or part of
Investor's investment therein.

                    (g) Investor understands that the foregoing representations
and warranties are to be relied upon by the Company as a basis for exemption of
the sale of the Shares under the Securities Act, under the securities laws of
all applicable states and for other purposes. In the event any of such
representations and warranties become inaccurate or untrue prior to the Closing,
the Investor will promptly notify the Company.

                    (h) Investor was not formed for the specific purpose of
acquiring the Shares.

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               3.5 FURTHER REPRESENTATIONS BY FOREIGN INVESTORS. If Investor is
not a U.S. person or entity such Investor hereby represents that it is satisfied
as to the full observance of the laws of such Investor's jurisdiction in
connection with the purchase of the Shares or any use of this Agreement,
including (i) the legal requirements with such Investor's jurisdiction for the
purchase of the Shares, (ii) any foreign exchange restrictions applicable to
such purchase, (iii) any governmental or other consents that may need to be
obtained, and (iv) the income tax and other tax consequences, if any, which may
be relevant to the purchase, holding, redemption, sale, or transfer of the
Shares. Such Investor's purchase of and payment for, and such Investor's
continued beneficial ownership of, the Shares will not violate any applicable
securities or other laws of such Investor's jurisdiction.

        4. CONDITIONS OF THE INVESTORS' OBLIGATIONS AT CLOSING.

        The obligations of Investors under subsection 1.1 of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against Investors unless
consented to by Investors in writing thereto:

               4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing, except those representations and
warranties qualified by materiality, which shall be true and correct in all
respects, with the same force and effect as though such representations and
warranties had been made on and as of the Closing.

               4.2 PERFORMANCE OF OBLIGATIONS. The Company shall have performed
and complied in all material respects with all agreements, obligations and
conditions contained herein that are required to be performed or complied with
by it on or prior to the Closing.

               4.3 COMPLIANCE CERTIFICATE. The Company shall deliver to
Investors at the Closing a Certificate, executed by the President of the
Company, certifying that the conditions specified in subsections 4.1 and 4.2
have been fulfilled.

               4.4 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country that are required in connection with the lawful
sale and issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, the California Commissioner of Corporations, or any
commissioner of corporations or similar officer of any other state or foreign
country having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which Investor and the Company are subject.

               4.5 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents and instruments incident thereto shall be reasonably satisfactory
in form and substance to Investor, which shall have received all such
counterpart original and certified or other copies of such documents as it may
reasonably request.

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        5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.

        The obligations of the Company to Investors under this Agreement are
subject to the fulfillment, on or before the Closing, of each of the following
conditions by Investor:

               5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investors contained in Section 3 hereof shall be true and correct
in all material respects on and as of the Closing, except those representations
and warranties qualified by materiality, which shall be true and correct in all
respects, with the same force and effect as though such representations and
warranties had been made on and as of the Closing.

               5.2 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country that are required in connection with the lawful
sale and issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, the California Commissioner of Corporations, or any
commissioner of corporations or similar officer of any other state or foreign
country having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which Investor and the Company are subject.

               5.3 PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by Investors on or prior to the
Closing shall have been performed or complied with in all material respects.

        6. REGISTRATION RIGHTS.

        The Company hereby grants to each of the Investors the registration
rights set forth in this Section 6 with respect to the Registrable Shares (as
hereinafter defined) owned by such Investors. The Company and the Investors
agree that the registration rights provided herein set forth the sole and entire
agreement on the subject matter between the Company and the Investors.

        6.1 DEFINITIONS.

                    (a) The terms "register," "registered," and "registration"
refer to a registration effected by filing with SEC a registration statement
(the "Registration Statement") in compliance with the Securities Act, and the
declaration or ordering by the SEC of the effectiveness of such Registration
Statement.

                    (b) The term "Registrable Shares" means the Shares issued to
the Investors pursuant to this Agreement and any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right, or
other security that is issued as) a dividend or other distribution with respect
to, or in exchange or in replacement of, such Registrable Shares. In the event
of any recapitalization by the Company, whether by stock split, reverse stock
split, stock dividend or the like, the number of shares of Registrable Shares
used throughout this Agreement for various purposes shall be proportionately
increased or decreased, provided, however, that any such security shall cease to
be a Registrable Share at such time as it is publicly saleable without
restriction, pursuant to Rule 144(k) of the SEC, or otherwise.

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               6.2 REGISTRATION OBLIGATION. The Company shall, after the
Closing, (i) use its best efforts to effect a registration under the Securities
Act with respect to all of the Registrable Shares as will permit or facilitate
the sale and distribution of the Registrable Shares, (ii) use its best efforts
to cause such registration to become effective within ninety (90) days after the
Closing and (iii) use its best efforts to cause such registration to remain
effective until the earlier to occur of the date (A) the Registrable Shares
covered thereby have been sold, or (B) the Investors are able to use Rule 144 of
the Securities Act to sell the Shares without restriction.

               6.3 REGISTRATION PROCEDURES. When the Company effects the
registration of the Registrable Shares under the Securities Act pursuant to
Sections 6.2 hereof, the Company will, at its expense, as expeditiously and as
reasonably possible, use its reasonable best efforts, to:

                    (a) In accordance with the Securities Act and the rules and
regulations of the SEC, prepare and file with the SEC a Registration Statement
with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for the period described
in Sections 6.2, and prepare and file with the SEC such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective for such period
and such Registration Statement and prospectus accurate and complete for such
period;

                    (b) Furnish to Investors such reasonable number of copies of
the Registration Statement, preliminary prospectus, final prospectus and such
other documents as Investor may reasonably request in order to facilitate the
public offering of such securities;

                    (c) Use its best efforts to register or qualify the
securities covered by such Registration Statement under such state securities or
blue sky laws of such jurisdictions as Investor may reasonably request within
twenty (20) days following the original filing of such Registration Statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified;

                    (d) Notify Investors, promptly after it shall receive notice
thereof, of the date and time when such Registration Statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been filed;

                    (e) Notify Investors promptly of any request by the SEC for
the amending or supplementing of such Registration Statement or prospectus or
for additional information;

                    (f) Notify Investors promptly if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
prepare and promptly file with the SEC, and promptly notify Investors of the
filing of, such amendments or supplements to such Registration Statement or
prospectus as may be necessary to correct such statements or omissions;

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                    (g) In case any Investor is required to deliver a prospectus
at a time when the prospectus then in circulation is not in compliance with the
Securities Act or the rules and regulations of the SEC, prepare promptly upon
request such amendments or supplements to such Registration Statement and such
prospectus as may be necessary in order for such prospectus to comply with the
requirements of the Securities Act and such rules and regulations;

                    (h) Advise Investors, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such Registration Statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;

                    (i) Use its best efforts to obtain a comfort letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters with respect to
offerings of such type as the Investors may reasonably request; and

                    (j) Cause all such securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied.

               6.4 EXPENSES. With respect to the registration effected pursuant
to Section 6.2 hereof, the Company agrees to bear all fees, costs and expenses
of and incidental to such registration and the public offering in connection
therewith, provided however, that Investors shall bear all underwriting
discounts and commissions, state transfer taxes and brokerage commissions. The
fees, costs and expenses of registration to be borne by the Company as provided
in this Section 6.4 shall include, without limitation, all registration, filing
and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, and all legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified.

               6.5 INDEMNIFICATION.

                    (a) The Company will, and does hereby undertake to,
indemnify and hold harmless each Investor, each of such Investor's officers,
directors, partners and agents, and each person controlling such Investor, with
respect to any registration, qualification, or compliance effected pursuant to
this Section 6, and each underwriter, if any, and each person who controls
within the meaning of Section 15 of the Securities Act any underwriter, of the
Registrable Shares held by or issuable to such Investor, against all claims,
losses, damages, and liabilities (or actions in respect thereto) to which they
may become subject under the Securities Act, the Exchange Act, or other federal
or state law arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular, or other similar document (including any related Registration
Statement, notification, or the like) incident to any such registration,
qualification, or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) any violation or alleged
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company in connection with any such registration,
qualification, or compliance, and will reimburse, as incurred, each Investor,
each underwriter, and each director, officer, partner, agent and controlling
person, for any legal and any other expenses reasonably

                                       10
<PAGE>   12

incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action; provided that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability or
expense, arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by an instrument duly executed
by any of the Investors or underwriter and stated to be specifically for use
therein.

                    (b) Each Investor will, if Registrable Shares held by or
issuable to such Investor are included in such registration, qualification, or
compliance, severally and not jointly, indemnify the Company, each of its
directors, officers, legal counsel and accountants and each underwriter, if any,
of the Company's securities covered by such Registration Statement, each person
controlling the Company or such underwriter, within the meaning of Section 15 of
the Securities Act, against all claims, losses, damages, and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse,
as incurred, the Company, and each such underwriter or other person, for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) was made in such
Registration Statement, prospectus, offering circular, or other document, in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Investor and stated to be
specifically for use therein; provided, however, that the liability of each such
Investor hereunder shall be limited to the gross proceeds received by such
Investor from the sale of securities under such Registration Statement. In no
event will any Investor be required to enter into any agreement or undertaking
in connection with any registration under this Section 6 providing for any
indemnification or contribution obligations on the part of such Investor greater
than such Investor's obligations under this Section 6.

                    (c) Promptly after receipt by a party indemnified pursuant
to the provisions of paragraph (a) or (b) of this Section 6.5 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party shall, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of such Sections
6.5(a) or 6.5(b), notify the indemnifying party of the commencement thereof;
provided, however, that the failure to so notify the indemnifying party shall
not relieve the indemnifying party from any liability which it may have to the
indemnified party otherwise than hereunder unless the failure to give such
notice is materially prejudicial to the indemnifying party's ability to defend
such action. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and to the extent that it may
wish, jointly assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to so assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party pursuant to the
provisions of Section 6.5(a) or 6.5(b) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation (except if representation
of such indemnified party by counsel to the indemnifying party would be
inappropriate due to actual or potential conflicting interests between the
indemnified party and any other party represented by such counsel). No
indemnifying party shall be liable to an indemnified party for any settlement of
any action or claim without the consent of the indemnifying party.

                                       11
<PAGE>   13

               6.6 REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT. The Company
shall timely file such information, documents and reports as the SEC may require
or prescribe under Section 13 or 15(d) of the Exchange Act. The Company
acknowledges and agrees that the purposes of the requirements contained in this
Section 6.6 are to enable Investors to comply with the current public
information requirement contained in paragraph (c) of Rule 144 should any
Investor ever wish to dispose of any of the Registrable Shares without
registration under the Securities Act in reliance upon Rule 144 (or any other
similar exemptive provision).

               6.7 INVESTOR INFORMATION. The Company may require Investors to
furnish the Company such information with respect to Investors and the
distribution of the Registrable Shares as the Company may from time to time
reasonably request in writing as shall be required by law or by the SEC in
connection therewith.

               6.8 TRANSFER OF REGISTRATION RIGHTS. The registration rights of
the Investors under this Agreement may be transferred (i) in the case of an
individual, to any member of the immediate family of such individual or to any
trust for the benefit of the individual or any such family member or members,
(ii) to any partner or affiliate of such Investor, (iii) to any transferee
provided (1) that the transferee receives the lesser of (A) at least 200,000
Registrable Shares (as constituted on the date hereof) or (B) all of the
Registrable Shares held by such Investor; (2) the transferee is bound by the
terms of this Agreement; and (3) the Company is given written notice prior to
such transfer. Notwithstanding the foregoing, the registration rights of
Investors under this Agreement may not be transferred to an entity, or a person
controlled by, under common control with or controlling such entity, which is a
direct competitor of the Company.

        7. MISCELLANEOUS.

               7.1 ENTIRE AGREEMENT. This Agreement, the Schedules hereto, and
the documents referred to herein constitute the full and entire understanding
and agreement between the parties and no party shall be liable or bound to any
to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.

               7.2 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and agreements of the Company and
Investors contained herein shall survive the execution and delivery of this
Agreement and the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of Investors or the Company.

               7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including permitted transferees of any Shares sold hereunder). Nothing
in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

               7.4 GOVERNING LAW; JURISDICTION AND VENUE; ATTORNEY'S FEES. This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed by and construed under the
laws of the State of Washington without reference to principles of conflicts of
laws. The parties hereby consent and agree that the United States District Court
for the Western District of Washington will have exclusive jurisdiction over any

                                       12
<PAGE>   14

legal action or proceeding arising out of or relating to this Agreement, and
each party consents to the in personam jurisdiction of such courts for the
purpose of any such action or proceeding and agrees that venue is proper in such
courts. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's and expert witness fees, costs and necessary disbursements
in addition to any other relief to which such party may be entitled.

               7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

               7.6 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

               7.7 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
overnight courier or five days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified at the address indicated for such party on the signature page
hereto, or at such address as such party may designate by ten days advance
written notice to the other party.

               7.8 FINDERS' FEES. Each Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' fee to any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which such Investor or any of its officers, partners, employees or
representatives is responsible. The Company agrees to indemnify and hold
harmless Investors from any liability for any commission or compensation in the
nature of a finders' fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company or any of its officers, employees or representatives is
responsible.

               7.9 EXPENSES. Irrespective of whether the Closing are effected,
the Company and each Investor shall each pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement.

               7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors
holding a majority of the Shares purchased hereunder. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon all the
Investors and the securities purchased under this Agreement at the time
outstanding (including securities into which such securities have been
converted), each future holder of all such securities and the Company.

               7.11 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and the balance of the
Agreement shall be enforceable in accordance with its terms.

               7.12 INFORMATION CONFIDENTIAL. Each Investor acknowledges that
the information received by it pursuant hereto is confidential and for such
Investor's use only, and it will refrain from

                                       13
<PAGE>   15

using such information or reproducing, disclosing, or disseminating such
information to any other person (other than its employees, affiliates, agents,
or partners having a need to know the contents of such information and its
attorneys), except in connection with the exercise of rights under this
Agreement, unless the Company has made such information available to the public
generally or it is required by a governmental body to disclose such information.

                                       14
<PAGE>   16

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

Address:                                EPOCH PHARMACEUTICALS, INC.

12277 134th Court NE, #110              By: /s/ William G. Gerber
Redmond, Washington 98052                   William G. Gerber,
                                            Chief Executive Officer

Address:                                LONE CYPRESS, LTD

Two Greenwich Plaza                     By: /s/ Stephen F. Mandel, Jr.
Greenwich, Connecticut  06830               Stephen F. Mandel, Jr.,
                                            Managing Member

Address:                                LONE SEQUOIA, LP

Two Greenwich Plaza                     By: /s/ Stephen F. Mandel, Jr.
Greenwich, Connecticut  06830               Stephen F. Mandel, Jr.,
                                            Managing Member

Address:                                LONE BALSAM, LP

Two Greenwich Plaza                     By: /s/ Stephen F. Mandel, Jr.
Greenwich, Connecticut  06830               Stephen F. Mandel, Jr.,
                                            Managing Member

Address:                                LONE SPRUCE, LP

Two Greenwich Plaza                     By: /s/ Stephen F. Mandel, Jr.
Greenwich, Connecticut  06830               Stephen F. Mandel, Jr.,
                                            Managing Member

<PAGE>   17

                                        AMERINDO TECHNOLOGY GROWTH FUND II, INC.
Address:

399 Park Avenue, 22nd Floor             By:________________________________
New York, New York  10022                  ________________,
                                           ________________

Address:                                GOLDMAN SACHS PERFORMANCE PARTNERS
                                        (OFFSHORE), L.P.

c/o Commodities Corporation, LLC        By: /s/ Karen M. Judge
701 Mt. Lucas Road                          Karen M. Judge,
Princeton, New Jersey  08540                Vice President

Address:                                GOLDMAN SACHS PERFORMANCE PARTNERS, L.P.

c/o Commodities Corporation, LLC        By: /s/ Karen M. Judge
701 Mt. Lucas Road                          Karen M. Judge,
Princeton, New Jersey  08540                Vice President

Address:                                AMERICAN MASTERS FUND, "HILSPEN SERIES"

c/o Hilspen Capital Management, LLC     By: /s/ Robert Duich
330 Primrose Road, Suite 312                Robert Duich,
Burlingame, California 94010                Chief Operating Officer

Address:                                HILSPEN CAPITAL PARTNERS I, L.P.

c/o Hilspen Capital Management, LLC     By: /s/ Robert Duich
330 Primrose Road, Suite 312                Robert Duich,
Burlingame, California 94010                Chief Operating Officer

                                       2
<PAGE>   18

                                        HILSPEN CAPITAL PARTNERS II, L.P.
Address:

c/o Hilspen Capital Management, LLC     By: /s/ Robert Duich
330 Primrose Road, Suite 330                Robert Duich,
Burlingame, California 94010                Chief Operating Officer

Address:                                ORACLE PARTNERS, L.P.

712 Fifth Avenue, 45th Floor            By: /s/ Daniel McLorin
New York, New York  10019                   Daniel McLorin,
                                            Chief Financial Officer

Address:                                MERLIN BIOMED INTERNATIONAL

237 Park Avenue, Suite 801              By: /s/ Norman Schleifer
New York, New York  10017                   Norman Schleifer,
                                            Chief Financial Officer

Address:                                PHARMAWEALTH

c/o Merlin BioMed L.P.                  By: /s/ Norman Schleifer
237 Park Avenue, Suite 801                  Norman Schleifer,
New York, New York  10017                   Chief Financial Officer

Address:                                NARRAGANSETT I, L.P.

375 Park Avenue, Suite 1404             By: /s/ Joseph L. Darling
New York, New York  10152                   Joseph L. Darling

Address:                                NARRAGANSETT OFFSHORE, LTD.

375 Park Avenue, Suite 1404             By: /s/ Joseph L. Darling
New York, New York  10152                   Joseph L. Darling

                                       3

<PAGE>   19

Address:                                PENSCO PENSION SERVICES
                                        F/B/O LAWRENCE A. MITCHELL IRA

250 Montgomery Street, Suite 350        By: /s/ Bob Hoff
San Francisco, California 94104

Address:                                CARL S. GOLDFISCHER, M.D.

161 West 61st Street                    By: /s/ Carl S. Goldfischer, MD
New York, New York  10023

Address:                                SETH HARRISON

124 West 18th Street, Apt. 7            By: /s/ Seth Harrison
New York, New York  10011

Address:                                RICHARD POPS

c/o Alkermes                            By: /s/ Richard Pops
64 Sidney Street
Cambridge, Massachusettes  02139

U. Vollenweider                         URSULA VOLLENWEIDER
CH. Marochon
1272 Genolier
Switzerland
                                        By: /s/ Ursula Vollenweider
P.O. Box 53
Route de la Cezille
1272 Genolier
Switzerland

                                       4<PAGE>   1

                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement") is made effective as of the
15th day of January, 1999 by and between AMERICAN VANGUARD CORPORATION, a
Delaware corporation ("American Vanguard") (referred to herein as "Employer"),
and ERIC G. WINTEMUTE ("Employee").

                              TERMS AND CONDITIONS

         In consideration of the foregoing and of the mutual covenants contained
herein and other valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:

         1. Employment. Employer hereby agrees to employ Employee, and Employee
agrees to serve as an employee of Employer, during the Term of Employment, as
defined in Section 2.

         2. Term of Employment. The Term of Employment-of the Employee shall
commence on January 15, 1999, and continued until January 15, 2003 (the "Term of
Employment").

         3. Duties of Employee.

            (a) Employee shall serve as President and Chief Executive Officer of
American Vanguard and AMVAC. Employee shall perform such duties, services and
responsibilities as are consistent with such positions. Employee's duties,
services and responsibilities will be determined by Employer's Board of
Directors ("Board of Directors") and will be performed under the overall
supervision of, and consistent with, the policies of the Board of Directors.

            (b) During the Term of Employment, Employee shall devote such time,
attention, skill, energy and efforts as may be necessary for the faithful
performance of his duties hereunder. The foregoing shall not be construed to
prohibit Employee from devoting reasonable periods of time during normal
business hours to activities involving educational, charitable, professional or
other similar types of organizations, and membership on the board of directors
of other organizations so long as such organization or business is not a
"Competing Enterprise" (as defined in Section 7(c) below).

                                      -1-
<PAGE>   2
         4. Compensation.

            (a) In consideration of the performance by Employee of Employee's
obligations hereunder during the Term of Employment, Employer will pay Employee
a minimum salary (the "Salary") at an annual rate as follows:

January 15, 1999 - 2000    $330,000

January 15, 2000 - 2001    $374,000

January 15, 2001 - 2002    $418,000

January 15, 2002 - 2003    2002 Salary plus a percentage increase equal to the
                           percentage increase in the Consumer Price Index - All
                           Urban Consumers - Los Angeles - Anaheim - Riverside
                           (1982-84=100) for calendar year 2002

Such salary shall be payable in accordance with the normal payroll practices of
Employer then in effect. The Salary, and any other form of compensation paid to
Employee hereunder, during the Term of Employment, shall be subject to all
applicable taxes required to be withheld by Employer pursuant to federal, state
and local law. Employee shall be solely responsible for income taxes imposed on
Employee by reasons of any cash or noncash compensation and benefits provided
hereunder.

            (b) During the Term of Employment, Employee shall be reimbursed for
reasonable travel and other business-related expenses incurred in the
furtherance of the business of Employer, other than expenses incurred by
Employee in travelling between any residence of Employee and Employer's
headquarters facility. Reimbursement of approved expenses shall be made by
Employer upon submission by Employee of a statement itemizing the expenses
incurred or such other verification as Employer may reasonably request.

         5. Employee Benefits.

            (a) In addition to the payment of Salary as described above, during
the Term of Employment Employee shall be entitled to all rights and benefits for
which Employee may be eligible under any bonus, participation or additional
compensation plans, pension or profit-sharing plans, group life, medical,
health, dental and/or disability insurance, automobile allowance or other

                                      -2-

<PAGE>   3

benefits Employer may, in its sole discretion, provide for Employee or its
employees generally.

            (b) During the Term of Employment, Employee shall be entitled to
four business weeks of vacation time each year without loss of compensation. In
the event that Employee is unable to take the total amount of vacation time
authorized herein during any year, he shall be deemed to have waived the
entitlement for that year.

            (c) If Employee should die during the Term of Employment, Employer
agrees to pay the designated beneficiary any amounts (including Salary) and
continue any benefits due Employee under this Agreement for a period of twelve
(12) months after the date of death.

            (d) Employer hereby grants Employee, as of April 1, 1999, the right
and option to purchase, at the time or times and on other terms and conditions
as hereinafter set forth, 50,000 shares of common stock of Employer (the "Option
Shares"), for the exercise price equal to the closing trading price on the AMEX
on April 1, 1999 (the "Options").

                (i) Subject to the provisions hereof, (a) 10,000 Option Shares
shall become exercisable on April 1, 1999, (b) 10,000 Option Shares shall become
exercisable on first anniversary of this Agreement, (c) 10,000 Option Shares
shall become exercisable on second anniversary of this Agreement, (d) 10,000
Option Shares shall become exercisable on third anniversary of this Agreement
and (e) the remaining 10,000 Option Shares shall become exercisable on the
fourth anniversary of this Agreement. All Option exercise privileges shall be
cumulative, so that any Option that has become exercisable, but that has not
been exercised, shall remain exercisable throughout the balance of the option
period, regardless of the additional exercise privileges becoming available
during such exercise period.

                (ii) If Employee is terminated for "Cause" [as defined in
Section 6(c) below] or if that Agreement is terminated pursuant to its Section 6
(a) (v) or Section 6 (a) (vi) , all Options vested at such time must be
exercised within ninety (90) days after Employee ceases to be an employee of
Employer and Employee shall have no rights to any other options described in
this Agreement. If Employee is terminated without Cause, Employee shall have the
right to exercise his Options in accordance with the terms of subsection (d)
above. If Employee dies or suffers a "Disability" (as defined in the Agreement),
Employee, or his beneficiary, shall have the right to exercise

                                      -3-

<PAGE>   4

all Options vested at the time of such event and all Options which become vested
within 12 months of such event but shall have no right to any other Options.
Notwithstanding any other terms of this Option, all options granted hereunder if
not exercised shall expire on January 15, 2008.

                (iii) The Option granted hereunder may be exercised in whole or
in part, and may be exercised in part from time to time, except that no exercise
may be for less than 100 Option Shares. Exercise shall be accomplished by
delivery to Employer of a timely written notice of election to exercise,
specifying the number of full Option Shares to be purchased, which shall be
delivered to the principal office of Employer accompanied by payment of the
purchase price for the Option Shares with respect to which the Option is
exercised. The purchase price of the Option Shares shall be paid in cash,
certified check, bank cashier's check or wire transfer or a combination of any
of the above methods of payment. As soon as practicable after each exercise of
the option and compliance by Employee with all applicable conditions, Employer
shall mail or cause to be mailed to Employee, at the address specified by
Employee in the notice, a stock certificate or certificates registered in the
name of the Employee for the number of shares of common stock which Employee
shall be entitled to receive upon such exercise under the provisions of this
Agreement.

                (iv) The Option and the rights and privileges associated
therewith shall not be transferred, assigned, pledged or hypothecated by
Employee otherwise than will or by the laws of descent and distribution. Upon
any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the
Option, or any right or privilege conferred thereby, contrary to the provisions
of this Agreement, or upon any attempted sale under the rights and privileges
conferred hereby, the Option including all rights and privileges thereunder
shall immediately become null and void.

                (v) The Options shall have antidilution protection and the
vesting of all Options hereunder shall accelerate upon a "change of control," of
Employer (acquisition of more than 50% of Employer's common stock by a person or
persons acting as a group).

                (vi) It is anticipated that a new option plan (or an amendment
to the existing plan) will be adopted by the Employer. At such time, the Options
under this Agreement, if requested by Employee, will be converted to options
under the new option plan.

                                      -4-

<PAGE>   5

         6. Termination.

            (a) Except as otherwise provided in this Agreement herein and
subject to the provisions of Section 6(e) hereof, this Agreement shall terminate
upon the earliest to occur of the dates specified below:

                (i) the close of business on the date of Employee's death;

                (ii) the close of business on the day on which Employer delivers
to Employee a written notice of Employer's election to terminate his employment
for "Cause" (as hereinafter defined);

                (iii) the close of business on the day on which Employer shall
have delivered to Employee a written notice of Employer's election to terminate
his employment, which notice shall be delivered not less than 120 days after
Employee suffers any physical or mental disability that would prevent him from
substantially performing his duties under the Agreement ("Disability");

                (iv) the close of business on the day following the date on
which the Board of Directors shall have adopted a resolution terminating the
employment of Employee hereunder and such termination is not for death, cause or
Disability;

                (v) the close of business on a date mutually agreed to in
writing by Employer and Employee which is prior to the end of the Term of
Employment; or

                (vi) the close of business on a date not later than thirty (30)
days after delivery of written notice by Employee to Employer terminating this
Agreement.

            (b) Any purported termination by Employer or by Employee pursuant to
Section 6(a) hereof shall be communicated by written "Notice of Termination" to
the other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which indicates the specific termination provision in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of this Agreement under
the provision so indicated. For purposes of this Agreement, no such purported
termination shall be effective without delivery of such "Notice of Termination".

                                      -5-

<PAGE>   6

            (c) For purposes of this Agreement, termination of employment for
"Cause" shall mean termination based on:

                (i) the intentional and continued failure of Employee to
substantially perform his duties pursuant to this Agreement after a written
demand by Employer identifying the manner in which it believes Employee has not
substantially performed his duties;

                (ii) a determination by Employer's Board of Directors that a
material breach of this Agreement by Employee has occurred;

                (iii) conviction in a criminal proceeding against Employee
involving a felony;

                (iv) a determination by Employer's Board of Directors that
Employee has committed fraud, embezzlement, theft or business conduct against
Employer or conduct involving a third party, any of which significantly impairs
the reputation of, or harms, Employer, its subsidiaries or affiliates;

                (v) a determination by Employer's Board of Directors that
Employee has inflicted intentional wrongful damage to property of Employer; or

                (vi) a determination by Employer's Board of Directors that
Employee has breached his fiduciary obligation to Employer or its subsidiaries.

            (d) For purposes of this Agreement, the term "Disability" shall mean
the good faith determination by a majority of the Board of Directors of Employer
that Employee's physical or mental condition effectively prevents Employee from
fulfilling his responsibilities on a consistent basis for at least 120 days. In
arriving at such good faith determination the Board of Directors shall review
the current and future requirements of Employee's position and the then
operational state and needs of Employer's business and shall have the right but
not the obligation to seek opinions from medical professionals, including
Employee's physician (with whom Employee hereby grants his approval for the
Board to contact in making its determination). The parties agree that
determination of Employee's disability by the Board shall be conclusive.

            (e) If this Agreement terminates because of Employee's death or
Disability, Employer will continue to pay Employee an amount equal to Employee's
Salary for a period of one (1) year

                                      -6-

<PAGE>   7

after the date of termination. If this Agreement is (i) terminated by the mutual
consent of the parties, (ii) voluntarily terminated by Employee, or (iii)
terminated by Employer for Cause, Employer shall pay Employee any portion of the
Salary accrued hereunder on or prior to the date of termination but not paid. If
this Agreement is terminated by Employer without Cause, Employer shall pay
Employee an amount equal to Employee's Salary for the remaining term of this
Agreement in accordance with Employer's normal payroll schedule.

                                      -7-

<PAGE>   8

         7. Employee Covenants.

            (a) Employee, during the term of this Agreement and thereafter, will
not, directly or indirectly (without Employer's prior written consent) , use for
himself, or use for or disclose to any party other than Employer or any
subsidiary or affiliate of Employer, any secret or confidential information or
data regarding the business of Employer or its subsidiaries and affiliates or
any secret or confidential information or data regarding the costs, uses,
methods, applications, customers (including their names and buying habits or
practices) , trade accounts or suppliers (and pertinent information respecting
transactions and prospective transactions therewith) of products made, produced
or sold by Employer or any of its subsidiaries or affiliates, or regarding its
marketing methods and related data or any secret or confidential apparatus,
process, system, manufacturing or other method at any time used, developed or
investigated by or for Employer or any of its subsidiaries or affiliates,
whether or not invented, developed, acquired, discovered or investigated by
Employee. At the termination of Employee's employment or at any other time
Employer may request, Employee shall promptly deliver to Employer all memoranda,
notes, records, plats, sketches, plans or other documents made, compiled by,
delivered to, or otherwise acquired by, Employee concerning costs, uses,
methods, designs, applications, purchasers or suppliers of products made or sold
by Employer or any subsidiary or affiliate of Employer or any secret or
confidential product, apparatus or process manufactured, used, developed,
acquired or investigated by Employer or any subsidiary or affiliate of Employer.

            (b) Employee agrees that any and all inventions, discoveries,
improvements, processes, methods, designs, patents, copyrights and trademarks
made,, developed, discovered or acquired by him during the Term of Employment,
solely or jointly with others or otherwise and which relate to the business of
Employer and all knowledge possessed by Employee relating thereto (collectively,
the "Inventions") shall be fully and promptly disclosed to the Board of
Directors and to such person or persons as the Board of Directors shall direct
and shall be the sole and absolute property of Employer and Employer will be the
sole and absolute owner thereof. Employee agrees that he will at all times keep
all of the same secret from everyone except Employer and such persons as the
Board of Directors may from time to time direct. Employee shall, as requested by
Employer, at any time and from time to time, whether prior to or after the
expiration of the Term of Employment, execute and deliver to Employer any

                                      -8-

<PAGE>   9

instruments deemed necessary by Employer to effect disclosure and assignment of
the Inventions to Employer or its designees and any patent applications (United
States or foreign) and renewals with respect thereto, including any other
instruments deemed necessary by Employer for the prosecution of patent
applications or the acquisition of letters patent. Employer hereby notifies
Employee that this Section 7(b) shall not apply to any invention which qualifies
fully under the provisions of Section 2870 of the California Labor Code.

            (c) By and in consideration of Employer's entering into this
Agreement and the Salary and benefits to be provided by Employer hereunder, and
further in consideration of Employee's exposure to the proprietary information
of Employer, manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor, employee,
partner or investor, with any Competing Enterprise. For purposes of this
paragraph, the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in a business in the United States which is
in competition with any of the businesses of Employer or any of its subsidiaries
or affiliates (i) as of the date of commencement of this Agreement, or (ii)
during the Term of Employment. The prohibition of this clause (c) shall not be
deemed to prevent Employee from owning less that 5% of any class of securities
of an entity that has a class of equity securities registered under Section 12
of the Securities Exchange Act of 1934, as amended.

            (d) During the term of this Agreement and for a period of four (4)
years thereafter, Employee shall not use any information obtained as a result of
his employment with Employer to interfere with Employer's relationship with, or
endeavor to entice away from Employer, any person who at any time during the
term of this Agreement was an employee or customer of Employer or otherwise had
a material business relationship with Employer. Notwithstanding the foregoing
provisions, nothing in this agreement is intended to be and shall ever be
construed as an agreement by Employee to refrain from fairly competing after the
termination of this agreement and using publicly accessible information to
solicit customers or other persons who had a material business relationship with
Employer.

            (e) Employee agrees that any breach of the terms of this Section 7
would result in irreparable injury and damage to Employer for which Employer
would have no adequate remedy at law; Employee therefore also agrees that in the
event of said breach or any threat of breach, Employer shall be entitled to an

                                      -9-

<PAGE>   10

immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by Employee and/or any and all persons
and/or entities acting for and/or with Employee, without having to prove
damages, in addition to any other remedies to which Employer may be entitled at
law or in equity; provided, however, that the prevailing party in any such
action brought by Employer pursuant to this Section 7(e) will be entitled to
recover from the other party all costs and expenses, including reasonable
attorney's fees and costs, incurred by the prevailing party in connection with
such action. The terms of this paragraph shall not prevent Employer from
pursuing other available remedies for any breach or threatened breach hereof,
including but not limited to the recovery of damages from Employee.

         The provisions of this Section 7 shall survive any termination of this
Agreement, and the existence of any claim or cause of action by Employee against
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of the covenants and
agreements of this Section 7.

         8. Indemnification. Employer agrees to indemnify Employee as an officer
and/or director, as applicable, of Employer to the fullest extent permitted
under applicable California corporate law.

         9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given (i) if
personally delivered, when so delivered, or (ii) if mailed, three (3) business
days after having been placed in the United States mail, registered or
certified, postage prepaid, addressed to the party to whom it is directed at the
address set forth below:

                  If to Employer:

                  American Vanguard Corporation
                  4695 MacArthur Court, Suite 1250
                  Newport Beach, California 92660

                  If to Employee:

                  Eric G. Wintemute
                  19001 Antioch Drive
                  Irvine, California 92612

                                      -10-

<PAGE>   11

         10. Binding Effect/Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estates, successors (including, without
limitation, by way of merger) and assigns. Notwithstanding the provisions or the
immediately preceding sentence, Employee shall not assign all or any portion of
this Agreement without the prior written consent of Employer.

         11. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter. This Agreement may not be amended, nor may any provision hereof
be modified or waived, except by an instrument in writing duly signed by the
party to be charged.

         12. Severability. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provisions or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.

         13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without reference
to the principles of conflict of laws.

         14. Attorney's Fees. In the event of default hereunder, the defaulting
party shall be liable to the nondefaulting party for all expenses and costs
incurred by the nondefaulting party in protecting or enforcing its rights
hereunder, including, but not limited to, reasonable attorney's fees.

         15. Modifications and Waivers. No provisions of this Agreement may be
modified, altered or amended except by an instrument in writing executed by the
parties hereto. No waiver by either party hereto of any breach by the other
party hereto of any provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions at the time
or at any prior or subsequent time.

         16. Headings. The headings contained herein are solely for the purpose
of reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.

                                      -11

<PAGE>   12

         17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                            [SIGNATURE PAGE FOLLOWS]

                                      -12-

<PAGE>   13

         IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
by the authority of its Board of Directors, and Employee has hereunto set his
hand, the day and year first above written.

EMPLOYER:                                 AMERICAN VANGUARD CORPORATION

                                          By: /s/ Herbert A. Kraft
                                              ----------------------------------
                                                  Herbert A. Kraft

EMPLOYEE:                                     /s/ Eric G. Wintemute
                                              ----------------------------------
                                                  Eric G. Wintemute

                                      -13-

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