PRICE GUARANTY AGREEMENT
PRICE GUARANTY AGREEMENT dated August __, 1998 (the "Closing Date") 1304516
Ontario Inc., an Ontario corporation ("Seller"), and AgriBioTech, Inc., a Nevada
corporation ("ABT").
R E C I T A L S:
X. Xxxxxxxx Seeds International Company ("Buyer") has agreed to purchase
from the Seller an aggregate of ________ Class A Shares100 and voting the common
shares of Oseco Inc., an Ontario corporation (the "Company"), pursuant to a
Stock Purchase Agreement dated August __, 1998 (the "Stock Purchase Agreement")
among the Seller, Xxxxxxx X. Eros and Xxxx X. Eros (the "Shareholders"), the
Buyer and ABT.
B. Pursuant to Section 3(a) of the Stock Purchase Agreement, ABT will
transfer to the Seller 100,000 shares of the common stock par value $.__ of ABT
(the "ABT Shares").
C. Pursuant to Section 3(c) of the Stock Purchase Agreement, Seller and the
Shareholder have entered into a Lock-Up Agreement (the "Lock-Up Agreement")
pursuant to which they have agreed that Seller will shall not sell, transfer or
otherwise dispose of the ABT Shares except as specified in the Lock-Up Agreement
and, pursuant to Section 3(c) of the Stock Purchase Agreement, ABT has agreed to
enter into this Price Guaranty Agreement with Seller.
Accordingly, in consideration of the foregoing recitals and the mutual
covenants contained in this Agreement, the parties hereto hereby agree as
follows:
(1) ABT agrees to pay to Seller any deficiency realized in the Net Proceeds
from sales by Seller of the ABT Share in accordance with the terms of the Lockup
Agreement provided all of the ABT Shares are sold by June 1, 1999 and copies of
sale confirmations and other documentation has been provided to ABT by Seller as
required by the Lockup Agreement. As used herein, "Net Proceeds" means the
remainder of subtracting customary sales commission and applicable stock
transfer and sales taxes from the gross sales price of the ABT Shares sold
pursuant to the Lockup Agreement. They shall be secured by a first priority
security interest, whenever reasonably possible, on the fixed assets and
equipment of the Company pursuant to the terms of a security agreement between
ABT and Seller.
(2) (a) The Net Proceeds shall be determined within 15 days following June
1, 1999:
(b) Subject to the provisions of the Stock purchase Agreement and the
Lock-Up Agreement, to the extent that the Net Proceeds of sales
of ABT Shares pursuant to the Lock-Up Agreement are less then
$2.06 million, ABT will pay to the Seller cash in an amount equal
to any such deficiencies within 15 business days after June 1,
1999.
(c) To the extent that the Net Proceeds of Sales of ABT Shares
pursuant to the Lock-Up Agreement exceed $2.6 million, Seller
will pay to ABT within 15 business days following June 1, 1999 an
amount equal to such surplus of Net Proceeds.
(d) Sellers shall prepare and deliver to ABT within 15 days after
June 1, 1999 a cumulative statement, supported by documentation
reflecting all sales of ABT Shares by Seller pursuant to the
Lock-Up Agreement.
(e) In the event that the Seller or the Shareholders offer, sell,
transfer or otherwise dispose of the ABT Shares in violation of
the Lock-Up Agreement, without the prior written consent of ABT,
(i) ABT's obligations hereunder will immediately terminate, and
(ii) all proceeds from the sale of all ABT Shares, whether such
proceeds derive from sales made prior to, concurrent with or
subsequent to such event of default, shall be paid to ABT.
(3) Subject to Section 6, this Agreement shall inure to the benefit of and
be binding upon ABT, its successors and assigns, and Seller.
(4) Should any provision of this Agreement, for any reason whatsoever, be
declared invalid, illegal, or incapable of being enforced in whole or
in part, such decision shall not affect the validity of the remaining
provisions, which will remain in full force and effect as if this
Agreement had been executed with the invalid portion thereof deleted.
(5) This Agreement shall be governed by, construed and enforced in
accordance with the __________ _________ laws of the State of Nevada
without giving to the choice of law rates thereof.
(6) This Agreement and all rights hereunder are personal to the parties
and shall not be assignable, and any purported assignment in violation
thereof shall be null and void.
(7) (a) All notices, requests, consents, and demands by the parties
hereunder shall be delivered by hand, sent by facsimile transmission
confirmed by a "hardcopy" sent by mail or overnight courier,
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
address set forth below:
(i) if to the Seller to:
R.R. 1
Norrik, Ontario L0P IK0
Attention: Xxxxxxx X. Eros
Telecopier: (000)000-0000
2
with a copy to:
Xxxxxxxxx & Xxxxxx
Xxxxx 0000
0 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Telecopier No.: (000)000-0000
(ii) if to the Buyer or ABT to:
AgriBioTech, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, President
Telecopier No.: (000) 000-0000
with a copy to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(b) Notices given by mail shall be deemed effective on the earlier of
the date shown on the proof of receipt of such mail or, unless
the recipient proves that the notice was received later or not
received, three (3) days after the date of mailing thereof. Other
notices shall be deemed given on the date of receipt. Any party
hereto may change the address specified herein by written notice
to the other parties hereto.
(8) In the event that ABT fails to make a payment to Seller required to be
made by it hereunder within 30 days after receipt of written notice
from Seller demanding such payment and Seller has fully complied with
its obligations hereunder and under the Stock Purchase Agreement and
the Lock-Up Agreement, ABT shall be in default under this Agreement
with respect to such payment. Upon such default by ABT, Seller may
declare a default under the Security Agreement and pursue all remedies
to which it is entitled.
(9) The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Agreement shall
not be construed as a waiver or relinquishment of future compliance
therewith, and such provisions, terms and conditions shall remain in
full force and effect. No waiver of any term or any condition of this
Agreement on the part of either party shall be effective for any
purpose whatsoever unless such waiver is in writing and signed by such
party.
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IN WITNESS WHEREOF, the parties hereto have executed this Guarantee as of
the day and year first written above.
1304516 Ontario Inc.
By:/s/ Xxxxxxx X. Eros
-------------------
Xxxxxxx X. Eros
President
AGRIBIOTECH, INC.
By:/s/ Xxxxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxxxx X. Xxxxxxxxx
Vice President
