EXHIBIT 2.5
PRICE GUARANTY AGREEMENT dated September 1, 1998 (the "Closing Date")
between 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 4,300 Class A Shares and 100 voting shares of
Oseco Inc., an Ontario corporation (the "Company"), pursuant to a Stock Purchase
Agreement dated September 1, 1998 (the "Stock Purchase Agreement") among the
Seller, Xxxxxxx X. Eros and Xxxx X. Eros (the "Shareholders"), Buyer and ABT.
B. Pursuant to Section 3(a) of the Stock Purchase Agreement, ABT will
deliver to the Seller 100,000 shares of the common stock, par value $.001, 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 not sell, transfer or
otherwise dispose of the ABT Shares, except as specified in the Lock-Up,
Agreement and, pursuant to Section 3(d) 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) (a) ABT agrees to pay to Seller any deficiency in the Net Proceeds
from sales by Seller of the ABT Shares in accordance with the terms of the Lock-
Up Agreement, provided that all of the ABT Shares are sold by June 1, 1999, or
such later date as all the ABT Shares are sold if sales are delayed by
interruption of trading or any other factor not the fault of Seller, and copies
of sale confirmations and other documentation have been provided to ABT by
Seller as required by the Lock-Up Agreement. In the event that Seller has not
sold all the ABT Shares by October 15, 1998 as a result of an interruption of
trading or any other factor not the fault of Seller, Seller may declare ABT in
default hereunder; ABT shall pay the Seller in cash any deficiency in the Net
Proceeds within 10 days of such declaration of default and Seller shall return
to ABT all remaining ABT Shares. If ABT fails to make such cash payment within
10 days of the declaration of a default, Seller may exercise its rights to
foreclose on the collateral under the Security Agreement (as defined in the
Stock Purchase 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
Lock-Up Agreement.
(b) ABT's obligations hereunder will be secured by a first priority
security interest, whenever reasonably possible, on the fixed assets and
equipment of
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the Company pursuant to the terms of a security agreement between the Company
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 from 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 deficiency on September 1, 1999,
plus interest from June 30, 1998 at a rate of 8% per annum.
(c) To the extent that the Net Proceeds from sales of ABT Shares
pursuant to the Lock-Up Agreement exceed $2.06 million, Seller will pay to ABT
cash in an amount equal to such surplus within 15 business days after June 1,
1999.
(d) Seller 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 and the Net Proceeds
from all such sales.
(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, (i) ABT's obligations hereunder will immediately terminate, and (ii)
all proceeds in excess of U.S. $15.75 per share from all sales of ABT Shares
regardless of whether such proceeds derive from sales made prior to, concurrent
with or subsequent to such event of default shall promptly be paid in cash to
ABT in accordance with the terms of the Lock-Up Agreement.
(3) Subject to Section 6, this Agreement shall enure to the benefit of and
be binding upon ABT, its successors and assigns, and Seller, its successor and
assigns.
(4) Should any provision of this Agreement, for any reason whatsoever, be
determined by a count of competent jurisdiction or arbitrator to be invalid,
illegal, or incapable of being enforced, in whole or in part, such determination
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 internal substantive laws of the State of Nevada without
giving effect to the choice of law rules 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.
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(7) (a) All notices, requests, consents, and demands by the parties
hereunder shall be delivered by hand, sent by facsimile transmission (confirmed
by a "hard copy" sent by mail or overnight courier), recognized national
overnight courier or by deposit in the mail, postage prepaid, by express or
priority mail, return receipt requested, addressed to the party to be notified
at the address set forth below:
(i) if to the Seller to:
Xxxxxxx X. Eros
X.X. #0
Xxxxxx, Xxxxxxx X0X IK0
Telecopier: (000)000-0000
with a copy to:
Xxxxxxxxx & Xxxxxx
Xxxxx 0000
0 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx X. Xxxxx, Q.C.
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, CEO
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.
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(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, 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 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.
(10) All references herein to "$" or "dollars", unless otherwise indicated,
means currency of the Government of Canada which is legal tender for the payment
of public and private debts.
(11) Any dispute hereunder shall be resolved in accordance with Section 20
of the Stock Purchase Agreement.
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
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Xxxxxxx X. Eros, President
AGRIBIOTECH, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Vice President
To induce AgriBioTech, Inc. to enter into the foregoing Price Guaranty
Agreement with 1304526 Ontario, Inc., in which the undersigned have a
substantial financial interest and in consideration of other consideration, the
receipt and sufficiency of which they hereby acknowledge, the undersigned agree,
jointly and
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severally, to take all action that may be necessary or expedient to cause such
corporation to perform and comply with its obligations thereunder.
/s/ Xxxxxxx X. Eros
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Xxxxxxx X. Eros
/s/ Xxxx X. Eros
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Xxxx X. Eros
