GUARANTY AGREEMENT
GUARANTY AGREEMENT (the "Guaranty") dated January 22, 1999 (the "Closing
Date") by and between each of Xxxx X. Xxxx, L.L.C., an Oregon limited liability
company (the "Seller"), and AgriBioTech, Inc., a Nevada corporation ("ABT" or
the "Buyer").
W I T N E S S E T H:
WHEREAS, Buyer has agreed to purchase from the Seller an aggregate of
twenty-five (25%) percent of the membership interests of HybriGene, L.L.C., an
Indiana limited liability company (the "Company"), pursuant to a Securities
Purchase Agreement dated January 22, 1999 (the "Securities Purchase Agreement")
by and among the Sellers, the Company, and ABT;
WHEREAS, pursuant to Section 3(a) of the Securities Purchase Agreement, ABT
will transfer to the Seller One Hundred Three Thousand Twelve (103,012) shares
of the Common Stock of ABT (the "ABT Shares");
WHEREAS, pursuant to Section 3(c) of the Securities Purchase Agreement, the
Seller has entered into a Lock-Up Agreement (the "Lock-Up") pursuant to which
they have agreed that they shall not sell, transfer or otherwise dispose of the
ABT Shares except as specified in the Lock-Up;
WHEREAS, pursuant to Section 3(a) of the Securities Purchase Agreement, ABT
has guaranteed the Purchase Price by guaranteeing the Net Proceeds (as defined
below) from the sale of the ABT Shares when sold pursuant to the Lock-Up; and
NOW, THEREFORE, in consideration of the foregoing and the terms, conditions
and mutual covenants appearing in this Guaranty, the parties hereto hereby agree
as follows:
Section 1.
(a) The ABT Shares, if sold pursuant to the Lock-Up, shall have Guaranteed
Net Proceeds (defined as gross sales price less customary sales commissions and
any applicable stock transfer and sales taxes) of no less than $18.45 per share
(the "Guaranteed Price/Share").
(b) ABT further agrees that until the Seller has received an aggregate of
$1,900,000 from all sales of ABT Shares made pursuant to the Lock-Up, Seller
shall be secured pursuant to the terms of a stock pledge agreement (the "Stock
Pledge Agreement").
(c) In consideration of the guarantee granted hereby and the Stock Pledge
Agreement, the Seller hereby agrees that Net Proceeds from sales of ABT Shares
at a price per share greater than the Guaranteed Price/Share shall be paid to
ABT, as set forth below.
Section 2.
(a) The Net Proceeds shall be determined on a quarterly basis according to
ABT's fiscal calendar.
(b) To the extent that sales of ABT Shares pursuant to the Lock-Up are made
at prices per Share that are lower than the Guaranteed Price/Share, ABT shall
issue to the Seller within ten (10) business days of the parties' quarterly
accounting, additional, duly registered shares of ABT Common Stock that can be
sold immediately for any shortfalls in the Guaranteed Net Proceeds resulting
from its individual sales of the ABT Shares, and in such amounts until the
Seller has received an aggregate of $1,900,000 from all sales of ABT Shares. If
at any time the Seller has received funds exceeding $1,900,000 in the aggregate
from sales of ABT Shares, the Seller shall promptly deliver such excess funds to
ABT.
(c) In the event that the Seller offers, sells, transfers or otherwise
disposes of the ABT Shares in violation of the Lock-Up, without the prior
written consent of ABT, (i) the Guaranty shall not apply to the Net Proceeds
received from such sale and the Guaranty shall from that time be null and void,
and (ii) all proceeds in excess of $10.00 per share from the sale of all ABT
Shares by such individual, regardless of whether such proceeds derive from sales
made prior to, concurrent with or subsequent to such event of default, shall be
paid to ABT.
Section 3. Subject to Section 6 hereunder, this Agreement shall inure to the
benefit of and be binding upon ABT, its successors and assigns (by way of
merger, sale, consolidation, reorganization or similar event), and upon the
Seller, and its successors and assigns.
Section 4. Should any part of this Guaranty, 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 any remaining portion, which
remaining portion shall remain in full force and effect as if this Guaranty had
been executed with the invalid portion thereof eliminated, and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Guaranty without including therein any portion which
may for any reason be declared invalid.
Section 5. This Guaranty shall be construed and enforced in accordance with the
laws of the State of Nevada applicable to agreements made and to be performed in
such State without application of the principles of conflicts of laws of such
State.
Section 6. This Guaranty and all rights hereunder shall not be assignable, and
any purported assignment by ABT in violation thereof shall be null and void.
Section 7.
(a) All notices, requests, consents, and demands by the parties hereunder
shall be delivered by hand, 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:
Xxxx Xxxx, L.L.C.
X.X. Xxx 000
Xxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxx
Telecopier: (000) 000-0000
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with a copy to:
Xxxxx Xxxxxx Xxxxxxxx LLP
2300 Xxxxx Fargo Tower
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
(ii) if to 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.
Section 8. In the event that ABT breaches its obligations under Section 2 hereof
within 30 days after receipt of written notice from Seller demanding such
payment, ABT shall be in default under this Guaranty with respect to such
payment ("Default Payment"). Upon such default by ABT, Seller may declare a
default under the Stock Pledge Agreement and pursue all remedies, under the
Stock Pledge Agreement and otherwise, to which it is entitled to the extent
necessary to relieve such default. This Guaranty shall otherwise remain in full
force and effect with respect to the payment of any future deficits or surpluses
by ABT or the Seller, as the case may be.
Section 9. The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Guaranty shall not be
construed as a waiver or relinquishment of future compliance therewith, and said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or any condition of this Guaranty 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 Guaranty as of
the day and year first written above.
XXXX X. XXXX, L.L.C.
By: /S/ Xxxx X. Xxxx
----------------
Xxxx X. Xxxx,
President and CEO
AGRIBIOTECH, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxxxx X. Xxxxxxxxx
Vice President
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