SUBSIDIARY GUARANTEE
Exhibit 10.4
SUBSIDIARY
GUARANTEE, dated as of November 27, 2019 (this “Guarantee”), made by each
of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Guarantors”), in favor of
the purchasers signatory (together with their permitted assigns,
the “Purchasers”) to that
certain Securities Purchase Agreement, dated as of the date hereof
(the “Purchase
Agreement”), between Exactus, Inc., a Nevada
corporation (the “Company”) and the
Purchasers.
W I T N E S S E T H:
WHEREAS, pursuant
to the Purchase Agreement, the Company has agreed to sell and issue
to the Purchasers, and the Purchasers have agreed to purchase from
the Company the Senior Secured Convertible Note and Warrants,
subject to the terms and conditions set forth therein;
WHEREAS, each
Guarantor will directly benefit from the extension of credit to the
Company represented by the issuance of the Senior Secured
Convertible Note and Warrants; and
NOW,
THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out
the transactions contemplated thereby, each Guarantor hereby agrees
with the Purchasers as follows:
1. Definitions.
Unless otherwise defined herein, terms defined in the Purchase
Agreement and used herein shall have the meanings given to them in
the Purchase Agreement. The words “hereof,”
“herein,” “hereto” and
“hereunder” and words of similar import when used in
this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms. The following terms shall have the following
meanings:
“Guarantee” means this
Subsidiary Guarantee, as the same may be amended, supplemented or
otherwise modified from time to time.
“Obligations” means, in
addition to all other costs and expenses of collection incurred by
Purchasers in enforcing any of such Obligations and/or this
Guarantee, all of the liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or
acquired, or owing to, of the Company or any Guarantor to the
Purchasers, including, without limitation, all obligations under
this Guarantee, the Senior Secured Convertible Note and any other
instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith, in each case,
whether now or hereafter existing, voluntary or involuntary, direct
or indirect, absolute or contingent, liquidated or unliquidated,
whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from any of
the Purchasers as a preference, fraudulent transfer or otherwise as
such obligations may be amended, supplemented, converted, extended
or modified from time to time. Without limiting the generality of
the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Senior
Secured Convertible Note and the loans extended pursuant thereto;
(ii) any and all other fees, indemnities, costs, obligations and
liabilities of the Company or any Guarantor from time to time under
or in connection with this Guarantee, the Senior Secured
Convertible Note and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to
post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts
are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Company or any Guarantor.
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2. Guarantee.
(a) Guarantee.
(i) The
Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantee to the Purchasers and their respective
successors, endorsees, transferees and assigns, the prompt and
complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the
Obligations.
(ii) Anything
herein or in any other Transaction Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed
the amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in Section
2(b)).
(iii) Each
Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section
2 or affecting the rights and remedies of the Purchasers
hereunder.
(iv) The
guarantee contained in this Section 2 shall remain in full force
and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by indefeasible payment in full.
(v) No
payment made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the
Purchasers from the Company, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in
respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable
for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are indefeasibly paid in
full.
(vi) Notwithstanding
anything to the contrary in this Guarantee, with respect to any
defaulted non-monetary Obligations the specific performance of
which by the Guarantors is not reasonably possible (e.g. the
issuance of the Company’s Common Stock), the Guarantors shall
only be liable for making the Purchasers whole on a monetary basis
for the Company’s failure to perform such Obligations in
accordance with the Transaction Documents.
(b) Right
of Contribution. Subject to Section 2(c), each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions
of Section 2(c). The provisions of this Section 2(b) shall in no
respect limit the obligations and liabilities of any Guarantor to
the Purchasers and each Guarantor shall remain liable to the
Purchasers for the full amount guaranteed by such Guarantor
hereunder.
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(c) No
Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Purchasers, no Guarantor shall be entitled to be
subrogated to any of the rights of the Purchasers against the
Company or any other Guarantor or any collateral security or
guarantee or right of offset held by the Purchasers for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Company or any
other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Purchasers by the Company
on account of the Obligations are indefeasibly paid in full. If any
amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such
Guarantor in trust for the Purchasers, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Purchasers in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Purchasers may
determine.
(d) Amendments,
Etc. With Respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any
of the Obligations made by the Purchasers may be rescinded by the
Purchasers and any of the Obligations continued, and the
Obligations, or the liability of any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Purchasers, and the Purchase Agreement and the other Transaction
Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Purchasers may deem
advisable from time to time, and any collateral security, guarantee
or right of offset at any time held by the Purchasers for the
payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Purchasers shall have no obligation to
protect, secure, perfect or insure any Lien at any time held by
them as security for the Obligations or for the guarantee contained
in this Section 2 or any property subject thereto.
(e) Guarantee
Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of
the Obligations and notice of or proof of reliance by the
Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended
or waived, in reliance upon the guarantee contained in this Section
2; and all dealings between the Company and any of the Guarantors,
on the one hand, and the Purchasers, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each
Guarantor waives to the extent permitted by law diligence,
presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Company or any of the Guarantors with
respect to the Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed
as a continuing, absolute and unconditional guarantee of payment
and performance without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction
Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Purchasers, (b) any
defense, set-off or counterclaim (other than a defense of payment
or performance or fraud by Purchasers) which may at any time be
available to or be asserted by the Company or any other Person
against the Purchasers, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Company or such
Guarantor) which constitutes, or might be construed to constitute,
an equitable or legal discharge of the Company for the Obligations,
or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Purchasers may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such
rights and remedies as they may have against the Company, any other
Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Purchasers to make any such demand,
to pursue such other rights or remedies or to collect any payments
from the Company, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Company,
any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Purchasers against any
Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal
proceedings.
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(f) Reinstatement.
The guarantee contained in this Section 2 shall continue to be
effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the
Purchasers upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Company or
any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been
made.
(g) Payments.
Each Guarantor hereby guarantees that payments hereunder will be
paid to the Purchasers without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in the Signature
Pages to the Purchase Agreement.
3. Representations
and Warranties. Each Guarantor hereby makes the following
representations and warranties to Purchasers as of the date
hereof:
(a) Organization
and Qualification. The Guarantor is a corporation or a
limited liability company, duly incorporated or formed, validly
existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate
or limited liability company power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. The Guarantor has no subsidiaries other than those
identified as such on the Disclosure Schedules to the Purchase
Agreement. The Guarantor is duly qualified to do business and is in
good standing as a foreign corporation or limited liability company
in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of any of
this Guaranty in any material respect, (y) have a material adverse
effect on the results of operations, assets, prospects, or
financial condition of the Guarantor or (z) adversely impair in any
material respect the Guarantor’s ability to perform fully on
a timely basis its obligations under this Guaranty (a
“Material Adverse
Effect”).
(b) Authorization;
Enforcement. The Guarantor has the requisite corporate or
limited liability company power and authority to enter into and to
consummate the transactions contemplated by this Guaranty, and
otherwise to carry out its obligations hereunder. The execution and
delivery of this Guaranty by the Guarantor and the consummation by
it of the transactions contemplated hereby have been duly
authorized by all requisite corporate or limited liability company
action on the part of the Guarantor. This Guaranty has been duly
executed and delivered by the Guarantor and constitutes the valid
and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.
(c) No
Conflicts. The execution, delivery and performance of this
Guaranty by the Guarantor and the consummation by the Guarantor of
the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its Certificate of
Incorporation or organizational document or By-laws or (ii)
conflict with, constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which
the Guarantor is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Guarantor is subject (including Federal and State securities laws
and regulations), or by which any material property or asset of the
Guarantor is bound or affected, except in the case of each of
clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as could
not, individually or in the aggregate, have or result in a Material
Adverse Effect. The business of the Guarantor is not being
conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually
or in the aggregate, do not have a Material Adverse
Effect.
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(d) Consents
and Approvals. The Guarantor is not required to obtain any
consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local,
foreign or other governmental authority or other person in
connection with the execution, delivery and performance by the
Guarantor of this Guaranty.
(e) Purchase
Agreement. The representations and warranties of the Company
set forth in the Purchase Agreement as they relate to such
Guarantor, each of which is hereby incorporated herein by
reference, are true and correct as of each time such
representations are deemed to be made pursuant to such Purchase
Agreement, and the Purchasers shall be entitled to rely on each of
them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the
Company’s knowledge shall, for the purposes of this Section
3, be deemed to be a reference to such Guarantor’s
knowledge.
(f) Foreign
Law. Each Guarantor has consulted with appropriate foreign
legal counsel with respect to any of the above representations for
which non-U.S. law is applicable. Such foreign counsel have advised
each applicable Guarantor that such counsel knows of no reason why
any of the above representations would not be true and accurate.
Such foreign counsel were provided with copies of this Subsidiary
Guarantee and the Transaction Documents prior to rendering their
advice.
4. Covenants.
(a) Each
Guarantor covenants and agrees with the Purchasers that, from and
after the date of this Guarantee until the Obligations shall have
been indefeasibly paid in full, such Guarantor shall take, and/or
shall refrain from taking, as the case may be, each commercially
reasonable action that is necessary to be taken or not taken, as
the case may be, so that no Event of Default (as defined in the
Senior Secured Convertible Note) is caused by the failure to take
such action or to refrain from taking such action by such
Guarantor.
(b) So
long as any of the Obligations are outstanding, unless Purchasers
holding at least 51% of the aggregate principal amount of the then
outstanding Senior Secured Convertible Note shall otherwise consent
in writing, each Guarantor will not directly or indirectly on or
after the date of this Guarantee:
(i) enter
into, create, incur, assume or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now
owned or hereafter acquired or any interest therein or any income
or profits therefrom;
(ii) enter
into, create, incur, assume or suffer to exist any liens of any
kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or
profits therefrom;
(iii) amend
its certificate of incorporation, bylaws or other charter documents
so as to adversely affect any rights of any Purchaser;
(iv) repay,
repurchase or offer to repay, repurchase or otherwise acquire more
than a de minimis number of shares of its securities or debt
obligations;
(v) pay
cash dividends on any equity securities of the
Company;
(vi) enter
into any transaction with any Affiliate of the Guarantor which
would be required to be disclosed in any public filing of the
Company with the Commission, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of
the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or
(vii)
enter into any agreement with respect to any of the
foregoing.
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5. Miscellaneous.
(a) Amendments
in Writing. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented or otherwise
modified except in writing by the Purchasers.
(b) Notices.
All notices, requests and demands to or upon the Purchasers or any
Guarantor hereunder shall be effected in the manner provided for in
the Purchase Agreement, provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 5(b).
(c) No
Waiver By Course Of Conduct; Cumulative Remedies. The
Purchasers shall not by any act (except by a written instrument
pursuant to Section 5(a)), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default under the Transaction Documents or Event
of Default. No failure to exercise, nor any delay in exercising, on
the part of the Purchasers, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Purchasers of any right or remedy
hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Purchasers would otherwise have on
any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by
law.
(d) Enforcement
Expenses; Indemnification.
(i) Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its
costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing
or preserving any rights under this Guarantee and the other
Transaction Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and
disbursements of counsel to the Purchasers.
(ii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes
which may be payable or determined to be payable in connection with
any of the transactions contemplated by this
Guarantee.
(iii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Guarantee to
the extent the Company would be required to do so pursuant to the
Purchase Agreement.
(iv) The
agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Purchase
Agreement and the other Transaction Documents.
(e) Successor
and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the
benefit of the Purchasers and their respective successors and
assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guarantee
without the prior written consent of the Purchasers.
(f) Set-Off.
Each Guarantor hereby irrevocably authorizes the Purchasers at any
time and from time to time while an Event of Default under any of
the Transaction Documents shall have occurred and be continuing,
without notice to such Guarantor or any other Guarantor, any such
notice being expressly waived by each Guarantor, to set-off and
appropriate and apply any and all deposits, credits, indebtedness
or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Purchasers to or for the credit or the account
of such Guarantor, or any part thereof in such amounts as the
Purchasers may elect, against and on account of the obligations and
liabilities of such Guarantor to the Purchasers hereunder and
claims of every nature and description of the Purchasers against
such Guarantor, in any currency, whether arising hereunder, under
the Purchase Agreement, any other Transaction Document or
otherwise, as the Purchasers may elect, whether or not the
Purchasers have made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured.
The Purchasers shall notify such Guarantor promptly of any such
set-off and the application made by the Purchasers of the proceeds
thereof, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of
the Purchasers under this Section are in addition to other rights
and remedies (including, without limitation, other rights of
set-off) which the Purchasers may have.
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(g) Counterparts.
This Guarantee may be executed by one or more of the parties to
this Guarantee on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
(h) Severability.
Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(i) Section
Headings. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the
interpretation hereof.
(j) Integration.
This Guarantee and the other Transaction Documents represent the
agreement of the Guarantors and the Purchasers with respect to the
subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Purchasers
relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Transaction
Documents.
(k) Governing
Laws. All questions concerning the construction, validity,
enforcement and interpretation of this Guarantee shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each of the Company and the Guarantors
agree that all proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this
Guarantee (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York, Borough of
Manhattan. Each of the Company and the Guarantors hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of
Manhattan for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such
proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this
Guarantee and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Guarantee or the transactions
contemplated hereby.
(l) Acknowledgements.
Each Guarantor hereby acknowledges that:
(i) it
has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the other Transaction Documents to
which it is a party;
(ii) the
Purchasers have no fiduciary relationship with or duty to any
Guarantor arising out of or in connection with this Guarantee or
any of the other Transaction Documents, and the relationship
between the Guarantors, on the one hand, and the Purchasers, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(iii) no
joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Guarantors and the
Purchasers.
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(m) Additional
Guarantors. The Company shall cause each of its subsidiaries
formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and
delivering an Assumption Agreement in the form of Annex 1
hereto.
(n) Release
of Guarantors. Each Guarantor will be released from all
liability hereunder concurrently with the indefeasible repayment in
full of all amounts owed under the Purchase Agreement, the Senior
Secured Convertible Note and the other Transaction
Documents.
(o) Seniority.
The Obligations of each of the Guarantors hereunder rank senior in
priority to any other Indebtedness (as defined in the Purchase
Agreement) of such Guarantor.
(p) WAIVER
OF JURY TRIAL.
EACH GUARANTOR AND, BY ACCEPTANCE
OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.
*********************
(Signature Pages Follow)
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IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered as of the date first above
written.
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EXACTUS ONE WORLD, LLC
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By:
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/s/ Xxxxxxxx
Xxxx
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Name:
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Xxxxxxxx
Xxxx
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Title:
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President
& CEO – Exactus, Inc.
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PARADISE MEDLIFE, LLC
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By:
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/s/
Xxxxxxxx Xxxx
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Name:
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Xxxxxxxx
Xxxx
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Title:
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President
& CEO – Exactus, Inc.
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-9-
SCHEDULE 1
GUARANTORS
The
following are the names, notice addresses and jurisdiction of
organization of each Guarantor.
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COMPANY
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JURISDICTION
OF
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OWNED
BY
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INCORPORATION
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PERCENTAGE
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Exactus
One World, LLC
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Oregon
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100%
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Paradise
Medlife, LLC
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Florida
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100%
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-10-
Annex 1
to
ASSUMPTION
AGREEMENT, dated as of November 27, 2019 made by Exactus, Inc., a
Nevada corporation (the “Additional Guarantor”),
in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall
have the meaning ascribed to them in such Purchase
Agreement.
W I T N E S S E T H:
WHEREAS, Exactus,
Inc., a Nevada corporation (the “Company”) and the
Purchasers have entered into a Securities Purchase Agreement, dated
as of November 27, 2019 (as amended, supplemented or otherwise
modified from time to time, the “Purchase
Agreement”);
WHEREAS, in
connection with the Purchase Agreement, the Subsidiaries of the
Company (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of November 27, 2019 (as amended,
supplemented or otherwise modified from time to time, the
“Guarantee”) in favor of
the Purchasers;
WHEREAS, the
Purchase Agreement requires the Additional Guarantor to become a
party to the Guarantee; and
WHEREAS, the
Additional Guarantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the
Guarantee;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee.
By executing and delivering this Assumption Agreement, the
Additional Guarantor, as provided in Section 5(m) of the Guarantee,
hereby becomes a party to the Guarantee as a Guarantor thereunder
with the same force and effect as if originally named therein as a
Guarantor and, without limiting the generality of the foregoing,
hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder. The information set forth in Annex 1 hereto
is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants
that each of the representations and warranties contained in
Section 3 of the Guarantee is true and correct on and as the date
hereof as to such Additional Guarantor (after giving effect to this
Assumption Agreement) as if made on and as of such
date.
2. Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.
IN
WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first
above written.
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[ADDITIONAL GUARANTOR]
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By:
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Name:
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Title:
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-11-
