GUARANTEE AGREEMENT
GUARANTEE AGREEMENT (the "Guarantee") dated June 26, 1998 (the "Closing
Date") by and between each of Xxxxxx Xxxxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxx, Xxxx X. Xxxxxxxxxxx, Xxxx X. Xxxxxxxxx and Xxxxx Xxxxxx (each or whom
shall be individually referred to as "Seller" and collectively as the
"Sellers"), Xxxxx X. Xxxxxxxx ("Xxxxxxxx"), and AgriBioTech, Inc., a Nevada
corporation ("ABT") and Xxxxxx-Xxxxxx Seed Service, Inc. a Nevada corporation
and wholly-owned subsidiary of ABT (the "Buyer").
W I T N E S S E T H:
WHEREAS, Buyer has agreed to purchase from the Sellers an aggregate of 100
shares of the common stock of W-D Seed Growers, Inc., an Idaho corporation (the
"Company"), pursuant to a Stock Purchase Agreement dated June 26, 1998 (the
"Stock Purchase Agreement") by and among the Sellers, the Company, the Buyer and
ABT;
WHEREAS, Buyer has agreed to purchase from Xxxxxxxx all of the issued and
outstanding shares of capital stock of Stanford Holding Ltd., a Delaware
corporation ("Stanford"), pursuant to a Stock Purchase Agreement dated June 26,
1998 (the "Stanford Stock Purchase Agreement") by and among Billings, Stanford,
the Buyer, and ABT;
WHEREAS, pursuant to Section 3(a) of the Stock Purchase Agreement, ABT will
transfer to the Sellers Sixty Eight Thousand One Hundred Eighty Two (68,182)
shares of the Common Stock of ABT;
WHEREAS, pursuant to Section 3(a) of the Stanford Stock Purchase Agreement,
ABT will transfer to Xxxxxxxx Sixty Eight Thousand One Hundred Eighty Two
(68,182) shares of the Common Stock of ABT (which, together with the shares of
ABT common stock transferred to the Sellers shall collectively be referred to as
the "ABT Shares");
WHEREAS, pursuant to Section 3(c) of the Stock Purchase Agreement, the
Sellers have 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(c) of the Stanford Stock Purchase Agreement,
Xxxxxxxx has entered into a Lock-Up Agreement (the "Lock-Up") pursuant to which
he has agreed that he shall not sell, transfer or otherwise dispose of the ABT
Shares except as specified in the Lock-Up;
WHEREAS, pursuant to Section 3(d) of the Stock Purchase Agreement, ABT has
guaranteed the Net Proceeds (as defined below) from the sale of the ABT Shares
when sold pursuant to the Lock-Up; and
WHEREAS, pursuant to Section 3(d) of the Stanford Stock Purchase Agreement,
ABT has guaranteed 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 $22.00 per share (the "Guaranteed
Price/Share").
(b) Buyer and ABT further agree that until the Sellers and
Xxxxxxxx have received an aggregate of $3,000,000 from all sales
of ABT Shares made pursuant to the Lock-Up, they shall be secured
by a first lien, wherever reasonably possible, on the fixed
assets and equipment of the Corporation pursuant to the terms of
a security agreement (the "Security Agreement").
(c) In consideration of the guarantee granted hereby and the
Security Agreement, each of the Sellers and Xxxxxxxx hereby
agrees that all Net Proceeds from all sales of ABT Shares at a
price per share greater than the Guaranteed Price/Share shall be
paid to ABT.
Section 2.
(a) The Net Proceeds shall be determined on a quarterly basis
according to ABT's fiscal calender.
(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 pay to each of the Sellers and
Xxxxxxxx cash for any shortfalls in the Guaranteed Net Proceeds
resulting from their individual sales of the ABT Shares on the
last day of the month following the end of the fiscal quarter in
which such shortfall occurred; provided, however, that any
shortfalls shall be calculated on a cumulative basis during such
fiscal quarter such that any shortfalls in the guaranteed
Price/Share shall be offset against any surplus in the Guaranteed
Price/Share.
(c) To the extent that sales of ABT Shares pursuant to the
Lock-Up are made at prices per Share that are greater than the
Guaranteed Price/Share, each of the Sellers and Xxxxxxxx ABT
shall pay to ABT cash for any surplus in the Guaranteed Net
Proceeds resulting from their individual sales of the ABT Shares
on the last day of the month following the end of the fiscal
quarter in which such surplus occurred; provided, however, that
any surplus shall be calculated on a cumulative basis during such
fiscal quarter such that any surplus in the Guaranteed
Price/Share shall be offset against any shortfalls in the
Guaranteed Price/Share.
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(d) Sellers and Xxxxxxxx shall prepare and deliver to ABT within
two weeks of the end of each fiscal quarter a cumulative
statement, supported by documentation reflecting all sales of ABT
Shares by each of them during such quarter, and stating the mount
to be paid by ABT to each of them pursuant to the terms of this
guarantee or the amount to be paid by each them to ABT pursuant
to the terms of this guarantee. In the event of a surplus in the
Guaranteed Price/Share during any fiscal quarter, ABT, in its
sole discretion, may elect to maintain such surplus without
receiving cash payment therefor, to be offset against any future
deficits in the Guaranteed Price/Share, by providing the Sellers
and Xxxxxxxx with written notice of such election prior to the
date upon which a payment of such surplus would otherwise be due.
(e) In the event that any of the Sellers or Xxxxxxxx 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 Guarantee shall not apply to the Net Proceeds
received from such sale and the Guarantee shall from that time be
null and void, and (ii) all proceeds in excess of $15.50 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, and upon the
Sellers, Billings, their heirs, executors, administrators, legatees and legal
representatives.
Section 4. Should any part of this Guarantee, 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 Guarantee 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 Guarantee without including therein any portion which
may for any reason be declared invalid.
Section 5. This Guarantee 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 Guarantee 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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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 Sellers or Xxxxxxxx to:
Stanford Holdings, Ltd.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxxxx
Telecopier No.: 000-000-0000
with a copy to:
Phillips, Lytle, Xxxxxxxxx, Xxxxxx
& Xxxxx LLP
0000 Xxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: 000-000-0000
(ii) if to the Buyer or ABT to:
Xxxxxx-Xxxxxx Seed Service, Inc.
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.
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Section 8. In the event that ABT fails to make a payment for a shortfall in the
Net Proceeds in accordance with Section 2 hereof within 30 days after receipt of
written notice from Sellers and Xxxxxxxx demanding such payment, ABT shall be in
default under this Guarantee with respect to such payment ("Default Payment").
Upon such default by ABT, Sellers and Xxxxxxxx may declare a default under the
Security Agreement and pursue all remedies to which they are entitled to the
extent necessary to relieve such default. This Guarantee shall otherwise remain
in full force and effect with respect to the payment of any future deficits or
surpluses by ABT or the Sellers and Xxxxxxxx, 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 Guarantee 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 Guarantee 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.
/s/ Xxxxxx Xxxxxxxx /s/ Xxxx X. Xxxxxxxxx
----------------------------- -------------------------------------
Xxxxxx Xxxxxxxx Xxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
----------------------------- -------------------------------------
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxx
----------------------------- -------------------------------------
Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxxxx
AGRIBIOTECH, INC.
By: /S/ Xxxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxxx
Vice President
XXXXXX-XXXXXX SEED SERVICE, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxxx
Vice President
