Exhibit 10.5


 


SUBSIDIARY GUARANTEE


 


SUBSIDIARY
GUARANTEE, dated as of March 31, 2008 (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,
between Advanced Cell Technology, Inc., a Delaware corporation (the “Company”)
and the Purchasers.


 


W I T N E S S E T H:


 


WHEREAS, pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and between the Company and the
Purchasers (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 Debentures, subject to the terms and conditions set forth
therein; and


 


WHEREAS, each Guarantor will directly benefit from
the extension of credit to the Company represented by the issuance of the
Debentures; 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 Debentures 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, 


 


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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 Debentures 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 Debentures 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.


 


2.             Guarantee.
 


(a)           Guarantee.


 


(i)            The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Purchasers and their respective
successors, indorsees, 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 


 


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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.


 


(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 


 


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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,


 


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(b) any defense, set-off or counterclaim (other than a defense of
payment or performance or fraud  or
misconduct 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.


 


(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, duly incorporated,
validly existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate power and
authority to own and use its properties and assets and to carry on its business



 


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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 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 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 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 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 Debentures)
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 67% of
the aggregate principal amount of the then outstanding Debentures 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 
 
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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.
 
Provided, however, that the Guarantor shall not be prohibited from undertaking any of the actions described above that the Company is permitted to undertake pursuant to the terms of the Purchase Agreements, Debentures and any and all other agreements or other documents entered into in connection with the financings contemplated by the Purchase Agreements.
 
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 Purchasers
holding 67% of the principal amount of Debentures then outstanding.


 


(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 


 


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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.


 


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(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.


 


(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.


 


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(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.


 


(m)          Additional
Guarantors.  The Company
shall cause each of its subsidiaries formed or acquired on or subsequent to the
date hereof to become a 


 


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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 Debentures 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.


 


	 
	MYTOGEN, INC.

	 
	 

	 
	By:
	/s/ William M. Caldwell, IV
	 
	 

	 
	 
	  Name: William M. Caldwell, IV

	 
	 
	  Title: President




 


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